<PAGE>
UNITED STATES
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 MARCH 31, 1997
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period ___________________ to _____________________
Commission File Number 1-13232
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
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(Exact name of registrant as specified in its charter)
Maryland 84-1259577
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1873 S. Bellaire Street, Suite 1700, Denver, Colorado 80222-4348
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(Address of principal executive offices) (Zip Code)
(303) 757-8101
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(Registrant's telephone number, including area code)
Not applicable
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(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
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The number of shares of Class A Common Stock outstanding as of April 30, 1997:
17,597,768
The number of shares of Class B Common Stock outstanding as of April 30, 1997:
325,000
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APARTMENT INVESTMENT AND MANAGEMENT COMPANY
FORM 10-Q
INDEX
<TABLE>
PART I. FINANCIAL INFORMATION PAGE
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Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 1997
(unaudited) and December 31, 1996 3
Consolidated Statements of Income for the Three Months
Ended March 31, 1997 and 1996 (unaudited) 4
Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 1997 and 1996 (unaudited) 5
Notes to Consolidated Financial Statements
(unaudited) 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 12
PART II. OTHER INFORMATION
Item 3. Quantitative and Qualitative Disclosures about Market Risk 18
Item 4. Submission of Matters to a Vote of Security Holders 18
Item 6. Exhibits and Reports on Form 8-K 19
Signatures 21
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION.
ITEM 1. FINANCIAL STATEMENTS.
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
March 31, December 31,
1997 1996
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(Unaudited)
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ASSETS
REAL ESTATE - net of accumulated depreciation of
$127,532 and $120,077 $742,399 $745,145
CASH AND CASH EQUIVALENTS 11,531 13,170
RESTRICTED CASH 10,423 15,831
ACCOUNTS RECEIVABLE 5,313 4,344
DEFERRED FINANCING COSTS 10,576 11,053
OTHER ASSETS 35,987 45,270
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$816,229 $834,813
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LIABILITIES AND STOCKHOLDERS' EQUITY
SECURED NOTES PAYABLE $240,935 $242,110
SECURED SHORT-TERM FINANCING 140,487 192,039
SECURED TAX-EXEMPT BOND FINANCING 75,151 75,497
UNSECURED SHORT-TERM FINANCING - 12,500
ACCOUNTS PAYABLE, ACCRUED AND OTHER LIABILITIES 14,248 16,299
RESIDENT SECURITY DEPOSITS AND PREPAID RENTS 4,623 4,316
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475,444 542,761
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COMMITMENTS AND CONTINGENCIES - -
MINORITY INTERESTS IN OTHER PARTNERSHIPS 9,893 10,386
MINORITY INTEREST IN OPERATING PARTNERSHIP 50,045 58,777
STOCKHOLDERS' EQUITY
Class A Common Stock, $.01 par value, 150,000,000 shares
authorized, 17,587,036 and 14,980,441 shares issued and outstanding 176 150
Class B Common Stock, $.01 par value, 425,000 shares authorized,
325,000 shares issued and outstanding 3 3
Non-voting preferred stock, $0.01 par value, 10,000,000
authorized, none issued or outstanding - -
Additional paid-in capital 297,322 236,791
Accumulated deficit (16,654) (14,055)
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280,847 222,889
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$816,229 $834,813
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</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Data)
(Unaudited)
<TABLE>
Three Months Ended Three Months Ended
March 31, 1997 March 31, 1996
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(Restated)
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RENTAL PROPERTY OPERATIONS
Rental and other property revenues $ 38,040 $ 22,451
Property operating expenses (14,456) (8,702)
Owned property management expense (1,321) (662)
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Income from property operations before
depreciation 22,263 13,087
Depreciation (7,455) (4,470)
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Income from rental property operations 14,808 8,617
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SERVICE COMPANY BUSINESS
Management fees and other income 2,444 1,848
Management and other expenses (1,420) (1,260)
Corporate overhead allocation (147) (149)
Management company goodwill amortization (237) (114)
Depreciation and amortization (88) (48)
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552 277
Minority interests in service company business (1) 14
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Company's share of income from service company business 551 291
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GENERAL AND ADMINISTRATIVE EXPENSES (351) (323)
INTEREST EXPENSE (9,452) (5,395)
INTEREST INCOME 507 114
MINORITY INTERESTS IN OTHER PARTNERSHIPS (369) -
------------ ------------
INCOME BEFORE MINORITY INTEREST IN OPERATING
PARTNERSHIP AND EXTRAORDINARY ITEM 5,694 3,304
MINORITY INTEREST IN OPERATING PARTNERSHIP (841) (494)
------------ ------------
INCOME BEFORE EXTRAORDINARY ITEM 4,853 2,810
EXTRAORDINARY ITEM-EARLY EXTINGUISHMENT OF
DEBT, NET OF MINORITY INTEREST (269) -
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NET INCOME $ 4,584 $ 2,810
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NET INCOME PER COMMON SHARE AND COMMON SHARE:
EQUIVALENT:
Income before extraordinary item $ 0.29 $ 0.24
Extraordinary item (0.01) -
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Net income $ 0.28 $ 0.24
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DIVIDENDS PAID PER COMMON SHARE $ 0.46 $ 0.43
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WEIGHTED AVERAGE SHARES AND COMMON SHARE
EQUIVALENTS OUTSTANDING 16,586 11,860
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</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOW
(In Thousands)
(Unaudited)
<TABLE>
Three Months Three Months
Ended Ended
March 31, March 31,
1997 1996
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(Restated)
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CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 4,584 $ 2,810
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Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 8,405 4,632
Minority interest in Operating Partnership 841 494
Minority interests in other partnerships 369 -
Changes in operating assets, (increase) decrease in:
Restricted cash 5,408 (249)
Accounts receivable (969) (443)
Accounts receivable from affiliates - 205
Other assets 9,082 (52)
Changes in operating liabilities, increase (decrease) in:
Accounts payable, accrued and other liabilities (2,051) (752)
Resident security deposits and prepaid rents 307 124
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Total adjustments 21,392 3,959
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Net cash provided by operating activities 25,976 6,769
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CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of real estate (628) (6,711)
Capital replacements (986) (827)
Initial capital expenditures (973) (261)
Construction in progress and capital enhancements (2,122) (1,437)
Purchase of office equipment and leasehold improvements (294) (114)
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Net cash used in investing activities (5,003) (9,350)
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CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of Class A Common Stock,
net of underwriting and offering costs 51,463 (51)
Principal repayments on secured short-term financing (30,752) -
Principal repayments on unsecured short-term financing (12,500) -
Net (paydowns) borrowings on Credit Facility (20,800) 8,500
Principal paydowns on secured notes payable (1,175) (926)
Proceeds from secured notes payable borrowings - 56
Principal paydowns on secured tax-exempt bond financing (346) -
Payment of loan costs (148) (118)
Payment of common stock dividends (7,183) (5,037)
Payment of distributions to minority interest in
Operating Partnership (1,171) (824)
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Net cash (used in) provided by financing activities (22,612) 1,600
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NET DECREASE IN CASH AND CASH EQUIVALENTS (1,639) (981)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 13,170 2,379
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 11,531 $ 1,398
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</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
Consolidated Statements of Cash Flow
(In Thousands Except Share and Operating Partnership Unit Data)
NON CASH INVESTING AND FINANCING ACTIVITIES
REDEMPTION OF OP UNITS
During the three months ended March 31, 1997, 543,794 Operating Partnership
units with a recorded value of $8,431 were redeemed in exchange for an equal
number of shares of Class A Common Stock.
PURCHASE OF REAL ESTATE
In January 1996, the Company assumed $18,920 of notes payable secured by first
and second deeds of trust and issued 82,703 Operating Partnership units with a
recorded value of $1,530 in connection with the purchase of real estate.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
Notes to Consolidated Financial Statements
March 31, 1997
(Unaudited)
NOTE 1 - ORGANIZATION
Apartment Investment and Management Company, a Maryland corporation
incorporated on January 10, 1994 ("AIMCO" and together with its
subsidiaries and other controlled entities, the "Company") acts as
sole general partner of AIMCO Properties, L.P. (the "Operating
Partnership"), through AIMCO-GP, Inc. and AIMCO-LP, Inc., wholly-owned
subsidiaries which hold all of the Company's general and limited
partnership interests in and majority ownership of the Operating
Partnership.
At March 31, 1997, the Company had 17,587,036 shares of Class A Common
Stock outstanding and the Operating Partnership had 2,858,046
Operating Partnership units ("OP Units") outstanding, for a combined
total of 20,445,082 shares and OP Units. The Company held an 86%
interest in the Operating Partnership as of March 31, 1997.
At March 31, 1997, the Company owned or controlled 23,764 apartment
units in 94 properties and managed an additional 17,731 apartment
units in 131 properties for third party owners and affiliates,
bringing the total managed portfolio to 41,495 apartment units in 225
properties located in the sunbelt regions of the United States.
NOTE 2 - BASIS OF PRESENTATION
The accompanying consolidated financial statements include the
accounts of AIMCO, the Operating Partnership, majority owned
subsidiaries and controlled real estate limited partnerships.
Interests held by limited partners in real estate partnerships
controlled by the Company are reflected as Minority Interests in Other
Partnerships.
The accompanying unaudited consolidated financial statements of the
Company as of March 31, 1997 and for the three months ended March 31,
1997 and 1996 have been prepared in accordance with generally accepted
accounting principles for interim financial information. Accordingly,
they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments considered
necessary for a fair presentation have been included and all such
adjustments are of a recurring nature. The consolidated financial
statements should be read in conjunction with the audited consolidated
financial statements and notes thereto included in the Annual Report
on Form 10-K for the year ended December 31, 1996. It should be
understood that accounting measurements at interim dates inherently
involve greater reliance on estimates than at year end. The results
of operations for the interim periods presented are not necessarily
indicative of the results for the entire year.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
Notes to Consolidated Financial Statements (continued)
NOTE 2 - BASIS OF PRESENTATION (CONTINUED)
In the second quarter of 1996, the Company adopted Emerging Issues
Task Force (EITF) Number 95-6 "Accounting by a Real Estate Investment
Trust for an Investment in a Service Corporation". The Company
reports the operations of the service company business on a
consolidated basis after the adoption of EITF 95-6. Prior to the
issuance of EITF 95-6, the Company reported the service company
business on the equity method. The adoption of EITF 95-6 has no
impact on net income, but does increase third party and affiliate
management and other income, management and other expenses,
amortization of management company goodwill and depreciation of non-
real estate assets. The Company has restated the statement of income
and statement of cash flows for the three months ended March 31, 1996
to reflect the retroactive application of the change.
NOTE 3 - OTHER ASSETS
In March 1997, certain executive officers of the Company (or entities
controlled by them) repaid $11.4 million of their $16.9 million in
notes payable to the Company executed for the purchase in 1996 of
814,500 shares of Class A Common Stock by these executive officers.
NOTE 4 - SECURED SHORT-TERM FINANCING
In February 1997, the Company repaid floating rate indebtedness of
$25,615,000 and borrowings on the variable rate revolving credit
facility with Bank of America (the "Credit Facility") of $8,500,000
with proceeds from a public offering of shares of Class A Common Stock
(see Note 6). In addition, the Company used $5,074,000 of restricted
cash which was held in escrow at December 31, 1996 to repay
indebtedness assumed in connection with the acquisition of the
Chesapeake Apartments in December 1996.
In March 1997, the Company paid down the Credit Facility by
$12,300,000 with funds received in connection with the repayment of
notes due to the Company (see Note 3).
In March 1997, the Company entered into an interest rate swap
agreement having a notional principal amount of $100,000,000, in
anticipation of financing certain floating rate indebtedness, which
will be incurred upon the completion of upcoming real estate
acquisitions, on a long term basis in the third quarter of 1997. The
interest rate swap agreement matures on September 25, 1997 and fixed
the twelve year treasury rate at 6.94%. Based on the fair value at
March 31, 1997, the Company had a liability of approximately $89,000.
NOTE 5 - UNSECURED SHORT-TERM FINANCING
The Company repaid in full $12,500,000 incurred in connection with the
purchase in 1996 of interests in limited partnerships with proceeds
from a public offering completed in February 1997 of shares of Class A
Common Stock (see Note 6).
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
Notes to Consolidated Financial Statements (continued)
NOTE 6 - COMPLETION OF PUBLIC OFFERING
In February 1997, the Company completed a public offering of 2,015,000
shares of Class A Common Stock (including 15,000 shares subject to the
underwriter's overallotment option) at a public offering price of
$26.75 per share. The net proceeds of approximately $51 million were
used to repay a portion of the Company's indebtedness incurred in
acquisitions completed in November and December 1996 (see Notes 4, 5).
NOTE 7 - EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per
Share" ("SFAS 128") which specifies the computation, presentation and
disclosure requirements for basic earnings per share and diluted
earnings per share. Management believes that adoption of SFAS 128
will not have a material effect on earnings per share of the Company.
NOTE 8 - NHP ACQUISITION
Pursuant to a Letter Agreement executed on February 19, 1997, AIMCO
entered into an Agreement and Plan of Merger, dated as of April 21,
1997 (the "Merger Agreement"), with NHP Incorporated, a Delaware
Corporation ("NHP"), and AIMCO/NHP Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of AIMCO ("Merger Sub"),
pursuant to which Merger Sub will be merged with and into NHP (the
"Merger"). In the Merger, holders of common stock, par value $.01 per
share ("NHP Common Stock"), of NHP may elect to receive, for each
share, either (i) 0.74766 shares of AIMCO Class A Common Stock, or
(ii) a combination of 0.37383 shares of AIMCO Common Stock and $10 in
cash. NHP has indicated that, as of March 7, 1997, 12,652,439 shares
of NHP Common Stock were issued and outstanding (excluding options).
The Merger Agreement also provides for NHP to distribute rights
("Rights") to its stockholders that will entitle them to receive
shares of NHP Financial Services, Ltd.; a Delaware corporation ("NHP
Financial"), NHP's commercial mortgage banking subsidiary, upon the
effectiveness of the Merger or on December 1, 1997 if the Merger has
not yet occurred. The Merger is conditioned on, among other things,
the approval of the stockholders of AIMCO and NHP (excluding AIMCO)
and certain governmental approvals.
Pursuant to the Letter Agreement executed on February 19, 1997, AIMCO
entered into a Stock Purchase Agreement, dated as of April 16, 1997
(the "Stock Purchase Agreement"), with Demeter Holdings Corporation, a
Massachusetts corporation ("Demeter"), an affiliate of Harvard Private
Capital Group, Inc., and Capricorn Investors, L.P., a Delaware limited
partnership ("Capricorn"), providing for AIMCO to acquire
approximately 6.9 million shares of NHP Common Stock from Demeter and
Capricorn. On May 5, 1997, pursuant to the Stock Purchase Agreement,
the Company acquired approximately 6.5 million shares of NHP Common
Stock for an aggregate purchase price of $132.6 million, consisting of
$72.6 million in cash and approximately 2.1 million shares of AIMCO
Class A Common Stock. The Company is also obligated to deliver to the
sellers the shares of NHP Financial that the Company will receive in
respect of such shares of NHP Common Stock (or, under certain
circumstances, $3.05 in cash per
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
Notes to Consolidated Financial Statements (continued)
NOTE 8 - NHP ACQUISITION (CONTINUED)
share of NHP Common Stock acquired). The cash payment of the purchase
price was financed with short term, floating rate indebtedness
incurred by a subsidiary and guaranteed by AIMCO. The shares of NHP
Common Stock acquired by the Company represent approximately 51% of
the outstanding shares of NHP Common Stock. The Stock Purchase
Agreement also provides for the purchase by the Company of an
additional, approximately 430,000 shares of NHP Common Stock.
AIMCO is continuing to negotiate the terms of a definitive agreement
with Demeter, Capricorn, Phemus Corporation, a Massachusetts
corporation and an affiliate of Demeter, and J. Roderick Heller,
President and Chief Executive Officer of NHP, relating to the
acquisition of certain entities formerly owned by NHP that own direct
and indirect interests in partnerships that own conventional and
affordable multifamily apartment properties managed primarily by NHP,
along with a captive insurance subsidiary and certain related assets
(collectively, the "NHP Real Estate Companies"). In connection with
the Merger Agreement, NHP has agreed to waive its right of first
refusal to purchase the NHP Real Estate Companies, effective May 3,
1997, provided that such an agreement is entered into on satisfactory
terms no later that May 31, 1997.
NOTE 9 - SUBSEQUENT EVENTS
PURCHASE OF THE BAY CLUB APARTMENTS
In April 1997, the Company purchased The Bay Club in Aventura ("Bay
Club"), a 702-unit luxury high rise apartment community located in
Aventura, Florida and 3.5 acres of vacant land adjacent to Bay Club.
The purchase price is $71 million, which includes the assumption of
$49 million of existing mortgage indebtedness that bears interest at
approximately 8.0% per annum and matures in November 2001. The
purchase price includes estimated closing costs and approximately $0.3
million for initial capital expenditures at the property.
COMPLETION OF REFINANCING
In April 1997, 23 partnerships controlled by the Company borrowed an
aggregate of $108 million from an institutional lender on a fully
amortizing, fixed rate basis with a term of 20 years. The loans have
a weighted average effective interest rate of 7.6% per year. The
loans are secured by 27 multifamily apartment properties owned by such
partnerships. The net proceeds of the borrowings, and $29 million
from additional borrowings under the Company's Credit Facility, were
used to repay approximately $137 million of secured, short term debt.
In March and April 1997, the two interest rate swap agreements
entered into in 1996, each having a notional principal amount of $50
million, matured resulting in a gain totaling $3.4 million. This gain
will be deferred and amortized over the life of the $108 million
indebtedness as a reduction to interest expense.
DIVIDEND DECLARED
On April 23, 1997, the Board of Directors declared a cash dividend of
$0.4625 per share of Class A Common Stock for the quarter ended March
31, 1997, payable on May 15, 1997 to stockholders of record on May 8,
1997.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
Notes to Consolidated Financial Statements (continued)
NOTE 9 - SUBSEQUENT EVENTS (CONTINUED)
SALE OF COMMON STOCK
In May 1997, AIMCO sold 1.9 million shares of AIMCO Class A Common
Stock at a price of $28.00 per share in a public offering. The net
proceeds of approximately $52 million were used to repay the
indebtedness then outstanding under the Company's Credit Facility.
In May 1997, AIMCO sold 400,000 shares of AIMCO Class A Common Stock
at $27.50 per share in a public offering. The net proceeds of $11
million were used to provide working capital.
SHELF REGISTRATION
In April 1997, the Company filed with the Securities and Exchange
Commission (the "SEC") a "Shelf" Registration Statement to register
for sale on a delayed or continuous basis up to $1 billion of debt and
equity securities. The SEC has not yet declared the Registration
Statement effective.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
OVERVIEW
The Company is a real estate investment trust with headquarters in Denver,
Colorado which holds a geographically diversified portfolio of apartments,
primarily serving the middle market. As of March 31, 1997, the Company owned or
controlled 23,764 apartment units in 94 multifamily apartment properties (the
"Owned Properties"). In addition to its Owned Properties, the Company managed
17,731 apartment units in 131 properties for third parties and affiliates,
bringing the total managed portfolio to 41,495 apartment units in 225
multifamily apartment properties located in the sunbelt regions of the United
States.
The following discussion contains forward-looking statements that are subject to
significant risks and uncertainties. There are several important factors that
could cause actual results to differ materially from the results anticipated by
the forward-looking statements contained in the following discussion. Such
factors and risks include, but are not limited to: financing risks, including
the risk that the Company's cash flow from operations may be insufficient to
meet required payments of principal and interest; real estate risks, including
variations of real estate values and the general economic climate in local
markets and competition for tenants in such markets; acquisition and development
risks, including failure of such acquisitions to perform in accordance with
projections; and possible environmental liabilities, including costs which may
be incurred due to necessary remediation of contamination of properties
presently owned or previously owned by the Company. In addition, the Company's
continued qualification as a real estate investment trust involves the
application of highly technical and complex provisions of the Internal Revenue
Code. Readers should carefully review the financial statements and the notes
thereto, as well as the risk factors described in the other documents the
Company files from time to time with the Securities and Exchange Commission.
RESULTS OF OPERATIONS
COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 1997 TO THE THREE MONTHS ENDED
MARCH 31, 1996
The Company recognized net income of $4,584,000 for the three months ended March
31, 1997 compared to $2,810,000 for the three months ended March 31, 1996. The
increase in net income of $1,774,000, or 63.1% was primarily the result of the
acquisition of forty-one Owned Properties in 1996 offset by the sale of four
properties sold in August 1996. The increase in net income is partially offset
by increased interest expense associated with indebtedness which was assumed or
incurred in connection with the acquisition of the Owned Properties in 1996.
These factors are discussed in more detail in the following paragraphs.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
RENTAL PROPERTY OPERATIONS
Rental and other property revenues from the Company's Owned Properties totaled
$38,040,000 for the three months ended March 31, 1997 consisting of $21,001,000
for the 51 "same store" properties, $16,015,000 for the properties acquired in
1996 and $1,024,000 for two properties in lease up after completion of an
expansion or renovation. Rental and other revenue for the 51 "same store"
properties increased from $20,157,000 for the three months ended March 31, 1996
to $21,001,000 for the three months ended March 31, 1997, an increase of
$844,000 or 4.2%. Average monthly rent per occupied unit for these 51
properties at March 31, 1997 and 1996 was $563 and $541, respectively, an
increase of 4.1%. Weighted average physical occupancy for the 51 properties
increased from 93.8% at March 31, 1996 to 94.5% at March 31, 1997, an 0.7%
increase.
Operating expenses, consisting of on-site payroll costs, utilities (net of
reimbursements received from tenants), contract services, turnover costs,
repairs and maintenance, advertising and marketing, property taxes and
insurance, totaled $14,456,000 for the three months ended March 31, 1997,
consisting of $7,623,000 for the 51 "same store" properties, $6,431,000 for the
42 properties acquired in 1996 and $402,000 for the two properties in lease up.
Operating expenses for the 51 properties totaled $7,623,000 for the three months
ended March 31, 1997, compared to $7,626,000 for the same period in 1996,
reflecting a $3,000 decrease in 1997.
Owned property management expenses, representing the costs of managing the
Company's Owned Properties, totaled $1,321,000 for the three months ended March
31, 1997, consisting of $559,000 for the 51 "same store" properties, $731,000
for the properties purchased in 1996 and $31,000 for the properties in lease up.
Owned property management expenses for the 51 properties totaled $559,000 for
three months ended March 31, 1977, compared to $571,000 for the same period in
1996, reflecting a decrease of $12,000 in 1997.
SERVICE COMPANY BUSINESS
The Company's share of income from the service company business was $551,000 for
the three months ended March 31, 1997 compared to $291,000 for the three months
ended March 31, 1996. The increase is due to the acquisition by the Company of
property management businesses in August and November 1996 offset by decreased
commercial asset management revenues attributable to fewer assets under
management and increased payroll costs.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
INTEREST EXPENSE
Interest expense totaled $9,452,000 for the three months ended March 31, 1997
compared to $5,395,000 for the three months ended March 31, 1996. Interest
expense, which includes amortization of deferred financing costs, for the three
months ended March 31, 1997 increased by $4,057,000, or 75.2% from the three
months ended March 31, 1996. The increase primarily consists of: (i) $3,153,000
of interest on secured short-term and long-term indebtedness incurred by
partnerships in which the Company acquired a controlling interest in November
and December 1996, (ii) $332,000 of increased interest due to increased
borrowings outstanding under the Credit Facility resulting from the acquisitions
completed in November and December 1996, (iii) $431,000 of interest expense on
secured and unsecured, short-term indebtedness incurred in connection with other
acquisitions in 1996, and (iv) $102,000 of increased interest on unsecured
short-term indebtedness incurred in connection with the purchase of limited
partnership interests in December 1996. During the three months ended March 31,
1997, the Company capitalized interest expense of $231,000 as a result of
increased construction and renovation activities compared to $136,000 of
interest expense which was capitalized during the three months ended March 31,
1996.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1997, the Company had $11,531,000 in cash and cash equivalents and
$10,423,000 of restricted cash primarily consisting of reserves and impounds
held by lenders for capital expenditures, property taxes and insurance. The
Company's principal demands for liquidity include normal operating activities,
payments of principal and interest on outstanding debt, capital improvements,
acquisitions of or investments in properties, dividends paid to its stockholders
and distributions paid to minority limited partners in the Operating
Partnership. The Company considers its cash provided by operating activities to
be adequate to meet short-term liquidity demands. The Company utilizes the
Credit Facility for general corporate purposes and to fund investments on an
interim basis. In January 1997, the interest rate on the Credit Facility was
reduced to LIBOR plus 1.45%. The Credit Facility matures in August 1998 and
subject to certain customary conditions, the outstanding balance may be
converted to a three year term loan. At March 31, 1997, $24,000,000 was borrowed
under the Credit Facility.
During the three months ended March 31, 1997, the Company repaid $25.6 million
of secured short-term indebtedness, $12.5 million of unsecured short-term
indebtedness and $20.8 of the outstanding balance under the Credit Facility with
proceeds from a public offering of AIMCO Class A Common Stock in February 1997
and funds received in connection with the repayment of notes due to the Company
from certain executives officers of the Company (or entities controlled by them)
related to their purchase of common stock of the Company.
In April 1997, 23 partnerships controlled by the Company borrowed an aggregate
of $108 million from an institutional lender on a fully amortizing, fixed rate
basis with a term of 20 years. The loans have a weighted average effective
interest rate of 7.6% per year. The loans are secured by 27 multifamily
apartment properties owned by such partnerships. The net proceeds of the
borrowings, and $29 million from additional borrowings under the Company's
Credit Facility, were used to repay approximately $137 million of secured, short
term debt.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
In May 1997, AIMCO sold 1.9 million shares of AIMCO Class A Common Stock at a
public offering price of $28.00 per share. The net proceeds of approximately
$52 million were used to repay indebtedness outstanding under the Company's
Credit Facility. In addition, AIMCO sold 400,000 shares of AIMCO Class A Common
Stock at $27.50 per share in a public offering. The net proceeds of $11 million
were used to provide working capital.
In May 1997, the Company acquired approximately 51% of the outstanding shares of
NHP Incorporated ("NHP") from Demeter Holdings Corporation ("Demeter"), an
affiliate of Harvard Private Capital Group, Inc. and Capricorn Investors, L.P.
("Capricorn") for an aggregate purchase price of $132.6 million. The purchase
price consisted of $72.6 million in cash and the issuance of approximately 2.14
million shares of AIMCO Class A Common Stock at $28 per share. The cash portion
of the purchase price was financed with a floating rate, short term loan bearing
interest at LIBOR plus 2.5%.
The proposed Merger with NHP will require the Company to pay up to $65
million in cash as consideration to NHP stockholders, and will require the
Company to repay $72.6 million of indebtedness incurred to finance the
purchase of shares of NHP Common Stock in May 1997. In addition, the proposed
acquisition of the NHP Real Estate Companies would involve a cash consideration
of up to $55 million.
The Company expects to meet its long-term liquidity requirements, including
the proposed Merger with NHP and the proposed acquisition of the NHP Real
Estate Companies, as well as property acquisitions and refinancing of
short-term debt with long-term, fixed rate, fully amortizing debt, secured or
unsecured, the issuance of debt securities, units of limited partnership in
the Operating Partnership ("OP Units") or equity securities and cash
generated from operations. In April 1997, the Company filed a "Shelf"
Registration Statement with the Securities and Exchange Commission with
respect to an aggregate of $1 billion of debt and equity securities. The SEC
has not yet declared the Registration Statement effective. No additional
amounts remain available under the $200 million shelf registration statement
filed with the SEC in October 1995.
As of March 31, 1997, the Company had outstanding indebtedness totaling $456.6
million including $240.9 million of secured long-term financing, $116.5 in
secured short-term financing, $75.2 million of secured tax-exempt bonds and $24
million outstanding under its Credit Facility. The Company's outstanding debt is
secured by substantially all of the Company's Owned Properties. At March 31,
1997 the weighted average interest rate on the Company's long-term secured tax-
exempt financing and secured notes payable was 8.0% with a weighted average
maturity of 11 years. The weighted average interest rate on the Company's
secured short-term financing was 7.7%.
CAPITAL EXPENDITURES
For the three months ended March 31, 1997, the Company spent $986,000 for
capital replacements and $973,000 for initial capital expenditures. In
addition, in the three months ended March 31, 1997, the Company spent $2.1
million in costs related to renovation of an Owned Property. These expenditures
were funded by borrowings under the Credit Facility, working capital reserves
and net cash provided by operating activities. The Company provides an
allowance for capital replacements of $300 per apartment unit per annum or
$1,533,000 for the quarter ended March 31, 1997. Therefore, a reserve for
unspent capital replacements of $547,000 was provided for the quarter ended
March 31, 1997. A reserve of $586,000 remained from the year ended December 31,
1996 bringing the total reserve to carry forward to future periods to
$1,133,000. The Company expects to incur initial capital expenditures and
capital enhancements of approximately $19 million during the year ended December
31, 1997. Initial capital expenditures and capital enhancements will be funded
by cash from operating activities and borrowings under the Credit Facility.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
CASH EARNED FOR SHAREHOLDERS AND FUNDS FROM OPERATIONS
The Company measures its economic profitability based on Funds From Operations
("FFO") less a minimum annual provision for capital replacements of $300 per
apartment unit, which the Company defines as Cash Earned For Shareholders
("CEFS"). FFO represents income before minority interest and gain on sale of
real estate based on generally accepted accounting principles plus real estate
depreciation and amortization of management company goodwill less any preferred
stock dividend payments. FFO computations conform to the National Association
of Real Estate Investment Trusts' ("NAREIT") definition, adjusted to add back
amortization of management company goodwill and deduct payment of dividends on
preferred stock.
FFO and CEFS do not represent cash generated from operating activities in
accordance with generally accepted accounting principles and therefore should
not be considered an alternative to net income as an indication of the Company's
performance or to net cash flows from operating activities as determined by
generally accepted accounting principles as a measure of liquidity and is not
necessarily indicative of cash available to fund future cash needs.
For the three months ended March 31, 1997 and 1996, FFO and CEFS were as follows
(amounts in thousands):
<TABLE>
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, 1997 MARCH 31, 1996
-------------- --------------
<S> <C> <C>
Income before gain on disposition of property
and minority interest in Operating Partnership $ 5,694 $ 3,304
Owned properties depreciation 6,581 4,470
Amortization of management company goodwill 237 114
------- -------
Funds From Operations (FFO) 12,512 7,888
Capital Replacements (1,533) (1,120)
------- -------
Cash Earned For Shareholders (CEFS) $10,979 $ 6,768
------- -------
------- -------
Weighted average common shares, common
share equivalents and OP Units outstanding 19,626 13,940
------- -------
------- -------
</TABLE>
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
CONTINGENCIES
Certain of the Company's Owned Properties are, and some of the Managed
Properties may be, located on or near properties that have contained underground
storage tanks or on which activities have occurred which could have released
hazardous substances into the soil or groundwater. There can be no assurances
that such hazardous substances have not been released or have not migrated, or
in the future will not be released or will not migrate onto the properties. In
addition, the Company's Montecito property in Austin, Texas, is located adjacent
to, and may be partially on, land that was used as a landfill. Low levels of
methane and other landfill gas have been detected at Montecito. The remediation
of the landfill gas is now substantially complete. The environmental
authorities have preliminarily approved the methane gas remediation efforts.
Final approval of the site and the remediation process is contingent upon the
results of continued methane gas monitors to confirm the effectiveness of the
remediation efforts. Should further actionable levels of methane gas be
detected, a proposed contingent plan of passive methane gas venting may be
implemented. The Company believes the costs of such further limited action, if
any, will not be material. Testing has also been conducted on Montecito to
determine whether, and to what extent, groundwater has been impacted. Test
reports have indicated that the groundwater is not contaminated at actionable
levels.
INFLATION
Substantially all of the leases at the Company's apartment properties are for a
period of six months or less, allowing, at the time of renewal, for adjustments
in the rental rate and the opportunity to re-lease the apartment unit at the
prevailing market rate. The short term nature of these leases generally serves
to minimize the risk to the Company of the adverse effect of inflation and the
Company does not believe that inflation has had a material adverse impact on its
revenues.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company held its annual meeting of stockholders on April 24, 1997. At the
meeting, the stockholders approved the four proposals set forth below:
1. Proposal to elect six directors, for a term of one year each, until the next
annual meeting of stockholders and until their successors are elected and
qualify:
Votes Votes
For Withheld
--- --------
Terry Considine 14,067,058 104,303
Richard S. Ellwood 14,067,058 104,303
Peter K. Kompaniez 14,067,058 104,303
J. Landis Martin 14,067,058 104,303
Thomas L. Rhodes 14,067,058 104,303
John D. Smith 14,067,058 104,303
2. Proposal to ratify the selection of Ernst & Young LLP, to serve as
independent auditors for the Company for the calendar year ending December 31,
1997:
Votes Votes Broker
For Against Abstentions Non Votes
--- ------- ----------- ---------
14,081,325 29,858 60,178 0
3. Proposal to approve the Apartment Investment and Management Company 1997
Stock Award and Incentive Plan:
Votes Votes Broker
For Against Abstentions Non Votes
--- ------- ----------- ---------
7,521,212 1,767,313 148,935 0
4. Proposal to approve and ratify (i) the Amended and Restated Apartment
Investment and Management Company Non-Qualified Stock Option Plan, and (ii) the
issuance and sale of 515,500 shares of AIMCO Class A Common Stock to certain of
the Company's executive officers:
Votes Votes Broker
For Against Abstentions Non Votes
--- ------- ----------- ---------
8,421,824 826,523 189,114 0
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PART II. OTHER INFORMATION (CONTINUED)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The following exhibits are filed with this report:
Exhibit
Number Description
- ------- -----------
2.1 Agreement and Plan of Merger, dated as of April 21, 1997, by and among
Apartment Investment and Management Company, AIMCO/NHP ACQUISITION
CORP. and NHP Incorporated (incorporated by reference from the
Company's report on Form 8-K, dated April 16, 1997, filed on April
24, 1997).
2.2 Stock Purchase Agreement, dated as of April 16, 1997, by and among
Apartment Investment and Management Company, Demeter Holdings
Corporation and Capricorn Investors, L.P. (incorporated by reference
from the Company's report on Form 8-K, dated April 16, 1997, filed
on April 24, 1997).
10.1 Credit Agreement, dated as of May 5, 1997, by and among AIMCO/NHP
Holdings, Inc., the lenders from time to time party thereto, Bank of
America National Trust and Savings Association, as one of the Lenders,
Smith Barney Mortgage Capital Group, Inc., as one of the Lenders, and
Bank of America National Trust and Savings Association, as Agent.
10.2 Promissory Note, dated as of May 5, 1997, by AIMCO/NHP Holdings, Inc.,
in favor of Smith Barney Mortgage Capital Group, Inc.
10.3 Promissory Note, dated as of May 5, 1997, by AIMCO/NHP Holdings, Inc.,
in favor of Bank of America National Trust and Savings Association.
10.4 Payment Guaranty, dated as of May 5, 1997, by the Company and AIMCO
Properties, L.P., in favor of Bank of America National Trust and
Savings Association, as the agent.
10.5 Pledge Agreement, dated as of May 5, 1997, by AIMCO Properties, L.P.
and Terry Considine and Peter K. Kompaniez and the Bank of America
National Trust and Savings Association, as Agent, for Bank of
America National Trust and Savings Association and Smith Barney
Mortgage Capital Group, Inc.
10.6 Amended and Restated Credit Agreement (Secured Revolver-to-Term
Facility), dated as of May 5, 1997, by and among AIMCO Properties,
L.P., the lenders from time to time party thereto, Bank of America
National Trust and Savings Association, as one of the Lenders and
as the Issuing Lender, and Bank of America National Trust and
Savings Association, as Agent.
10.7 Promissory Note, dated as of May 5, 1997, by AIMCO Properties, L.P.,
in favor of Bank of America National Trust and Savings Association.
2
<PAGE>
10.8 Payment Guaranty, dated as of May 5, 1997, by the Company, AIMCO-LP,
Inc., AIMCO-GP, Inc., AIMCO Holdings QRS, Inc., AIMCO Somerset, Inc.
and AIMCO/OTC QRS, Inc. in favor of Bank of America National Trust
and Savings Association, as the agent.
10.9 Amended and Restated Credit Agreement (Bridge Loan Facility), dated
as of May 5, 1997, by and among AIMCO Properties, L.P., the lenders
from time to time party thereto, Bank of America National Trust and
Savings Association, as one of the Lenders, and Bank of America
National Trust and Savings Association, as Agent.
10.10 Promissory Note, dated as of May 5, 1997, by AIMCO Properties, L.P.,
in favor of Bank of America National Trust and Savings Association.
27.1 Financial Data Schedule
(b) Reports on Form 8-K
During the quarter for which this report is filed, the
Company filed the following Reports on Form 8-K:
(1) Current Report on Form 8-K, dated December 19, 1996,
relating to sale of Chesapeake Apartments; acquisition of
Bay West Apartments and Dolphins Landing Apartments; borrowings
from NationsBank of Texas, N.A.; stock sales pursuant to the
Company's management stock acquisition plan; certain pro forma
financial information; and including the Historical Summary of
Gross Income and Direct Operating Expenses of Villa Ladera
Apartment for the year ended December 31, 1995.
(2) Current Report on Form 8-K, dated February 19, 1997,
relating to a letter agreement which involves the acquisition of
an interest in NHP Incorporated, interests in certain entities
managed by NHP Incorporated, a 50% interest in one joint venture
and a 25% interest in another joint venture with the Sellers, as
well as the merger of NHP Incorporated with the Company or one of
its subsidiaries.
3
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
REGISTRANT:
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
Date: May 14, 1997 /s/ Leeann Morein
-----------------
Leeann Morein
Senior Vice President and
Chief Financial Officer
(duly authorized officer and principal financial officer)
/s/ Patricia K. Heath
---------------------
Patricia K. Heath
Vice President and
Chief Accounting Officer
(principal accounting officer)
<PAGE>
CREDIT AGREEMENT
(ACQUISITION SUB FACILITY)
among
AIMCO/NHP Holdings, Inc.,
a Delaware corporation,
Bank of America National Trust and Savings Association,
as the Agent,
and
Bank of America National Trust and Savings Association
and
Smith Barney Mortgage Capital Group, Inc.
as the initial Lenders
May 5, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Defined Terms. . . . . . . . . . . . . . . . . . . . 1
1.02 Other Definitional Provisions. . . . . . . . . . . .15
1.03 Accounting Principles1 . . . . . . . . . . . . . . . 6
ARTICLE II THE FACILITY . . . . . . . . . . . . . . . . . . . . . . . . .16
2.01 Amounts and Terms of Commitments . . . . . . . . . .16
2.02 Note . . . . . . . . . . . . . . . . . . . . . . . .16
2.03 Procedures for Borrowings. . . . . . . . . . . . . .17
2.04 Conversion and Continuation Elections. . . . . . . .19
2.05 Optional Prepayments . . . . . . . . . . . . . . . .20
2.06 Mandatory Prepayments of Loans . . . . . . . . . . .20
2.07 Application of Proceeds. . . . . . . . . . . . . . .21
2.08 Repayment. . . . . . . . . . . . . . . . . . . . . .21
2.09 Interest . . . . . . . . . . . . . . . . . . . . . .21
2.10 Fees . . . . . . . . . . . . . . . . . . . . . . . .22
2.11 Computation of Fees and Interest . . . . . . . . . .22
2.12 Payments by the Company. . . . . . . . . . . . . . .23
2.13 Payments by the Lenders to the Agent . . . . . . . .23
2.14 Sharing of Payments, Etc.. . . . . . . . . . . . . .24
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY . . . . . . . . . . . .24
3.01 Taxes. . . . . . . . . . . . . . . . . . . . . . . .24
3.02 Illegality . . . . . . . . . . . . . . . . . . . . .27
3.03 Increased Costs and Reduction of Return. . . . . . .28
3.04 Funding Losses . . . . . . . . . . . . . . . . . . .28
3.05 Inability to Determine Rates . . . . . . . . . . . .29
3.06 Certificates of Lender . . . . . . . . . . . . . . .29
3.07 Survival . . . . . . . . . . . . . . . . . . . . . .29
1
<PAGE>
ARTICLE IV CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . .29
4.01 Conditions of First Loan . . . . . . . . . . . . . .29
4.02 Conditions to Each Loan, Continuation or Conversion.32
ARTICLE V REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . .32
5.01 Existence and Power. . . . . . . . . . . . . . . . .32
5.02 Authorization; No Conflict . . . . . . . . . . . . .33
5.03 Governmental Authorization . . . . . . . . . . . . .33
5.04 Binding Effect . . . . . . . . . . . . . . . . . . .33
5.05 Litigation . . . . . . . . . . . . . . . . . . . . .33
5.06 Subsidiaries; Interests in Other Entities. . . . . .34
5.07 Taxes. . . . . . . . . . . . . . . . . . . . . . . .34
5.08 Employees. . . . . . . . . . . . . . . . . . . . . .34
5.09 Collateral Documents . . . . . . . . . . . . . . . .34
5.10 Regulated Entities . . . . . . . . . . . . . . . . .34
5.11 Use of Proceeds. . . . . . . . . . . . . . . . . . .35
5.13 No Default . . . . . . . . . . . . . . . . . . . . .35
5.14 NHP. . . . . . . . . . . . . . . . . . . . . . . . .35
5.15 Full Disclosure. . . . . . . . . . . . . . . . . . .35
ARTICLE VI AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . .35
6.01 Financial Information. . . . . . . . . . . . . . . .36
6.02 Certificates; Other Information. . . . . . . . . . .36
6.03 Notices. . . . . . . . . . . . . . . . . . . . . . .36
6.04 Preservation of Existence, Etc.. . . . . . . . . . .37
6.06 Payment of Obligations . . . . . . . . . . . . . . .37
6.07 Compliance with Laws . . . . . . . . . . . . . . . .38
6.08 Use of Proceeds. . . . . . . . . . . . . . . . . . .38
6.09 Inspection of Property and Books and Records . . . .38
6.10 Further Assurances . . . . . . . . . . . . . . . . .38
6.11 Solvency . . . . . . . . . . . . . . . . . . . . . .39
ARTICLE VII NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . .39
7.01 Liens. . . . . . . . . . . . . . . . . . . . . . . .39
7.02 Indebtedness . . . . . . . . . . . . . . . . . . . .39
7.03 Contingent Obligations . . . . . . . . . . . . . . .40
7.04 Lease Obligations. . . . . . . . . . . . . . . . . .40
7.05 Disposition of Properties. . . . . . . . . . . . . .40
7.06 Consolidations and Mergers . . . . . . . . . . . . .40
7.07 Liquidations; Issuances of Stock . . . . . . . . . .41
2
<PAGE>
7.08 Changes in Business Investments. . . . . . . . . . .42
7.09 Restricted Payments. . . . . . . . . . . . . . . . .42
7.10 Transactions with Affiliates . . . . . . . . . . . .42
ARTICLE VIII EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . .42
8.01 Event of Default . . . . . . . . . . . . . . . . . .42
8.02 Remedies . . . . . . . . . . . . . . . . . . . . . .44
8.03 Rights Not Exclusive . . . . . . . . . . . . . . . .45
8.04 Certain Requirements in Order to Pursue
the Guaranty . . . . . . . . . . . . . . . . . . .45
ARTICLE IX THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . .45
9.01 Appointment and Authorization. . . . . . . . . . . .45
9.02 Delegation of Duties . . . . . . . . . . . . . . . .46
9.03 Liability of Agent . . . . . . . . . . . . . . . . .46
9.04 Reliance by Agent. . . . . . . . . . . . . . . . . .46
9.05 Notice of Default. . . . . . . . . . . . . . . . . .47
9.06 Credit Decision. . . . . . . . . . . . . . . . . . .47
9.07 Indemnification. . . . . . . . . . . . . . . . . . .48
9.08 Agent in Individual Capacity . . . . . . . . . . . .48
9.09 Successor Agents . . . . . . . . . . . . . . . . . .49
9.10 Collateral Matters . . . . . . . . . . . . . . . . .49
ARTICLE X MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . .49
10.01 Amendments and Waivers . . . . . . . . . . . . . . .49
10.02 Notices. . . . . . . . . . . . . . . . . . . . . . .50
10.03 No Waiver; Cumulative Remedies . . . . . . . . . . .51
10.04 Costs and Expenses . . . . . . . . . . . . . . . . .51
10.05 Indemnity. . . . . . . . . . . . . . . . . . . . . .52
10.06 Marshalling; Payments Set Aside. . . . . . . . . . .52
10.07 Successors and Assigns . . . . . . . . . . . . . . .52
10.08 Assignments, Participations, etc.. . . . . . . . . .52
10.09 Setoff . . . . . . . . . . . . . . . . . . . . . . .54
10.10 Notification of Addresses, Lending Offices, etc. . .55
10.11 Counterparts . . . . . . . . . . . . . . . . . . . .55
10.12 Severability . . . . . . . . . . . . . . . . . . . .55
10.13 No Third Parties Benefited . . . . . . . . . . . . .55
10.14 Time . . . . . . . . . . . . . . . . . . . . . . . .55
10.15 Governing Law. . . . . . . . . . . . . . . . . . . .55
10.16 Waiver of Jury Trial . . . . . . . . . . . . . . . .55
10.17 Arbitration. . . . . . . . . . . . . . . . . . . . .56
10.18 Notice of Claims; Claims Bar . . . . . . . . . . . .56
10.19 Entire Agreement . . . . . . . . . . . . . . . . . .57
3
<PAGE>
10.20 Interpretation . . . . . . . . . . . . . . . . . . .57
10.21 Relationship . . . . . . . . . . . . . . . . . . . .57
10.22 Consent to Jurisdiction and Service of Process . . .57
4
<PAGE>
CREDIT AGREEMENT
(Acquisition Sub Facility)
This CREDIT AGREEMENT is entered into as of May 5, 1997, AIMCO/NHP
HOLDINGS, INC., a Delaware corporation (the "Company"), the lenders from time to
time party to this Agreement (the "Lenders"), BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION ("BofA"), as one of the Lenders, SMITH BARNEY MORTGAGE
CAPITAL GROUP, INC., as one of the Lenders, and BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent (the "Agent").
IN CONSIDERATION OF the mutual agreements, provisions and covenants
contained herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01 DEFINED TERMS. Capitalized terms used but not defined herein
shall have the meanings set forth in the Operating Partnership Credit Agreement.
In addition to the terms defined elsewhere in this Agreement, the following
terms have the following meanings:
"AFFILIATE" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Without
limitation, any director, executive officer or beneficial owner of five percent
(5%) or more of the equity of a Person shall, for the purposes of this
Agreement, be deemed to control the other Person. In no event shall any Lender
be deemed an "Affiliate" of the Company.
"AGENT" means Bank of America National Trust and Savings Association,
in its capacity as Agent, and any successor Agent appointed hereunder.
"AGENT-RELATED PERSONS" has the meaning specified in Section 9.03.
"AGGREGATE COMMITMENT" means the combined Commitments of the Lenders,
in the amount of up to $76,000,000.
"AGREEMENT" means this Credit Agreement, as amended, supplemented or
modified from time to time.
"AIMCO GROSS ASSET VALUE" shall have the meaning set forth in the REIT
Guaranty Documents.
"APPLICABLE LIBOR MARGIN", with respect to LIBOR Loans, shall mean
2.50%.
"APPLICABLE MARGIN" means
1
<PAGE>
(a) with respect to Base Rate Loans, 1.0%; and
(b) with respect to LIBOR Loans, the Applicable LIBOR Margin.
"ASSIGNEE" has the meaning specified in Section 10.08(a).
"ASSIGNMENT AND ACCEPTANCE" has the meaning specified in Section
10.08(a).
"ATTORNEY COSTS" means and includes all reasonable fees and
disbursements of any law firm or other external counsel, the allocated cost of
internal legal services and all disbursements of internal counsel.
"BANKRUPTCY CODE" means the Federal Bankruptcy Reform Act of 1978 (12
U.S.C. Section 101, ET. SEQ.), as amended from time to time.
"BASE RATE" means the higher of:
(a) the annual rate of interest publicly announced from time to
time by the Reference Lender as its "reference" rate. The "reference" rate is a
rate set based upon various factors including the Reference Lender's costs and
desired return, general economic conditions, and other factors, and is used as
reference points for pricing some loans. Any change in the Base Rate shall take
effect on the day specified in the public announcement of such change; or
(b) one-half of one percent (0.5%) per annum above the latest
Federal Funds Rate.
"BASE RATE LOAN" means a Loan that bears interest based on the Base
Rate.
"BOFA" means Bank of America National Trust and Savings Association,
other than in its capacity as the Agent hereunder.
"BORROWING NOTICE" means a notice given by the Company to the Agent
pursuant to Section 2.03, in substantially the form of EXHIBIT A.
"BRIDGE LOAN AGREEMENT" means that certain Amended and Restated Credit
Agreement (Bridge Loan Facility) dated as of May 5, 1997, by and among the
Operating Partnership, BofA as the agent and the lenders party thereto which
provides, inter alia, that the lenders party thereto will make available to the
Operating Partnership a credit facility in the amount of up to Twenty-Five
Million Dollars ($25,000,000.00), as the same may be amended, supplemented, or
modified from time to time.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other
day on which commercial lenders are authorized or required by law to close in
New York City or the city in which the Agent's office charged with
administration of the Loans is located; except in cases in which it relates to
any LIBOR Loan, in which cases "Business Day" means such a day on which dealings
are carried on in the London dollar interbank market.
"CAPITAL ADEQUACY REGULATION" means any guideline, request or
directive of any central lender or other Governmental Authority having
jurisdiction, or any other law, rule or regulation, whether or not having the
force of law, regarding capital adequacy of any Lender or of any corporation
controlling a Lender.
"CAPITAL LEASE" means any leasing or similar arrangement which, in
accordance with GAAP, is classified as a capital lease.
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"CAPITAL LEASE OBLIGATIONS" means, with respect to any Person, the
amount at which such Person's obligations under Capital Leases are required to
be carried on the balance sheet of such Person in accordance with GAAP.
"CASH EQUIVALENTS" means:
(a) securities issued or fully guaranteed or insured by the United
States Government or any agency thereof and backed by the full faith and credit
of the United States having maturities of not more than six months from the date
of acquisition;
(b) certificates of deposit, time deposits, demand deposits,
eurodollar time deposits, repurchase agreements, reverse repurchase agreements,
or bankers' acceptances, having in each case a tenor of not more than three (3)
months, issued by the Agent, or by any U.S. commercial bank (or any branch or
agency of a non-U.S. bank licensed to conduct business in the U.S.) having
combined capital and surplus of not less than $100,000,000 whose short-term
securities are rated at least A-1 by S&P and P-1 by Moody's; PROVIDED, HOWEVER,
such Investments may not be made in amounts with any bank that is owed
Indebtedness in excess of $50,000 by the Company or in excess of $1,000,000, the
REIT, the Operating Partnership or any Subsidiary (other than the Obligations)
unless such bank waives in writing (in form and substance satisfactory to the
Requisite Lenders) its right to set-off such Investment against such
Indebtedness;
(c) demand deposits on deposit in accounts maintained at commercial
lenders having membership in the FDIC and in amounts not exceeding the maximum
amounts of insurance thereunder; and
(d) commercial paper of an issuer rated at least A-1 by S&P or P-1 by
Moody's and in either case having a tenor of not more than three (3) months.
"CLOSING DATE" means the date on which all conditions precedent set
forth in Section 4.01 are satisfied or waived by all Lenders; said date shall
occur no later than the earlier of (i) May 7, 1997 or (ii) the "Closing Date"
under (and as such term is defined in) the Operating Partnership Credit
Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and any regulations promulgated thereunder.
"COLLATERAL" means all property interests, now owned or hereafter
acquired, in or upon which a Lien now or hereafter exists in favor of the Agent
on behalf of the Lenders hereunder or under the Collateral Documents.
"COLLATERAL DOCUMENTS" means, collectively, (a) the Stock Pledge
Agreements and all security agreements, and other similar agreements executed by
the REIT and the Common Stockholders in favor of the Lenders or the Agent for
the benefit of the Lenders as security for the REIT Guaranty Documents now or
hereafter delivered to the Lenders or the Agent pursuant to or in connection
with the transactions contemplated hereby, (b) all financing statements (or
comparable documents) now or hereafter filed in accordance with the UCC (or
comparable law) relating thereto, (c) any other documents executed in order to
establish, perfect or protect any of the liens or security interests granted in
any of the foregoing, and (d) any amendments, supplements, modifications,
renewals, replacements, consolidations, substitutions and extensions of any of
the foregoing.
"COMMITMENT", with respect to each Lender, shall mean that Lender's
Commitment as specified in SCHEDULE 1.01.
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"COMMITMENT EXPIRATION DATE" means (i) the date on which the
Commitments of the Lenders hereunder have been terminated in accordance with the
terms set forth herein; (ii) the date on which each Lender has funded the entire
amount of its Commitment, (iii) the date on which the Company shall have
acquired all of the NHP Stock pursuant to the NHP Stock Purchase Agreement;
(iv) any date on which the NHP Stock Purchase Agreement is terminated; or
(v) October 1, 1997.
"COMMITMENT PERCENTAGE" means, as to any Lender, the percentage
equivalent of such Lender's Commitment divided by the Aggregate Commitment.
"COMMON STOCKHOLDERS" means Terry Considine and Peter K. Kompaniez.
"CONTINGENT OBLIGATION" means, as to any Person, (a) any Guaranty
Obligation of that Person, and (b) any direct or indirect obligation or
liability, contingent or otherwise, of that Person, (i) in respect of any letter
of credit or similar instrument issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings, (ii) as a
partner or joint venturer in any partnership or joint venture, (iii) to purchase
any materials, supplies or other Property from, or to obtain the services of,
another Person if the relevant contract or other related document or obligation
requires that payment for such materials, supplies or other Property, or for
such services, shall be made regardless of whether delivery of such materials,
supplies or other Property is ever made or tendered, or such services are ever
performed or tendered, or (iv) incurred pursuant to any Rate Contract. The
amount of any Contingent Obligation shall (subject, in the case of Guaranty
Obligations, to the last sentence of the definition of "Guaranty Obligation") be
deemed equal to the maximum reasonably anticipated liability in respect thereof.
"CONTRACTUAL OBLIGATION" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
mortgage, deed of trust, indenture, or other instrument, document or agreement
to which such Person is a party or by which it or any of its Property is bound.
"DEFAULT" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise remedied)
constitute an Event of Default.
"DISPOSITION" means the sale, lease, conveyance, transfer or other
disposition of (whether in one or a series of transactions) any Property,
including accounts and notes receivable (with or without recourse) and
sale-leaseback transactions, but otherwise excluding Permitted Liens.
"DOLLARS", "DOLLARS" and "$" each mean lawful money of the United
States.
"DOMESTIC LENDING OFFICE" means, with respect to each Lender, the
office of that Lender designated as such on the signature pages hereto or such
other office of a Lender as it may from time to time specify in writing to the
Company and the Agent.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $100,000,000, (b) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having a combined capital and surplus of at least $100,000,000,
provided that such commercial bank is acting through a branch or agency located
in the country in which it is organized or another country which is also a
member of the OECD, and (c) any Lender Affiliate.
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"EVENT OF DEFAULT" means any of the events or circumstances specified
in Section 8.01.
"EXCHANGE ACT" means the Securities and Exchange Act of 1934, and
regulations promulgated thereunder.
"EXCLUDED PROCEEDS" shall have the meaning set forth in the Guaranty.
"FEDERAL FUNDS RATE" means, for any period, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)". If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotation") for such day under the caption "Federal Funds Effective Rate". If
on any relevant day the appropriate rate for such previous day is not yet
published in either H.15(519) or the Composite 3:30 p.m. Quotations, the rate
for such day will be the arithmetic mean of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York time) on that
day by each of three (3) leading brokers of Federal funds transactions in New
York City selected by the Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System or any successor thereof.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the accounting profession), or in such
other statements by such other entity as may be in general use by significant
segments of the U.S. accounting profession, which are applicable to the
circumstances as of the date of determination.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"GP CORP" means AIMCO-GP, Inc., a Delaware corporation.
"GUARANTOR EVENT OF DEFAULT" means an "Event of Default" (as such term
is defined in the REIT Guaranty Documents).
"GUARANTY OBLIGATION" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary obligation") of
another Person (the "primary obligor"), including any obligation of that Person,
whether or not contingent, (a) to purchase, repurchase or otherwise acquire such
primary obligations or any Property constituting direct or indirect security
therefor, or (b) to advance or provide funds (i) for the payment or discharge of
any such primary obligation, or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
the primary obligor, or (c) to purchase securities, other Properties or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation,
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or (d) otherwise to assure or hold harmless the holder of any such primary
obligation against loss in respect thereof. The amount of any Guaranty
Obligation shall be deemed equal to the stated or determinable amount of the
primary obligation in respect of which such Guaranty Obligation is made or, if
not stated or if indeterminable, the maximum reasonably anticipated liability in
respect thereof.
"INDEBTEDNESS" of any Person means without duplication, (a) all
indebtedness for borrowed money, (b) all obligations issued, undertaken or
assumed as the deferred purchase price of Property or services, (c) all
reimbursement obligations with respect to surety bonds, letters of credit,
bankers' acceptances and similar instruments (in each case, to the extent
material or non-contingent), (d) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred
in connection with the acquisition of Properties, (e) all indebtedness created
or arising under any conditional sale or other title retention agreement, or
incurred as financing, in either case with respect to Properties acquired by the
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
properties), (f) all Capital Lease Obligations, (g) all net obligations with
respect to Rate Contracts, (h) all obligations to purchase, redeem, or acquire
any Stock of such Person or its Affiliates that, by its terms or by the terms of
any security into which it is convertible or exchangeable, is, or upon the
happening of any event or the passage of time would be, required to be redeemed
or repurchased by such Person or its Affiliates, including at the option of the
holder, in whole or in part, or has, or upon the happening of an event or
passage of time would have, a redemption or similar payment due, before June 30,
2001, (i) all indebtedness referred to in clauses (a) through (h) above secured
by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in Properties
(including accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness,
and (j) all Guaranty Obligations in respect of indebtedness or obligations of
others of the kinds referred to in clauses (a) through (h) above.
"INDEMNIFIED LIABILITIES" has the meaning specified in Section 10.05.
"INDEMNIFIED PERSON" has the meaning specified in Section 10.05.
"INITIAL LOAN" shall mean the Loans made by all Lenders on the Closing
Date in the aggregate amount of $72,600,000.00.
"INSOLVENCY PROCEEDING" means (a) any case, action or proceeding
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors; in each case as undertaken under U.S. Federal, State or foreign
law.
"INTEREST PAYMENT DATE" means each of July 3, 1997 and October 3,
1997.
"INTEREST PERIOD" means, with respect to any LIBOR Loan, the period
commencing on the Business Day on which the Loan is disbursed or on the Pricing
Conversion Date on which the Loan is continued as or converted to the LIBO Rate
and ending on the date one (1), two (2) or three (3) months thereafter, as
selected by the Company in its Borrowing Notice or Notice of
Conversion/Continuation; PROVIDED that:
(a) if any Interest Period would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such Interest
Period into another
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calendar month, in which event such Interest Period shall end on the immediately
preceding Business Day;
(b) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period; and
(c) no Interest Period for any Loan shall extend beyond the Maturity
Date.
"INTRA-COMPANY DEBT" means Indebtedness (whether book-entry or
evidenced by a term, demand or other note or other instrument) owed by the
Operating Partnership, the REIT or any of their respective Subsidiaries to any
Subsidiary, and incurred or assumed for the purpose of capitalizing a Subsidiary
of the REIT or the Operating Partnership. As of the date hereof, Intra-Company
Debt includes the Indebtedness listed in SCHEDULE 1.01C attached to the
Operating Partnership Credit Agreement and Indebtedness of the Subsidiaries
under the promissory notes of Subsidiaries assigned to the Operating Partnership
and described on SCHEDULE 7.02 attached to the Operating Partnership Credit
Agreement.
"INVESTMENT" means (a) any purchase or acquisition of any capital
stock, equity interest, asset, obligation or other security of or any interest
in, any Person, (b) any advance, loan, extension of credit or capital
contribution to any Person, (c) any purchase, lease, or other acquisition of
Property for investment purposes or for the purpose of resale or leasing to
another Person, and (d) any contingent or other agreement to do any of the
foregoing.
"IRS" means the Internal Revenue Service or any agency successor
thereto.
"KNOWLEDGE OF THE COMPANY" means the actual knowledge (after
reasonable inquiry) of any of the officers of the Company, the Operating
Partnership or the REIT and each other Person with executive responsibility for
any aspect of the Company's, the Operating Partnership's or the REIT's business.
"LENDER" means each of the lenders party to this Agreement, and
includes BofA in its individual capacity.
"LENDER AFFILIATE" means a Person that is engaged primarily in the
business of commercial lending and is a Subsidiary of a Lender or of a Person of
which a Lender is a Subsidiary.
"LENDING OFFICE" means, with respect to any Lender, the office or
offices of the Lender specified as its "Lending Office" opposite its name on the
signature pages hereto, or such other office or offices of the Lender as it may
from time to time specify in writing to the Company and the Agent.
"LIBO RATE" means, for each Interest Period for any LIBOR Loan, an
interest rate per annum (rounded upward to the nearest 1/100th of 1%) determined
pursuant to the following formula:
LIBO Rate = LIBOR
-------------------------
---
1.00 - Reserve Percentage
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Where,
(i) "LIBOR" means the per annum rate of interest, rounded
upward, if necessary, to the nearest 1/16th of one percent (0.0625%), at which
the Reference Lender's London branch, London, England, would offer U.S. dollar
deposits in amounts and for periods comparable to those of the applicable LIBOR
Loan and Interest Period to major banks in the London U.S. dollar inter-bank
market at approximately 11:00 a.m., London time, on the first Business Day after
the Borrowing Notice or Notice of Conversion/Continuation for such LIBOR Loan is
delivered to the Agent; and
(ii) "RESERVE PERCENTAGE" means the total of the maximum reserve
percentages from time to time for determining the reserves to be maintained by
member banks of the Federal Reserve System for Eurocurrency Liabilities, as
defined in Federal Reserve Board Regulation D, whether or not applicable to any
Lender. The Reserve Percentage shall be expressed in decimal form and rounded
upward, if necessary, to the nearest 1/100th of one percent, and shall include
marginal, emergency, supplemental, special and other reserve percentages.
"LIBOR LOAN" means a Loan that bears interest based on the LIBO Rate.
"LIEN" means any mortgage, deed of trust, security agreement, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preference, priority or other security interest or
preferential arrangement of any kind or nature whatsoever (including those
created by, arising under or evidenced by any conditional sale or other title
retention agreement, the interest of a lessor under a Capital Lease, any
financing lease having substantially the same economic effect as any of the
foregoing, or the filing of any financing statement naming the owner of the
asset to which such lien relates as debtor, under the UCC or any comparable law)
and any contingent or other agreement to provide any of the foregoing.
"LOAN" has the meaning specified in Section 2.01(a).
"LOAN DOCUMENTS" means this Agreement, the Note, the Collateral
Documents, the REIT Guaranty Documents, and all other documents delivered to the
Agent or the Lenders in connection therewith.
"MANAGEMENT ENTITY" shall mean each of the following Persons and any
successor thereto which conducts the management business described in the SEC
Report, as well as any Subsidiary of the Operating Partnership or the REIT which
is engaged in the business of managing multi-family apartment projects or other
real estate projects: Property Asset Management Services, L.P., a Delaware
limited partnership, Property Asset Management Services, Inc., a Delaware
corporation, Property Asset Management Services-CA, LLC, a California limited
liability company; each of the "Service LLC's" referred to in the SEC Report;
and any Subsidiary formed to conduct the management business currently conducted
by NHP.
"MATERIAL ADVERSE EFFECT" means either: (a) in the case of the
Company, a material adverse change in, or a material adverse effect upon, any of
(i) the assets, operations, business, condition (financial or otherwise), or
prospects of the Company, or (ii) the ability of the Company to perform under
any Loan Document and avoid any Event of Default (other than, in either such
case, resulting from the sale or pledge of the NHP Stock or any change in the
market value thereof); (b) in the case of the Operating Partnership, the REIT
and their
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respective Subsidiaries, a material adverse change in, or a material adverse
effect upon, any of (i) the assets, operations, business, condition (financial
or otherwise), or prospects of the Operating Partnership, the REIT and their
respective Subsidiaries, taken as a whole, (ii) the ability of the Operating
Partnership, the REIT and their respective Subsidiaries party thereto to perform
under any Loan Document and avoid any Event of Default, or (iii) the ability of
the Operating Partnership, the REIT and their respective Subsidiaries party
thereto to perform under the REIT Guaranty Documents; or (c) a material adverse
effect upon the ability to consummate the transactions under the NHP Merger
Agreement.
"MATURITY DATE" shall mean the Scheduled Maturity Date, subject to
earlier acceleration as provided herein.
"MAXIMUM DISBURSEMENT AMOUNT" shall mean, in relation to any requested
Subsequent Loan, an amount (rounded down to the nearest $100,000 in the case of
the first Subsequent Loan, and rounded up to the nearest $100,000 in the case of
the second Subsequent Loan) equal to the lesser of (i) 55.8824% of the purchase
price (at not more than $20.00 per share) payable under the NHP Stock Purchase
Agreement for the shares of NHP Stock proposed to be acquired in part with the
proceeds of such Subsequent Loan, (ii) the cash portion proposed to be paid by
the Company of the purchase price for such shares of NHP Stock payable pursuant
to the NHP Stock Purchase Agreement (the amount of which cash portion shall be
calculated based upon a valuation of the portion of the purchase price payable
for such shares of NHP Stock in the form of Stock of the REIT at the greater of
$26.75 per share or the fair market value thereof, as determined in good faith
by the Company, at the time of such payment) and (iii) the remaining unfunded
Aggregate Commitment of the Lenders.
"MERGER SUB" means AIMCO/NHP Acquisition Corp., a Delaware
corporation.
"MOODY'S" shall mean Moody's Investors Service, a Delaware
corporation, and its successors and assigns.
"NET ISSUANCE PROCEEDS" shall have the meaning set forth in the REIT
Guaranty Documents.
"NET SALE PROCEEDS" shall have the meaning set forth in the REIT
Guaranty Documents.
"NHP" means NHP, Incorporated, a Delaware corporation.
"NHP COMBINATION DATE" means the date on which the Company, the REIT,
any of their Subsidiaries shall have acquired one hundred percent (100%) of the
common stock of NHP or shall have consummated a merger with NHP, whichever is
the earlier.
"NHP MERGER AGREEMENT" means that certain Agreement and Plan of
Merger, dated April 21, 1997, entered into among the REIT, the Merger Sub and
NHP.
"NHP STOCK" means the shares of stock in NHP owned by the Company from
time to time.
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"NHP STOCK PURCHASE AGREEMENT" means that certain Stock Purchase
Agreement dated as of April 16, 1997, among the REIT and the NHP Shareholders.
"NHP-RELATED REAL ESTATE ACQUISITION AGREEMENT" means the Real Estate
Acquisition Agreement to be entered into among the NHP Shareholders and Phemus
Corporation, as the sellers, the Operating Partnership and the REIT.
"NHP REVOLVING CREDIT AGREEMENT" means that certain Revolving Credit
Agreement, dated as of August 18, 1995, among NHP and its subsidiaries, The
First National Bank of Boston, as Lead Agent, and Fleet Bank of Massachusetts,
National Association, and Morgan Guaranty Trust Company of New York, as
Co-Agents, as amended by that certain First Amendment thereto, dated as of
November 10, 1995, that certain Consent and Amendment Agreement, dated as of
March 27, 1996, and that certain Amendment No. 2 thereto, dated as of February
11, 1997.
"NHP SHAREHOLDERS" means Demeter Holdings Corporation and Capricorn
Investors, L.P.
"NOTE" means a promissory note of the Company payable to the order of
a Lender in substantially the form of EXHIBIT B, evidencing the aggregate
indebtedness of the Company to such Lender resulting from Loans made by such
Lender.
"NOTICE OF CONVERSION/CONTINUATION" means a notice given by the
Company to the Agent pursuant to Section 2.04, in substantially the form of
EXHIBIT C.
"NOTICE OF LIEN" means any "notice of lien" or similar document
intended to be filed or recorded with any court, registry, recorder's office,
central filing office or other Governmental Authority for the purpose of
evidencing, creating, perfecting or preserving the priority of a Lien securing
obligations owing to a Governmental Authority.
"OBLIGATIONS" means all Loans, and other Indebtedness, advances,
debts, liabilities, obligations, covenants and duties owed by the Company, the
REIT, the Operating Partnership or any of their respective Subsidiaries to the
Agent, any Lender, or any other Person required to be indemnified under any Loan
Document, of any kind or nature, present or future, whether or not evidenced by
any note, guaranty or other instrument, arising under this Agreement or under
any other Loan Document, whether or not for the payment of money, whether
arising by reason of an extension of credit, loan, guaranty, indemnification or
in any other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired.
"OPERATING PARTNERSHIP" means AIMCO Properties, L.P., a Delaware
limited partnership
"OPERATING PARTNERSHIP CREDIT AGREEMENT" means that certain Amended
and Restated Credit Agreement (Secured Revolver-to-Term Facility) dated as of
May 5, 1997, by and among the Operating Partnership, BofA as the agent and a
lender and the other lenders named therein, as the same may be amended,
supplemented, or modified from time to time.
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"ORDINARY COURSE OF BUSINESS" means, in respect of any transaction
involving a Person, the ordinary course of such Person's business, substantially
as intended to be conducted by any such Person as of the Closing Date (which, in
the case of the REIT, shall be as reflected in the SEC Report), and undertaken
by such Person in good faith and not for purposes of evading any covenant or
restriction in any Contractual Obligation of such Person.
"ORGANIZATIONAL DOCUMENTS" means: (a) for any corporation, the
certificate or articles of incorporation, the bylaws, any supplementary
articles, certificate of determination or instrument relating to the rights of
preferred shareholders, and all duly adopted resolutions of the board of
directors (or any committee thereof) of such corporation; (b) for any
partnership, the partnership agreement, the certificate and/or statement of
partnership and all duly adopted authorizations of the partners thereof; (c) for
any limited liability company, the articles of organization and operating
agreement therefor and duly adopted authorizations or resolutions of the members
thereof; and (d) for any trust, the declaration or agreement of trust.
"OTHER TAXES" has the meaning specified in Section 3.01(b).
"OUTSTANDING AMOUNT" means the aggregate principal amount of all
outstanding Loans from time to time.
"PARTICIPANT" has the meaning specified in Section 10.08(d).
"PAYMENT OFFICE" means the address for payments set forth on the
signature page hereto in relation to the Agent or such other address as the
Agent may from time to time specify in accordance with Section 10.02.
"PERSON" means an individual, partnership, corporation, business
trust, joint stock company, trust, limited liability company, unincorporated
association, joint venture or governmental authority.
"PROPERTY" means any estate or interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or intangible.
"REFERENCE LENDER" means BofA.
"REIT" means Apartment Investment and Management Company, a Maryland
corporation.
"REIT GUARANTY DOCUMENTS" shall mean a guaranty of the Obligations, in
the form of EXHIBIT D attached hereto, and such other documents relating to such
guaranty as the Agent may require, duly executed by the REIT and the Operating
Partnership and together with all Collateral Documents.
"REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its Property or to which the Person or any of its Property is subject.
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"REQUISITE LENDERS" means, as of any date of determination, (a) if
there is only one Lender hereunder having a minimum Commitment of $5,000,000,
that Lender, and (b) if there are two (2) or more Lenders hereunder each having
a minimum Commitment of $5,000,000, then two (2) or more Lenders (for purposes
of counting Lenders, BofA and all affiliates of BofA collectively count as one
Lender, and in order to qualify as one of the two (2) necessary Lenders, a
Lender must hold a minimum Commitment of $5,000,000), holding at least sixty-six
and two-thirds percent (66-2/3%) of the outstanding balance of the Loans, or, if
there are no Loans outstanding, having at least sixty-six and two-thirds percent
(66-2/3%) of the Aggregate Commitment.
"RESPONSIBLE OFFICER" means, in relation to the REIT, the Chief
Executive Officer or the Vice Chairman of the REIT, and, in relation to the
Operating Partnership, the Chief Executive Officer or any Vice President of the
general partner of the Operating Partnership, in its capacity as the general
partner of the Company, and/or any other officer of the REIT or the general
partner of the Operating Partnership having substantially the same authority and
responsibility, or, with respect to financial matters, the Chief Financial
Officer or the Treasurer of the REIT or the general partner, respectively, or
any other officer having substantially the same authority and responsibility;
and in relation to the Company means the president, vice president, treasurer or
chief financial officer.
"S&P" shall mean Standard & Poor's Ratings Group and its successors
and assigns.
"SBI" shall mean Smith Barney Mortgage Capital Group, Inc.
"SCHEDULED MATURITY DATE" means the earlier of: (a) six months after
the Closing Date or (b) ten (10) days after the NHP Combination Date.
"SEC" means the Securities and Exchange Commission, or any successor
thereto.
"SEC REPORT" means the Annual Report of the REIT on Form 10-K filed
with the SEC for the year ending December 31, 1996.
"SOLVENT" means, as to any Person at any time, that (a) the fair value
of the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code and, in the alternative, for purposes of the
Uniform Fraudulent Transfer Act; (b) the present fair saleable value of the
Property of such Person is not less than the amount that will be required to pay
the probable liability of such Person on its debts as they become absolute and
matured; (c) such Person is able to realize upon its Property and pay its debts
and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (d) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"STOCK" means all shares, options, warrants, interests, participations
or other equivalents (regardless of how designated) of or in a corporation or
equivalent entity, whether voting or nonvoting, including common stock,
preferred stock, perpetual preferred stock or
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any other "equity security" (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the SEC under the Exchange Act).
"STOCK PLEDGE AGREEMENT" means a stock pledge agreement in
substantially the form of EXHIBIT E, duly executed and delivered by the REIT and
the Common Stockholders and pledging their interests in the Company as security
for the REIT Guaranty Documents.
"SUBSIDIARY" of a Person means any corporation, association,
partnership, joint venture, trust or other business entity of which more than
fifty percent (50%) of the Stock or other equity or beneficial interests (in the
case of Persons other than corporations) is owned or controlled directly or
indirectly by the Person, or one or more of the Subsidiaries of the Person, or a
combination thereof (regardless of whether such Stock or other interests are
entitled to voting rights).
"SUBSEQUENT LOAN" means any Loan made subsequent to the Initial Loans.
"TAXES" has the meaning specified in Section 3.01(a).
"UCC" means the Uniform Commercial Code as in effect in any relevant
jurisdiction.
"UNITED STATES" and "U.S." each mean the United States of America.
"UNITS" shall mean the units of limited partnership interest in the
Operating Partnership issued and outstanding from time to time.
1.02 OTHER DEFINITIONAL PROVISIONS
(a) DEFINED TERMS. Unless otherwise specified herein or therein, all
terms defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto. The meaning of
defined terms shall be equally applicable to the singular and plural forms of
the defined terms. Terms (including uncapitalized terms) not otherwise defined
herein but defined in the UCC shall have the meanings set forth therein.
(b) THE AGREEMENT. The words "hereof", "herein", "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement; and
section, schedule and exhibit references are to this Agreement unless otherwise
specified.
(c) CERTAIN COMMON TERMS.
(i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
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(iii) The term "ratably" means, at any time that Loans may be
outstanding, in accordance with the amount of the outstanding Loans of the
respective Lenders; and, at any time that no Loans are outstanding, in
accordance with the outstanding Commitments of the respective Lenders.
(d) PERFORMANCE; TIME. Whenever any performance obligation hereunder
(other than a payment obligation) is stated to be due or required to be
satisfied on a day other than a Business Day, such performance shall be made or
satisfied on the next succeeding Business Day. In the computation of periods of
time from a specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to but excluding,"
and the word "through" means "to and including". If any provision of this
Agreement refers to any action taken or to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be interpreted to
encompass any and all means, direct or indirect, of taking, or not taking, such
action.
(e) CONTRACTS. Unless otherwise expressly provided herein,
references to agreements and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications thereto, but only to
the extent such amendments and other modifications are not prohibited by the
terms of any Loan Document.
(f) LAWS. References to any statute or regulation are to be
construed as including all statutory and regulatory provisions consolidating,
amending or replacing the statute or regulation.
(g) CAPTIONS. The captions and headings of this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.
(h) INDEPENDENCE OF PROVISIONS. The parties acknowledge that this
Agreement and other Loan Documents may use several different limitations, tests
or measurements to regulate the same or similar matters, and that such
limitations, tests and measurements are cumulative and must each be performed,
except as expressly stated to the contrary in this Agreement.
1.03 ACCOUNTING PRINCIPLES
(a) GAAP. Unless the context otherwise clearly requires, all
accounting terms not expressly defined herein shall be construed, and all
financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
(b) FISCAL YEAR; QUARTER. References herein to "fiscal year" and
"fiscal quarter" refer to such fiscal periods of the Company.
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ARTICLE II
THE FACILITY
2.01 AMOUNTS AND TERMS OF COMMITMENTS
(a) THE LOANS. Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make loans to the Company (each such loan,
a "Loan") from time to time on any Business Day during the period from the
Closing Date to the Commitment Expiration Date, in an aggregate amount not to
exceed at any time the amount set forth opposite such Lender's name in SCHEDULE
2.01 (such amount as the same may be reduced or increased as a result of one or
more assignments pursuant to Section 10.08, such Lender's "Commitment").
(b) USAGE. The Company shall use the proceeds of the Loans to pay
the cash portion of the acquisition price for the NHP Stock payable under the
NHP Stock Purchase Agreement and for no other purpose.
2.02 NOTE. The Loan made by each Lender shall be evidenced by a Note
dated the Closing Date payable to the order of that Lender in an amount equal to
its Commitment.
2.03 PROCEDURES FOR BORROWINGS
(a) INITIAL LOANS.
(i) BORROWING NOTICE. The Initial Loans shall be made upon the
irrevocable written notice (including notice via facsimile confirmed immediately
by a telephone call) of the Company in the form of a Borrowing Notice delivered
to each Lender, subject to the following:
(A) DESIGNATION OF INTEREST RATE. The Initial Loans shall
be made as Base Rate Loans. On the Closing Date the Company shall deliver to
the Agent a Notice of Conversion/Continuation requesting the conversion of the
entire amount of such Loans to a LIBOR Loan as of a date no later than the
fourth (4th) Business Day after the date such Loan is disbursed.
(B) TIMING OF NOTICE. The Borrowing Notice for the Initial
Loans shall be submitted to and received by each Lender prior to 12:00 noon
(California time) on the specified borrowing date.
(ii) FUNDING OF COMMITMENT. Each Lender shall directly fund in
accordance with the Company's written instructions its Commitment Percentage of
the Initial Loans described in the initial Borrowing Notice on the borrowing
date specified therein by wire transfer of immediately available funds. The
Agent is not responsible for the receipt of funds transferred by SBI, and is
authorized to assume that SBI has funded on the same date as BofA funds an
amount equal to the funds advanced by BofA.
(b) SUBSEQUENT LOANS.
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(i) BORROWING NOTICE FOR A SUBSEQUENT LOAN. Each Subsequent
Loan shall be made upon the irrevocable written notice (including notice via
facsimile confirmed immediately by a telephone call) of the Company in the
form of a Borrowing Notice for a Subsequent Loan, as follows:
(A) DESIGNATION OF INTEREST RATE. The Company shall have the right to
elect that a Subsequent Loan be made as a LIBOR Loan or a Base Rate Loan;
PROVIDED that after giving effect to such Subsequent Loan there shall not be
more than three (3) different LIBOR Loans outstanding; and provided further
that, except as otherwise provided in Section 2.04(a), if the Company elects
that a Subsequent Loan be made as a Base Rate Loan, on the date such Loan is
disbursed, Company shall deliver to the Agent a Notice of
Conversion/Continuation requesting the conversion of the entire amount of
such Loans to a LIBOR Loan as of a date no later than the fourth (4th)
Business Day after the date such Loan is disbursed.
(B) TIMING OF NOTICE. Each Borrowing Notice for a Subsequent Loan shall
be submitted to and received by the Agent prior to 9:00 a.m. (California
time) (A) at least three (3) Business Days prior to the specified borrowing
date, in the case of LIBOR Loans; and (B) at least one (1) Business Day prior
to the specified borrowing date, in the case of Base Rate Loans.
(C) CONTENTS OF NOTICE. Each Borrowing Notice for a Subsequent Loan shall
set forth the following information with respect to the Subsequent Loan subject
thereto:
(I) a single, specific borrowing date, which shall be a Business Day;
(II) a single, exact amount for the Subsequent Loan, which for any LIBOR
Loan, shall be in an aggregate minimum principal amount of $1,000,000 or any
multiple of $100,000 in excess thereof (except for the final disbursement);
(III) whether the Subsequent Loan is to be made as a LIBOR Loan or a Base
Rate Loan;
(IV) if the Subsequent Loan is to be made as a LIBOR Loan, the applicable
Interest Period. If a Borrowing Notice for a Subsequent Loan shall fail to
specify the applicable Interest Period for any LIBOR Loan requested, the Agent
is hereby irrevocably instructed and authorized by the Company and the Lenders
that the applicable Interest Period shall be thirty (30) days; and
(V) a calculation of the Maximum Disbursement Amount relating to the NHP
Stock to be acquired with the requested Subsequent Loan.
(ii) NOTICE TO LENDERS. Upon receipt of a Borrowing Notice
for a Subsequent Loan conforming with the terms of Section 2.03(b), the Agent
shall promptly notify each Lender thereof and of the amount of such Lender's
Commitment Percentage of the Subsequent Loan described therein.
(iii) FUNDING OF COMMITMENT. Each Lender shall make the
amount of its Commitment Percentage of the Subsequent Loan described in any
Borrowing Notice for a Subsequent Loan available to the Agent for the account
of the Company at the Payment Office by 9:00 a.m. (California time) on the
borrowing date specified therein in funds
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immediately available to the Agent; provided, that in no event shall the amount
funded by any Lender exceed the Maximum Disbursement Amount for the requested
Subsequent Loan. Unless any applicable condition specified in Article IV has
not been satisfied, such funds shall then be made available to the Company by
the Agent at such office by crediting the account of the Company with the
aggregate of the amounts made available to the Agent by the Lenders (in like
funds as received by the Agent).
(iv) FREQUENCY OF BORROWINGS. No more than two (2) Borrowing
Notices for Subsequent Loans may be given. No Subsequent Loan shall be
requested or disbursed subsequent to the Commitment Expiration Date. Amounts
prepaid may not be reborrowed.
2.04 CONVERSION AND CONTINUATION ELECTIONS.
(a) NOTICE OF CONVERSION/CONTINUATION. Each conversion or
continuation of an outstanding Loan shall be made upon the irrevocable
written notice (including notice via facsimile confirmed immediately by a
telephone call) of the Company in the form of a Notice of
Conversion/Continuation, as follows:
(i) DESIGNATION OF INTEREST RATE. The Company shall have the
right to make the following elections with respect to the conversion or
continuation of any outstanding Loan:
(A) to convert, on any Business Day, any Base Rate Loan,
in a minimum principal amount of $1,000,000 or an integral multiple of
$100,000 in excess thereof, into a LIBOR Loan; or
(B) to continue, on the last day of any Interest Period
with respect to a LIBOR Loan (or, on any other day of any Interest Period,
upon payment of any loss or expense incurred or sustained by any Lender with
respect to the early termination of such LIBOR Loan prior to the last day of
the Interest Period as provided in Section 3.04), such LIBOR Loan (or any
part thereof in a minimum principal amount of $1,000,000 or an integral
multiple of $100,000 in excess thereof) for a subsequent Interest Period;
PROVIDED, that unless the Agent shall otherwise agree in writing, the Company
may not elect to have any outstanding LIBOR Loan or Base Rate Loan (or any
portion thereof) continued as or converted into a LIBOR Loan if (A) a Default
or Event of Default shall exist, (B) after giving effect to such continuation
or conversion there shall be more (i) than three (3) different LIBOR Loans
outstanding or (ii) the aggregate outstanding principal amount of all LIBOR
Loans shall have been reduced, by payment or prepayment, to less than
$1,000,000.
(ii) TIMING OF NOTICE. Each Notice of Conversion/Continuation
shall be submitted to and received by the Agent prior to 9:00 a.m.
(California time) at least three (3) Business Days prior to the date on which
the requested conversion or continuation is to become effective.
(A) the date on which the requested conversion or
continuation is to become effective, which shall be a Business Day;
(B) the amount of the Loan to be converted or continued;
and
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(C) the applicable Interest Period for the LIBOR Loan
into which such Loan is to be converted or which is to be continued.
(b) AUTOMATIC CONVERSIONS.
(i) Except as provided in Sections 2.04 (b)(ii), 3.02 and
3.05, any outstanding LIBOR Loan shall, effective on the last day of the
applicable Interest Period for such Loan, automatically convert to a LIBOR
Loan having a one month Interest Period, unless the Company shall have
delivered to the Agent at least three (3) Business Days prior to the last day
of the Interest Period for such outstanding LIBOR Loan a Notice of
Conversion/ Continuation requesting the conversion of such Loan to a LIBOR
Loan having a longer Interest Period. In the event of any such automatic
conversion, the Company shall be deemed to have delivered to the Agent a
Notice of Conversion/Continuation requesting such Loan for such thirty (30)
day Interest Period, and the Company hereby releases the Agent and the
Lenders from any claims or liabilities as a result of their reliance upon
such instructions.
(ii) Any outstanding LIBOR Loan shall automatically convert to
a Base Rate Loan, effective on the last day of the applicable Interest
Period, if as of such date:
(A) DEFAULT; EVENT OF DEFAULT. A Default or Event of
Default shall exist; or
(B) FAILURE TO MAINTAIN MINIMUM LOANS. If the aggregate
outstanding principal amount of LIBOR Loans having the same Interest Period
shall have been reduced, by payment, prepayment, or partial conversion to be
less than $1,000,000.
(c) NOTICE TO LENDERS. Upon receipt of a Notice of
Conversion/Continuation conforming with the terms of Section 2.04(a), or an
automatic conversion pursuant to Section 2.04(b), the Agent shall promptly
notify each Lender thereof. All conversions and continuations shall be made
pro rata according to the respective outstanding principal amounts of the
Loans converted or continued.
2.05 OPTIONAL PREPAYMENTS. Subject to Section 3.04, the Company
may, at any time and from time to time, ratably prepay Loans in whole or in
part, in an aggregate minimum amount of $1,000,000 or an integral multiple of
$100,000 in excess thereof.
2.06 MANDATORY PREPAYMENTS OF LOANS.
(a) On July 3, 1997, the Company shall prepay the Loan in an amount
equal to the lesser of (i) 4.75% of the increase in AIMCO Gross Asset Value,
if any, from March 31, 1997 to June 30, 1997 (other than any increase
resulting from Excluded Proceeds or the consummation of the acquisition by
the Company of the NHP Stock and the formation of the Company) or (ii) the
sum of the Net Issuance Proceeds plus Net Sale Proceeds (other than Excluded
Proceeds) received during such period. (b) On October 3, 1997, the
Company shall prepay the Loan in an amount equal to (i) the lesser of (A)
4.75% of the increase in AIMCO Gross Asset Value, if any, from March 31, 1997
to September 30, 1997 (other than any increase resulting from Excluded
Proceeds or the consummation of the acquisition by the Company of the NHP
Stock and the formation of the Company) or (B) the sum of the Net Issuance
Proceeds plus Net Sale
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Proceeds (other than Excluded Proceeds) received during such period minus (ii)
the amount of any prepayment under Section 2.06 (a) above.
2.07 APPLICATION OF PROCEEDS. Unless otherwise instructed by the
Company, any prepayments pursuant to Section 2.05 or Section 2.06 made (i) on
a day other than the last day of an Interest Period for any Loan shall be
applied first to any Base Rate Loans then outstanding and then to any LIBOR
Loans then outstanding, in the inverse order of such LIBOR Loans' stated
maturities and (ii) on the last day of an Interest Period for any LIBOR Loan
shall be applied first to such maturing LIBOR Loan, then to any Base Rate
Loans outstanding, and then to any other LIBOR Loans then outstanding, in the
inverse order of such LIBOR Loans' stated maturities.
2.08 REPAYMENT. Subject to Section 2.06, the Company shall repay
all Obligations on the Maturity Date.
2.09 INTEREST.
(a) RATES. Subject to Section 2.09(c), each Loan shall bear
interest on the outstanding principal amount thereof from the date such Loan
is made until the date such Loan becomes due, at a rate per annum equal to
the LIBO Rate or the Base Rate, as the case may be, PLUS the Applicable
Margin.
(b) PAYMENT DATES. Interest on each Loan shall be payable in
arrears on each Interest Payment Date and the Maturity Date. Interest shall
also be payable on the date of any prepayment of Loans pursuant to Section
2.05 or Section 2.06 for the portion of the Loans so prepaid. During the
existence of any Event of Default, interest shall be payable on demand.
(c) DEFAULT RATES. While any Event of Default exists or after
acceleration and during the continuation thereof, the Company shall pay
interest on all outstanding Obligations at a rate per annum which is
determined by increasing the Applicable Margin by three percent (3%) per
annum; PROVIDED, HOWEVER, that, on and after the expiration of the Interest
Period applicable to any LIBOR Loan outstanding on the date of occurrence of
such Event of Default or acceleration, the outstanding Obligations shall,
during the continuation of such Event of Default or after acceleration, bear
interest at a fluctuating rate per annum equal to the Base Rate plus the
Applicable Margin plus three percent (3%); and provided further, that in the
event the Obligations remain unpaid after the Scheduled Maturity Date, the
Company shall pay interest on all outstanding Obligations at a rate per annum
which is determined by increasing the Applicable Margin by three and one-half
percent (3.50%) per annum (at all times during the first three months after
the Scheduled Maturity Date) and by five and one-half percent (5.50%) per
annum (at all times after the first three months after the Scheduled Maturity
Date) until all Obligations are paid in full. The increased rates applicable
under this Section shall apply after as well as before judgment to the extent
permitted by law.
(d) LIMITATIONS FOR APPLICABLE LAW. Anything herein to the
contrary notwithstanding, payments of interest shall not be required, for any
period for which interest is computed hereunder, to the extent (but only to
the extent) that contracting for or receiving such payments by the respective
Lender would be contrary to the provisions of any law applicable to such
Lender limiting the highest rate of interest which may be lawfully contracted
for, charged or received by such Lender, and in such event the Company shall
pay such Lender interest at the highest rate permitted by applicable law.
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2.10 FEES.
(a) FACILITY FEES. Upon the due execution and delivery of this
Agreement by the Company, the Agent and each of the Lenders which are the
initial Lenders party to this Agreement, the Company shall pay to the Agent
for the account of each Lender ratably an amount equal to 1.50% of the
Aggregate Commitment of the initial Lenders as a facility fee.
(b) ADDITIONAL FACILITY FEES. On the Scheduled Maturity Date, if
the Loans have not been paid in full on or prior to such date, the Company
shall pay to the Agent for the account of each Lender ratably an amount equal
to 2.00% of the Outstanding Amount on such date as an additional facility
fee. On the date which is three months after the Scheduled Maturity Date, if
the Loans have not been paid in full on or prior to such date, the Company
shall pay to the Agent for the account of each Lender ratably an amount equal
to an additional 2.00% of the Outstanding Amount on such date as an
additional facility fee. Nothing contained herein shall be deemed to extend
the Maturity Date.
2.11 COMPUTATION OF FEES AND INTEREST.
(a) COMPUTATION PERIOD. All computations of fees and interest
under this Agreement shall be made on the basis of a 360-day year and actual
days elapsed, except that interest on Base Rate Loans shall be computed on
the basis of a 365/366 day year and actual days elapsed. Interest and fees
shall accrue during each period for which interest or fees are computed from
the first day thereof to the last day thereof.
(b) NOTICE. The Agent shall, with reasonable promptness, notify
the Company and the Lenders of each determination of a LIBO Rate, PROVIDED
that no failure to do so shall relieve the Company of any obligation
hereunder. Any change in the interest rate on a Loan resulting from a change
in the Reserve Percentage (as defined in the definition of "LIBO Rate") shall
become effective as of the opening of business on the day on which such
change becomes effective. The Agent shall with reasonable promptness notify
the Company and the Lenders of the effective date and the amount of each such
change, PROVIDED that no failure to do so shall relieve the Company of any
obligation hereunder. Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be conclusive and binding
on the Company and the Lenders in the absence of manifest error.
(c) DETAIL OF CALCULATION. The Agent shall, at the request of the
Company or any Lender, deliver to the Company or such Lender, as the case may
be, a statement showing the quotations used by the Agent in determining any
interest rate.
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2.12 PAYMENTS BY THE COMPANY.
(a) TERMS OF PAYMENTS. All payments (including prepayments) to be
made by the Company on account of principal, interest, fees and other amounts
required hereunder shall be made without setoff or counterclaim and shall,
except as otherwise expressly provided herein, be made to the Agent for the
ratable account of the Lenders at the Payment Office, in dollars and in
immediately available funds, no later than 9:00 a.m. (California time) on the
date specified herein. The Agent shall promptly distribute to each Lender
such Lender's Commitment Percentage (or other applicable share as expressly
provided herein) of such principal, interest, fees or other amounts (in like
funds as received). Any payment which is received by the Agent later than
9:00 a.m. (California time) shall be deemed to have been received on the
immediately succeeding Business Day, and any applicable interest or fee shall
continue to accrue.
(b) BUSINESS DAYS. Whenever any payment hereunder shall be stated
to be due on a day other than a Business Day, such payment shall be made on
the next succeeding Business Day, and such extension of time shall be
included in the computation of interest or fees, as the case may be; subject
to the provisions set forth in the definition of "Interest Period."
(c) RELIANCE OF AGENT ON PAYMENTS BY THE COMPANY. Unless the Agent
shall have received notice from the Company prior to the date on which any
payment is due to the Lenders hereunder that the Company will not make such
payment in full, the Agent may assume that the Company has made such payment
in full to the Agent on such date, and the Agent may (but shall not be
required to), in reliance upon such assumption, cause to be distributed to
each Lender on such due date the amount then due such Lender. If and to the
extent the Company shall not have made such payment in full to the Agent,
each Lender shall repay to the Agent on demand such amount distributed to
such Lender, together with interest thereon for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Agent, at the Federal Funds Rate as in effect for each such day.
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2.13 PAYMENTS BY THE LENDERS TO THE AGENT.
(a) RELIANCE OF AGENT ON PAYMENTS BY THE LENDERS. Unless the Agent
shall have received notice from a Lender on the Closing Date that such Lender
will not make available to the Agent for the account of the Company the
amount of that Lender's Commitment Percentage of the Loan to be funded on
such date, the Agent may assume that each Lender has made such amount
available to the Agent on the borrowing date, and the Agent may (but shall
not be required to), in reliance upon such assumption, make available to the
Company a corresponding amount on such date. If and to the extent any Lender
shall not have made its full amount available to the Agent and the Agent in
such circumstances has made available to the Company such amount, that Lender
shall on the next Business Day following the date of such borrowing make such
amount available to the Agent, together with interest at the Federal Funds
Rate for and determined as of each day during such period. A certificate of
the Agent submitted to any Lender with respect to amounts owing under this
Section 2.13(a) shall be conclusive, absent manifest error. If such amount
is so made available, such payment to the Agent shall constitute such
Lender's Loan (as of the date of the borrowing) for all purposes of this
Agreement. If such amount is not made available to the Agent on the next
Business Day following the borrowing date, the Agent shall notify the Company
of such failure to fund and, upon demand by the Agent, the Company shall pay
such amount to the Agent for the Agent's account, together with interest
thereon for each day elapsed since the date of such borrowing, at a rate per
annum equal to the interest rate applicable at the time to the Loans
comprising such borrowing, and the Company may exercise any rights and
remedies it may have against the Lender that so failed to fund.
(b) OBLIGATIONS OF AGENT; LENDER. The failure of any Lender to
make any Loan on any date of borrowing shall not relieve any other Lender of
any obligation hereunder to make a Loan on the date of such borrowing, but no
Lender shall be responsible for the failure of any other Lender to make the
Loan to be made by such other Lender on the date of any borrowing.
2.14 SHARING OF PAYMENTS, ETC. If, other than as expressly
contemplated elsewhere herein, any Lender shall obtain on account of the
Loans made by it any payment (whether voluntary, involuntary, through
exercise of any right of setoff, or otherwise) in excess of its Commitment
Percentage of payments on account of the Loans obtained by all the Lenders,
such Lender shall forthwith (a) notify the Agent of such fact, and (b)
purchase from the other Lenders such participations in the Loans made by them
as shall be necessary to cause such purchasing Lender to share the excess
payment ratably with each of them; PROVIDED, HOWEVER, that if all or any
portion of such excess payment is thereafter recovered from the purchasing
Lender, such purchase shall to that extent be rescinded and each other Lender
shall repay to the purchasing Lender the purchase price paid thereto together
with a percentage (calculated by dividing (i) the amount of such paying
Lender's required repayment by (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Company
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.14 may, to the fullest extent permitted by law,
exercise all of such purchasing Lender's rights of payment (including the
right of setoff, but subject to Section 10.09) with respect to such
participation as fully as if such purchasing Lender were the direct creditor
of the Company in the amount of such participation. The Agent shall keep
records (which shall be conclusive and binding in the absence of manifest
error) of participations purchased pursuant to this Section 2.14 and shall in
each case notify the Lenders following any such purchases.
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ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Subject to Section 3.01(g), any and all payments by the Company
to the Agent or the Lenders under this Agreement shall be made free and clear
of, and without deduction or withholding for, any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding such taxes (including income
taxes or franchise taxes) as are imposed on or measured by the recipient's
net income by the jurisdiction under the laws of which the recipient is
organized or maintains a Lending Office, or otherwise does business, or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred
to as "Taxes").
(b) In addition, the Company shall pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery, recordation or registration of, or otherwise with
respect to, this Agreement or any other Loan Documents (hereinafter referred
to as "Other Taxes").
(c) The Company shall indemnify and hold harmless the Agent and
each Lender for the full amount of Taxes or Other Taxes (including any Taxes
or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 3.01) paid by the Agent or such Lender and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Payment under this indemnification shall be made within
thirty (30) days from the date the Agent or any Lender makes written demand
therefor.
(d) If the Company shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable hereunder to
the Agent or any Lender, then, subject to Section 3.01(g):
(i) the sum payable shall be increased as necessary so that,
after making all required deductions (including deductions applicable to
additional sums payable under this Section 3.01) the Agent or such Lender, as
the case may be, receives an amount equal to the sum it would have received
had no such deductions been made;
(ii) the Company shall make such deductions; and
(iii) the Company shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
(e) Within 30 days after the date of any payment by the Company of
Taxes or Other Taxes, the Company shall furnish to the Agent the original or
a certified copy of a receipt evidencing payment thereof, or other evidence
of payment satisfactory to the Agent.
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(f) Each Lender which is a foreign Person (i.e., a Person other
than a United States Person for United States Federal income tax purposes)
agrees that:
(i) such Lender shall, no later than the Closing Date (or, in
the case of a Lender which becomes a party hereto pursuant to Section 10.08
after the Closing Date, the date upon which such Lender becomes a party
hereto), deliver to the Company through the Agent two (2) accurate and
complete signed originals of Internal Revenue Service Form 4224 or any
successor thereto ("Form 4224"), or two (2) accurate and complete signed
originals of Internal Revenue Service Form 1001 or any successor thereto
("Form 1001"), as appropriate, in each case indicating that the Lender is on
the date of delivery thereof entitled to receive payments of principal,
interest and fees under this Agreement free from withholding of United States
Federal income tax;
(ii) if at any time such Lender makes any changes
necessitating a new form, such Lender shall with reasonable promptness
deliver to the Company through the Agent in replacement for, or in addition
to, the forms previously delivered by such Lender hereunder, two (2) accurate
and complete signed originals of Form 4224, or two (2) accurate and complete
signed originals of Form 1001, as appropriate, in each case indicating that
such Lender is on the date of delivery thereof entitled to receive payments
of principal, interest and fees under this Agreement free from withholding of
United States Federal income tax;
(iii) such Lender shall, before or promptly after the
occurrence of any event (including the passing of time but excluding any
event mentioned in (ii) above) requiring a change in or renewal of the most
recent Form 4224 or Form 1001 previously delivered by such Lender, deliver to
the Company through the Agent two (2) accurate and complete original signed
copies of Form 4224 or Form 1001, as appropriate, in replacement of the forms
previously delivered by such Lender; and
(iv) such Lender shall, promptly upon the Company's reasonable
request to that effect, deliver to the Company such other forms or similar
documentation as may be required from time to time by any applicable law,
treaty, rule or regulation in order to establish such Lender's tax status for
withholding purposes.
(g) The Company shall not be required to pay any additional amounts
in respect of United States Federal or state income tax pursuant to Section
3.01(d) to any Lender or any duly appointed assignee for the account of any
Lending Office of such Lender or assignee:
(i) if the obligation to pay such additional amounts arises
as a result of a failure by such Lender or assignee to comply with its
obligations under Section 3.01(f) in respect of such Lending Office;
(ii) if such Lender or assignee shall have delivered to the
Company a Form 4224 in respect of such Lending Office pursuant to Section
3.01(f), and such Lender or assignee shall not at any time be entitled to
exemption from deduction or withholding of United States Federal income tax
in respect of payments by the Company hereunder for any reason other than a
change in United States law or regulations or in the official interpretation
of such law or regulations by any governmental authority charged with the
interpretation or administration thereof (whether or not having the force of
law) after the date of delivery of such Form 4224; or
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(iii) if such Lender or assignee shall have delivered to the
Company a Form 1001 in respect of such Lending Office pursuant to Section
3.01(f), and such Lender or assignee shall not at any time be entitled to
reduction, partial exemption or exemption from deduction or withholding of
United States federal income tax in respect of payments by the Company
hereunder for the account of such Lending Office for any reason other than a
change in United States law or regulations or any applicable tax treaty or
regulations or in the official interpretation of such law, treaty or
regulations by any governmental authority charged with the interpretation or
administration thereof (whether or not having the force of law) after the
date of delivery of such Form 1001.
(h) If, at any time, the Company requests any Lender to deliver any
forms or other documentation pursuant to Section 3.01(f)(iv), then the
Company shall, on demand of such Lender, through the Agent reimburse such
Lender for any costs and expenses (including Attorney Costs) reasonably
incurred by such Lender in the preparation or delivery of such forms or other
documentation.
(i) If the Company is required to pay additional amounts to the
Agent or any Lender pursuant to Section 3.01(d), then such Lender shall use
its reasonable best efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office so as to
eliminate any such additional payment by the Company which may thereafter
accrue if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender.
3.02 ILLEGALITY.
(a) If any Lender shall determine that the introduction of any
Requirement of Law or any change therein or in the interpretation or
administration thereof has made it unlawful, or that any central bank or
other Governmental Authority has asserted that it is unlawful, for such
Lender or its Lending Office to make LIBOR Loans, then, on notice thereof by
such Lender to the Company through the Agent, the obligation of such Lender
to make LIBOR Loans shall be suspended until such Lender shall have notified
the Agent and the Company that the circumstances giving rise to such
determination no longer exist.
(b) If any Lender shall reasonably determine that it is unlawful to
maintain any LIBOR Loan, the Company shall notify Lender that the Company
shall either (i) prepay in full all LIBOR Loans of such lender then
outstanding, together with interest accrued thereon, or (ii) elect to convert
in accordance with Section 2.04 all LIBOR Loans then outstanding, after
payment to such Lender of all interest accrued thereon, into Base Rate Loans,
either on the last day of the Interest Period thereof if such Lender may
lawfully continue to maintain such LIBOR Loans to such day, or immediately if
such Lender may not lawfully continue to maintain such LIBOR Loans, together
with any amounts required to be paid in connection therewith pursuant to
Section 3.04.
(c) If the obligation of any Lender to make or maintain LIBOR Loans
has been terminated, the Company may elect, by giving notice to such Lender
through the Agent, that all Loans which would otherwise be made by such
Lender as LIBOR Loans shall instead be made as Base Rate Loans.
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3.03 INCREASED COSTS AND REDUCTION OF RETURN.
(a) If any Lender shall determine that, due to either (i) the
introduction of or any change in or in the interpretation of any Requirement
of Law or (ii) the compliance with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of
law), there shall be any increase in the cost to such Lender of agreeing to
make or of making, funding or maintaining any LIBOR Loans hereunder, then the
Company shall be liable for, and shall from time to time, upon written demand
therefor by such Lender (with a copy of such demand to the Agent), which
demand shall set forth the basis of such increased cost in reasonable detail,
pay to the Agent for the account of such Lender, such additional amounts as
are sufficient to compensate such Lender for such increased costs.
(b) If any Lender shall have reasonably determined that (i)
the introduction of any Capital Adequacy Regulation, (ii) any change in any
Capital Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or
other Governmental Authority charged with the interpretation or
administration thereof, or (iv) compliance with any Capital Adequacy
Regulation by such Lender (or its Lending Office) or any corporation
controlling such Lender, effects or would effect an increase in the amount of
capital required or expected to be maintained by such Lender or any
corporation controlling such Lender (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy and such
Lender's desired return on capital), then, upon written demand of such Lender
(with a copy to the Agent), which demand shall set forth in reasonable detail
the basis for any such increase in required capital, the Company shall
immediately pay to such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender for such
increase.
(c) If any Lender shall have determined that any of the events
described in Sections 3.03(a) or 3.03(b) affects or would affect an increase
in cost or reduction of return resulting in additional Obligations hereunder,
such Lender shall, with reasonable promptness, notify the Company and the
Agent of such determination, PROVIDED that no failure to do so shall relieve
the Company of any Obligation hereunder.
3.04 FUNDING LOSSES. The Company agrees to reimburse each Lender
for, and to hold each Lender harmless from, any loss or expense that such
Lender may sustain or incur as a consequence of:
(a) the failure of the Company to make any required payment or
prepayment of principal of any LIBOR Loan or Base Rate Loan (including
payments to be made after any acceleration thereof);
(b) the failure of the Company to borrow, continue or convert
a Loan after the Company has given (or is deemed to have given) a Borrowing
Notice or a Notice of Conversion/Continuation;
(c) the failure of the Company to make any prepayment after
the Company has given a notice in accordance with Section 2.05;
(d) the prepayment of a LIBOR Loan on a day which is not the
last day of the Interest Period with respect thereto; or
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(e) the conversion of any LIBOR Loan to a Base Rate Loan on a
day that is not the last day of the Interest Period with respect thereto;
such amount or amounts to include an amount equal to the excess, if any, of
(a) the amount of interest that would have accrued on the amount not paid,
not borrowed, not prepaid, prepaid, or converted for the period from the date
of such failure to pay, failure to borrow, failure to prepay, prepayment, or
conversion to the last day of then current Interest Period (or in the case of
a failure to borrow, the Interest Period which would have commenced on the
date of such failure) at the interest rate applicable to that LIBOR Loan,
over (b) the amount of interest that would accrue to the Lender on such
amount at the LIBO Rate in effect on such date by placing such amount on
deposit for a comparable period with leading lenders in the London interbank
market.
3.05 INABILITY TO DETERMINE RATES. If the Agent shall have
determined that for any reason adequate and reasonable means do not exist for
ascertaining the LIBO Rate for any requested Interest Period with respect to
a proposed LIBOR Loan or that the LIBO Rate applicable pursuant to Section
2.09(a) for any requested Interest Period with respect to a proposed LIBOR
Loan does not adequately and fairly reflect the cost to such Lenders of
funding such Loan, the Agent will forthwith give notice of such determination
to the Company and each Lender. Thereafter, the obligation of the Lenders to
make or maintain LIBOR Loans hereunder shall be suspended until the Agent
revokes such notice in writing. Upon receipt of such notice, the Company may
revoke any Borrowing Notice or Notice of Conversion/Continuation then
submitted by it. If the Company does not revoke such notice, the Lenders
shall make, convert or continue the Loans, as proposed by the Company, in the
amount specified in the applicable notice submitted by the Company, but such
Loans shall be made, converted or continued as Base Rate Loans instead of
LIBOR Loans.
3.06 CERTIFICATES OF LENDERS. Any Lender claiming reimbursement or
compensation pursuant to this Article III, shall deliver to the Company (with
a copy to the Agent) a certificate setting forth in reasonable detail a
summary of the basis of such demand and the amount payable to such Lender
hereunder.
3.07 SURVIVAL. The agreements and obligations of the Company in
this Article III shall survive the payment of all other obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 CONDITIONS OF FIRST LOAN. The obligation of each Lender to
make its Loan hereunder on the Closing Date is subject to the condition that
the Agent shall have received, on or before the Closing Date, the following,
in the case of agreements, documents and other instruments, in form and
substance satisfactory to the Agent, each Lender and their respective counsel
in their sole discretion and in sufficient copies for each Lender:
(a) CREDIT AGREEMENT AND NOTES. This Agreement executed by
the Company, the Agent and each of the Lenders, and Notes executed by the
Company in favor of each of the Lenders; the Notes shall be dated the Closing
Date;
(b) REIT GUARANTY DOCUMENTS. The REIT Guaranty Documents
executed by the REIT and the Operating Partnership; the Stock Pledge
Agreement executed
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by the REIT and the Common Stockholders; and delivery to the Agent of all
original shares of the Stock in the Company together with endorsements
thereof in blank;
(c) SUBORDINATION AGREEMENT. Such subordination agreements
relating to the Intra-Company Debt as the Requisite Lenders may require, in
form and substance satisfactory to the Requisite Lenders;
(d) RESOLUTIONS; INCUMBENCY.
(i) Certified copies of the resolutions of the boards of
directors of the Company, the REIT, GP Corp and the other corporations party
(whether directly or as general partners) to the Loan Documents, authorizing
their execution, delivery and performance thereof, including, in the case of
GP Corp, a resolution approving and authorizing in its capacity as the
general partner of the Company the execution, delivery and performance by the
Company of this Agreement and the other Loan Documents to be delivered
hereunder and the borrowing of the Loans; and
(ii) A certificate of the Secretary or Assistant
Secretary of the Company, the REIT, GP Corp and the other corporations party
(whether directly or as general partners) to the Loan Documents certifying
the names and true signatures of the officers of such Persons authorized to
execute and deliver, as applicable, this Agreement and all other Loan
Documents to be delivered hereunder;
(e) ORGANIZATIONAL DOCUMENTS. Each of the following documents:
(i) certified copies of the Organizational Documents of
the Company, the REIT, GP Corp, the Operating Partnership and, if requested
by Lender, any Subsidiary thereof as in effect on the Closing Date, and, in
the case of corporate or limited liability company articles or a certificate
of limited partnership, certified as of a recent date by the secretary of
state of the state of organization; and
(ii) a good-standing certificate for the Company, the
REIT, GP Corp, the Operating Partnership and, if requested by Lender, any
Subsidiary thereof, from the secretary of state of the state of organization
thereof, dated as of recent date;
(f) CERTIFICATE. A certificate signed by a duly authorized
Responsible Officer of the Company, the REIT and the Operating Partnership,
dated as of the Closing Date, stating that:
(i) the representations and warranties of the Company
contained in Article V hereof and of the Company, the REIT and the Operating
Partnership contained in the Loan Documents are true and correct on and as of
such date, as though made on and as of such date;
(ii) no Default or Event of Default exists or would result
from the initial borrowing; and
(iii) all conditions precedent set forth in this Section
4.01 have been satisfied (other than those based solely on the approval of the
Agent, the Lenders, or the Requisite Lenders);
(g) LEGAL OPINIONS. The Agent shall have received favorable
opinions of counsel to the Company and the parties signatory to the REIT
Guaranty Documents and the Stock Pledge Agreement, and addressed to the Agent
and the Lenders, which comply with the opinion requirements set forth on EXHIBIT
F in a form approved by Agent;
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(h) DOCUMENTATION REGARDING THE NHP STOCK PURCHASE AGREEMENT,
THE MERGER AGREEMENT AND THE REAL ESTATE ASSETS. The Agent shall have
received copies of the NHP Stock Purchase Agreement and the NHP Merger
Agreement, each certified by a duly authorized Responsible Officer as being
true, correct and complete, together with (i) evidence that all material
conditions precedent (including, without limitation, all governmental
approval contingencies) under the NHP Stock Purchase Agreement to the
consummation of the sale of at least 6,496,071 shares of the NHP Stock
thereunder shall, upon funding of the initial Loans hereunder, be satisfied
and that the balance of the consideration for such Stock (consisting of
shares of Stock in the REIT having a value of at least $60,000,000 based on
the current market value thereof) shall have been issued to the NHP
Shareholders; and (ii) evidence of the approval of the NHP Merger Agreement
by the Board of Directors of NHP;
(i) COSTS; EXPENSES; FEES. Payment of all costs, expenses, and
accrued and unpaid fees (including legal fees and expenses) to the extent then
due and payable on the Closing Date, including any arising under Sections 2.10,
3.01 and 10.04;
(j) SBI ENGAGEMENT LETTER. The REIT and SBI shall have entered
into a separate engagement letter relating to the retention of SBI for certain
underwriting and other services; and
(k) OTHER DOCUMENTS. Such other approvals, opinions, or
documents as the Agent or the Requisite Lenders may reasonably request.
4.02 CONDITIONS TO EACH LOAN, CONTINUATION OR CONVERSION. The
obligation of each Lender to make its Initial Loan or any Subsequent Loan and
any continuation or conversion thereof is subject to the satisfaction of the
following conditions precedent:
(a) BORROWING NOTICE. The Agent shall have received a
Borrowing Notice or Notice of Conversion/Continuation in compliance with the
terms of Section 2.03 or Section 2.04, as applicable;
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Company, the REIT, the Operating Partnership and the
Common Stockholders contained in the Loan Documents, including Article V of
this Agreement, shall be true and correct on and as of the date such Loan is
made, with the same effect as if made on and as of such date; and
(c) NO EXISTING DEFAULT. No Default or Event of Default shall
exist or shall result from the making, continuation or conversion of such
Loan.
(d) DISBURSEMENT LIMIT. The requested Subsequent Loan shall
not exceed the Maximum Disbursement Amount for the NHP Stock to be acquired
therewith;
(e) NO MATERIAL ADVERSE EFFECT. No act, omission, change,
occurrence or event which has a Material Adverse Effect shall have occurred
since the Closing Date.
Each Borrowing Notice and Notice of Continuation/Conversion submitted by the
Company hereunder shall constitute a representation and warranty by the
Company hereunder, as of the date of such notice and as of the date of the
making, continuation or conversion of the corresponding Loan, that the
conditions in this Section 4.02 have been satisfied.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Lender
that:
5.01 EXISTENCE AND POWER. The Company is a Delaware corporation,
the Operating Partnership is a Delaware limited partnership, the REIT is a
Maryland corporation, and each of the Company, the Operating Partnership and
the REIT:
(a) ORGANIZATION. Is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization;
(b) POWER AND AUTHORITY. Has the power and authority and all
governmental licenses, authorizations, consents and approvals to own its
Properties, to carry on its business and to execute, deliver, and perform its
obligations under, the Organizational Documents of the Company and the Loan
Documents to which it is a party;
(c) DUE QUALIFICATION. Is duly qualified as a foreign
corporation, partnership, trust or other organization, and licensed and in
good standing under the laws of each jurisdiction where its ownership, lease
or operation of its Properties or the conduct of its business requires such
qualification; and
(d) COMPLIANCE WITH LEGAL REQUIREMENTS. Is in compliance with
all Requirements of Law applicable to it.
5.02 AUTHORIZATION; NO CONFLICT. The execution, delivery and
performance by the Company, the Operating Partnership and the REIT of this
Agreement, any other Loan Document to which such Person is party, and the
Organizational Documents for the Company have been duly authorized by all
necessary partnership, corporate or other organizational action, and do not
and will not:
(a) ORGANIZATIONAL DOCUMENTS. Contravene the terms of any of
such Person's Organizational Documents;
(b) CONTRACTUAL OBLIGATIONS. Conflict with, or result in any
breach or contravention of, or the creation of any Lien (other than pursuant
to the Loan Documents) under, any document evidencing any Contractual
Obligation to which such Person is a party or any order, injunction, writ or
decree of any Governmental Authority to which such Person or its Properties
are subject; or
(c) REQUIREMENTS OF LAW. Violate any Requirement of Law
applicable to it.
5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority (except for recordings in connection with the Liens
granted to the Agent under the Collateral Documents) is necessary or required
in connection with the execution, delivery or performance by, or enforcement
against, the Company, the Operating Partnership or the REIT of this
Agreement, any other Loan Document or the Organizational Documents for the
Company.
5.04 BINDING EFFECT. This Agreement and each other Loan Document to
which the Company, the Operating Partnership or the REIT is a party
constitute the legal, valid and binding obligations of such Person,
enforceable against such Person in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy,
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insolvency, or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability.
5.05 LITIGATION. There are no actions, suits, proceedings, claims
or disputes pending, or to the Knowledge of the Company, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, (a) against the Company, the Operating Partnership, the REIT, any
Management Entity, any of their Subsidiaries or any of their respective
Properties, which purport to affect or pertain to this Agreement, or any
other Loan Document, or any of the transactions contemplated hereby or
thereby, or (b) which purports to affect or pertain to the NHP Stock Purchase
Agreement or the NHP Merger Agreement or the NHP-Related Real Estate
Acquisition Agreement as of the date hereof or the Closing Date or, if the
same would have a Material Adverse Effect, after the Closing Date. No
injunction, writ, temporary restraining order or any other order of any
nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution, delivery and performance of
this Agreement any other Loan Document, the NHP Stock Purchase Agreement, the
NHP Merger Agreement or the NHP-Related Real Estate Acquisition Agreement, or
directing that the transactions provided for herein or therein not be
consummated as herein or therein provided, remains in effect as of the date
hereof or the Closing Date or, if the same would have a Material Adverse
Effect, after the Closing Date.
5.06 SUBSIDIARIES; INTERESTS IN OTHER ENTITIES. Except for the NHP
Stock, the Company has no interest in any corporation, partnership or other
entity.
5.07 TAXES. The Company has filed all Federal and other material
tax returns and reports required to be filed. All tax returns filed by the
Company are complete and correct; the Company has paid all Federal and other
material taxes, assessments, fees and other governmental charges for which
they are liable (whether or not reflected on any tax returns) and have fully
satisfied any taxes, assessments, fees, and other governmental charges levied
or imposed upon them or their Properties, income or assets or otherwise due
and payable, except those which are being contested in good faith by
appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP and no Notice of Lien has been filed or recorded; there
is no proposed tax assessment against the Company which would, if the
assessment were made, have a Material Adverse Effect; and (iv) the Company
has no primary, secondary or other liability for taxes of any kind arising
with respect to any individual, trust, corporation, partnership or other
entity as to which the Company is directly or indirectly liable for taxes of
any kind incurred by such individual or entity either as a transferee, or
pursuant to Treasury Regulations section 1.1502-6, or pursuant to any other
Requirement of Law. The Company is not a party to any tax sharing agreement.
5.08 EMPLOYEES. The Company has no employees.
5.09 COLLATERAL DOCUMENTS. When executed, delivered and recorded
pursuant hereto, the Collateral Documents shall be effective to create in
favor of the Agent, for the benefit of the Lenders, legal, valid and
enforceable first-priority Liens in the Collateral and the proceeds thereof.
All action shall have been taken that is necessary or appropriate to perfect
the Agent's Lien, for the benefit of the Lenders, in the Collateral. All
representations and warranties of any other Person party to any Collateral
Documents that are contained therein are true and correct.
5.10 REGULATED ENTITIES. The Company is not (a) an "investment
company" within the meaning of the Investment Company Act of 1940; or (b)
subject to regulation under the Public Utility Holding Company Act of 1935,
the Federal Power Act, the Interstate Commerce Act, any state public
utilities code, or any other Federal or state statute or regulation limiting
its ability to incur Indebtedness.
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5.11 USE OF PROCEEDS. The proceeds of the Loans are intended to be
and shall be used solely for the purposes set forth in and permitted by
Sections 2.01(b) and Section 6.08.
5.12 [Intentionally deleted]
5.13 NO DEFAULT. No Default or Event of Default exists or would
result from the incurring of any Obligations by the Company, the REIT or the
Operating Partnership. Neither the Company, nor the REIT, nor the Operating
Partnership, nor any Management Entity, nor any of their Subsidiaries is in
default under or with respect to any Contractual Obligation in any respect
which, individually or together with all such other defaults, would reasonably
be expected to have a Material Adverse Effect.
5.14 NHP. All of the representations and warranties set forth in
the NHP Stock Purchase Agreement and the Merger Agreement given by the REIT or
the Operating Partnership or, to the best knowledge of the Company, given by any
other Person are true and correct.
5.15 FULL DISCLOSURE. None of the representations or warranties
made by the Company, the Operating Partnership, the REIT, or any other Person
(other than the Agent and the Lenders) in the Loan Documents or by the Company,
the Operating Partnership or the REIT in the NHP Stock Purchase Agreement or the
NHP Merger Agreement as of the date such representations and warranties are made
or deemed made, and none of the statements contained in each exhibit, report,
statement or certificate furnished by or on behalf of any such Person in
connection therewith, contains any untrue statement of a material fact or omits
any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they are
made, not misleading. There is no fact, to the Knowledge of the Company, which
would have a Material Adverse Effect which has not been disclosed herein or in
other documents, certificates and statements furnished to the Agent and each
Lender hereunder or pursuant hereto. In the course of the due diligence of NHP
by the REIT, the Operating Partnership and the Company in connection with the
transactions contemplated by the NHP Stock Purchase Agreement and the NHP Merger
Agreement, no material adverse information concerning NHP or its assets,
operations, business, condition (financial or otherwise) or prospects was
discovered which is not publicly disclosed in the reports and statements filed
by NHP with the SEC or otherwise previously disclosed to the Lenders in writing
by the REIT. The copies of all documents delivered to the Agent and/or the
Lenders from time to time in connection with this Agreement are and shall be
true and complete copies of the originals thereof and have not been or shall not
be amended except as disclosed to the Agent and/or the Lenders, as applicable.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as any Lender shall
have any Commitment hereunder, or any Loan or other obligation shall remain
unpaid or unsatisfied, unless the Requisite Lenders waive compliance in writing:
6.01 FINANCIAL INFORMATION. The Company shall deliver to the
Agent and to each Lender, in form and detail satisfactory to the Agent and the
Lenders:
(a) FINANCIAL STATEMENTS. Such balance sheets, statements
of operations, stockholders' equity (where applicable) and cash flows, as the
Agent or any Lender may reasonably request from time to time; and
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(b) FINANCIAL STATEMENTS AND OTHER INFORMATION FOR NHP. Until
the NHP Combination Date, within five (5) days after the receipt thereof by
the Company, the Operating Partnership, the REIT or any Subsidiary thereof,
such periodic, quarterly, annual and special financial statements, reports,
press releases, proxy statements and other information as may be received by
any such Person in its capacity as a shareholder in NHP or under the NHP
Merger Agreement; and within five (5) days after the delivery of any thereof
by any such Person, copies of any reports, proxy statements, tender or
exchange offers or other information provided by such Person to NHP or to the
shareholders thereof or to the SEC in respect of such Person's ownership of
or intentions or proposals with respect to NHP; and within five (5) days
after the Company, the Operating Partnership, the REIT or any Subsidiary
obtains Knowledge, information concerning the progress of the merger with NHP
and of the approvals of the shareholders of NHP and the REIT required to be
obtained as a condition thereto and as to satisfaction of any other material
condition to such merger; and within five (4) days after the execution
thereof, a copy of the NHP-Related Real Estate Acquisition Agreement.
6.02 CERTIFICATES; OTHER INFORMATION. The Company shall furnish to
the Agent with sufficient copies for each Lender:
(a) OFFICERS' CERTIFICATES. Within forty-five (45) days after
the end of each fiscal quarter, a compliance certificate, substantially in
the form of EXHIBIT G, signed by at least two (2) Responsible Officers
stating that, to the best of such officers' knowledge, the Company during
such period has observed or performed all of its covenants and other
agreements, and satisfied every condition contained in this Agreement and the
other Loan Documents to be observed, performed or satisfied by it, and that
such officers have no knowledge of any Default or Event of Default except as
specified in such certificate;
(b) ACCOUNTANTS' REPORTS. Promptly after the same are
received, copies of all reports which the independent certified public
accountants of the Company deliver to the Company; and
(c) OTHER INFORMATION. Promptly, such additional financial
and other information as the Agent may or any Lender from time to time
reasonably request.
6.03 NOTICES. The Company shall promptly (and in no event later
than ten (10) days after the Company has reason to know of the same) notify
the Agent and each Lender of:
(a) DEFAULT; EVENT OF DEFAULT. The occurrence of any Default
or Event of Default, and of the occurrence or existence of any event or
circumstance that is likely to become a Default or Event of Default. Each
notice under Section 6.03(a) shall describe with particularity the clause or
provision of this Agreement this or other Loan Document that has been
breached or violated.;
(b) LITIGATION. The commencement of, or any material
development in, any litigation, arbitration or proceeding (a) affecting the
Company or (b) which, if adversely determined, would reasonably be expected
to have a material adverse effect on the ability to consummate the
transactions under the NHP Merger Agreement;
(c) MATERIAL ADVERSE EFFECTS. The occurrence of any act,
omission, change or event which has a Material Adverse Effect subsequent to
the date of the most recent financial statements of the Company delivered to
the Agent pursuant to Section 6.01(a).
(d) MATERIAL TRANSACTIONS. The consummation of any material
Disposition of any Property or of any other material transaction by the
Company;
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(e) ACCOUNTING CHANGES. Any change in the Company's
accounting policies or financial reporting practices;
(f) LEGAL COMPLIANCE. Any material notice received from any
Governmental Authority asserting that the Company is not in compliance with
any Requirements of Law; and
(g) CROSS-DEFAULT. Any notice received by the Company, the
Operating Partnership, the REIT, any Management Entity or any of their
Subsidiaries of any default under any Indebtedness or Guaranty Obligation
described in Section 8.01(e). Each notice pursuant to this section shall be
accompanied by a written statement, signed by at least two (2) Responsible
Officers, setting forth details of the occurrence referred to therein and the
provisions of this Agreement affected, and stating what action the Company,
the Operating Partnership or the REIT proposes to take with respect thereto.
6.04 PRESERVATION OF EXISTENCE, ETC. Except as permitted under
Sections 7.06 and 7.07 below, the Company shall (a) preserve and maintain in
full force and effect its corporate or other organizational existence and
good standing under the laws of its state or jurisdiction of organization,
and (b) preserve and maintain in full force and effect all rights,
privileges, qualifications, permits, licenses and franchises necessary or
desirable in the normal conduct of its business.
6.05 [Intentionally deleted]
6.06 PAYMENT OF OBLIGATIONS. The Company shall pay and discharge as
the same shall become due and payable and otherwise comply with, all their
respective obligations and liabilities, including (a) all tax liabilities,
assessments and governmental charges or levies upon it or its Properties,
unless the same are being contested in good faith by appropriate proceedings
and adequate reserves in accordance with GAAP are being maintained by the
Company or such Person, (b) all lawful claims which, if unpaid, would by law
become a Lien upon its Properties, (c) all Indebtedness, as and when due and
payable, but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness, and (d) all Contractual
Obligations.
6.07 COMPLIANCE WITH LAWS. The Company shall comply with all
Requirements of Law and all orders of any Governmental Authority having
jurisdiction over it or its business, including, without limitation, all
securities laws and regulations.
6.08 USE OF PROCEEDS. The Company shall use the proceeds of the
Loans solely in accordance with Section 2.01(b) above.
6.09 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Company
shall maintain proper books of record and account, in which full, true and
correct entries in conformity with GAAP consistently applied shall be made of
all financial transactions and matters involving the Properties and business
of the Company. The Company shall permit representatives of the Agent or any
Lender to examine their respective corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective directors,
officers, and independent public accountants, all at the expense of the
Company and at any time during normal business hours and as often as may be
reasonably desired, upon no less than forty-eight (48) hours advance notice
to the Company; PROVIDED, HOWEVER, when an Event of Default exists, the Agent
or any Lender may visit and inspect at the expense of the Company such
Properties at any time during business hours and without advance notice.
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6.10 FURTHER ASSURANCES.
(a) FULL DISCLOSURE. The Company will ensure that all other
written information, exhibits and reports furnished to any Agent or Lender by
the Company do not contain any untrue statement of a material fact and do not
and will not omit to state any material fact or any fact necessary to make
the statements contained therein not misleading in light of the circumstances
in which made, and will promptly disclose to the Agent and the Lenders and
correct any defect or error that may be discovered therein or in any Loan
Document or in the execution, acknowledgment or recordation thereof.
(b) FURTHER ACTS. Promptly upon request by the Agent or the
Requisite Lenders, the Company shall (and shall cause the REIT and the
Operating Partnership to) do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register, any and all such further
acts, security agreements, assignments, estoppel certificates, financing
statements and continuations thereof, termination statements, notices of
assignment, transfers, certificates, assurances and other instruments that
the Agent or such Lenders, as the case may be, may reasonably require from
time to time in order (i) to carry out more effectively the purposes of this
Agreement or any other Loan Document, (ii) to subject to the Liens created by
any of the Collateral Documents any of the Collateral, (iii) to perfect and
maintain the validity, effectiveness and priority of any of the Collateral
Documents and the Liens intended to be created thereby, and (iv) to better
assure, convey, grant, assign, transfer, preserve, protect and confirm to the
Agent and Lenders the rights granted or now or hereafter intended to be
granted under any Loan Document, or any other document executed in connection
herewith or therewith.
6.11 SOLVENCY. The Company shall at all times be Solvent.
ARTICLE VII
NEGATIVE COVENANTS
The Company hereby covenants and agrees that, so long as any Lender
shall have any Commitment hereunder, or any Loan or other Obligation shall
remain unpaid or unsatisfied, unless the Requisite Lenders waive compliance
in writing:
7.01 LIENS. The Company shall not, directly or indirectly, make,
create, incur, assume or suffer to exist any Lien upon or with respect to any
part of its Property, whether now owned or hereafter acquired, consisting of
cash or Cash Equivalents, other than Liens arising solely by virtue of any
statutory or common-law provision relating to banker's liens, rights of
setoff or similar rights and remedies as to deposit accounts or other funds
maintained with a creditor depository institution and as to which Liens
waivers have been obtained to the extent required in the definition of "Cash
Equivalents"; PROVIDED that (a) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by the
depositor in excess of those set forth by regulations promulgated by the
Federal Reserve Board, and (b) such deposit account is not intended by the
depositor to provide collateral to the depository institution.
7.02 INDEBTEDNESS. The Company shall not create, incur, assume,
suffer to exist, or otherwise become or remain directly or indirectly liable
with respect to, any Indebtedness except the following ("PERMITTED
INDEBTEDNESS"):
(a) CERTAIN INDEBTEDNESS. Indebtedness incurred pursuant to
this Agreement;
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(b) ACCOUNTS PAYABLE. Accounts payable to trade creditors for
goods and services and current operating liabilities (not the result of the
borrowing of money) incurred in the Ordinary Course of Business in accordance
with customary terms and paid within the specified time, unless contested in
good faith by appropriate proceedings and reserved for in accordance with GAAP;
(c) CONTINGENT OBLIGATIONS. Indebtedness consisting of
Contingent Obligations permitted by Section 7.03; and
(d) OTHER INDEBTEDNESS. Other Indebtedness incurred by the
Company provided that either (i) the proceeds of such Indebtedness are used
to pay in full all of the outstanding Obligations or (ii) in any other case,
Lenders holding Commitment Percentages aggregating at least 75% shall have
approved the terms of such Indebtedness proposed to be incurred by the
Company and all of the Net Issuance Proceeds of such Indebtedness are used to
prepay the outstanding Obligations in compliance with Section 2.05 of this
Agreement.
7.03 CONTINGENT OBLIGATIONS. The Company shall not create, incur,
assume or suffer to exist any Contingent Obligations except endorsements for
collection or deposit in the Ordinary Course of Business and except those
arising from the acquisition of the NHP Stock or under the NHP Merger Agreement
or arising in connection with the transactions contemplated hereby.
7.04 LEASE OBLIGATIONS. The Company shall not create or suffer to
exist any obligations for the payment of rent for any Property under a lease or
agreement to lease that is not a Capital Lease.
7.05 DISPOSITION OF PROPERTIES. The Company shall not, directly or
indirectly, make any Disposition of any Property, or enter into any agreement to
do so, unless such Disposition is at fair market value (as determined in good
faith by the Company's Board of Directors) and is for consideration consisting
exclusively of cash or Cash Equivalents; provided, however, that, so long as no
Event of Default is then continuing hereunder or would result therefrom, the
Company may make a Disposition of the NHP Stock to the Merger Sub for
consideration other than cash or Cash Equivalents immediately prior to and
solely in connection with the consummation of the merger described in the NHP
Merger Agreement and following satisfaction of all material conditions precedent
thereto, so long as, if the Obligations are not to be paid in full effective
upon the consummation of such merger, (i) the Merger Sub shall assume all of the
Obligations of the Company under the Loan Documents pursuant to an assumption
agreement in form and substance reasonably satisfactory to the Agent and the
Requisite Lenders in their discretion (which assumption obligations shall be
part of the debts, liabilities and duties assumed by the surviving entity in
such merger); (ii) there shall be no material adverse effect therefrom upon the
Agent or the Lenders, in the reasonable opinion of the Agent and the Requisite
Lenders; (iii) the REIT, the Operating Partnership and the Common Stockholders
shall ratify and reaffirm their obligations under the REIT Guaranty Documents in
form and substance reasonably satisfactory to the Agent and the Requisite
Lenders in their discretion in connection therewith; and (iv) the Agent and the
Lenders bear no cost or expense in connection with such matters.
7.06 CONSOLIDATIONS AND MERGERS. The Company shall not merge or
consolidate with or into any Person; provided, however, that the Agent and the
Lenders shall agree to permit the Company to be consolidated with or merged
into a special purpose Subsidiary of the REIT as the surviving entity solely in
connection with the consummation of the merger under the NHP Merger Agreement,
so long as: (i) no Event of Default is then continuing hereunder; (ii) there
shall be no material adverse effect therefrom upon the Agent or the Lenders, in
the reasonable opinion of the Agent and the Requisite Lenders; (iii) such
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surviving entity assumes all of the Obligations of the Company under the Loan
Documents pursuant to an assumption agreement in form and substance reasonably
satisfactory to the Agent and the Requisite Lenders in their discretion and
executes all such documents and takes such other actions as may be necessary to
maintain, preserve, perfect and protect the rights and interests of the Agent
and the Lenders arising under the Loan Documents; (iv) the Operating
Partnership, the REIT and the Common Stockholders reaffirm and ratify in writing
all of their respective obligations under the Loan Documents in connection with
such merger or consolidation, in form and substance reasonably satisfactory to
the Agent and the Requisite Lenders in their discretion; (v) the Agent and the
Lenders receive such favorable legal opinions from counsel to the Company, the
REIT, the Operating Partnership and such surviving entity in connection with
such matters as they may reasonably request; and (vi) the Agent and the Lenders
bear no cost or expense in connection with such matters.
7.07 LIQUIDATIONS; ISSUANCES OF STOCK.
(a) The Company shall not liquidate, wind-up or dissolve, or
amend its Organizational Documents in any respect; provided, however, that the
Agent and the Lenders shall agree to permit all of the assets of the Company to
be transferred to the REIT or a special purpose Subsidiary of the REIT in
connection with the liquidation of the Company solely in connection with the
consummation of the merger under the NHP Merger Agreement, so long as: (i) no
Event of Default is then continuing hereunder; (ii) there shall be no material
adverse effect therefrom upon the Agent or the Lenders, in the reasonable
opinion of the Agent and the Requisite Lenders; (iii) such transferee assumes
the Obligations of the Company under the Loan Documents pursuant to an
assumption agreement in form and substance reasonably satisfactory to the Agent
and the Requisite Lenders in their discretion; (iv) the Operating Partnership,
the REIT and the Common Stockholders reaffirm and ratify in writing all of their
respective obligations under the REIT Guaranty Documents in connection with such
transfer and liquidation, in form and substance reasonably satisfactory to the
Agent and the Requisite Lenders in their discretion and such Persons and such
transferee execute all such other documents and take such other actions as may
be necessary to maintain, preserve, perfect and protect the rights and interests
of the Agent and the Lenders under the Loan Documents; (v) the Agent and the
Lenders receive such favorable legal opinions from counsel to the Company, the
REIT, the Operating Partnership and such transferee in connection with such
matters as they may reasonably request; and (vi) the Agent and the Lenders bear
no cost or expense in connection with such matters.
(b) The Company shall not issue any Stock to any Person other
than the Operating Partnership or a Common Stockholder on the date hereof and
only if such Person has pledged such Stock to the Agent for the ratable benefit
of the Lenders pursuant to the Stock Pledge Agreement or an amendment thereto;
provided, however, that the Agent and the Lenders shall agree to permit the
Stock of the Company pledged to them under the Stock Pledge Agreement to be
transferred to the REIT or a special purpose Subsidiary of the REIT subject to
the security interests and all other rights in their favor created under the
Stock Pledge Agreement solely in connection with the consummation of the merger
under the NHP Merger Agreement, so long as: (i) no Event of Default is then
continuing hereunder; (ii) there shall be no material adverse effect therefrom
upon the Agent or the Lenders, in the reasonable opinion of the Agent and the
Requisite Lenders; (iii) such transferee assumes the Obligations of a Pledgor
(as such term is defined in the Stock Pledge Agreement) pursuant to an
assumption agreement in form and substance reasonably satisfactory to the Agent
and the Requisite Lenders in their discretion and executes all such documents
and takes such other actions as may be necessary to maintain, preserve, perfect
and protect the rights and interests of the Agents and the Lenders in the Stock
so transferred and arising under the Stock Pledge Agreement; (iv) the Company,
the Operating Partnership, the REIT and the Common Stockholders reaffirm and
ratify in writing all of their respective obligations under the Loan Documents
in connection with such transfer, in form and substance reasonably satisfactory
to
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the Agent and the Requisite Lenders in their discretion and execute all such
other documents and take such other actions as may be necessary to maintain,
preserve, perfect and protect the rights and interests of the Agent and the
Lenders under the Loan Documents; (v) the Agent and the Lenders receive such
favorable legal opinions from counsel to the Company, the REIT, the Operating
Partnership and such transferee in connection with such matters as they may
reasonably request; and (vi) the Agent and the Lenders bear no cost or expense
in connection with such matters.
7.08 INVESTMENTS. The Company shall not directly or indirectly own
or acquire any assets or make any Investments (or incur any Contractual
Obligation or enter into any letter of intent to make any Investments) other
than:
(a) cash and Cash Equivalents;
(b) NHP Stock; and
(c) promissory notes delivered to the Company by the Common
Stockholders in exchange for Stock.
7.09 RESTRICTED PAYMENTS. The Company shall not declare or make, or
permit any of their respective Subsidiaries to declare or make, any distribution
of any Properties, including cash, rights or obligations, on account of any
Stock, or purchase, redeem or otherwise acquire for value any of its Stock, now
or hereafter outstanding to any Person (all of the foregoing, collectively,
"distributions").
7.10 TRANSACTIONS WITH AFFILIATES. The Company shall not enter into
any transaction with any Affiliate of the Company or of the REIT, the Operating
Partnership or any of their Subsidiaries, except (a) for the transactions under
NHP Stock Purchase Agreement or the NHP Merger Agreement or as expressly
permitted by this Agreement, or (b) in the Ordinary Course of Business and
pursuant to the reasonable requirements of the business of the Company or such
Person; in each case (a) and (b), upon fair and reasonable terms no less
favorable to the Company than would obtain in a comparable arm's-length
transaction with a Person not such an Affiliate.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 EVENT OF DEFAULT. Any of the following shall constitute an
"Event of Default":
(a) NON-PAYMENT. The Company shall fail to pay, (i) when and as
required to be paid herein, any amount of principal of any Loan, or (ii) within
five days after the same shall become due, any amount of interest on any Loan or
any fee or other amount payable hereunder or pursuant to any other Loan
Document; or
(b) REPRESENTATION OR WARRANTY. Any representation or warranty by
the Company, the REIT, the Operating Partnership or any Common Stockholder made
or deemed made herein, in any Loan Document, or in any certificate, document or
financial or other statement by the Company, the REIT, the Operating
Partnership, any Common Stockholder, or any Responsible Officer, furnished at
any time under this Agreement, or in or under any Loan Document, shall prove to
have been incorrect in any material respect on or as of the date made or deemed
made; or
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(c) SPECIFIC DEFAULTS. The Company shall fail to perform or
observe any term, covenant or agreement contained in Section 6.08 and/or in
Article VII; or
(d) OTHER DEFAULTS. The Company, the REIT, the Operating
Partnership or any Common Stockholder shall fail to perform or observe any other
term or covenant contained in this Agreement or any Loan Document (other than as
set forth elsewhere in this Section 8.01), and such default shall continue
uncured for a period of 10 days after the earlier of (i) the date upon which a
Responsible Officer knew or received written notice of such failure or (ii) the
date upon which written notice thereof is given to the Company by Agent or any
Lender; or
(e) CROSS-DEFAULT. The Company shall fail, after any applicable
cure period:
(A) to make any payment (and which uncured failure to pay is
continuing) in respect of any Indebtedness or Guaranty Obligation when due which
in the aggregate exceeds $500,000 (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise), other than a payment with
respect to Intra-Company Debt where the obligee has not commenced pursuing its
remedies; or
(B) to perform or observe any other condition or covenant, or any
other event shall occur or condition exist, under any agreement or instrument
relating to any such Indebtedness or Guaranty Obligation, if the effect of such
failure, event or condition is to cause, or to permit the holder or holders of
such Indebtedness or the beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, such Indebtedness to be declared to be due and payable
prior to its stated maturity, or such Guaranty Obligation to become payable or
cash collateral in respect thereof to be demanded; or
(C) to perform or observe any condition or covenant of the
subordination agreement in favor of the lenders relating to the Intra-Company
Debt; or
(f) BANKRUPTCY OR INSOLVENCY. The Company, the REIT, the Operating
Partnership, any of their Subsidiaries or any Management Entity or, at any time
prior to the NHP Combination Date, NHP shall (i) become insolvent, or generally
fail to pay, or admit in writing its inability to pay, its debts as they become
due, subject to applicable grace periods, if any, whether at stated maturity or
otherwise; (ii) voluntarily cease to conduct its business in the ordinary
course; (iii) commence any Insolvency Proceeding with respect to itself; or
(iv) take any action to effectuate or authorize any of the foregoing; or
(g) INVOLUNTARY PROCEEDINGS. (i) Any Insolvency Proceeding shall be
commenced or filed against the Company, the REIT, the Operating Partnership, any
of their Subsidiaries, or any Management Entity or, at any time prior to the NHP
Combination Date, NHP or any writ, judgment, warrant of attachment, execution or
similar process, shall be issued or levied against a substantial part of such
Person's Properties, and any such proceeding or petition shall not be dismissed,
or such writ, judgment, warrant of attachment, execution or similar process
shall not be released, vacated or fully bonded within sixty (60) days after
commencement, filing or levy; (ii) the Company, the REIT, the Operating
Partnership, any of their Subsidiaries or, at any time prior to the NHP
Combination Date, NHP shall admit the material allegations of a petition against
it in any Insolvency Proceeding, or an order for relief (or similar order under
non-U.S. law) is ordered in any Insolvency Proceeding; or (iii) the Company, the
REIT, the Operating Partnership, any of their Subsidiaries or any Management
Entity or, at any time prior to the NHP Combination Date, NHP shall acquiesce in
the appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in
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possession (or agent therefor), or other similar Person for itself or a
substantial portion of its Property or business; or
(h) MONETARY JUDGMENTS. One or more final (non-interlocutory)
judgments, orders or decrees shall be entered against the Company, involving in
the aggregate a liability (not fully covered by insurance) as to any single or
related series of transactions, incidents or conditions, of $500,000 or more,
and the same shall remain unvacated and unstayed pending appeal for a period of
thirty (30) days after the entry thereof; or
(i) NON-MONETARY JUDGMENTS. Any non-monetary judgment, order or
decree shall be rendered against the Company, that has or would reasonably be
expected to have a Material Adverse Effect, and there shall be any period of ten
(10) consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; or
(j) REIT GUARANTY DOCUMENTS. The occurrence of any Guarantor Event
of Default.
8.02 REMEDIES.
If any Event of Default occurs, the Agent shall, at the request
of, or may, with the consent of, the Requisite Lenders:
(a) TERMINATION OF COMMITMENT. Declare the Commitment of each
Lender to make Loans to be terminated, whereupon such Commitments shall
forthwith be terminated;
(b) ACCELERATION. Declare (i) the unpaid principal amount of all
outstanding Loans and all interest accrued and unpaid thereon, and (ii) all
other amounts owing or payable hereunder or under any other Loan Document to be
immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived;
(c) OTHER REMEDIES. Exercise on behalf of itself and the Lenders
all rights and remedies available to it and the Lenders under the Loan Documents
or applicable law; PROVIDED, however, that upon the occurrence of any event
specified in Section 8.01(f) or 8.01(g) (in the case of clause (i) of Section
8.01(g) upon the expiration of the sixty (60)-day period mentioned therein), the
Commitment of each Lender to make Loans shall automatically terminate, and the
unpaid principal amount of all outstanding Loans and interest accrued and unpaid
thereon, and all other amounts owing or payable hereunder as aforesaid shall
automatically become due and payable without further act of any Agent or Lender.
8.03 RIGHTS NOT EXCLUSIVE. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are not exclusive of
any other rights, powers, privileges or remedies provided by law or in equity,
or under any other instrument, document or agreement now existing or hereafter
arising.
8.04 CERTAIN REQUIREMENTS IN ORDER TO PURSUE THE GUARANTY. Each
Lender intends that this Agreement creates a loan facility between such Lender
and the Company, and is not intended to be a loan to the REIT, the Operating
Partnership or any other Subsidiary thereof. Each Lender is relying on the
Company for repayment of the Obligations owing to such Lender, and neither the
Agent nor any Lender shall pursue the Guaranty, which is intended to guaranty
the Company's Obligations in the event the Company fails to perform under this
Agreement, unless the Agent has provided the Company 10 Business Days to perform
its Obligations hereunder, pursuant to and to the extent required by Section
2.01 of the Guaranty.
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ARTICLE IX
THE AGENT
9.01 APPOINTMENT AND AUTHORIZATION. Each Lender hereby irrevocably
appoints, designates and authorizes the Agent to take such action on its behalf
under the provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated to it by
the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary contained elsewhere in this Agreement or in any other Loan
Document, Agent shall not have any duties or responsibilities except those
expressly set forth herein, nor shall Agent have or be deemed to have any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist on the part of Agent.
9.02 DELEGATION OF DUTIES. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
9.03 LIABILITY OF AGENT. The Agent, its respective Affiliates, or
their respective officers, directors, employees, agents, or attorneys-in-fact
(all of the foregoing being collectively referred to as the "Agent-Related
Persons") shall not (a) be liable for any action taken or omitted to be taken by
any of them under or in connection with this Agreement or any other Loan
Document (except for its own gross negligence or willful misconduct), or (b) be
responsible in any manner to any of the Lenders for any recital, statement,
representation or warranty made by the Company, the Operating Partnership, the
REIT, any Subsidiary, any Common Stockholder or any Affiliate of any such
Person, or any officer thereof, contained in this Agreement or in any other Loan
Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by the Agent under or in connection with, this
Agreement or any other Loan Document, or for the value of any Collateral or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, any other Loan Document, or for any failure of the Company, the REIT,
the Operating Partnership, or any other party to any Loan Document to perform
its obligations hereunder or thereunder. No Agent-Related Person shall be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the Properties, books or
records of the Company, the REIT, the Operating Partnership, any Subsidiary, any
Common Stockholder or Affiliates thereof.
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9.04 RELIANCE BY AGENT.
(a) GENERALLY. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telecopy, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Requisite Lenders as it deems appropriate and, if
it so requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
or any other Loan Document in accordance with a request or consent of the
Requisite Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
(b) CONDITIONS PRECEDENT. For purposes of determining compliance
with the conditions specified in Sections 4.01 and 4.02 (as to the initial
borrowing hereunder), each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to such Lender, unless an officer of the Agent
responsible for the transactions contemplated by the Loan Documents shall have
received notice from such Lender prior to the initial borrowing specifying its
objection thereto and either such objection shall not have been withdrawn by
notice to the Agent to that effect or such Lender shall not have made available
to the Agent the Lender's ratable portion of such borrowing.
9.05 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Lenders, unless the Agent shall
have received written notice from a Lender or the Company referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Lenders. The Agent shall
take such action with respect to such Default or Event of Default as shall be
requested by the Requisite Lenders in accordance with Article VIII; PROVIDED,
HOWEVER, that unless and until the Agent shall have received any such request,
it may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable or in the best interest of the Lenders.
9.06 CREDIT DECISION. Each Lender expressly acknowledges that none
of the Agent-Related Persons has made any representation or warranty to such
Lender and that no act by the Agent hereinafter taken, including any review of
the affairs of the Company, the REIT, the Operating Partnership, any Subsidiary,
or any Common Stockholder shall be deemed to constitute any representation or
warranty by the Agent to any Lender. Each
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Lender represents to the Agent that such Lender has, independently and without
reliance upon the Agent and based on such documents and information as such
Lender has deemed appropriate, made its own appraisal of and investigation into
the business, prospects, operations, Properties, financial and other condition
and creditworthiness of the Company, the REIT, the Operating Partnership,
Subsidiary, or Common Stockholder and all applicable lender regulatory laws
relating to the transactions contemplated thereby (including, without
limitation, applicable margin regulations), and made its own decision to enter
into this Agreement and extend credit to the Company hereunder. Each Lender
also represents that it will, independently and without reliance upon the Agent
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, Properties, financial and other condition and
creditworthiness of the Company, the REIT, the Operating Partnership, the
Subsidiaries and Common Stockholders. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the Agent,
Agent shall have no duty or responsibility to provide any Lender with any credit
or other information concerning the business, prospects, operations, Properties,
financial and other condition or creditworthiness of the Company, the REIT, the
Operating Partnership, the Subsidiaries and Common Stockholders which may come
into the possession of any of the Agent-Related Persons.
9.07 INDEMNIFICATION. The Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so) ratably
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind whatsoever which may at any time (including at any time following the
repayment of the Loans) be imposed on, incurred by or asserted against any such
Person in any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by any such Person
under or in connection with any of the foregoing; PROVIDED, HOWEVER, that no
Lender shall be liable for the payment to the Agent-Related Persons of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from such
Person's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender shall reimburse the Agent upon demand (to the extent the
Agent is not reimbursed upon demand by the Company, unless the Agent is legally
restricted from making such demand upon the Company, in which case demand need
not be made upon the Company) for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Company. Without limiting
the generality of the foregoing, if the IRS or any authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered or was not properly executed, or because such
Lender failed to notify the Agent of a change in
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circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason), such Lender shall indemnify the Agent
fully for all amounts paid, directly or indirectly, by the Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the Agent under this Section 9.07,
together with all costs, expenses and attorneys' fees (including allocated costs
for in-house legal services). The obligation of the Lenders in this Section
shall survive the payment of all Obligations.
9.08 AGENT IN INDIVIDUAL CAPACITY. BofA (and any other Lender that
may hereafter serve as Agent) and each of their respective Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory or other business with, the Company, the REIT, the Operating
Partnership, and the Subsidiaries and Affiliates as though BofA (or any other
such Lender) were not the agent hereunder and without notice to the Lenders.
With respect to its Loans, BofA (and any other Lender that may hereafter serve
as Agent), shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same as though each of them were not an agent,
and the terms "Lender" and "Lenders" shall include BofA (and any other Lender
that may hereafter serve as Agent), in its individual capacity.
9.09 SUCCESSOR AGENTS. The Agent may resign as Agent upon 30 days'
notice to the Lenders. If an Agent shall resign under this Agreement, the
Requisite Lenders shall appoint from among the Lenders a successor Agent for the
Lenders, which successor Agent shall, if no Default or Event of Default exists
hereunder, be subject to the approval of the Company. If no successor Agent is
appointed prior to the effective date of the resignation of the retiring Agent,
the retiring Agent shall appoint, after consulting with the Lenders and the
Company, a successor Agent. Upon the acceptance of its appointment as successor
Agent hereunder, such successor Agent shall succeed to all the rights, powers
and duties of the retiring Agent, and the term "Agent" shall mean such successor
Agent, and the retiring Agent's rights, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article IX and Sections 10.04 and 10.05 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was an
Agent under this Agreement.
9.10 COLLATERAL MATTERS.
(a) PERFECTION. The Agent is authorized on behalf of all the
Lenders, without the necessity of any notice to or further consent from the
Lenders, from time to time to take any action with respect to any Collateral or
the Collateral Documents which may be necessary to perfect and maintain
perfected the security interest in and Liens upon the Collateral granted
pursuant to the Collateral Documents.
(b) RELEASE. Upon request by the Agent at any time, the Lenders
will confirm in writing the Agent's authority to release particular types or
items of Collateral pursuant to Section 2.13(e) or any other provision of the
Loan Documents. The Agent shall be completely protected in taking any action
directed by all the Lenders in response to such
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request and shall incur no liability to the Company or any Lender for failing to
take any action as to which all of the Lenders do not concur.
(c) NO OTHER COLLATERAL. Each Lender agrees with and in favor of
each other (which agreement shall not be for the benefit of the Company, the
REIT, any Subsidiaries, any Common Stockholders or any Affiliates) that the
Company's obligation to such Lender under this Agreement and the other Loan
Documents is not and shall not be secured by any real property collateral now or
hereafter acquired by such Lender other than the Collateral hereunder.
ARTICLE X
MISCELLANEOUS
10.01 AMENDMENTS AND WAIVERS.
(a) GENERALLY. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure therefrom, shall be effective unless the same shall be in writing and
signed by the Requisite Lenders, and then such amendment, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
(b) MATTERS REQUIRING UNANIMOUS CONSENT. Notwithstanding the terms
of Section 10.01(a), no amendment or waiver of any provision of this Agreement
or any other Loan Document, no agreement to forebear from acting upon any
departure by the Company therefrom, and no consent with respect to any departure
by the Company therefrom, shall be effective to do any of the following, unless
the same is in writing and signed by all the Lenders:
(i) increase the Commitment of any Lender;
(ii) postpone or delay any date fixed for any payment of principal,
interest, fees or other amounts due hereunder or under any Loan Document whether
by acceleration or otherwise;
(iii) reduce the principal of, or the rate of interest specified
herein on, any Loan, or any fees or other amounts payable hereunder or under any
Loan Document;
(iv) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans required for the Lenders or any of them to
take any action hereunder;
(v) amend Section 2.15 (Sharing of Payments, Etc.), Section 6.10
(Use of Proceeds), Section 8.02 (Remedies), Section 10.15 (Governing Law and
Jurisdiction) or this Section 10.01;
(vi) release any portion of the Collateral; or
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(vii) release any guarantor from liability under the REIT Guaranty
Documents.
(c) MATTERS REQUIRING AGENTS' CONSENT. Notwithstanding the terms
of Section 10.01(a), no amendment or waiver of any provision of this Agreement
or any other Loan Document, and no consent with respect to any departure by the
Company therefrom, shall be effective to affect the rights or duties of the
Agent under this Agreement or any other Loan Document, unless the same is in
writing and signed by the Agent.
10.02 NOTICES.
(a) DELIVERY. All notices, requests and other communications
provided for hereunder shall be in writing (including, unless the context
expressly otherwise provides, telegraphic, telex, facsimile transmission or
cable communication) and mailed, telegraphed, telexed or delivered, (i) if to
the Company, to its address specified on the signature pages hereof, (ii) if to
any Lender, to its Domestic Lending Office, and (iii) if to Agent, to its
address specified on the signature pages hereof; or, as to the Company or the
Agent, to such other address as shall be designated by such party in a written
notice to the other parties, and as to each other party, at such other address
as shall be designated by such party in a written notice to the Company and the
Agent.
(b) RECEIPT. All such notices and communications shall, when
transmitted by overnight delivery, telegraphed, telecopied by facsimile, telexed
or cabled, be effective when delivered for overnight delivery or to the
telegraph company, transmitted by telecopier, confirmed by telex answerback or
delivered to the cable company, respectively, or if delivered, upon delivery,
except that notices pursuant to Article II or VIII shall not be effective until
actually received by the Agent.
(c) RELIANCE. The Company acknowledges and agrees that any
agreement of the Agent and the Lenders under Article II to receive certain
notices by telephone and facsimile is solely for the convenience and at the
request of the Company. The Agent and the Lenders shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by the Company
to give such notice, and the Agent and the Lenders shall not have any liability
to the Company or any other Person on account of any action taken or not taken
by the Agent and the Lenders in reliance upon such telephonic or facsimile
notice. The obligation of the Company to repay the Loans shall not be affected
in any way or to any extent by any failure by the Agent and the Lenders to
receive written confirmation of any telephonic or facsimile notice or the
receipt by the Agent and the Lenders of a confirmation which is at variance with
the terms understood by the Agent and the Lenders to be contained in the
telephonic or facsimile notice.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of any Agent or Lender, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
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10.04 COSTS AND EXPENSES. The Company shall, whether or not the
transactions contemplated hereby shall be consummated:
(a) FACILITY EXPENSES. Pay or reimburse the Agent and each Lender
on demand for all reasonable costs and expenses incurred by it in connection
with the development, preparation, delivery, and execution of, and any
amendment, supplement, waiver or modification to, this Agreement, any Loan
Document and any other documents prepared in connection herewith or therewith,
the consummation of the transactions contemplated hereby and thereby (including,
without limitation, recording costs and taxes, travel and due diligence expenses
incurred by representatives of the Agent, and the reasonable Attorney Costs
incurred by the Agent with respect thereto); and
(b) ENFORCEMENT EXPENSES. Pay or reimburse the Agent and Lenders
on demand for all reasonable costs and expenses incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies (including in connection with any "workout" or restructuring regarding
the Loans) under this Agreement, any other Loan Document, and any such other
documents, including reasonable Attorney Costs incurred by the Agent and Lender.
10.05 INDEMNITY. The Company shall indemnify and hold harmless the
Agent, each Lender and each of their respective officers, directors, employees,
counsel, agents and attorneys-in-fact (each, an "Indemnified Person") from and
against and pay them for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses or disbursements
(including Attorney Costs) of any kind or nature whatsoever with respect to the
execution, delivery or enforcement of this Agreement and any other Loan
Documents, or the transactions contemplated hereby and thereby, and with respect
to any investigation, litigation or proceeding related to this Agreement or the
Loans or the use of the proceeds thereof, whether or not any Indemnified Person
is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); PROVIDED, that the Company shall have no obligation hereunder to
any Indemnified Person with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of such Indemnified Person. The
agreements in this Section 10.05 shall survive payment of all other Obligations.
10.06 MARSHALLING; PAYMENTS SET ASIDE. Neither the Agent nor any
Lender shall be under any obligation to marshall any assets in favor of the
Company or any other Person or against or in payment of any or all of the
Obligations. To the extent that the Company makes a payment or payments to the
Agent or any Lender, or the Agent or any Lender enforces its Liens or exercises
its rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, receiver or any other party in connection with any Insolvency
Proceeding, or otherwise, then to the extent of such recovery the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.
10.07 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and
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assigns, except that the Company may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of the Agent
and each Lender, which may be withheld in their sole and absolute discretion.
10.08 ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) ASSIGNMENTS. Subject to the further provisions of this Section
10.08(a), any Lender may, with the written consent of the Agent, which consent
shall not be unreasonably withheld, at any time assign and delegate to one or
more Eligible Assignees (provided that no written consent of the Agent shall be
required in connection with any assignment and delegation by a Lender to a
Lender Affiliate of such Lender) (each an "Assignee") all, or any ratable part
of all, of the Loans, the Commitments and the other rights and obligations of
such Lender hereunder, in a minimum amount of $5,000,000 and in additional
increments of $250,000; PROVIDED, HOWEVER, that the Company and the Agent may
continue to deal solely and directly with such Lender in connection with the
interest so assigned to an Assignee until (A) written notice of such assignment,
together with payment instructions, addresses and related information with
respect to the Assignee, shall have been given to the Company and the Agent by
such Lender and the Assignee; (B) such Lender and its Assignee shall have
delivered to the Company and the Agent an Assignment and Acceptance in the form
of EXHIBIT H ("Assignment and Acceptance") together with any Note or Notes
subject to such assignment; (C) such Lender shall have paid to the Agent, for
its own account, an assignment fee in the amount of $1500, if the Assignee is a
Lender (without giving effect to the Assignment), and $3000 in all other cases;
and (D) such Lender shall have delivered to the Agent such documents as may be
required by Section 3.01(f). Any such assignment requiring the approval of the
Agent shall also require the approval of the Company (such approval not to be
unreasonably withheld or delayed), provided that the Company's failure to
approve or disapprove such assignment within five days' after receiving written
notice thereof shall be deemed approval by the Company of such assignment, and
provided further, that no such approval from the Company shall be required
during the continuation of a Default or Event of Default.
(b) RIGHTS OF ASSIGNEE. From and after the date that the Agent
notifies the assignor Lender that the Agent has received an executed Assignment
and Acceptance and payment of the assignment fee specified in Section 10.08(a),
(i) the Assignee thereunder shall, subject to Section 10.08(a), be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Lender under the Loan Documents, and (ii) the assignor
Lender shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Loan Documents.
(c) REPLACEMENT NOTES. Within thirty (30) Business Days after its
receipt of notice by the Agent that the Agent has received an executed
Assignment and Acceptance and payment of the processing fee, the Company shall
execute and deliver to the Agent, new Notes evidencing such Assignee's assigned
Loans and Commitment and, if the assignor Lender has retained a portion of its
Loans and its Commitment, replacement Notes in the principal amount of the Loans
retained by the assignor Lender (such Notes to be in exchange
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for, but not in payment of, the Notes held by such Lender). Immediately upon
each Assignee's making its payment under the Assignment and Acceptance, this
Agreement shall be deemed to be amended to the extent, but only to the extent,
necessary to reflect the addition of the Assignee and the resulting adjustment
of the Commitments arising therefrom. The Commitment allocated to each Assignee
shall reduce such Commitment of the assigning Lender PRO TANTO.
(d) PARTICIPATIONS. Any Lender may at any time sell to one or more
commercial lenders (a "Participant") participating interests in any Loans,
Liability and Commitment of that Lender and the other interests of that Lender
(the "originating Lender") hereunder and under the other Loan Documents;
PROVIDED, HOWEVER, that (i) the originating Lender's obligations under this
Agreement shall remain unchanged, (ii) the originating Lender shall remain
solely responsible for the performance of such obligations, (iii) the Company
and the Agent shall continue to deal solely and directly with the originating
Lender in connection with the originating Lender's rights and obligations under
this Agreement and the other Loan Documents, (iv) no Lender shall transfer or
grant any participating interest under which the Participant shall have rights
to approve any amendment to, or any consent or waiver with respect to, this
Agreement or any other Loan Document, except to the extent such amendment,
consent or waiver would require unanimous consent as described in the FIRST
PROVISO to Section 10.01; and (v) the Company shall have approved the transfer
or grant of any participating interest in any Loans, and Commitment of the
originating Lender to a Participant that has not theretofore previously held a
participating interest therein (such approval not to be unreasonably withheld or
delayed), provided that the Company's failure to approve or disapprove in
writing such Participant within five days' after receiving written notice
thereof shall be deemed approval by the Company of such transfer or grant to
such Participant, and provided further, that no such approval from the Company
shall be required during the continuation of a Default or Event of Default.. In
the case of any such participation, the Participant shall not have any rights
under this Agreement, or any of the other Loan Documents, and all amounts
payable by the Company hereunder shall be determined as if such Lender had not
sold such participation; except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of setoff in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement.
(e) ASSIGNMENTS TO FEDERAL RESERVE BANK. Notwithstanding any other
provision contained in this Agreement or any other Loan Document to the
contrary, any Lender may assign all or any portion of the Loans or Notes held by
it to any Federal Reserve Bank or the United States Treasury as collateral
security pursuant to Regulation A of the Board of Governors of the Federal
Reserve System and any Operating Circular issued by such Federal Reserve Bank,
provided that any payment in respect of such assigned Loans or Notes made by the
Company to or for the account of the assigning and/or pledging Lender in
accordance with the terms of this Agreement shall satisfy the Company's
obligations hereunder in respect of such assigned Loans or Notes to the extent
of such payment. No such assignment shall release the assigning Lender from its
obligations hereunder.
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10.09 SETOFF. In addition to any rights and remedies of the Lenders
provided by law, if an Event of Default exists, each Lender is authorized at any
time and from time to time, without prior notice to the Company, any such notice
being waived by the Company to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held by, and other indebtedness at any time owing to, such
Lender to or for the credit or the account of the Company against any and all
obligations owing to such Lender, now or hereafter existing, irrespective of
whether the Agent or such Lender shall have made demand under this Agreement or
any Loan Document and whether such obligations may be contingent or unmatured.
Each Lender agrees to promptly notify the Company and the Agent after any such
setoff and application made by such Lender; PROVIDED, HOWEVER, that the failure
to give such notice shall not affect the validity of such setoff and
application. The rights of each Lender under this Section 10.09 are in addition
to the other rights and remedies (including other rights of setoff) that such
Lender may have. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE, OR
ATTEMPT TO EXERCISE, ANY RIGHT OF SETOFF, BANKER'S LIEN, OR THE LIKE, AGAINST
ANY DEPOSIT ACCOUNT OR PROPERTY OF THE COMPANY, HELD OR MAINTAINED BY ANY
LENDER, WITHOUT THE PRIOR WRITTEN CONSENT OF THE REQUISITE LENDERS.
10.10 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Lender
shall notify the Agent in writing of any changes in the address to which notices
to such Lender should be directed, of addresses of its Offshore Lending Office,
of payment instructions in respect of all payments to be made to it hereunder
and of such other administrative information as the Agent shall reasonably
request.
10.11 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement in any number of separate counterparts, each of
which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Company and the Agent.
10.12 SEVERABILITY. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
10.13 NO THIRD PARTIES BENEFITED. This Agreement is made and entered
into for the sole protection and legal benefit of the Company, the Agent and the
Lenders, and their permitted successors and assigns, and no other Person shall
be a direct or indirect legal beneficiary of, or have any direct or indirect
cause of action or claim in connection with, this Agreement or any of the other
Loan Documents. No Agent or Lender shall have any obligation to any Person not
a party to this Agreement or the other Loan Documents.
10.14 TIME. Time is of the essence of each term and provision of
this Agreement and each of the other Loan Documents.
10.15 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
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GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
10.16 WAIVER OF JURY TRIAL. THE COMPANY, THE AGENT, AND THE LENDERS
EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. SUBJECT TO SECTION 10.17 BELOW, THE COMPANY, THE AGENT,
AND THE LENDERS EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED
BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES
FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.17 ARBITRATION.
(a) MANDATORY ARBITRATION. Any controversy or claim between or
among the parties arising out of or relating to this Agreement, the Loan
Documents, and any claim based on or arising from an alleged tort, shall at the
request of any party be determined by arbitration. The arbitration shall be
conducted in New York, New York, in accordance with the United States
Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law
provision in this Agreement, and under the Commercial Rules of the American
Arbitration Association (the "AAA"). The arbitrator(s) shall give effect to
statutes of limitation in determining any claim. Any controversy concerning
whether an issue is arbitrable shall be determined by the arbitrator(s).
Judgment upon the arbitration award may be entered in any court having
jurisdiction. The institution and maintenance of an action for judicial relief
or pursuit of a provisional or ancillary remedy shall not constitute a waiver of
the right of any party, including the plaintiff, to submit the controversy or
claim to arbitration if any other party contests such action for judicial
relief.
(b) PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No provision
of this Section 10.17 shall limit the right of any party to this Agreement to
exercise self-help remedies such as setoff, foreclosure against or sale of any
real or personal property collateral or security, or to obtain provisional or
ancillary remedies from a court of competent jurisdic-
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tion before, after, or during the pendency of any arbitration or other
proceeding. The exercise of a remedy does not waive the right of either party
to resort to arbitration.
10.18 NOTICE OF CLAIMS; CLAIMS BAR. THE COMPANY HEREBY AGREES THAT
IT SHALL GIVE PROMPT WRITTEN NOTICE TO THE AGENT OF ANY CLAIM OR CAUSE OF ACTION
IT BELIEVES IT HAS, OR MAY SEEK TO ASSERT OR ALLEGE AGAINST THE AGENT OR ANY
LENDER, WHETHER SUCH CLAIM IS BASED IN LAW OR EQUITY, ARISING UNDER OR RELATED
TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR TO THE LOANS (OR THE
COLLATERAL THEREFOR), OR ANY ACT OR OMISSION TO ACT BY THE AGENT OR ANY LENDER
WITH RESPECT HERETO OR THERETO, AND THAT IF THE COMPANY SHALL FAIL TO GIVE SUCH
PROMPT NOTICE TO THE AGENT WITH REGARD TO ANY SUCH CLAIM OR CAUSE OF ACTION, THE
COMPANY SHALL BE DEEMED TO HAVE WAIVED, AND SHALL BE FOREVER BARRED FROM
BRINGING OR ASSERTING, SUCH CLAIM OR CAUSE OF ACTION IN ANY ARBITRATION OR ANY
SUIT, ACTION OR PROCEEDING IN ANY COURT OR BEFORE ANY GOVERNMENTAL AGENCY.
10.19 ENTIRE AGREEMENT. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding between the Company,
the Agent and the Lenders. Accordingly, this Agreement, together with the other
Loan Documents, supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof, except for any prior arrangements made with respect
to the payment by the Company of (or any indemnification for) any fees, costs,
expenses, liabilities, damages or claims payable to or incurred (or to be
incurred) by or on behalf of the Agent or the Lenders.
10.20 INTERPRETATION. This Agreement, together with the other Loan
Documents, is the result of negotiations between and has been reviewed by
counsel to the Agent, the Lenders and the Company and other parties, and is the
product of all parties hereto. Accordingly, this Agreement and the other Loan
Documents shall not be construed against the Lenders or the Agent merely because
of the Agent's or Lender's involvement in the preparation of such documents and
agreements.
10.21 RELATIONSHIP. Nothing herein contained shall in any manner be
construed as creating any relationship between the Agent and the Lenders, on the
one hand, and the Company, on the other hand, other than as creditor and debtor.
The Company agrees to indemnify, protect, defend and hold the Agent and each
Lender harmless from and against any and all losses, liabilities, damages, and
costs and expenses (including, but not limited to, reasonable attorneys' fees
and disbursements, including reasonably allocated costs of in-house counsel)
resulting from any other construction of the parties' relationship.
10.22. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR RELATING TO THIS AGREEMENT
MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE
STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT COMPANY
ACCEPTS
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FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT. Company hereby agrees that service
of all process in any such proceeding in any such court may be made by
registered or certified mail, return receipt requested, to Company at its
address provided in Section 10.04, such service being hereby acknowledged by
Company to be sufficient for personal jurisdiction in any action against Company
in any such court and to be otherwise effective and binding service in every
respect. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of the Agent or any Lender to
bring proceedings against Company in the courts of any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first written above.
COMPANY
AIMCO/NHP HOLDINGS, INC.,
a Delaware corporation
By:
Peter K. Kompaniez
Vice President
Notices to be sent to:
c/o AIMCO PROPERTIES, L.P.
1873 South Bellaire Street
17th Floor
Denver, Colorado 80222
Attention: Peter K. Kompaniez,
Vice Chairman
Facsimile: (303) 757-8735
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AGENT
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Agent
By:
Name:
Title:
Notices to be sent to:
Bank of America National Trust and Savings Association CRESG #1357
555 South Flower Street, 6th Floor
Los Angeles, CA 90071
Att'n: M. Harvey
Telephone: 213/228-4013
Facsimile: 213/228-5389
Payments to be made to:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
333 S. Beaudry Ave.
Loan Accounting Dept #1503
Los Angeles, CA 90017
ABA #: 121 000 358
Credit Account #: 15031-00407
Attention: Maria Mora
Ref: AIMCO/NHP Holdings, Inc.
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<PAGE>
B OF A
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as a Lender
By:
Name:
Title:
Notices to be sent to:
Bank of America National Trust and Savings Association CRESG #1357
555 South Flower Street, 6th Floor
Los Angeles, CA 90071
Att'n: M. Harvey
Telephone: 213/228-4013
Facsimile: 213/228-5389
Payments to be made to:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
333 S. Beaudry Ave.
Loan Accounting Dept #1503
Los Angeles, CA 90017
ABA #: 121 000 358
Credit Account #: 15031-00407
Attention: Maria Mora
Ref: AIMCO/NHP Holdings, Inc.
55
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SMITH BARNEY MORTGAGE CAPITAL GROUP, INC.,
a Delaware corporation,
as a Lender
By:
Name:
Title:
Notices to be sent to:
Smith Barney Mortgage Capital Group, Inc.
388 Greenwich Street, 33rd Floor
New York, New York 10013
Attention: Robert Deckey
Telephone: (212) 816-8240
Facsimile: (212) 816-7491
Payments to be made to:
Chase Manhattan Bank
ABA No.: 021-000-021
Ref.: AIMCO Funding
Attention: Joseph Martinelli
56
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SCHEDULES
Schedule 2.01 Commitments of the Lenders
EXHIBITS
EXHIBIT A Borrowing Notice
EXHIBIT B Note
EXHIBIT C Notice of Conversion/Continuation
EXHIBIT D Guaranty
EXHIBIT E Stock Pledge Agreement
Exhibit F Opinion Requirements
EXHIBIT G Compliance Certificate
EXHIBIT H Assignment and Acceptance
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Schedule 2.01
Commitments of the Lenders
- --------------------------------------------------------------------------------
Commitment
Bank of America National Trust and Savings Association $38,000,000
Smith Barney Mortgage Capital Group, Inc. $38,000,000
--------------------
Total Commitments $76,000,000
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EXHIBIT A
TO ACQUISITION SUB CREDIT AGREEMENT
BORROWING NOTICE
, 1997
Bank of America National Trust
and Savings Association, as Agent
CRESG #1357
555 South Flower Street, 6th Floor
Los Angeles, California 90071
Attn: Unit Manager
Re: Credit Agreement (Acquisition Sub Facility) dated as of May 5, 1997 (as the
same may be amended, modified or supplemented from time to time, the
"Agreement"), among AIMCO/NHP Holdings, Inc., a Delaware corporation (the
"Company"), the lenders from time to time party to the Agreement (the
"Lenders"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as one
of the Lenders, SMITH BARNEY MORTGAGE CAPITAL GROUP, INC., as one of the
Lenders, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
Agent (the "Agent") for the Lenders
Ladies and Gentlemen:
Reference is made to the Agreement. Capitalized terms used in this
Borrowing Notice without definition have the meanings specified in the
Agreement.
Pursuant to Section 2.03 of the Agreement, notice is hereby given that the
Company desires that the Lenders make the loan described in attached SCHEDULE 1
(the "Loan"). In connection therewith, the Company and the undersigned
Responsible Officers of the Company hereby certify that:
(1) REPRESENTATIONS AND WARRANTIES. All representations and
warranties of the Company contained in the Loan Documents, including those
contained in Article V of the Agreement, are true and correct as of the date
hereof and shall be true and correct in all material respects on the date of the
Loan, both before and after giving effect to the Loan;
(2) NO DEFAULT/EVENT OF DEFAULT. No Default or Event of Default
exists as of the date hereof or will result from the making of the Loan;
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(3) USE OF PROCEEDS. The proceeds of the Loan will be used only as
permitted under Sections 2.01(b), 6.10 and 7.12 of the Agreement;
(4) MAXIMUM DISBURSEMENT AMOUNT. The amount of the requested Loan
does not exceed the Maximum Disbursement Amount for the NHP Stock to be acquired
in part with the proceeds of the requested Loan; and
(5) NO MATERIAL ADVERSE EFFECT. No act, omission, change or event
which has a Material Adverse Effect has occurred since the Closing Date.
AIMCO/NHP Holdings, Inc.,
a Delaware corporation
By:
Name:
Its:
2
<PAGE>
SCHEDULE 1
to Borrowing Notice
REQUESTED LOAN
AMOUNT OF REQUESTED LOAN: $
(must be $1,000,000 a multiple of
$100,000 in excess thereof)
DESIGNATION OF INTEREST RATE:
(Portion of requested Loan to be funded as Base Rate Loan and/or LIBOR Loan):
(1) BASE RATE LOAN. The following Base Rate Loan:
Amount: $
Requested Borrowing Date:
(must be a Business Day at least two (2) Business Day after date of
notice)
(2) LIBOR LOAN. The following LIBOR Loan:
(there must not, after giving effect to the requested Loan, be more
than five (5) different LIBOR Loans in effect)
Amount: $
Requested Borrowing Date:
(must be a Business Day at least three (3) Business Days after date of
notice)
Interest Period:
(1,2,3, or 6 months)
3
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EXHIBIT B
TO ACQUISITION SUB CREDIT AGREEMENT
FORM OF PROMISSORY NOTE
May ___, 1997
$[3] [2]
FOR VALUE RECEIVED, AIMCO/NHP Holdings, Inc., a Delaware corporation (the
"Company"), promises to pay to the order of [4] ("Lender") the principal amount
of [5] ($ [3] ) or, if less, the aggregate amount of Loans (as
such term and all other capitalized terms used but not defined herein are
defined in the Credit Agreement referred to below) made by the Lender to the
Company pursuant to the Credit Agreement referred to below, outstanding on the
Maturity Date.
The Company also promises to make principal payments and interest on the
unpaid principal amount hereof from the date hereof until paid at the rates and
at the times which shall be determined in accordance with the provisions of the
Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Payment Office. Until notified of the transfer of this Note, the Company shall
be entitled to deem the Lender or such person who has been so identified by the
transferor in writing to the Company as the holder of this Note, as the owner
and holder of this Note. The Lender and any subsequent holder of this Note
agrees that before disposing of this Note, or any part hereof, it will make a
notation hereon of all principal payments previously made hereunder of the date
to which interest hereon has been paid on the schedule attached hereto, if any;
PROVIDED, HOWEVER, that the failure to make notation of any payment made on this
Note shall not limit or otherwise affect the obligation of the Company hereunder
with respect to payments of principal or interest on this Note.
This Note is referred to in, and is entitled to the benefits of, the Credit
Agreement dated as of May 5, 1997 (the "CREDIT AGREEMENT") among the Company,
the lenders from time to time party thereto, and Bank of America National Trust
and Savings Association, as Agent (the "Agent"). The Credit Agreement, among
other things, (i) provides for the making of loans (the "LOANS") by the Lender
to the Company from time to time in an aggregate amount first above mentioned,
the indebtedness of the Company resulting from each such Loan being evidenced by
this Note, and (ii) contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events and also for mandatory and optional
prepayments on account of principal hereof and certain principal payments prior
to the maturity hereof upon the terms and conditions therein specified.
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The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
The Company promises to pay all costs and expenses, including reasonable
attorneys' fees, incurred in the collection and enforcement of this Note. The
Company hereby waives diligence, presentment, and protest, and except as
provided in the Credit Agreement, demand and notice of every kind and, to the
full extent permitted by law, the right to plead any statute of limitations as a
defense to any demand hereunder.
This Note shall be governed by, and construed in accordance with, the laws
of the state of New York without giving effect to its choice of law doctrine.
IN WITNESS WHEREOF, the Company has caused this Note to be executed and
delivered by its duly authorized officer, as of the date and place first above
written.
AIMCO/NHP Holdings, Inc.,
a Delaware corporation
By:
Name:
Its:
2
<PAGE>
EXHIBIT C
TO ACQUISITION SUB CREDIT AGREEMENT
NOTICE OF CONVERSION/CONTINUATION
__________________, 199___
Bank of America National Trust
and Savings Association, as Agent
CRESD #1357
555 South Flower Street, 6th Floor
Los Angeles, California 90071
Attn: Unit Manager
Re: Credit Agreement dated as of May 5, 1997(as the same may be amended,
modified or supplemented from time to time, the "Agreement"), by and among
AIMCO/NHP Holdings, Inc., a Delaware corporation (the "Company"), the
lenders from time to time party to the Agreement (the "Lenders"), BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as one of the Lenders,
SMITH BARNEY MORTGAGE CAPITAL GROUP, INC., as one of the Lenders, and BANK
OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent (the "Agent")
Ladies and Gentlemen:
Reference is made to the Agreement. Capitalized terms used in this
Notice of Conversion/Continuation without definition have the meanings specified
in the Agreement.
Pursuant to Section 2.04 of the Agreement, the Company hereby elects
to convert or continue the loans described in attached SCHEDULE 1 (the "Loans").
In connection therewith, the Company and the undersigned Responsible Officers of
the Company hereby certify that:
(1) REPRESENTATIONS AND WARRANTIES. All representations and
warranties of the Company contained in the Loan Documents, including those
contained in Article V of the Agreement, are true and correct as of the date
hereof and shall be true and correct in all material respects on the date of the
continuation/conversion of the Loan, both before and after giving effect to such
continuation/conversion;
(2) NO DEFAULT/EVENT OF DEFAULT. No Default or Event of Default
exists as of the date hereof or will result from the continuation/conversion of
the Loan; and
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(3) NO MATERIAL ADVERSE EFFECT. No act, omission, change or
event which has a Material Adverse Effect has occurred since the Closing Date.
AIMCO/NHP Holdings, Inc.,
a Delaware corporation
By:
Name:
Its:
By:
Name:
Its:
2
<PAGE>
SCHEDULE 1
to Notice of Conversion/Continuation
LOAN TO BE CONVERTED OR CONTINUED
A. All conversions and continuations must be of a Loan, or portion thereof, in
a principal amount of $1,000,000 or a multiple of $100,000 in excess
thereof.
B. Conversions/continuations to a LIBOR Loan under paragraphs (1) and (2)
below are not permitted if, after giving effect to thereto, (a) there would
be more than five (5) different LIBOR Loans in effect, or (b) the aggregate
outstanding principal amount of all LIBOR Loans would be reduced to be less
than $1,000,000.
(1) CONVERSION OF A BASE RATE LOAN INTO A LIBOR LOAN.
The following Base Rate Loan to a LIBOR Loan:
Amount: $
Requested Conversion Date:
(must be a Business Day at
least three
(3) Business Days after date
of notice)
Requested Interest Period:
(1, 2 or 3months)
(2) CONTINUATION OF A LIBOR LOAN INTO A SUBSEQUENT INTEREST PERIOD.
The following LIBOR Loan into a subsequent
Interest Period:
Amount: $
Last day of current Interest Period:
(must be a Business Day at
least three
(3) Business Days after date
of notice)
Requested Interest Period:
(1, 2 or 3 months)
3
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EXHIBIT D
PAYMENT GUARANTY
(ACQUISITION SUB FACILITY)
This Payment Guaranty ("Guaranty") is made as of May 5, 1997, by
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation (the
"REIT"), and AIMCO PROPERTIES, L.P., a Delaware limited partnership (the
"Operating Partnership") (each of the REIT and the Operating Partnership is
referred to herein individually and collectively as "Guarantor") in favor of
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BofA"), as the agent
(in such capacity, the "Agent") for itself and the lenders ("Lenders") from time
to time party to the Acquisition Sub Credit Agreement (as hereinafter defined).
FACTUAL BACKGROUND
Guarantor is executing this Guaranty to induce the Lenders to make a
$76,000,000 loan facility available to AIMCO/NHP Holdings, Inc., a Delaware
corporation ("Acquisition Sub") in accordance with the Credit Agreement
(Acquisition Sub Facility) (the "Acquisition Sub Credit Agreement"), dated of
even date herewith, by and among Acquisition Sub, BofA, as Agent and as a
Lender, Smith Barney Mortgage Capital Group, Inc., as a Lender, and the other
Lenders from time to time party thereto. Capitalized terms used but not defined
herein shall have the meanings set forth in the Acquisition Sub Credit Agreement
or, if not defined therein, in the Operating Partnership Credit Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, each Guarantor hereby agrees as
follows:
ARTICLE I
DEFINITIONS
1.01 DEFINED TERMS. As used herein, the following terms shall have
the meanings set forth below:
"AIMCO GROSS ASSET VALUE" means, as of any date, the total asset value
of the REIT, as determined in good faith by the Board of Directors of AIMCO in
accordance with Treasury Regulation Section 1.856-2(d)(3) and Code Section 856.
"BofA" means Bank of America National Trust and Savings Association,
other than in its capacity as the Agent under the Acquisition Sub Credit
Agreement.
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"COLLATERAL DOCUMENTS" means, collectively, (a) the Stock Pledge
Agreement and other similar agreements between any Guarantor or Common
Stockholder and the Lenders or the Agent for the benefit of the Lenders now or
hereafter delivered to the Lenders or the Agent pursuant to or in connection
with the transactions contemplated hereby, (b) all financing statements (or
comparable documents) now or hereafter filed in accordance with the UCC (or
comparable law) against any Guarantor or Common Stockholder as debtor in favor
of the Lenders or the Agent for the benefit of the Lenders as secured party, (c)
any other documents executed by any Guarantor or Common Stockholder at the
request of Agent and upon the recommendation of Agent's counsel or local counsel
in order to establish, perfect or protect any of the liens or security interests
granted in the Stock Pledge Agreement, and (d) any amendments, supplements,
modifications, renewals, replacements, consolidations, substitutions and
extensions of any of the foregoing.
"COMMON STOCKHOLDERS" means Terry Considine and Peter K. Kompaniez.
"CREDIT AGREEMENT EVENT OF DEFAULT" means an "Event of Default" as
defined in the Acquisition Sub Credit Agreement.
"EXCLUDED PROCEEDS" shall mean the sum of (i) all Net Issuance
Proceeds or Net Sale Proceeds received by the Operating Partnership or the REIT
prior to the Closing Date, (ii) all Net Issuance Proceeds to be received by the
REIT from those certain Stock offerings expected to be consummated by the REIT
on May 5, 1997, for 1,900,000 shares of Stock and on May 6, 1997, for 400,000
shares of Stock; and (iii) all loan proceeds disbursed under the Acquisition Sub
Credit Agreement, the Operating Partnership Credit Agreement or the Bridge Loan
Agreement.
"GUARANTOR DEFAULT" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or otherwise
remedied) constitute a Guarantor Event of Default.
"GUARANTOR EVENT OF DEFAULT" means any of the events or circumstances
specified in Section 8.01.
"GUARANTIED INDEBTEDNESS" means all Loans, and other Indebtedness,
advances, debts, liabilities, obligations, covenants and duties owed by the
Acquisition Sub to the Agent, any Lender, or any other Person required to be
indemnified under the Acquisition Sub Credit Agreement or any other Loan
Document, of any kind or nature, present or future, whether or not evidenced by
any note, guaranty or other instrument, whether or not for the payment of money,
whether arising by reason of an extension of credit, loan, guaranty,
indemnification or in any other manner, whether primary, secondary, direct or
indirect (including those acquired by assignment), absolute, fixed or
contingent, due or to become due, now existing or hereafter arising and however
acquired, and including without limitation, all obligations of the Acquisition
Sub to pay principal, interest, prepayment charges, breakage costs, late
charges,
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loan fees, and any other charges, fees and other sums, costs and expenses which
may due from time to time thereunder.
"NET SALE PROCEEDS" means, in respect of any Disposition of any
Property by the Operating Partnership, the REIT or any of their respective
Subsidiaries, the proceeds in cash or Cash Equivalents received by the Operating
Partnership, the REIT or any of their respective Subsidiaries upon or
substantially simultaneously with such Disposition, net of the direct costs of
such Disposition then payable by the recipient of such proceeds (excluding
amounts payable to the Operating Partnership, the REIT or any Affiliate of the
Operating Partnership or the REIT).
"OPERATING PARTNERSHIP CREDIT AGREEMENT" means that certain Amended
and Restated Credit Agreement (Secured Revolver-to-Term Facility) dated as of
May 5, 1997, by and among the Operating Partnership, BofA as the agent and a
lender and the other lenders named therein, as the same may be amended from time
to time. Notwithstanding the foregoing, for purposes of any incorporation
herein of any defined terms or any other provisions therein, such terms and
provisions shall be incorporated herein as such terms and provisions are set
forth in and in effect under said agreement on the date hereof, and as the same
may be amended from time to time with the consent of the Requisite Lenders
hereunder (or, if such provision would require the consent of a greater
percentage of the Lenders hereunder, then such greater percentage). Except as
otherwise provided herein, if any provision of the Operating Partnership Credit
Agreement is incorporated herein by reference, such provision shall be, subject
to the foregoing, as if fully set forth herein, but with all references therein
to the "Agent", any "Lender", the "Lenders" and the "Requisite Lenders" having
the meanings of those terms as set forth in this Guaranty.
"ORGANIZATIONAL CHART" means the organizational chart attached as
SCHEDULE 5.06 of the Operating Partnership Credit Agreement showing the REIT,
the Operating Partnership, all of their Subsidiaries and their interests in the
Acquisition Sub, the Management Entities and the Unconsolidated Partnerships, as
the same may be modified pursuant hereto.
"SBI" means Smith Barney Mortgage Capital Group, Inc.
1.02 OTHER DEFINITIONAL PROVISIONS.
(a) DEFINED TERMS. Unless otherwise specified herein or
therein, all terms defined in this Guaranty shall have the defined meanings when
used in any certificate or other document made or delivered pursuant hereto.
The meaning of defined terms shall be equally applicable to the singular and
plural forms of the defined terms. Terms (including uncapitalized terms) not
otherwise defined herein but defined in the UCC shall have the meanings set
forth therein.
(b) THE AGREEMENT. The words "hereof", "herein", "hereunder"
and words of similar import when used in this Guaranty shall refer to this
Guaranty as a whole and not to any particular provision of this Guaranty; and
section, schedule and exhibit references are to this Guaranty unless otherwise
specified.
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(c) CERTAIN COMMON TERMS.
(i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) The term "ratably" means, at any time that Loans may be
outstanding, in accordance with the amount of the outstanding Loans of the
respective Lenders; and, at any time that no Loans are outstanding, in
accordance with the outstanding Commitments of the respective Lenders.
(d) PERFORMANCE; TIME. Whenever any performance obligation
hereunder (other than a payment obligation) is stated to be due or required to
be satisfied on a day other than a Business Day, such performance shall be made
or satisfied on the next succeeding Business Day. In the computation of periods
of time from a specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to but excluding,"
and the word "through" means "to and including". If any provision of this
Guaranty refers to any action taken or to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be interpreted to
encompass any and all means, direct or indirect, of taking, or not taking, such
action.
(e) CONTRACTS. Unless otherwise expressly provided herein,
references to agreements and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications thereto, but only to
the extent such amendments and other modifications are not prohibited by the
terms of any Loan Document.
(f) LAWS. References to any statute or regulation are to be
construed as including all statutory and regulatory provisions consolidating,
amending or replacing the statute or regulation.
(g) CAPTIONS. The captions and headings of this Guaranty are for
convenience of reference only and shall not affect the construction of this
Guaranty.
(h) INDEPENDENCE OF PROVISIONS. The parties acknowledge that this
Guaranty and other Loan Documents may use several different limitations, tests
or measurements to regulate the same or similar matters, and that such
limitations, tests and measurements are cumulative and must each be performed,
except as expressly stated to the contrary in this Guaranty.
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1.03 ACCOUNTING PRINCIPLES.
(a) GAAP. Unless the context otherwise clearly requires, all
accounting terms not expressly defined herein shall be construed, and all
financial computations required under this Guaranty shall be made, in accordance
with GAAP, consistently applied.
(b) FISCAL YEAR; QUARTER. References herein to "fiscal year"
and "fiscal quarter" refer to such fiscal periods of the Operating Partnership.
ARTICLE II
GUARANTY PROVISIONS
2.01. GUARANTY OF LOAN.
(a) Guarantor absolutely, unconditionally and irrevocably
guaranties to Agent and the Lenders the full payment and performance of the
Guarantied Indebtedness and unconditionally agrees to pay to Agent and the
Lenders the full amount of the Guarantied Indebtedness in accordance with this
Guaranty. This is a guaranty of payment, not of collection.
(b) If Acquisition Sub (i) fails to pay the Guarantied
Indebtedness in full on the Scheduled Maturity Date thereof; (ii) fails to pay
the Guarantied Indebtedness in full within ten (10) Business Days after
acceleration of maturity thereof and demand for payment thereof by Agent to
Acquisition Sub, other than as described in clause (iii) below, or (iii) fails
to pay the Guarantied Indebtedness in full immediately upon acceleration of
maturity thereof as a result of any Credit Agreement Event of Default described
in Section 8.01(f) or 8.01(g) of the Acquisition Sub Credit Agreement (but only
in the case of the occurrence of any of the events described therein with
respect to the Acquisition Sub, the Operating Partnership or the REIT),
Guarantor shall, in lawful money of the United States, pay to Agent and the
Lenders, on demand, all sums due and owing on the Guarantied Indebtedness. If
the amount outstanding under the Guarantied Indebtedness is determined by a
court of competent jurisdiction or in any arbitration proceeding described in
Section 10.17 of the Acquisition Sub Credit Agreement, that determination shall
be conclusive and binding on Guarantor, regardless of whether Guarantor was a
party to the proceeding in which the determination was made or not.
2.02 REVIVAL AND REINSTATEMENT. If Agent or any Lender is required to
pay, return or restore to Acquisition Sub or any other person any amounts
previously paid on the Guarantied Indebtedness because of any Insolvency
Proceeding of Acquisition Sub or any other reason, the obligations of Guarantor
shall be reinstated and revived and the rights of Agent and such Lender shall
continue with regard to such amounts, all as though they had never been paid.
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2.03 ADDITIONAL AND INDEPENDENT OBLIGATIONS. Guarantor's obligations under
this Guaranty are in addition to its obligations under any future guaranties,
each of which shall remain in full force and effect until it is expressly
modified or released in a writing signed by Agent and consented to by the
Lenders. Guarantor's obligations under this Guaranty are independent of those
of Acquisition Sub on the Guarantied Indebtedness. Except as provided in
Section 2.01(b)(i), Agent or the Lenders may bring a separate action, or
commence a separate arbitration proceeding, against Guarantor without first
proceeding against Acquisition Sub, any other Guarantor or person or any
security that Agent or any Lender may hold, and without pursuing any other
remedy. None of Agent's or any Lender's rights under this Guaranty shall be
exhausted by any action by Agent or any Lender until the Guarantied Indebtedness
has been paid and performed in full in cash.
2.04 OBLIGATIONS IN RESPECT OF RESTRICTED CASH.
(a) If at any time (i) the REIT or the Operating Partnership shall
make any public or private issuance of Stock (or partnership units) for cash or
Cash Equivalents (other than for Excluded Proceeds) or (ii) incur Indebtedness
for borrowed money (other than for Excluded Proceeds) or (iii) the REIT, the
Operating Partnership or any Subsidiary (other than the Acquisition Sub) shall
make any Disposition of any Property for cash or Cash Equivalents (other than
for Excluded Proceeds), the REIT shall (A) notify the Agent of such issuance,
incurrence or Disposition (including the amount of the estimated Net Issuance
Proceeds or Net Sale Proceeds thereof) and (B) immediately upon the receipt by
the Operating Partnership or the REIT of such Net Issuance Proceeds or receipt
by the Operating Partnership, the REIT or such Subsidiary of such Net Sale
Proceeds, the REIT shall cause such Net Issuance Proceeds and Net Sale Proceeds,
to be contributed to the Operating Subsidiary, and the Operating Partnership
shall deposit, as collateral for the obligations of all Guarantors under this
Guarantor, such Net Issuance Proceeds and Net Sale Proceeds, whether received by
it directly or by contribution from the REIT, (together with all interest and
earnings thereon, "Restricted Cash"), into an interest bearing deposit account
(the "Restricted Cash Account") established with and pledged to the Agent for
the ratable benefit of the Lenders pursuant to documentation in form and
substance satisfactory to the Agent and the Requisite Lenders, until the balance
in the Restricted Cash Account shall equal the outstanding amount of the
Guarantied Indebtedness together with all interest accrued but unpaid thereon
and all interest reasonably projected by the Agent to accrue thereon through the
Maturity Date of the Guarantied Indebtedness, whereupon no further such deposits
shall be required to be so made.
(b) The Operating Partnership hereby grants a perfected first
priority security interest in favor of the Agent for the ratable benefit of the
Lenders in all Restricted Cash and in the Restricted Cash Account and all sums
at any time held, deposited or invested therein, together with any interest or
other earnings thereon, and all proceeds thereof, whether accounts, general
intangibles, chattel paper, deposit accounts, instruments, documents or
securities, together with all rights of a secured party with respect thereto
(even if no further documentation is requested by the Agent or the Requisite
Lenders or executed by the Operating Partnership with respect thereto). The
Operating Partnership shall
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execute such additional documents as the Agent or the Requisite Lenders in their
discretion may require and shall provide all other documents requested by the
Agent or the Requisite Lenders to evidence or perfect the Agent's first priority
security interest in such Restricted Cash Account and to grant to the Agent
dominion and control over the Restricted Cash Account. The Restricted Cash
Account shall be held in the name of the Operating Partnership as debtor, with
the Agent as secured party for the ratable benefit of the Lenders.
(c) All interest earned on the Restricted Cash Account shall be
retained in the Restricted Cash Account subject to the Operating Partnership's
withdrawal rights set forth herein. The Operating Partnership shall treat all
interest earned on the Restricted Cash Account as its income for federal and
state income tax purposes.
(d) Until the Guarantied Indebtedness shall have been paid in full,
no Restricted Cash shall be withdrawn from the Restricted Cash Account by the
Operating Partnership except for purposes of contributing capital to the
Acquisition Sub in amounts necessary to satisfy the prepayment obligations of
the Acquisition Sub under Section 2.06 of the Acquisition Sub Credit Agreement,
and provided that the amounts so contributed are actually used for such
purposes.
(e) Upon the occurrence and during the continuation of a Guarantor
Event of Default, and provided that Agent shall have given to the Acquisition
Sub, pursuant to and to the extent required by Section 2.01(b) of this Guaranty,
the 10 Business Days notice referred to therein, the Agent may (and, upon the
instruction of the Requisite Lenders, shall):
(i) without any advertisement or notice to or authorization from
the Operating Partnership or any other Person (all of which advertisements,
notices and/or authorizations are hereby expressly waived), withdraw, sell or
otherwise liquidate all Restricted Cash and apply the proceeds thereof to the
unpaid obligations of all Guarantors under this Guaranty in such order as the
Requisite Lenders may elect in their sole discretion, without liability for any
loss (including as a result of any sale or liquidation of any account including
such Restricted Cash before maturity) and the Operating Partnership and the REIT
hereby consents to any such withdrawal and application as a commercially
reasonable disposition of such Restricted Cash and agrees that such withdrawal
shall not result in satisfaction of the obligations of all Guarantors under this
Guaranty except to the extent the amounts are applied to such sums;
(ii) without any advertisement or notice to or authorization from
the REIT (all of which advertisements, notices and/or authorizations are hereby
expressly waived), notify any account debtor on any such Restricted Cash to make
payment directly to the Agent;
(iii) foreclose upon all or any portion of such Restricted Cash or
otherwise enforce the Agent's security interest in any manner permitted by law
or provided for in this Agreement;
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(iv) sell or otherwise dispose of all or any portion of such
Restricted Cash at one or more public or private sales, whether or not such
Restricted Cash is present at the place of sale, for cash or credit or future
delivery, on such terms and in such manner as the Requisite Lenders may
determine;
(v) recover from the Operating Partnership all costs and
expenses, including, without limitation, reasonable attorneys' fees, incurred or
paid by the Agent in exercising any right, power or remedy provided by this
section or by law; and
(vi) exercise any other right or remedy available to the Agent or
the Lenders under applicable law or in equity.
ARTICLE III
FURTHER PROVISIONS IN RESPECT OF THE GUARANTY
3.01 RIGHTS OF AGENT AND THE LENDERS. Guarantor authorizes Agent or
any Lender to perform any or all of the following acts at any time in its sole
discretion, all without notice to Guarantor and without affecting Guarantor's
obligations under this Guaranty:
(a) Agent or the Requisite Lenders may alter any terms of the
Guarantied Indebtedness or any part of it, including renewing, compromising,
extending or accelerating, or otherwise changing the time for payment of, or
increasing or decreasing the rate of interest on, the Guarantied Indebtedness or
any part of it.
(b) Agent or any Lender may take and hold security for the Guarantied
Indebtedness or this Guaranty, accept additional or substituted security for
either, and subordinate, exchange, enforce, waive, release, compromise, fail to
perfect and sell or otherwise dispose of any such security.
(c) Upon any Credit Agreement Event of Default or Guarantor Event of
Default, Agent or any Lender may direct the order and manner of any sale of all
or any part of any security now or later to be held for the Guarantied
Indebtedness or this Guaranty, respectively, and Agent or any Lender may also
bid at any such sale.
(d) Agent or any Lender may apply any payments or recoveries from
Acquisition Sub, Guarantor or any other source, and any proceeds of any
security, to Acquisition Sub's obligations under the Loan Documents in such
manner, order and priority as Agent or such Lender may elect, whether or not
those obligations are guarantied by this Guaranty or secured at the time of the
application.
(e) Agent or any Lender may substitute, add or release any one or
more Guarantors, other guarantors or endorsers.
(f) In addition to the Guarantied Indebtedness, Agent or any Lender
may extend other credit to Acquisition Sub or any other Guarantor, and may
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take and hold security for the credit so extended, all without affecting
Guarantor's liability under this Guaranty.
3.02 GUARANTY TO BE ABSOLUTE. Guarantor expressly agrees that
until the Guarantied Indebtedness is paid and performed in full and each and
every term, covenant and condition of this Guaranty is fully performed,
Guarantor shall not be released by or because of:
(a) Any act or event which might otherwise discharge, reduce,
limit or modify Guarantor's obligations under this Guaranty;
(b) Any waiver, extension, modification, forbearance, delay or
other act or omission of Agent or any Lender, or its failure to proceed
promptly or otherwise as against Acquisition Sub, Guarantor or any security;
(c) Any action, omission or circumstance which might increase the
likelihood that Guarantor may be called upon to perform under this Guaranty
or which might affect the rights or remedies of Guarantor as against
Acquisition Sub;
(d) Any dealings occurring at any time between Acquisition Sub
and Agent or any Lender, whether relating to the Guarantied Indebtedness or
otherwise; or
(e) Any action of Agent or any Lender described in Section 3.01
above.
Guarantor hereby acknowledges that absent this Section 3.02,
Guarantor might have a defense to the enforcement of this Guaranty as a
result of one or more of the foregoing acts, omissions, agreement, waivers or
matters. Guarantor hereby expressly waives and surrenders any defense to its
liability under this Guaranty based upon any of the foregoing acts,
omissions, agreements, waivers or matters. It is the purpose and intent of
this Guaranty that the obligations of Guarantor under it shall be absolute
and unconditional under any and all circumstances.
ARTICLE IV
WAIVERS AND SUBORDINATION BY GUARANTOR
4.01 GUARANTOR'S WAIVERS. Guarantor waives:
(a) All statutes of limitations as a defense to any action or
proceeding brought against Guarantor by Agent or any Lender, to the fullest
extent permitted by law;
(b) Except as expressly provided in Section 2.01(b)(i), any right
it may have to require Agent or any Lender to proceed against Acquisition
Sub,
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proceed against or exhaust any security held from Acquisition Sub, or pursue
any other remedy in Agent's or any Lender's power to pursue;
(c) Any defense based on any claim that Guarantor's obligations
exceed or are more burdensome than those of Acquisition Sub;
(d) Any defense based on: (i) any legal disability of Acquisition
Sub, (ii) any release, discharge, modification, impairment or limitation of
the liability of Acquisition Sub to Agent or any Lender from any cause,
whether consented to by Agent or any Lender or arising by operation of law or
from any Insolvency Proceeding and (iii) any rejection or disaffirmance of
the Guarantied Indebtedness, or any part of it, or any security held for it,
in any such Insolvency Proceeding;
(e) Any defense based on any action taken or omitted by Agent or
any Lender in any Insolvency Proceeding involving Acquisition Sub, including
any election to have Agent's or that Lender's claim allowed as being secured,
partially secured or unsecured, any extension of credit by Lender to
Acquisition Sub in any Insolvency Proceeding, and the taking and holding by
Agent or any Lender of any security for any such extension of credit;
(f) All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices of
acceptance of this Guaranty and of the existence, creation, or incurring of
new or additional indebtedness, and demands and notices of every kind except
for any demand or notice by Agent or any Lender to Guarantor expressly
provided for in Section 2.01;
(g) Any defense based on or arising out of any defense that
Acquisition Sub may have to the payment or performance of the Guarantied
Indebtedness or any part of it; and
(h) Any defense based on or arising out of any action of Agent or
any Lender described in Article III above.
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4.02 WAIVERS OF SUBROGATION AND OTHER RIGHTS.
(a) During the existence of any Credit Agreement Event of
Default, Agent or any Lender, without prior notice to or consent of
Guarantor, may elect to: (i) foreclose either judicially or nonjudicially
against any security it may hold for the Guarantied Indebtedness, (ii) accept
a transfer of any such security in lieu of foreclosure, (iii) compromise or
adjust the Guarantied Indebtedness or any part of it or make any other
accommodation with Acquisition Sub or Guarantor, or (iv) exercise any other
remedy against Acquisition Sub or any security. No such action by Agent or
any Lender shall release or limit the liability of Guarantor, who shall
remain liable under this Guaranty after the action, even if the effect of the
action is to deprive Guarantor of any subrogation rights, rights of
indemnity, or other rights to collect reimbursement from Acquisition Sub for
any sums paid to Agent or any Lender, whether contractual or arising by
operation of law or otherwise. Guarantor expressly agrees that under no
circumstances shall it be deemed to have any right, title, interest or claim
in or to any property to be held by Agent or any Lender or any third party
after any foreclosure or transfer in lieu of foreclosure of any security for
the Guarantied Indebtedness.
(b) Regardless of whether Guarantor may have made any payments to
Lender, Guarantor hereby absolutely, irrevocably and unconditionally, now and
forever, waives, releases and covenants not to sue Acquisition Sub, any
shareholder thereof or any other Guarantor in respect of: (i) all rights of
restitution, subrogation, exoneration, indemnification and contribution, all
rights to collect reimbursement and all other rights, howsoever denominated,
to recover from Acquisition Sub, any shareholder thereof or any Guarantor any
sums paid to Agent or any Lender whether pursuant hereto or otherwise paid on
the Guarantied Indebtedness, and any other rights arising from the existence,
payment, performance or enforcement of Guarantor's obligations under this
Guaranty or any Collateral Document, (ii) all rights to enforce any remedy
that the Agent or any Lender may have against Acquisition Sub, (iii) all
rights to participate in any security now or later to be held by Agent or any
Lender for the Guarantied Indebtedness, and (iv) all rights to require
Acquisition Sub to perform the Guarantied Indebtedness; in each case whether
now existing or hereafter arising and whether contractual or arising in
equity, by statute, common law or otherwise by operation of law (including
the United States Bankruptcy Code or any successor or similar statute) or
otherwise. The foregoing waivers, releases and covenants are a material part
of the consideration to the Lenders for extending the credit under the
Acquisition Sub Credit Agreement to the Acquisition Sub and may be enforced
by and inure to the benefit of Agent, each Lender, Acquisition Sub, its
shareholders and each other Guarantor from time to time.
(c) Guarantor waives all rights and defenses arising out of an
election of remedies by the Agent or any Lender, even though that election of
remedies may affect Guarantor's rights of subrogation and reimbursement
against the Acquisition Sub by the operation of law or otherwise.
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4.03 INFORMATION REGARDING BORROWER. Before signing this
Guaranty, Guarantor investigated the financial condition and business
operations of Acquisition Sub and such other matters as Guarantor deemed
appropriate to assure itself of Acquisition Sub's ability to discharge its
obligations under the Loan Documents. Guarantor assumes full responsibility
for that due diligence, as well as for keeping informed of all matters which
may affect Acquisition Sub's ability to pay and perform its obligations to
the Agent and the Lenders. Neither Agent nor any Lender has any duty to
disclose to Guarantor any information which such party may have or receive
about Acquisition Sub's financial condition, business operations, or any
other circumstances bearing on its ability to perform.
4.04 SUBORDINATION. Any rights of Guarantor, whether now existing
or later arising, to receive payment on account of any indebtedness
(including interest) owed to it by Acquisition Sub or to receive any payment
from Acquisition Sub shall at all times be subordinate as to lien and time of
payment and in all other respects to the full and prior repayment of the
Guarantied Indebtedness. Guarantor shall not be entitled to enforce or
receive payment of any sums hereby subordinated until the Guarantied
Indebtedness has been paid and performed in full and any such sums received
in violation of this Guaranty shall be received by Guarantor in trust for the
Agent and the Lenders.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Guarantor represents and warrants to the Agent and each Lender that:
5.01 EXISTENCE AND POWER. Guarantor:
(a) ORGANIZATION. Is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization;
(b) POWER AND AUTHORITY. Has the power and authority and all
governmental licenses, authorizations, consents and approvals to own its
Properties, to carry on its business and to execute, deliver, and perform its
obligations under, this Guaranty, the Collateral Documents to which it is a
party and the Organizational Documents of the Acquisition Sub to which it is
a party;
(c) DUE QUALIFICATION. Is duly qualified as a foreign
corporation, partnership, trust or other organization, and licensed and in
good standing under the laws of each jurisdiction where its ownership, lease
or operation of its Properties or the conduct of its business requires such
qualification; and
(d) COMPLIANCE WITH LEGAL REQUIREMENTS. Is in compliance with
all Requirements of Law applicable to it.
5.02 AUTHORIZATION; NO CONFLICT. The execution, delivery and
performance by Guarantor of this Guaranty, any Collateral Document and the
Organi-
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zational Documents of the Acquisition Sub to which such Person is party, have
been duly authorized by all necessary partnership, corporate or other
organizational action, and do not and will not:
(a) ORGANIZATIONAL DOCUMENTS. Contravene the terms of any of
such Person's Organizational Documents;
(b) CONTRACTUAL OBLIGATIONS. Conflict with, or result in any
breach or contravention of, or the creation of any Lien (other than pursuant
to the Collateral Documents) under, any document evidencing any Contractual
Obligation to which such Person is a party or any order, injunction, writ or
decree of any Governmental Authority to which such Person or its Properties
are subject; or
(c) REQUIREMENTS OF LAW. Violate any material Requirement of Law
applicable to it.
5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority (except for recordings in connection with the Liens
granted to the Agent under the Collateral Documents) is necessary or required
in connection with the execution, delivery or performance by, or enforcement
against, Guarantor of this Guaranty, any of the Collateral Documents or the
Organizational Documents of the Acquisition Sub.
5.04 BINDING EFFECT. This Guaranty and each Collateral Document
to which Guarantor is a party constitute the legal, valid and binding
obligations of such Person, enforceable against such Person in accordance
with their respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting the enforcement
of creditors' rights generally or by equitable principles relating to
enforceability.
5.05 LITIGATION. Except as specifically disclosed in SCHEDULE
5.05 of the Operating Partnership Credit Agreement, there are no actions,
suits, proceedings, claims or disputes pending, or to the Knowledge of the
REIT, threatened or contemplated, at law, in equity, in arbitration or before
any Governmental Authority, against Guarantor, any Management Entity, any of
their Subsidiaries or any of their respective Properties, which (a) purport
to affect or pertain to this Guaranty, or any Collateral Document, or any of
the transactions contemplated hereby or thereby, or (b) if determined
adversely to any such Person, would reasonably be expected to have a Material
Adverse Effect. No injunction, writ, temporary restraining order or any other
order of any nature has been issued by any court or other Governmental
Authority purporting to enjoin or restrain the execution, delivery and
performance of this Guaranty or any Collateral Document, or directing that
the transactions provided for herein or therein not be consummated as herein
or therein provided.
5.06 SUBSIDIARIES; INTERESTS IN OTHER ENTITIES; CHANGES IN ORGANIZATIONAL
STRUCTURE. Except for the NHP Interests, neither the Operating Partnership, nor
the REIT, nor any of their respective Subsidiaries has any interest in any
corporation,
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partnership or other entity, except as disclosed in the Organizational Chart
and except for Subsidiaries or Unconsolidated Partnerships hereafter formed
or acquired in compliance with Section 7.07 and except for changes permitted
under Sections 7.06, 7.07 and 7.08 hereof.
5.07 FINANCIAL CONDITION. All financial statements delivered by
the REIT hereunder: (a) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (b) are complete, accurate and fairly present the
financial condition of the REIT as of the dates thereof and results of
operations for the periods covered thereby.
5.08 REGULATED ENTITIES. No Guarantor is (a) an "investment
company" within the meaning of the Investment Operating Partnership Act of
1940; or (b) subject to regulation under the Public Utility Holding Operating
Partnership Act of 1935, the Federal Power Act, the Interstate Commerce Act,
any state public utilities code, or any other Federal or state statute or
regulation limiting its ability to incur Indebtedness. Each Guarantor has,
to the extent required under Regulation G of the Federal Reserve Board,
registered with such Board. The incurrence by any Guarantor of its
obligations hereunder does not violate Regulations G, U or X of said Board.
5.09 REIT AND TAX STATUS; STOCK EXCHANGE LISTING. The REIT
currently has REIT Status and has maintained REIT Status on a continuous
basis since its formation. The shares of common Stock of the REIT are listed
on the NYSE.
5.10 NO GUARANTOR DEFAULT. No Guarantor Default or Guarantor
Event of Default exists or would result from the incurring of any obligations
hereunder by the Guarantors. None of the Guarantors is in default under or
with respect to any Contractual Obligation in any respect which, individually
or together with all such other defaults, would reasonably be expected to
have a Material Adverse Effect.
5.11 [INTENTIONALLY DELETED].
5.12 FULL DISCLOSURE. None of the representations or warranties
made by the Guarantors herein or in the Collateral Documents as of the date
such representations and warranties are made or deemed made, and none of the
statements contained in each exhibit, report, statement or certificate
furnished by or on behalf of any such Person in connection with the
Collateral Documents, contains any untrue statement of a material fact or
omits any material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances under which they
are made, not misleading. There is no fact, to the Knowledge of the REIT,
which materially and adversely affects the business, operations, properties,
assets or condition (financial or otherwise) of the Operating Partnership,
the REIT, the Management Entities, or any of the Subsidiaries which has not
been disclosed herein or in other documents, certificates and statements
furnished to the Agent and each Lender hereunder or pursuant hereto. The
copies of all documents delivered to the Agent and/or the Lenders from time
to time in connection with this Guaranty are and shall be
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true and complete copies of the originals thereof and have not been or shall
not be amended except as disclosed to the Agent and/or the Lenders, as
applicable.
5.13 REPRESENTATIONS IN THE ACQUISITION SUB CREDIT AGREEMENT. All
of the representations and warranties of the Acquisition Sub in the
Acquisition Sub Credit Agreement are true and correct.
ARTICLE VI
AFFIRMATIVE COVENANTS
As further consideration for this Guaranty, the REIT covenants and
agrees that, so long as the Guarantied Indebtedness shall remain unpaid or
unsatisfied, unless the Requisite Lenders waive compliance in writing:
6.01 FINANCIAL INFORMATION. The REIT shall deliver to the Agent
and to each Lender, in form and detail satisfactory to the Agent and the
Lenders;
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, but not
later than ninety (90) days after the end of each fiscal year, a copy of the
audited consolidated balance sheet of the REIT as of the end of such year and
the related consolidated statements of operations, stockholders' equity
(where applicable) and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous year, including the
REIT's SEC Form 10K for such period, and accompanied by the unqualified
opinion of a nationally-recognized independent public accounting firm stating
that such consolidated financial statements present fairly the financial
position for the periods indicated, in conformity with GAAP, and applied on a
basis consistent with prior years;
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available, but
not later than forty-five (45) days after the end of each of the first three
(3) fiscal quarters of each year, a copy of the unaudited consolidated
balance sheet of the REIT as of the end of such quarter and the related
consolidated statements of operations, stockholders' equity (where
applicable) and cash flows for the period commencing on the first day and
ending on the last day of such quarter, including the REIT's SEC Form 10Q for
such period, and accompanied by a certificate signed by at least two (2)
Responsible Officers stating that such financial statements are complete and
correct and present fairly the financial position for the periods indicated,
in conformity with GAAP for interim financial statements, and applied on a
basis consistent with prior quarters; and
(c) FINANCIAL STATEMENTS AND OTHER INFORMATION FOR NHP. Until
the NHP Combination Date, within five (5) days after the receipt thereof by the
Acquisition Sub, the REIT, the Operating Partnership or any Subsidiary thereof,
such periodic, quarterly, annual and special financial statements, reports,
proxy statements and other information as may be received by any such Person in
its capacity as a shareholder in NHP, and within five (5) days after the
delivery of any thereof by any such Person, copies of any reports, proxy
statements, tender or exchange offers or
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other information provided by such Person to NHP or to the shareholders
thereof to the SEC in respect of such Person's ownership of or intentions or
proposals with respect to NHP.
6.02 CERTIFICATES; OTHER INFORMATION. The REIT shall furnish to
the Agent with sufficient copies for each Lender:
(a) ACCOUNTING CERTIFICATES. Concurrently with the delivery of
the financial statements referred to in Section 6.01(a), a certificate of the
independent certified public accountants reporting on such financial
statements stating that, in making the examination necessary therefor, no
knowledge was obtained of any Guarantor Default or Guarantor Event of
Default, except as specified in such certificate;
(b) OFFICERS' CERTIFICATES. Concurrently with the delivery of
the financial statements referred to in Sections 6.01(a) and 6.01(b) above, a
compliance certificate, substantially in the form of EXHIBIT A, signed by at
least two (2) Responsible Officers (i) stating that, to the best of such
officers' knowledge, each of the REIT, the Operating Partnership and their
respective Subsidiaries, during such period, has observed or performed all of
its covenants and other agreements, and satisfied every condition contained
in this Guaranty and the other Collateral Documents to be observed, performed
or satisfied by it, and that such officers have no knowledge of any Guarantor
Default or Guarantor Event of Default except as specified in such
certificate; and (ii) showing in detail the calculations supporting such
statement for such period in respect of the covenants in Section 7.09 and
7.15;
(c) PERIODIC REPORTS AND FILINGS; PRESS RELEASES. Promptly
after the same are sent or released, copies of all reports, proxy statements and
financial statements which the REIT sends to its shareholders and copies of all
press releases made by the Operating Partnership and the REIT, promptly after
the same are filed, copies of all financial statements and regular, periodical
or special reports which the REIT may make to, or file with, the SEC or any
successor or similar Governmental Authority and promptly after the same are
received, copies of any reports prepared by analysts for or with respect to the
Operating Partnership or the REIT;
(d) ACCOUNTANTS' REPORTS. Promptly after the same are received,
copies of all reports which the independent certified public accountants of
the Operating Partnership or the REIT deliver to the Operating Partnership or
the REIT; and
(e) OTHER INFORMATION. Promptly, revisions to the Organizational
Chart and such additional financial and other information as the Agent may
from time to time reasonably request.
6.03 NOTICES. The REIT shall promptly (and in no event later than
ten (10) days after the REIT has reason to know of the same) notify the Agent
and each Lender of:
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(a) GUARANTOR DEFAULT; GUARANTOR EVENT OF DEFAULT. The
occurrence of any Guarantor Default or Guarantor Event of Default, and of the
occurrence or existence of any event or circumstance that is likely to become
a Guarantor Default or Guarantor Event of Default. Each notice under this
Section 6.03(a) shall describe with particularity the clause or provision of
this Guaranty or other Collateral Documents that have been breached or
violated;
(b) LITIGATION. The commencement of, or any material development
in, any litigation, arbitration or proceeding affecting the REIT, the
Operating Partnership, any Management Entity or any Subsidiary (i) in which
the amount of damages claimed is $2,000,000 or more, (ii) in which injunctive
or similar relief is sought and which, if adversely determined, would
reasonably be expected to have a Material Adverse Effect, (iii) in which the
relief sought is an injunction or other stay of the performance of any Loan
Document or (iv) required to be reported to the SEC pursuant to the Exchange
Act;
(c) ENVIRONMENTAL MATTERS. (i) Any and all material enforcement,
cleanup, removal or other governmental or regulatory actions instituted,
completed or threatened against the Operating Partnership, the REIT, any
Management Entity or any of their Subsidiaries or any of their Properties
pursuant to any Environmental Laws, (ii) all other material Environmental
Claims, and (iii) any environmental or similar condition on any real property
adjoining or in the vicinity of the Properties of the Operating Partnership,
the REIT, any Management Entity or any of their Subsidiaries that could
reasonably be anticipated to cause such Properties (or any portion thereof)
to be subject to any material restrictions on ownership, occupancy,
transferability or use under any Environmental Laws;
(d) ERISA. The occurrence of any of the following ERISA events
affecting the REIT or any member of its Controlled Group, together with a
copy of any notice with respect to such event that may be required to be
filed with any Governmental Authority and any notice delivered by a
Governmental Authority to the REIT or any member of its Controlled Group with
respect to such event:
(i) an ERISA Event where the aggregate liability is likely to
exceed $1,000,000;
(ii) the adoption of any new Plan that is subject to Title IV
of ERISA or Section 412 of the Code by any member of the Controlled Group;
(iii) the adoption of any amendment to a Plan that is subject
to Title IV of ERISA or Section 412 of the Code, if such amendment results in
a material increase in benefits or unfunded liabilities; or
(iv) the commencement of contributions by any member of the
Controlled Group to any Plan that is subject to Title IV of ERISA or Section
412 of the Code;
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(e) MATERIAL ADVERSE EFFECTS. The occurrence of any act,
omission, change or event which has a Material Adverse Effect subsequent to
the date of the most recent audited financial statements of the Operating
Partnership and the REIT delivered to the Agent pursuant to Section 6.01(a);
(f) MATERIAL TRANSACTIONS OR OCCURRENCES. The consummation of
any material Investment or Disposition, of any material issuance of Stock of
the REIT (other than upon the tender of any Units for redemption or upon the
conversion of any shares of the REIT's Class B Common Stock into shares of
the REIT's Class A Common Stock) or Units, of any incurrence of material
Indebtedness or of any other material transaction entered into, or the
commencement of any material Development Activity, by the Operating
Partnership, the REIT, any Management Entity or any of their Subsidiaries,
including, without limitation, any material occurrences or developments
(including, without limitation, the satisfaction of applicable conditions
precedent) in connection with the transactions contemplated by the NHP Merger
Agreement; and any change in any executive officer of the REIT.
(g) FAILURE TO QUALIFY AS A REIT. The failure of the REIT to
maintain REIT Status or of any Subsidiary of the REIT to maintain its status
as a qualified REIT subsidiary under the Code;
(h) ACCOUNTING CHANGES. Any material change in the Operating
Partnership's or the REIT's accounting policies or financial reporting
practices; and
(i) CROSS-DEFAULT. Any notice received by the Operating
Partnership, the REIT, any Management Entity or any of their Subsidiaries of
any default under any Indebtedness or Guaranty Obligation described in
Section 8.01(e). Each notice pursuant to this section shall be accompanied
by a written statement, signed by at least two (2) Responsible Officers,
setting forth details of the occurrence referred to therein and the
provisions of this Guaranty affected, and stating what action the Operating
Partnership or the REIT proposes to take with respect thereto; and
(j) CERTAIN TRANSACTIONS.
(i) On July 3, 1997, a notice setting forth the AIMCO Gross
Asset Value as of June 30, 1997; the amount of any increase in the AIMCO
Gross Asset Value , if any, during the period from March 31, 1997 to June 30,
1997 (other than any increase resulting from Excluded Proceeds); and the sum
of the Net Issuance Proceeds plus Net Sale Proceeds (other than Excluded
Proceeds) received during such period.
(ii) On October 3, 1997, a notice setting forth the AIMCO
Gross Asset Value as of September 30, 1997; the amount of any increase in
AIMCO Gross Asset Value, if any, from March 31, 1997 to September 30, 1997
(other than any increase resulting from Excluded Proceeds); and the sum of
the Net Issuance Proceeds plus Net Sale Proceeds (other than Excluded
Proceeds) received during such period.
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6.04 PRESERVATION OF EXISTENCE, ETC.; MAINTENANCE OF PROPERTY;
INSURANCE; PAYMENT OBLIGATIONS; COMPLIANCE WITH LAWS. The REIT and the
Operating Partnership shall perform all of the covenants and agreements set
forth in Sections 6.04, 6.05, 6.06, 6.07, 6.08 and 6.09 of the Operating
Partnership Credit Agreement, each of which is incorporated herein by this
reference.
6.05 MAINTENANCE OF REIT STATUS; STOCK EXCHANGE LISTING. The REIT
shall at all times maintain its REIT Status and maintain its common Stock
listed on the NYSE, the American Stock Exchange, or Nasdaq Stock Exchange.
The REIT shall cause each Wholly-Owned Subsidiary to comply with all
requirements applicable under the Code to REIT subsidiaries.
6.06 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The REIT shall
maintain, and shall cause the Operating Partnership, the Management Entities
and each of their Subsidiaries to maintain, proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the Properties and business of the REIT, the Operating Partnership,
the Management Entities and each of their Subsidiaries. The REIT shall
permit, and shall cause the Operating Partnership, the Management Entities
and each of their Subsidiaries to permit, representatives of the Agent or any
Lender to visit and inspect any of their respective Properties, to examine
their respective corporate, financial and operating records, and make copies
thereof or abstracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective directors, officers, and
independent public accountants, all at the expense of the REIT and at any
time during normal business hours and as often as may be reasonably desired,
upon no less than forty-eight (48) hours advance notice to the REIT;
PROVIDED, HOWEVER, when a Guarantor Event of Default exists, the Agent or any
Lender may visit and inspect at the expense of the REIT such Properties at
any time during business hours and without advance notice.
6.07 FURTHER ASSURANCES.
(a) FULL DISCLOSURE. The REIT will ensure that all other written
information, exhibits and reports furnished to any Agent or Lender by the
Operating Partnership, the REIT, any Management Entity or any of their
Subsidiaries do not contain any untrue statement of a material fact and do
not and will not omit to state any material fact or any fact necessary to
make the statements contained therein not misleading in light of the
circumstances in which made, and will promptly disclose to the Agent and the
Lenders and correct any defect or error that may be discovered therein or in
this Guaranty or any Collateral Document or in the execution, acknowledgment
or recordation thereof.
(b) FURTHER ACTS. Promptly upon request by the Agent or the
Requisite Lenders, the REIT shall (and shall cause the Operating Partnership,
each Management Entity and each of their Subsidiaries to) do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and
re-register, any and all such further acts, deeds, conveyances, security
agreements, mortgages, deeds of trust, assignments,
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estoppel certificates, financing statements and continuations thereof,
termination statements, notices of assignment, transfers, certificates,
assurances and other instruments that the Agent or such Lenders, as the case
may be, may reasonably require from time to time in order (i) to carry out
more effectively the purposes of this Guaranty or any Collateral Document,
(ii) to subject to the Liens created by any of the Collateral Documents any
of the Collateral, (iii) to perfect and maintain the validity, effectiveness
and priority of any of the Collateral Documents and the Liens intended to be
created thereby, and (iv) to better assure, convey, grant, assign, transfer,
preserve, protect and confirm to the Agent and Lenders the rights granted or
onw or hereafter intended to be granted under any Loan Document, or any other
document executed in connection herewith or therewith.
6.08 COMMUNICATION WITH ACCOUNTANTS. If any Guarantor Event of
Default is continuing, the REIT authorizes the Agent and any Lender to
communicate directly with the REIT's and the Operating Partnership's
independent accountants and authorizes such accountants to disclose to such
Persons any and all financial statements and other information of any kind,
including the substance of any oral information or conversation that such
accountants may have with respect to the business, financial condition and
other affairs of the REIT and the Operating Partnership.
6.09 SOLVENCY. The REIT shall at all times be, and shall cause
the Operating Partnership to be, Solvent.
6.10 REFINANCING ACTIVITIES.
(a) In order to further assure to the Agent and the Lenders the
full repayment of the Guarantied Indebtedness, the REIT hereby agrees that,
in the event that the Guarantied Indebtedness shall not have been paid in
full on or prior to the date which is five (5) months after the Closing Date,
the REIT shall use best efforts promptly to raise capital (either through the
offering of stock (whether common or preferred, and whether publicly or in
private placements) or the sale or refinancing of Properties), in order to
cause the Guarantied Indebtedness to be repaid as soon as possible and in any
event prior to the maturity of the Guarantied Indebtedness.
(b) Without limiting the foregoing, in the event that the
Guarantied Indebtedness shall not have been paid in full on or prior to the
date which is five (5) months after the Closing Date, the REIT and the
Operating Partnership shall accept the terms and pricing presented to them by
SBI of a transaction to issue common Stock, preferred Stock and/or
Indebtedness of the REIT or the Operating Partnership in an amount which
would be sufficient to pay the Guarantied Indebtedness in full on or prior to
the Maturity Date, and shall cause such transaction to be consummated on or
prior to the Maturity Date.
ARTICLE VII
NEGATIVE COVENANTS
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As further consideration for this Guaranty, the REIT hereby
covenants and agrees that, so long as any of the Guarantied Indebtedness
shall remain unpaid or unsatisfied, unless the Requisite Lenders waive
compliance in writing:
7.01 LIENS. Neither the Operating Partnership, nor the REIT, nor
any Management Entity, nor any of their Subsidiaries shall, directly or
indirectly, make, create, incur, assume or suffer to exist any Lien upon or
with respect to any part of its Property, whether now owned or hereafter
acquired, other than Permitted Liens. Nothing contained in this Guaranty
shall restrict the granting of Liens by the Acquisition Sub unless such Liens
are prohibited under the Acquisition Sub Credit Agreement.
7.02 INDEBTEDNESS. Neither the Operating Partnership, nor the
REIT, nor any Management Entity, nor any of their Subsidiaries shall create,
incur, assume, suffer to exist, or otherwise become or remain directly or
indirectly liable with respect to, any Indebtedness except Permitted
Indebtedness. Nothing contained in this Section 7.02 shall be deemed to
excuse any lack of compliance by Operating Partnership, the REIT, or any
Subsidiary with the terms of Section 7.15 below.
7.03 CONTINGENT OBLIGATIONS. Neither the Operating Partnership,
nor the REIT, nor any of their Subsidiaries shall create, incur, assume or
suffer to exist any Contingent Obligations except as permitted under Section
7.03 of the Operating Partnership Credit Agreement, which is incorporated
herein by this reference.
7.04 LEASE OBLIGATIONS. Neither the Operating Partnership, nor
the REIT, nor any of their Subsidiaries shall create or suffer to exist any
obligations for the payment of rent for any Property under a lease or
agreement to lease that is not a Capital Lease, except as permitted under
Section 7.04 of the Operating Partnership Credit Agreement, which is
incorporated herein by this reference.
7.05 DISPOSITION OF PROPERTIES. Neither the Operating
Partnership, nor the REIT, nor any of their Subsidiaries shall, directly or
indirectly:
(a) make any Disposition of its interest in any Management
Entity, or enter into any agreement to do so; or
(b) make any Disposition of any other Property, or enter into any
agreement to do so, unless in the case of this clause (b) such Disposition
is at fair market value, and at the time of the Disposition no Guarantor
Event of Default exists.
Nothing contained in this Guaranty shall restrict Dispositions by
the Acquisition Sub unless such Dispositions are prohibited under the
Acquisition Sub Credit Agreement.
7.06 CONSOLIDATIONS AND MERGERS. Neither the Operating
Partnership, nor the REIT, nor any of their Subsidiaries shall merge,
consolidate with or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or
substantially all of its Properties (whether now owned or hereafter acquired)
to or in favor of any Person; except as permitted under Section
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7.06 of the Operating Partnership Credit Agreement, which is incorporated
herein by this reference.
7.07 LIQUIDATIONS; MATERIAL ORGANIZATION CHANGES; NEW
SUBSIDIARIES. The REIT and the Operating Partnership shall perform all of
the covenants and agreements set forth in Section 7.07 of the Operating
Partnership Credit Agreement, which is incorporated herein by this reference.
7.08 INVESTMENTS. Neither the Operating Partnership, nor the
REIT, nor any Management Entity, nor any of their Subsidiaries shall directly
or indirectly own or acquire any assets or make any Investments (or incur any
Contractual Obligation or enter into any letter of intent to make any
Investments) other than:
(i) cash and Cash Equivalents;
(ii) multi-family apartment projects in fee simple or partnership
or joint venture interests therein;
(iii) ownership interests in Management Entities, provided in each
case the same are engaged in managing multi-family apartment projects;
(iv) prior to the NHP Combination Date, the ownership of Stock in
NHP by Acquisition Sub (it being understood that no Affiliate of AIMCO other
than the Acquisition Sub or, to the extent expressly permitted in the
Operating Partnership Credit Agreement, the Merger Sub, shall acquire any
Stock in NHP); and
(v) other assets not described elsewhere in this Section 7.08,
provided that the aggregate Carrying Value of such interests shall not at any
time exceed twenty-five percent (25%) of the Carrying Value of the total
assets owned by the Operating Partnership, the REIT, and their Subsidiaries.
7.09 RESTRICTED PAYMENTS AND DEMANDS.
(a) Neither the Operating Partnership nor the REIT shall declare
or make, or permit any of their respective Subsidiaries to declare or make, any
distribution of any Properties, including cash, rights, obligations, or
partnership interests or units, on account of any partnership interests, Units
or Stock, or purchase, redeem or otherwise acquire for value any of its
partnership interests, Units or Stock, now or hereafter outstanding to any
Person other than the Operating Partnership, the REIT or a Wholly-Owned
Subsidiary, (all of the foregoing, collectively, "distributions"), except
(a) for the exchange of common Stock of the REIT for Units; (b) that if no
Guarantor Default or Guarantor Event of Default exists under Section 8.01(a) or
under Section 8.01(c) as a result of a breach of Section 7.15, the REIT, the
Operating Partnership and all such Subsidiaries may make distributions during
any twelve (12) month period in an amount in the aggregate which does not exceed
the greater of 80%
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of Funds From Operations for such period or such amount as is necessary to
maintain REIT Status.
(b) Under no circumstances shall the REIT or the Operating
Partnership permit any payment to be made with respect to Intra-Company Debt
while any Guarantor Event of Default is continuing.
7.10 TRANSACTIONS WITH AFFILIATES. Neither the Operating
Partnership, nor the REIT, nor any Management Entity, nor any of their
Subsidiaries shall enter into any transaction with any Affiliate of the
Operating Partnership or of any such Person, except as permitted under
Section 7.10 of the Operating Partnership Credit Agreement, which is
incorporated herein by this reference.
7.11 SPECIAL COVENANTS RELATING TO THE REIT. The REIT shall
perform all of the covenants and agreements set forth in Section 7.11 of the
Operating Partnership Credit Agreement, which is incorporated herein by this
reference.
7.12 TAXATION OF THE OPERATING PARTNERSHIP. The Operating
Partnership shall at all times be taxed as a partnership under the Code and
not as an association taxable as a corporation.
7.13 ERISA. The REIT shall perform all of the covenants and
agreements set forth in Section 7.13 of the Operating Partnership Credit
Agreement, which is incorporated herein by this reference.
7.14 PREPAYMENTS. Neither the REIT nor the Operating Partnership
nor any Subsidiary shall, while the Guarantied Indebtedness is outstanding,
prepay any Indebtedness (other than the Guarantied Indebtedness and the
Indebtedness outstanding from time to time under the Operating Partnership
Credit Agreement and the Bridge Loan Agreement), unless the REIT shall have
theretofore deposited with the Agent Restricted Cash in the maximum amount
required under Section 2.04 of this Guaranty; provided, however, a prepayment
of Indebtedness shall be permitted in connection with the refinancing thereof
so long as the maximum principal amount of the loan so used to prepay any
such Indebtedness does not exceed the amount of such Indebtedness being
prepaid.
7.15 FINANCIAL COVENANTS.
(a) The REIT shall not permit the Net Worth of the REIT and its
Subsidiaries on a consolidated basis to be less at any time than $400,000,000
plus 75% of the Net Issuance Proceeds of all issuances of Stock or Units after
the Closing Date.
(b) The REIT shall not permit the ratio of Consolidated Total
Indebtedness to Gross Asset Value to exceed 0.60-to-1.00 at any time.
(c) The REIT shall not permit the Consolidated EBITDA-to-Interest
Ratio computed for any fiscal quarter or year to be less than 2.00-to-1.00.
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(d) The REIT shall not permit the Consolidated EBITDA-to-Fixed
Charges Ratio computed for any fiscal quarter or year to be less than
1.80-to-1.00.
7.16 ACCOUNTING CHANGES. Neither the Operating Partnership nor
the REIT shall make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change its fiscal year.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 GUARANTOR EVENT OF DEFAULT. Any of the following shall
constitute a "Guarantor Event of Default":
(a) NON-PAYMENT. Any Guarantor or any Common Stockholder shall
fail to pay, when and as required to be paid herein or in the Collateral
Documents, any amount payable hereunder or thereunder; or
(b) REPRESENTATION OR WARRANTY. Any representation or warranty
by any Guarantor or any Common Stockholder made or deemed made herein, in any
Collateral Document, or in any certificate, document or financial or other
statement by such Guarantor or any Common Stockholder or any Responsible
Officer, furnished at any time under this Guaranty or in or under any Collateral
Document, shall prove to have been incorrect in any material respect on or as of
the date made or deemed made; or
(c) SPECIFIC GUARANTOR DEFAULTS. The REIT or the Operating
Partnership shall fail to perform or observe any term, covenant or agreement
binding upon it contained in Section 6.06, Section 6.10 and/or in Article
VII; provided that, in the case of a violation of the terms governing the
maximum amount of distributions during any twelve (12)-month period set forth
in Section 7.09(b), such failure shall not constitute a Guarantor Event of
Default if, by the end of the third month after such twelve (12)-month
period, such violation no longer exists, so long as no distributions were
made during such twelve (12)-month period in violation of the provisions of
Section 7.09(b) which prohibit distributions while certain Guarantor Defaults
or Guarantor Events of Default exist; or
(d) OTHER GUARANTOR DEFAULTS. Any Guarantor shall fail to
perform or observe any other term or covenant contained in this Guaranty or any
Collateral Document, and such default shall continue uncured for a period of 10
days after the earlier of (i) the date upon which a Responsible Officer knew or
received written notice of such failure or (ii) the date upon which written
notice thereof is given to the REIT by Agent or any Lender; or
(e) CROSS-DEFAULT. The Acquisition Sub shall fail, after any
applicable cure period:
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(i) to make any payment (and which uncured failure to pay is
continuing) in respect of any Indebtedness or Guaranty Obligation when due
which in the aggregate exceeds $500,000 (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise), other than a
payment with respect to Intra-Company Debt where the obligee has not
commenced pursuing its remedies; or
(ii) to perform or observe any other condition or covenant,
or any other event shall occur or condition exist, under any agreement or
instrument relating to any such Indebtedness or Guaranty Obligation, if the
effect of such failure, event or condition is to cause, or to permit the
holder or holders of such Indebtedness or the beneficiary or beneficiaries of
such Indebtedness (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, such Indebtedness to be declared
to be due and payable prior to its stated maturity, or such Guaranty
Obligation to become payable or cash collateral in respect thereof to be
demanded; or
(f) BANKRUPTCY OR INSOLVENCY. The Operating Partnership, the
REIT, any of their Subsidiaries, any Management Entity, any Common
Stockholder or, at any time prior to the NHP Combination Date, NHP shall (i)
become insolvent, or generally fail to pay, or admit in writing its inability
to pay, its debts as they become due, subject to applicable grace periods, if
any, whether at stated maturity or otherwise; (ii) voluntarily cease to
conduct its business in the ordinary course; (iii) commence any Insolvency
Proceeding with respect to itself; or (iv) take any action to effectuate or
authorize any of the foregoing; or
(g) INVOLUNTARY PROCEEDINGS. (i) Any Insolvency Proceeding shall
be commenced or filed against the Operating Partnership, the REIT, any of
their Subsidiaries, any Management Entity, any Common Stockholder or, at any
time prior to the NHP Combination Date, NHP or any writ, judgment, warrant of
attachment, execution or similar process, shall be issued or levied against a
substantial part of such Person's Properties, and any such proceeding or
petition shall not be dismissed, or such writ, judgment, warrant of
attachment, execution or similar process shall not be released, vacated or
fully bonded within sixty (60) days after commencement, filing or levy; (ii)
the Operating Partnership, the REIT, any of their Subsidiaries, any
Management Entity, any Common Stockholder or, at any time prior to the NHP
Combination Date, NHP shall admit the material allegations of a petition
against it in any Insolvency Proceeding, or an order for relief (or similar
order under non-U.S. law) is ordered in any Insolvency Proceeding; or (iii)
the Operating Partnership, the REIT, any of their Subsidiaries or any
Management Entity, any Common Stockholder or, at any time prior to the NHP
Combination Date, NHP shall acquiesce in the appointment of a receiver,
trustee, custodian, conservator, liquidator, mortgagee in possession (or
agent therefor), or other similar Person for itself or a substantial portion
of its Property or business; or
(h) COLLATERAL DOCUMENTS. Any provision of any Collateral
Document shall for any reason (other than pursuant to the terms thereof) cease
to be valid and binding on or enforceable against the Person party thereto
(except to the
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extent that the same results solely from an act or omission of the Agent or
the Lenders), or such Person shall so state in writing or bring an action to
limit its obligations or liabilities thereunder.
ARTICLE IX
ARBITRATION, REFERENCE, INDEMNIFICATION, OTHER REMEDIES
9.01 REFERENCE AND ARBITRATION.
(a) MANDATORY ARBITRATION. Any controversy or claim between or
among the parties, including those arising out of or relating to this
Guaranty or the Loan Documents and any claim based on or arising from an
alleged tort, shall at the request of any party be determined by arbitration.
The arbitration shall be conducted in New York, New York, in accordance with
the United States Arbitration Act (Title 9, U.S. Code), notwithstanding any
choice of law provision in this Guaranty, and under the Commercial Rules of
the American Arbitration Association (the "AAA"). The arbitrator(s) shall
give effect to statutes of limitation in determining any claim. Any
controversy concerning whether an issue is arbitrable shall be determined by
the arbitrator(s). Judgment upon the arbitration award may be entered in any
court having jurisdiction. The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests
such action for judicial relief.
(b) PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No
provision of this Section 9.01 shall limit the right of any party to exercise
self-help remedies such as setoff, foreclosure against or sale of any real or
personal property collateral or security, or to obtain provisional or
ancillary remedies from a court of competent jurisdiction before, after, or
during the pendency of any arbitration.
9.02 INDEMNITY. Guarantor shall indemnify and hold harmless the
Agent, each Lender and each of their respective officers, directors,
employees, counsel, agents and attorneys-in-fact (each, an "Indemnified
Person") from and against and pay them for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses or disbursements (including Attorney Costs) of any kind or
nature whatsoever with respect to the execution, delivery and enforcement of
this Guaranty, or the transactions contemplated hereby and thereby, and with
respect to any investigation, litigation or proceeding related to this
Guaranty, whether or not any Indemnified Person is a party thereto (all the
foregoing, collectively, the "Indemnified Liabilities"); PROVIDED, that a
Guarantor shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities arising from the gross negligence or
willful misconduct of such Indemnified Person. The agreements in this
Section 9.02 shall survive payment of the Guarantied Indebtedness.
9.03 MARSHALLING; PAYMENTS SET ASIDE. Neither the Agent nor any
Lender shall be under any obligation to marshall any assets in favor of any
Guarantor or any other Person or against or in payment of any or all of the
obligations of such
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Guarantor under this Guaranty. To the extent that any Guarantor makes a
payment or payments to the Agent or any Lender, or the Agent or any Lender
enforces its Liens or exercises its rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, receiver or any other party in
connection with any Insolvency Proceeding, or otherwise, then to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
9.04 SETOFF. In addition to any rights and remedies of the
Lenders provided by law, if a Guarantor Event of Default exists, then
irrespective of whether the Agent or such Lender shall have made demand under
this Guaranty and whether such obligations may be contingent or unmatured,
each Lender is authorized at any time and from time to time, without prior
notice to any Guarantor, any such notice being hereby waived to the fullest
extent permitted by law, to place a hold (in the full amount of the
Guarantied Indebtedness) against any and all deposits (general or special,
time or demand, provisional or final) at any time held by such Lender to or
for the credit or the account of such Guarantor and, provided that Guarantor
shall then be obligated to pay all sums due and owing on the Guarantied
Indebtedness in accordance with Section 2.01(b) hereof, to set off and apply
any and all such deposits and other indebtedness at any time owing to such
Lender to or for the credit or the account of such Guarantor against any and
all obligations owing to such Lender, now or hereafter existing. Each Lender
agrees to promptly notify the affected Guarantor and the Agent after any such
hold, setoff or application made by such Lender; PROVIDED, HOWEVER, that the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of each Lender under this Section 10.09 are in
addition to the other rights and remedies (including other rights of setoff)
that such Lender may have. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL
EXERCISE, OR ATTEMPT TO EXERCISE, ANY RIGHT OF SETOFF, BANKER'S LIEN, OR THE
LIKE, AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF ANY GUARANTOR HELD OR
MAINTAINED BY ANY LENDER, WITHOUT THE PRIOR WRITTEN CONSENT OF THE REQUISITE
LENDERS.
ARTICLE X
MISCELLANEOUS
10.01 NO WAIVER; CONSENTS; CUMULATIVE REMEDIES. Each waiver by
Agent or the Lenders must be in writing, and no waiver shall be construed as
a continuing waiver. No waiver shall be implied from Agent's or any Lender's
delay in exercising or failure to exercise any right or remedy against
Acquisition Sub, Guarantor or any security. Consent by Agent or the Lenders
to any act or omission by Acquisition Sub or Guarantor shall not be construed
as a consent to any other or subsequent act or omission, or as a waiver of
the requirement for Agent's or the Lenders' consent to be obtained in any
future or other instance. All remedies of
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Agent and each Lender against Acquisition Sub and Guarantor are cumulative.
As among the Agent and the Lenders only, nothing contained in this Guaranty
shall limit any of the approval rights of the Agent or the Lenders set forth
in the Loan Documents.
10.02 NO RELEASE. Guarantor shall not be released, in whole or in
part, from its obligations under this Guaranty except by a writing signed by
Agent and all the Lenders.
10.03 HEIRS, SUCCESSORS AND ASSIGNS; PARTICIPATIONS. The terms of
this Guaranty shall bind and benefit the heirs, legal representatives,
successors and assigns of Agent, the Lenders and Guarantor; provided,
however, that Guarantor may not assign this Guaranty, or assign or delegate
any of its rights or obligations under this Guaranty, without the prior
written consent of Agent in each instance. Without notice to or the consent
of Guarantor, Agent and any Lender may disclose any and all information in
its possession concerning Guarantor, this Guaranty and any security for this
Guaranty to any actual or prospective purchaser of any securities issued or
to be issued by Agent or such Lender, and to any actual or prospective
purchaser or assignee of any participation or other interest in the
Guarantied Indebtedness and this Guaranty.
10.04 NOTICES.
(a) DELIVERY. All notices, requests and other communications
provided for hereunder shall be in writing (including, unless the context
expressly otherwise provides, telegraphic, telex, facsimile transmission or
cable communication) and mailed, telegraphed, telexed or delivered to its
address specified on the signature pages hereof, or to such other address as
shall be designated by such party in a written notice to the other party.
(b) RECEIPT. All such notices and communications shall, when
transmitted by overnight delivery, telegraphed, telecopied by facsimile, telexed
or cabled, be effective when delivered for overnight delivery or to the
telegraph company, transmitted by telecopier, confirmed by telex answerback or
delivered to the cable company, respectively, or if delivered, upon delivery.
(c) RELIANCE. Agent and each Lender shall be entitled to rely on
the authority of any person purporting to be a person authorized by Guarantor
to give such notice, and neither Agent nor any Lender shall have any
liability to Guarantor or any other person on account of any action taken or
not taken by Agent or such Lender in reliance upon such telephonic or
facsimile notice. The obligation of Guarantor hereunder shall not be
affected in any way or to any extent by any failure by Lender to receive
written confirmation of any telephonic or facsimile notice or the receipt by
Agent or a Lender of a confirmation which is at variance with the terms
understood by Agent or such Lender to be contained in the telephonic or
facsimile notice.
10.05 RULES OF CONSTRUCTION. In this Guaranty, the word
"Acquisition Sub" includes both the named Acquisition Sub and any other
person who at any time
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assumes or otherwise becomes primarily liable for all or any part of the
obligations of the named Acquisition Sub on the Guarantied Indebtedness. The
word "person" includes any individual, company, trust or other legal entity
of any kind. If this Guaranty is executed by more than one person, the word
"Guarantor" includes all such persons. All headings appearing in this
Guaranty are for convenience only and shall be disregarded in construing this
Guaranty.
10.06 GOVERNING LAW. THIS GUARANTY AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES.
10.07 COSTS AND EXPENSES. If any lawsuit or arbitration is
commenced which arises out of, or which relates to this Guaranty, the Loan
Documents or the Guarantied Indebtedness, the prevailing party shall be
entitled to recover from each other party such sums as the court or
arbitrator may adjudge to be reasonable attorneys' fees (including allocated
costs for services of in-house counsel) in the action or proceeding, in
addition to costs and expenses otherwise allowed by law. In all other
situations, including any Insolvency Proceeding, Guarantor agrees to pay all
of the Agent's and each Lender's costs and expenses, including attorneys'
fees (including allocated costs for services of the Agent's and each Lender's
in-house counsel) which may be incurred in any effort to collect or enforce
the Guarantied Indebtedness or any part of it or any term of this Guaranty.
Without limiting any rights of the Agent or Lenders under the Acquisition Sub
Credit Agreement or , all amounts of any kind due and payable under this
Guaranty (whether for principal, interest, and other costs under the
Guarantied Indebtedness, or for costs, fees, and expenses for which the
Guarantors are directly responsible hereunder, or otherwise) shall accrue
interest from the time the Agent or the Lenders make demand therefor
hereunder until paid in full in cash to such Agent or the Lenders at the Base
Rate, as defined in the Acquisition Sub Credit Agreement, plus three (3%)
percentage points, except to the extent that any such amounts are then
accruing interest under the Guarantied Indebtedness, in which case such Base
Rate plus 3% interest rate shall not be applied if the effect would be to
compound the interest to which such obligations are subject to under the
Guarantied Indebtedness.
10.08 CONSIDERATION. Guarantor acknowledges that it expects to
benefit from Lenders' extension of the loan facility under the Acquisition
Sub Credit Agreement to Acquisition Sub because of its relationship to
Acquisition Sub, because such loan facility is essential to Acquisition Sub's
acquisition of a portion of the outstanding Stock of NHP and because such
acquisition is part of Guarantor's overall plan to acquire or merge with NHP.
Guarantor is executing this Guaranty in consideration of these anticipated
benefits.
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10.09 INTEGRATION; MODIFICATIONS. This Guaranty (a) integrates
all the terms and conditions mentioned in or incidental to this Guaranty, (b)
supersedes all oral negotiations and prior writings with respect to its
subject matter, and (c) is intended by Guarantor, Agent and the and Lenders
as the final expression of the agreement with respect to the terms and
conditions set forth in this Guaranty and as the complete and exclusive
statement of the terms agreed to by Guarantor, Agent and the Lenders. No
representation, understanding, promise or condition shall be enforceable
against any party hereto unless it is contained in this Guaranty. This
Guaranty may not be modified except in a writing signed by both Agent (with
the consent of the Requisite Lenders) and Guarantor. No course of prior
dealing, usage of trade, parol or extrinsic evidence of any nature shall be
used to supplement, modify or vary any of the terms hereof. As between Agent
and the Lenders only, nothing contained in this Guaranty shall alter the
rights and obligations among Agent and the Lenders set forth in the Credit
Agreement.
10.10 MISCELLANEOUS. The illegality or unenforceability of one
or more provisions of this Guaranty shall not affect any other provision.
Time is of the essence in the performance of this Guaranty by Guarantor. The
obligations of each Guarantor under this Guaranty shall be joint and several.
10.11 COUNTERPARTS. This Guaranty may be executed by one or
more of the parties to this Guaranty in any number of separate counterparts,
each of which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the
same instrument.
10.12 SEVERABILITY. The illegality or unenforceability of any
provision of this Guaranty or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Guaranty or any instrument or agreement required
hereunder.
10.13 WAIVER OF JURY TRIAL. GUARANTOR, THE AGENT, AND THE
LENDERS EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS GUARANTY OR
THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY
OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
OTHERWISE. SUBJECT TO SECTION 9.01 ABOVE, GUARANTOR, THE AGENT, AND THE
LENDERS EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES
FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY
OF THIS GUARANTY OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO
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ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
GUARANTY.
10.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST GUARANTOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT GUARANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES
TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT. Guarantor hereby agrees that service of all process in any such
proceeding in any such court may be made by registered or certified mail,
return receipt requested, to Guarantor at its address provided in Section
10.04, such service being hereby acknowledged by Guarantor to be sufficient
for personal jurisdiction in any action against Guarantor in any such court
and to be otherwise effective and binding service in every respect. Nothing
herein shall affect the right to serve process in any other manner permitted
by law or shall limit the right of the Agent or any Lender to bring
proceedings against Guarantor in the courts of any other jurisdiction.
10.15 INTERPRETATION. This Guaranty is the result of
negotiations between and has been reviewed by counsel to the Agent, the
Lenders and the Guarantors, and is the product of all parties hereto.
Accordingly, this Guaranty shall not be construed against the Lenders or the
Agent merely because of the Agent's or Lender's involvement in the
preparation of such documents and agreements.
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IN WITNESS WHEREOF, the undersigned have executed this Guaranty on the date
hereinabove set forth.
Guarantors:
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY,
a Maryland corporation
By:
---------------------------------
Peter K. Kompaniez, Vice Chairman
AIMCO PROPERTIES, L.P.,
a Delaware limited partnership
By: AIMCO-GP, Inc.,
a Delaware corporation
By:
----------------------------------
Peter K. Kompaniez, Vice President
Address Where Notices to
Guarantors are to be Sent:
1873 South Bellaire Street
17th Floor
Denver, Colorado 90071
Address Where Notices to Agent
are to be Sent:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
555 South Flower Street, 6th Floor
Los Angeles, California 90071
Att'n: Manager - Unit #1357
Addresses Where Notices to the Lenders are
to be Sent:
Per the Acquisition Sub Credit Agreement
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EXHIBIT E
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT ("Pledge Agreement") is made and dated as of this
5th day of May, 1997, by AIMCO Properties L.P., a Delaware limited
partnership ("AIMCO") and Terry Considine and Peter K. Kompaniez (each, a
"Common Stockholder," and collectively, the "Common Stockholders"; AIMCO and
the Common Stockholders are individually and collectively referred to herein
as "Pledgor") and Bank of America National Trust and Savings Association, a
national banking association ("BofA"), as Agent ("Secured Party") for BofA,
Smith Barney Mortgage Capital Group, Inc., a Delaware corporation and the
other lenders ("Lenders") from time to time party to the Acquisition Sub
Credit Agreement described below. Capitalized terms used but not defined
herein shall have the meanings set forth in the Guaranty described below or,
if not defined therein, in such Acquisition Sub Credit Agreement.
RECITALS
A. The Lenders have extended credit to or for the benefit of
AIMCO/NHP Holdings, Inc., a Delaware corporation ("Acquisition Sub"), on the
terms and subject to the conditions set forth in the Acquisition Sub Credit
Agreement, dated as of May 5, 1997 (as amended, modified, waived or replaced
from time to time, the "Acquisition Sub Credit Agreement") under which the
Lenders have committed to make available to the Acquisition Sub a credit
facility of up to $76,000,000. Secured Party is the agent for the Lenders.
B. AIMCO and Apartment Investment and Management Company, a
Maryland corporation (the "REIT") (individually, a "Guarantor" and
collectively, the "Guarantors") have guarantied the obligations of
Acquisition Sub pursuant to a Payment Guaranty, dated as of May 5, 1997 (the
"Guaranty"). Pledgor has agreed to pledge and to grant to Secured Party a
security interest in and lien upon the Collateral (as defined in Paragraph 2
below) as security for all Obligations (as defined in Paragraph 3 below), for
the ratable benefit of the Lenders.
C. Pledgor is the owner of Stock in Acquisition Sub, consisting of
the interests described on SCHEDULE 1 attached hereto.
NOW, THEREFORE, in consideration of the above Recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Pledgor hereby agrees as follows:
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AGREEMENT
1. GRANT OF SECURITY INTEREST. Pledgor hereby pledges and
grants to Secured Party a security interest in the property described in
Paragraph 2 below (collectively and severally, the "Collateral") to secure
payment and performance of the Obligations.
2. COLLATERAL. The Collateral shall consist of the following,
whether now existing or hereafter arising:
(a) SECURITIES. All shares of capital stock or other
equity or beneficial interests in the Acquisition Sub held by Pledgor,
including, without limitation, the stock described on SCHEDULE 1 attached
hereto, all related securities, warrants, options or rights to receive any
capital stock or other equity or beneficial interests, and any interest of
Pledgor in the entries of on the books of any financial intermediary
pertaining thereto. All of the foregoing are collectively referred to herein
as the "Pledged Stock";
(b) CERTIFICATES. All certificates (including, without
limitation, any certificate representing a stock dividend or a distribution
in connection with any reclassification, increase or reduction of capital, or
issued in connection with any reorganization), options or rights, whether as
an addition to, in substitution of, as evidence of, or in exchange for, any
of the Pledged Stock;
(c) ADDITIONAL SHARES. All additional shares of, and all
securities convertible into and warrants, options and other rights to
purchase or otherwise acquire, stock of any issuer of the Pledged Stock from
time to time acquired by Pledgor in any manner (which shares shall be deemed
to be part of the Pledged Stock), the certificates or other instruments
representing such additional shares, securities, warrants, options or other
rights and any interest of Pledgor in the entries on the books of any
financial intermediary pertaining to such additional shares, and all
dividends, cash, warrants, rights, instruments and other property or proceeds
from time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of such additional shares, securities,
warrants, options or other rights;
(d) DISTRIBUTIONS, DIVIDENDS, ETC. All rights of Pledgor
as a shareholder or other holder of any equity or beneficial interest in the
Acquisition Sub, including, without limitation, all management and voting
rights, all rights to distributions, dividends, the payment of money or the
distribution of other property from the Acquisition Sub (including, without
limitation, all rights to receive profits or surplus of, or other
distributions or compensation by way of income, return of capital or any
liquidating or other distribution from the Acquisition Sub and whether such
distributions or payments are on account of Pledgor's interest as a
shareholder or other holder of any equity or beneficial interest in the
Acquisition Sub, as a creditor of the
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Acquisition Sub, or otherwise), and all rights to the assets of the
Acquisition Sub held by Pledgor or accruing to Pledgor under the
Organizational Documents for the Acquisition Sub or under applicable law.
All such rights are collectively referred to as the "Pledged Rights";
(e) BOOKS AND RECORDS. All present and future books and
records relating to the Collateral to the extent Pledgor has rights therein,
including, without limitation, books of account and ledgers of every kind and
nature, all electronically recorded data relating to the Collateral or the
business thereof, all receptacles and containers for such records, and all
files and correspondence relating thereto; and
(f) PROCEEDS. All proceeds of the foregoing Collateral.
For purposes of this Pledge Agreement, the term "proceeds" includes whatever
is receivable or received when Collateral or proceeds is sold, collected,
exchanged or otherwise disposed of, whether such disposition is voluntary or
involuntary, and includes, without limitation, all rights to payment,
including return premiums, with respect to any insurance relating thereto.
Nothing contained herein shall be deemed to render Secured Party or
any Lender responsible for any liabilities or obligations of Pledgor with
respect to the Pledged Stock or any other portion of the Collateral.
3. OBLIGATIONS. The obligations secured by this Pledge Agreement
shall consist of all obligations and liabilities, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including the payment of amounts that would become due but for the operation
of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
Section 362(a) or any successor provision), of all obligations and
liabilities of every nature of the Guarantors under the Guaranty, whether now
or hereafter existing, and all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to any of the Guarantors,
would accrue on such obligations), fees, expenses, indemnities or otherwise,
whether voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owned with others, and
whether or not from time to time decreased or extinguished and later
increased, created or incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Secured Party or any Lender
as a preference, fraudulent transfer or otherwise (all such obligations and
liabilities being the "Underlying Debt"), and all obligations of every nature
of Pledgor now or hereafter existing under this Pledge Agreement (all such
obligations of Pledgor, together with the Underlying Debt, being the
"Obligations").
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4. REPRESENTATIONS AND WARRANTIES. Pledgor hereby represents,
warrants and covenants with Secured Party that:
(a) OWNERSHIP OF COLLATERAL. Pledgor is the sole owner of
and has good title to the Collateral (or, in the case of after-acquired
Collateral, at the time Pledgor acquires rights in the Collateral, will be
the owner thereof) and is the record and beneficial owner of the Pledged
Stock included in the Collateral described on SCHEDULE 1.
(b) PERFECTION AND PRIORITY. The pledge of the Collateral
pursuant to this Agreement creates (together with (i) the delivery to Secured
Party of all stock certificates representing the Pledged Stock, and (ii)
filing of Uniform Commercial code financing statements with the Secretary of
State of Colorado (and, in the case of Peter Kompaniez, California) a valid
and perfected first priority security interest in the Collateral, securing
the payment of the Obligations. Except for the security interests in favor
of Secured Party hereunder, no Person has (or, in the case of after-acquired
Collateral, at the time Pledgor acquires rights therein, will have) any
right, title, claim or interest (by way of security interest or other lien or
charge) in, against or to the Collateral.
(c) ACCURACY OF INFORMATION. All information heretofore,
herein or hereafter supplied to Secured Party by or on behalf of Pledgor with
respect to the Collateral is or will be true and correct.
(d) DELIVERY OF DOCUMENTS, ETC. Pledgor has delivered to
Secured Party (i) true and correct copies of the Organizational Documents for
the Acquisition Sub, (ii) all instruments, documents, chattel paper and other
items of Collateral in which a security interest is or may be perfected by
possession, and (iii) any certificated Pledged Stock together with such
additional writings, including, without limitation, assignments and stock
powers, with respect thereto as Secured Party shall have requested.
(e) PLEDGED SHARES. The Pledged Stock has been validly
issued and is fully paid and nonassessable; and there are no outstanding
options, warrants or other agreements with respect thereto. The Pledged
Stock constitutes all of the issued and outstanding shares of capital stock
and the equity and beneficial interests in the Acquisition Sub.
(f) ORGANIZATIONAL DOCUMENTS. The terms of the
Organizational Documents for the Acquisition Sub have not been modified or
waived in any respect from such documents delivered to Secured Party pursuant
to Section 4(d)(i) above.
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(g) SET-OFF. Neither the Acquisition Sub nor any of the
other shareholders, partners, members or other holders of equity or
beneficial interests in the Acquisition Sub has any defense, set-off, claim
or counterclaim against Pledgor which can be asserted against Secured Party,
whether in any proceeding to enforce Secured Party's rights in the Collateral
or otherwise.
(h) NO DEFAULT. There is no default by Pledgor under the
Organizational Documents for the Acquisition Sub nor has any event occurred
which, with the passage of time or giving of notice, or both, would
constitute a default thereunder.
5. COVENANTS AND AGREEMENTS OF PLEDGOR. In addition to all
covenants and agreements of Pledgor set forth in any other agreement with
Secured Party, which are incorporated herein by this reference, Pledgor
hereby agrees:
(a) MAINTENANCE OF COLLATERAL. Pledgor agrees to do all
acts that may be necessary to maintain, preserve and protect the Collateral.
(b) USE OF COLLATERAL. Pledgor agrees not to use or
permit any Collateral to be used unlawfully or in violation of any provision
of the Guaranty, or any applicable statute, regulation or ordinance covering
the Collateral.
(c) TAXES. Pledgor agrees to pay all taxes, assessments,
charges, encumbrances and liens now or hereafter imposed upon or affecting
any Collateral prior to the time the same become delinquent, except for those
being contested in good faith by appropriate proceedings and for which the
Pledgor has provided adequate reserves.
(d) FINANCING STATEMENTS. Pledgor agrees to procure,
execute and deliver from time to time any endorsements, assignments,
financing statements and other writings reasonably deemed necessary or
appropriate by Secured Party to perfect, maintain and protect its security
interest hereunder and the priority thereof and to deliver promptly to
Secured Party all originals of Collateral or proceeds consisting of chattel
paper or instruments.
(e) ACTIONS. Pledgor agrees to appear in and defend any
action or proceeding which may affect its title to or Secured Party's
interest in the Collateral.
(f) USE OF PROCEEDS. Pledgor agrees, if the Lenders give
value to enable Pledgor to acquire rights in or the use of any Collateral, to
use such value for such purpose.
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(g) RECORDS. Pledgor agrees to keep separate, accurate
and complete records of the Collateral and to provide Secured Party with such
records and such other reports and information relating to the Collateral as
Secured Party may reasonably request from time to time.
(h) SALE OR ENCUMBRANCE. Except as permitted under
Section 7.07 of the Acquisition Sub Credit Agreement, Pledgor agrees not to
surrender or lose possession of (other than to Secured Party), sell,
encumber, or otherwise dispose of or transfer any Collateral or right or
interest therein and, notwithstanding any provision of the Organizational
Documents, to keep the Collateral free of all levies and security interests
or other Liens, charges, preferences or priorities, except those approved in
writing by Secured Party.
(i) PROCEEDS. Pledgor agrees to account fully for and
promptly deliver to Secured Party, in the form received, all proceeds of the
Collateral received, endorsed to Secured Party as appropriate, and until so
delivered all proceeds shall be held by Pledgor in trust for Secured Party,
separate from all other property of Pledgor and identified as the property of
Secured Party.
(j) LOCATION OF RECORDS. Pledgor agrees to keep the
records concerning the Collateral at the location set forth in Section 24
below and not to remove the records concerning the Collateral from such
location without the prior written consent of Secured Party.
(k) DISSOLUTION. Except as permitted under Section 7.07
of the Acquisition Sub Credit Agreement, Pledgor agrees not to permit or take
any action to dissolve or terminate the Acquisition Sub.
(l) COMPLIANCE WITH LAWS. To comply with all laws,
regulations and ordinances relating to the possession, operation, maintenance
and control of the Collateral.
(m) SAFEKEEPING. That such care as Secured Party gives to
the safekeeping of its own property of like kind shall constitute reasonable
care of such Collateral when in Secured Party's possession.
(n) PAYMENT OF SECURED PARTY'S COSTS AND EXPENSES. To
reimburse Secured Party upon demand for any reasonable costs and expenses,
including, without limitation, reasonable attorneys' fees, Secured Party may
incur while exercising any right, power or remedy provided by this Pledge
Agreement or by law, all of which costs and expenses are included in the
Obligations secured hereby.
(o) NOTICE OF CHANGES. To give Secured Party thirty (30)
days prior written notice of any change in Pledgor's residence or chief place
of
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business or legal name or trade name(s) or style(s) set forth in Section 24
of this Pledge Agreement.
(p) DIVIDENDS ON PLEDGED RIGHTS AND PLEDGED STOCK. To
account fully for and promptly deliver to Secured Party, as additional
Collateral hereunder, in the form received, any dividend or any other
distribution on account of its Pledged Rights and Pledged Stock, if any,
whether in cash, securities or property by way of stock-split, spin-off,
split-up or reclassification, combination of shares or the like, or in case
of any reorganization, consolidation or merger. Pledgor further agrees that
it will, upon obtaining any additional shares of stock or other securities of
the Acquisition Sub referred to in Section 1(c), promptly (and in any event
within five Business Days) deliver to Secured Party a Pledge Amendment, duly
executed by Pledgor, in substantially the form of EXHIBIT A annexed hereto (a
"Pledge Amendment"), in respect of the additional Pledged Stock to be pledged
pursuant to this Pledge Agreement. Pledgor hereby authorizes Secured Party
to attach each Pledge Amendment to this Pledge Agreement and agrees that all
Pledged Stock listed on any Pledge Amendment delivered to Secured Party shall
for all purposes hereunder be considered Collateral; PROVIDED that the
failure of Pledgor to execute a Pledge Amendment with respect to any
additional Pledged Stock pledged pursuant to this Pledge Agreement shall not
impair the security interest of Secured Party therein or otherwise adversely
affect the rights and remedies of Secured Party hereunder with respect
thereto.
(q) AMENDMENT OF ORGANIZATIONAL DOCUMENTS. Not to amend
or permit the amendment of the articles of incorporation, by-laws or other
Organizational Documents of the Acquisition Sub.
(r) COMPLIANCE WITH ACQUISITION SUB CREDIT AGREEMENT. To
cause the Acquisition Sub to comply with all the terms of the Acquisition Sub
Credit Agreement.
6. AUTHORIZED ACTION BY SECURED PARTY.
(a) Pledgor hereby agrees that from time to time, without
presentment, notice or demand, and without affecting or impairing in any way
the rights of Secured Party with respect to the Collateral, the obligations
of Pledgor hereunder or the Obligations, Secured Party may, but shall not be
obligated to and shall incur no liability to Pledgor or any third party for
failure to take any act which Pledgor is obligated by this Pledge Agreement
to do, during the existence of an Event of Default, exercise such rights and
powers as Pledgor might exercise with respect to the Collateral, and Pledgor
hereby irrevocably appoints Secured Party as its attorney-in-fact to, during
the existence of an Event of Default, exercise such rights and powers,
including without limitation: (i) collect by legal proceedings or otherwise
and endorse, receive and receipt for all dividends, interest, payments,
proceeds and other
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sums and property now or hereafter payable on or on account of the
Collateral; (ii) enter into any extension, reorganization, deposit, merger,
consolidation or other agreement pertaining to, or deposit, surrender,
accept, hold or apply other property in exchange for the Collateral; (iii)
insure, process and preserve the Collateral; (iv) transfer the Collateral to
its own or its nominee's name; (v) make any compromise or settlement, and
take any action it deems advisable, with respect to the Collateral; and (vi)
to notify any account pledgor on any Collateral to make payment directly to
Secured Party.
(b) So long as no Event of Default shall have occurred and be
continuing:
(i) Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any part
thereof for any purpose not inconsistent with the terms of this Pledge
Agreement; PROVIDED, HOWEVER, that Pledgor shall give Secured Party at least
10 Business Days' prior written notice with respect to any shareholder vote
with respect to any act or undertaking which, if effected, would have a
Material Adverse Effect or would violate the Credit Agreement; and
(ii) Secured Party shall promptly execute and deliver (or
cause to be executed and delivered) to Pledgor all such proxies and other
instruments as Pledgor may from time to time reasonably request for the
purpose of enabling Pledgor to exercise the voting and other consensual
rights which it is entitled to exercise pursuant to paragraph (i) above.
(c) Upon the occurrence and during the continuation of an Event
of Default, and upon written notice from Secured Party to Pledgor, all rights
of Pledgor to exercise the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to Section 6(b)(i) shall cease,
and all such rights shall thereupon become vested in Secured Party who shall
thereupon have the sole right to exercise such voting and other consensual
rights;
(d) In order to permit Secured Party to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant to
Section(6)(c)(i) and to receive all dividends and other distributions which
it is entitled to receive hereunder, (i) Pledgor shall promptly execute and
deliver (or cause to be executed and delivered) to Secured Party all such
proxies, dividend payment orders and other instruments as Secured Party may
from time to time reasonably request and (ii) without limiting the effect of
the immediately preceding clause (i), Pledgor hereby grants to Secured Party
an irrevocable proxy to vote the Pledged Stock and to exercise all other
rights, powers, privileges and remedies to which a holder of the Pledged
Stock would be entitled (including, without limitation, giving or withholding
written consents of shareholders,
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calling special meetings of shareholders and voting at such meetings), which
proxy shall be effective, automatically and without the necessity of any
action (including any transfer of any Pledged Stock on the record books of
the issuer thereof) by any other Person (including the issue of the Pledged
Stock or any officer or agent thereof), upon the occurrence and during the
continuance of an Event of Default and which proxy shall only terminate upon
the payment in full of the Obligations.
7. DEFAULT. The occurrence of any Guarantor Event of Default
shall constitute an Event of Default hereunder.
8. REMEDIES. Upon the occurrence and during the continuance of
any such Event of Default, provided that Guarantor shall then be obligated to
pay all sums then due and owing on the Guarantied Indebtedness in accordance
with Section 2.01(b) of the Guaranty, Secured Party may, at its option, and,
without notice to or demand on Pledgor and in addition to all rights and
remedies available to Secured Party under any other agreement do any one or
more of the following:
(a) GENERAL ENFORCEMENT. Foreclose or otherwise enforce
Secured Party's security interest in any manner permitted by law, or provided
for in this Pledge Agreement;
(b) SALE, ETC. Sell, lease or otherwise dispose of any
Collateral at one or more public or private sales at Secured Party's place of
business or any other place or places, including, without limitation, any
broker's board or securities exchange, whether or not such Collateral is
present at the place of sale, for cash or credit or future delivery, on such
terms and in such manner as Secured Party may determine;
(c) COSTS OF REMEDIES. Recover from Pledgor all costs
and expenses, including, without limitation, reasonable attorneys' fees,
incurred or paid by Secured Party in exercising any right, power or remedy
provided by this Pledge Agreement or by law with respect to the Collateral;
(d) ASSEMBLY OF COLLATERAL. Require Pledgor to assemble
the Collateral and make it available to Secured Party at a place to be
designated by Secured Party;
(e) TAKE POSSESSION OF COLLATERAL. Enter onto property
where Collateral is located and take possession thereof with or without
judicial process. Pledgor expressly waives any constitutional or other right
to a judicial hearing prior to the time Secured Party takes possession of the
Collateral upon default as provided herein;
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(f) VOTE OF PLEDGED STOCK. Vote or consent, and in
connection therewith Pledgor grants to Secured Party a proxy to vote or to
consent, with respect to Pledged Stock or Pledged Rights;
(g) MANNER OF SALE OF PLEDGED STOCK. Restrict the
prospective bidders or purchasers of Pledged Stock or Pledged Rights to
persons or entities who (i) will represent and agree that they are purchasing
for their own account, for investment, and not with a view to the
distribution or sale of any of the Pledged Stock or Pledged Rights; and (ii)
satisfy the offeree and purchaser requirements for a valid private placement
transaction under Section 4(2) of the Securities Act of 1933, as amended (the
"Act"), and under all applicable Securities and Exchange Commission releases,
rules and regulations. Pledgor agrees that disposition of any of the Pledged
Stock or Pledged Rights, if any, pursuant to any private sale made as
provided above may be at prices and on other terms less favorable than if the
Pledged Stock or Pledged Rights were sold at public sale, and that Secured
Party has no obligation to delay the sale of any Pledged Stock or Pledged
Rights for public sale under the Act. Pledgor agrees that a private sale or
sales made under the foregoing circumstances shall be deemed to have been
made in a commercially reasonable manner. In the event that Secured Party
elects to sell the Pledged Stock or Pledged Rights, or part of them, and
there is a public market for the Pledged Stock or Pledged Rights, in a public
sale, Pledgor shall, upon demand by Secured Party, use its best efforts to
register and qualify the Pledged Stock and/or Pledged Rights, under the Act
and all state Blue Sky or securities laws required by the proposed terms of
sale, and all expenses thereof shall be payable by Pledgor, including, but
not limited to, all costs of (i) registration or qualification of, under the
Act or any state Blue Sky or securities laws or pursuant to any applicable
rule or regulation issued pursuant thereto, any Pledged Stock or Pledged
Rights, and (ii) sale of such Pledged Shares, including, but not limited to,
brokers' or underwriters' commissions, fees or discounts, accounting and
legal fees, costs of printing and other expenses of transfer and sale. If
any consent, approval or authorization of any state, municipal or other
governmental department, agency or authority shall be necessary to effectuate
any sale or other disposition of Pledged Stock or Pledged Rights, or any part
thereof, Pledgor will execute such applications and other instruments as may
be required in connection with securing any such consent, approval or
authorization, and will otherwise use its best efforts to secure the same;
(h) MANNER OF SALE OF COLLATERAL OTHER THAN PLEDGED STOCK.
Pledgor shall be given five (5) business days' prior notice of the time and
place of any public sale or of the time after which any private sale or other
intended disposition of the Collateral other than Pledged Stock is to be
made, which notice Pledgor hereby agrees shall be deemed reasonable notice
thereof; and
(i) APPLICATION OF RECEIPTS. Secured Party shall apply
all sums received or collected from or on account of the Collateral,
including, without limitation, the proceeds of any sale thereof, to the
payment of the costs and expenses
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incurred in preserving and enforcing the rights of Secured Party in effecting
a sale of such Collateral (including, without limitation, reasonable
attorneys' fees and legal expenses, including fees and expenses of in-house
counsel) and to the payment of the Obligations in such order and manner as
Secured Party, in its sole discretion, elects.
9. DELIVERY TO AND RIGHTS OF PURCHASER. Upon any sale or other
disposition pursuant to this Pledge Agreement, Secured Party shall have the
right to deliver, assign and transfer to the purchaser thereof the Collateral
or portion thereof so sold or disposed of. Each purchaser at any such sale
or other disposition (including Secured Party) shall hold the Collateral free
from any claim or right of whatever kind, including any equity or right of
redemption of Pledgor, and Pledgor specifically waives (to the extent
permitted by law), upon any such sale or disposition pursuant to this Pledge
Agreement, all rights of redemption, stay or appraisal which it has or may
have under any rule of law or statute now existing or hereafter adopted.
10. COLLECTION OF COLLATERAL PAYMENTS.
(a) COLLECTION OF PAYMENTS. Pledgor shall, at its sole
cost and expense, take all reasonable and necessary action to obtain payment,
when due and payable, of all sums due or to become due with respect to any
Collateral ("Collateral Payments" or a "Collateral Payment"), including,
without limitation, the taking of such action with respect thereto as Secured
Party may request, or, in the absence of such request, as Pledgor may
reasonably deem advisable; provided, however, that Pledgor shall not, without
the prior written consent of Secured Party, grant or agree to any rebate,
refund, compromise or extension with respect to any Collateral Payment. Upon
the request of Secured Party, Pledgor will notify and direct any account
pledgor who is or might become obligated to make any Collateral Payment, to
make payment thereof to Secured Party (or to Pledgor in care of Secured
Party) at such address as Secured Party may designate. Pledgor will
reimburse Secured Party promptly upon demand for all out-of-pocket costs and
expenses, including reasonable attorneys' fees and litigation expenses,
incurred by Secured Party in seeking to collect its Collateral Payment.
(b) PAYMENTS IN TRUST. Upon the request of Secured Party,
Pledgor will, forthwith upon receipt, transmit and deliver to Secured Party,
in the form received, all cash, checks, drafts and other instruments for the
payment of money (properly endorsed where required so that such items may be
collected by Secured Party) which may be received by Pledgor at any time as
payment on account of any Collateral Payment and if such request shall be
made, until delivery to Secured Party, such items will be held in trust for
Secured Party and will not be commingled by Pledgor with any of its other
funds or property. Thereafter, Secured Party is hereby authorized and
empowered to endorse the name of Pledgor on any check, draft or other
instrument for the payment of money received by Secured Party on account of
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any Collateral Payment if Secured Party believes such endorsement is
necessary or desirable for purposes of collection.
(c) INDEMNIFICATION. Pledgor hereby indemnifies and saves
harmless Secured Party and its agents, officers and employees from and
against all liabilities and reasonable expenses on account of any adverse
claim asserted against Secured Party relating to any moneys received by
Secured Party on account of any of Pledgor's Collateral Payments and such
obligation of Pledgor shall continue in effect after and notwithstanding the
discharge of the Obligations and the release of the security interest granted
in Paragraph 1 above.
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11. STANDARD OF CARE. The powers conferred on Secured Party
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the exercise
of reasonable care in the custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, Secured Party shall
have no duty as to any Collateral, it being understood that Secured Party
shall have no responsibility for (a) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other
matters relating to any Collateral, whether or not Secured Party has or is
deemed to have knowledge of such matters, (b) taking any necessary steps
(other than steps taken in accordance with the standard of care set forth
above to maintain possession of the Collateral) to preserve rights against
any parties with respect to any Collateral, (c) taking any necessary steps to
collect or realize upon the Obligations or any guarantee therefor, or any
part thereof, or any of the Collateral, or (d) initiating any action to
protect the Collateral against the possibility of a decline in market value.
Secured Party shall be deemed to have exercised reasonable care in the
custody and preservation of Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Secured Party accords
its own property consisting of negotiable securities.
12. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS. This
Pledge Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of all Obligations and the cancellation or termination of the
Commitments, (b) be binding upon Pledgor, its successors and assigns, and (c)
inure, together with the rights and remedies of Secured Party hereunder, to
the benefit of Secured Party and its successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), but subject to
the provisions of Section 10.08 of the Credit Agreement, any Lender may
assign or otherwise transfer any Loans held by it to any other Person, and
such other Person shall thereupon become vested with all the benefits in
respect thereof granted to Lenders herein or otherwise. Upon the payment in
full of Obligations, the cancellation or termination of the Commitments, the
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to Pledgor. Upon any such termination Secured Party
will, at Pledgor's expense, execute and deliver to Pledgor such documents as
Pledgor shall reasonably request to evidence such termination and Pledgor
shall be entitled to the return, upon its request and at its expense, against
receipt and without recourse to Secured Party, of such of the Collateral as
shall not have been sold or otherwise applied pursuant to the terms hereof.
13 SECURED PARTY AS AGENT.
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(a) Secured Party has been appointed to act as Secured Party
hereunder by Lenders, Secured Party shall be obligated, and shall have the
right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of Collateral),
solely in accordance with this Pledge Agreement and the Credit Pledge
Agreement.
(b) Secured Party shall at all times be the same Person that
is Agent under the Acquisition Sub Credit Agreement. Written notice of
resignation by Agent pursuant to Article IX of the Acquisition Sub Credit
Agreement shall also constitute notice of resignation as Secured Party under
this Pledge Agreement; removal of Agent pursuant to Article IX of the
Acquisition Sub Credit Agreement shall also constitute removal as Secured
Party under this Pledge Agreement; and appointment of a successor Agent
pursuant to Article IX of the Acquisition Sub Credit Agreement shall also
constitute appointment of a successor Secured Party under this Pledge
Agreement. Upon the acceptance of any appointment as Agent under Article IX
of the Acquisition Sub Credit Agreement by a successor Agent, that successor
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring or removed Secured Party under
this Pledge Agreement, and the retiring or removed Secured Party under this
Pledge Agreement shall promptly (i) transfer to such successor Secured Party
all sums, securities and other items of Collateral held hereunder, together
with all records and other documents necessary or appropriate in connection
with the performance of the duties of the successor Secured Party under this
Pledge Agreement, and (ii) execute and deliver to such successor Secured
Party such amendments to financing statements, and take such other actions,
as may be necessary to appropriate in connection with the assignment to such
successor Secured Party of the security interests created hereunder,
whereupon such retiring or removed Secured Party shall be discharged from its
duties and obligations under this Pledge Agreement. After any retiring or
removed Agent's resignation or removal hereunder as Secured Party, the
provisions of this Pledge Agreement shall insure to its benefit as to any
actions taken or omitted to be taken by it under this Pledge Agreement while
it was Secured Party hereunder.
14. CUMULATIVE RIGHTS. The rights, powers and remedies of Secured
Party under this Pledge Agreement shall be in addition to all rights, powers
and remedies given to Secured Party by virtue of any statute or rule of law,
the Acquisition Sub Credit Agreement, the Loan Documents, the Guaranty or any
other agreement, all of which rights, powers and remedies shall be cumulative
and may be exercised successively or concurrently without impairing Secured
Party's security interest in the Collateral.
15. WAIVER. Any waiver, forbearance or failure or delay by Secured
Party in exercising any right, power or remedy shall not preclude the further
exercise thereof, and every right, power or remedy of Secured Party shall
continue in full force
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and effect until such right, power or remedy is specifically waived in a
writing executed by Secured Party. Pledgor waives any right to require
Secured Party to proceed against any person or to exhaust any Collateral or
to pursue any remedy in Secured Party's power, subject to the express
provision of Section 2.01(b) of the Guaranty.
16. SETOFF. Pledgor agrees that Secured Party may exercise its
rights of setoff with respect to the Obligations in the same manner as if the
Obligations were unsecured.
17. BINDING UPON SUCCESSORS. All rights of each party hereto shall
inure to the benefit of its successors and assigns, and all obligations of
each party hereto shall bind its successors and assigns.
18. ENTIRE AGREEMENT; SEVERABILITY; COUNTERPARTS. This Pledge
Agreement contains the entire pledge agreement between Secured Party and
Pledgor. If any of the provisions of this Pledge Agreement shall be held
invalid or unenforceable, this Pledge Agreement shall be construed as if not
containing those provisions and the rights and obligations of the parties
hereto shall be construed and enforced accordingly. This Agreement may be
executed in counterparts all of which together shall constitute but one
agreement.
19. CHOICE OF LAW. THIS PLEDGE AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE
EXTENT THAT THE UNIFORM COMMERCIAL CODE PROVIDES THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF CALIFORNIA. Unless otherwise defined
herein or in the Credit Pledge Agreement, terms used in Articles 8 and 9 of
the Uniform Commercial Code in the State of California are used herein as
therein defined. Any disputes or claims relating to this Pledge Agreement
shall be resolved by arbitration in accordance with the terms and conditions
set forth in Section 10.17 of the Acquisition Sub Credit Agreement and
Section 9.01 of the Guaranty.
20. AMENDMENT. This Pledge Agreement may not be amended or
modified except by a writing signed by each of the parties hereto.
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21. NOTICES. Communications provided for herein shall be in
writing and shall be delivered, mailed, postage prepaid or communicated in
accordance with the Acquisition Sub Credit Agreement.
22. ADDRESS; TRADE NAMES; RECORDS. The REIT represents that its
chief place of business is 1873 South Bellaire Street, Suite 1700, Denver,
Colorado, that "AIMCO" constitutes the only trade name or style used by the
REIT; and that the REIT's records concerning the Collateral are kept at the
REIT's chief place of business listed above. Each Common Stockholder
represents that its place of business is as follows: c/o Apartment
Investment and Management Company, 1873 South Bellaire Street, Suite 1700,
Denver, Colorado, and that its records concerning the Collateral are kept at
1873 South Bellaire St., Suite 1700, Denver, Colorado.
23. CAPTIONS. All captions used in this Pledge Agreement are for
convenience only and shall not affect the construction of this Pledge
Agreement.
24. MODIFICATIONS. No modification or amendment of this Pledge
Agreement shall be effective unless in writing and signed by the parties
sought to be charged or bound hereby.
25. PLEDGOR'S THIRD PARTY WAIVERS.
(a) RIGHTS OF SECURED PARTY. Pledgor authorizes Secured
Party or any Lender to perform any or all of the following acts at any time
in its sole discretion, all without notice to Pledgor, without affecting
Pledgor's obligations under this Pledge Agreement or any other Loan Documents
and without affecting the Liens and encumbrances against the Collateral in
favor of Secured Party:
(i) Secured Party or any Lender may alter any terms
of the Obligations or any part thereof, including renewing,
compromising, extending or accelerating, or otherwise changing the time
for payment of, or increasing or decreasing the rate of interest on,
the Obligations or any part thereof.
(ii) Secured Party or any Lender may take and hold
security for the Obligations, accept additional or substituted security,
and subordinate, exchange, enforce, waive, release, compromise, fail to
perfect and sell or otherwise dispose of any such security.
(iii) Secured Party or any Lender may direct the
order and manner of any sale of all or any part of any security now or
later to be held for the Obligations, and Secured Party or any Lender
may also bid at any such sale.
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(iv) Secured Party or any Lender may apply any payments or
recoveries from Company, Pledgor, any Guaranty or any other source, and
any proceeds of any security, to the obligations under the Loan
Documents and the Obligations hereunder in such manner, order and
priority as Secured Party or such Lender may elect.
(v) Secured Party or any Lender may release any Guarantor
of its liability for the Obligations or any part thereof and the
Acquisition Sub of its liability under the Acquisition Sub Credit
Agreement or the Loan Documents or any part thereof.
(vi) Secured Party or any Lender may substitute, add or
release any one or more guarantors or endorsers.
(vii) In addition to the Obligations, Secured Party or any
Lender may extend other credit to the Acquisition Sub or any Guarantor,
and may take and hold security for the credit so extended, all without
affecting Pledgor's liability hereunder and without affecting the liens
and encumbrances against the Collateral hereunder.
(b) ABSOLUTE OBLIGATIONS. Pledgor expressly agrees that until all
Obligations are paid and performed in full and each and every term, covenant and
condition of this Pledge Agreement to which Pledgor is a party is fully
performed, Pledgor shall not be released of its obligations, waivers and
agreements set forth herein nor shall the validity, enforceability or priority
of the liens and encumbrances against the Collateral in favor of Secured Party
be affected in any manner by or because of:
(i) Any act or event which might otherwise discharge,
reduce, limit or modify Pledgor's obligations hereunder or the liens
and encumbrances against the Collateral in favor of Secured Party;
(ii) Any waiver, extension, modification, forbearance, delay
or other act or omission of Secured Party or any Lender or any failure
to proceed promptly or otherwise as against the Acquisition Sub, any
Guarantor, Pledgor or any other Person or any security;
(iii) Any action, omission or circumstance which might
increase the likelihood that Secured Party or any Lender might enforce
the rights granted under this Pledge Agreement or which might affect
the rights or remedies of Pledgor as against the Acquisition Sub or any
Guarantor; or
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(iv) Any dealings occurring at any time between the
Acquisition Sub or any Guarantor and Secured Party or any Lender,
whether relating to the Obligations or otherwise.
Pledgor hereby expressly waives and surrenders any defense to the
performance of the obligations under this Pledge Agreement or to the
enforcement of the liens and encumbrances against the Collateral in favor of
Secured Party based upon any of the foregoing acts, omissions, agreements,
waivers or matters described in this subsection. It is the purpose and
intent of this Pledge Agreement that the obligations of Pledgor under this
Pledge Agreement shall be absolute and unconditional under any and all
circumstances.
(c) PLEDGOR'S WAIVERS. Pledgor waives:
(i) All statutes of limitations as a defense to any action
or proceeding brought against Pledgor or the Collateral by Secured
Party or any Lender, to the fullest extent permitted by law;
(ii) Any right it may have to require Secured Party or any
Lender to proceed against the Acquisition Sub, any Guarantor or any
other Person, proceed against or exhaust any security held from the
Acquisition Sub, any Guarantor or any Person, or pursue any other
remedy in Secured Party's or such Lender's power to pursue;
(iii) Any defense based on any claim that Pledgor's
obligations exceed or are more burdensome than those of any Guarantor
or the Acquisition Sub;
(iv) Any defense: (A) based on any legal disability of the
Acquisiton Sub or any Guarantor, (B) based on any release, discharge,
modification, impairment or limitation of the liability of the
Acquisiton Sub or any Guarantor to Secured Party or any Lender from any
cause, whether consented to by Secured Party or arising by operation of
law, (C) arising out of or able to be asserted as a result of any case,
action or proceeding before any court or other Governmental Authority
relating to any Insolvency Proceeding or (D) arising from any rejection
or disaffirmance of the Obligations, or any part thereof, or any
security held therefor, in any such Insolvency Proceeding;
(v) Any defense based on any action taken or omitted by
Secured Party or any Lender in any Insolvency
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Proceeding involving the Acquisiton Sub or any Guarantor or any other
Pledgor, including any election to have Secured Party's or such
Lender's claim allowed as being secured, partially secured or
unsecured, any extension of credit by Secured Party or any Lender to
the Acquisiton Sub or any Guarantor in any Insolvency Proceeding, and
the taking and holding by Secured Party or such Lender of any security
for any such extension of credit;
(vi) All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor,
notices of intention to accelerate, notices of acceleration, notices of
acceptance of this Pledge Agreement and of the existence, creation, or
incurring of new or additional indebtedness, and demands and notices of
every kind; and
(vii) Any defense based on or arising out of any defense that
the Acquisiton Sub or any Guarantor or any of their affiliates may have
to the payment or performance of the Obligations.
(d) WAIVERS OF SUBROGATION AND OTHER RIGHTS.
(i) Upon any Event of Default, in its sole discretion,
without prior notice to or consent of Pledgor, Secured Party or any
Lender may elect to: (A) foreclose against any Collateral for the
Obligations, (B) accept a transfer of any such Collateral for the
Obligations in lieu of foreclosure, (C) compromise or adjust the
Obligations or any part thereof or make any other accommodation with
any Guarantor or any Person, or (D) exercise any other remedy against
any Guarantor or any Collateral for the Obligations. No such action by
Secured Party or any Lender shall release or limit Secured Party's or
the Lenders' rights hereunder, even if the effect of the action is to
deprive Pledgor of any subrogation rights, rights of indemnity, or
other rights to collect reimbursement from any Guarantor or any other
Person for any sums paid to Secured Party or such Lender, whether
contractual or arising by operation of law or otherwise. Pledgor
expressly agrees that under no circumstances shall it be deemed to have
any right, title, interest or claim in or to any property to be held by
Secured Party or any third party after any foreclosure or transfer in
lieu of foreclosure of any security for the Obligations.
(ii) Regardless of whether Pledgor may have made any
payments to Secured Party, Pledgor forever waives: (A) all rights of
subrogation, all rights of indemnity, and any other rights to collect
reimbursement from any Guarantor on account of the Collateral
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encumbered by this Pledge Agreement, whether contractual or arising by
operation of law (including the United States Bankruptcy Code or any
successor or similar statute) or otherwise; (B) all rights to enforce
any remedy that Secured Party or any Lender may have against any
Guarantor or any Person granting collateral for the Obligations; and
(C) all rights to participate in any Collateral now or later to be held
by Secured Party.
(iii) Regardless of whether Pledgor may have made any
payments to Lender, Pledgor hereby absolutely, irrevocably and
unconditionally, now and forever, waives, releases and covenants not to
sue Acquisition Sub or any shareholder thereof in respect of: (i) all
rights of restitution, subrogation, exoneration, indemnification and
contribution, all rights to collect reimbursement and all other rights,
howsoever denominated, to recover from Acquisition Sub, any shareholder
thereof any sums paid to Secured Party or any Lender whether pursuant
hereto or otherwise paid on the Underlying Debt, and any other rights
arising from the existence, payment, performance or enforcement of
Pledgor's obligations under this Pledge Agreement or any Collateral
Document, (ii) all rights to enforce any remedy that the Secured Party
or any Lender may have against Acquisition Sub, (iii) all rights to
participate in any security now or later to be held by Secured Party or
any Lender for the Underlying Indebtedness, and (iv) all rights to
require Acquisition Sub to perform the Underlying Indebtedness; in each
case whether now exiting existing or hereafter arising and whether
contractual or arising in equity, by statute, common law or otherwise
by operation of law (including the United States Bankruptcy Code or any
successor or similar statute) or otherwise. The foregoing waivers,
releases and covenants are a material part of the consideration to the
Lenders for extending the credit under the Acquisition Sub Credit
Agreement to the Acquisition Sub and may be enforced by and inure to
the benefit of Secured Party, each Lender, Acquisition Sub and its
shareholders from time to time.
(e) REVIVAL AND REINSTATEMENT. If Secured Party or any Lender
is required to pay, return or restore to the Acquisition Sub, any Guarantor
or any other Person any amounts previously paid under the Loan Documents
because of any Insolvency Proceeding affecting the Acquisition Sub or any
Guarantor or any other reason, the obligations of Pledgor shall be reinstated
and revived and the rights of Secured Party and such Lender shall continue
with regard to such amounts, all as though they had never been paid.
(f) ELECTION OF REMEDIES. Without limiting the foregoing,
Pledgor waives all rights and defenses arising out of an election of remedies
by the
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Secured Party or any Lender even though that election of remedies has
destroyed the Pledgor's rights of subrogation and reimbursement against the
Acquisition Sub, any Guarantor or any other Pledgor by operation of law or
otherwise.
(g) ADDITIONAL OBLIGATIONS. Pledgor's obligations under this
Pledge Agreement are in addition to Pledgor's obligations under any other
existing or future agreements, each of which shall remain in full force and
effect until it is expressly modified or released in a writing signed by
Secured Party with any required consent of the Lenders. Secured Party may
exercise its remedies hereunder, without first proceeding against the
Acquisition Sub, any Guarantor, any other Person or any collateral that
Secured Party may hold, and without pursuing any other remedy. Secured
Party's rights under this Pledge Agreement shall not be exhausted by any
action by Secured Party until all Obligations have been paid and performed in
full.
(h) CONSIDERATION. Pledgor acknowledges: that it expects to
benefit from the Lenders' extension of the credit under the Loan Documents to
the Acquisitioin Sub because of its relationship to the Acquisition Sub; that
it is receiving substantial benefits (which are reasonably equivalent
consideration for Pledgor's execution hereof) from the transaction of which
that extension of indebtedness forms a part; and that it is executing this
Pledge Agreement in consideration of those benefits.
(g) INTER-CREDITOR PROVISIONS. As among the Agent and the
Lenders only, nothing contained in this Pledge Agreement shall limit any of
the approval rights of the Agent or the Lenders set forth in the Loan
Documents.
26. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO THIS PLEDGE
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATES OF NEW YORK OR CALIFORNIA, AND BY EXECUTION AND
DELIVERY OF THIS PLEDGE AGREEMENT PLEDGOR ACCEPTS FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS PLEDGE AGREEMENT. Pledgor hereby
agrees that service of all process in any such proceeding in any such court
may be made by registered or certified mail, return receipt requested, to
Pledgor at its address provided in Section 24, such service being hereby
acknowledged by Pledgor to be sufficient for personal jurisdiction in any
action against Pledgor in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right
of Secured Party to bring proceedings against Pledgor in the courts of any
other jurisdiction.
21
<PAGE>
EXECUTED as of this 5th day of May, 1997.
PLEDGOR:
AIMCO Properties L.P.,
a Delaware limited partnership
By:
------------------------------------------
Peter K. Kompaniez
Vice President
--------------------------------------------
Peter K. Kompaniez
---------------------------------------
Terry Considine
22
<PAGE>
SCHEDULE 1
The following shares of capital stock in AIMCO/NHP Holdings, Inc.:
- --------------------------------------------------------------------------
Holder Description of Par Value Quantity
Shares
- --------------------------------------------------------------------------
AIMCO PROPERTIES, Series A Preferred $.01 95,000 shares
L.P., a Delaware Stock of AIMCO/NHP
limited partnership Holdings, Inc.
- --------------------------------------------------------------------------
Terry Considine Common Stock of $.01 4,000 shares
AIMCO/NHP
Holdings, Inc.
- --------------------------------------------------------------------------
Peter K. Kompaniez Common Stock of $.01 1,000 shares
AIMCO/NHP
Holdings, Inc.
- --------------------------------------------------------------------------
23
<PAGE>
EXHIBIT A
PLEDGE AMENDMENT
This Pledge Amendment, dated _____________, 19__, is delivered pursuant to
Section 5(p) of the Pledge Agreement referred to below. The undersigned hereby
agree(s) that this Pledge Amendment may be attached to the Pledge Agreement
dated May 5, 1997, between the undersigned and Bank of America National Trust
and Savings Association, a national banking association, as Agent, as Secured
Party (the "Pledge Agreement"), and that the Pledged Shares listed on this
Pledge Amendment shall be deemed to be part of the Pledged Stock and shall
become part of the Collateral and shall secure payment and performance of the
Obligations.
PLEDGOR:
By
-------------------------------------
- -------------------------------------------------------------------------------
Holder Description of Par Value Quantity
Shares
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
24
<PAGE>
Exhibit F
OPINION REQUIREMENTS
1
<PAGE>
LEGAL OPINION REQUIREMENTS
FOR THE
SYNDICATED CREDIT FACILITIES TO
AIMCO PROPERTIES, L.P. AND ITS AFFILIATES
IN CONNECTION WITH
THE ACQUISITION OF STOCK IN
NHP, INC.
OPINIONS REQUIRED UNDER CREDIT FACILITY #2 (ACQUISITION FINANCING TO THE
ACQUISITION SUBSIDIARY)
REQUIRED OPINIONS AS TO THE COMPANY COUNSEL TO OPINE
----------------------------------- ----------------
(AIMCO Properties, LP)
1. The Company is limited partnership duly organized Skadden, Arps
validly existing and in good standing under the laws of
the State of Delaware.
2. The Company has the requisite partnership power and " "
partnership authority (i) to own and operate its
properties and assets; (ii) to carry out its business as
such business is currently being conducted; (iii) to carry
out the terms and conditions applicable to it under the
Loan Documents and (iv) to acquire a preferred stock
interest in the Acquisition Subsidiary on the terms set
forth in the relevant preferred stock documents.
3. The execution, delivery and performance of the Loan " "
Documents by the Company and the acquisition of a
preferred stock interest in the Acquisition Subsidiary on
the terms set forth in the relevant preferred stock
documents have been duly authorized by all requisite
partnership action on the part of the Company and the
Loan Documents have been duly executed and delivered
by the Company.
4. The execution and delivery of the Loan Documents, " "
the consummation of the Loans and the acquisition of a
preferred stock interest in the Acquisition Subsidiary on
the terms set forth in the relevant preferred stock
documents by the Company will not conflict with or
result in a violation of any applicable law or rule
affecting the Company.
2
<PAGE>
5. No consent, approval, authorization, or other action by, " "
or filing with, any federal, state, or local governmental
authority is required in connection with the execution
and delivery by the Company of the Loan Documents,
the consummation of the Loans or the acquisition of a
preferred stock interest in the Acquisition Subsidiary on
the terms set forth in the relevant preferred stock
documents
6. The execution and delivery of the Loans Documents, " "
the consummation of the loan by the Company and the
acquisition of a preferred stock interest in the
Acquisition Subsidiary on the terms set forth in the
relevant preferred stock documents will not conflict
with or result in a violation of the Company's
Organization Documents.
7. The execution and delivery of the Loan Documents " "
and consummation of the loans by the Company will not
conflict with or result in a violation of any judgment,
order, or decree of any court or governmental agency to
which the Company is a party or by which it is bound.
(Based on an officer's certificate as to judgments,
orders and decrees.)
8. The execution and delivery of the Loan Documents, " "
the consummation of the Loans by the Company and the
acquisition of a preferred stock interest in the
Acquisition Subsidiary on the terms set forth in the
relevant preferred stock documents will not conflict with
or result in a violation of any material contract,
indenture, instrument, or other agreement to which the
Company is a party or by which it is bound. (Based on
an officer's certificate as to material contracts, etc.)
9. The Loan Documents constitute legal, valid, and " "
binding obligations of the Company, enforceable in
accordance with their terms.
3
<PAGE>
REQUIRED OPINIONS AS TO THE REIT COUNSEL TO OPINE
-------------------------------- ----------------
I. The REIT is a corporation duly organized, validly Maryland counsel to
existing, and in good standing under the laws of the the REIT
State of Maryland.
II. The REIT has the requisite corporate power and " "
corporate authority (i) to own and operate its properties
and assets; (ii) to carry out its business as such
business is currently being conducted; and (iii) to carry
out the terms and conditions applicable to it under the
Loan Documents.
III. The execution, delivery, and performance of the Loan " "
Documents by the REIT have been duly authorized by all
requisite corporate action on the part of the REIT and
the Loan Documents have been duly executed and delivered
by the REIT.
IV. The execution and delivery of the Loan Documents by Maryland counsel to
the REIT will not conflict with or result in a violation the REIT and Skadden,
of any applicable law or rule affecting the REIT. Arps
V. No consent, approval, authorization, or other action " "
by, or filing with, any federal, state, or local
governmental authority is required in connection with the
execution and delivery by the REIT of the Loan Documents.
VI. The execution and delivery of the Loan Documents by Maryland counsel to
the REIT will not conflict with or result in a violation the REIT
of the REIT's Organizational Documents.
VII. The execution and delivery of the Loan Documents by Maryland counsel to
the REIT will not conflict with or result in a violation the REIT and Skadden,
of any judgment, order, or decree of any court or Arps
governmental agency to which the REIT is a party or by
which it is bound. (Based on an officer's certificate as
to judgments, orders and decrees.)
VIII. The execution and delivery of the Loan Documents Skadden, Arps
by the REIT will not conflict with or result in a
violation of any contract, indenture, instrument, or
other agreement to which the REIT is a party or by which
it is bound. (Based on an officer's certificate as to
material contracts, etc.)
4
<PAGE>
IX. The Loan Documents constitute legal, valid, and " "
binding obligations of the REIT, enforceable in accordance
with their terms.
X. Commencing with the REIT's initial taxable year ended " "
December 31, 1994, the REIT was organized in conformity
with the requirements for qualification as a real estate
investment trust under the Code, and (i) the REIT's actual
method of operation since its formation and (ii) the REIT's
proposed method of operation, including the performance of
any of its obligations pursuant to the Loan Documents, will
enable it to meet the requirements for qualification and
taxation as a real estate investment trust under the Code.
5
<PAGE>
REQUIRED OPINIONS AS TO THE ACQUISITION
---------------------------------------
SUBSIDIARY COUNSEL TO OPINE
---------- ----------------
I. The Subsidiary is a corporation duly organized validly Skadden, Arps
existing and in good standing under the laws of the State
of Delaware.
II. The Subsidiary has the requisite partnership power and " "
partnership authority (i) to own and operate its properties
and assets; (ii) to carry out its business as such business
is currently being conducted; and (iii) to carry out the
terms and conditions applicable to it under the Loan
Documents.
III. The execution, delivery and performance of the Loan " "
Documents by the Subsidiary have been duly authorized by all
requisite partnership action on the part of the Subsidiary
and the Loan Documents have been duly executed and delivered
by the Subsidiary.
IV. The execution and delivery of the Loan Documents and " "
consummation of the Loans by the Subsidiary will not conflict
with or result in a violation of any applicable law or rule
affecting the Subsidiary.
V. No consent, approval, authorization, or other action by, " "
or filing with, any federal, state, or local governmental
authority is required in connection with the execution and
delivery by the Subsidiary of the Loan Documents and the
consummation of the Loans.
VI. The execution and delivery of the Loan Documents and " "
consummation of the Loan by the Subsidiary will not conflict
with or result in a violation of the Subsidiary's
Organizational Documents.
VII. The execution and delivery of the Loan Documents and " "
consummation of the Loans by the Subsidiary will not
conflict with or result in a violation of any judgment,
order, or decree of any court or governmental agency to
which the Subsidiary is a party or by which it is bound.
(Based on an officer's certificate as to judgments, orders
and decrees.)
6
<PAGE>
VIII. The execution and delivery of the Loan Documents, and " "
consummation of the Loan by the Subsidiary will not conflict
with or result in a violation of any material contract,
indenture, instrument, or other agreement to which the
Subsidiary is a party or by which it is bound. (Based on an
officer's certificate as to material contracts, etc.)
IX. The Loan Documents constitute legal, valid, and binding " "
obligations of the Subsidiary, enforceable in accordance with
their terms.
X. The extension, obtaining and arranging of credit pursuant " "
to the Loan Documents and the application of the proceeds
thereof as provided in the Credit Agreement do not violate
Regulation G, U or X of the Board of Governors of the Federal
Reserve System.
XI. The REIT and the Common Stockholders are the record owners " "
of the Pledged Stock. The Pledge Agreement creates a valid
security interest in the interest of the REIT and the Common
Stockholders in the Pledged Stock (as defined in the Pledge
Agreement), which security interest is perfected by possession
by Bank of America, as Agent, of the shares evidencing the
Pledged Stock.
7
<PAGE>
EXHIBIT G
TO ACQUISITION SUB CREDIT AGREEMENT
COMPLIANCE CERTIFICATE
____________, 1997
Bank of America National Trust and
Savings Association, as Agent
CRESG #1357
555 South Flower Street, 6th Floor
Los Angeles, California 90071
Attn: Unit Manager
Re: Credit Agreement, dated as of May 5, 1997 (as amended,
modified, supplemented, restated, or renewed from time to time, the
"Credit Agreement"), by and between AIMCO/NHP Holdings, Inc., a
Delaware corporation (the "Company"), the lenders from time to time
party to the Credit Agreement (the "Lenders"), BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association, as one of the Lenders, SMITH BARNEY MORTGAGE CAPITAL
GROUP, INC., a Delaware corporation, as one of the Lenders and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association, as Agent for the Lenders ("Agent")
Ladies and Gentlemen:
Reference is made to the Credit Agreement. Each initially capitalized term
not defined in this Compliance Certificate (including the schedules and other
attachments hereto, this "Certificate") shall have the meaning ascribed to such
term in the Credit Agreement.
The undersigned hereby certifies to Agent and each of the Lenders that, to
the best of the undersigned's knowledge after diligent inquiry with respect to
the fiscal quarter ending _____________, 199_ (the "Reporting Period"):
(1)REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company, the REIT, and their respective Subsidiaries contained
in the Loan Documents, including those contained in Article V of the Agreement,
are true and correct in all material respects as of the date hereof and were
true and correct at all times during the Reporting Periods;
1
<PAGE>
(2)COVENANTS. During the Reporting Period, the Company, the
REIT, and their respective Subsidiaries observed and performed all of their
respective covenants and other agreements under the Loan Documents, and
satisfied each of the conditions contained therein to be observed, performed or
satisfied by the Company, the REIT, and their respective Subsidiaries; and
(3)NO DEFAULT; EVENT OF DEFAULT. [Except as expressly set
forth in attached SCHEDULE 1,] no Default or Event of Default exists as of the
date hereof or existed at any time during the Reporting Period. [SCHEDULE 1
sets forth a true, correct and complete description of the nature and period of
existence of each Default or Event of Default that exists as of the date hereof
or existed at any time during the Reporting Periods and the actions that the
Company, the REIT, or their respective Subsidiaries have taken, are taking and
propose to take with respect thereto].
IN WITNESS WHEREOF, this Certificate is executed by the undersigned this
____ day of ____________, 19__.
AIMCO/NHP Holdings, Inc.,
a Delaware corporation
By:
-------------------------------------
Name:
-----------------------------------
Its:
------------------------------------
By:
-------------------------------------
Name:
-----------------------------------
Its:
------------------------------------
2
<PAGE>
SCHEDULE 1
to Compliance Certificate
DEFAULTS; EVENTS OF DEFAULT
____________, 199_
Condition(s) or event(s) constituting a Default or Event of Default:
_______________________
______________________________________________________________________________
___________
PERIOD OF EXISTENCE:
Remedial actions taken or proposed to be taken with respect to each such Default
or Event of
Default:_____________________________________________________________________
____
3
<PAGE>
EXHIBIT H
(to Acquisition Sub Credit Agreement)
ASSIGNMENT AND ACCEPTANCE AGREEMENT
_________________, 1997
This ASSIGNMENT AND ACCEPTANCE AGREEMENT ("Agreement") is entered
into by _______________________________________________________________, as
Assignor ("Assignor") and ___________________________________________________
as Assignee ("Assignee"). Capitalized terms used in this Agreement without
definition have the meanings specified in the Acquisition Sub Credit Agreement
described below.
RECITALS
A. Assignor is party to the Credit Agreement (Acquisition Sub
Facility) dated as of May 5, 1997 (as the same may be amended, modified or
supplemented from time to time, the "Acquisition Sub Credit Agreement"),
among AIMCO/NHP Holdings, Inc., a Delaware corporation (the "Company"), the
Lenders, including BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
one of the Lenders, SMITH BARNEY MORTGAGE CAPITAL GROUP, INC., as one of the
Lenders, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent
(the "Agent") for the Lenders;
B. Pursuant to the Acquisition Sub Credit Agreement, Assignor has
committed to make a loans ("the Loan") to the Company in the amount of
$__________ ("Assignor's Commitment") and the Lenders have committed to make
loans to the Company in an aggregate amount of $76,000,000 (the "Aggregate
Commitment" thereunder);
C. As of the date hereof, Assignor has made the Loan to the Company
under the Credit Agreement in the aggregate principal outstanding amount of
___________, and the Lenders have made loans to the Company under the
Acquisition Sub Credit Agreement in the aggregate principal outstanding
amount of _________;
D. Assignor wishes to assign to Assignee [part of] the rights and
obligations of Assignor under the Acquisition Sub Credit Agreement in respect of
Assignor's Commitment in an amount equal to $____________ (the "Assigned
1
<PAGE>
Amount") on the terms and subject to the conditions set forth herein and
Assignee wishes to accept assignment of such rights and to assume such
obligations from Assignor on such terms and subject to such conditions.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. ASSIGNMENT AND ACCEPTANCE.
(a) Subject to the terms and conditions of this Agreement,
upon the Effective Date (as hereinafter defined) (i) Assignor hereby sells,
transfers and assigns to Assignee, and (ii) Assignee hereby purchases,
assumes and undertakes from Assignor, without recourse and without
representation or warranty (except as provided in this Agreement),
_____________% (the "Assignee's Percentage Share") of (A) the Loan made by
Assignor and (B) all related rights, benefits, obligations, liabilities and
indemnities of Assignor under and in connection with the Acquisition Sub
Credit Agreement and the Loan Documents.
(b) With effect on and after the Effective Date (as defined in
Section 5), Assignee shall be a party to the Acquisition Sub Credit Agreement
and succeed to all of the rights and be obligated to perform all of the
obligations of a Lender under the Acquisition Sub Credit Agreement with a
Commitment equal to $__________. Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Acquisition Sub Credit Agreement are required to be performed by it as a
Lender. It is the intent of the parties hereto that, as of the Effective
Date, the Commitment of Assignor shall be reduced by an amount equal to
$____________ , and Assignor shall relinquish its rights and be released from
its obligations under the Credit Agreement to the extent such obligations
have been assumed by Assignee.
(c) After giving effect to the assignment and assumption, on
the Effective Date, Assignee's Commitment will be $_____________.
2. PAYMENTS.
As consideration for the sale, assignment and transfer contemplated
in Section 1, Assignee shall pay to Assignor on the Effective Date in
immediately available funds an amount equal to $_____________,
_________representing Assignee's Percentage Share of the outstanding
principal amount of the Loan made by Assignor.
2
<PAGE>
3. REALLOCATION OF PAYMENTS.
Any interest, fees and other payments accrued to the Effective Date with
respect to the Assignor's Commitment and the outstanding amount of the Loan made
by Assignor shall be for the account of Assignor. Any interest, fees and other
payments accrued on and after the Effective Date with respect to the Assigned
Amount shall be for the account of Assignee. Each of Assignor and Assignee
agrees that it will (a) hold in trust for the other party, any interest, fees
and other amounts which it may receive to which the other party is entitled,
pursuant to the preceding sentences and (b) promptly upon receipt, pay to the
other party any such amounts which it may receive.
4. INDEPENDENT CREDIT DECISION.
Assignee (a) acknowledges that it has received a copy of the Acquisition
Sub Credit Agreement and the Schedules and Exhibits thereto, together with
copies of the most recent financial statements referred to in Section 6.01 of
each of the Acquisition Sub Credit Agreement, and such other documents and
information as it has deemed appropriate to make its own credit and legal
analysis and decision to enter into this Agreement; and (b) agrees that it will,
independently and without reliance upon Assignor, any Agent or any other Lender
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit and legal decisions in taking or not
taking action under the Acquisition Sub Credit Agreement.
5. EFFECTIVE DATE; NOTICES.
(a) As between Assignor and Assignee, the effective date for this
Agreement shall be ______________199__ (the "Effective Date"); PROVIDED
that the following conditions precedent have been satisfied on or before the
Effective Date:
(i) this Agreement shall be executed and delivered by Assignor
and Assignee;
(ii) Assignee shall pay to Assignor all amounts due to Assignor
under this Agreement;
(iii) to the extent required under Section 10.08(a) of each
of the Acquisition Sub Credit Agreement, the consent of the Agent and the
Company shall have been duly obtained (or, in the case of the Company, been
deemed obtained) and shall be in full force and effect as of the Effective Date;
(iv) Assignee shall have complied with Section 3.01(f) of each
of the Acquisition Sub Credit Agreement (if applicable); and
3
<PAGE>
(b) Promptly following the execution of this Agreement, Assignor
shall deliver to the Company and the Agent for acknowledgment by the Agent, a
Notice of Assignment in the form of attached SCHEDULE 1.
6. AGENT.
(a) Assignee hereby acknowledges such powers delegated to the Agent
pursuant to the terms of the Credit Agreement.
(b) Assignee shall assume no duties or obligations held by the Agent
under the Acquisition Sub Credit Agreement.
7. WITHHOLDING TAX.
Assignee agrees to comply with Section 3.01(f) of each of the
Acquisition Sub Credit Agreement (if applicable).
8. REPRESENTATIONS AND WARRANTIES.
(a) Assignor represents and warrants that (i) it is duly organized
and existing and it has the full power and authority to take, and has taken, all
action necessary to execute and deliver this Agreement and any other documents
required or permitted to be executed or delivered by it in connection with this
Agreement and to fulfill its obligations hereunder; (ii) no notices to, or
consents, authorizations or approvals of, any Person are required (other than
any already given or obtained) for its due execution, delivery and performance
of this Agreement, and apart from any agreements or undertakings or filings
required by the Acquisition Sub Credit Agreement, no further action by, or
notice to, or filing with, any Person is required of it for such execution,
delivery or performance; (iii) this Agreement has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of
Assignor, enforceable against Assignor in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles; and (iv) it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any Lien or other adverse claim;
(b) Assignor makes no representation or warranty in connection with,
and assumes no responsibility with respect to:
(i) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Acquisition Sub Credit Agreement or any
other Loan Document, or any other instrument or document furnished in
connection therewith;
4
<PAGE>
(ii) any statements, warranties or representations made in or in
connection with the Acquisition Sub Credit Agreement, any other Loan
Document, or any other instrument or document furnished in connection
therewith; or
(iii) the solvency, financial condition or financial statements of the
Company, or the performance or observance by the Company, of any of
its respective obligations under the Acquisition Sub Credit
Agreement, any other Loan Document, or any other instrument or
document furnished in connection therewith.
(c) Assignee represents and warrants that (i) it is duly organized
and existing and it has full power and authority to take, and has taken, all
action necessary to execute and deliver this Agreement and any other documents
required or permitted to be executed or delivered by it in connection with this
Agreement, and to fulfill its obligations hereunder; (ii) no notices to, or
consents, authorizations or approvals of, any Person are required (other than
any already given or obtained) for its due execution, delivery and performance
of this Agreement; and apart from any agreements or undertakings or filings
required by the Acquisition Sub Credit Agreement, no further action by, or
notice to, or filing with, any Person is required of it for such execution,
delivery or performance; (iii) this Agreement has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of
Assignee, enforceable against Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles; and (iv) it is an
Eligible Assignee.
9. FURTHER ASSURANCES.
Assignor and Assignee each hereby agrees to execute and deliver such other
instruments, and take such other action, as either party may reasonably request
in connection with the transactions contemplated by this Agreement, including
the delivery of any notices or other documents or instruments to the Company or
the Agent, which may be required in connection with the assignment and
assumption contemplated hereby.
10. MISCELLANEOUS.
(a) Any amendment or waiver of any provision of this Agreement shall
be in writing and signed by the parties hereto. No failure or delay by either
party hereto in exercising any right, power or privilege hereunder shall operate
as a waiver thereof and any waiver of any breach of the provisions of this
Agreement shall be without prejudice to any rights with respect to any other or
further breach thereof.
5
<PAGE>
(b) All payments made hereunder shall be made without any set-off or
counterclaim.
(c) Assignor and Assignee shall each pay its own costs and expenses
incurred in connection with the negotiation, preparation, execution and
performance of this Agreement.
(d) This Agreement may be executed in any number of counterparts and
all of such counterparts taken together shall be deemed to constitute one and
the same instrument.
(e) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, PROVIDED HOWEVER THAT THE AGENT AND THE
LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
6
<PAGE>
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment and
Acceptance Agreement to be executed and delivered by their duly authorized
officers as of the date first above written.
______________________________________, Assignor
By:_______________________________________
Name _____________________________________
Title: ___________________________________
Address:
________________________________________, Assignee
By:_______________________________________
Name _____________________________________
Title: ___________________________________
Address:
7
<PAGE>
SCHEDULE 1
to Assignment and Acceptance
NOTICE OF ASSIGNMENT AND ACCEPTANCE
___________________, 199__
Bank of America National Trust and
Savings Association, as Agent
CRESG #1357
555 South Flower Street, 6th Floor
Los Angeles, California 90071
Attention: Unit Manager
AIMCO/NHP Holdings, Inc.,
a Delaware corporation
1873 South Bellaire Street, 17th Floor
Denver, Colorado 80222
Attention: Peter Kompaniez, Vice Chairman
Re: Credit Agreement, dated as of May 5, 1997
(Acquisition Sub Facility) (as the same may be amended,
modified or supplemented from time to time, the
"Acquisition Sub Credit Agreement"), as the same may be
amended, modified or supplemented from time to time, among
AIMCO/NHP Holdings, Inc., a Delaware corporation (the
"Company"), the lenders from time to time party to the
Credit Agreement (the "Lenders"), BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, as one of the Lenders, and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
Agent (the "Agent") for the Lenders.
Ladies and Gentlemen:
Reference is made to the Acquisition Sub Credit Agreement. Capitalized
terms used in this Notice of Assignment and Acceptance without definition have
the meanings specified in the Acquisition Sub Credit Agreement.
8
<PAGE>
1. We hereby give notice to the Company and to the Agent of the
assignment by _____________________ ("Assignor") ______________________
("Assignee") of __________% of the right, title and interest of Assignor in and
to the Acquisition Sub Credit Agreement, including, without limitation, the
right, title and interest of Assignor in and to:
(A) Assignor's Commitment under and as such term is defined in the
Acquisition Sub Credit Agreement representing ___________% of the $__________
current Aggregate Commitment of all Lenders,
(B) Assignor's Commitment Percentage of the outstanding Loan made by
the Assignor under the Acquisition Sub Credit Agreement (representing an amount
equal to $____________ as of the Effective Date),
(C) all related rights, benefits, obligations, liabilities and
indemnities of Assignor under and in connection with the Acquisition Sub Credit
Agreement.
Before giving effect to the assignment and assumption, on the Effective
Date, Assignor's Commitment was $______________. After giving effect to the
assignment and assumption, on the Effective Date, Assignor's Commitment will be
$______________. After giving effect to the assignment and assumption, on the
Effective Date, Assignee's Commitment will be $_____________.
2. Assignee agrees that, upon receiving the consent of the Agent and the
Company to such assignment, Assignee will be bound by the terms of the
Acquisition Sub Credit Agreement as fully and to the same extent as if Assignee
were the Lender originally holding the interest so assigned to it under the
Acquisition Sub Credit Agreement.
3. The following administrative details apply to Assignee:
(A) Notice Address:
Assignee name:
Address:
Att'n:
Telephone:
Telecopier:
9
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(B) Payment Instructions:
ABA No.
Account No.
At:
Reference:
Att'n:
10
<PAGE>
IN WITNESS WHEREOF, Assignor and Assignee have caused this Notice of
Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.
Very truly yours,
[Assignor]
By:
---------------------------------
Title:
------------------------------
[Assignee]
By:
---------------------------------
Title:
------------------------------
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent
By:
--------------------------
Title:
-----------------------
[Add Company's Signature Block if Company's Consent is required]
AIMCO/NHP Holdings, Inc.,
a Delaware corporation
By:
--------------------------
Title:
-----------------------
11
<PAGE>
PROMISSORY NOTE
May 5, 1997
$38,000,000 Los Angeles, California
FOR VALUE RECEIVED, AIMCO/NHP Holdings, Inc., a Delaware corporation (the
"Company"), promises to pay to the order of SMITH BARNEY MORTGAGE CAPITAL GROUP,
INC. ("Lender") the principal amount of THIRTY-EIGHT MILLION AND NO/100
DOLLARS ($38,000,000) or, if less, the aggregate amount of Loans (as such
term and all other capitalized terms used but not defined herein are defined
in the Credit Agreement referred to below) made by the Lender to the Company
pursuant to the Credit Agreement referred to below, outstanding on the
Maturity Date.
The Company also promises to make principal payments and interest on the
unpaid principal amount hereof from the date hereof until paid at the rates
and at the times which shall be determined in accordance with the provisions
of the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Payment Office. Until notified of the transfer of this Note, the Company
shall be entitled to deem the Lender or such person who has been so
identified by the transferor in writing to the Company as the holder of this
Note, as the owner and holder of this Note. The Lender and any subsequent
holder of this Note agrees that before disposing of this Note, or any part
hereof, it will make a notation hereon of all principal payments previously
made hereunder of the date to which interest hereon has been paid on the
schedule attached hereto, if any; PROVIDED, HOWEVER, that the failure to make
notation of any payment made on this Note shall not limit or otherwise affect
the obligation of the Company hereunder with respect to payments of principal
or interest on this Note.
This Note is referred to in, and is entitled to the benefits of, the
Credit Agreement dated as of May 5, 1997 (the "CREDIT AGREEMENT") among the
Company, the lenders from time to time party thereto, and Bank of America
National Trust and Savings Association, as Agent (the "Agent"). The Credit
Agreement, among other things, (i) provides for the making of loans (the
"LOANS") by the Lender to the Company from time to time in an aggregate
amount first above mentioned, the indebtedness of the Company resulting from
each such Loan being evidenced by this Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated
events and also for mandatory and optional prepayments on account of
principal hereof and certain principal payments prior to the maturity hereof
upon the terms and conditions therein specified.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligation of the
Company, which is absolute and
1
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unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed.
The Company promises to pay all costs and expenses, including reasonable
attorneys' fees, incurred in the collection and enforcement of this Note. The
Company hereby waives diligence, presentment, and protest, and except as
provided in the Credit Agreement, demand and notice of every kind and, to the
full extent permitted by law, the right to plead any statute of limitations
as a defense to any demand hereunder.
This Note shall be governed by, and construed in accordance with, the
laws of the state of New York without giving effect to its choice of law
doctrine.
IN WITNESS WHEREOF, the Company has caused this Note to be executed and
delivered by its duly authorized officer, as of the date and place first
above written.
AIMCO/NHP Holdings, Inc.,
a Delaware corporation
By: /s/ Peter K. Kompaniez
--------------------------
Peter K. Kompaniez
Vice President
2
<PAGE>
PROMISSORY NOTE
May 5, 1997
$38,000,000 Los Angeles, California
FOR VALUE RECEIVED, AIMCO/NHP Holdings, Inc., a Delaware corporation (the
"Company"), promises to pay to the order of BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION ("Lender") the principal amount of THIRTY-EIGHT
MILLION AND NO/100 DOLLARS ($38,000,000) or, if less, the aggregate amount of
Loans (as such term and all other capitalized terms used but not defined
herein are defined in the Credit Agreement referred to below) made by the
Lender to the Company pursuant to the Credit Agreement referred to below,
outstanding on the Maturity Date.
The Company also promises to make principal payments and interest on the
unpaid principal amount hereof from the date hereof until paid at the rates
and at the times which shall be determined in accordance with the provisions
of the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Payment Office. Until notified of the transfer of this Note, the Company
shall be entitled to deem the Lender or such person who has been so
identified by the transferor in writing to the Company as the holder of this
Note, as the owner and holder of this Note. The Lender and any subsequent
holder of this Note agrees that before disposing of this Note, or any part
hereof, it will make a notation hereon of all principal payments previously
made hereunder of the date to which interest hereon has been paid on the
schedule attached hereto, if any; PROVIDED, HOWEVER, that the failure to make
notation of any payment made on this Note shall not limit or otherwise affect
the obligation of the Company hereunder with respect to payments of principal
or interest on this Note.
This Note is referred to in, and is entitled to the benefits of, the
Credit Agreement dated as of May 5, 1997 (the "CREDIT AGREEMENT") among the
Company, the lenders from time to time party thereto, and Bank of America
National Trust and Savings Association, as Agent (the "Agent"). The Credit
Agreement, among other things, (i) provides for the making of loans (the
"LOANS") by the Lender to the Company from time to time in an aggregate
amount first above mentioned, the indebtedness of the Company resulting from
each such Loan being evidenced by this Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated
events and also for mandatory and optional prepayments on account of
principal hereof and certain principal payments prior to the maturity hereof
upon the terms and conditions therein specified.
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligation of the Company,
which is absolute and
1
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unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed.
The Company promises to pay all costs and expenses, including reasonable
attorneys' fees, incurred in the collection and enforcement of this Note. The
Company hereby waives diligence, presentment, and protest, and except as
provided in the Credit Agreement, demand and notice of every kind and, to the
full extent permitted by law, the right to plead any statute of limitations as a
defense to any demand hereunder.
This Note shall be governed by, and construed in accordance with, the laws
of the state of New York without giving effect to its choice of law doctrine.
IN WITNESS WHEREOF, the Company has caused this Note to be executed and
delivered by its duly authorized officer, as of the date and place first above
written.
AIMCO/NHP Holdings, Inc.,
a Delaware corporation
By: /s/ Peter K. Kompaniez
-----------------------------
Peter K. Kompaniez
Vice President
2
<PAGE>
PAYMENT GUARANTY
(ACQUISITION SUB FACILITY)
BY
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
AND
AIMCO PROPERTIES, L.P.
TO
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, AS AGENT
FOR THE RATABLE BENEFIT OF
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
AND
SMITH BARNEY MORTGAGE CAPITAL GROUP, INC.
MAY 5, 1997
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . 3
1.03 Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE II GUARANTY PROVISIONS . . . . . . . . . . . . . . . . . . . . . 5
2.01. Guaranty of Loan . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.02 Revival and Reinstatement . . . . . . . . . . . . . . . . . . . . . 5
2.03 Additional and Independent Obligations . . . . . . . . . . . . . . . 5
2.04 Cash Collateral Obligations . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III FURTHER PROVISIONS IN RESPECT OF THE GUARANTY . . . . . . . . 7
3.01 Rights of Agent and the Lenders . . . . . . . . . . . . . . . . . . 8
3.02 Guaranty to be Absolute . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV WAIVERS AND SUBORDINATION BY GUARANTOR . . . . . . . . . . . . 9
4.01 Guarantor's Waivers . . . . . . . . . . . . . . . . . . . . . . . . 9
4.02 Waivers of Subrogation and Other Rights . . . . . . . . . . . . . . 10
4.03 Information Regarding Borrower . . . . . . . . . . . . . . . . . . . 11
4.04 Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE V REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 11
5.01 Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . 11
5.02 Authorization; No Conflict . . . . . . . . . . . . . . . . . . . . . 12
5.03 Governmental Authorization . . . . . . . . . . . . . . . . . . . . . 12
5.04 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.05 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.06 Subsidiaries; Interests in Other Entities; Changes in
Organizational Structure . . . . . . . . . . . . . . . . . . . . . . 13
5.07 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . 13
5.08 Regulated Entities . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.09 REIT and Tax Status; Stock Exchange Listing . . . . . . . . . . . . 13
5.10 No Guarantor Default . . . . . . . . . . . . . . . . . . . . . . . . 13
5.11 Intentionally Deleted] . . . . . . . . . . . . . . . . . . . . . . . 14
5.12 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.13.Representations in the Acquisition Sub Credit Agreement . . . . . . 14
ARTICLE VI AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . 14
6.01 Financial Information . . . . . . . . . . . . . . . . . . . . . . . 14
6.02 Certificates; Other Information . . . . . . . . . . . . . . . . . . 15
6.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
<PAGE>
6.04 Preservation of Existence, Etc.; Maintenance of
Property; Insurance; Payment Obligations;
Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . 18
6.05 Maintenance of REIT Status; Stock Exchange Listing . . . . . . . . . 18
6.06 Inspection of Property and Books and Records . . . . . . . . . . . . 19
6.07 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.08 Communication with Accountants . . . . . . . . . . . . . . . . . . . 19
6.09 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.10 Refinancing Activities . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VII NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . 20
7.01 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.02 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.03 Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . 20
7.04 Lease Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.05 Disposition of Properties . . . . . . . . . . . . . . . . . . . . . 21
7.06 Consolidations and Mergers . . . . . . . . . . . . . . . . . . . . . 21
7.07 Liquidations; Material Organization Changes; New Subsidiaries . . . 21
7.08 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.09 Restricted Payments and Demands . . . . . . . . . . . . . . . . . . 22
7.10 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . 22
7.11 Special Covenants Relating to the REIT . . . . . . . . . . . . . . . 22
7.12 Taxation of the Operating Partnership . . . . . . . . . . . . . . . 22
7.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.14 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.15 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . 23
7.16 Accounting Changes . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VIII EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . 23
8.01 Guarantor Event of Default . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE IX ARBITRATION, REFERENCE, INDEMNIFICATION, OTHER REMEDIES . . 25
9.01 Reference and Arbitration . . . . . . . . . . . . . . . . . . . . . 25
9.02 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.03 Marshalling; Payments Set Aside . . . . . . . . . . . . . . . . . . 26
9.04 Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.01 No Waiver; Consents; Cumulative Remedies . . . . . . . . . . . . . 27
10.02 No Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.03 Heirs, Successors and Assigns; Participations . . . . . . . . . . . 27
10.04 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.05 Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . 28
10.06 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.07 Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . 28
10.08 Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
<PAGE>
10.09 Integration; Modifications . . . . . . . . . . . . . . . . . . . . 29
10.10 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.13 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . 29
10.14 Consent to Jurisdiction and Service of Process . . . . . . . . . . 30
10.15 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SCHEDULES
Schedule 1.01A Executive Officers
Schedule 1.01C Intra-Company Lenders
Schedule 5.05 Litigation
Schedule 5.07 Organizational Chart
Schedule 7.02 Indebtedness
EXHIBITS
Exhibit A Compliance Certificate
- -------
Exhibit B Joinder Agreement for Additional Guarantors
- -------
<PAGE>
EXHIBIT D
PAYMENT GUARANTY
(ACQUISITION SUB FACILITY)
This Payment Guaranty ("Guaranty") is made as of May 5, 1997, by
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation (the
"REIT"), and AIMCO PROPERTIES, L.P., a Delaware limited partnership (the
"Operating Partnership") (each of the REIT and the Operating Partnership is
referred to herein individually and collectively as "Guarantor") in favor of
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BofA"), as the agent
(in such capacity, the "Agent") for itself and the lenders ("Lenders") from time
to time party to the Acquisition Sub Credit Agreement (as hereinafter defined).
FACTUAL BACKGROUND
------------------
Guarantor is executing this Guaranty to induce the Lenders to make a
$76,000,000 loan facility available to AIMCO/NHP Holdings, Inc., a Delaware
corporation ("Acquisition Sub") in accordance with the Credit Agreement
(Acquisition Sub Facility) (the "Acquisition Sub Credit Agreement"), dated of
even date herewith, by and among Acquisition Sub, BofA, as Agent and as a
Lender, Smith Barney Mortgage Capital Group, Inc., as a Lender, and the other
Lenders from time to time party thereto. Capitalized terms used but not defined
herein shall have the meanings set forth in the Acquisition Sub Credit Agreement
or, if not defined therein, in the Operating Partnership Credit Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, each Guarantor hereby agrees as
follows:
ARTICLE I
DEFINITIONS
1.01 DEFINED TERMS. As used herein, the following terms shall have the
meanings set forth below:
"AIMCO GROSS ASSET VALUE" means, as of any date, the total asset value
of the REIT, as determined in good faith by the Board of Directors of AIMCO in
accordance with Treasury Regulation Section 1.856-2(d)(3) and Code Section 856.
"Bofa" means Bank of America National Trust and Savings Association,
other than in its capacity as the Agent under the Acquisition Sub Credit
Agreement.
"COLLATERAL DOCUMENTS" means, collectively, (a) the Stock Pledge
Agreement and other similar agreements between any Guarantor or Common
Stockholder and the Lenders or the Agent for the benefit of the Lenders now or
hereafter delivered to the Lenders or the Agent
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pursuant to or in connection with the transactions contemplated hereby, (b) all
financing statements (or comparable documents) now or hereafter filed in
accordance with the UCC (or comparable law) against any Guarantor or Common
Stockholder as debtor in favor of the Lenders or the Agent for the benefit of
the Lenders as secured party, (c) any other documents executed by any Guarantor
or Common Stockholder at the request of Agent and upon the recommendation of
Agent's counsel or local counsel in order to establish, perfect or protect any
of the liens or security interests granted in the Stock Pledge Agreement, and
(d) any amendments, supplements, modifications, renewals, replacements,
consolidations, substitutions and extensions of any of the foregoing.
"COMMON STOCKHOLDERS" means Terry Considine and Peter Kompaniez.
"CREDIT AGREEMENT EVENT OF DEFAULT" means an "Event of Default" as defined
in the Acquisition Sub Credit Agreement.
"EXCLUDED PROCEEDS" shall mean the sum of (i) all Net Issuance Proceeds or
Net Sale Proceeds received by the Company or the REIT prior to the Closing Date,
(ii) all Net Issuance Proceeds to be received by the REIT from those certain
Stock offerings expected to be consummated by the REIT on May 5, 1997, for
$1,900,000 shares of Stock and on May 6, 1997, for $400,000 shares of Stock; and
(iii) all loan proceeds disbursed to the Company under the Operating Partnership
Credit Agreement or the Bridge Loan Agreement.
"GUARANTOR DEFAULT" means any event or circumstance which, with the giving
of notice, the lapse of time, or both, would (if not cured or otherwise
remedied) constitute a Guarantor Event of Default.
"GUARANTOR EVENT OF DEFAULT" means any of the events or circumstances
specified in Section 8.01.
"GUARANTIED INDEBTEDNESS" means all Loans, and other Indebtedness,
advances, debts, liabilities, obligations, covenants and duties owed by the
Acquisition Sub to the Agent, any Lender, or any other Person required to be
indemnified under the Acquisition Sub Credit Agreement or any other Loan
Document, of any kind or nature, present or future, whether or not evidenced by
any note, guaranty or other instrument, whether or not for the payment of money,
whether arising by reason of an extension of credit, loan, guaranty,
indemnification or in any other manner, whether primary, secondary, direct or
indirect (including those acquired by assignment), absolute, fixed or
contingent, due or to become due, now existing or hereafter arising and however
acquired, and including without limitation, all obligations of the Acquisition
Sub to pay principal, interest, prepayment charges, breakage costs, late
charges, loan fees, and any other charges, fees and other sums, costs and
expenses which may due from time to time thereunder.
"NET SALE PROCEEDS" means, in respect of any Disposition of any Property by
the Operating Partnership, the REIT or any of their respective Subsidiaries, the
proceeds in cash or Cash Equivalents received by the Operating Partnership, the
REIT or any of their respective Subsidiaries upon or. substantially
simultaneously with such Disposition, net of the direct costs of
2
<PAGE>
such Disposition then payable by the recipient of such proceeds (excluding
amounts payable to the Operating Partnership, the REIT or any Affiliate of the
Operating Partnership or the REIT).
"OPERATING PARTNERSHIP CREDIT AGREEMENT" means that certain Amended
and Restated Credit Agreement (Secured Revolver-to-Term Facility) dated as of
May 5, 1997, by and among the Operating Partnership, BofA as the agent and a
lender and the other lenders named therein, as the same may be amended from time
to time. Notwithstanding the foregoing, for purposes of any incorporation herein
of any defined terms or any other provisions therein, such terms and provisions
shall be incorporated herein as such terms and provisions are set forth in and
in effect under said agreement on the date hereof, and as the same may be
amended from time to time with the consent of the Requisite Lenders hereunder
(or, if such provision would require the consent of a greater percentage of the
Lenders hereunder, then such greater percentage). Except as otherwise provided
herein, if any provision of the Operating Partnership Credit Agreement is
incorporated herein by reference, such provision shall be, subject to the
foregoing, as if fully set forth herein, but with all references therein to the
"Agent", any "Lender", the "Lenders" and the "Requisite Lenders" having the
meanings of those terms as set forth in this Guaranty.
"ORGANIZATIONAL CHART" means the organizational chart attached as
SCHEDULE 5.06 of the Operating Partnership Credit Agreement showing the REIT,
the Operating Partnership, all of their Subsidiaries and their interests in the
Acquisition Sub, the Management Entities and the Unconsolidated Partnerships, as
the same may be modified pursuant hereto.
"SBI" means Smith Barney Mortgage Capital Group, Inc.
1.02 OTHER DEFINITIONAL PROVISIONS.
(a) DEFINED TERMS. Unless otherwise specified herein or
therein, all terms defined in this Guaranty shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto. The meaning of defined terms shall be equally applicable to the
singular and plural forms of the defined terms. Terms (including
uncapitalized terms) not otherwise defined herein but defined in the UCC
shall have the meanings set forth therein.
(b) THE AGREEMENT. The words "hereof', "herein", "hereunder"
and words of similar import when used in this Guaranty shall refer to this
Guaranty as a whole and not to any particular provision of this Guaranty; and
section, schedule and exhibit references are to this Guaranty unless
otherwise specified.
(c) CERTAIN COMMON TERMS.
(i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
3
<PAGE>
(iii) The term "ratably" means, at any time that Loans may
be outstanding, in accordance with the amount of the outstanding Loans of the
respective Lenders; and, at any time that no Loans are outstanding, in
accordance with the outstanding Commitments of the respective Lenders.
(d) PERFORMANCE: TIME. Whenever any performance obligation
hereunder (other than a payment obligation) is stated to be due or required to
be satisfied on a day other than a Business Day, such performance shall be made
or satisfied on the next succeeding Business Day. In the computation of periods
of time from a specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to but excluding,"
and the word "through" means "to and including". If any provision of this
Guaranty refers to any action taken or to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be interpreted to
encompass any and all means, direct or indirect, of taking, or not taking, such
action.
(e) CONTRACTS. Unless otherwise expressly provided herein,
references to agreements and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications thereto, but only to
the extent such amendments and other modifications are not prohibited by the
terms of any Loan Document.
(f) LAWS. References to any statute or regulation are to be
construed as including all statutory and regulatory provisions consolidating,
amending or replacing the statute or regulation.
(g) CAPTIONS. The captions and headings of this Guaranty are for
convenience of reference only and shall not affect the construction of this
Guaranty.
(h) INDEPENDENCE OF PROVISIONS. The parties acknowledge that this
Guaranty and other Loan Documents may use several different limitations, tests
or measurements to regulate the same or similar matters, and that such
limitations, tests and measurements are cumulative and must each be performed,
except as expressly stated to the contrary in this Guaranty.
1.03 ACCOUNTING PRINCIPLES.
(a) GAAP. Unless the context otherwise clearly requires, all
accounting terms not expressly defined herein shall be construed, and all
financial computations required under this Guaranty shall be made, in accordance
with GAAP, consistently applied.
(b) FISCAL YEAR: QUARTER. References herein to "fiscal year" and
"fiscal quarter" refer to such fiscal periods of the Operating Partnership.
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ARTICLE II
GUARANTY PROVISIONS
2.01 GUARANTY OF LOAN.
(a) Guarantor absolutely, unconditionally and irrevocably
guaranties to Agent and the Lenders the full payment and performance of the
Guarantied Indebtedness and unconditionally agrees to pay to Agent and the
Lenders the full amount of the Guarantied Indebtedness in accordance with this
Guaranty. This is a guaranty of payment, not of collection.
(b) If Acquisition Sub (i) fails to pay the Guarantied
Indebtedness in full on the Scheduled Maturity Date thereof; (ii) fails to pay
the Guarantied Indebtedness in full within ten (10) Business Days after
acceleration of maturity thereof and demand for payment thereof by Agent to
Acquisition Sub, other than as described in clause (iii) below, or (iii) fails
to pay the Guarantied Indebtedness in full immediately upon acceleration of
maturity thereof as a result of any Credit Agreement Event of Default described
in Section 8.01(f) or 8.01(g) of the Acquisition Sub Credit Agreement (but only
in the case of the occurrence of any of the events described therein with
respect to the Acquisition Sub, the Operating Partnership or the REIT),
Guarantor shall, in lawful money of the United States, pay to Agent and the
Lenders, on demand, all sums due and owing on the Guarantied Indebtedness. If
the amount outstanding under the Guarantied Indebtedness is determined by a
court of competent jurisdiction or in any arbitration proceeding described in
Section 10.17 of the Acquisition Sub Credit Agreement, that determination shall
be conclusive and binding on Guarantor, regardless of whether Guarantor was a
party to the proceeding in which the determination was made or not.
2.02 REVIVAL AND REINSTATEMENT. If Agent or any Lender is required to
pay, return or restore to Acquisition Sub or any other person any amounts
previously paid on the Guarantied Indebtedness because of any Insolvency
Proceeding of Acquisition Sub or any other reason, the obligations of Guarantor
shall be reinstated and revived and the rights of Agent and such Lender shall
continue with regard to such amounts, all as though they had never been paid.
2.03 ADDITIONAL AND INDEPENDENT OBLIGATIONS. Guarantor's obligations
under this Guaranty are in addition to its obligations under any future
guaranties, each of which shall remain in full force and effect until it is
expressly modified or released in a writing signed by Agent and consented to by
the Lenders. Guarantor's obligations under this Guaranty are independent of
those of Acquisition Sub on the Guarantied Indebtedness. Except as provided in
Section 2.01(b)(i), Agent or the Lenders may bring a separate action, or
commence a separate arbitration proceeding, against Guarantor without first
proceeding against Acquisition Sub, any other Guarantor or person or any
security that Agent or any Lender may hold, and without pursuing any other
remedy. None of Agent's or any Lender's rights under this Guaranty shall be
exhausted by any action by Agent or any Lender until the Guarantied Indebtedness
has been paid and performed in full in cash.
2.04 OBLIGATIONS IN RESPECT OF RESTRICTED CASH.
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(a) If at any time (i) the REIT or the Operating Partnership
shall make any public or private issuance of Stock (or partnership units) for
cash or Cash Equivalents (other than for Excluded Proceeds) or (ii) incur
Indebtedness for borrowed money (other than for Excluded Proceeds) or (iii) the
REIT, the Operating Partnership or any Subsidiary (other than the Acquisition
Sub) shall make any Disposition of any Property for cash or Cash Equivalents
(other than for Excluded Proceeds), the REIT shall (A) notify the Agent of such
issuance, incurrence or Disposition (including the amount of the estimated Net
Issuance Proceeds or Net Sale Proceeds thereof) and (B) immediately upon the
receipt by the Operating Partnership or the REIT of such Net Issuance Proceeds
or receipt by the Operating Partnership, the REIT or such Subsidiary of such Net
Sale Proceeds, the REIT shall deposit, as collateral for the obligations of all
Guarantors under this Guarantor, such Net Issuance Proceeds and Net Sale
Proceeds (together with all interest and earnings thereon, "Restricted Cash"),
into an interest bearing deposit account (the "Restricted Cash Account")
established with and pledged to the Agent for the ratable benefit of the Lenders
pursuant to documentation in form and substance satisfactory to the Agent and
the Requisite Lenders, until the balance in the Restricted Cash Account shall
equal the outstanding amount of the Guarantied Indebtedness together with all
interest accrued but unpaid thereon and all interest reasonably projected by the
Agent to accrue thereon through the Maturity Date of the Guarantied
Indebtedness, whereupon no further such deposits shall be required to be so
made.
(b) The REIT hereby grants a perfected first priority security
interest in favor of the Agent for the ratable benefit of the Lenders in all
Restricted Cash and in the Restricted Cash Account and all sums at any time
held, deposited or invested therein, together with any interest or other
earnings thereon, and all proceeds thereof, whether accounts, general
intangibles, chattel paper, deposit accounts, instruments, documents or
securities, together with all rights of a secured party with respect thereto
(even if no further documentation is requested by the Agent or the Requisite
Lenders or executed by the REIT with respect thereto). The REIT shall execute
such additional documents as the Agent or the Requisite Lenders in their
discretion may require and shall provide all other documents requested by the
Agent or the Requisite Lenders to evidence or perfect the Agent's first priority
security interest in such Restricted Cash Account and to grant to the Agent
dominion and control over the Restricted Cash Account. The Restricted Cash
Account shall be held in the name of the REIT as debtor, with the Agent as
secured party for the ratable benefit of the Lenders.
(c) All interest earned on the Restricted Cash Account shall be
retained in the Restricted Cash Account subject to the REIT's withdrawal rights
set forth herein. The REIT shall treat all interest earned on the Restricted
Cash Account as its income for federal and state income tax purposes.
(d) Until the Guarantied Indebtedness shall have been paid in
full, no Restricted Cash shall be withdrawn from the Restricted Cash Account by
the REIT except for purposes of contributing capital to the Acquisition Sub in
amounts necessary to satisfy the prepayment obligations of the Acquisition Sub
under Section 2.06 of the Acquisition Sub Credit Agreement, and provided that
the amounts so contributed are actually used for such purposes
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(e) Upon the occurrence and during the continuation of a
Guarantor Event of Default, and provided that Agent shall have given to the
Acquisition Sub, pursuant to and to the extent required by Section 2.01(b) of
this Guaranty, the 10 Business Days notice referred to therein, the Agent may
(and, upon the instruction of the Requisite Lenders, shall):
(i) without any advertisement or notice to or authorization
from the REIT or any other Person (all of which advertisements, notices
and/or authorizations are hereby expressly waived), withdraw, sell or
otherwise liquidate all Restricted Cash and apply the proceeds thereof to the
unpaid obligations of all Guarantors under this Guaranty in such order as the
Requisite Lenders may elect in their sole discretion, without liability for
any loss (including as a result of any sale or liquidation of any account
including such Restricted Cash before maturity) and the REIT hereby consents
to any such withdrawal and application as a commercially reasonable
disposition of such Restricted Cash and agrees that such withdrawal shall not
result in satisfaction of the obligations of all Guarantors under this
Guaranty except to the extent the amounts are applied to such sums;
(ii) without any advertisement or notice to or
authorization from the REIT (all of which advertisements, notices and/or
authorizations are hereby expressly waived), notify any account debtor on any
such Restricted Cash to make payment directly to the Agent;
(iii) foreclose upon all or any portion of such Restricted
Cash or otherwise enforce the Agent's security interest in any manner
permitted by law or provided for in this Agreement;
(iv) sell or otherwise dispose of all or any portion of
such Restricted Cash at one or more public or private sales, whether or not
such Restricted Cash is present at the place of sale, for cash or credit or
future delivery, on such terms and in such manner as the Requisite Lenders
may determine;
(v) recover from the REIT all costs and expenses,
including, without limitation, reasonable attorneys' fees, incurred or paid
by the Agent in exercising any right, power or remedy provided by this
Agreement or by law; and
(vi) exercise any other right or remedy available to the
Agent or the Lenders under applicable law or in equity.
ARTICLE III
FURTHER PROVISIONS IN RESPECT OF THE GUARANTY
3.01 RIGHTS OF AGENT AND THE LENDERS. Guarantor authorizes Agent or
any Lender to perform any or all of the following acts at any time in its sole
discretion, all without notice to Guarantor and without affecting Guarantor's
obligations under this Guaranty:
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(a) Agent or the Requisite Lenders may alter any terms of the
Guarantied Indebtedness or any part of it, including renewing, compromising,
extending or accelerating, or otherwise changing the time for payment of, or
increasing or decreasing the rate of interest on, the Guarantied Indebtedness or
any part of it.
(b) Agent or any Lender may take and hold security for the
Guarantied Indebtedness or this Guaranty, accept additional or substituted
security for either, and subordinate, exchange, enforce, waive, release,
compromise, fail to perfect and sell or otherwise dispose of any such security.
(c) Upon any Credit Agreement Event of Default or Guarantor Event
of Default, Agent or any Lender may direct the order and manner of any sale of
all or any part of any security now or later to be held for the Guarantied
Indebtedness or this Guaranty, respectively, and Agent or any Lender may also
bid at any such sale.
(d) Agent or any Lender may apply any payments or recoveries from
Acquisition Sub, Guarantor or any other source, and any proceeds of any
security, to Acquisition Sub's obligations under the Loan Documents in such
manner, order and priority as Agent or such Lender may elect, whether or not
those obligations are guarantied by this Guaranty or secured at the time of the
application.
(e) Agent or any Lender may substitute, add or release any one or
more Guarantors, other guarantors or endorsers.
(f) In addition to the Guarantied Indebtedness, Agent or any
Lender may extend other credit to Acquisition Sub or any other Guarantor, and
may take and hold security for the credit so extended, all without affecting
Guarantor's liability under this Guaranty.
3.02 GUARANTY TO BE ABSOLUTE. Guarantor expressly agrees that
until the Guarantied Indebtedness is paid and performed in full and each and
every term, covenant and condition of this Guaranty is fully performed,
Guarantor shall not be released by or because of:
(a) Any act or event which might otherwise discharge, reduce,
limit or modify Guarantor's obligations under this Guaranty;
(b) Any waiver, extension, modification, forbearance, delay or
other act or omission of Agent or any Lender, or its failure to proceed promptly
or otherwise as against Acquisition Sub, Guarantor or any security;
(c) Any action, omission or circumstance which might increase the
likelihood that Guarantor may be called upon to perform under this Guaranty or
which might affect the rights or remedies of Guarantor as against Acquisition
Sub;
(d) Any dealings occurring at any time between Acquisition Sub
and Agent or any Lender, whether relating to the Guarantied Indebtedness or
otherwise; or
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(e) Any action of Agent or any Lender described in Section 3.01
above.
Guarantor hereby acknowledges that absent this Section 3.02,
Guarantor might have a defense to the enforcement of this Guaranty as a result
of one or more of the foregoing acts, omissions, agreement, waivers or matters.
Guarantor hereby expressly waives and surrenders any defense to its liability
under this Guaranty based upon any of the foregoing acts, omissions. agreements,
waivers or matters. It is the purpose and intent of this Guaranty that the
obligations of Guarantor under it shall be absolute and unconditional under any
and all circumstances.
ARTICLE IV
WAIVERS AND SUBORDINATION BY GUARANTOR
4.01 GUARANTOR'S WAIVERS. Guarantor waives:
(a) All statutes of limitations as a defense to any action or
proceeding brought against Guarantor by Agent or any Lender, to the fullest
extent permitted by law;
(b) Except as expressly provided in Section 2.01(b)(i), any right
it may have to require Agent or any Lender to proceed against Acquisition Sub,
proceed against or exhaust any security held from Acquisition Sub, or pursue any
other remedy in Agent's or any Lender's power to pursue;
(c) Any defense based on any claim that Guarantor's obligations
exceed or are more burdensome than those of Acquisition Sub;
(d) Any defense based on: (i) any legal disability of Acquisition
Sub, (ii) any release, discharge, modification, impairment or limitation of the
liability of Acquisition Sub to Agent or any Lender from any cause, whether
consented to by Agent or any Lender or arising by operation of law or from any
Insolvency Proceeding and (iii) any rejection or disaffirmance of the Guarantied
Indebtedness, or any part of it, or any security held for it, in any such
Insolvency Proceeding;
(e) Any defense based on any action taken or omitted by Agent or
any Lender in any Insolvency Proceeding involving Acquisition Sub, including any
election to have Agent's or that Lender's claim allowed as being secured,
partially secured or unsecured, any extension of credit by Lender to Acquisition
Sub in any Insolvency Proceeding, and the taking and holding by Agent or any
Lender of any security for any such extension of credit;
(f) All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices of
acceptance of this Guaranty and of the existence, creation, or incurring of new
or additional indebtedness, and demands and notices of every kind except for any
demand or notice by Agent or any Lender to Guarantor expressly provided for in
Section 2.01;
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(g) Any defense based on or arising out of any defense that
Acquisition Sub may have to the payment or performance of the Guarantied
Indebtedness or any part of it; and
(h) Any defense based on or arising out of any action of Agent or
any Lender described in Article III above
4.02 WAIVERS OF SUBROGATION AND OTHER RIGHTS
(a) During the existence of any Credit Agreement Event of
Default, Agent or any Lender, without prior notice to or consent of Guarantor,
may elect to: (i) foreclose either judicially or nonjudicially against any
security it may hold for the Guarantied Indebtedness, (ii) accept a transfer of
any such security in lieu of foreclosure, (iii) compromise or adjust the
Guarantied Indebtedness or any part of it or make any other accommodation with
Acquisition Sub or Guarantor, or (iv) exercise any other remedy against
Acquisition Sub or any security. No such action by Agent or any Lender shall
release or limit the liability of Guarantor, who shall remain liable under this
Guaranty after the action, even if the effect of the action is to deprive
Guarantor of any subrogation rights, rights of indemnity, or other rights to
collect reimbursement from Acquisition Sub for any sums paid to Agent or any
Lender, whether contractual or arising by operation of law or otherwise.
Guarantor expressly agrees that under no circumstances shall it be deemed to
have any right, title, interest or claim in or to any property to be held by
Agent or any Lender or any third party after any foreclosure or transfer in lieu
of foreclosure of any security for the Guarantied Indebtedness.
(b) Regardless of whether Guarantor may have made any payments to
Lender, Guarantor hereby absolutely, irrevocably and unconditionally, now and
forever, waives, releases and covenants not to sue Acquisition Sub, any
shareholder thereof or any other Guarantor in respect of: (i) all rights of
restitution, subrogation, exoneration, indemnification and contribution, all
rights to collect reimbursement and all other rights, howsoever denominated, to
recover from Acquisition Sub, any shareholder thereof or any Guarantor any sums
paid to Agent or any Lender whether pursuant hereto or otherwise paid on the
Guarantied Indebtedness, and any other rights arising from the existence,
payment, performance or enforcement of Guarantor's obligations under this
Guaranty or any Collateral Document, (ii) all rights to enforce any remedy that
the Agent or any Lender may have against Acquisition Sub, (iii) all rights to
participate in any security now or later to be held by Agent or any Lender for
the Guarantied Indebtedness, and (iv) all rights to require Acquisition Sub to
perform the Guarantied Indebtedness; in each case whether now existing or
hereafter arising and whether contractual or arising in equity, by statute,
common law or otherwise by operation of law (including the United States
Bankruptcy Code or any successor or similar statute) or otherwise. The foregoing
waivers, releases and covenants are a material part of the consideration to the
Lenders for extending the credit under the Acquisition Sub Credit Agreement to
the Acquisition Sub and may be enforced by and inure to the benefit of Agent,
each Lender, Acquisition Sub, its shareholders and each other Guarantor from
time to time.
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(c) Guarantor waives all rights and defenses arising out of an
election of remedies by the Agent or any Lender, even though that election of
remedies may affect Guarantor's rights of subrogation and reimbursement against
the Acquisition Sub by the operation of law or otherwise.
4.03 INFORMATION REGARDING BORROWER. Before signing this Guaranty,
Guarantor investigated the financial condition and business operations of
Acquisition Sub and such other matters as Guarantor deemed appropriate to assure
itself of Acquisition Sub's ability to discharge its obligations under the Loan
Documents. Guarantor assumes full responsibility for that due diligence, as well
as for keeping informed of all matters which may affect Acquisition Sub's
ability to pay and perform its obligations to the Agent and the Lenders. Neither
Agent nor any Lender has any duty to disclose to Guarantor any information which
such party may have or receive about Acquisition Sub's financial condition,
business operations, or any other circumstances bearing on its ability to
perform.
4.04 SUBORDINATION. Any rights of Guarantor, whether now existing or
later arising, to receive payment on account of any indebtedness (including
interest) owed to it by Acquisition Sub or to receive any payment from
Acquisition Sub shall at all times be subordinate as to lien and time of payment
and in all other respects to the full and prior repayment of the Guarantied
Indebtedness. Guarantor shall not be entitled to enforce or receive payment of
any sums hereby subordinated until the Guarantied Indebtedness has been paid and
performed in full and any such sums received in violation of this Guaranty shall
be received by Guarantor in trust for the Agent and the Lenders.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Guarantor represents and warrants to the Agent and each Lender that:
5.01 EXISTENCE AND POWER. Guarantor:
(a) ORGANIZATION. Is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization;
(b) POWER AND AUTHORITY. Has the power and authority and all
governmental licenses, authorizations, consents and approvals to own its
Properties, to carry on its business and to execute, deliver, and perform its
obligations under, this Guaranty, the Collateral Documents to which it is a
party and the Organizational Documents of the Acquisition Sub to which it is a
party;
(c) DUE QUALIFICATION. Is duly qualified as a foreign
corporation, partnership, trust or other organization, and licensed and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of its Properties or the conduct of its business requires such
qualification; and
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(d) COMPLIANCE WITH LEGAL REQUIREMENTS. Is in compliance with all
Requirements of Law applicable to it.
5.02 AUTHORIZATION: NO CONFLICT. The execution, delivery and
performance by Guarantor of this Guaranty, any Collateral Document and the
Organizational Documents of the Acquisition Sub to which such Person is party,
have been duly authorized by all necessary partnership, corporate or other
organizational action, and do not and will not:
(a) ORGANIZATIONAL DOCUMENTS. Contravene the terms of any of such
Person's Organizational Documents;
(b) CONTRACTUAL OBLIGATIONS. Conflict with, or result in any
breach or contravention of, or the creation of any Lien (other than pursuant to
the Collateral Documents) under, any document evidencing any Contractual
Obligation to which such Person is a party or any order, injunction, writ or
decree of any Governmental Authority to which such Person or its Properties are
subject; or
(c) REQUIREMENTS OF LAW. Violate any material Requirement of Law
applicable to it.
5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority (except for recordings in connection with the Liens
granted to the Agent under the Collateral Documents) is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, Guarantor of this Guaranty, any of the Collateral Documents or the
Organizational Documents of the Acquisition Sub.
5.04 BINDING EFFECT. This Guaranty and each Collateral Document to
which Guarantor is a party constitute the legal, valid and binding obligations
of such Person, enforceable against such Person in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.
5.05 LITIGATION. Except as specifically disclosed in SCHEDULE 5.05 of
the Operating Partnership Credit Agreement, there are no actions, suits,
proceedings, claims or disputes pending, or to the Knowledge of the REIT,
threatened or contemplated, at law, in equity, in arbitration or before any
Governmental Authority, against Guarantor, any Management Entity, any of their
Subsidiaries or any of their respective Properties, which (a) purport to affect
or pertain to this Guaranty, or any Collateral Document, or any of the
transactions contemplated hereby or thereby, or (b) if determined adversely to
any such Person, would reasonably be expected to have a Material Adverse Effect.
No injunction, writ, temporary restraining order or any other order of any
nature has been issued by any court or other Governmental Authority purporting
to enjoin or restrain the execution, delivery and performance of this Guaranty
or any Collateral Document, or directing that the transactions provided for
herein or therein not be consummated as herein or therein provided.
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5.06 SUBSIDIARIES: INTERESTS IN OTHER ENTITIES: CHANGES IN
ORGANIZATIONAL STRUCTURE. Except for the NHP Interests, neither the Operating
Partnership, nor the REIT, nor any of their respective Subsidiaries has any
interest in any corporation, partnership or other entity, except as disclosed in
the Organizational Chart and except for Subsidiaries or Unconsolidated
Partnerships hereafter formed or acquired in compliance with Section 7.07 and
except for changes permitted under Sections 7.06, 7.07 and 7.08 hereof.
5.07 FINANCIAL CONDITION. All financial statements delivered by the
REIT hereunder: (a) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein; and (b) are complete, accurate and fairly present the financial
condition of the REIT as of the dates thereof and results of operations for the
periods covered thereby.
5.08 REGULATED ENTITIES. No Guarantor is (a) an "investment company"
within the meaning of the Investment Operating Partnership Act of 1940; or (b)
subject to regulation under the Public Utility Holding Operating Partnership Act
of 1935, the Federal Power Act, the Interstate Commerce Act, any state public
utilities code, or any other Federal or state statute or regulation limiting its
ability to incur Indebtedness. Each Guarantor has, to the extent required under
Regulation G of the Federal Reserve Board, registered with such Board. The
incurrence by any Guarantor of its obligations hereunder does not violate
Regulations G, U or X of said Board.
5.09 REIT AND TAX STATUS: STOCK EXCHANGE LISTING. The REIT currently
has REIT Status and has maintained REIT Status on a continuous basis since its
formation. The shares of common Stock of the REIT are listed on the NYSE.
5.10 NO GUARANTOR DEFAULT. No Guarantor Default or Guarantor Event of
Default exists or would result from the incurring of any obligations hereunder
by the Guarantors. None of the Guarantors is in default under or with respect to
any Contractual Obligation in any respect which, individually or together with
all such other defaults, would reasonably be expected to have a Material Adverse
Effect.
5.11 [INTENTIONALLY DELETED].
5.12 FULL DISCLOSURE. None of the representations or warranties made
by the Guarantors herein or in the Collateral Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in each exhibit, report, statement or certificate furnished
by or on behalf of any such Person in connection with the Collateral Documents,
contains any untrue statement of a material fact or omits any material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they are made, not misleading. There
is no fact, to the Knowledge of the REIT, which materially and adversely affects
the business, operations, properties, assets or condition (financial or
otherwise) of the Operating Partnership, the REIT, the Management Entities, or
any of the Subsidiaries which has not been disclosed herein or in other
documents, certificates and statements furnished to the Agent and each Lender
hereunder or pursuant hereto. The copies of all documents delivered to the Agent
and/or the Lenders from time to time in
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connection with this Guaranty are and shall be true and complete copies of the
originals thereof and have not been or shall not be amended except as disclosed
to the Agent and/or the Lenders, as applicable.
5.13 REPRESENTATIONS IN THE ACQUISITION SUB CREDIT AGREEMENT. All of
the representations and warranties of the Acquisition Sub in the Acquisition Sub
Credit Agreement are true and correct.
ARTICLE VI
AFFIRMATIVE COVENANTS
As further consideration for this Guaranty, the REIT covenants and
agrees that, so long as the Guarantied Indebtedness shall remain unpaid or
unsatisfied, unless the Requisite Lenders waive compliance in writing:
6.01 FINANCIAL INFORMATION. The REIT shall deliver to the Agent and to
each Lender, in form and detail satisfactory to the Agent and the Lenders;
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, but not
later than ninety (90) days after the end of each fiscal year, a copy of the
audited consolidated balance sheet of the REIT as of the end of such year and
the related consolidated statements of operations, stockholders' equity (where
applicable) and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous year, including the REIT's SEC
Form 10K for such period, and accompanied by the unqualified opinion of a
nationally-recognized independent public accounting firm stating that such
consolidated financial statements present fairly the financial position for the
periods indicated, in conformity with GAAP, and applied on a basis consistent
with prior years;
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available, but not
later than forty-five (45) days after the end of each of the first three (3)
fiscal quarters of each year, a copy of the unaudited consolidated balance sheet
of the REIT as of the end of such quarter and the related consolidated
statements of operations, stockholders' equity (where applicable) and cash flows
for the period commencing on the first day and ending on the last day of such
quarter, including the REIT's SEC Form 10Q for such period, and accompanied by a
certificate signed by at least two (2) Responsible Officers stating that such
financial statements are complete and correct and present fairly the financial
position for the periods indicated, in conformity with GAAP for interim
financial statements, and applied on a basis consistent with prior quarters; and
(c) FINANCIAL STATEMENTS AND OTHER INFORMATION FOR NHP. Until the
NHP Combination Date, within five (5) days after the receipt thereof by the
Acquisition Sub, the REIT, the Operating Partnership or any Subsidiary thereof,
such periodic, quarterly, annual and special financial statements, reports,
proxy statements and other information as may be received by any such Person in
its capacity as a shareholder in NHP, and within five (5) days after the
delivery of any thereof by any such Person, copies of any reports, proxy
statements, tender or exchange offers or other information provided by such
Person to NHP or to the shareholders
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thereof to the SEC in respect of such Person's ownership of or intentions or
proposals with respect to NHP.
6.02 CERTIFICATES: OTHER INFORMATION. The REIT shall furnish to the
Agent with sufficient copies for each Lender:
(a) ACCOUNTING CERTIFICATES. Concurrently with the delivery of
the financial statements referred to in Section 6.01(a), a certificate of the
independent certified public accountants reporting on such financial statements
stating that, in making the examination necessary therefor, no knowledge was
obtained of any Guarantor Default or Guarantor Event of Default, except as
specified in such certificate;
(b) OFFICERS' CERTIFICATES. Concurrently with the delivery of the
financial statements referred to in Sections 6.01(a) and 6.01(b) above, a
compliance certificate, substantially in the form of EXHIBIT A, signed by at
least two (2) Responsible Officers (i) stating that, to the best of such
officers' knowledge, each of the REIT, the Operating Partnership and their
respective Subsidiaries, during such period, has observed or performed all of
its covenants and other agreements, and satisfied every condition contained in
this Guaranty and the other Collateral Documents to be observed, performed or
satisfied by it, and that such officers have no knowledge of any Guarantor
Default or Guarantor Event of Default except as specified in such certificate;
and (ii) showing in detail the calculations supporting such statement for such
period in respect of the covenants in Section 7.09 and 7.15;
(c) PERIODIC REPORTS AND FILINGS: PRESS RELEASES. Promptly after
the same are sent or released, copies of all reports, proxy statements and
financial statements which the REIT sends to its shareholders and copies of all
press releases made by the Operating Partnership and the REIT, promptly after
the same are filed, copies of all financial statements and regular, periodical
or special reports which the REIT may make to, or file with, the SEC or any
successor or similar Governmental Authority and promptly after the same are
received, copies of any reports prepared by analysts for or with respect to the
Operating Partnership or the REIT;
(d) ACCOUNTANTS' REPORTS. Promptly after the same are received,
copies of all reports which the independent certified public accountants of the
Operating Partnership or the REIT deliver to the Operating Partnership or the
REIT; and
(e) OTHER INFORMATION. Promptly, revisions to the Organizational
Chart and such additional financial and other information as the Agent may from
time to time reasonably request.
6.03 NOTICES. The REIT shall promptly (and in no event later than
ten (10) days after the REIT has reason to know of the same) notify the Agent
and each Lender of:
(a) GUARANTOR DEFAULT; GUARANTOR EVENT OF DEFAULT. The occurrence
of any Guarantor Default or Guarantor Event of Default, and of the occurrence or
existence of any event or circumstance that is likely to become a Guarantor
Default or Guarantor Event of
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Default. Each notice under this Section 6.03(a) shall describe with
particularity the clause or provision of this Guaranty or other Collateral
Documents that have been breached or violated;
(b) LITIGATION. The commencement of, or any material development
in, any litigation, arbitration or proceeding affecting the REIT, the Operating
Partnership, any Management Entity or any Subsidiary (i) in which the amount of
damages claimed is $2,000,000 or more, (ii) in which injunctive or similar
relief is sought and which, if adversely determined, would reasonably be
expected to have a Material Adverse Effect, (iii) in which the relief sought is
an injunction or other stay of the performance of any Loan Document or (iv)
required to be reported to the SEC pursuant to the Exchange Act;
(c) ENVIRONMENTAL MATTERS. (i) Any and all material enforcement,
cleanup, removal or other governmental or regulatory actions instituted,
completed or threatened against the Operating Partnership, the REIT, any
Management Entity or any of their Subsidiaries or any of their Properties
pursuant to any Environmental Laws, (ii) all other material Environmental
Claims, and (iii) any environmental or similar condition on any real property
adjoining or in the vicinity of the Properties of the Operating Partnership, the
REIT, any Management Entity or any of their Subsidiaries that could reasonably
be anticipated to cause such Properties (or any portion thereof) to be subject
to any material restrictions on ownership, occupancy, transferability or use
under any Environmental Laws;
(d) ERISA. The occurrence of any of the following ERISA events
affecting the REIT or any member of its Controlled Group, together with a copy
of any notice with respect to such event that may be required to be filed with
any Governmental Authority and any notice delivered by a Governmental Authority
to the REIT or any member of its Controlled Group with respect to such event:
(i) an ERISA Event where the aggregate liability is
likely to exceed $1,000,000;
(ii) the adoption of any new Plan that is subject to
Title IV of ERISA or Section 412 of the Code by any member of the Controlled
Group;
(iii) the adoption of any amendment to a Plan that is
subject to Title IV of ERISA or Section 412 of the Code, if such amendment
results in a material increase in benefits or unfunded liabilities; or
(iv) the commencement of contributions by any member of
the Controlled Group to any Plan that is subject to Title IV of ERISA or
Section 412 of the Code;
(e) MATERIAL ADVERSE EFFECTS. The occurrence of any act,
omission, change or event which has a Material Adverse Effect subsequent to the
date of the most recent audited financial statements of the Operating
Partnership and the REIT delivered to the Agent pursuant to Section 6.01(a);
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(f) MATERIAL TRANSACTIONS OR OCCURRENCES. The consummation of any
material Investment or Disposition, of any material issuance of Stock of the
REIT (other than upon the tender of any Units for redemption or upon the
conversion of any shares of the REIT's Class B Common Stock into shares of the
REIT's Class A Common Stock) or Units, of any incurrence of material
Indebtedness or of any other material transaction entered into, or the
commencement of any material Development Activity, by the Operating Partnership,
the REIT, any Management Entity or any of their Subsidiaries, including, without
limitation, any material occurrences or developments (including, without
limitation, the satisfaction of applicable conditions precedent) in connection
with the transactions contemplated by the NHP Merger Agreement; and any change
in any executive officer of the REIT.
(g) FAILURE TO QUALIFY AS A REIT. The failure of the REIT to
maintain REIT Status or of any Subsidiary of the REIT to maintain its status as
a qualified REIT subsidiary under the Code;
(h) ACCOUNTING CHANGES. Any material change in the Operating
Partnership's or the REIT's accounting policies or financial reporting
practices; and
(i) CROSS-DEFAULT. Any notice received by the Operating
Partnership, the REIT, any Management Entity or any of their Subsidiaries of any
default under any Indebtedness or Guaranty Obligation described in Section
8.01(e). Each notice pursuant to this section shall be accompanied by a written
statement, signed by at least two (2) Responsible Officers, setting forth
details of the occurrence referred to therein and the provisions of this
Guaranty affected, and stating what action the Operating Partnership or the REIT
proposes to take with respect thereto; and
(j) CERTAIN TRANSACTIONS
(i) On July 3, 1997, a notice setting forth the AIMCO Gross
Asset Value as of June 30, 1997; the amount of any increase in the AIMCO
Gross Asset Value, if any, during the period from March 31, 1997 to June 30,
1997 (other than any increase resulting from Excluded Proceeds); and the sum
of the Net Issuance Proceeds plus Net Sale Proceeds (other than Excluded
Proceeds) received during such period.
(ii) On October 3, 1997, a notice setting forth the AIMCO
Gross Asset Value as of September 30, 1997; the amount of any increase in
AIMCO Gross Asset Value, if any, from March 31, 1997 to September 30, 1997
(other than any increase resulting from Excluded Proceeds); and the sum of
the Net Issuance Proceeds plus Net Sale Proceeds (other than Excluded
Proceeds) received during such period.
6.04 PRESERVATION OF EXISTENCE. ETC.: MAINTENANCE OF PROPERTY:
INSURANCE: PAYMENT OF OBLIGATIONS: COMPLIANCE WITH LAWS. The REIT and the
Operating Partnership shall perform all of the covenants and agreements set
forth in Sections 6.04, 6.05, 6.06, 6.07, 6.08 and 6.09 of the Operating
Partnership Credit Agreement, each of which is incorporated herein by this
reference.
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6.05 MAINTENANCE OF REIT STATUS: STOCK EXCHANGE LISTING. The REIT
shall at all times maintain its REIT Status and maintain its common Stock listed
on the NYSE, the American Stock Exchange, or Nasdaq Stock Exchange. The REIT
shall cause each Wholly-Owned Subsidiary to comply with all requirements
applicable under the Code to REIT subsidiaries.
6.06 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The REIT shall
maintain, and shall cause the Operating Partnership, the Management Entities and
each of their Subsidiaries to maintain, proper books of record and account, in
which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
Properties and business of the REIT, the Operating Partnership, the Management
Entities and each of their Subsidiaries. The REIT shall permit, and shall cause
the Operating Partnership, the Management Entities and each of their
Subsidiaries to permit, representatives of the Agent or any Lender to visit and
inspect any of their respective Properties, to examine their respective
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective directors, officers, and independent public accountants, all at
the expense of the REIT and at any time during normal business hours and as
often as may be reasonably desired, upon no less than forty-eight (48) hours
advance notice to the REIT; PROVIDED, HOWEVER, when a Guarantor Event of Default
exists, the Agent or any Lender may visit and inspect at the expense of the REIT
such Properties at any time during business hours and without advance notice.
6.07 FURTHER ASSURANCES.
(a) FULL DISCLOSURE. The REIT will ensure that all other
written information, exhibits and reports furnished to any Agent or Lender by
the Operating Partnership, the REIT, any Management Entity or any of their
Subsidiaries do not contain any untrue statement of a material fact and do
not and will not omit to state any material fact or any fact necessary to
make the statements contained therein not misleading in light of the
circumstances in which made, and will promptly disclose to the Agent and the
Lenders and correct any defect or error that may be discovered therein or in
this Guaranty or any Collateral Document or in the execution, acknowledgment
or recordation thereof.
(b) FURTHER ACTS. Promptly upon request by the Agent or the
Requisite Lenders, the REIT shall (and shall cause the Operating Partnership,
each Management Entity and each of their Subsidiaries to) do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and
re-register, any and all such further acts, deeds, conveyances, security
agreements, mortgages, deeds of trust, assignments, estoppel certificates,
financing statements and continuations thereof, termination statements,
notices of assignment, transfers, certificates, assurances and other
instruments that the Agent or such Lenders, as the case may be, may
reasonably require from time to time in order (i) to carry out more
effectively the purposes of this Guaranty or any Collateral Document, (ii) to
subject to the Liens created by any of the Collateral Documents any of the
Collateral, (iii) to perfect and maintain the validity, effectiveness and
priority of any of the Collateral Documents and the Liens intended to be
created thereby, and (iv) to better assure, convey, grant, assign, transfer,
preserve, protect and confirm to the Agent
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and Lenders the rights granted or now or hereafter intended to be granted under
any Loan Document, or any other document executed in connection herewith or
therewith.
6.08 COMMUNICATION WITH ACCOUNTANTS. If any Guarantor Event of Default
is continuing, the REIT authorizes the Agent and any Lender to communicate
directly with the REIT's and the Operating Partnership's independent accountants
and authorizes such accountants to disclose to such Persons any and all
financial statements and other information of any kind, including the substance
of any oral information or conversation that such accountants may have with
respect to the business, financial condition and other affairs of the REIT and
the Operating Partnership.
6.09 SOLVENCY. The REIT shall at all times be, and shall cause the
Operating Partnership to be, Solvent.
6.10 REFINANCING ACTIVITIES.
(a) In order to further assure to the Agent and the Lenders the
full repayment of the Guarantied Indebtedness, the REIT hereby agrees that, in
the event that the Guarantied Indebtedness shall not have been paid in full on
or prior to the date which is five (5) months after the Closing Date, the REIT
shall use best efforts promptly to raise capital (either through the offering of
stock (whether common or preferred, and whether publicly or in private
placements) or the sale or refinancing of Properties), in order to cause the
Guarantied Indebtedness to be repaid as soon as possible and in any event prior
to the maturity of the Guarantied Indebtedness.
(b) Without limiting the foregoing, in the event that the
Guarantied Indebtedness shall not have been paid in full on or prior to the date
which is five (5) months after the Closing Date, the REIT and the Operating
Partnership shall accept the terms and pricing presented to them by SBI of a
transaction to issue common Stock, preferred Stock and/or Indebtedness of the
REIT or the Operating Partnership in an amount which would be sufficient to pay
the Guarantied Indebtedness in full on or prior to the Maturity Date, and shall
cause such transaction to be consummated on or prior to the Maturity Date.
ARTICLE VII
NEGATIVE COVENANTS
As further consideration for this Guaranty, the REIT hereby
covenants and agrees that, so long as any of the Guarantied Indebtedness
shall remain unpaid or unsatisfied, unless the Requisite Lenders waive
compliance in writing:
7.01 LIENS. Neither the Operating Partnership, nor the REIT, nor any
Management Entity, nor any of their Subsidiaries shall, directly or indirectly,
make, create, incur, assume or suffer to exist any Lien upon or with respect to
any part of its Property, whether now owned or hereafter acquired, other than
Permitted Liens. Nothing contained in this Guaranty
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shall restrict the granting of Liens by the Acquisition Sub unless such Liens
are prohibited under the Acquisition Sub Credit Agreement.
7.02 INDEBTEDNESS. Neither the Operating Partnership, nor the REIT,
nor any Management Entity, nor any of their Subsidiaries shall create, incur,
assume, suffer to exist, or otherwise become or remain directly or indirectly
liable with respect to, any Indebtedness except Permitted Indebtedness. Nothing
contained in this Section 7.02 shall be deemed to excuse any lack of compliance
by Operating Partnership, the REIT, or any Subsidiary with the terms of Section
7.15 below.
7.03 CONTINGENT OBLIGATIONS. Neither the Operating Partnership, nor
the REIT, nor any of their Subsidiaries shall create, incur, assume or suffer to
exist any Contingent Obligations except as permitted under Section 7.03 of the
Operating Partnership Credit Agreement, which is incorporated herein by this
reference.
7.04 LEASE OBLIGATIONS. Neither the Operating Partnership, nor the
REIT, nor any of their Subsidiaries shall create or suffer to exist any
obligations for the payment of rent for any Property under a lease or agreement
to lease that is not a Capital Lease, except as permitted under Section 7.04 of
the Operating Partnership Credit Agreement, which is incorporated herein by this
reference.
7.05 DISPOSITION OF PROPERTIES. Neither the Operating Partnership, nor
the REIT, nor any of their Subsidiaries shall, directly or indirectly:
(a) make any Disposition of its interest in any Management
Entity, or enter into any agreement to do so; or
(b) make any Disposition of any other Property, or enter into any
agreement to do so, unless in the case of this clause (b) such Disposition is at
fair market value, and at the time of the Disposition no Guarantor Event of
Default exists.
Nothing contained in this Guaranty shall restrict Dispositions by
the Acquisition Sub unless such Dispositions are prohibited under the
Acquisition Sub Credit Agreement.
7.06 CONSOLIDATIONS AND MERGERS. Neither the Operating Partnership,
nor the REIT, nor any of their Subsidiaries shall merge, consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
Properties (whether now owned or hereafter acquired) to or in favor of any
Person; except as permitted under Section 7.06 of the Operating Partnership
Credit Agreement, which is incorporated herein by this reference.
7.07 LIQUIDATIONS: MATERIAL ORGANIZATION CHANGES: NEW SUBSIDIARIES.
The REIT and the Operating Partnership shall perform all of the covenants and
agreements set forth in Section 7.07 of the Operating Partnership Credit
Agreement, which is incorporated herein by this reference.
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7.08 INVESTMENTS. Neither the Operating Partnership, nor the REIT, nor
any Management Entity, nor any of their Subsidiaries shall directly or
indirectly own or acquire any assets or make any Investments (or incur any
Contractual Obligation or enter into any letter of intent to make any
Investments) other than:
(i) cash and Cash Equivalents;
(ii) multi-family apartment projects in fee simple or
partnership or joint venture interests therein;
(iii) ownership interests in Management Entities, provided
in each case the same are engaged in managing multi-family apartment projects;
(iv) prior to the NHP Combination Date, the ownership of
Stock in NHP by Acquisition Sub (it being understood that no Affiliate of AIMCO
other than the Acquisition Sub or, to the extent expressly permitted in the
Operating Partnership Credit Agreement, the Merger Sub, shall acquire any Stock
in NHP); and
(v) other assets not described elsewhere in this Section
7.08, provided that the aggregate Carrying Value of such interests shall not at
any time exceed twenty-five percent (25%) of the Carrying Value of the total
assets owned by the Operating Partnership, the REIT, and their Subsidiaries.
7.09 RESTRICTED PAYMENTS AND DEMANDS.
(a) Neither the Operating Partnership nor the REIT shall declare
or make, or permit any of their respective Subsidiaries to declare or make, any
distribution of any Properties, including cash, rights, obligations, or
partnership interests or units, on account of any partnership interests, Units
or Stock, or purchase, redeem or otherwise acquire for value any of its
partnership interests, Units or Stock, now or hereafter outstanding to any
Person other than the Operating Partnership, the REIT or a Wholly-Owned
Subsidiary, (all of the foregoing, collectively, "distributions"), except (a)
for the exchange of common Stock of the REIT for Units; (b) that if no Guarantor
Default or Guarantor Event of Default exists under Section 8.01(a) or under
Section 8.01(c) as a result of a breach of Section 7.15, the REIT, the Operating
Partnership and all such Subsidiaries may make distributions during any twelve
(12) month period in an amount in the aggregate which does not exceed the
greater of 80% of Funds From Operations for such period or such amount as is
necessary to maintain REIT Status.
(b) Under no circumstances shall the REIT or the Operating
Partnership permit any payment to be made with respect to Intra-Company Debt
while any Guarantor Event of Default is continuing.
7.10 TRANSACTIONS WITH AFFILIATES. Neither the Operating Partnership,
nor the REIT, nor any Management Entity, nor any of their Subsidiaries shall
enter into any transaction with any Affiliate of the Operating Partnership or of
any such Person, except as permitted under
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Section 7.10 of the Operating Partnership Credit Agreement, which is
incorporated herein by this reference.
7.11 SPECIAL COVENANTS RELATING TO THE REIT. The REIT shall perform
all of the covenants and agreements set forth in Section 7.11 of the
Operating Partnership Credit Agreement, which is incorporated herein by this
reference.
7.12 TAXATION OF THE PARTNERSHIP. The Operating Partnership shall at
all times be taxed as a partnership under the Code and not as an association
taxable as a corporation.
7.13 ERISA. The REIT shall perform all of the covenants and agreements
set forth in Section 7.13 of the Operating Partnership Credit Agreement, which
is incorporated herein by this reference.
7.14 PREPAYMENTS. Neither the REIT nor the Operating Partnership nor
any Subsidiary shall, while the Guarantied Indebtedness is outstanding, prepay
any Indebtedness (other than the Guarantied Indebtedness and the Indebtedness
outstanding from time to time under the Operating Partnership Credit Agreement
and the Bridge Loan Agreement), unless the REIT shall have theretofore deposited
with the Agent Restricted Cash in the maximum amount required under Section 2.04
of this Guaranty; provided, however, a prepayment of Indebtedness shall be
permitted in connection with the refinancing thereof so long as the maximum
principal amount of the loan so used to prepay any such Indebtedness does not
exceed the amount of such Indebtedness being prepaid.
7.15 FINANCIAL COVENANT.
(a) The REIT shall not permit the Net Worth of the REIT and its
Subsidiaries on a consolidated basis to be less at any time than $400,000,000
plus 75% of the Net Issuance Proceeds of all issuances of Stock or Units after
the Closing Date.
(b) The REIT shall not permit the ratio of Consolidated Total
Indebtedness to Gross Asset Value to exceed 0.60-to-1.00 at any time.
(c) The REIT shall not permit the Consolidated
EBITDA-to-Interest Ratio computed for any fiscal quarter or year to be less
than 2.00-to-1.00.
(d) The REIT shall not permit the Consolidated EBITDA-to-Fixed
Charges Ratio computed for any fiscal quarter or year to be less than
1.80-to-1.00.
7.16 ACCOUNTING CHANGES. Neither the Operating Partnership nor the
REIT shall make any significant change in accounting treatment or reporting
practices, except as required by GAAP, or change its fiscal year.
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ARTICLE VIII
EVENTS OF DEFAULT
8.01 GUARANTOR EVENT OF DEFAULT. Any of the following shall constitute
a "Guarantor Event of Default":
(a) NON-PAYMENT. Any Guarantor or any Common Stockholder shall
fail to pay, when and as required to be paid herein or in the Collateral
Documents, any amount payable hereunder or thereunder; or
(b) REPRESENTATION OR WARRANTY. Any representation or warranty
by any Guarantor or any Common Stockholder made or deemed made herein, in any
Collateral Document, or in any certificate, document or financial or other
statement by such Guarantor or any Common Stockholder or any Responsible
Officer, furnished at any time under this Guaranty or in or under any
Collateral Document, shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) SPECIFIC GUARANTOR DEFAULTS. The REIT or the Operating
Partnership shall fail to perform or observe any term, covenant or agreement
binding upon it contained in Section 6.06, Section 6.10 and/or in Article
VII; provided that, in the case of a violation of the terms governing the
maximum amount of distributions during any twelve (12)-month period set forth
in Section 7.09(b), such failure shall not constitute a Guarantor Event of
Default if, by the end of the third month after such twelve (12)-month
period, such violation no longer exists, so long as no distributions were
made during such twelve (12)-month period in violation of the provisions of
Section 7.09(b) which prohibit distributions while certain Guarantor Defaults
or Guarantor Events of Default exist; or
(d) OTHER GUARANTOR DEFAULTS. Any Guarantor shall fail to perform
or observe any other term or covenant contained in this Guaranty or any
Collateral Document, and such default shall continue uncured for a period of 10
days after the earlier of (i) the date upon which a Responsible Officer knew or
received written notice of such failure or (ii) the date upon which written
notice thereof is given to the REIT by Agent or any Lender; or
(e) CROSS-DEFAULT. The Acquisition Sub shall fail, after any
applicable cure period:
(i) to make any payment (and which uncured failure to pay
is continuing) in respect of any Indebtedness or Guaranty Obligation when due
which in the aggregate exceeds $500,000 (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise), other than a payment with
respect to Intra-Company Debt where the obligee has not commenced pursuing its
remedies; or
(ii) to perform or observe any other condition or
covenant, or any other event shall occur or condition exist, under any agreement
or instrument relating to any such Indebtedness or Guaranty Obligation, if the
effect of such failure, event or condition is to
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cause, or to permit the holder or holders of such Indebtedness or the
beneficiary or beneficiaries of such Indebtedness (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, such
Indebtedness to be declared to be due and payable prior to its stated maturity,
or such Guaranty Obligation to become payable or cash collateral in respect
thereof to be demanded; or
(f) BANKRUPTCY OR INSOLVENCY. The Operating Partnership, the
REIT, any of their Subsidiaries, any Management Entity, any Common Stockholder
or, at any time prior to the NHP Combination Date, NHP shall (i) become
insolvent, or generally fail to pay, or admit in writing its inability to pay,
its debts as they become due, subject to applicable grace periods, if any,
whether at stated maturity or otherwise; (ii) voluntarily cease to conduct its
business in the ordinary course; (iii) commence any Insolvency Proceeding with
respect to itself; or (iv) take any action to effectuate or authorize any of the
foregoing; or
(g) INVOLUNTARY PROCEEDINGS. (i) Any Insolvency Proceeding shall
be commenced or filed against the Operating Partnership, the REIT, any of their
Subsidiaries, any Management Entity, any Common Stockholder or, at any time
prior to the NHP Combination Date, NHP or any writ, judgment, warrant of
attachment, execution or similar process, shall be issued or levied against a
substantial part of such Person's Properties, and any such proceeding or
petition shall not be dismissed, or such writ, judgment, warrant of attachment,
execution or similar process shall not be released, vacated or fully bonded
within sixty (60) days after commencement, filing or levy; (ii) the Operating
Partnership, the REIT, any of their Subsidiaries, any Management Entity, any
Common Stockholder or, at any time prior to the NHP Combination Date, NHP shall
admit the material allegations of a petition against it in any Insolvency
Proceeding, or an order for relief (or similar order under non-U.S. law) is
ordered in any Insolvency Proceeding; or (iii) the Operating Partnership, the
REIT, any of their Subsidiaries or any Management Entity, any Common Stockholder
or, at any time prior to the NHP Combination Date, NHP shall acquiesce in the
appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor), or other similar Person for itself
or a substantial portion of its Property or business; or
(h) COLLATERAL DOCUMENTS. Any provision of any Collateral
Document shall for any reason (other than pursuant to the terms thereof) cease
to be valid and binding on or enforceable against the Person party thereto
(except to the extent that the same results solely from an act or omission of
the Agent or the Lenders), or such Person shall so state in writing or bring an
action to limit its obligations or liabilities thereunder.
ARTICLE IX
ARBITRATION, REFERENCE, INDEMNIFICATION, OTHER REMEDIES
9.01 Reference and Arbitration.
(a) MANDATORY ARBITRATION. Any controversy or claim between or
among the parties, including those arising out of or relating to this Guaranty
or the Loan Documents and any claim based on or arising from an alleged tort,
shall at the request of any
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party be determined by arbitration. The arbitration shall be conducted in New
York, New York, in accordance with the United States Arbitration Act (Title 9,
U.S. Code), notwithstanding any choice of law provision in this Guaranty, and
under the Commercial Rules of the American Arbitration Association (the "AAA").
The arbitrator(s) shall give effect to statutes of limitation in determining any
claim. Any controversy concerning whether an issue is arbitrable shall be
determined by the arbitrator(s). Judgment upon the arbitration award may be
entered in any court having jurisdiction. The institution and maintenance of an
action for judicial relief or pursuit of a provisional or ancillary remedy shall
not constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.
(b) PROVISIONAL REMEDIES SELF-HELP AND FORECLOSURE. No provision
of this Section 9.01 shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain provisional or ancillary remedies
from a court of competent jurisdiction before, after, or during the pendency of
any arbitration.
9.02 INDEMNITY. Guarantor shall indemnify and hold harmless the Agent,
each Lender and each of their respective officers, directors, employees,
counsel, agents and attorneys-in-fact (each, an "Indemnified Person") from and
against and pay them for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses or disbursements
(including Attorney Costs) of any kind or nature whatsoever with respect to the
execution, delivery and enforcement of this Guaranty, or the transactions
contemplated hereby and thereby, and with respect to any investigation,
litigation or proceeding related to this Guaranty, whether or not any
Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); PROVIDED, that a Guarantor shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities
arising from the gross negligence or willful misconduct of such Indemnified
Person. The agreements in this Section 9.02 shall survive payment of the
Guarantied Indebtedness.
9.03 MARSHALLING; PAYMENTS SET ASIDE. Neither the Agent nor any Lender
shall be under any obligation to marshall any assets in favor of any Guarantor
or any other Person or against or in payment of any or all of the obligations of
such Guarantor under this Guaranty. To the extent that any Guarantor makes a
payment or payments to the Agent or any Lender, or the Agent or any Lender
enforces its Liens or exercises its rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party in connection
with any Insolvency Proceeding, or otherwise, then to the extent of such
recovery the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such enforcement or setoff had not occurred.
9.04 SETOFF. In addition to any rights and remedies of the Lenders
provided by law, if a Guarantor Event of Default exists, then irrespective of
whether the Agent or such Lender shall have made demand under this Guaranty and
whether such obligations may be
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contingent or unmatured, each Lender is authorized at any time and from time to
time, without prior notice to any Guarantor, any such notice being hereby waived
to the fullest extent permitted by law, to place a hold (in the full amount of
the Guarantied Indebtedness) against any and all deposits (general or special,
time or demand, provisional or final) at any time held by such Lender to or for
the credit or the account of such Guarantor and, provided that Guarantor shall
then be obligated to pay all sums due and owing on the Guarantied Indebtedness
in accordance with Section 2.01(b) hereof, to set off and apply any and all such
deposits and other indebtedness at any time owing to such Lender to or for the
credit or the account of such Guarantor against any and all obligations owing to
such Lender, now or hereafter existing. Each Lender agrees to promptly notify
the affected Guarantor and the Agent after any such hold, setoff or application
made by such Lender; PROVIDED, HOWEVER, that the failure to give such notice
shall not affect the validity of such setoff and application. The rights of each
Lender under this Section 10.09 are in addition to the other rights and remedies
(including other rights of setoff) that such Lender may have. NOTWITHSTANDING
THE FOREGOING, NO LENDER SHALL EXERCISE, OR ATTEMPT TO EXERCISE, ANY RIGHT OF
SETOFF, BANKER'S LIEN, OR THE LIKE, AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF
ANY GUARANTOR HELD OR MAINTAINED BY ANY LENDER, WITHOUT THE PRIOR WRITTEN
CONSENT OF THE REQUISITE LENDERS.
ARTICLE X
MISCELLANEOUS
10.01 NO WAIVER; CONSENTS; CUMULATIVE REMEDIES. Each waiver by Agent
or the Lenders must be in writing, and no waiver shall be construed as a
continuing waiver. No waiver shall be implied from Agent's or any Lender's delay
in exercising or failure to exercise any right or remedy against Acquisition
Sub, Guarantor or any security. Consent by Agent or the Lenders to any act or
omission by Acquisition Sub or Guarantor shall not be construed as a consent to
any other or subsequent act or omission, or as a waiver of the requirement for
Agent's or the Lenders' consent to be obtained in any future or other instance.
All remedies of Agent and each Lender against Acquisition Sub and Guarantor are
cumulative. As among the Agent and the Lenders only, nothing contained in this
Guaranty shall limit any of the approval rights of the Agent or the Lenders set
forth in the Loan Documents.
10.02 NO RELEASE. Guarantor shall not be released, in whole or in
part, from its obligations under this Guaranty except by a writing signed by
Agent and all the Lenders.
10.03 HEIRS, SUCCESSORS AND ASSIGNS; PARTICIPATIONS. The terms of this
Guaranty shall bind and benefit the heirs, legal representatives, successors and
assigns of Agent, the Lenders and Guarantor; provided, however, that Guarantor
may not assign this Guaranty, or assign or delegate any of its rights or
obligations under this Guaranty, without the prior written consent of Agent in
each instance. Without notice to or the consent of Guarantor, Agent and any
Lender may disclose any and all information in its possession concerning
Guarantor, this Guaranty and any security for this Guaranty to any actual or
prospective purchaser of any securities issued or to be issued by Agent or such
Lender, and to any actual or prospective
26
<PAGE>
purchaser or assignee of any participation or other interest in the Guarantied
Indebtedness and this Guaranty.
10.04 NOTICES.
(a) DELIVER. All notices, requests and other communications
provided for hereunder shall be in writing (including, unless the context
expressly otherwise provides, telegraphic, telex, facsimile transmission or
cable communication) and mailed, telegraphed, telexed or delivered to its
address specified on the signature pages hereof, or to such other address as
shall be designated by such party in a written notice to the other party.
(b) RECEIPT. All such notices and communications shall, when
transmitted by overnight delivery, telegraphed, telecopied by facsimile, telexed
or cabled, be effective when delivered for overnight delivery or to the
telegraph company, transmitted by telecopier, confirmed by telex answerback or
delivered to the cable company, respectively, or if delivered, upon delivery.
(c) RELIANCE. Agent and each Lender shall be entitled to rely on
the authority of any person purporting to be a person authorized by Guarantor to
give such notice, and neither Agent nor any Lender shall have any liability to
Guarantor or any other person on account of any action taken or not taken by
Agent or such Lender in reliance upon such telephonic or facsimile notice. The
obligation of Guarantor hereunder shall not be affected in any way or to any
extent by any failure by Lender to receive written confirmation of any
telephonic or facsimile notice or the receipt by Agent or a Lender of a
confirmation which is at variance with the terms understood by Agent or such
Lender to be contained in the telephonic or facsimile notice.
10.05 RULES OF CONSTRUCTION. In this Guaranty, the word "Acquisition
Sub" includes both the named Acquisition Sub and any other person who at any
time assumes or otherwise becomes primarily liable for all or any part of the
obligations of the named Acquisition Sub on the Guarantied Indebtedness. The
word "person" includes any individual, company, trust or other legal entity of
any kind. If this Guaranty is executed by more than one person, the word
"Guarantor" includes all such persons. All headings appearing in this Guaranty
are for convenience only and shall be disregarded in construing this Guaranty.
10.06 GOVERNING LAW. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
10.07 COSTS AND EXPENSES. If any lawsuit or arbitration is commenced
which arises out of, or which relates to this Guaranty, the Loan Documents or
the Guarantied Indebtedness, the prevailing party shall be entitled to recover
from each other party such sums as
27
<PAGE>
the court or arbitrator may adjudge to be reasonable attorneys' fees
(including allocated costs for services of in-house counsel) in the action or
proceeding, in addition to costs and expenses otherwise allowed by law. In
all other situations, including any Insolvency Proceeding, Guarantor agrees
to pay all of the Agent's and each Lender's costs and expenses, including
attorneys' fees (including allocated costs for services of the Agent's and
each Lender's in-house counsel) which may be incurred in any effort to
collect or enforce the Guarantied Indebtedness or any part of it or any term
of this Guaranty. Without limiting any rights of the Agent or Lenders under
the Acquisition Sub Credit Agreement or, all amounts of any kind due and
payable under this Guaranty (whether for principal, interest, and other costs
under the Guarantied Indebtedness, or for costs, fees, and expenses for which
the Guarantors are directly responsible hereunder, or otherwise) shall accrue
interest from the time the Agent or the Lenders make demand therefor
hereunder until paid in full in cash to such Agent or the Lenders at the Base
Rate, as defined in the Acquisition Sub Credit Agreement, plus three (3%)
percentage points, except to the extent that any such amounts are then
accruing interest under the Guarantied Indebtedness, in which case such Base
Rate plus 3% interest rate shall not be applied if the effect would be to
compound the interest to which such obligations are subject to under the
Guarantied Indebtedness.
10.08 CONSIDERATION. Guarantor acknowledges that it expects to benefit
from Lenders' extension of the loan facility under the Acquisition Sub Credit
Agreement to Acquisition Sub because of its relationship to Acquisition Sub,
because such loan facility is essential to Acquisition Sub's acquisition of a
portion of the outstanding Stock of NHP and because such acquisition is part of
Guarantor's overall plan to acquire or merge with NHP. Guarantor is executing
this Guaranty in consideration of these anticipated benefits.
10.09 INTEGRATION; MODIFICATIONS. This Guaranty (a) integrates all the
terms and conditions mentioned in or incidental to this Guaranty, (b) supersedes
all oral negotiations and prior writings with respect to its subject matter, and
(c) is intended by Guarantor, Agent and the and Lenders as the final expression
of the agreement with respect to the terms and conditions set forth in this
Guaranty and as the complete and exclusive statement of the terms agreed to by
Guarantor, Agent and the Lenders. No representation, understanding, promise or
condition shall be enforceable against any party hereto unless it is contained
in this Guaranty. This Guaranty may not be modified except in a writing signed
by both Agent (with the consent of the Requisite Lenders) and Guarantor. No
course of prior dealing, usage of trade, parol or extrinsic evidence of any
nature shall be used to supplement, modify or vary any of the terms hereof. As
between Agent and the Lenders only, nothing contained in this Guaranty shall
alter the rights and obligations among Agent and the Lenders set forth in the
Credit Agreement.
10.10 MISCELLANEOUS. The illegality or unenforceability of one or more
provisions of this Guaranty shall not affect any other provision. Time is of the
essence in the performance of this Guaranty by Guarantor. The obligations of
each Guarantor under this Guaranty shall be joint and several.
10.11 COUNTERPARTS. This Guaranty may be executed by one or more of
the parties to this Guaranty in any number of separate counterparts, each of
which, when so
28
<PAGE>
executed, shall be deemed an original, and all of said counterparts taken
together shall be deemed to constitute but one and the same instrument.
10.12 SEVERABILITY. The illegality or unenforceability of any
provision of this Guaranty or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Guaranty or any instrument or agreement required
hereunder.
10.13 WAIVER OF JURY TRIAL. GUARANTOR, THE AGENT, AND THE LENDERS EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH
RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. SUBJECT TO SECTION 9.01
ABOVE, GUARANTOR, THE AGENT, AND THE LENDERS EACH AGREE THAT ANY SUCH CLAIM OR
CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING
THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL
BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS GUARANTY OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
GUARANTY.
10.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST GUARANTOR ARISING OUT OF OR RELATING TO THIS
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT
GUARANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY
AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY
ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. Guarantor
hereby agrees that service of all process in any such proceeding in any such
court may be made by registered or certified mail, return receipt requested, to
Guarantor at its address provided in Section 10.04, such service being hereby
acknowledged by Guarantor to be sufficient for personal jurisdiction in any
action against Guarantor in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to serve
process in any other manner permitted by law or shall limit the right of the
Agent or any Lender to bring proceedings against Guarantor in the courts of any
other jurisdiction.
29
<PAGE>
10.15 INTERPRETATION. This Guaranty is the result of negotiations
between and has been reviewed by counsel to the Agent, the Lenders and the
Guarantors, and is the product of all parties hereto. Accordingly, this Guaranty
shall not be construed against the Lenders or the Agent merely because of the
Agent's or Lender's involvement in the preparation of such documents and
agreements.
30
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Guaranty on the date
hereinabove set forth.
Guarantors:
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY,
a Maryland corporation
By: /s/ Peter K. Kompaniez
---------------------------------
Peter K. Kompaniez, Vice Chairman
AIMCO PROPERTIES, L.P.,
a Delaware limited partnership
By: AIMCO-GP, Inc.,
a Delaware corporation
By: /s/ Peter K. Kompaniez
----------------------------------
Peter K. Kompaniez, Vice President
Address Where Notices to Guarantors are to be
Sent:
1873 South Bellaire Street
17th Floor
Denver, Colorado 90071
Address Where Notices to Agent are to be
Sent:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
555 South Flower Street, 6th Floor
Los Angeles, California 90071
Att'n: Manager - Unit #1357
Addresses Where Notices to the Lenders are to
be Sent:
Per the Acquisition Sub Credit Agreement
31
<PAGE>
EXHIBIT A
TO GUARANTY
COMPLIANCE CERTIFICATE
______________, 1997
Bank of America National Trust and
Savings Association, as Agent
CRESG #1357
555 South Flower Street, 6th Floor
Los Angeles, California 90071
Attn: Unit Manager
Re: Payment Guaranty, dated as of May 5, 1997 (as amended, modified,
supplemented, restated, or renewed from time to time, the
"Guaranty"), by and among Apartment Investment and Management
Company (the "REIT"), AIMCO Properties, L.P. (the "Operating
Partnership"), the lenders from time to time party, to the
Credit Agreement (the "Lenders"), BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, a national banking association, as one
of the Lenders, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, a national banking association, as Agent for the
Lenders ("Agent")
Ladies and Gentlemen:
Reference is made to the Guaranty. Each initially capitalized term not
defined in this Compliance Certificate (including the schedules and other
attachments hereto, this "Certificate") shall have the meaning ascribed to
such term in the Guaranty.
Pursuant to Section 6.02(b) of the Guaranty, the undersigned hereby
certify to Agent and each of the Lenders that, to the best of the
undersigned's knowledge after diligent inquiry, the information furnished in
the attached schedules, including, without limitation, each of the
calculations in attached SCHEDULE 1 and the related attachments with respect
to the covenants of the Company in Sections 7.09 and 7.15 of the Guaranty is
true, correct and complete in all material respects as of the last day of the
fiscal period subject to the financial statements being delivered to the
Lender pursuant to Section 6.01 of the Guaranty together with this
Certificate (such statements the "Financial Statements" and the periods
covered thereby the "Reporting Period") and for such Reporting Period.
The undersigned hereby further certify to Agent and each of the Lenders
that, to the best of the undersigned's knowledge after diligent inquiry:
(1) REVIEW OF FINANCIAL CONDITION. The undersigned have reviewed the
terms of the Guaranty, including, without limitation, the representations and
warranties set forth in Article V thereof and the covenants set forth in
Article VI and VII thereof, and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and condition
of the Company, the REIT, and their respective Subsidiaries during the
Reporting
A-1
<PAGE>
Periods. The Financial Statements accurately present the financial position
of the Company, the REIT, and their respective Subsidiaries as of the date
thereof and for the Reporting Periods covered thereby;
(2) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company, the REIT, and their respective Subsidiaries
contained in the Loan Documents, including those contained in Article V of
the Agreement, are true and correct as of the date hereof and were true and
correct at all times during the Reporting Periods;
(3) COVENANTS. During the Reporting Period, the Company, the REIT,
and their respective Subsidiaries observed and performed all of their
respective covenants and other agreements under the Loan Documents, and
satisfied each of the conditions contained therein to be observed, performed
or satisfied by the Company, the REIT, and their respective Subsidiaries; and
(4) NO DEFAULT; EVENT OF DEFAULT. [Except as expressly set forth in
attached SCHEDULE 2,] no Default or Event of Default exists as of the date
hereof or existed at any time during the Reporting Period. [SCHEDULE 2 sets
forth a true, correct and complete description of the nature and period of
existence of each Default or Event of Default that exists as of the date
A-2
<PAGE>
hereof or existed at any time during the Reporting Periods and the actions
that the Company, the REIT, or their respective Subsidiaries have taken, are
taking and propose to take with respect thereto].
IN WITNESS WHEREOF, this Certificate is executed by the undersigned this
____ day of ______________, 19__.
AIMCO PROPERTIES, L.P., a Delaware limited
partnership
By: AIMCO-GP, Inc.,
a Delaware corporation
Its general partner
By: ______________________________
Name: ____________________________
Title: ___________________________
By: ______________________________
Name: ____________________________
Title: ___________________________
APARTMENT INVESTMENT AND MANAGEMENT
COMPANY,
a Maryland corporation
By: ________________________________
Name: ______________________________
Title: _____________________________
By: ________________________________
Name: ______________________________
Title: _____________________________
A-3
<PAGE>
SCHEDULE 1
to Compliance Certificate
COVENANT COMPLIANCE
As of ______________,199_
and for the period from ______________, 199_
to ______________, 199_
A. NET WORTH (SECTION 7.15(a)) AS OF ______________, 199_
[Net Worth not to be less than $400,000,000 plus 75% of Net Issuance
Proceeds of equity securities since Closing Date]
Gross Asset Value
Net Operating Income from all apartment
projects 100% owned by the Company or the
Wholly-Owned Subsidiaries from the
commencement of the then current year
through the end of the most recent quarter (A-1) $ ____________
Annualization of (A-1) (Insert fraction
used here: ____________) (A-2) $ ____________
Item (A-2) capitalized at the Apartment
Property Cap Rate (9.60%) (A-3) $ ____________
Company's or Subsidiaries' share of Net
Operating Income from all apartment projects
not 100% owned by the Company or any
Subsidiary from the commencement of the then
current year through the end of the
A-4
<PAGE>
most recent quarter (A-4) $ ____________
Annualization of (A-4) (Insert fraction used
here: ____________) (A-5) $ ____________
Item (A-5) capitalized at the Apartment
Property Cap Rate (9.60%) (A-6) $ ____________
Unconsolidated net income of Management
Entities for the period from the commencement
date of the then current year through the end
of the most recent quarter (A-7) $ ____________
Annualization of (A-7) (insert fraction used
here: ____________) (A-8) $ ____________
Item (A-8) multiplied by [6.5] (A-9) $ ____________
Unconsolidated net income of Unconsolidated
Partnerships for the period from the
commencement date of the then current year
through the end of the most recent quarter (A-10) $ ___________
Annualization of (A-10) (insert fraction
here: ____________) (A-11) $ ___________
Item (A-11) multiplied by [6.5] (A-12) $ ___________
Acquisition Sub's
A-5
<PAGE>
share of EBITDA of NHP for the period from
the commencement date of the then current
year through the end of the most recent
quarter (A-13) $ ___________
Annualization of (A-13) (insert fraction
here: ____________) (A-14) $ ___________
Item (A-14) multiplied by (A-15) $ ___________
All cash (including Restricted Cash) and the
fair market value of all Cash Equivalents
held as of the last day of such quarter (A-16) $ ___________
Total Gross Asset Value (sum of Items (A-3),
(A-6), (A-9), (A-2), (A-15) and (A-16)) (A-17) $ ___________
Liabilities (as determined in accordance with
GAAP) of the Company, the REIT, and their
respective Subsidiaries on a consolidated basis (B) $ ______________
Net Worth ((A-17) minus (B)) (C-1) $ ____________
Net Issuance Proceeds from all Stock and Units
issued since the Closing Date (____________,
1997), multiplied by 75% (C-2) $ ____________
Covenant compliance? (Item (C-1) must not be
less than $400,000,000 plus item (C-2)) (C-3) ________ (yes or no)
A-6
<PAGE>
B. CONSOLIDATED TOTAL INDEBTEDNESS TO GROSS ASSET VALUE (SECTION 7.15(b))
AS OF ____________, 199_
[not to exceed 60% at any time]
Total Indebtedness
All outstanding Indebtedness (including its
share of Indebtedness of partnerships and
joint ventures) and in the case of letters of
credit Indebtedness available to be drawn, of
the Company, the REIT, and their respective
Subsidiaries (D-1) $ ____________
Acquisition Sub's Pro Rata Share (__%) of all
outstanding Indebtedness (including its share
of Indebtedness of partnerships and joint
ventures) and in the case of letters of credit
Indebtedness available to be drawn, of NHP. (D-2) $ ____________
Consolidated Total Indebtedness (D-3) $ ____________
Gross Asset Value (A-17) (E) $ ______________
Ratio of Total Indebtedness to Gross Asset Value
((D-3) divided by (E)) (F) $ ______________
Covenant compliance? (Item (F) must be less than
or equal to 60%) (G) __________ (yes or no)
C. CONSOLIDATED EBITDA-TO-INTEREST RATIO (SECTION 7.15(c)) FOR THE PERIOD
FROM ____________, 199_ TO ____________, 199_
[not to be less than 2.00:1.00 for any fiscal quarter or year]
EBITDA with respect to the REIT and its Subsidiaries
(on a consolidated basis)
Net Income (or Net Loss) (without giving effect
A-7
<PAGE>
to extraordinary gains or losses) (H-1) $ ____________
Interest Expense (H-2) $ ____________
Real estate depreciation (H-3) $ ____________
Amortization expenses relating to intangibles (H-4) $ ____________
Accrued income taxes (H-5) $ ____________
EBITDA for REIT and its Subsidiaries (sum of
Items (H-1)+(H-2)+(H-3)+(H-4)+(H-5)) (H-6) $ ____________
EBITDA with respect to NHP (on a consolidated
basis)
Net Income (or Net Loss) (without giving effect
to extraordinary gains or losses) for NHP (H-7) $ ____________
Interest Expense for NHP (H-8) $ ____________
Real estate depreciation for NHP (H-9) $ ____________
Amortization expenses relating to intangibles
for NHP (H-10) $ ___________
Accrued income taxes for NHP (H-11) $ ___________
EBITDA for NHP (sum of Items (H-7) + (H-8) +
(H-9) + (H-10) + (H-11)) (H-12) $ ___________
Acquisition Sub's Pro Rata Share (__%) of EBITDA
for NHP (H-12) (H-13) $ ___________
Consolidated EBITDA ((H-6) + (H-13)) (I) $ ______________
Imputed Capital Expenditures
A-8
<PAGE>
For any four consecutive quarters, an amount
equal to the average number of apartment
units owned by the Company, its Subsidiaries
and the REIT during such period (J-1) ______________
Item I-l), multiplied by $300, and for any
period less than four consecutive quarters,
an appropriate proration of such amount (J-2) $ ____________
Consolidated EBITDA less Imputed Capital
Expenditures (Item (I) minus Item (J-2)) (K) $ ______________
Net Interest Expense for REIT, Company and
Subsidiaries (K-1) $ ____________
Acquisition Sub's Pro Rata Share (__%) of Net
Interest Expense for NHP (K-2) $ ____________
Consolidated Interest Expense (K-3) $ ____________
Consolidated EBITDA-to-Interest Ratio (Item (K)
divided by Item (K-3)) (L) ________________
Covenant compliance? (Item (L) must not be less
than 2.00:1.00) (M) __________ (yes or no)
D. CONSOLIDATED EBITDA-TO-FIXED CHARGES RATIO (SECTION 7.15(d)) FOR THE
PERIOD FROM ____________ 199_ TO ____________, 199_
[not to be less than 1.80:1.00 for any fiscal quarter or year]
Consolidated EBITDA minus
A-9
<PAGE>
Imputed Capital Expenditures (Item (K)) (N) $ ______________
Consolidated Interest Expense (Item (K-3)) (O) $ ______________
Amortization
Scheduled Amortization of the Company, its
Subsidiaries, and the REIT (i.e., current
portion (due within 12 months) of all
regularly scheduled amortization payments due
under long-term fully amortizing mortgage
Indebtedness) (P-1) $ ____________
Acquisition Sub's Pro Rata Share (__%) of
Scheduled Amortization of NHP (P-2) $ ____________
Consolidated Scheduled Amortization (sum of
(Items (P-1)+(P-2)) (P-3) $ ____________
Dividends Payable and carried over on Preferred
Stock of the REIT (P-4) $ ____________
Consolidated EBITDA-to-Fixed Charges Ratio
(Item (N) divided by the sum of
Items (0)+(P-3)+(P-4)) (Q) ________________
Covenant Compliance? (Item (Q) must not be less
than 1.80:1.00) (R) __________ (yes or no)
A-10
<PAGE>
E. DISTRIBUTIONS (SECTION 7.09) FOR THE PERIOD FROM ____________,199_ TO
____________,199_ (four consecutive quarters)
[not to exceed 80% of Funds From Operations)
Funds From Operations
With respect to the Company, the REIT, and
their Subsidiaries on a consolidated basis,
net income calculated in accordance with
GAAP, excluding gains or losses from debt
restructuring and sales of property, plus
real estate depreciation and amortization,
plus amortization associated with the
purchase of property management companies,
and after adjustments for unconsolidated
partnerships and joint ventures (S-1) $ ____________
80% of Item (S-1) (S-2) $ ____________
Distributions (as defined in Section 7.09 of
the Credit Agreement) made to Persons other
than Company, REIT and Wholly-Owned
Subsidiaries (T) $ ______________
Total distributions (as defined in Section 7.09
of the Credit Agreement) of the Company and
Subsidiaries during any 12 month period
(Item (T)) shall not exceed 80% of Funds from
Operations (Item (S-2)) (U) __________ (yes or no)
If greater in order to maintain REIT Status,
explain ____________________
F. NON-CORE ASSETS (SECTION 7.08(a)(vi))
[not to exceed 25% of Carrying Value of all assets]
Carrying Value of cash and cash equivalents,
multi-family apartment projects owned in fee
simple,
A-11
<PAGE>
ownership interests in permitted Subsidiaries
and Management Entities, NHP Interests (V-1) $ ____________
Carrying Value of all assets owned by the REIT,
the Company, and their Subsidiaries (V-2) $ ____________
Covenant compliance? Item (V-2) minus Item (V-1)
must not exceed 25% of Item (V-2) (W) _________ (yes or no?)
A-12
<PAGE>
SCHEDULE 2
to Compliance Certificate
DEFAULTS; EVENTS OF DEFAULT
____________, 199_
Condition(s) or event(s) constituting a Default or Event of Default: ___________
________________________________________________________________________________
PERIOD OF EXISTENCE:
Remedial actions taken or proposed to be taken with respect to each such
Default or Event of Default: ___________________________________________________
A-13
<PAGE>
EXHIBIT B
(to Payment Guaranty for Acquisition Sub Credit Agreement)
FORM OF
JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "Joinder Agreement") is made and dated as of
____________, 19__ by __________________________________________________________
_____________________________________________ (the "Additional Guarantor").
RECITALS
A. The Additional Guarantor desires to become a "Guarantor" under (1)
that certain Payment Guarantor dated as of May 5, 1997 (as amended, extended
and restated from time to time, the "Guaranty"), delivered by Apartment
Investment and Management Company, AIMCO Properties, L.P. and certain other
guarantors in favor of Bank of America National Trust and Savings
Association, as the Agent and the lenders party to that certain Credit
Agreement (Acquisition Sub Facility), dated as of May 5, 1997. Capitalized
terms not otherwise defined herein shall have the meanings set forth in the
Guaranty.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
AGREEMENT
1. The Additional Guarantor hereby acknowledges and agrees that from and
after the date hereof, it will be a "Guarantor" under the Guarantor
with all the liabilities, duties and obligations of a Guarantor
thereunder, as fully as if the Additional Guarantor shall have been
named originally as a Guarantor therein. Additional Guarantor expressly
consents to all of the waivers set forth in the Guaranty, including
without limitation, those set forth in Articles III and IV of the
Guaranty.
2. Additional Guarantor assumes and agrees that it will perform in
accordance with their terms all of the obligations which by the terms
of the Guarantor are required to be performed by it as a Guarantor. No
reduction in the liability of any existing Guarantor shall result from
this Joinder Agreement, it being understood, acknowledged and agreed
that the liability of all Guarantors, including the Additional
Guarantor, shall be joint and several.
3. Prior to the date hereof, Additional Guarantor investigated the
financial condition and business operations of Acquisition Sub and
such other matters as Additional
1
<PAGE>
Guarantor deemed appropriate to assure itself of Acquisition Sub's
ability to discharge its obligations under the Loan Documents.
Additional Guarantor assumes full responsibility for that due
diligence, as well as for keeping informed of all matters which may
affect Acquisition Sub's ability to pay and perform its obligations
to the Agent and the Lenders. Neither Agent nor any Lender has any
duty to disclose to Additional Guarantor any information which such
party may have or receive about Acquisition Sub's financial condition,
business operations, or any other circumstances bearing on its ability
to perform.
4. Additional Guarantor represents and warrants all of the representation
and warranties set forth in the Guaranty with respect to each Guarantor
or Guarantor Subsidiary are true, correct and complete with respect to
it as of the date hereof.
5. Additional Guarantor hereby agrees to execute and deliver such other
instruments, and take such other action, as the Agent or any Lender
may reasonably request in connection with the transactions contemplated
by this Joinder Agreement.
6. Any amendment or waiver of any provision of this Joinder Agreement
shall be in writing and signed by the parties hereto. No failure or
delay by either party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof and any waiver
of any breach of the provisions of this Joinder Agreement shall be
without prejudice to any rights with respect to any other or further
breach thereof.
7. This Agreement may be executed in any number of counterparts and all
of such counterparts taken together shall be deemed to constitute one
and the same instrument.
8. This Joinder Agreement shall be deemed part of the Guaranty and all of
the terms and provisions of the Guaranty are incorporated herein by
reference.
9. The Domestic Lending Office of the Additional Guarantor shall initially
be as set forth beneath its signature below.
EXECUTED as of the date and year first above written.
ADDITIONAL GUARANTOR: [ NAME ]
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By:
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Title:
----------------------------------
Address:
--------------------------------
Attn:
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PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT ("Pledge Agreement") is made and dated as of this
5th day of May, 1997, by AIMCO Properties L.P., a Delaware limited
partnership ("AIMCO") and Terry Considine and Peter K. Kompaniez (each, a
"Common Stockholder," and collectively, the "Common Stockholders"; AIMCO and
the Common Stockholders are individually and collectively referred to herein
as "Pledgor") and Bank of America National Trust and Savings Association, a
national banking association ("BofA"), as Agent ("Secured Party") for BofA,
Smith Barney Mortgage Capital Group, Inc., a Delaware corporation and the
other lenders ("Lenders") from time to time party to the Acquisition Sub
Credit Agreement described below. Capitalized terms used but not defined
herein shall have the meanings set forth in the Guaranty described below or,
if not defined therein, in such Acquisition Sub Credit Agreement.
RECITALS
A. The Lenders have extended credit to or for the benefit of AIMCO/NHP
Holdings, Inc., a Delaware corporation ("Acquisition Sub"), on the terms and
subject to the conditions set forth in the Acquisition Sub Credit Agreement,
dated as of May 5, 1997 (as amended, modified, waived or replaced from time
to time, the "Acquisition Sub Credit Agreement") under which the Lenders have
committed to make available to the Acquisition Sub a credit facility of up to
$76,000,000. Secured Party is the agent for the Lenders.
B. AIMCO and Apartment Investment and Management Company, a Maryland
corporation (the "REIT") (individually, a "Guarantor" and collectively, the
"Guarantors") have guarantied the obligations of Acquisition Sub pursuant to
a Payment Guaranty, dated as of May 5, 1997 (the "Guaranty"). Pledgor has
agreed to pledge and to grant to Secured Party a security interest in and
lien upon the Collateral (as defined in Paragraph 2 below) as security for
all Obligations (as defined in Paragraph 3 below), for the ratable benefit of
the Lenders.
C. Pledgor is the owner of Stock in Acquisition Sub, consisting of the
interests described on SCHEDULE 1 attached hereto.
NOW, THEREFORE, in consideration of the above Recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Pledgor hereby agrees as follows:
AGREEMENT
1. GRANT OF SECURITY INTEREST. Pledgor hereby pledges and grants to
Secured Party a security interest in the property described in Paragraph 2
below (collectively and severally, the "Collateral") to secure payment and
performance of the Obligations.
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2. COLLATERAL. The Collateral shall consist of the following, whether
now existing or hereafter arising:
(a) SECURITIES. All shares of capital stock or other equity or
beneficial interests in the Acquisition Sub held by Pledgor, including,
without limitation, the stock described on SCHEDULE 1 attached hereto, all
related securities, warrants, options or rights to receive any capital stock
or other equity or beneficial interests, and any interest of Pledgor in the
entries of on the books of any financial intermediary pertaining thereto. All
of the foregoing are collectively referred to herein as the "Pledged Stock";
(b) CERTIFICATES. All certificates (including, without limitation,
any certificate representing a stock dividend or a distribution in connection
with any reclassification, increase or reduction of capital, or issued in
connection with any reorganization), options or rights, whether as an
addition to, in substitution of, as evidence of, or in exchange for, any of
the Pledged Stock;
(c) ADDITIONAL SHARES. All additional shares of, and all
securities convertible into and warrants, options and other rights to
purchase or otherwise acquire, stock of any issuer of the Pledged Stock from
time to time acquired by Pledgor in any manner (which shares shall be deemed
to be part of the Pledged Stock), the certificates or other instruments
representing such additional shares, securities, warrants, options or other
rights and any interest of Pledgor in the entries on the books of any
financial intermediary pertaining to such additional shares, and all
dividends, cash, warrants, rights, instruments and other property or proceeds
from time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of such additional shares, securities,
warrants, options or other rights;
(d) DISTRIBUTIONS, DIVIDENDS. ETC. All rights of Pledgor as a
shareholder or other holder of any equity or beneficial interest in the
Acquisition Sub, including, without limitation, all management and voting
rights, all rights to distributions, dividends, the payment of money or the
distribution of other property from the Acquisition Sub (including, without
limitation, all rights to receive profits or surplus of, or other
distributions or compensation by way of income, return of capital or any
liquidating or other distribution from the Acquisition Sub and whether such
distributions or payments are on account of Pledgor's interest as a
shareholder or other holder of any equity or beneficial interest in the
Acquisition Sub, as a creditor of the Acquisition Sub, or otherwise), and all
rights to the assets of the Acquisition Sub held by Pledgor or accruing to
Pledgor under the Organizational Documents for the Acquisition Sub or under
applicable law. All such rights are collectively referred to as the "Pledged
Rights";
(e) BOOKS AND RECORDS. All present and future books and records
relating to the Collateral to the extent Pledgor has rights therein,
including, without limitation, books of account and ledgers of every kind and
nature, all electronically recorded data relating to the Collateral or the
business thereof, all receptacles and containers for such records, and all
files and correspondence relating thereto; and
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(f) PROCEEDS. All proceeds of the foregoing Collateral. For
purposes of this Pledge Agreement, the term "proceeds" includes whatever is
receivable or received when Collateral or proceeds is sold, collected,
exchanged or otherwise disposed of, whether such disposition is voluntary or
involuntary, and includes, without limitation, all rights to payment,
including return premiums, with respect to any insurance relating thereto.
Nothing contained herein shall be deemed to render Secured Party or
any Lender responsible for any liabilities or obligations of Pledgor with
respect to the Pledged Stock or any other portion of the Collateral.
3. OBLIGATIONS. The obligations secured by this Pledge Agreement shall
consist of all obligations and liabilities, whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise
(including the payment of amounts that would become due but for the operation
of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
Section 362(a) or any successor provision), of all obligations and
liabilities of every nature of the Guarantors under the Guaranty, whether now
or hereafter existing, and all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to any of the Guarantors,
would accrue on such obligations), fees, expenses, indemnities or otherwise,
whether voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owned with others, and
whether or not from time to time decreased or extinguished and later
increased, created or incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Secured Party or any Lender
as a preference, fraudulent transfer or otherwise (all such obligations and
liabilities being the "Underlying Debt"), and all obligations of every nature
of Pledgor now or hereafter existing under this Pledge Agreement (all such
obligations of Pledgor, together with the Underlying Debt, being the
"Obligations").
4. REPRESENTATIONS AND WARRANTIES. Pledgor hereby represents, warrants
and covenants with Secured Party that:
(a) OWNERSHIP OF COLLATERAL. Pledgor is the sole owner of and has
good title to the Collateral (or, in the case of after-acquired Collateral,
at the time Pledgor acquires rights in the Collateral, will be the owner
thereof) and is the record and beneficial owner of the Pledged Stock included
in the Collateral described on SCHEDULE 1.
(b) PERFECTION AND PRIORITY. The pledge of the Collateral pursuant
to this Agreement creates (together with (i) the delivery to Secured Party of
all stock certificates representing the Pledged Stock, and (ii) filing of
Uniform Commercial code financing statements with the Secretary of State of
Colorado (and, in the case of Peter Kompaniez, California) a valid and
perfected first priority security interest in the Collateral, securing the
payment of the Obligations. Except for the security interests in favor of
Secured Party hereunder, no Person has (or, in the case of after-acquired
Collateral, at the time Pledgor acquires rights therein, will have)
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any right, title, claim or interest (by way of security interest or other
lien or charge) in, against or to the Collateral.
(c) ACCURACY OF INFORMATION. All information heretofore, herein or
hereafter supplied to Secured Party by or on behalf of Pledgor with respect
to the Collateral is or will be true and correct.
(d) DELIVERY OF DOCUMENTS. ETC. Pledgor has delivered to Secured
Party (i) true and correct copies of the Organizational Documents for the
Acquisition Sub, (ii) all instruments, documents, chattel paper and other
items of Collateral in which a security interest is or may be perfected by
possession, and (iii) any certificated Pledged Stock together with such
additional writings, including, without limitation, assignments and stock
powers, with respect thereto as Secured Party shall have requested.
(e) PLEDGED SHARES. The Pledged Stock has been validly issued and
is fully paid and nonassessable; and there are no outstanding options,
warrants or other agreements with respect thereto. The Pledged Stock
constitutes all of the issued and outstanding shares of capital stock and the
equity and beneficial interests in the Acquisition Sub.
(f) ORGANIZATIONAL DOCUMENTS. The terms of the Organizational
Documents for the Acquisition Sub have not been modified or waived in any
respect from such documents delivered to Secured Party pursuant to Section
4(d)(i) above.
(g) SET-OFF. Neither the Acquisition Sub nor any of the other
shareholders, partners, members or other holders of equity or beneficial
interests in the Acquisition Sub has any defense, set-off, claim or
counterclaim against Pledgor which can be asserted against Secured Party,
whether in any proceeding to enforce Secured Party's rights in the Collateral
or otherwise.
(h) NO DEFAULT. There is no default by Pledgor under the
Organizational Documents for the Acquisition Sub nor has any event occurred
which, with the passage of time or giving of notice, or both, would
constitute a default thereunder.
5. COVENANTS AND AGREEMENTS OF PLEDGOR. In addition to all covenants
and agreements of Pledgor set forth in any other agreement with Secured
Party, which are incorporated herein by this reference, Pledgor hereby agrees:
(a) MAINTENANCE OF COLLATERAL. Pledgor agrees to do all acts that
may be necessary to maintain, preserve and protect the Collateral.
(b) USE OF COLLATERAL. Pledgor agrees not to use or permit any
Collateral to be used unlawfully or in violation of any provision of the
Guaranty, or any applicable statute, regulation or ordinance covering the
Collateral.
(c) TAXES. Pledgor agrees to pay all taxes, assessments, charges,
encumbrances and liens now or hereafter imposed upon or affecting any
Collateral prior to the
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time the same become delinquent, except for those being contested in good
faith by appropriate proceedings and for which the Pledgor has provided
adequate reserves.
(d) FINANCING STATEMENTS. Pledgor agrees to procure, execute and
deliver from time to time any endorsements, assignments, financing statements
and other writings reasonably deemed necessary or appropriate by Secured
Party to perfect, maintain and protect its security interest hereunder and
the priority thereof and to deliver promptly to Secured Party all originals
of Collateral or proceeds consisting of chattel paper or instruments.
(e) ACTIONS. Pledgor agrees to appear in and defend any action or
proceeding which may affect its title to or Secured Party's interest in the
Collateral.
(f) USE OF PROCEEDS. Pledgor agrees, if the Lenders give value to
enable Pledgor to acquire rights in or the use of any Collateral, to use such
value for such purpose.
(g) RECORDS. Pledgor agrees to keep separate, accurate and complete
records of the Collateral and to provide Secured Party with such records and
such other reports and information relating to the Collateral as Secured
Party may reasonably request from time to time.
(h) SALE OR ENCUMBRANCE. Except as permitted under Section 7.07 of
the Acquisition Sub Credit Agreement, Pledgor agrees not to surrender or lose
possession of (other than to Secured Party), sell, encumber, or otherwise
dispose of or transfer any Collateral or right or interest therein and,
notwithstanding any provision of the Organizational Documents, to keep the
Collateral free of all levies and security interests or other Liens, charges,
preferences or priorities, except those approved in writing by Secured Party.
(i) PROCEEDS. Pledgor agrees to account fully for and promptly
deliver to Secured Party, in the form received, all proceeds of the
Collateral received, endorsed to Secured Party as appropriate, and until so
delivered all proceeds shall be held by Pledgor in trust for Secured Party,
separate from all other property of Pledgor and identified as the property of
Secured Party.
(j) LOCATION OF RECORDS. Pledgor agrees to keep the records
concerning the Collateral at the location set forth in Section 24 below and
not to remove the records concerning the Collateral from such location
without the prior written consent of Secured Party.
(k) DISSOLUTION. Except as permitted under Section 7.07 of the
Acquisition Sub Credit Agreement, Pledgor agrees not to permit or take any
action to dissolve or terminate the Acquisition Sub.
(l) COMPLIANCE WITH LAWS. To comply with all laws, regulations and
ordinances relating to the possession, operation, maintenance and control of
the Collateral.
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(m) SAFEKEEPING. That such care as Secured Party gives to the
safekeeping of its own property of like kind shall constitute reasonable care
of such Collateral when in Secured Party's possession.
(n) PAYMENT OF SECURED PARTY'S COSTS AND EXPENSES. To reimburse
Secured Party upon demand for any reasonable costs and expenses, including,
without limitation, reasonable attorneys' fees, Secured Party may incur while
exercising any right, power or remedy provided by this Pledge Agreement or by
law, all of which costs and expenses are included in the Obligations secured
hereby.
(o) NOTICE OF CHANGES. To give Secured Party thirty (30) days prior
written notice of any change in Pledgor's residence or chief place of
business or legal name or trade name(s) or style(s) set forth in Section 24
of this Pledge Agreement.
(p) DIVIDENDS ON PLEDGED RIGHTS AND PLEDGED STOCK. To account fully
for and promptly deliver to Secured Party, as additional Collateral
hereunder, in the form received, any dividend or any other distribution on
account of its Pledged Rights and Pledged Stock, if any, whether in cash,
securities or property by way of stock-split, spin-off, split-up or
reclassification, combination of shares or the like, or in case of any
reorganization, consolidation or merger. Pledgor further agrees that it will,
upon obtaining any additional shares of stock or other securities of the
Acquisition Sub referred to in Section 1(c), promptly (and in any event
within five Business Days) deliver to Secured Party a Pledge Amendment, duly
executed by Pledgor, in substantially the form of EXHIBIT A annexed hereto (a
"Pledge Amendment"), in respect of the additional Pledged Stock to be pledged
pursuant to this Pledge Agreement. Pledgor hereby authorizes Secured Party to
attach each Pledge Amendment to this Pledge Agreement and agrees that all
Pledged Stock listed on any Pledge Amendment delivered to Secured Party shall
for all purposes hereunder be considered Collateral; PROVIDED that the
failure of Pledgor to execute a Pledge Amendment with respect to any
additional Pledged Stock pledged pursuant to this Pledge Agreement shall not
impair the security interest of Secured Party therein or otherwise adversely
affect the rights and remedies of Secured Party hereunder with respect thereto.
(q) AMENDMENT OF ORGANIZATIONAL DOCUMENTS. Not to amend or permit
the amendment of the articles of incorporation, by-laws or other
Organizational Documents of the Acquisition Sub.
(r) COMPLIANCE WITH ACQUISITION SUB CREDIT AGREEMENT. To cause the
Acquisition Sub to comply with all the terms of the Acquisition Sub Credit
Agreement.
6. AUTHORIZED ACTION BY SECURED PARTY.
(a) Pledgor hereby agrees that from time to time, without
presentment, notice or demand, and without affecting or impairing in any way
the rights of Secured Party with respect to the Collateral, the obligations
of Pledgor hereunder or the Obligations, Secured Party may, but shall not be
obligated to and shall incur no liability to Pledgor or any third party for
failure to take any act which Pledgor is obligated by this Pledge Agreement
to do, during the
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existence of an Event of Default, exercise such rights and powers as Pledgor
might exercise with respect to the Collateral, and Pledgor hereby irrevocably
appoints Secured Party as its attorney-in-fact to, during the existence of an
Event of Default, exercise such rights and powers, including without
limitation: (i) collect by legal proceedings or otherwise and endorse,
receive and receipt for all dividends, interest, payments, proceeds and other
sums and property now or hereafter payable on or on account of the
Collateral; (ii) enter into any extension, reorganization, deposit, merger,
consolidation or other agreement pertaining, or deposit, surrender, accept,
hold or apply other property in exchange for the Collateral; (iii) insure,
process and preserve the Collateral; (iv) transfer the Collateral to its own
or its nominee's name; (v) make any compromise or settlement, and take any
action it deems advisable, with respect to the Collateral; and (vi) to notify
any account pledgor on any Collateral to make payment directly to Secured
Party.
(b) So long as no Event of Default shall have occurred and be
continuing:
(i) Pledgor shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Collateral or any part thereof
for any purpose not inconsistent with the terms of this Pledge Agreement;
PROVIDED, HOWEVER, that Pledgor shall give Secured Party at least 10 Business
Days' prior written notice with respect to any shareholder vote with respect
to any act or undertaking which, if effected, would have a Material Adverse
Effect or would violate the Credit Agreement; and
(ii) Secured Party shall promptly execute and deliver (or cause
to be executed and delivered) to Pledgor all such proxies and other
instruments as Pledgor may from time to time reasonably request for the
purpose of enabling Pledgor to exercise the voting and other consensual
rights which it is entitled to exercise pursuant to paragraph (i) above.
(c) Upon the occurrence and during the continuation of an Event of
Default, and upon written notice from Secured Party to Pledgor, all rights of
Pledgor to exercise the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to Section 6(b)(i) shall cease,
and all such rights shall thereupon become vested in Secured Party who shall
thereupon have the sole right to exercise such voting and other consensual
rights;
(d) In order to permit Secured Party to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant to
Section(6)(c)(i) and to receive all dividends and other distributions which
it is entitled to receive hereunder, (i) Pledgor shall promptly execute and
deliver (or cause to be executed and delivered) to Secured Party all such
proxies, dividend payment orders and other instruments as Secured Party may
from time to time reasonably request and (ii) without limiting the effect of
the immediately preceding clause (i), Pledgor hereby grants to Secured Party
an irrevocable proxy to vote the Pledged Stock and to exercise all other
rights, powers, privileges and remedies to which a holder of the Pledged
Stock would be entitled (including, without limitation, giving or withholding
written consents of shareholders, calling special meetings of shareholders
and voting at such meetings), which proxy shall be effective, automatically
and without the necessity of any action (including any transfer of any
Pledged Stock on the record books of the issuer thereof) by any other Person
(including
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the issue of the Pledged Stock or any officer or agent thereof), upon the
occurrence and during the continuance of an Event of Default and which proxy
shall only terminate upon the payment in full of the Obligations.
7. DEFAULT. The occurrence of any Guarantor Event of Default shall
constitute an Event of Default hereunder.
8. REMEDIES. Upon the occurrence and during the continuance of any such
Event of Default, provided that Guarantor shall then be obligated to pay all
sums then due and owing on the Guarantied Indebtedness in accordance with
Section 2.01(b) of the Guaranty, Secured Party may, at its option, and,
without notice to or demand on Pledgor and in addition to all rights and
remedies available to Secured Party under any other agreement do any one or
more of the following:
(a) GENERAL ENFORCEMENT. Foreclose or otherwise enforce Secured
Party's security interest in any manner permitted by law, or provided for in
this Pledge Agreement;
(b) SALE, ETC. Sell, lease or otherwise dispose of any Collateral
at one or more public or private sales at Secured Party's place of business
or any other place or places, including, without limitation, any broker's
board or securities exchange, whether or not such Collateral is present at
the place of sale, for cash or credit or future delivery, on such terms and
in such manner as Secured Party may determine;
(c) COSTS OF REMEDIES. Recover from Pledgor all costs and expenses,
including, without limitation, reasonable attorneys' fees, incurred or paid
by Secured Party in exercising any right, power or remedy provided by this
Pledge Agreement or by law with respect to the Collateral;
(d) ASSEMBLY OF COLLATERAL. Require Pledgor to assemble the
Collateral and make it available to Secured Party at a place to be designated
by Secured Party;
(e) TAKE POSSESSION OF COLLATERAL. Enter onto property where
Collateral is located and take possession thereof with or without judicial
process. Pledgor expressly waives any constitutional or other right to a
judicial hearing prior to the time Secured Party takes possession of the
Collateral upon default as provided herein;
(f) VOTE OF PLEDGED STOCK. Vote or consent, and in connection
therewith Pledgor grants to Secured Party a proxy to vote or to consent, with
respect to Pledged Stock or Pledged Rights;
(g) MANNER OF SALE OF PLEDGED STOCK. Restrict the prospective
bidders or purchasers of Pledged Stock or Pledged Rights to persons or
entities who (i) will represent and agree that they are purchasing for their
own account, for investment, and not with a view to the distribution or sale
of any of the Pledged Stock or Pledged Rights; and (ii) satisfy the offeree
and purchaser requirements for a valid private placement transaction under
Section 4(2) of the
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Securities Act of 1933, as amended (the "Act"), and under all applicable
Securities and Exchange Commission releases, rules and regulations. Pledgor
agrees that disposition of any of the Pledged Stock or Pledged Rights, if
any, pursuant to any private sale made as provided above may be at prices and
on other terms less favorable than if the Pledged Stock or Pledged Rights
were sold at public sale, and that Secured Party has no obligation to delay
the sale of any Pledged Stock or Pledged Rights for public sale under the
Act. Pledgor agrees that a private sale or sales made under the foregoing
circumstances shall be deemed to have been made in a commercially reasonable
manner. In the event that Secured Party elects to sell the Pledged Stock or
Pledged Rights, or part of them, and there is a public market for the Pledged
Stock or Pledged Rights, in a public sale, Pledgor shall, upon demand by
Secured Party, use its best efforts to register and qualify the Pledged Stock
and/or Pledged Rights, under the Act and all state Blue Sky or securities
laws required by the proposed terms of sale, and all expenses thereof shall
be payable by Pledgor, including, but not limited to, all costs of (i)
registration or qualification of, under the Act or any state Blue Sky or
securities laws or pursuant to any applicable rule or regulation issued
pursuant thereto, any Pledged Stock or Pledged Rights, and (ii) sale of such
Pledged Shares, including, but not limited to, brokers' or underwriters'
commissions, fees or discounts, accounting and legal fees, costs of printing
and other expenses of transfer and sale. If any consent, approval or
authorization of any state, municipal or other governmental department,
agency or authority shall be necessary to effectuate any sale or other
disposition of Pledged Stock or Pledged Rights, or any part thereof, Pledgor
will execute such applications and other instruments as may be required in
connection with securing any such consent, approval or authorization, and
will otherwise use its best efforts to secure the same;
(h) MANNER OF SALE OF COLLATERAL OTHER THAN PLEDGED STOCK. Pledgor
shall be given five (5) business days' prior notice of the time and place of
any public sale or of the time after which any private sale or other intended
disposition of the Collateral other than Pledged Stock is to be made, which
notice Pledgor hereby agrees shall be deemed reasonable notice thereof; and
(i) APPLICATION OF RECEIPTS. Secured Party shall apply all sums
received or collected from or on account of the Collateral, including,
without limitation, the proceeds of any sale thereof, to the payment of the
costs and expenses incurred in preserving and enforcing the rights of Secured
Party in effecting a sale of such Collateral (including, without limitation,
reasonable attorneys' fees and legal expenses, including fees and expenses of
in-house counsel) and to the payment of the Obligations in such order and
manner as Secured Party, in its sole discretion, elects.
9. DELIVER TO AND RIGHTS OF PURCHASER. Upon any sale or other
disposition pursuant to this Pledge Agreement, Secured Party shall have the
right to deliver, assign and transfer to the purchaser thereof the Collateral
or portion thereof so sold or disposed of. Each purchaser at any such sale or
other disposition (including Secured Party) shall hold the Collateral free
from any claim or right of whatever kind, including any equity or right of
redemption of Pledgor, and Pledgor specifically waives (to the extent
permitted by law), upon any such sale or disposition pursuant to this Pledge
Agreement, all rights of redemption, stay or appraisal which it has or may
have under any rule of law or statute now existing or hereafter adopted.
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10. COLLECTION OF COLLATERAL PAYMENTS.
(a) COLLECTION OF PAYMENTS. Pledgor shall, at its sole cost and
expense, take all reasonable and necessary action to obtain payment, when due
and payable, of all sums due or to become due with respect to any Collateral
("Collateral Payments" or a "Collateral Payment"), including, without
limitation, the taking of such action with respect thereto as Secured Party
may request, or, in the absence of such request, as Pledgor may reasonably
deem advisable; provided, however, that Pledgor shall not, without the prior
written consent of Secured Party, grant or agree to any rebate, refund,
compromise or extension with respect to any Collateral Payment. Upon the
request of Secured Party, Pledgor will notify and direct any account pledgor
who is or might become obligated to make any Collateral Payment, to make
payment thereof to Secured Party (or to Pledgor in care of Secured Party) at
such address as Secured Party may designate. Pledgor will reimburse Secured
Party promptly upon demand for all out-of-pocket costs and expenses,
including reasonable attorneys' fees and litigation expenses, incurred by
Secured Party in seeking to collect its Collateral Payment.
(b) PAYMENTS IN TRUST. Upon the request of Secured Party, Pledgor
will, forthwith upon receipt, transmit and deliver to Secured Party, in the
form received, all cash, checks, drafts and other instruments for the payment
of money (properly endorsed where required so that such items may be
collected by Secured Party) which may be received by Pledgor at any time as
payment on account of any Collateral Payment and if such request shall be
made, until delivery to Secured Party, such items will be held in trust for
Secured Party and will not be commingled by Pledgor with any of its other
funds or property. Thereafter, Secured Party is hereby authorized and
empowered to endorse the name of Pledgor on any check, draft or other
instrument for the payment of money received by Secured Party on account of
any Collateral Payment if Secured Party believes such endorsement is
necessary or desirable for purposes of collection.
(c) INDEMNIFICATION. Pledgor hereby indemnifies and saves harmless
Secured Party and its agents, officers and employees from and against all
liabilities and reasonable expenses on account of any adverse claim asserted
against Secured Party relating to any moneys received by Secured Party on
account of any of Pledgor's Collateral Payments and such obligation of
Pledgor shall continue in effect after and notwithstanding the discharge of
the Obligations and the release of the security interest granted in Paragraph
1 above.
11. STANDARD OF CARE. The powers conferred on Secured Party hereunder
are solely to protect its interest in the Collateral and shall not impose any
duty upon it to exercise any such powers. Except for the exercise of
reasonable care in the custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, Secured Party shall
have no duty as to any Collateral, it being understood that Secured Party
shall have no responsibility for (a) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other
matters relating to any Collateral, whether or not Secured Party has or is
deemed to have knowledge of such matters, (b) taking any necessary steps
(other than steps taken in accordance with the standard of care set forth
above to maintain possession of the Collateral) to preserve rights against
any parties with respect to any Collateral, (c) taking any
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<PAGE>
necessary steps to collect or realize upon the Obligations or any guarantee
therefor, or any part thereof, or any of the Collateral, or (d) initiating
any action to protect the Collateral against the possibility of a decline in
market value. Secured Party shall be deemed to have exercised reasonable care
in the custody and preservation of Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which Secured
Party accords its own property consisting of negotiable securities.
12. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS. This Pledge
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the payment in full of all
Obligations and the cancellation or termination of the Commitments, (b) be
binding upon Pledgor, its successors and assigns, and (c) inure, together
with the rights and remedies of Secured Party hereunder, to the benefit of
Secured Party and its successors, transferees and assigns. Without limiting
the generality of the foregoing clause (c), but subject to the provisions of
Section 10.08 of the Credit Agreement, any Lender may assign or otherwise
transfer any Loans held by it to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof
granted to Lenders herein or otherwise. Upon the payment in full of
Obligations, the cancellation or termination of the Commitments, the security
interest granted hereby shall terminate and all rights to the Collateral
shall revert to Pledgor. Upon any such termination Secured Party will, at
Pledgor's expense, execute and deliver to Pledgor such documents as Pledgor
shall reasonably request to evidence such termination and Pledgor shall be
entitled to the return, upon its request and at its expense, against receipt
and without recourse to Secured Party, of such of the Collateral as shall not
have been sold or otherwise applied pursuant to the terms hereof.
13. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured Party
hereunder by Lenders, Secured Party shall be obligated, and shall have the
right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of Collateral),
solely in accordance with this Pledge Agreement and the Credit Pledge
Agreement.
(b) Secured Party shall at all times be the same Person that is
Agent under the Acquisition Sub Credit Agreement. Written notice of
resignation by Agent pursuant to Article IX of the Acquisition Sub Credit
Agreement shall also constitute notice of resignation as Secured Party under
this Pledge Agreement; removal of Agent pursuant to Article IX of the
Acquisition Sub Credit Agreement shall also constitute removal as Secured
Party under this Pledge Agreement; and appointment of a successor Agent
pursuant to Article IX of the Acquisition Sub Credit Agreement shall also
constitute appointment of a successor Secured Party under this Pledge
Agreement. Upon the acceptance of any appointment as Agent under Article IX
of the Acquisition Sub Credit Agreement by a successor Agent, that successor
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring or removed Secured Party under
this Pledge Agreement, and the retiring or removed Secured Party under this
Pledge Agreement shall promptly (i) transfer to such successor Secured Party
all sums, securities and other items of Collateral held hereunder, together
with all records
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and other documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under this Pledge
Agreement, and (ii) execute and deliver to such successor Secured Party such
amendments to financing statements, and take such other actions, as may be
necessary to appropriate in connection with the assignment to such successor
Secured Party of the security interests created hereunder, whereupon such
retiring or removed Secured Party shall be discharged from its duties and
obligations under this Pledge Agreement. After any retiring or removed
Agent's resignation or removal hereunder as Secured Party, the provisions of
this Pledge Agreement shall insure to its benefit as to any actions taken or
omitted to be taken by it under this Pledge Agreement while it was Secured
Party hereunder.
14. CUMULATIVE RIGHTS. The rights, powers and remedies of Secured Party
under this Pledge Agreement shall be in addition to all rights, powers and
remedies given to Secured Party by virtue of any statute or rule of law, the
Acquisition Sub Credit Agreement, the Loan Documents, the Guaranty or any
other agreement, all of which rights, powers and remedies shall be cumulative
and may be exercised successively or concurrently without impairing Secured
Party's security interest in the Collateral.
15. WAIVER. Any waiver, forbearance or failure or delay by Secured Party
in exercising any right, power or remedy shall not preclude the further
exercise thereof, and every right, power or remedy of Secured Party shall
continue in full force and effect until such right, power or remedy is
specifically waived in a writing executed by Secured Party. Pledgor waives
any right to require Secured Party to proceed against any person or to
exhaust any Collateral or to pursue any remedy in Secured Party's power,
subject to the express provision of Section 2.01(b) of the Guaranty.
16. SETOFF. Pledgor agrees that Secured Party may exercise its rights of
setoff with respect to the Obligations in the same manner as if the
Obligations were unsecured.
17. BINDING UPON SUCCESSORS. All rights of each party hereto shall inure
to the benefit of its successors and assigns, and all obligations of each
party hereto shall bind its successors and assigns.
18. ENTIRE AGREEMENT; SEVERABILITY; COUNTERPARTS. This Pledge Agreement
contains the entire pledge agreement between Secured Party and Pledgor. If
any of the provisions of this Pledge Agreement shall be held invalid or
unenforceable, this Pledge Agreement shall be construed as if not containing
those provisions and the rights and obligations of the parties hereto shall
be construed and enforced accordingly. This Agreement may be executed in
counterparts all of which together shall constitute but one agreement.
19. CHOICE OF LAW. THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE
UNIFORM COMMERCIAL CODE PROVIDES THAT THE VALIDITY OR PERFECTION OF THE
SECURITY INTEREST HEREUNDER, OR REMEDIES
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<PAGE>
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS
OF A JURISDICTION OTHER THAN THE STATE OF CALIFORNIA. Unless otherwise
defined herein or in the Credit Pledge Agreement, terms used in Articles 8
and 9 of the Uniform Commercial Code in the State of California are used
herein as therein defined. Any disputes or claims relating to this Pledge
Agreement shall be resolved by arbitration in accordance with the terms and
conditions set forth in Section 10.17 of the Acquisition Sub Credit Agreement
and Section 9.01 of the Guaranty.
20. AMENDMENT. This Pledge Agreement may not be amended or modified
except by a writing signed by each of the parties hereto.
21. NOTICES. Communications provided for herein shall be in writing and
shall be delivered, mailed, postage prepaid or communicated in accordance
with the Acquisition Sub Credit Agreement.
22. ADDRESS; TRADE NAMES; RECORDS. The REIT represents that its chief
place of business is 1873 South Bellaire Street, Suite 1700, Denver,
Colorado, that "AIMCO" constitutes the only trade name or style used by the
REIT; and that the REIT's records concerning the Collateral are kept at the
REIT's chief place of business listed above. Each Common Stockholder
represents that its place of business is as follows: c/o Apartment Investment
and Management Company, 1873 South Bellaire Street, Suite 1700, Denver,
Colorado, and that its records concerning the Collateral are kept at 1873
South Bellaire St., Suite 1700, Denver, Colorado.
23. CAPTIONS. All captions used in this Pledge Agreement are for
convenience only and shall not affect the construction of this Pledge
Agreement.
24. MODIFICATIONS. No modification or amendment of this Pledge Agreement
shall be effective unless in writing and signed by the parties sought to be
charged or bound hereby.
25. PLEDGOR'S THIRD PARTY WAIVERS.
(a) RIGHTS OF SECURED PARTY. Pledgor authorizes Secured Party or
any Lender to perform any or all of the following acts at any time in its
sole discretion, all without notice to Pledgor, without affecting Pledgor's
obligations under this Pledge Agreement or any other Loan Documents and
without affecting the Liens and encumbrances against the Collateral in favor
of Secured Party:
(i) Secured Party or any Lender may alter any terms of the
Obligations or any part thereof, including renewing, compromising,
extending or accelerating, or otherwise changing the time for payment of,
or increasing or decreasing the rate of interest on, the Obligations or
any part thereof.
(ii) Secured Party or any Lender may take and hold security for
the Obligations, accept additional or substituted security, and
subordinate,
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exchange, enforce, waive, release, compromise, fail to perfect and sell or
otherwise dispose of any such security.
(iii) Secured Party or any Lender may direct the order and manner
of any sale of all or any part of any security now or later to be held for
the Obligations, and Secured Party or any Lender may also bid at any such
sale.
(iv) Secured Party or any Lender may apply any payments or
recoveries from Company, Pledgor, any Guaranty or any other source, and any
proceeds of any security, to the obligations under the Loan Documents and
the Obligations hereunder in such manner, order and priority as Secured
Party or such Lender may elect.
(v) Secured Party or any Lender may release any Guarantor of
its liability for the Obligations or any part thereof and the Acquisition
Sub of its liability under the Acquisition Sub Credit Agreement or the Loan
Documents or any part thereof.
(vi) Secured Party or any Lender may substitute, add or
release any one or more guarantors or endorsers.
(vii) In addition to the Obligations, Secured Party or any
Lender may extend other credit to the Acquisition Sub or any Guarantor, and
may take and hold security for the credit so extended, all without affecting
Pledgor's liability hereunder and without affecting the liens and
encumbrances against the Collateral hereunder.
(b) ABSOLUTE OBLIGATIONS. Pledgor expressly agrees that until all
Obligations are paid and performed in full and each and every term, covenant
and condition of this Pledge Agreement to which Pledgor is a party is fully
performed, Pledgor shall not be released of its obligations, waivers and
agreements set forth herein nor shall the validity, enforceability or
priority of the liens and encumbrances against the Collateral in favor of
Secured Party be affected in any manner by or because of:
(i) Any act or event which might otherwise discharge, reduce,
limit or modify Pledgor's obligations hereunder or the liens and
encumbrances against the Collateral in favor of Secured Party;
(ii) Any waiver, extension, modification, forbearance, delay
or other act or omission of Secured Party or any Lender or any failure to
proceed promptly or otherwise as against the Acquisition Sub, any Guarantor,
Pledgor or any other Person or any security;
(iii) Any action, omission or circumstance which might increase
the likelihood that Secured Party or any Lender might enforce the rights
granted
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<PAGE>
under this Pledge Agreement or which might affect the rights or remedies of
Pledgor as against the Acquisition Sub or any Guarantor; or
(iv) Any dealings occurring at any time between the
Acquisition Sub or any Guarantor and Secured Party or any Lender, whether
relating to the Obligations or otherwise.
Pledgor hereby expressly waives and surrenders any defense to the
performance of the obligations under this Pledge Agreement or to the
enforcement of the liens and encumbrances against the Collateral in favor of
Secured Party based upon any of the foregoing acts, omissions, agreements,
waivers or matters described in this subsection. It is the purpose and intent
of this Pledge Agreement that the obligations of Pledgor under this Pledge
Agreement shall be absolute and unconditional under any and all circumstances.
(c) PLEDGOR'S WAIVERS. Pledgor waives:
(i) All statutes of limitations as a defense to any action or
proceeding brought against Pledgor or the Collateral by Secured Party or
any Lender, to the fullest extent permitted by law;
(ii) Any right it may have to require Secured Party or any
Lender to proceed against the Acquisition Sub, any Guarantor or any other
Person, proceed against or exhaust any security held from the Acquisition
Sub, any Guarantor or any Person, or pursue any other remedy in Secured
Party's or such Lender's power to pursue;
(iii) Any defense based on any claim that Pledgor's obligations
exceed or are more burdensome than those of any Guarantor or the
Acquisition Sub;
(iv) Any defense: (A) based on any legal disability of the
Acquisiton Sub or any Guarantor, (B) based on any release, discharge,
modification, impairment or limitation of the liability of the Acquisiton
Sub or any Guarantor to Secured Party or any Lender from any cause, whether
consented to by Secured Party or arising by operation of law, (C) arising
out of or able to be asserted as a result of any case, action or proceeding
before any court or other Governmental Authority relating to any Insolvency
Proceeding or (D) arising from any rejection or disaffirmance of the
Obligations, or any part thereof, or any security held therefor, in any such
Insolvency Proceeding;
(v) Any defense based on any action taken or omitted by
Secured Party or any Lender in any Insolvency Proceeding involving the
Acquisiton Sub or any Guarantor or any other Pledgor, including any
election to have Secured Party's or such Lender's claim allowed as being
secured, partially secured or unsecured, any extension of credit by Secured
Party or any Lender to the Acquisiton Sub or any Guarantor in any
Insolvency Proceeding, and the taking
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<PAGE>
and holding by Secured Party or such Lender of any security for any such
extension of credit;
(vi) All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices
of intention to accelerate, notices of acceleration, notices of acceptance
of this Pledge Agreement and of the existence, creation, or incurring of
new or additional indebtedness, and demands and notices of every kind; and
(vii) Any defense based on or arising out of any defense that
the Acquisiton Sub or any Guarantor or any of their affiliates may have to
the payment or performance of the Obligations.
(d) WAIVERS OF SUBROGATION AND OTHER RIGHTS.
(i) Upon any Event of Default, in its sole discretion,
without prior notice to or consent of Pledgor, Secured Party or any Lender
may elect to: (A) foreclose against any Collateral for the Obligations, (B)
accept a transfer of any such Collateral for the Obligations in lieu of
foreclosure, (C) compromise or adjust the Obligations or any part thereof
or make any other accommodation with any Guarantor or any Person, or (D)
exercise any other remedy against any Guarantor or any Collateral for the
Obligations. No such action by Secured Party or any Lender shall release or
limit Secured Party's or the Lenders' rights hereunder, even if the effect
of the action is to deprive Pledgor of any subrogation rights, rights of
indemnity, or other rights to collect reimbursement from any Guarantor or
any other Person for any sums paid to Secured Party or such Lender, whether
contractual or arising by operation of law or otherwise. Pledgor expressly
agrees that under no circumstances shall it be deemed to have any right,
title, interest or claim in or to any property to be held by Secured Party
or any third party after any foreclosure or transfer in lieu of foreclosure
of any security for the Obligations.
(ii) Regardless of whether Pledgor may have made any payments to
Secured Party, Pledgor forever waives: (A) all rights of subrogation, all
rights of indemnity, and any other rights to collect reimbursement from any
Guarantor on account of the Collateral encumbered by this Pledge Agreement,
whether contractual or arising by operation of law (including the United
States Bankruptcy Code or any successor or similar statute) or otherwise;
(B) all rights to enforce any remedy that Secured Party or any Lender may
have against any Guarantor or any Person granting collateral for the
Obligations; and (C) all rights to participate in any Collateral now or
later to be held by Secured Party.
(iii) Regardless of whether Pledgor may have made any payments to
Lender, Pledgor hereby absolutely, irrevocably and unconditionally, now and
forever, waives, releases and covenants not to sue Acquisition Sub or any
shareholder thereof in respect of: (i) all rights of restitution,
subrogation,
16
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exoneration, indemnification and contribution, all rights to collect
reimbursement and all other rights, howsoever denominated, to recover from
Acquisition Sub, any shareholder thereof any sums paid to Secured Party or
any Lender whether pursuant hereto or otherwise paid on the Underlying
Debt, and any other rights arising from the existence, payment, performance
or enforcement of Pledgor's obligations under this Pledge Agreement or any
Collateral Document, (ii) all rights to enforce any remedy that the Secured
Party or any Lender may have against Acquisition Sub, (iii) all rights to
participate in any security now or later to be held by Secured Party or any
Lender for the Underlying Indebtedness, and (iv) all rights to require
Acquisition Sub to perform the Underlying Indebtedness; in each case
whether now exiting existing or hereafter arising and whether contractual
or arising in equity, by statute, common law or otherwise by operation of
law (including the United States Bankruptcy Code or any successor or
similar statute) or otherwise. The foregoing waivers, releases and
covenants are a material part of the consideration to the Lenders for
extending the credit under the Acquisition Sub Credit Agreement to the
Acquisition Sub and may be enforced by and inure to the benefit of Secured
Party, each Lender, Acquisition Sub and its shareholders from time to time.
(e) REVIVAL AND REINSTATEMENT. If Secured Party or any Lender is
required to pay, return or restore to the Acquisition Sub, any Guarantor or
any other Person any amounts previously paid under the Loan Documents because
of any Insolvency Proceeding affecting the Acquisition Sub or any Guarantor
or any other reason, the obligations of Pledgor shall be reinstated and
revived and the rights of Secured Party and such Lender shall continue with
regard to such amounts, all as though they had never been paid.
(f) ELECTION OF REMEDIES. Without limiting the foregoing, Pledgor
waives all rights and defenses arising out of an election of remedies by the
Secured Party or any Lender even though that election of remedies has
destroyed the Pledgor's rights of subrogation and reimbursement against the
Acquisition Sub, any Guarantor or any other Pledgor by operation of law or
otherwise.
(g) ADDITIONAL OBLIGATIONS. Pledgor's obligations under this Pledge
Agreement are in addition to Pledgor's obligations under any other existing
or future agreements, each of which shall remain in full force and effect
until it is expressly modified or released in a writing signed by Secured
Party with any required consent of the Lenders. Secured Party may exercise
its remedies hereunder, without first proceeding against the Acquisition Sub,
any Guarantor, any other Person or any collateral that Secured Party may
hold, and without pursuing any other remedy. Secured Party's rights under
this Pledge Agreement shall not be exhausted by any action by Secured Party
until all Obligations have been paid and performed in full.
(h) CONSIDERATION. Pledgor acknowledges: that it expects to benefit
from the Lenders' extension of the credit under the Loan Documents to the
Acquisitioin Sub because of its relationship to the Acquisition Sub; that it
is receiving substantial benefits (which are reasonably equivalent
consideration for Pledgor's execution hereof) from the transaction of
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which that extension of indebtedness forms a part; and that it is executing
this Pledge Agreement in consideration of those benefits.
(g) INTER-CREDITOR PROVISIONS. As among the Agent and the Lenders
only, nothing contained in this Pledge Agreement shall limit any of the
approval rights of the Agent or the Lenders set forth in the Loan Documents.
26. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO THIS PLEDGE
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATES OF NEW YORK OR CALIFORNIA, AND BY EXECUTION AND
DELIVERY OF THIS PLEDGE AGREEMENT PLEDGOR ACCEPTS FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS PLEDGE AGREEMENT. Pledgor hereby
agrees that service of all process in any such proceeding in any such court
may be made by registered or certified mail, return receipt requested, to
Pledgor at its address provided in Section 24, such service being hereby
acknowledged by Pledgor to be sufficient for personal jurisdiction in any
action against Pledgor in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right
of Secured Party to bring proceedings against Pledgor in the courts of any
other jurisdiction.
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<PAGE>
EXECUTED as of this 5th day of May, 1997.
PLEDGOR:
AIMCO Properties L.P.,
a Delaware limited partnership
By: /s/ Peter K. Kompaniez
--------------------------------
Peter K. Kompaniez
Vice President
/s/ Peter K. Kompaniez
--------------------------------
Peter K. Kompaniez
SIGNATURES CONTINUED ON NEXT PAGE
19
<PAGE>
--------------------------------
Terry Considine
20
<PAGE>
SCHEDULE 1
The following shares of capital stock in AIMCO/NHP Holdings, Inc.:
- -------------------------------------------------------------------------------
Holder Description of Shares Par Value Quantity
- -------------------------------------------------------------------------------
AIMCO PROPERTIES, L.P., Series A Preferred $.01 95,000 shares
a Delaware limited Stock of AIMCO/NHP
partnership Holdings, Inc.
- -------------------------------------------------------------------------------
Terry Considine Common Stock of $.01 4,000 shares
AIMCO/NHP Holdings,
Inc.
- -------------------------------------------------------------------------------
Peter K. Kompaniez Common Stock of $.01 1,000 shares
AIMCO/NHP Holdings,
Inc.
- -------------------------------------------------------------------------------
<PAGE>
EXHIBIT A
PLEDGE AMENDMENT
This Pledge Amendment, dated_______________, 19__, is delivered pursuant
to Section 5(p) of the Pledge Agreement referred to below. The undersigned
hereby agree(s) that this Pledge Amendment may be attached to the Pledge
Agreement dated May 5, 1997, between the undersigned and Bank of America
National Trust and Savings Association, a national banking association, as
Agent, as Secured Party (the "Pledge Agreement"), and that the Pledged Shares
listed on this Pledge Amendment shall be deemed to be part of the Pledged
Stock and shall become part of the Collateral and shall secure payment and
performance of the Obligations.
PLEDGOR:
By
------------------------------------
- -------------------------------------------------------------------------------
Holder Description of Shares Par Value Quantity
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
Exhibit 10.6
Amended and Restated Credit Agreement
(Secured Revolver-to-Term Facility)
among
AIMCO Properties, L.P.,
a Delaware limited partnership,
Bank of America National Trust and Savings Association,
as the Agent,
and
Bank of America National Trust and Savings Association,
as the initial Lender
May 5, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.01 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.02 Other Definitional Provisions. . . . . . . . . . . . . . . . . . . . 29
1.03 Accounting Principles. . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE II THE FACILITY. . . . . . . . . . . . . . . . . . . . . . . . . 30
2.01 Amounts and Terms of Commitments . . . . . . . . . . . . . . . . . . 30
2.02 Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.03 Procedure for Borrowing. . . . . . . . . . . . . . . . . . . . . . . 34
2.04 Conversion and Continuation Elections. . . . . . . . . . . . . . . . 36
2.05 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . 37
2.06 Mandatory Prepayments of Loans; Mandatory Amortization and
Reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.07 Application of Proceeds. . . . . . . . . . . . . . . . . . . . . . . 39
2.08 Repayment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.09 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.10 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.11 Computation of Fees and Interest . . . . . . . . . . . . . . . . . . 41
2.12 Payments by the Company. . . . . . . . . . . . . . . . . . . . . . . 42
2.13 Security; Additions, Substitutions and Exclusions of Borrowing
Base Properties; Cash Collateral . . . . . . . . . . . . . . . . . . 42
2.14 Payments by the Lenders to the Agent . . . . . . . . . . . . . . . . 48
2.15 Sharing of Payments, Etc.. . . . . . . . . . . . . . . . . . . . . . 48
2.16 Participations Purchased by Lenders in the Letter of Credit
Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY . . . . . . . . . . . 50
3.01 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
3.02 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
3.03 Increased Costs and Reduction of Return. . . . . . . . . . . . . . . 53
3.04 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
3.05 Inability to Determine Rates . . . . . . . . . . . . . . . . . . . . 55
3.06 Certificates of Lender . . . . . . . . . . . . . . . . . . . . . . . 55
3.07 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE IV CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . 55
4.01 Conditions of First Loan . . . . . . . . . . . . . . . . . . . . . . 55
4.02 Conditions to Each Loan. . . . . . . . . . . . . . . . . . . . . . . 58
4.03 Conversion Conditions. . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE V REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 60
5.01 Existence and Power. . . . . . . . . . . . . . . . . . . . . . . . . 60
5.02 Authorization; No Conflict . . . . . . . . . . . . . . . . . . . . . 61
5.03 Governmental Authorization . . . . . . . . . . . . . . . . . . . . . 61
5.04 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
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5.05 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
5.06 Title to Properties. . . . . . . . . . . . . . . . . . . . . . . . . 62
5.07 Subsidiaries; Interests in Other Entities; Changes in
Organizational Structure . . . . . . . . . . . . . . . . . . . . . . 62
5.08 Financial Condition. . . . . . . . . . . . . . . . . . . . . . . . . 62
5.09 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
5.10 ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . 63
5.11 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . . 64
5.12 Collateral Documents . . . . . . . . . . . . . . . . . . . . . . . . 65
5.13 Regulated Entities . . . . . . . . . . . . . . . . . . . . . . . . . 65
5.14 Use of Proceeds; Margin Regulations. . . . . . . . . . . . . . . . . 65
5.15 REIT and Tax Status; Stock Exchange Listing. . . . . . . . . . . . . 66
5.16 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
5.17 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
5.18 [Intentionally Deleted.] . . . . . . . . . . . . . . . . . . . . . . 66
5.19 Not a "Foreign Person. . . . . . . . . . . . . . . . . . . . . . . . 66
5.20 Defects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
5.21 Property Documents . . . . . . . . . . . . . . . . . . . . . . . . . 66
5.22 Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
5.23 Violation of Laws; Permits . . . . . . . . . . . . . . . . . . . . . 67
5.24 Utilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
5.25 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
5.26 Full Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE VI AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . 68
6.01 Financial Information. . . . . . . . . . . . . . . . . . . . . . . . 68
6.02 Certificates; Other Information. . . . . . . . . . . . . . . . . . . 69
6.03 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
6.04 Preservation of Existence, Etc.. . . . . . . . . . . . . . . . . . . 72
6.05 Maintenance of Property. . . . . . . . . . . . . . . . . . . . . . . 72
6.06 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.07 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . 72
6.08 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . 73
6.09 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . 73
6.10 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . 73
6.11 Maintenance of REIT Status; Stock Exchange Listing . . . . . . . . . 73
6.12 Inspection of Property and Books and Records . . . . . . . . . . . . 73
6.13 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . 74
6.14 Communication with Accountants . . . . . . . . . . . . . . . . . . . 74
6.15 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
6.16 Covenants Relating to Borrowing Base Properties. . . . . . . . . . . 75
ARTICLE VII NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . 76
7.01 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
7.02 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
7.03 Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . 78
7.04 Lease Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . 78
7.05 Disposition of Properties. . . . . . . . . . . . . . . . . . . . . . 79
7.06 Consolidations and Mergers . . . . . . . . . . . . . . . . . . . . . 79
7.07 Liquidations; Changes in Structure; New Subsidiaries . . . . . . . . 80
7.08 Changes in Business Investments. . . . . . . . . . . . . . . . . . . 81
7.09 Restricted Payments and Demands. . . . . . . . . . . . . . . . . . . 82
7.10 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . 82
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7.11 Special Covenants Relating to the REIT . . . . . . . . . . . . . . . 82
7.12 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . 83
7.13 Taxation of the Company. . . . . . . . . . . . . . . . . . . . . . . 83
7.14 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
7.15 Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
7.16 Financial Covenants. . . . . . . . . . . . . . . . . . . . . . . . . 84
7.17 Accounting Changes . . . . . . . . . . . . . . . . . . . . . . . . . 84
7.18 Transfers of Non-Owned Interests in the Management Entities. . . . . 84
ARTICLE VIII EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . 84
8.01 Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . 84
8.02 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
8.03 Rights Not Exclusive . . . . . . . . . . . . . . . . . . . . . . . . 89
ARTICLE IX THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . 89
9.01 Appointment and Authorization. . . . . . . . . . . . . . . . . . . . 89
9.02 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . 90
9.03 Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . 90
9.04 Reliance by Agent. . . . . . . . . . . . . . . . . . . . . . . . . . 90
9.05 Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . . . 91
9.06 Credit Decision. . . . . . . . . . . . . . . . . . . . . . . . . . . 91
9.07 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . 91
9.08 Agent in Individual Capacity . . . . . . . . . . . . . . . . . . . . 92
9.09 Successor Agents . . . . . . . . . . . . . . . . . . . . . . . . . . 92
9.10 Collateral Matters . . . . . . . . . . . . . . . . . . . . . . . . . 93
ARTICLE X MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 93
10.01 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . . 93
10.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
10.03 No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . . . . . 95
10.04 Costs and Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 95
10.05 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
10.06 Marshalling; Payments Set Aside . . . . . . . . . . . . . . . . . . 96
10.07 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . 96
10.08 Assignments, Participations, etc. . . . . . . . . . . . . . . . . . 96
10.09 Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
10.10 Notification of Addresses, Lending Offices, Etc . . . . . . . . . . 99
10.11 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
10.12 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
10.13 No Third Parties Benefited. . . . . . . . . . . . . . . . . . . . . 99
10.14 Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
10.15 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . .100
10.16 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . . . .100
10.17 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . .100
10.18 Notice of Claims; Claims Bar. . . . . . . . . . . . . . . . . . . .101
10.19 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . .101
10.20 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . .101
10.21 Exculpation of Lenders. . . . . . . . . . . . . . . . . . . . . . .101
10.22 Relationship. . . . . . . . . . . . . . . . . . . . . . . . . . . .102
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AMENDED AND RESTATED CREDIT AGREEMENT
(Secured Revolver-To-Term Facility)
This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of May 5,
1997, among AIMCO PROPERTIES, L.P., a Delaware limited partnership (the
"Company"), the lenders from time to time party to this Agreement (the
"Lenders"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BofA"),
as one of the Lenders and as the Issuing Lender, and BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, as Agent (the "Agent").
A. Pursuant to that certain Credit Agreement, dated as of August 12,
1996, by and between BofA, as a lender and the agent, and the Company, as
amended (as so amended, the "Previous Credit Agreement"), BofA made available
to the Company a revolver-to-term credit facility in the amount of up to
Fifty Million Dollars ($50,000,000).
B. BofA, the Lenders and the Company desire to replace the Previous
Credit Agreement with this Agreement thereby making available to the Company
a revolver-to-term credit facility upon the terms and conditions set forth in
this Agreement. Upon the Closing Date (as defined below), the lending
commitments of any Lender to the Company under the Previous Credit Agreement
shall be cancelled.
C. As of the date hereof, the outstanding principal balance under the
Previous Credit Agreement is $52,180,261, and letters of credit have been
issued thereunder in the stated amount of $614,739.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01 DEFINED TERMS. In addition to the terms defined elsewhere in this
Agreement, the following terms have the following meanings:
"ACQUISITION SUB" means AIMCO/NHP Holdings, Inc., a Delaware corporation.
"ACQUISITION SUB FINANCING DOCUMENTS" means all documents evidencing,
securing or relating to credit facilities now or hereafter provided to the
Acquisition Sub, the Company, the REIT or any of their respective
Subsidiaries for purposes of
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financing the acquisition of all or any portion of the NHP Interests, and
shall include, without limitation that certain Credit Agreement, of even date
herewith, among the Acquisition Sub, BofA as the agent and a lender and Smith
Barney Mortgage Capital Group, Inc. as a lender, providing for a maximum
credit facility of up to $76,000,000, and that certain Payment Guaranty
delivered to such lender by the REIT and the Company pursuant thereto,
together with all amendments, extensions and renewals of any of the
foregoing, and all documents whereby the obligations of any Person other than
the lenders thereunder shall be assumed or guaranteed by any other Person
(whether or not the Company, the REIT or any Subsidiary thereof).
"ACQUISITION SUB'S PRO RATA SHARE" means, as of any date, the ratio
(expressed as a percentage) which the aggregate number of shares of Stock in
NHP held by the Acquisition Sub bears to the aggregate number of issued and
outstanding shares of Stock in NHP.
"ACTUAL ADVANCE RATIO" means, at any time, the ratio (expressed as a
percentage) determined by dividing the Outstanding Amount at such time by the
sum of (i) the Appraised Values of all Borrowing Base Properties minus any
assessment liens against such properties plus (ii) ninety-five percent (95%)
of the amount of Pledged Cash at such time.
"ADDITIONAL LENDER" has the meaning specified in Section 2.01(a)(iv).
"ADDITIONAL LENDER AGREEMENT" means an agreement by and among an
Additional Lender, the Agent and the Company entered into pursuant to Section
2.01(a)(iv), substantially in the form of EXHIBIT M.
"AFFILIATE" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person,
whether through the ownership of voting securities, by contract or otherwise.
Without limitation, any director, executive officer or beneficial owner of
five percent (5%) or more of the equity of a Person shall, for the purposes
of this Agreement, be deemed to control the other Person. In no event shall
any Lender be deemed an "Affiliate" of the Company.
"AGENT" means Bank of America National Trust and Savings Association, in
its capacity as Agent, and any successor Agent appointed hereunder.
"AGENT-RELATED PERSONS" has the meaning specified in Section 9.03.
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"AGGREGATE COMMITMENT" means the combined Commitments of the Lenders. As
of the Closing Date the Aggregate Commitment is $60,000,000 and the Aggregate
Commitment shall be increased above $60,000,000 to not more than $100,000,000
only in compliance with Section 2.01(a)(iv) below.
"AGREEMENT" means this Credit Agreement, as amended, supplemented or
modified from time to time.
"ANNUALIZED CURRENT YEAR NOI" shall mean for each Borrowing Base
Property for any fiscal quarter during the term of the Revolving Facility,
the annualized Net Operating Income from such Borrowing Base Property for the
period from the commencement of the then current year through the end of the
most recent quarter, with adjustments to reflect a level of annual Capital
Expenditures equal to the Imputed Capital Expenditures.
"APARTMENT PROPERTY CAP RATE" means nine and 6/10ths percent (9.6%).
"APPLICABLE LIBOR MARGIN" shall mean, with respect to LIBOR Loans, on
any date during a Rate Period described below, the applicable spread set
forth below:
Applicable Period Applicable LIBOR Margin
- ----------------- -----------------------
For Rate Periods 1.70% if, after such
ending prior to LIBOR Loan is made,
the Six Month converted or continued,
Date the Actual Advance Ratio
would exceed 60%, and
1.45% if, after such
LIBOR Loan is made,
converted or continued,
the Actual Advance Ratio
would be less than or
equal to 60%
For Rate Periods 1.45%
ending on or
after the Six
Month Date
"APPLICABLE MARGIN" means
(a) with respect to Base Rate Loans, 0.0%; and
(b) with respect to LIBOR Loans, the Applicable LIBOR Margin.
"APPRAISAL" means a real estate appraisal providing an assessment of the
fair market value of a Property, taking into account any and all Estimated
Remediation Costs, that is (a) conducted on an "as-is" basis in accordance
with the Uniform Standards of Professional Appraisal Practice (as promulgated
by the Appraisal Standards Board of the Appraisal Foundation), all
Requirements of Law applicable to the Agent, FIRREA, and the
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applicable internal policies of the Agent, and (b) undertaken by an
independent M.A.I. appraisal firm engaged by the Agent and satisfactory to
the Agent and the Requisite Lenders.
"APPRAISED VALUE" as to any item of Collateral shall, as of any date of
determination, be the value of such Collateral reflected in the Appraisal
thereof most recently delivered to and approved by the Agent pursuant to
Section 2.13(a)(ii)(A).
"ASSIGNEE" has the meaning specified in Section 10.08(a).
"ASSIGNMENT AND ACCEPTANCE" has the meaning specified in Section
10.08(a).
"ASSIGNMENT OF LEASES" means an assignment of leases and rents,
substantially in the form of EXHIBIT A, in each case with such revisions as
may be proposed by local counsel to the Agent and acceptable to the Agent and
the Requisite Lenders.
"ASSUMED INTEREST RATE" shall mean an annual rate equal to the greater
of (a) the yield on U.S. Treasury obligations having a maturity of ten (10)
years from the date of determination (or the closest maturity date
thereafter), plus two and one-half percent (2.50%), or (b) nine percent
(9.0%). In calculating the Revolving Facility Debt Service Coverage-Based
Principal Limit or Term Loan Debt Service Coverage-Based Principal Limit for
any fiscal quarter, the Assumed Interest Rate shall be based on the yield on
such U.S. Treasury obligations as published for the last Business Day of the
preceding fiscal quarter. In calculating the Term Loan Debt Service
Coverage-Based Principal Limit as of the Conversion Date, the Assumed
Interest Rate shall be based on the yield on such obligations as published
for the Business Day preceding the date a notice of the Company's request for
the conversion is delivered to the Agent pursuant to Section 4.03.
"ATTORNEY COSTS" means and includes all reasonable fees and
disbursements of any law firm or other external counsel, the allocated cost
of internal legal services and all disbursements of internal counsel.
"BANKRUPTCY CODE" means the Federal Bankruptcy Reform Act of 1978 (12
U.S.C. Section 101, ET. SEQ.), as amended from time to time.
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"BASE RATE" means the higher of:
(a) the annual rate of interest publicly announced from time to
time by the Reference Lender as its "reference" rate. The "reference" rate
is a rate set based upon various factors including the Reference Lender's
costs and desired return, general economic conditions, and other factors, and
is used as reference points for pricing some loans. Any change in the Base
Rate shall take effect on the day specified in the public announcement of
such change; or
(b) one-half of one percent (0.5%) per annum above the latest
Federal Funds Rate.
"BASE RATE LOAN" means a Loan that bears interest based on the Base Rate.
"BORROWING BASE" shall mean at any time: (a) in the case of the
Revolving Facility, the Revolving Facility Borrowing Base and (b) in the case
of the Term Loan, the Term Loan Borrowing Base.
"BORROWING BASE PROPERTY" means one of the multi-family apartment
projects which is identified on SCHEDULE 1.01A attached hereto or otherwise
offered by the Company and accepted by all of the Lenders as Collateral
pursuant to Section 2.13(a) below (upon the satisfaction of the conditions
set forth therein), together with all personal property, deposits, accounts,
contract rights, leases and other Collateral relating to such project, unless
and until such project is excluded as a Borrowing Base Property or otherwise
released as Collateral pursuant to Sections 2.13(b), 2.13(e), 7.05, or
10.01(b)(vi), as applicable.
"BOFA" means Bank of America National Trust and Savings Association,
other than in its capacity as the Agent hereunder.
"BORROWING NOTICE" means a notice given by the Company to the Agent
pursuant to Section 2.03, in substantially the form of EXHIBIT B.
"BRIDGE LOAN AGREEMENT" means that certain Amended and Restated Credit
Agreement (Bridge Loan Facility) dated as of even date herewith by and among
the Company, the Agent and the initial Lenders which provides, inter alia,
that the lenders party thereto will make available to the Company a credit
facility in the amount of up to Twenty-Five Million Dollars ($25,000,000.00),
as the same may be amended, supplemented, or modified from time to time.
"BRIDGE LOAN" means any Base Rate Loan and any LIBOR Loan (as such terms
are defined in the Bridge Loan Agreement) made pursuant to the Bridge Loan
Agreement.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other
day on which commercial lenders are authorized or
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<PAGE>
required by law to close in New York City or the city in which the Agent's
office charged with administration of the Loans is located; except in cases
in which it relates to any LIBOR Loan, in which cases "Business Day" means
such a day on which dealings are carried on in the London dollar interbank
market.
"CAPITAL ADEQUACY REGULATION" means any guideline, request or directive
of any central lender or other Governmental Authority having jurisdiction, or
any other law, rule or regulation, whether or not having the force of law,
regarding capital adequacy of any Lender or of any corporation controlling a
Lender.
"CAPITAL EXPENDITURES" means, for any period and with respect to any
Person, the aggregate of all expenditures by such Person for the acquisition
or leasing of fixed or capital assets or additions to equipment (including
replacements, capitalized repairs and improvements during such period) which
should be capitalized under GAAP on a consolidated balance sheet of such
Person. For the purpose of this definition, the purchase price of equipment
which is purchased simultaneously with the trade-in of existing equipment
owned by such Person or with insurance proceeds shall be included in Capital
Expenditures only to the extent of the gross amount of such purchase price,
less the credit granted by the seller of such equipment for such equipment
being traded in at such time, or the amount of such proceeds, as the case may
be.
"CAPITAL LEASE" means any leasing or similar arrangement which, in
accordance with GAAP, is classified as a capital lease.
"CAPITAL LEASE OBLIGATIONS" means, with respect to any Person, the
amount at which such Person's obligations under Capital Leases are required
to be carried on the balance sheet of such Person in accordance with GAAP.
"CARRYING VALUE" means, with respect to any asset or liability of any
Person, the amount at which such asset or liability has been recorded or, in
accordance with GAAP, should have been recorded, in the books of account of
such Person, as reduced by any reserves or write-downs which have been
announced, set aside or taken or, in accordance with GAAP, should have been
set aside or taken, with respect thereto; PROVIDED, HOWEVER, that, if more
than one method of recording the amount of any asset or liability, or the
setting aside or taking of any reserves or write-downs with respect thereto,
is permitted under GAAP, the permitted method actually used shall be
controlling for purposes of determining Carrying Value, provided that such
method is used in a manner consistent with prior periods.
"CASH COLLATERAL ACCOUNT" has the meaning specified in Section 2.13(d).
"CASH EQUIVALENTS" means:
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(a) securities issued or fully guaranteed or insured by the United
States Government or any agency thereof and backed by the full faith and
credit of the United States having maturities of not more than six months
from the date of acquisition;
(b) certificates of deposit, time deposits, demand deposits,
eurodollar time deposits, repurchase agreements, reverse repurchase
agreements, or bankers' acceptances, having in each case a tenor of not more
than three (3) months, issued by the Agent, or by any U.S. commercial bank
(or any branch or agency of a non-U.S. bank licensed to conduct business in
the U.S.) having combined capital and surplus of not less than $100,000,000
whose short-term securities are rated at least A-1 by S&P and P-1 by Moody's;
PROVIDED, HOWEVER, such Investments may not be made in amounts in excess of
$1,000,000 with any lender that is owed Indebtedness in excess of $1,000,000
by the Company, the REIT or any Subsidiary (other than the Obligations)
unless such bank waives in writing (in form and substance satisfactory to the
Requisite Lenders) its right to set-off such Investment against such
Indebtedness;
(c) demand deposits on deposit in accounts maintained at commercial
banks having membership in the FDIC and in amounts not exceeding the maximum
amounts of insurance thereunder; and
(d) commercial paper of an issuer rated at least A-1 by S&P or P-1
by Moody's and in either case having a tenor of not more than three (3)
months.
"CERCLA" has the meaning specified in the definition of "Environmental
Laws".
"CLOSING DATE" means the date on which all conditions precedent to the
effectiveness of this Agreement set forth in Section 4.01 (a) are satisfied
or waived by all Lenders; said date shall occur no later than the earlier of
(i) May 7, 1997 or (ii) the "Closing Date" under (and as such term is defined
in) the Acquisition Sub Credit Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and any regulations promulgated thereunder.
"COLLATERAL" means all property interests, now owned or hereafter
acquired, of the Company or any Wholly-Owned Subsidiary in or upon which a
Lien now or hereafter exists in favor of the Agent on behalf of the Lenders
hereunder or under the Collateral Documents.
"COLLATERAL DOCUMENTS" means, collectively, (a) the Mortgages, the
Assignments of Leases, the Environmental Indemnity Agreements and all
security agreements, lease assignments and other similar agreements between
the Company or any Wholly-Owned
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<PAGE>
Subsidiary and the Lenders or the Agent for the benefit of the Lenders now or
hereafter delivered to the Lenders or the Agent pursuant to or in connection
with the transactions contemplated hereby, (b) all financing statements (or
comparable documents) now or hereafter filed in accordance with the UCC (or
comparable law) against the Company or any Wholly-Owned Subsidiary as debtor
in favor of the Lenders or the Agent for the benefit of the Lenders as
secured party, (c) any other documents executed by the Company or any
Wholly-Owned Subsidiary at the request of Agent and upon the recommendation
of Agent's counsel or local counsel in order to establish, perfect or protect
any of the liens or security interests granted in the Mortgages, and (d) any
amendments, supplements, modifications, renewals, replacements,
consolidations, substitutions and extensions of any of the foregoing.
"COMMITMENT", with respect to each Lender, shall mean that Lender's
Revolving Commitment (during the term of the Revolving Facility) or Term
Commitment (during the term of the Term Loan), as specified in Sections
2.01(a) or (c), as applicable.
"COMMITMENT PERCENTAGE" means, as to any Lender, the percentage
equivalent of such Lender's Commitment divided by the Aggregate Commitment.
"CONSOLIDATED EBITDA" means, for any period, and without double counting
any item, the sum of the EBITDA for the Company, the REIT and their
respective Subsidiaries for such period on a consolidated basis PLUS for all
periods until the NHP Combination Date, Acquisition Sub's Pro Rata Share of
the EBITDA for NHP and its Subsidiaries (exclusive of NHP Financial Services,
Inc. and its Subsidiaries) for such period on a consolidated basis.
"CONSOLIDATED EBITDA-TO-FIXED CHARGES RATIO" means for any period of
determination, the ratio computed as follows:
Consolidated EBITDA- [Consolidated EBITDA minus Imputed Capital Expenditures]
to-Fixed Charges Ratio= divided by
Consolidated Fixed Charges
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"CONSOLIDATED EBITDA-TO-INTEREST RATIO" means for any period of
determination, the ratio computed as follows:
Consolidated EBITDA- [Consolidated EBITDA minus Imputed Capital Expenditures]
to-Interest Ratio = divided by
Consolidated Interest Expense
"CONSOLIDATED FIXED CHARGES" means for any period of determination the
sum of the Consolidated Interest Expense for such period, plus Consolidated
Scheduled Amortization for such period, plus dividends accrued (whether or
not declared or payable) on the REIT's preferred Stock during such period
plus any cumulative unpaid dividends on such preferred Stock carried over to
such period from a prior period.
"CONSOLIDATED INTEREST EXPENSE" means for any period of determination,
and without double counting any item, the sum of the Interest Expense for the
Company, the REIT and their respective Subsidiaries for such period on a
consolidated basis plus, for all periods until the NHP Combination Date, the
sum of the Acquisition Sub's Pro Rata Share of the Interest Expense for NHP
and its Subsidiaries (exclusive of NHP Financial Services, Inc.) for such
period on a consolidated basis.
"CONSOLIDATED SCHEDULED AMORTIZATION" means for any period of
determination, and without double counting any item, the sum of the Scheduled
Amortization for the Company, the REIT and their respective Subsidiaries for
such period on a consolidated basis plus, for all periods until the NHP
Combination Date, the sum of the Acquisition Sub's Pro Rata Share of the
Scheduled Amortization for NHP and its Subsidiaries (exclusive of NHP
Financial Services, Inc.) for such period on a consolidated basis.
"CONSOLIDATED TOTAL INDEBTEDNESS" means as of any date, and without
double counting any item, the sum of (a) the Total Indebtedness for the
Company, the REIT and their respective Subsidiaries as of such date
(including, without limitation the Total Indebtedness of the Acquisition Sub
as of such date), plus (b) at all times until the NHP Combination Date, the
sum of the Acquisition Sub's Pro Rata Share of the Total Indebtedness of NHP
and its Subsidiaries (exclusive of NHP Financial Services, Inc.) as of such
date.
"CONTINGENT OBLIGATION" means, as to any Person, (a) any Guaranty
Obligation of that Person, and (b) any direct or indirect obligation or
liability, contingent or otherwise, of that Person, (i) in respect of any
letter of credit or similar instrument issued for the account of that Person
or as to which that Person is otherwise liable for reimbursement of drawings,
(ii) as a partner or joint venturer in any partnership or joint venture,
(iii) to purchase any materials, supplies or other Property from, or to
obtain the services of, another Person if the relevant contract or other
related document or obligation requires that payment for such materials,
supplies or other Property, or for such services, shall be made regardless of
whether delivery of such materials, supplies or other Property is ever made
or tendered, or such services are ever performed or tendered, or (iv)
incurred pursuant to any Rate Contract. Except as provided in the definition
of "Total Indebtedness" below, the amount of any Contingent Obligation shall
(subject, in the case of Guaranty Obligations, to the last sentence
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of the definition of "Guaranty Obligation") be deemed equal to the maximum
reasonably anticipated liability in respect thereof.
"CONTRACTUAL OBLIGATION" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
mortgage, deed of trust, indenture, or other instrument, document or
agreement to which such Person is a party or by which it or any of its
Property is bound.
"CONTROLLED GROUP" means the Company and all Persons (whether or not
incorporated) under common control or treated as a single employer with the
Company pursuant to Section 414(b), (c), (m) or (o) of the Code.
"CONVERSION CONDITIONS" has the meaning specified in Section 4.03.
"CONVERSION DATE" shall mean the date on which all Conversion Conditions
have been satisfied and the Revolving Facility has been converted into the
Term Loan. The Conversion Date shall be set forth in the certificate
delivered to and approved by the Agent pursuant to Section 4.03(e) below.
"DEFAULT" means any event or circumstance which, with the giving of notice,
the lapse of time, or both, would (if not cured or otherwise remedied)
constitute an Event of Default.
"DEVELOPMENT ACTIVITY" means, as to any Property of the Company or any
Subsidiary, any construction, reconstruction, rehabilitation or other
development activity or related series of activities in connection with any
single apartment or commercial complex, the cost of which, in the aggregate,
exceeds $1,000,000.
"DISPOSITION" means the sale, lease, conveyance, transfer or other
disposition of (whether in one or a series of transactions) any Property,
including accounts and notes receivable (with or without recourse) and
sale-leaseback transactions, but otherwise excluding Permitted Liens.
"DOLLARS", "DOLLARS" and "$" each mean lawful money of the United States.
"DOMESTIC LENDING OFFICE" means, with respect to each Lender, the office
of that Lender designated as such on the signature pages hereto or such other
office of a Lender as it may from time to time specify in writing to the
Company and the Agent.
"EBITDA" means, for any period, the sum determined in accordance with
GAAP, of the following, for any Person on a consolidated basis (a) the net
income (or net loss) of such Person during such Period PLUS (b) all amounts
treated as expenses for real estate depreciation, Interest Expense and the
amortization of intangibles of any kind to the extent included in the
determination of such net income (or loss), PLUS (c) all accrued taxes on or
measured by income to the extent included in the determination of such net
income (or loss); PROVIDED, HOWEVER, that net income (or loss) shall be
computed for these purposes without giving effect to extraordinary losses or
extraordinary gains.
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"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized under the laws
of the United States, or any state thereof, and having a combined capital and
surplus of at least $100,000,000, (b) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any
such country, and having a combined capital and surplus of at least
$100,000,000, provided that such commercial bank is acting through a branch
or agency located in the country in which it is organized or another country
which is also a member of the OECD, and (c) any Lender Affiliate.
"ENVIRONMENTAL CLAIMS" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law or for release or
injury to the environment or threat to public health, personal injury
(including sickness, disease or death), property damage, natural resources
damage, or otherwise alleging liability or responsibility for damages
(punitive or otherwise), cleanup, removal, remedial or response costs,
restitution, civil or criminal penalties, injunctive relief, or other type of
relief, resulting from or based upon (a) the presence, placement, discharge,
emission or release (including intentional and unintentional, negligent and
non-negligent, sudden or non-sudden, accidental or non-accidental placement,
spills, leaks, discharges, emissions or releases) of any Hazardous Material
at, in, or from Property, whether or not owned by the Company, or (b) any
other circumstances forming the basis of any violation, or alleged violation,
of any Environmental Law.
"ENVIRONMENTAL INDEMNITY AGREEMENT" means an environmental indemnity
agreement substantially in the form of EXHIBIT C, with such revisions as may
be proposed by local counsel to the Agent and acceptable to the Agent and the
Requisite Lenders.
"ENVIRONMENTAL LAWS" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with
all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety and land
use matters; including the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 ("CERCLA"), the Hazardous Material Transportation
Act, the Federal Water Pollution Control Act, the Clean Air Act, the Federal
Water Pollution Control Act of 1972, the Solid Waste Disposal Act, the
Federal Resource Conservation and Recovery Act, the Occupational Safety and
Health Act, the Toxic Substances Control Act and the Emergency Planning and
Community Right-to-Know Act, each as amended or supplemented, and any
analogous future or present local, municipal, state or federal statutes and
regulations promulgated pursuant thereto, each as in effect as of the date of
any determination.
"ENVIRONMENTAL PERMITS" has the meaning set forth in Section 5.11(b).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated
thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with the Company within the meaning of
Section 414(b), 414(c) or 414(m) of the Code.
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"ERISA EVENT" means (a) a Reportable Event with respect to a Qualified
Plan or a Multiemployer Plan; (b) a withdrawal by the Company or any ERISA
Affiliate from a Qualified Plan subject to Section 4063 of ERISA during a
plan year in which it was a substantial employer (as defined in Section
4001(a)(2) of ERISA); (c) a complete or partial withdrawal by the Company or
any ERISA Affiliate from a Multiemployer Plan; (d) the filing of a notice of
intent to terminate, the treatment of a plan amendment as a termination under
Section 4041 or 4041A of ERISA or the commencement of proceedings by the PBGC
to terminate a Qualified Plan or Multiemployer Plan subject to Title IV of
ERISA; (e) a failure by the Company or any member of the Controlled Group to
make required contributions to a Qualified Plan or Multiemployer Plan when
due; (f) an event or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Qualified Plan or Multiemployer
Plan pursuant to Section 4042 of ERISA; (g) the imposition of any liability
under Title IV of ERISA, other than PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon the Company or any ERISA Affiliate; (h) an
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code with respect to any Plan; (i) a
non-exempt prohibited transaction occurs with respect to any Plan for which
the Company or any Subsidiary of the Company may be directly or indirectly
liable; or (j) a violation of the applicable requirements of Section 404 or
405 of ERISA or the exclusive benefit rule under Section 401(a) of the Code
by any fiduciary or disqualified person with respect to any Plan for which
the Company or any member of the Controlled Group may be directly or
indirectly liable.
"ESTIMATED REMEDIATION COST" means all costs associated with performing
work to remediate contamination of real property or groundwater, including
engineering and other professional fees and expenses, costs to remove,
transport and dispose of contaminated soil, costs to "cap" or otherwise
contain contaminated soil, and costs to pump and treat water and monitor
water quality.
"EVENT OF DEFAULT" means any of the events or circumstances specified in
Section 8.01.
"EVENT OF LOSS" means, with respect to any Borrowing Base Property, any
of the following: (a) any loss, destruction or damage of such property, (b)
any pending or threatened institution of any proceedings for the condemnation
or seizure of such property or for the exercise of any right of eminent
domain, or (c) any actual condemnation, seizure or taking, by exercise of the
power of eminent domain or otherwise, of such property, or confiscation of
such property or requisition of the use of such property.
"EXCHANGE ACT" means the Securities and Exchange Act of 1934, and
regulations promulgated thereunder.
"FEDERAL FUNDS RATE" means, for any period, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)". If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release
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designated as the Composite 3:30 p.m. Quotations for U.S. Government
Securities, or any successor publication, published by the Federal Reserve
Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotation") for such day under the caption "Federal Funds Effective Rate".
If on any relevant day the appropriate rate for such previous day is not yet
published in either H.15(519) or the Composite 3:30 p.m. Quotations, the rate
for such day will be the arithmetic mean of the rates for the last
transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York
time) on that day by each of three (3) leading brokers of Federal funds
transactions in New York City selected by the Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System or any successor thereof.
"FINANCE SUBSIDIARY" means AIMCO Properties Finance Partnership, L.P., a
Delaware limited partnership.
"FINANCE SUBSIDIARY LOAN" means, collectively, (i) the loan in the
amount of $95,387,690 made by the Finance Subsidiary to the REIT on or around
September 12, 1995, as evidenced by that certain Promissory Note, dated as of
September 12, 1995, executed by the REIT, in favor of the Finance Subsidiary,
which loan has been assumed by the Company pursuant to that certain
Redemption Agreement, dated as of April 15, 1996, between the REIT and the
Company, among others, and (ii) the loan in the amount of $3,000,000 made by
the Finance Subsidiary to the REIT on or around September 6, 1995, as
evidenced by that certain Promissory Note, dated as of September 6, 1995,
executed by the REIT, in favor of the Finance Subsidiary.
"FIRREA" means the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989, as amended from time to time, and any regulations
promulgated thereunder.
"FUNDS FROM OPERATIONS" means, with respect to the Company, the REIT,
and their Subsidiaries on a consolidated basis, net income calculated in
accordance with GAAP, excluding gains or losses from debt restructuring and
sales of property, plus real estate depreciation and amortization, plus
amortization associated with the purchase of property management companies,
and after adjustments for unconsolidated partnerships and joint ventures
(with adjustments for unconsolidated partnerships and joint ventures
calculated to reflect funds from operations on the same basis), as
interpreted by the National Association of Real Estate Investment Trusts in
its March, 1995, White Paper on Funds From Operations.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such other entity as may be in
general use by significant segments of the U.S. accounting profession, which
are applicable to the circumstances as of the date of determination.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority)
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thereof, any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or capital
ownership or otherwise, by any of the foregoing.
"GP CORP" means AIMCO-GP, Inc., a Delaware corporation. GP Corp is a
Wholly-Owned Subsidiary of the REIT and is the general partner of the Company.
"GROSS ASSET VALUE" means, with respect to the Company, the REIT and
their respective Subsidiaries on a consolidated basis, and without double
counting any item, the sum of: (a) the Company's, REIT's, or their
respective Subsidiaries' annualized Net Operating Income from all apartment
projects one hundred percent (100%) owned by the Company or Wholly-Owned
Subsidiaries for the period from the commencement of the then current year
through the end of the most recent quarter, capitalized at the Apartment
Property Cap Rate, PLUS (b) the Company's, REIT's, or their respective
Subsidiaries' share of annualized Net Operating Income from all apartment
projects in which the Company or any Subsidiary holds an interest less than
one hundred percent (100%) for the period from the commencement of the then
current year through the end of the most recent quarter, capitalized at the
Apartment Property Cap Rate, PLUS (c) to the extent not included in clause
(b) above, the Company's, REIT's or their respective Subsidiaries' share of
annualized unconsolidated net income of the Management Entities and the
Unconsolidated Partnerships for the period from the commencement of the then
current year through the end of the most recent quarter multiplied by 6.5
PLUS (d) prior to the NHP Combination Date, the Acquisition Sub's Pro Rata
Share of the annualized EBITDA of NHP for the period from the commencement of
the then current year through the end of the most recent quarter multiplied
by 8.0, PLUS (e) all cash (including Restricted Cash) and the fair market
value of all Cash Equivalents held as of the last day of such quarter.
"GUARANTOR SUBSIDIARIES" means AIMCO Holdings QRS, Inc., a Delaware
corporation, AIMCO/OTC QRS, Inc., a Delaware corporation, AIMCO Holdings,
L.P., a Delaware limited partnership, AIMCO-GP, Inc., a Delaware corporation,
AIMCO-LP, Inc., a Delaware corporation, and AIMCO Somerset, Inc., a Delaware
corporation.
"GUARANTY OBLIGATION" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary obligation") of
another Person (the "primary obligor"), including any obligation of that
Person, whether or not contingent, (a) to purchase, repurchase or otherwise
acquire such primary obligations or any Property constituting direct or
indirect security therefor, or (b) to advance or provide funds (i) for the
payment or discharge of any such primary obligation, or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet item, level of income
or financial condition of the primary obligor, or (c) to purchase securities,
other Properties or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation, or (d) otherwise to assure or hold
harmless the holder of any such primary obligation against loss in respect
thereof. Except as set forth in the definition of "Total Indebtedness"
below, the amount of any Guaranty Obligation shall be deemed equal to the
stated or determinable amount of the primary obligation in respect of which
such Guaranty Obligation is made or, if
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not stated or if indeterminable, the maximum reasonably anticipated
liability in respect thereof.
"HAZARDOUS MATERIALS" means (i) all those substances which are regulated
by, or which may form the basis of liability under, any Environmental Law,
including all substances identified under any Environmental Law as a
pollutant, contaminant, hazardous waste, hazardous constituent, special
waste, hazardous substance, hazardous material, or toxic substance, or
petroleum or petroleum-derived substance or waste, (ii) any other materials
or pollutants that (a) pose a hazard to any Property of the Company or to
Persons on or about such Property or (b) cause such Property to be in
violation of any Environmental Laws, (iii) asbestos in any form which is or
could become friable, urea formaldehyde foam insulation, electrical equipment
which contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of fifty parts per million, and (iv) any
other chemical, material, substance, or waste, exposure to which is
prohibited, limited, or regulated by any Governmental Authority or may or
could pose a hazard to the health and safety of the owners, occupants, or any
Persons surrounding the relevant Property.
"IMPUTED CAPITAL EXPENDITURES" means, for any four (4) consecutive
quarters, an amount equal to the average number of apartment units owned by
the Operating Partnership, the REIT or the Subsidiaries of the Operating
Partnership or the REIT during such period multiplied by (a) Three-Hundred
Dollars ($300) per apartment unit in the case of a unit in their primary
portfolio of Class A or B market-rate units and (b) Four Hundred Dollars
($400) per apartment unit in the case of any Class C, affordable or other
unit, and for any period of less than four (4) consecutive quarters, an
appropriate proration of such figure.
"INDEBTEDNESS" of any Person means without duplication, (a) all
indebtedness for borrowed money, (b) all obligations issued, undertaken or
assumed as the deferred purchase price of Property or services, (c) all
reimbursement obligations with respect to surety bonds, letters of credit,
bankers' acceptances and similar instruments (in each case, to the extent
material or non-contingent), (d) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of Properties, (e) all
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to
Properties acquired by the Person (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such properties), (f) all Capital Lease Obligations,
(g) all net obligations with respect to Rate Contracts, (h) all obligations
(other than, in the case of the REIT, the obligation to acquire Units in
exchange for shares of common Stock of the REIT) to purchase, redeem, or
acquire any Stock of such Person or its Affiliates that, by its terms or by
the terms of any security into which it is convertible or exchangeable, is,
or upon the happening of any event or the passage of time would be, required
to be redeemed or repurchased by such Person or its Affiliates, including at
the option of the holder, in whole or in part, or has, or upon the happening
of an event or passage of time would have, a redemption or similar payment
due, before June 30, 2001, (i) all indebtedness referred to in clauses (a)
through (h) above secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien
upon or in Properties (including accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for
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the payment of such Indebtedness, and (j) all Guaranty Obligations in respect
of indebtedness or obligations of others of the kinds referred to in clauses
(a) through (h) above.
"INDEMNIFIED LIABILITIES" has the meaning specified in Section 10.05.
"INDEMNIFIED PERSON" has the meaning specified in Section 10.05.
"INITIAL BORROWING BASE PROPERTIES" means the real properties so
designated on SCHEDULE 1.01A hereto.
"INSOLVENCY PROCEEDING" means (a) any case, action or proceeding before
any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshalling of assets for creditors or
other, similar arrangement in respect of its creditors generally or any
substantial portion of its creditors; in each case as undertaken under U.S.
Federal, State or foreign law.
"INTEREST EXPENSE" means, for any period, gross interest expense for the
period (including all commissions, discounts, fees and other charges in
connection with standby letters of credit and similar instruments) for the
Company, the REIT and their respective Subsidiaries PLUS the portion of the
upfront costs and expenses for Rate Contracts entered into by the Company,
the REIT and their respective Subsidiaries (to the extent not included in
gross interest expense) fairly allocated to such Rate Contracts as expenses
for such period, as determined in accordance with GAAP; provided, that, all
interest expense accrued by the Company, the REIT and their respective
Subsidiaries during such period, even if not payable on or before the
Maturity Date, shall be included within "Interest Expense." Notwithstanding
the foregoing, interest accrued under any Intra-Company Debt shall not be
included within "Interest Expense" for any purposes hereof.
"INTEREST PAYMENT DATE" means, with respect to any Base Rate Loan and
any LIBOR Loan, the first day of each month.
"INTEREST PERIOD" means, with respect to any LIBOR Loan, the period
commencing on the Business Day on which the Loan is disbursed or on the
Pricing Conversion Date on which the Loan is continued as or converted to the
LIBO Rate and ending on the date one (1), two (2), three (3) or six (6)
months thereafter, as selected by the Company in its Borrowing Notice or
Notice of Conversion/Continuation; PROVIDED that:
(a) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to carry
such Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Business Day;
(b) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of the calendar month at the end of such Interest
Period; and
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(c) no Interest Period for any Loan shall extend beyond the
Revolving Facility Maturity Date or after the Conversion Date, the Term Loan
Maturity Date.
"INTRA-COMPANY DEBT" means Indebtedness (whether book-entry or evidenced
by a term, demand or other note or other instrument) owed by the Company, the
REIT or any of their respective Subsidiaries to any Subsidiary, and incurred
or assumed for the purpose of capitalizing a Subsidiary of the REIT or the
Company. As of the date hereof, Intra-Company Debt includes the Indebtedness
listed in SCHEDULE 1.01B and Indebtedness of the Subsidiaries under the
promissory notes of Subsidiaries assigned to the Company and described on
SCHEDULE 7.02 attached hereto.
"INTRA-COMPANY LOAN SUBORDINATION AGREEMENT" means a Subordination
Agreement, in form and substance satisfactory to the Requisite Lenders, with
respect to Intra-Company Debt (including the Finance Subsidiary Loan), in
favor of the Agent for the ratable benefit of the Lenders, and entered into
by each of the "Lenders" designated on SCHEDULE 1.01B and the Company.
"INVESTMENT" means (a) any purchase or acquisition of any capital stock,
equity interest, asset, obligation or other security of or any interest in,
any Person, (b) any advance, loan, extension of credit or capital
contribution to any Person, (c) any purchase, lease, or other acquisition of
Property for investment purposes or for the purpose of resale or leasing to
another Person, and (d) any contingent or other agreement to do any of the
foregoing.
"IRS" means the Internal Revenue Service or any agency successor thereto.
"ISSUING LENDER" shall mean BofA, in its capacity as the issuer of
Letters of Credit.
"KNOWLEDGE OF THE COMPANY" means the actual knowledge (after reasonable
inquiry) of any of the officers of the Company or the REIT and each other
Person with executive responsibility for any aspect of the Company's or the
REIT's business.
"LENDER" means each of the lenders party to this Agreement, and includes
BofA in its individual capacity.
"LENDER AFFILIATE" means a Person that is engaged primarily in the
business of commercial lending and is a Subsidiary of a Lender or of a Person
of which a Lender is a Subsidiary.
"LENDING OFFICE" means, with respect to any Lender, the office or
offices of the Lender specified as its "Lending Office" opposite its name on
the signature pages hereto, or such other office or offices of the Lender as
it may from time to time specify in writing to the Company and the Agent.
"LETTER OF CREDIT" means any letter of credit issued pursuant hereto by
the Issuing Lender for the account of the Company for general corporate
purposes. Each Letter of Credit shall be for a term of not more than one
year from the date of issuance thereof, but shall in any event expire prior
to the Revolving Facility Maturity Date.
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"LETTER OF CREDIT LIABILITY" means, as of any date of determination, all
then existing liabilities of the Company to the Issuing Lender in respect of
Letters of Credit, whether such liability is contingent or fixed, and shall
consist in principal amount of the sum of (a) the available amount under all
Letters of Credit (the determination of such amount to assume compliance with
all conditions for drawing) and (b) the aggregate amount which has then been
paid by, and not been reimbursed by the Company to, the Issuing Lender under
all Letters of Credit.
"LIBO RATE" means, for each Interest Period for any LIBOR Loan, an
interest rate per annum (rounded upward to the nearest 1/100th of 1%)
determined pursuant to the following formula:
LIBO Rate = LIBOR
-------------------------
1.00 - Reserve Percentage
Where,
(i) "LIBOR" means the per annum rate of interest, rounded upward, if
necessary, to the nearest 1/16th of one percent (0.0625%), at which the
Reference Lender's London branch, London, England, would offer U.S. dollar
deposits in amounts and for periods comparable to those of the applicable
LIBOR Loan and Interest Period to major banks in the London U.S. dollar
inter-bank market at approximately 11:00 a.m., London time, on the first
Business Day after the Borrowing Notice or Notice of Conversion/Continuation
for such LIBOR Loan is delivered to the Agent; and
(ii) "RESERVE PERCENTAGE" means the total of the maximum reserve
percentages from time to time for determining the reserves to be maintained
by member banks of the Federal Reserve System for Eurocurrency Liabilities,
as defined in Federal Reserve Board Regulation D, whether or not applicable
to any Lender. The Reserve Percentage shall be expressed in decimal form and
rounded upward, if necessary, to the nearest 1/100th of one percent, and
shall include marginal, emergency, supplemental, special and other reserve
percentages.
"LIBOR LOAN" means a Loan that bears interest based on the LIBO Rate.
"LIEN" means any mortgage, deed of trust, security agreement, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preference, priority or other security interest or
preferential arrangement of any kind or nature whatsoever (including those
created by, arising under or evidenced by any conditional sale or other title
retention agreement, the interest of a lessor under a Capital Lease, any
financing lease having substantially the same economic effect as any of the
foregoing, or the filing of any financing statement naming the owner of the
asset to which such lien relates as debtor, under the UCC or any comparable
law) and any contingent or other agreement to provide any of the foregoing.
"LOAN" has the meaning specified in Section 2.01(d).
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"LOAN DOCUMENTS" means this Agreement, the Notes, the Collateral
Documents, the REIT Guaranty Documents, and all other documents delivered to
the Agent or the Lenders in connection therewith.
"MANAGEMENT ENTITY" shall mean the Acquisition Sub and each of the
following Persons and any successor thereto which conducts the management
business described in the SEC Report, as well as any Subsidiary of the
Company or the REIT which is engaged in the business of managing multi-family
apartment projects or other real estate projects: Property Asset Management
Services, L.P., a Delaware limited partnership, Property Asset Management
Services, Inc., a Delaware corporation, Property Asset Management
Services-CA, LLC, a California limited liability company; each of the
"Service LLC's" referred to in the SEC Report; and any Subsidiary formed to
conduct the management business related to the NHP Interests.
"MARGIN STOCK" means "margin stock" as such term is defined from time to
time in Regulation G, T, U or X of the Federal Reserve Board.
"MATERIAL ADVERSE EFFECT" means a material adverse change in, or a
material adverse effect upon, any of (a) the assets, operations, business,
condition (financial or otherwise), or prospects of the Company, the REIT and
their respective Subsidiaries, taken as a whole, (b) the ability of the
Company, the REIT and their respective Subsidiaries to perform under any Loan
Document and avoid any Event of Default, (c) the ability of the REIT and the
Subsidiaries party thereto to perform under the REIT Guaranty Documents.
"MOODY'S" shall mean Moody's Investors Service, a Delaware corporation,
and its successors and assigns.
"MORTGAGE" means a deed of trust, mortgage or similar real property
security instrument encumbering Collateral, substantially in the form of
EXHIBIT D, with such revisions as may be proposed by local counsel to the
Agent and acceptable to the Agent and the Requisite Lenders.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" (within the meaning of
Section 4001(a)(3) of ERISA) and to which any member of the Controlled Group
makes, is making, or is obligated to make contributions or, during the
preceding three calendar years, has made, or been obligated to make,
contributions.
"NET ISSUANCE PROCEEDS" means, in respect of any issuance of Stock,
Units or Indebtedness by the Company, the REIT or any of their respective
Subsidiaries, the proceeds in cash or Cash Equivalents (or, for purposes of
Section 7.16(a), in the case of any issuance of Units in exchange for
Property, the fair market value of the Property so acquired) received by the
Company, the REIT or any of their respective Subsidiaries upon or
substantially simultaneously with such issuance, net of (a) the direct costs
of such issuance then payable by the recipient of such proceeds (excluding
amounts payable to the Company, the REIT or any Affiliate of the Company or
the REIT) (b) sales, use and other taxes paid or payable by such recipient as
a result thereof, and (c) in the case of the issuance of indebtedness secured
by any Property the portion of such proceeds used to repay Indebtedness
previously incurred and secured by the same Property.
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"NET OPERATING INCOME," as to any Property, means (a) all gross revenues
received from the operation of such Property during a particular period
(including, without limitation, payments received from insurance on account
of business or rental interruption and condemnation proceeds from any
temporary use or occupancy, in each case to the extent attributable to the
period for which such Net Operating Income is being determined, but excluding
any proceeds from the sale or other disposition of any part or all of such
Property; or from any financing or refinancing of such Property; or from any
condemnation of any part or all of such Property (except for temporary use or
occupancy); or on account of a casualty to the property (other than payments
from insurance on account of business or rental interruption); or any
security deposits paid under leases of all or a part of such Property, unless
forfeited by tenants; and similar items or transactions the proceeds of which
under GAAP are deemed attributable to capital), MINUS (b) all reasonable and
customary property maintenance and repair costs, leasing and administrative
costs, management fees assumed to be three percent (3%) of gross receipts
(whether or not actually paid pursuant to a separate management contract or
otherwise) and real estate taxes and insurance premiums actually paid by the
Company during such period with respect to such Property (exclusive of
Capital Expenditures). There shall be no deduction for any expense not
involving a cash expenditure, such as depreciation.
"NET WORTH" means at any time the Gross Asset Value minus all
liabilities (as determined in accordance with GAAP) of the Company, the REIT
and their respective Subsidiaries on a consolidated basis, inclusive of their
respective shares of Indebtedness of the Unconsolidated Partnerships.
Regardless of its characterization under GAAP, the Indebtedness of the
Acquisition Sub under the Acquisition Sub Financing Documents and the
Acquisition Sub's Pro Rata Share of Indebtedness of NHP shall be
characterized as a liability of the REIT for purposes of this definition.
Notwithstanding the foregoing, the liabilities of the REIT shall include the
redemption amount payable under any preferred Stock of the REIT which is
optionally or mandatorily redeemable at any time on or prior to one year
after the Revolving Facility Maturity Date (or, if the Company elects to
convert the Revolving Facility into the Term Loan, on or prior to one year
after the Term Loan Maturity Date).
"NHP" means NHP, Incorporated, a Delaware corporation.
"NHP COMBINATION DATE" means the date on which Acquisition Sub, the
Company, the REIT or any of their Subsidiaries shall have acquired one
hundred percent (100%) of the common stock of NHP or shall have consummated a
merger with NHP, whichever is the earlier.
"NHP INTERESTS" means collectively, (a) the shares of stock in NHP
acquired or to be acquired from the NHP Shareholders by the Acquisition Sub
pursuant to that certain Stock Purchase Agreement dated April 16, 1997, among
the REIT and the NHP Shareholders and (b) the NHP-Related Real Estate Assets.
"NHP-RELATED REAL ESTATE ACQUISITION AGREEMENT" means the Real Estate
Acquisition Agreement to be entered into among the NHP Shareholders and
Phemus Corporation, as the sellers, the Company and the REIT.
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"NHP-RELATED REAL ESTATE ASSETS" means the shares of stock, partnership,
membership and other equity interests, and loans acquired or to be acquired
by the Company pursuant to the NHP-Related Real Estate Acquisition Agreement.
"NHP REVOLVING CREDIT AGREEMENT" means that certain Revolving Credit
Agreement, dated as of August 18, 1995, among NHP and its subsidiaries, The
First National Bank of Boston, as Lead Agent, and Fleet Bank of
Massachusetts, National Association, and Morgan Guaranty Trust Company of New
York, as Co-Agents, as amended by that certain First Amendment thereto, dated
as of November 10, 1995, that certain Consent and Amendment Agreement, dated
as of March 27, 1996, and that certain Amendment No. 2 thereto, dated as of
February 11, 1997.
"NHP SHAREHOLDERS" means Demeter Holdings Corporation and Capricorn
Investors, L.P.
"NOTE" means a promissory note of the Company payable to the order of a
Lender in substantially the form of EXHIBIT E, evidencing the aggregate
indebtedness of the Company to such Lender resulting from Loans made by such
Lender.
"NOTICE OF CONVERSION/CONTINUATION" means a notice given by the Company
to the Agent pursuant to Section 2.04, in substantially the form of EXHIBIT F.
"NOTICE OF LIEN" means any "notice of lien" or similar document intended
to be filed or recorded with any court, registry, recorder's office, central
filing office or other Governmental Authority for the purpose of evidencing,
creating, perfecting or preserving the priority of a Lien securing
obligations owing to a Governmental Authority.
"NYSE" means the New York Stock Exchange.
"OBLIGATIONS" means all Loans, and other Indebtedness, advances, debts,
liabilities, obligations, covenants and duties owed by the Company, the REIT
or any of their respective Subsidiaries to the Agent, any Lender, or any
other Person required to be indemnified under any Loan Document, of any kind
or nature, present or future, whether or not evidenced by any note, guaranty
or other instrument, arising under this Agreement or under any other Loan
Document, whether or not for the payment of money, whether arising by reason
of an extension of credit, loan, guaranty, indemnification or in any other
manner, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter
arising and however acquired.
"ORDINARY COURSE OF BUSINESS" means, in respect of any transaction
involving a Person, the ordinary course of such Person's business,
substantially as intended to be conducted by any such Person as of the
Closing Date (which, in the case of the Company, shall be as reflected in the
SEC Report), and undertaken by such Person in good faith and not for purposes
of evading any covenant or restriction in any Contractual Obligation of such
Person.
"ORGANIZATIONAL CHART" means the organizational chart attached as
SCHEDULE 5.07 hereto showing the REIT, the Company, all of their Subsidiaries
and their interests in the
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Acquisition Sub, the Management Entities and the Unconsolidated Partnerships,
as the same may be modified pursuant hereto.
"ORGANIZATIONAL DOCUMENTS" means: (a) for any corporation, the
certificate or articles of incorporation, the bylaws, any supplementary
articles, certificate of determination or instrument relating to the rights
of preferred shareholders, and all duly adopted resolutions of the board of
directors (or any committee thereof) of such corporation; (b) for any
partnership, the partnership agreement, the certificate and/or statement of
partnership and all duly adopted authorizations of the partners thereof; (c)
for any limited liability company, the articles of organization and operating
agreement therefor and duly adopted authorizations or resolutions of the
members thereof; and (d) for any trust, the declaration or agreement of trust.
"OTHER TAXES" has the meaning specified in Section 3.01(b).
"OUTSTANDING AMOUNT" means the aggregate principal amount of all
outstanding Loans (including, without limitation, the aggregate Letter of
Credit Liability) from time to time.
"OUTSTANDING INDEBTEDNESS" means, as of any date of determination, that
portion of Total Indebtedness outstanding. In the case of any Indebtedness
consisting of letter of credit reimbursement obligations, such Indebtedness
shall be deemed "outstanding" for purposes hereof to the full extent of the
aggregate amount available to be drawn under the letter of credit under any
circumstances, whether or not the same is then available to be drawn.
"PARTICIPANT" has the meaning specified in Section 10.08(d).
"PAYMENT OFFICE" means the address for payments set forth on the
signature page hereto in relation to the Agent or such other address as the
Agent may from time to time specify in accordance with Section 10.02.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED EXCEPTIONS" means covenants, conditions, restrictions,
easements and other exceptions to title affecting a Borrowing Base Property
approved by the Agent and shown as exceptions in the Title Policy for such
property.
"PERMITTED INDEBTEDNESS" has the meaning specified in Section 7.02.
"PERMITTED LIENS" has the meaning specified in Section 7.01.
"PERSON" means an individual, partnership, corporation, business trust,
joint stock company, trust, limited liability company, unincorporated
association, joint venture or governmental authority.
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"PLAN" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which the Company or any member of the Controlled Group sponsors or
maintains or to which the Company or any member of the Controlled Group
makes, is making or is obligated to make contributions, and includes any
Multiemployer Plan or Qualified Plan.
"PLEDGED CASH" shall mean the amount held on deposit in the Cash
Collateral Account.
"PREVIOUS CREDIT AGREEMENT" has the meaning specified in the Recital A.
"PRICING CONVERSION DATE" means any date on which the Company elects to
(a) convert a Base Rate Loan to a LIBOR Loan or a LIBOR Loan to a Base Rate
Loan or (b) continue an existing LIBOR Loan for an additional Interest Period.
"PRO FORMA REVOLVING FACILITY DEBT SERVICE" shall mean at any time the
sum of the annual pro forma payments of principal and interest which would be
due (based on a monthly repayment schedule) on an initial principal sum equal
to the Revolving Facility Debt Service Coverage-Based Principal Limit based
on a mortgage constant calculated upon the Assumed Interest Rate at such time
and a twenty-five (25) year amortization period.
"PRO FORMA TERM LOAN DEBT SERVICE" for any Borrowing Base Property shall
mean the sum of (a) the pro forma amount of interest which would accrue
during a period of one year on a principal sum equal to the Term Loan Debt
Service Coverage-Based Principal Limit for such property at a rate equal to
the Assumed Interest Rate plus (b) an amount equal to 1/25th of the Term Loan
Amount for such Borrowing Base Property calculated as of the Conversion Date.
"PROHIBITED TRANSACTION" means any transaction described in section 406
of ERISA which is not exempt by reason of section 408 of ERISA or the
transitional rules set forth in section 414(c) of ERISA and any transaction
described in section 4975(c)(12) of the Code which is not exempt by reason of
section 4975(c)(2) or section 4975(d) of the Code, or the transitional rules
of section 2003(c) of ERISA.
"PROPERTY" means any estate or interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or intangible.
"QUALIFIED PLAN" means a pension plan (as defined in Section 3(2) of
ERISA) intended to be tax-qualified under Section 401(a) of the Code and
which any member of the Controlled Group sponsors, maintains, or to which it
makes, is making or is obligated to make contributions, or in the case of a
multiple employer plan (as described in Section 4064(a) of ERISA) has made
contributions at any time during the immediately preceding period covering at
least five (5) plan years, but excluding any Multiemployer Plan.
"RATE CONTRACTS" means interest rate and currency swap agreements, cap,
floor and collar agreements, interest rate insurance, currency spot and
forward contracts and other agreements or arrangements designed to provide
protection against fluctuations in interest or currency exchange rates.
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"REFERENCE LENDER" means BofA.
"REIT" means Apartment Investment and Management Company, a Maryland
corporation.
"REIT GUARANTY DOCUMENTS" shall mean a guaranty of the Obligations, in
the form of EXHIBIT G attached hereto, and such other documents relating to
such guaranty as the Agent may require, duly executed by the REIT and the
Guarantor Subsidiaries, together with the guaranties delivered pursuant to
Section 6.13(c) and Section 7.07(c).
"REIT STATUS" means, with respect to any Person, (a) the qualification
of such Person as a real estate investment trust under Sections 856 through
860 of the Code, (b) the applicability to such Person and its shareholders of
the method of taxation provided for in Sections 857 ET SEQ. of the Code, and
(c) the qualification and taxation of such Person as a real estate investment
trust under analogous provisions of state and local law in each state and
jurisdiction in which such Person owns property, operates or conducts
business.
"REPORTABLE EVENT" means any of the events set forth in section 4043(b)
of ERISA or the regulations thereunder, a withdrawal from a Plan described in
section 4063 of ERISA, a cessation of operations described in section 4068(f)
of ERISA, an amendment to a Plan necessitating the posting of security under
section 401(a)(29) of the Code, or a failure to make when due a payment
required by section 412(m) of the Code and section 302(e) of ERISA.
"REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person
or any of its Property or to which the Person or any of its Property is
subject.
"REQUISITE LENDERS" means, as of any date of determination, (a) if there
is only one Lender hereunder having a minimum Commitment of $5,000,000, that
Lender, and (b) if there are two (2) or more Lenders hereunder each having a
minimum Commitment of $5,000,000, then two (2) or more Lenders (for purposes
of counting Lenders, BofA and all affiliates of BofA collectively count as
one Lender, and in order to qualify as one of the two (2) necessary Lenders,
a Lender must hold a minimum Commitment of $5,000,000), holding at least
sixty-six and two-thirds percent (66-2/3%) of the outstanding balance of the
Loans, or, if there are no Loans outstanding, having at least sixty-six and
two-thirds percent (66-2/3%) of the Aggregate Commitment.
"RESPONSIBLE OFFICER" means, in relation to the REIT, the Chief
Executive Officer or the Vice Chairman of the REIT, and, in relation to the
Company, the Chief Executive Officer or any Vice President of GP Corp, in its
capacity as the general partner of the Company, and/or any other officer of
the REIT or GP Corp having substantially the same authority and
responsibility, or, with respect to financial matters, the Chief Financial
Officer or the Treasurer of the REIT or GP Corp, respectively, or any other
officer having substantially the same authority and responsibility.
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"RESTRICTED CASH" means the sum of Pledged Cash plus any cash pledged by
the Company, the REIT or any of their respective Subsidiaries to other
lenders, as indicated in the line item for "restricted cash" in the REIT's
balance sheet from time to time.
"REVOLVING AVAILABILITY" shall mean at any time the Revolving Commitment
of all Lenders, minus the outstanding balance of any Bridge Loans at such
time.
"REVOLVING COMMITMENT" has the meaning specified in Section 2.01(a).
"REVOLVING FACILITY" has the meaning specified in Section 2.01(a).
"REVOLVING FACILITY BORROWING BASE" shall mean at any time during any
fiscal quarter or portion thereof the lesser of:
(a) The Revolving Availability;
(b) The sum of (i) seventy-five percent (75%) (at all times prior
to the Six Month Date and sixty percent (60%) (at all times on and subsequent
to the Six Month Date), as the case may be, of the Appraised Value of all
Borrowing Base Properties, minus the amounts of any assessment liens against
such properties, and plus (ii) ninety-five percent (95%) of the amount of
Pledged Cash at such time; and
(c) The Revolving Facility Debt Service Coverage-Based Principal
Limit for the fiscal quarter in question.
"REVOLVING FACILITY DEBT SERVICE COVERAGE RATIO" shall mean the ratio
determined for each fiscal quarter during the term of the Revolving Facility
by dividing Annualized Current Year NOI for all Borrowing Base Properties for
the period from the commencement of the then current year through the end of
the most recent quarter by the aggregate Pro Forma Revolving Facility Debt
Service for such period.
"REVOLVING FACILITY DEBT SERVICE COVERAGE-BASED PRINCIPAL LIMIT" shall
mean the principal balance which, if it were outstanding under the Revolving
Facility, would produce a Revolving Facility Debt Service Coverage Ratio
equal to 1.20:1.0 (at all times prior to the Six Month Date) and 1.30:1.0 (at
all times on and subsequent to the Six Month Date), as the case may be. Said
amount shall be determined for any fiscal quarter based on the Revolving
Facility Debt Service Coverage Ratio for the period from the commencement of
the then current year through the end of the most recent quarter.
"REVOLVING FACILITY MATURITY DATE" means August 12, 1998, subject,
however, to earlier acceleration pursuant to the provisions of the Loan
Documents.
"REVOLVING LOAN" has the meaning specified in Section 2.01(a).
"S&P" shall mean Standard & Poor's Ratings Group and its successors and
assigns.
"SCHEDULED AMORTIZATION" means, with respect to any Person, the sum, as
of any date of determination, of the current portion (I.E., such portion as
is scheduled to be paid
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by the obligor thereof within twelve (12) months from the date of
determination) of all regularly scheduled amortization payments due on such
Person's long-term fully amortizing mortgage Indebtedness (exclusive of
balloon payments).
"SEC" means the Securities and Exchange Commission, or any successor
thereto.
"SEC REPORT" means the Annual Report of the REIT on Form 10-K filed with
the SEC for the year ending December 31, 1996.
"SIX MONTH DATE" means the date which is six (6) months after the
Closing Date.
"SOLVENT" means, as to any Person at any time, that (a) the fair value
of the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code and, in the alternative, for purposes of the
Uniform Fraudulent Transfer Act; (b) the present fair saleable value of the
Property of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become
absolute and matured; (c) such Person is able to realize upon its Property
and pay its debts and other liabilities (including disputed, contingent and
unliquidated liabilities) as they mature in the normal course of business;
(d) such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature; and (e) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute unreasonably small capital.
"STOCK" means all shares, options, warrants, interests, participations
or other equivalents (regardless of how designated) of or in a corporation or
equivalent entity, whether voting or nonvoting, including common stock,
preferred stock, perpetual preferred stock or any other "equity security" (as
such term is defined in Rule 3a11-1 of the General Rules and Regulations
promulgated by the SEC under the Exchange Act).
"SUBSIDIARY" of a Person means any corporation, association,
partnership, joint venture, trust or other business entity of which more than
fifty percent (50%) of the Stock or other equity or beneficial interests (in
the case of Persons other than corporations) is owned or controlled directly
or indirectly by the Person, or one or more of the Subsidiaries of the
Person, or a combination thereof (regardless of whether such Stock or other
interests are entitled to voting rights). As of the date hereof, the Persons
listed on the Organizational Chart are Subsidiaries of the REIT and the
Company.
"TAXES" has the meaning specified in Section 3.01(a).
"TERM ADVANCE" has the meaning specified in Section 2.01(c).
"TERM COMMITMENT" has the meaning specified in Section 2.01(c).
"TERM LOAN" has the meaning specified in Section 2.01(c).
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"TERM LOAN AMOUNT" shall mean the amount of the Term Loan allocated to a
Borrowing Base Property, as follows: The amount of the Term Loan allocated to
each Borrowing Base Property initially shall be equal to the outstanding
balance of the Term Loan as of the Conversion Date multiplied by the Term
Loan Percentage for such Borrowing Base Property, and shall be reduced from
time to time by such property's Term Loan Percentage of principal payments
and prepayments occurring after the Conversion Date (other than payments and
prepayments resulting from or made in connection with the release of a
Borrowing Base Property as Collateral). If a Property is removed or released
as a Borrowing Base Property, for any reason, the Term Loan Amount for such
Property shall be zero.
"TERM LOAN BORROWING BASE" shall mean the lesser of (i) the outstanding
balance of the Revolving Facility on the Conversion Date; (ii) the maximum
Term Loan amount as determined under Section 4.03 below; (iii) the sum of the
Term Loan Limit or Term Loan Amount (whichever is less) for all Borrowing
Base Properties at any time; and (iv) the Aggregate Commitment minus, as of
any date, in the case of (i), (ii) or (iii) above, the aggregate cumulative
amortization payments required to be made through such date under Section
2.06(c).
"TERM LOAN DEBT SERVICE COVERAGE-BASED PRINCIPAL LIMIT" shall mean, with
respect to any Borrowing Base Property, the principal balance which, if it
were outstanding under the Term Loan, would produce a Term Loan Debt Service
Coverage Ratio for such Borrowing Base Property equal to 1.30:1.0. Said
amount shall be determined as of the Conversion Date and for any fiscal
quarter based on the Term Loan Debt Service Coverage Ratio for the period
from the commencement of the then current year through the end of the most
recent quarter.
"TERM LOAN DEBT SERVICE COVERAGE RATIO" with respect to any Borrowing
Base Property shall mean the ratio determined as of the Conversion Date and
for each fiscal quarter during the term of the Term Loan by dividing the
Annualized Current Year NOI for such Borrowing Base Property for the
applicable quarter by Pro Forma Term Loan Debt Service for such Borrowing
Base Property for such quarter.
"TERM LOAN LIMIT" for any Borrowing Base Property shall mean the lesser
of the amounts described in clauses (a) and (b) below; such amounts shall be
calculated as of the Conversion Date and as of the end of each fiscal quarter
while the Term Loan is outstanding for each property then in the Borrowing
Base:
(a) sixty percent (60%) of the "as-is" appraised value of such
Borrowing Base Property, as most recently determined prior to the Conversion
Date or the end of the fiscal quarter in question pursuant to an M.A.I.
appraisal or reappraisal ordered and approved by the Agent, minus the amounts
of any assessment liens against such property; or
(b) the Term Loan Debt Service Coverage-Based Principal Limit for
such Borrowing Base Property as of the Conversion Date or for the fiscal
quarter in question, as applicable.
"TERM LOAN PERCENTAGE" for any Borrowing Base Property shall mean at any
time the percentage equivalent of the Term Loan Limit for such Borrowing Base
Property as
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of the Conversion Date divided by the sum of the Term Loan Limits for all
Borrowing Base Properties at such time.
"TERM LOAN MATURITY DATE" means the date which is three (3) years after
the Conversion Date, subject, however, to earlier acceleration pursuant to
the provisions of the Loan Documents.
"TITLE INSURER" means a title insurance company acceptable to the Agent.
"TITLE POLICY" for any Borrowing Base Property means an extended
coverage 1970 ALTA Loan Policy (revised 10/17/70) issued by the Title Insurer
and in form and substance satisfactory to the Agent in its discretion, which
shall insure the lien of the Mortgage on such Borrowing Base Property as a
valid first lien on the Company's (or the applicable Wholly-Owned
Subsidiary's) fee simple estate therein (as well as on all rights and
easements under any applicable reciprocal easement or similar agreement and
all other appurtenant interests), subject to no exceptions other than
Permitted Exceptions. Unless otherwise approved by the Agent, each Title
Policy shall be in the amount of the Commitments of all Lenders (or such
lesser amount as may be approved by the Agent for Borrowing Base Properties
located in states where aggregate liability coverage is not available), and
shall be reinsured with other companies and in such amounts as may be
acceptable to the Agent pursuant to 1987 ALTA Facultative Reinsurance
Agreements (with direct access) in form and substance satisfactory to the
Agent in its discretion. Each Title Policy shall also include such
endorsements as may be required by the Agent in its discretion, including,
without limitation, each of the following endorsements: (i) a CLTA 100
endorsement relating to covenants, conditions and restrictions and
encroachments; (ii) a CLTA 103.4 or 103.7 endorsement insuring that such
Borrowing Base Property has access to a specified physically open, dedicated
and accepted public street; (iii) a CLTA 104.6 endorsement insuring the
priority of the assignment of leases and rents for such Borrowing Base
Property; (iv) a CLTA 111.5 endorsement (variable rate); (v) a CLTA 116
endorsement; (vi) a CLTA 116.1 endorsement; (vii) a revolving credit
endorsement; (viii) a tie-in endorsement; (ix) an environmental endorsement;
and (x) "last-dollar" endorsement. Unless otherwise approved by the Agent,
no Title Policy shall include an exception for bankruptcy, fraudulent
conveyance or creditors' rights issues. The Title Insurer shall not insure
or endorse over any lien or other easement, whether based on an indemnity
from the Company or otherwise, without the prior approval of the Agent.
"TOTAL INDEBTEDNESS" means as of any date of determination and in
respect of any Person, all outstanding Indebtedness, and in the case of clause
(iii) below, Indebtedness available to be drawn, of a Person, and shall include,
without limitation: (i) such Person's share of the Indebtedness of any
partnership or joint venture in which such Person directly or indirectly holds
any interest; (ii) any recourse or contingent obligations, directly or
indirectly, of such Person with respect to any Indebtedness of such partnership
or joint venture in excess of its proportionate share and (iii) such Person's
liability in respect of letters of credit, whether such liability in contingent
or fixed (such liability to be determined on the assumption that all conditions
for drawing upon such letters of credit have been complied with).
Notwithstanding the foregoing, (x) Intra-Company Debt, and (y) accounts payable
to trade creditors for goods and services and current operating liabilities (not
the result of the
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borrowing of money) incurred in the Ordinary Course of Business in accordance
with customary terms and paid within the specified time, shall be excluded
from the calculation of "Total Indebtedness" but shall not otherwise be
excluded as Indebtedness for any other purpose hereof.
"UCC" means the Uniform Commercial Code as in effect in any relevant
jurisdiction.
"UNCONSOLIDATED PARTNERSHIP" means any partnership or joint venture (a)
in which the Company or any Subsidiary of the Company or the REIT holds an
interest which is not consolidated in the financial statements of the REIT or
(b) which is not a Subsidiary.
"UNFUNDED PENSION LIABILITIES" means the excess of a Plan's benefit
liabilities under section 4001(a)(16) of ERISA, over the current value of
that Plan's assets, determined in accordance with the assumptions used by the
Plan's actuaries for funding the Plan pursuant to section 412 for the
applicable plan year.
"UNITED STATES" and "U.S." each mean the United States of America.
"UNITS" shall mean the units of limited partnership interest in the
Company issued and outstanding from time to time.
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary of the Company or the REIT
(i) one hundred percent (100%) of the Stock or other equity or other
beneficial interests (in the case of Persons other than corporations) is
owned directly or indirectly by (A) the Company and/or (B) the REIT and (ii)
which is formed in compliance with Section 7.07 (c); provided, however, that
where such term is qualified with respect to a specific Person (e.g.,
"Wholly-Owned Subsidiary of the REIT") such term means a Subsidiary (i) one
hundred percent (100%) of the Stock or other equity or other beneficial
interests (in the case of Persons other than corporations) is owned directly
or indirectly by the specified Person, and (ii) which is formed in compliance
with Section 7.07 (c).
1.02 OTHER DEFINITIONAL PROVISIONS.
(a) DEFINED TERMS. Unless otherwise specified herein or therein,
all terms defined in this Agreement shall have the defined meanings when used
in any certificate or other document made or delivered pursuant hereto. The
meaning of defined terms shall be equally applicable to the singular and
plural forms of the defined terms. Terms (including uncapitalized terms) not
otherwise defined herein but defined in the UCC shall have the meanings set
forth therein.
(b) THE AGREEMENT. The words "hereof", "herein", "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement;
and section, schedule and exhibit references are to this Agreement unless
otherwise specified.
(c) CERTAIN COMMON TERMS.
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(i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) The term "ratably" means, at any time that Loans may be
outstanding, in accordance with the amount of the outstanding Loans of the
respective Lenders; and, at any time that no Loans are outstanding, in
accordance with the outstanding Commitments of the respective Lenders.
(d) PERFORMANCE; TIME. Whenever any performance obligation
hereunder (other than a payment obligation) is stated to be due or required
to be satisfied on a day other than a Business Day, such performance shall be
made or satisfied on the next succeeding Business Day. In the computation of
periods of time from a specified date to a later specified date, the word
"from" means "from and including"; the words "to" and "until" each mean "to
but excluding," and the word "through" means "to and including". If any
provision of this Agreement refers to any action taken or to be taken by any
Person, or which such Person is prohibited from taking, such provision shall
be interpreted to encompass any and all means, direct or indirect, of taking,
or not taking, such action.
(e) CONTRACTS. Unless otherwise expressly provided herein,
references to agreements and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications thereto, but only
to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document.
(f) LAWS. References to any statute or regulation are to be
construed as including all statutory and regulatory provisions consolidating,
amending or replacing the statute or regulation.
(g) CAPTIONS. The captions and headings of this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.
(h) INDEPENDENCE OF PROVISIONS. The parties acknowledge that this
Agreement and other Loan Documents may use several different limitations,
tests or measurements to regulate the same or similar matters, and that such
limitations, tests and measurements are cumulative and must each be
performed, except as expressly stated to the contrary in this Agreement.
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1.03 ACCOUNTING PRINCIPLES.
(a) GAAP. Unless the context otherwise clearly requires, all
accounting terms not expressly defined herein shall be construed, and all
financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied. Notwithstanding anything to the
contrary contained herein, all financial covenants applicable to the Company
and the REIT hereunder shall be calculated based upon the EBITDA, Interest
Expense, Scheduled Amortization, Net Worth, Total Indebtedness, Gross Asset
Value, and other accounting items of the REIT, before any adjustment for the
minority interest attributable to the holders of limited partner interests in
the Company.
(b) FISCAL YEAR; QUARTER. References herein to "fiscal year" and
"fiscal quarter" refer to such fiscal periods of the Company.
ARTICLE II
THE FACILITY
2.01 AMOUNTS AND TERMS OF COMMITMENTS.
(a) REVOLVING LOANS.
(i) REVOLVING LOANS. Each Lender severally agrees, on the
terms and conditions hereinafter set forth, to make loans to the Company
(each such loan, a "Revolving Loan" and all such loans collectively, the
"Revolving Facility") from time to time on any Business Day during the period
from the Closing Date to the earlier of the Conversion Date or the Revolving
Facility Maturity Date, in an aggregate amount not to exceed at any time the
lesser of the amount set forth opposite such Lender's name in SCHEDULE 2.01
(such amount as the same may be affected by reason of Section 2.01(a)(iv) or
reduced or increased as a result of one or more assignments pursuant to
Section 10.08, and inclusive of such Lender's participation in the Letter of
Credit Liability, such Lender's "Revolving Commitment") or such Lender's
Commitment Percentage of the Revolving Availability.
(ii) LETTERS OF CREDIT. Provided that the Company is in
compliance with all of the terms and conditions for the making of Revolving
Loans by the Lenders, the Company shall have the right to request, through a
Borrowing Notice, the Issuing Lender to deliver from time to time Letters of
Credit, and the Issuing Lender shall promptly upon such request issue the
requested Letter of Credit, each of which shall be in a form approved by the
Issuing Lender; provided that the maximum Letter of Credit Liability at any
one time outstanding shall not exceed $2,000,000. Each drawing under a Letter
of Credit shall be payable in full upon the date thereof by the Company,
without notice or demand of any kind. The Company shall have the right to
obtain, in accordance with the terms and conditions otherwise applicable to
advances of the Revolving Loans hereunder, a Revolving Loan hereunder in the
amount so drawn to be used to reimburse BofA as the Issuing Lender for the
amount so drawn. The liability of the Company to reimburse the Issuing
Lender for the amounts drawn under Letters of Credit shall be included within
the terms "Revolving Loan" and "Loan" for all purposes of this Agreement, and
any amounts so drawn shall bear interest
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until paid in full (whether out of the proceeds of a Revolving Loan otherwise
permitted hereunder or otherwise) at the Base Rate, subject to Section
2.09(c). The Company's Obligation to reimburse the Issuing Lender for any
and all amounts drawn under any Letter of Credit and all interest thereon
shall be secured by the Collateral. The Company's obligations to repay any
and all drawings under any Letter of Credit and any and all other amounts
payable to Issuing Lender, Agent or any other Lender hereunder shall be
absolute, irrevocable and unconditional under any and all circumstances
whatsoever and irrespective of any set-off, counterclaim or defense to
payment which the Company may have or have had against Issuing Lender, Agent
or any other Lender (except such as may arise out of Issuing Lender's,
Agent's or any other Lender's gross negligence or willful misconduct
hereunder) or any other Person, including, without limitation, any setoff,
counterclaim or defense based upon or arising out of:
(A) Any lack of validity or enforceability of this
Agreement or any of the other Loan Documents or such Letter of Credit;
(B) Any amendment or waiver of or any consent to or
departure from the terms of such Letter of Credit or the Loan Documents;
(C) The existence of any claim, setoff, defense or other
right which the Company or any other Person may have at any time against, any
beneficiary or any transferee of such Letter of Credit (or any Person for
whom any such beneficiary or any such transferee may be acting), Issuing
Lender, Agent or any other Lender or any other Person, whether in connection
with such Letter of Credit, the Loan Documents or any unrelated transaction;
(D) Any demand, statement or any other document presented
under such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect, or any statement therein being untrue or
inaccurate in any respect whatsoever or any variations in punctuation,
capitalization, spelling or format of the drafts or any statements presented
in connection with any drawing under such Letter of Credit;
(E) The surrender or impairment of any security for the
performance or observance of any of the terms of such Letter of Credit or the
Loan Documents; and
(F) The failure, for any reason, of any Lender to fund
advances to the Company hereunder for any purpose.
Nothing contained herein shall constitute a waiver of any rights or remedies
of the Company against Issuing Lender, Agent or any other Lender arising out
of the gross negligence or willful misconduct of Issuing Lender, Agent or any
such other Lender.
(iii) LIMITS ON REVOLVING LOANS AND LETTERS OF CREDIT.
Notwithstanding anything to the contrary set forth herein, after giving
effect to any Revolving Loan and after the issuance of any Letter of Credit,
in no event shall the Outstanding Amount exceed the then applicable Revolving
Facility Borrowing Base. Within the limitations set forth in this Section
2.01(a), and subject to the other terms and conditions hereof, the
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Company may borrow or request Letters of Credit to be issued under this
Section 2.01(a), repay or prepay pursuant to Section 2.05 or otherwise cause
Letters of Credit to be cancelled or to expire undrawn and reborrow (subject
to the limitations set forth hereinbelow) or request additional Letters of
Credit to be issued pursuant to this Section 2.01.
(iv) INCREASE IN COMMITMENTS. The Agent may from time to time
prior to the Revolving Facility Maturity Date arrange an increase in the
Aggregate Commitment in accordance with this Section 2.01(a)(iv); provided,
that the aggregate amount of all such Aggregate Commitment increases shall
not exceed $40,000,000 and in no event shall the Aggregate Commitment exceed
$100,000,000. Agent may arrange either for an existing Lender to increase its
Commitment or arrange for one or more lenders not a party to this Agreement,
but qualifying as an Eligible Assignee (each such person, an "Additional
Lender"), to assume such additional Commitment(s) (provided that any
Additional Lender shall have a Commitment of not less than $5,000,000) by
becoming a party to this Agreement by signing an Additional Lender Agreement
and such other documentation as the Agent may reasonably request to
effectuate such transaction. If, after giving effect to any increase in the
Commitments as aforesaid, the respective Commitment Percentages of the
Lenders are not the same as the respective Commitment Percentages of the
Lenders immediately prior to such increase, the Company shall prepay any
outstanding Loans, together with interest thereon and any amounts due
pursuant to Section 3.04, effective as of the date of such increase, which
payments shall be applied in accordance with each Lender's Commitment
Percentage prior to giving effect to such increase, and may reborrow such
Revolving Loans from each Lender in accordance with each Lender's revised
Commitment Percentage after giving effect to such increase. The Agent and
the Lenders shall use reasonable efforts to effect any such increase so as to
minimize amounts due pursuant to Section 3.04. In the event of an increase
in Commitments pursuant to this Section, appropriate adjustments shall be
made to the Bridge Commitment Percentages of the lenders party to the Bridge
Loan Agreement, as more fully described therein.
(v) OUTSTANDING LETTER OF CREDIT LIABILITY AS OF THE
CLOSING DATE. As of the Closing Date, the Company and each Lender acknowledge
that BofA as the Issuing Lender has issued Letters of Credit in the outstanding
stated amount of $614,739 under the Previous Credit Agreement, which Letters of
Credit shall, for all purposes hereof, be deemed to have been issued under this
Agreement and shall be subject to the terms and conditions hereof. The
Company's reimbursement obligations in respect of such Letters of Credit shall
be secured by the Mortgages and other Collateral Documents.
(b) REVOLVING CREDIT USAGE. The Company shall use the proceeds of
all Revolving Loans and all Letters of Credit for general working capital
purposes, including, without limitation, acquisitions of multi-family
apartment projects and other real estate assets (including, without
limitation, the acquisition of the NHP-Related Real Estate Assets, but only
in accordance with the NHP-Related Real Estate Acquisition Agreement and any
amendment thereof approved by the Requisite Lenders), Investments in Persons
engaged primarily in the business of owning or managing real estate assets
and other Investments permitted hereunder, Capital Expenditures and
redevelopment projects. Notwithstanding the foregoing, in no event shall the
Company use the proceeds of any Revolving Loans or Letters of Credit
hereunder to pay for the NHP-Related Real Estate Assets in amounts in excess
of the following:
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--------------------------------------------------------------------
Maximum Amount of
NHP-Related Real Estate Loans and Letters of
Asset to be acquired Credit to be used for
the acquisition thereof
---------------------------------------------------------------------
Through purchase, the interests of
the Selling Shareholders and
Phemus in the entities holding the
general partner interests in a port-
folio of conventional Class A
apartment projects containing
11,078 apartment units $24,500,000
---------------------------------------------------------------------
Through capital contribution,
acquisition of partnership interests
in partnerships owning certain
affordable housing units and man-
agement rights $14,500,000
---------------------------------------------------------------------
Through purchase, all of the stock
in HPI, Inc. $ 3,500,000
---------------------------------------------------------------------
(c) AMOUNTS AND TERMS OF TERM LOAN. Each Lender severally agrees,
on the terms and conditions hereinafter set forth, and provided all
Conversion Conditions have been satisfied, to continue or convert loans to
the Company (each such loan, a "Term Advance" and all such loans collectively
the "Term Loan") from time to time on any Business Day from the Conversion
Date to the Term Loan Maturity Date, in an aggregate amount not to exceed at
any time the amount set forth opposite the Lender's name in SCHEDULE 2.01
(such amount as the same may be affected by reason of Section 2.01(a)(iv) or
reduced or increased as a result of one or more assignments pursuant to
Section 10.08, the Lender's "Term Commitment"); provided, however, that after
giving effect to any Term Advance, the Outstanding Amount shall not exceed
the then applicable Term Loan Borrowing Base. Once repaid or prepaid, the
Company may not reborrow any Term Advance.
(d) LOANS GENERALLY. As used herein, the term "Loan" or "Loans"
shall mean any Revolving Loan or any Term Advance, as the case may be.
2.02 NOTE. The Loans made by each Lender shall be evidenced by a Note
dated the Closing Date payable to the order of that Lender in an amount equal
to its Commitment. Each Lender shall endorse on the schedules annexed to the
Note, the date, amount and maturity of each Loan made by it and the amount of
each payment of principal made by the Company with respect thereto. Each
Lender is irrevocably authorized by the Company to endorse its Note, and each
Lender's record shall be conclusive absent manifest error; PROVIDED, HOWEVER,
that the failure of a Lender to make, or an error in making, a notation
thereon with respect to any Loan shall not limit or otherwise affect the
obligations of the Company hereunder or under any such Note to such Lender.
As of the Closing Date, the Notes shall evidence each Lender's share of the
outstanding advances made under the Previous Credit Agreement (together with
all accrued interest thereon as of the date hereof and accruing hereafter),
which advances shall, for all purposes hereof, be deemed to have
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been made under this Agreement and shall be subject to the terms and
conditions hereof. All such advances shall be evidenced by the Notes and
shall be secured by the Mortgages and other Collateral Documents and shall
bear interest at the rates and for the remainder of the Interest Periods
established under the Previous Credit Agreement.
2.03 PROCEDURE FOR BORROWING.
(a) BORROWING NOTICE. Each Loan shall be made upon the
irrevocable written notice (including notice via facsimile confirmed
immediately by a telephone call) of the Company in the form of a Borrowing
Notice, as follows:
(i) DESIGNATION OF INTEREST RATE. The Company shall have the
right to elect that a Loan be made as a LIBOR Loan or a Base Rate Loan;
PROVIDED that, unless the Agent shall otherwise agree in writing, the Company
may not elect that a Loan be made as a LIBOR Loan if after giving effect to
such Loan there shall be more than five (5) different LIBOR Loans outstanding.
(ii) [intentionally left blank]
(iii) TIMING OF NOTICE. Each Borrowing Notice shall be
submitted to and received by the Agent prior to 9:00 a.m. (California time)
(A) at least three (3) Business Days prior to the specified borrowing date, in
the case of LIBOR Loans; (B) at least one (1) Business Day prior to the
specified borrowing date, in the case of Base Rate Loans; and (C) in the case of
a Borrowing Notice requesting a proposed Letter of Credit, at least five (5)
Business Days prior to the proposed issuance date of such Letter of Credit.
(iv) CONTENTS OF NOTICE. Each Borrowing Notice shall set
forth the following information with respect to the Loan subject thereto:
(A) a single, specific borrowing date, which shall be a
Business Day;
(B) a single, exact amount for the Loan, which for any
LIBOR Loan, shall be in an aggregate minimum principal amount of $1,000,000
or any multiple of $100,000 in excess thereof;
(C) whether the Loan is to be made as a LIBOR Loan or a
Base Rate Loan;
(D) if the Loan is to be made as a LIBOR Loan, the
applicable Interest Period. If a Borrowing Notice shall fail to specify the
applicable Interest Period for any LIBOR Loan requested, such Loan will
instead be made as a Base Rate Loan; and
(E) in the case of any proposed Letter of Credit, such
Borrowing Notice shall be accompanied by a letter of credit application,
appropriately completed, on the Issuing Lender's standard form substantially
in the form of EXHIBIT H.
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(b) NOTICE TO LENDERS. Upon receipt of a Borrowing Notice
conforming with the terms of Section 2.03(a), the Agent shall promptly notify
each Lender thereof and of the amount of such Lender's Commitment Percentage
of the Loan described therein.
(c) FUNDING OF COMMITMENT. Each Lender shall make the amount of
its Commitment Percentage of the Loan described in any Borrowing Notice
available to the Agent for the account of the Company at the Payment Office
by 9:00 a.m. (California time) on the borrowing date specified therein in
funds immediately available to the Agent. Unless any applicable condition
specified in Article IV has not been satisfied, such funds shall then be made
available to the Company by the Agent at such office by crediting the account
of the Company with the aggregate of the amounts made available to the Agent
by the Lenders (in like funds as received by the Agent).
(d) FREQUENCY OF BORROWINGS. No more than four (4) Borrowing
Notices may be given in any calendar month.
2.04 CONVERSION AND CONTINUATION ELECTIONS.
(a) NOTICE OF CONVERSION/CONTINUATION. Each conversion or
continuation of an outstanding Base Rate Loan or LIBOR Loan shall be made upon
the irrevocable written notice (including notice via facsimile confirmed
immediately by a telephone call) of the Company in the form of a Notice of
Conversion/Continuation, as follows:
(i) DESIGNATION OF INTEREST RATE. The Company shall have
the right to make the following elections with respect to the conversion or
continuation of any outstanding Base Rate Loan or LIBOR Loan:
(A) to convert, on any Business Day, any Base Rate Loan,
in a minimum principal amount of $1,000,000 or an integral multiple of
$100,000 in excess thereof, into a LIBOR Loan; or
(B) to convert, on the last day of any Interest Period
with respect to a LIBOR Loan (or, on any other day of any Interest Period,
upon payment of any loss or expense incurred or sustained by any Lender with
respect to the early termination of such LIBOR Loan prior to the last day of
the Interest Period as provided in Section 3.04), such LIBOR Loan into a Base
Rate Loan; or
(C) to continue, on the last day of any Interest
Period with respect to a LIBOR Loan (or, on any other day of any Interest
Period, upon payment any loss or expense incurred or sustained by any Lender
with respect to the early termination of such LIBOR Loan prior to the last day
of the Interest Period as provided in Section 3.04), such LIBOR Loan (or any
part thereof in a minimum principal amount of $1,000,000 or an integral multiple
of $100,000 in excess thereof) for a subsequent Interest Period;
PROVIDED, that unless the Agent shall otherwise agree in writing, the Company
may not elect to have any outstanding LIBOR Loan or Base Rate Loan (or any
portion thereof) continued as
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or converted into a LIBOR Loan if (A) a Default or Event of Default shall
exist, (B) after giving effect to such continuation or conversion there shall
be more (i) than five different LIBOR Loans outstanding or (ii) the aggregate
outstanding principal amount of all LIBOR Loans shall have been reduced, by
payment, prepayment, or partial conversion to less than $1,000,000.
(ii) TIMING OF NOTICE. Each Notice of Conversion/Continuation
shall be submitted to and received by the Agent prior to 9:00 a.m.
(California time): (A) at least three (3) Business Days prior to the Pricing
Conversion Date of any outstanding Loan to be converted into or continued as
a LIBOR Loan; and (B) at least one (1) Business Day prior to the Pricing
Conversion Date of any outstanding Loan to be converted into or continued as
a Base Rate Loan.
(iii) CONTENTS OF NOTICE. The Notice of
Conversion/Continuation shall set forth the following information with
respect to the Loan subject thereto:
(A) the Pricing Conversion Date, which shall be a Business
Day;
(B) the amount of the LIBOR Loan or Base Rate Loan to be
converted or continued;
(C) whether such Loan is to be converted into/continued as
a LIBOR Loan or a Base Rate Loan; and
(D) if such Loan (or any portion thereof) is to be
converted into/continued as a LIBOR Loan, the applicable Interest Period.
(b) AUTOMATIC CONVERSIONS. Any outstanding LIBOR Loan shall
automatically convert to a Base Rate Loan, effective on the last day of the
applicable Interest Period, if as of such date:
(i) DEFAULT; EVENT OF DEFAULT. A Default or Event of Default
shall exist;
(ii) FAILURE TO PROVIDE NOTICE. The Company shall have failed
to submit a Notice of Conversion/Continuation for such Loan in compliance
with the terms of Section 2.04(a); or
(iii) FAILURE TO MAINTAIN MINIMUM LOANS. If the aggregate
outstanding principal amount of LIBOR Loans having the same Interest Period
shall have been reduced, by payment, prepayment, or partial conversion to be
less than $1,000,000.
(c) NOTICE TO LENDERS. Upon receipt of a Notice of
Conversion/Continuation conforming with the terms of Section 2.04(a), or an
automatic conversion pursuant to Section 2.04(b), the Agent shall promptly
notify each Lender thereof. All
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<PAGE>
conversions and continuations shall be made pro rata according to the
respective outstanding principal amounts of the Loans converted or continued.
2.05 OPTIONAL PREPAYMENTS; OPTIONAL REDUCTIONS OF THE REVOLVING
COMMITMENT.
(a) Subject to Section 3.04, the Company may, at any time and from
time to time, ratably prepay Loans in whole or in part, in an aggregate
minimum amount of $1,000,000 or an integral multiple of $100,000 in excess
thereof, upon (a) at least three (3) Business Days' prior notice, if the
Loans to be prepaid are LIBOR Loans, and (b) at least one Business Day's
prior notice, if the Loans to be prepaid are Base Rate Loans. Such notice of
prepayment shall specify (i) the amount of such prepayment, (ii) the date of
such prepayment, which shall be a Business Day, and (iii) whether such
prepayment is of LIBOR Loans, Base Rate Loans, or any combination thereof.
Such notice shall not thereafter be revocable by the Company and the Agent
shall promptly notify each Lender thereof and of such Lender's Commitment
Percentage of such prepayment. If a prepayment notice is given, the payment
amount specified therein shall be due and payable on the date specified
therein, together with accrued interest to such date on the amount prepaid
and any amounts required to be paid pursuant to Section 3.04.
(b) At any time after the payment in full of all obligations owing
under the Acquisition Sub Financing Documents and prior to the Conversion
Date, the Company may, upon not less than five (5) Business Days' prior
notice to Agent, terminate the aggregate Revolving Commitment of all Lenders
or permanently reduce the aggregate Revolving Commitment of all Lenders by an
aggregate minimum amount of $1,000,000 or an integral multiple of $100,000 in
excess thereof; PROVIDED that no such termination or reduction shall be
permitted if, after giving effect thereto and to any prepayments of the Loans
made on the effective date thereof, the Outstanding Amount would exceed the
amount of the Revolving Facility Borrowing Base then in effect and, PROVIDED,
FURTHER, that once reduced in accordance with this Section 2.05(b), the
aggregate Revolving Commitment of all Lenders may not be increased. Any
reduction of the aggregate Revolving Commitment of all Lenders shall be
applied to each Lender's Revolving Commitment in accordance with such
Lender's Revolving Commitment Percentage. If the Revolving Commitments are
terminated in their entirety, all accrued commitment fees under Section
2.11(c) to, but not including, the effective date of such termination shall
be payable on the effective date of such termination.
2.06 MANDATORY PREPAYMENTS OF LOANS; MANDATORY AMORTIZATION AND
REDUCTIONS.
(a) STOCK OR DEBT ISSUANCE AFTER CONVERSION DATE. If at any time
after the Conversion Date, the REIT or the Company shall (i) make any public
or private issuance of Stock for cash or Cash Equivalents or (ii) incur
Indebtedness for borrowed money (other than Indebtedness permitted under
Section 7.02(a)-(f)), the Company shall (A) notify the Agent of such issuance
or incurrence (including the amount of the estimated Net Issuance Proceeds
thereof) and (B) immediately upon the receipt of the Net Issuance Proceeds of
such issuance or incurrence, prepay Loans in an amount equal to the following
percentages of the aggregate Net Issuance Proceeds of such issuance or
incurrence:
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(i) during the 1st year after Conversion Date: 50%;
(ii) during the 2nd year after Conversion Date: 75%; and
(iii) during the 3rd year after Conversion Date: 100%.
(b) BORROWING BASE. If at any time the Outstanding Amount exceeds
the then applicable Borrowing Base, the Company shall immediately prepay
Loans (or cause Letters of Credit to be cancelled) in an amount sufficient to
reduce the Outstanding Amount to the then applicable Borrowing Base. In
addition, if at any time the Outstanding Amount of the Term Loan multiplied
by the Term Loan Percentage for any Borrowing Base Property exceeds the Term
Loan Amount for such property or the Term Loan Limit for such property,
whichever is less, the Company shall immediately prepay Term Advances in the
amount of such excess.
(c) AMORTIZATION. On the last Business Day of each March, June,
September and December following the Conversion Date, the Company shall repay
or prepay Loans in an aggregate amount equal to one-one hundredth (1/100th)
of the initial outstanding balance of the Term Loan as of the Conversion Date.
(d) EXERCISE OF PUT RIGHTS. If the Company or any Subsidiary
exercises any right under the NHP-Related Real Estate Acquisition Agreement
to transfer to the sellers thereunder any NHP-Related Real Estate Assets for
a purchase price payable in cash, the Company shall immediately upon such
transfer prepay Loans in an amount equal to the purchase price so received in
cash.
2.07 APPLICATION OF PROCEEDS. Unless otherwise instructed by the
Company, any prepayments pursuant to Section 2.05 or Section 2.06 made (i) on
a day other than the last day of an Interest Period for any Loan shall be
applied first to any Base Rate Loans then outstanding and then to any LIBOR
Loans then outstanding, in the inverse order of such LIBOR Loans' stated
maturities and (ii) on the last day of an Interest Period for any LIBOR Loan
shall be applied first to such maturing LIBOR Loan, then to any Base Rate
Loans outstanding, and then to any other LIBOR Loans then outstanding, in the
inverse order of such LIBOR Loans' stated maturities.
2.08 REPAYMENT. Subject to Section 2.06, unless the Revolving
Facility has been converted into the Term Loan, the Company shall repay all
Obligations on the Revolving Facility Maturity Date and, if the Revolving
Facility has been converted into the Term Loan, shall repay all Obligations
on the Term Loan Maturity Date.
2.09 INTEREST.
(a) RATES. Subject to Section 2.09(c), each Loan shall bear
interest on the outstanding principal amount thereof from the date such Loan
is made until the date such Loan becomes due, at a rate per annum equal to
the LIBO Rate or the Base Rate, as the case may be, PLUS the Applicable
Margin.
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(b) PAYMENT DATES. Interest on each Loan shall be payable in
arrears on each Interest Payment Date and the Revolving Facility Maturity
Date or, if the Revolving Facility has been converted into the Term Loan, the
Term Loan Maturity Date. Interest shall also be payable on the date of any
prepayment of Loans pursuant to Section 2.05 or Section 2.06 for the portion
of the Loans so prepaid. During the existence of any Event of Default,
interest shall be payable on demand.
(c) DEFAULT RATES. While any Event of Default exists or after
acceleration and during the continuation thereof, and after as well as before
any entry of judgment thereon, the Company shall pay interest (after as well
as before judgment to the extent permitted by law) on all outstanding
Obligations at a rate per annum which is determined by increasing the
Applicable Margin then in effect by three percent (3%) per annum; PROVIDED,
HOWEVER, that, on and after the expiration of the Interest Period applicable
to any LIBOR Loan outstanding on the date of occurrence of such Event of
Default or acceleration, the outstanding Obligations shall, during the
continuation of such Event of Default or after acceleration and during the
continuation thereof, bear interest at a fluctuating rate per annum equal to
the Base Rate plus three percent (3%).
(d) LIMITATIONS FOR APPLICABLE LAW. Anything herein to the
contrary notwithstanding, payments of interest shall not be required, for any
period for which interest is computed hereunder, to the extent (but only to
the extent) that contracting for or receiving such payments by the respective
Lender would be contrary to the provisions of any law applicable to such
Lender limiting the highest rate of interest which may be lawfully contracted
for, charged or received by such Lender, and in such event the Company shall
pay such Lender interest at the highest rate permitted by applicable law.
2.10 FEES.
(a) ARRANGEMENT FEE. Upon the due execution and delivery of this
Agreement by the Company, the Agent and each of the Lenders which are the
initial Lenders party to this Agreement, the Company shall pay to BofA an
arrangement fee as set forth in a separate letter agreement between the
Company and BofA.
(b) FACILITY FEES. The Company shall pay to BofA such facility
fees as are set forth in a separate letter agreement between the Company and
BofA.
(c) COMMITMENT FEES. Commencing on the date hereof and up to the
Conversion Date, the Company shall pay to the Agent for the account of each
Lender ratably a commitment fee on the average daily unused portion of such
Lender's Commitment Percentage of the Aggregate Commitment (inclusive of the
average daily undrawn available amount of all Letters of Credit outstanding),
regardless of whether or not such Aggregate Commitment is available to be
advanced hereunder equal to 0.175% per annum. Such commitment fee shall
accrue from the Closing Date to the earlier of the Conversion Date or the
Revolving Facility Maturity Date and shall be due and payable in arrears
quarterly on the last Business Day of each March, June, September, and
December commencing on the last Business Day of June 1997, on the Revolving
Facility Maturity Date, and on any other date on which the Revolving Facility
is paid in full and the Commitment permanently terminated.
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(d) CONVERSION FEE. On the Conversion Date, the Company shall pay to
the Agent for the account of each Lender then a party to this Agreement
ratably a conversion fee equal to 0.50% of the original balance of the Term
Loan as of the Conversion Date.
(e) BORROWING BASE ADJUSTMENT FEE. Without limiting the Company's
obligations to pay costs and expenses under Section 2.13 and 10.04, upon the
addition of a project as a Borrowing Base Property on or after the date
hereof, the Company shall pay to the Agent for the ratable benefit of the
Lenders a Borrowing Base Property adjustment fee in the amount of $2,000 per
property for each project added as a Borrowing Base Property on or after the
date hereof after the first five (5) approved additional Borrowing Base
Properties.
(f) LETTER OF CREDIT FEES.
(i) The Company shall pay to Agent for the benefit of the Issuing
Lender only a non-refundable letter of credit origination fee in the amount
of one-half of one percent (0.50%) of the initial available amount under each
Letter of Credit, prior to issuance of such Letter of Credit and as a
condition thereto.
(ii) The Company shall pay to the Agent for the ratable benefit of
the Lenders a letter of credit commitment fee in an amount equal to one and
six hundred twenty-five thousandths percent (1.625%) per annum of the
aggregate daily undrawn amount of all Letters of Credit outstanding.
(iii) Such fees as described in Section 2.10(f)(ii), shall accrue
from the date of issuance of each Letter of Credit to the date of the
expiration or cancellation thereof, and shall be due and payable in arrears
quarterly on the last Business Day of each March, June, September and
December, on the Revolving Facility Maturity Date, and on any other date on
which the Revolving Facility is paid in full and the Revolving Commitment
permanently terminated.
(g) ACCRUED FEES. The Company ratifies and confirms its agreement to
pay all accrued but unpaid fees under the Previous Credit Agreement, which
obligation shall be paid promptly upon demand by the Agent and shall not be
superseded by this Agreement.
2.11 COMPUTATION OF FEES AND INTEREST.
(a) COMPUTATION PERIOD. All computations of fees and interest under
this Agreement shall be made on the basis of a 360-day year and actual days
elapsed. Interest and fees shall accrue during each period for which
interest or fees are computed from the first day thereof to the last day
thereof.
(b) NOTICE. The Agent shall, with reasonable promptness, notify the
Company and the Lenders of each determination of a LIBO Rate, PROVIDED that
no failure to do so shall relieve the Company of any obligation hereunder.
Any change in the interest rate on a Loan resulting from a change in the
Reserve Percentage (as defined in the definition of
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"LIBO Rate") shall become effective as of the opening of business on the day
on which such change becomes effective. The Agent shall with reasonable
promptness notify the Company and the Lenders of the effective date and the
amount of each such change, PROVIDED that no failure to do so shall relieve
the Company of any obligation hereunder. Each determination of an interest
rate by the Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Company and the Lenders in the absence of
manifest error.
(c) DETAIL OF CALCULATION. The Agent shall, at the request of the
Company or any Lender, deliver to the Company or such Lender, as the case may
be, a statement showing the quotations used by the Agent in determining any
interest rate.
2.12 PAYMENTS BY THE COMPANY.
(a) TERMS OF PAYMENTS. All payments (including prepayments) to be made
by the Company on account of principal, interest, fees and other amounts
required hereunder shall be made without setoff or counterclaim and shall,
except as otherwise expressly provided herein, be made to the Agent for the
ratable account of the Lenders at the Payment Office, in dollars and in
immediately available funds, no later than 9:00 a.m. (California time) on the
date specified herein. The Agent shall promptly distribute to each Lender
such Lender's Commitment Percentage (or other applicable share as expressly
provided herein) of such principal, interest, fees or other amounts (in like
funds as received). Any payment which is received by the Agent later than
9:00 a.m. (California time) shall be deemed to have been received on the
immediately succeeding Business Day, and any applicable interest or fee shall
continue to accrue.
(b) BUSINESS DAYS. Whenever any payment hereunder shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall be included in
the computation of interest or fees, as the case may be; subject to the
provisions set forth in the definition of "Interest Period."
(c) RELIANCE OF AGENT ON PAYMENTS BY THE COMPANY. Unless the Agent
shall have received notice from the Company prior to the date on which any
payment is due to the Lenders hereunder that the Company will not make such
payment in full, the Agent may assume that the Company has made such payment
in full to the Agent on such date, and the Agent may (but shall not be
required to), in reliance upon such assumption, cause to be distributed to
each Lender on such due date the amount then due such Lender. If and to the
extent the Company shall not have made such payment in full to the Agent,
each Lender shall repay to the Agent on demand such amount distributed to
such Lender, together with interest thereon for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Agent, at the Federal Funds Rate as in effect for each such day.
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2.13 SECURITY; ADDITIONS, SUBSTITUTIONS AND EXCLUSIONS OF BORROWING
BASE PROPERTIES; CASH COLLATERAL.
(a) SECURITY. As of the Closing Date, the Borrowing Base Properties
hereunder shall be the Initial Borrowing Base Properties. Additional
apartment projects may be offered by the Company and shall be included as
Borrowing Base Properties only in accordance with the following (and any
other applicable terms and conditions contained in this Agreement):
(i) REQUEST FOR BORROWING BASE INCREASE. The Company from time to
time may request that stabilized apartment projects owned or to be acquired
in fee simple by the Company or any Wholly-Owned Subsidiary be accepted as
Collateral and included as a Borrowing Base Property by delivering to the
Agent and the Lenders a written request therefor.
(ii) ACCEPTANCE OF COLLATERAL. The Lenders shall have the right, in
their sole discretion, and after performing such due diligence as the Lenders
desire in their sole discretion, to accept or reject any project offered as
an additional Borrowing Base Property. The Lenders shall not unreasonably
withhold their acceptance of an apartment project owned in fee simple by the
Company or any Wholly-Owned Subsidiary offered as a Borrowing Base Property
hereunder if, through the due diligence contemplated hereby, the Lenders
determine that the project is of a quality and character, and is located in a
geographical market, which is consistent with the then-current or any
previous Borrowing Base Properties hereunder or under the Previous Credit
Agreement. The Company shall at its expense provide the Agent and the
Lenders with the following due diligence materials and information with
respect to any project offered as a Borrowing Base Property hereunder, at
least six (60) days prior to the delivery by the Company of the initial
Borrowing Notice with respect to such project:
(A) an Appraisal;
(B) a preliminary title report and an ALTA survey meeting the
Agent's customary requirements;
(C) written advice relating to such lien and judgment searches
as the Agent shall have requested of the Company with respect to such
Borrowing Base Property;
(D) an environmental site assessment with respect to such
Borrowing Base Property, dated as of a recent date, prepared by a qualified
firm acceptable to the Agent, identifying any conditions or operations on
such property that are not in compliance with any Environmental Laws and any
Hazardous Materials located thereon, showing Estimated Remediation Costs, if
any, and stating that there are no conditions on such property or other items
requiring further investigation or remediation, and any follow-on or
supplemental report required by the Agent, together with the Agent's standard
form Environmental Questionnaire and Disclosure Statement completed by the
Company;
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(E) if required by the Agent, a report regarding structural,
siting, engineering, seismic and code/legal compliance (including compliance
with the Americans With Disabilities Act) matters;
(F) current, certified rent roll and other reports of the
financial and operating results (for the most recent 12-month period) and
projections for the property setting forth in such format as the Agent may
require the information relevant to such property necessary to calculate the
Revolving Facility Debt Service Coverage-Based Principal Limit therefor;
(G) copies of the standard lease form and the property
management agreement and other material operating agreements or contracts
relating to the property;
(H) if required by the Agent, evidence of the zoning,
subdivision and entitlements status of the property, including, without
limitation, copies of the certificate of occupancy and any other material
permits, licenses or approvals required for the property;
(I) a copy of the purchase and sale agreement(s) by which the
Company or such Wholly-Owned Subsidiary has acquired the property;
(J) such consents, estoppels, subordination agreements and
other documents and instruments executed by Persons party to material
contracts relating to such Borrowing Base Property as are requested by the
Agent or the Requisite Lenders; and
(K) such other items as the Agent may reasonably request.
The Company acknowledges that the review of the due diligence materials
described in this Section 2.13(a)(ii) will require advance notice to the Agent
and the Lenders, and the Company undertakes to provide as much advance notice as
possible to achieve timely review of such materials.
(iii) CONDITIONS TO INCLUSION OF PROPOSED PROJECTS IN BORROWING BASE.
Each of the following conditions must be satisfied (or waived by the Agent
in writing) prior to the Lenders' acceptance of any apartment project as a
Borrowing Base Property and as Collateral hereunder:
(A) ACCEPTANCES. The Lenders shall have agreed to accept the
apartment project offered by the Company for inclusion as a Borrowing Base
Property and as Collateral in the Lenders' sole and absolute discretion in
accordance with Section 2.13(a)(ii) above, and the Agent shall have so
notified the Company in writing. Any such acceptance shall be subject to the
satisfaction of the other conditions set forth in this Section 2.13(a)(iii).
Acceptance by the Lenders of any apartment project as a Funded Project under
(and as defined in) the Bridge Loan Agreement shall not create a presumption
of acceptance of such project as a Borrowing Base Property hereunder.
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(B) COLLATERAL DOCUMENTS. The Company shall deliver to the
Agent, at the Company's sole expense: (i) the Collateral Documents for such
project, each of which shall be duly executed by the Company and recorded
where required and shall create a duly perfected first priority Lien on or
security interest in, or assignment of, the Collateral described therein, and
(ii) such termination statements and other documents as may be necessary to
terminate all Liens on such Project other than Permitted Exceptions. In the
case of a Borrowing Base Property owned by a Wholly-Owned Subsidiary, the
Collateral Documents delivered to the Agent shall include Environmental
Indemnity Agreements executed both by such Wholly-Owned Subsidiary and by the
Company.
(C) TITLE ASSURANCES. The Agent shall receive a Title Policy
for such project.
(D) INSURANCE. The Company shall have provided the Agent with
evidence satisfactory to the Requisite Lenders that the Company has obtained
and the Agent has been named as loss payee under and has been issued a
standard mortgagee endorsement for, all policies of casualty insurance, and
named as additional insured under all policies of liability insurance,
required by any Collateral Document with respect to such Borrowing Base
Property;
(E) LEGAL OPINIONS. The Company shall have delivered to the
Agent, if required by the Agent, favorable opinions of (I) counsel to the
Company as to the due authorization, execution and delivery of the Mortgage
and other Collateral Documents for such property, and lack of any conflict of
any such document with any Contractual Obligations of the Company or the REIT
in form and substance satisfactory to the Agent and the Requisite Lenders,
and (II) counsel to the Agent in the state where the property is located
concerning the form, legality and enforceability of the Mortgage and other
Collateral Documents relating to such property, lack of any violation of any
Requirements of Law as a result of the execution, delivery and performance of
such documents, and such other matters relating to the Company, the REIT,
such property and such documents as the Agent may require; and
(F) OFFICERS' CERTIFICATE. The Company shall have delivered to
the Agent a certificate of two Responsible Officers substantially in the form
of EXHIBIT I confirming (i) that all conditions precedent set forth in this
Section 2.13(a)(iii) (other than those based solely upon the approval of the
Agent or the Lenders) have been satisfied with respect to such project; (ii)
that all financial and operating information delivered to the Agent pursuant
to Section 2.13(a)(ii), subject to audit, is complete and correct to the
knowledge of the Company and setting forth in detail the calculation of the
Revolving Facility Debt Service Coverage-Based Principal Limit for such
project; (iii) that the proposed project, if included as a Borrowing Base
Property, would not be required to be excluded as Collateral pursuant to
Section 2.13(b); (iv) the Company's purchase price for the property, upon
which the Agent and the Lenders shall be entitled to rely; and (v) the Person
owning the proposed project has incurred no Indebtedness other than as
permitted under Section 7.02(a)-(g).
Under no circumstances shall the Agent or the Lenders be deemed to have
a lien on any Borrowing Base Property prior to the time a first priority
Mortgage and first
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priority assignment of leases and rents encumbering such property have been
recorded at the Agent's instruction.
(b) EXCLUSION OF BORROWING BASE PROPERTIES FROM THE COLLATERAL.
Any Borrowing Base Property will automatically be considered to have an
Appraised Value of zero for purposes of the calculations of the Borrowing Base
hereunder and will be excluded as a Borrowing Base Property and removed as
Collateral for the Obligations:
(i) Within ten (10) days after demand from the Agent to the Company
following the occurrence of any one of the following events:
(A) any Event of Loss with respect to such property which is
not restored or repaired as required under the terms of the Mortgage
encumbering such property within no more than one hundred and twenty (120)
days after the occurrence of such Event of Loss; or
(B) the occurrence of an adverse change in the environmental
condition of the property from that described in the materials described in
Section 2.13(a)(ii)(D) above which is not adequately remediated pursuant to
the terms of the Environmental Indemnity Agreement relating to or Mortgage
encumbering such property;
(ii) Immediately upon the occurrence of any sale, transfer or
encumbrance of such property (without limiting the other rights of the
Lenders with respect to any such sale, transfer or encumbrance under the Loan
Documents) other than Permitted Liens.
(c) APPRAISALS. The Company shall reimburse the Agent for the cost of
all Appraisals of properties offered by the Company as proposed Borrowing
Base Properties under Section 2.13(a). Any delay in the completion of such
appraisals shall be the sole risk of the Company. Requisite Lenders shall
have the right to have the Borrowing Base Properties reappraised in the event
that the Company delivers a notice of its election to convert the Revolving
Facility to the Term Loan pursuant to Section 4.03. Requisite Lenders may
exercise this right only once at any time after the notice of election to
convert is delivered to the Agent (unless otherwise required by applicable
law) and the Company shall reimburse the Agent for the cost of all such
reappraisals. All appraisals shall be subject to review and approval by the
Agent and the Requisite Lenders. The Company shall cooperate with such
Appraisals, including by providing the appraisers with access to the premises
of the Company, the books and records of the Company, and the Collateral or
proposed Collateral subject to Appraisal.
(d) CASH COLLATERAL. The Company shall have the right to deposit cash
as Collateral hereunder (together with all interest and earnings thereon,
"PLEDGED CASH") into an interest bearing deposit account (the "CASH
COLLATERAL ACCOUNT") established with and pledged to the Agent for the
ratable benefit of the Lenders pursuant to documentation in form and
substance satisfactory to the Agent and the Requisite Lenders. Such Cash
Collateral Account shall secure the Obligations. The Company hereby grants a
perfected first priority security interest in favor of the Agent for the
ratable benefit of the Lenders in all Pledged Cash and in such Cash
Collateral Account and all sums at any time held, deposited or
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invested therein, together with any interest or other earnings thereon, and
all proceeds thereof, whether accounts, general intangibles, chattel paper,
deposit accounts, instruments, documents or securities, together with all
rights of a secured party with respect thereto (even if no further
documentation is requested by the Agent or the Requisite Lenders or executed
by the Company with respect thereto). The Company shall execute such
additional documents as the Agent or the Requisite Lenders in their
discretion may require and shall provide all other documents requested by the
Agent or the Requisite Lenders to evidence or perfect the Agent's first
priority security interest in such Cash Collateral Account. The Cash
Collateral Account shall be held in the name of the Company as debtor, with
the Agent as secured party for the ratable benefit of the Lenders. All
interest earned on the Cash Collateral Account shall be retained in the Cash
Collateral Account subject to the Company's withdrawal rights set forth
herein. The Company shall treat all interest earned on the Cash Collateral
Account as its income for federal income tax purposes. No Pledged Cash shall
be withdrawn from the Cash Collateral Account by the Company unless after
such withdrawal the Borrowing Base would be equal to or greater than the
Outstanding Amount and no Event of Default is then continuing. Upon the
occurrence and during the continuation of an Event of Default, the Agent may
(and, upon the instruction of the Requisite Lenders, shall):
(i) without any advertisement or notice to or authorization from
the Company (all of which advertisements, notices and/or authorizations are
hereby expressly waived), withdraw, sell or otherwise liquidate all Pledged
Cash and apply the proceeds thereof to the unpaid Obligations in such order
as the Requisite Lenders may elect in their sole discretion, without
liability for any loss (including as a result of any sale or liquidation of
any account including such Pledged Cash such before maturity) and the Company
hereby consents to any such withdrawal and application as a commercially
reasonable disposition of such Collateral and agrees that such withdrawal
shall not result in satisfaction of the Obligations except to the extent the
amounts are applied to such sums;
(ii) without any advertisement or notice to or authorization from
the Company (all of which advertisements, notices and/or authorizations are
hereby expressly waived), notify any account debtor on any such Collateral to
make payment directly to the Agent;
(iii) foreclose upon all or any portion of such Collateral or
otherwise enforce the Agent's security interest in any manner permitted by
law or provided for in this Agreement;
(iv) sell or otherwise dispose of all or any portion of such
Collateral at one or more public or private sales, whether or not such
Collateral is present at the place of sale, for cash or credit or future
delivery, on such terms and in such manner as the Requisite Lenders may
determine;
(v) recover from the Company all costs and expenses, including,
without limitation, reasonable attorneys' fees, incurred or paid by the Agent
in exercising any right, power or remedy provided by this Agreement or by
law; and
(vi) exercise any other right or remedy available to the Agent or
the Lenders under applicable law or in equity.
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(e) RELEASES. The Lenders irrevocably authorize the Agent, at its
option and in its discretion, to release any Lien granted to or held by the
Agent upon any Collateral (i) upon termination of the Commitments and payment
in full of all Loans payable under this Agreement and under any other Loan
Document; (ii) if such Collateral is excluded as Collateral pursuant to
Section 2.13(b); (iii) pursuant to Section 7.05 or 2.13(d); or (iv) if
approved, authorized or ratified in writing by all the Lenders. In addition,
the Lenders irrevocably authorize the Agent, at its option and in its
discretion, to subordinate the Lien granted to or held by the Agent upon any
Collateral to easements, rights-of-way, restrictions, or other similar
encumbrances incurred in the Ordinary Course of Business of the Company which
do not in any case materially detract from the value of the Property subject
thereto or interfere with the ordinary conduct of the business of the
Company; in making the determinations set forth in this sentence, the Agent
shall be entitled to rely solely, without investigation of any kind, upon the
written certification of two (2) Responsible Officers of the Company, and the
Agent shall incur no liability to any Person by virtue of such reliance.
2.14 PAYMENTS BY THE LENDERS TO THE AGENT.
(a) RELIANCE OF AGENT ON PAYMENTS BY THE LENDERS. Unless the Agent
shall have received notice from a Lender on the Closing Date or, with respect
to each borrowing after the Closing Date, at least one Business Day prior to
the date of any proposed borrowing, that such Lender will not make available
to the Agent for the account of the Company the amount of that Lender's
Commitment Percentage of the Loan to be funded on such date, the Agent may
assume that each Lender has made such amount available to the Agent on the
borrowing date, and the Agent may (but shall not be required to), in reliance
upon such assumption, make available to the Company a corresponding amount on
such date. If and to the extent any Lender shall not have made its full
amount available to the Agent and the Agent in such circumstances has made
available to the Company such amount, that Lender shall on the next Business
Day following the date of such borrowing make such amount available to the
Agent, together with interest at the Federal Funds Rate for and determined as
of each day during such period. A certificate of the Agent submitted to any
Lender with respect to amounts owing under this Section 2.14(a) shall be
conclusive, absent manifest error. If such amount is so made available, such
payment to the Agent shall constitute such Lender's Loan (as of the date of
the borrowing) for all purposes of this Agreement. If such amount is not
made available to the Agent on the next Business Day following the borrowing
date, the Agent shall notify the Company of such failure to fund and, upon
demand by the Agent, the Company shall pay such amount to the Agent for the
Agent's account, together with interest thereon for each day elapsed since
the date of such borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Loans comprising such borrowing, and the
Company may exercise any rights and remedies it may have against the Lender
that so failed to fund.
(b) OBLIGATIONS OF AGENT; LENDER. The failure of any Lender to
make any Loan on any date of borrowing shall not relieve any other Lender of any
obligation hereunder to make a Loan on the date of such borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Loan to be
made by such other Lender on the date of any borrowing.
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2.15 SHARING OF PAYMENTS, ETC. If, other than as expressly contemplated
elsewhere herein, any Lender shall obtain on account of the Loans made by it
any payment (whether voluntary, involuntary, through exercise of any right
of setoff, or otherwise) in excess of its Commitment Percentage of payments
on account of the Loans obtained by all the Lenders, such Lender shall
forthwith (a) notify the Agent of such fact, and (b) purchase from the other
Lenders such participations in the Loans made by them as shall be necessary
to cause such purchasing Lender to share the excess payment ratably with each
of them; PROVIDED, HOWEVER, that if all or any portion of such excess payment
is thereafter recovered from the purchasing Lender, such purchase shall to
that extent be rescinded and each other Lender shall repay to the purchasing
Lender the purchase price paid thereto together with a percentage (calculated
by dividing (i) the amount of such paying Lender's required repayment by (ii)
the total amount so recovered from the purchasing Lender) of any interest or
other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered. The Company agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.15 may, to the
fullest extent permitted by law, exercise all of such purchasing Lender's
rights of payment (including the right of setoff, but subject to Section
10.09) with respect to such participation as fully as if such purchasing
Lender were the direct creditor of the Company in the amount of such
participation. The Agent shall keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased
pursuant to this Section 2.15 and shall in each case notify the Lenders
following any such purchases.
2.16 PARTICIPATIONS PURCHASED BY LENDERS IN THE LETTER OF CREDIT
LIABILITY.
(a) On the date of the issuance of each Letter of Credit (and, with
respect to the Letters of Credit previously issued under the Previous Credit
Agreement, on the Closing Date), the Issuing Lender shall be deemed
irrevocably and unconditionally to have sold and transferred to each Lender
(other than the Issuing Lender) and each Lender shall be deemed to have
irrevocably and unconditionally purchased and received from the Issuing
Lender, an undivided interest and participation, to the extent of such
Lender's Commitment Percentage in effect from time to time, in such Letter of
Credit and all Letter of Credit Liability with respect thereto. The
Revolving Commitment of each Lender hereunder shall include that Lender's
share of the Letter of Credit Liability.
(b) In the event that any reimbursement obligation under this Agreement
is not paid when due to the Issuing Lender with respect to any Letter of
Credit, the Issuing Lender shall promptly notify the Agent to that effect,
and the Agent shall promptly notify each Lender (other than the Issuing
Lender) of the amount of such reimbursement obligation and each Lender other
than the Issuing Lender shall immediately pay to the Agent for distribution
to the Issuing Lender, in lawful money of the United States and in same day
funds, an amount equal to such Lender's Commitment Percentage then in effect
of the amount of such unpaid reimbursement obligation.
(c) The obligation of each Lender other than the Issuing Lender to make
payments under subsection (b) above shall be unconditional and irrevocable
and shall be made under all circumstances, including, without limitation,
following the occurrence of any
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Default or any Event of Default or any of the circumstances referred to in
Section 2.01(a)(ii) hereof.
(d) Prior to the occurrence of any Event of Default, the Agent shall
promptly distribute to each Lender its Commitment Percentage (or other
applicable share as expressly provided herein) of all amounts received on
account of the obligations of the Company to repay amounts drawn under any
Letter of Credit (in like funds as received). Following the occurrence of an
Event of Default, all amounts received by the Agent on account of such
obligations shall be disbursed by the Agent as follows:
(i) First, to the payment of expenses incurred by the Agent in the
performance of its duties and enforcement of its rights under the Loan
Documents, including, without limitation, all costs and expenses of
collection, attorneys' fees, court costs and foreclosure expenses;
(ii) Then, to the Lenders, pro rata in accordance with their
respective Commitment Percentages until all outstanding reimbursement
obligations for drawings on such Letter of Credit and interest accrued
thereon have been paid in full; and
(iii) Then, and if but only if there remains any available amount
which has not been drawn under such Letter of Credit, to the Agent to hold as
cash collateral for the obligation of Company to reimburse any future
drawings on such Letter of Credit, Company hereby granting to the Agent, for
the pro rata, PARI PASSU benefit of the Lenders, a first perfected security
interest therein and hereby irrevocably agreeing that amounts so held may be
applied from time to time in reimbursement of drawings on such Letter of
Credit as the same may occur, until the expiration of such Letter of Credit
and payment in full of all amounts due with respect to any drawing thereon.
(e) If any payment received from Company on account of any
reimbursement obligation with respect to any Letter of Credit and distributed to
a Lender under Section 2.16(d) hereof is thereafter recovered from the Issuing
Lender, each Lender which received such distribution shall, upon demand by the
Agent, repay to the Issuing Lender such Lender's ratable share of the amount so
recovered together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered) of any interest of other amount
paid or payable by the Issuing Lender in respect of the total amount so
recovered.
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ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Subject to Section 3.01(g), any and all payments by the Company to
the Agent or the Lenders under this Agreement shall be made free and clear
of, and without deduction or withholding for, any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding such taxes (including income
taxes or franchise taxes) as are imposed on or measured by the recipient's
net income by the jurisdiction under the laws of which the recipient is
organized or maintains a Lending Office, or otherwise does business, or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred
to as "Taxes").
(b) In addition, the Company shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery, recordation or registration of, or otherwise with respect to, this
Agreement or any other Loan Documents (hereinafter referred to as "Other
Taxes").
(c) The Company shall indemnify and hold harmless the Agent and each
Lender for the full amount of Taxes or Other Taxes (including any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Section
3.01) paid by the Agent or such Lender and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Payment under this indemnification shall be made within
thirty (30) days from the date the Agent or any Lender makes written demand
therefor.
(d) If the Company shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to the
Agent or any Lender, then, subject to Section 3.01(g):
(i) the sum payable shall be increased as necessary so that, after
making all required deductions (including deductions applicable to additional
sums payable under this Section 3.01) the Agent or such Lender, as the case
may be, receives an amount equal to the sum it would have received had no
such deductions been made;
(ii) the Company shall make such deductions; and
(iii) the Company shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(e) Within 30 days after the date of any payment by the Company of
Taxes or Other Taxes, the Company shall furnish to the Agent the original or
a certified copy of a receipt evidencing payment thereof, or other evidence
of payment satisfactory to the Agent.
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(f) Each Lender which is a foreign Person (i.e., a Person other than a
United States Person for United States Federal income tax purposes) agrees
that:
(i) such Lender shall, no later than the Closing Date (or, in the
case of a Lender which becomes a party hereto pursuant to Section 10.08 after
the Closing Date, the date upon which such Lender becomes a party hereto),
deliver to the Company through the Agent two (2) accurate and complete signed
originals of Internal Revenue Service Form 4224 or any successor thereto
("Form 4224"), or two (2) accurate and complete signed originals of Internal
Revenue Service Form 1001 or any successor thereto ("Form 1001"), as
appropriate, in each case indicating that the Lender is on the date of
delivery thereof entitled to receive payments of principal, interest and fees
under this Agreement free from withholding of United States Federal income
tax;
(ii) if at any time such Lender makes any changes necessitating a
new form, such Lender shall with reasonable promptness deliver to the Company
through the Agent in replacement for, or in addition to, the forms previously
delivered by such Lender hereunder, two (2) accurate and complete signed
originals of Form 4224, or two (2) accurate and complete signed originals of
Form 1001, as appropriate, in each case indicating that such Lender is on the
date of delivery thereof entitled to receive payments of principal, interest
and fees under this Agreement free from withholding of United States Federal
income tax;
(iii) such Lender shall, before or promptly after the occurrence of
any event (including the passing of time but excluding any event mentioned in
(ii) above) requiring a change in or renewal of the most recent Form 4224 or
Form 1001 previously delivered by such Lender, deliver to the Company through
the Agent two (2) accurate and complete original signed copies of Form 4224
or Form 1001, as appropriate, in replacement of the forms previously
delivered by such Lender; and
(iv) such Lender shall, promptly upon the Company's reasonable
request to that effect, deliver to the Company such other forms or similar
documentation as may be required from time to time by any applicable law,
treaty, rule or regulation in order to establish such Lender's tax status for
withholding purposes.
(g) The Company shall not be required to pay any additional amounts in
respect of United States Federal or state income tax pursuant to Section
3.01(d) to any Lender or any duly appointed assignee for the account of any
Lending Office of such Lender or assignee:
(i) if the obligation to pay such additional amounts arises as a
result of a failure by such Lender or assignee to comply with its obligations
under Section 3.01(f) in respect of such Lending Office;
(ii) if such Lender or assignee shall have delivered to the Company
a Form 4224 in respect of such Lending Office pursuant to Section 3.01(f),
and such Lender or assignee shall not at any time be entitled to exemption
from deduction or withholding of United States Federal income tax in respect
of payments by the Company hereunder for any reason other than a change in
United States law or regulations or in the
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official interpretation of such law or regulations by any governmental
authority charged with the interpretation or administration thereof (whether
or not having the force of law) after the date of delivery of such Form 4224;
or
(iii) if such Lender or assignee shall have delivered to
the Company a Form 1001 in respect of such Lending Office pursuant to Section
3.01(f), and such Lender or assignee shall not at any time be entitled to
reduction, partial exemption or exemption from deduction or withholding of
United States federal income tax in respect of payments by the Company hereunder
for the account of such Lending Office for any reason other than a change in
United States law or regulations or any applicable tax treaty or regulations or
in the official interpretation of such law, treaty or regulations by any
governmental authority charged with the interpretation or administration thereof
(whether or not having the force of law) after the date of delivery of such Form
1001.
(h) If, at any time, the Company requests any Lender to deliver any
forms or other documentation pursuant to Section 3.01(f)(iv), then the
Company shall, on demand of such Lender, through the Agent reimburse such
Lender for any costs and expenses (including Attorney Costs) reasonably
incurred by such Lender in the preparation or delivery of such forms or other
documentation.
(i) If the Company is required to pay additional amounts to the Agent
or any Lender pursuant to Section 3.01(d), then such Lender shall use its
reasonable best efforts (consistent with legal and regulatory restrictions)
to change the jurisdiction of its Lending Office so as to eliminate any such
additional payment by the Company which may thereafter accrue if such change
in the judgment of such Lender is not otherwise disadvantageous to such
Lender.
3.02 ILLEGALITY.
(a) If any Lender shall determine that the introduction of any
Requirement of Law or any change therein or in the interpretation or
administration thereof has made it unlawful, or that any central bank or
other Governmental Authority has asserted that it is unlawful, for such
Lender or its Lending Office to make LIBOR Loans, then, on notice thereof by
such Lender to the Company through the Agent, the obligation of such Lender
to make LIBOR Loans shall be suspended until such Lender shall have notified
the Agent and the Company that the circumstances giving rise to such
determination no longer exist.
(b) If any Lender shall reasonably determine that it is unlawful
to maintain any LIBOR Loan, the Company shall notify Lender that the Company
shall either (i) prepay in full all LIBOR Loans of such lender then outstanding,
together with interest accrued thereon, or (ii) elect to convert in accordance
with Section 2.04 all LIBOR Loans then outstanding, after payment to such Lender
of all interest accrued thereon, into Base Rate Loans, either on the last day of
the Interest Period thereof if such Lender may lawfully continue to maintain
such LIBOR Loans to such day, or immediately if such Lender may not lawfully
continue to maintain such LIBOR Loans, together with any amounts required to be
paid in connection therewith pursuant to Section 3.04.
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(c) If the obligation of any Lender to make or maintain LIBOR Loans has
been terminated, the Company may elect, by giving notice to such Lender
through the Agent, that all Loans which would otherwise be made by such
Lender as LIBOR Loans shall instead be made as Base Rate Loans.
3.03 INCREASED COSTS AND REDUCTION OF RETURN.
(a) If any Lender shall determine that, due to either (i) the
introduction of or any change in or in the interpretation of any Requirement
of Law or (ii) the compliance with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of
law), there shall be any increase in the cost to such Lender of agreeing to
make or of making, funding or maintaining any LIBOR Loans hereunder, then the
Company shall be liable for, and shall from time to time, upon written demand
therefor by such Lender (with a copy of such demand to the Agent), which
demand shall set forth the basis of such increased cost in reasonable detail,
pay to the Agent for the account of such Lender, such additional amounts as
are sufficient to compensate such Lender for such increased costs.
(b) If any Lender shall have reasonably determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any
Capital Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or
other Governmental Authority charged with the interpretation or
administration thereof, or (iv) compliance with any Capital Adequacy
Regulation by such Lender (or its Lending Office) or any corporation
controlling such Lender, effects or would effect an increase in the amount of
capital required or expected to be maintained by such Lender or any
corporation controlling such Lender (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy and such
Lender's desired return on capital), then, upon written demand of such Lender
(with a copy to the Agent), which demand shall set forth in reasonable detail
the basis for any such increase in required capital, the Company shall
immediately pay to such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender for such
increase.
(c) If any Lender shall have determined that any of the events
described in Sections 3.03(a) or 3.03(b) affects or would affect an increase
in cost or reduction of return resulting in additional Obligations hereunder,
such Lender shall, with reasonable promptness, notify the Company and the
Agent of such determination, PROVIDED that no failure to do so shall relieve
the Company of any Obligation hereunder.
3.04 FUNDING LOSSES. The Company agrees to reimburse each Lender for,
and to hold each Lender harmless from, any loss or expense that such Lender
may sustain or incur as a consequence of:
(a) the failure of the Company to make any required payment or
prepayment of principal of any LIBOR Loan or Base Rate Loan (including
payments to be made after any acceleration thereof);
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(b) the failure of the Company to borrow, continue or convert a Loan
after the Company has given (or is deemed to have given) a Borrowing Notice
or a Notice of Conversion/Continuation;
(c) the failure of the Company to make any prepayment after the Company
has given a notice in accordance with Section 2.05;
(d) the prepayment of a LIBOR Loan on a day which is not the last day
of the Interest Period with respect thereto; or
(e) the conversion of any LIBOR Loan to a Base Rate Loan on a day that
is not the last day of the Interest Period with respect thereto;
such amount or amounts to include an amount equal to the excess, if any, of
(a) the amount of interest that would have accrued on the amount not paid,
not borrowed, not prepaid, prepaid, or converted for the period from the date
of such failure to pay, failure to borrow, failure to prepay, prepayment, or
conversion to the last day of then current Interest Period (or in the case of
a failure to borrow, the Interest Period which would have commenced on the
date of such failure) at the interest rate applicable to that LIBOR Loan,
over (b) the amount of interest that would accrue to the Lender on such
amount at the LIBO Rate in effect on such date by placing such amount on
deposit for a comparable period with leading lenders in the London interbank
market.
3.05 INABILITY TO DETERMINE RATES. If the Agent shall have determined
that for any reason adequate and reasonable means do not exist for
ascertaining the LIBO Rate for any requested Interest Period with respect to
a proposed LIBOR Loan or that the LIBO Rate applicable pursuant to Section
2.09(a) for any requested Interest Period with respect to a proposed LIBOR
Loan does not adequately and fairly reflect the cost to such Lenders of
funding such Loan, the Agent will forthwith give notice of such determination
to the Company and each Lender. Thereafter, the obligation of the Lenders to
make or maintain LIBOR Loans hereunder shall be suspended until the Agent
revokes such notice in writing. Upon receipt of such notice, the Company may
revoke any Borrowing Notice or Notice of Conversion/Continuation then
submitted by it. If the Company does not revoke such notice, the Lenders
shall make, convert or continue the Loans, as proposed by the Company, in the
amount specified in the applicable notice submitted by the Company, but such
Loans shall be made, converted or continued as Base Rate Loans instead of
LIBOR Loans.
3.06 CERTIFICATES OF LENDERS. Any Lender claiming reimbursement or
compensation pursuant to this Article III, shall deliver to the Company (with
a copy to the Agent) a certificate setting forth in reasonable detail a
summary of the basis of such demand and the amount payable to such Lender
hereunder.
3.07 SURVIVAL. The agreements and obligations of the Company in this
Article III shall survive the payment of all other obligations.
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ARTICLE IV
CONDITIONS PRECEDENT
4.01 CONDITIONS OF EFFECTIVENESS.
(a) CONDITIONS TO EFFECTIVENESS. The effectiveness of this Agreement
is subject to the condition that the Agent shall have received, on or before
the Closing Date, the following, in the case of agreements, documents and
other instruments, in form and substance satisfactory to the Agent, each
Lender and their respective counsel in their sole discretion and in
sufficient copies for each Lender:
(i) CREDIT AGREEMENT AND NOTES. This Agreement executed by the
Company, the Agent and each of the Lenders, and a Note executed by the
Company in favor of each of the Lenders; the Notes shall be dated the Closing
Date;
(ii) REIT GUARANTY DOCUMENTS. The REIT Guaranty Documents
executed by the REIT and the Guarantor Subsidiaries;
(iii) BORROWING BASE DOCUMENTS. Execution of modification
agreements, Collateral Documents or other written assurances for each of the
Initial Borrowing Base Properties, whereby the Company and the other Persons
who own such Properties shall confirm that such Properties secure, on a first
lien priority basis, the obligations of the Company under this Agreement;
(iv) SUBORDINATION AGREEMENT. Such subordination agreements
relating to the Intra-Company Debt and the Finance Subsidiary Loan as the
Requisite Lenders may require, in form and substance satisfactory to the
Requisite Lenders.
(v) RESOLUTIONS; INCUMBENCY.
(A) To the extent available at the Closing Date, certified
copies of the resolutions of the boards of directors of the REIT, the
Company, GP Corp and, if required by the initial Lender, the other
corporations party (whether directly or as general partners) to the Loan
Documents, their execution, delivery and performance thereof, including, in
the case of GP Corp, a resolution approving and authorizing in its capacity
as the general partner of the Company the execution, delivery and performance
by the Company of this Agreement and the other Loan Documents to be delivered
hereunder and the borrowing of the Loans;
(B) To the extent available at the Closing Date, a
certificate of the Secretary or Assistant Secretary of the REIT, the Company,
GP Corp and, if required by the initial Lender, the other corporations party
(whether directly or as general partners) to the Loan Documents certifying
the names and true signatures of the officers of such Persons authorized to
execute and deliver, as applicable, this Agreement and all other Loan
Documents to be delivered hereunder;
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(vi) ORGANIZATIONAL DOCUMENTS. To the extent available at the
Closing Date, each of the following documents:
(A) certified copies of the Organizational Documents of the
REIT, the Company and, if requested by the initial Lender, any Subsidiary
thereof as in effect on the Closing Date, and, in the case of corporate or
limited liability company articles or a certificate of limited partnership,
certified as of a recent date by the secretary of state of the state of
organization; and
(B) a good-standing certificate for the REIT, the Company
and, if requested by the initial Lender, any Subsidiary thereof, from the
secretary of state of the state of organization of the same as of a recent
date;
(vii) CERTIFICATE. A certificate signed by a duly authorized
Responsible Officer, dated as of the Closing Date, stating that:
(A) the representations and warranties of the Company and the
REIT contained in Article V hereof and of the Company, the REIT and their
Subsidiaries contained in the Loan Documents are true and correct on and as
of such date, as though made on and as of such date;
(B) no Default or Event of Default exists or would result
from the initial borrowing;
(C) there has occurred since December 31, 1996 no act,
omission, change or occurrence which would have a Material Adverse Effect; and
(D) all conditions precedent set forth in this Section 4.01
have been satisfied (other than those based solely on the approval of the
Agent, the Lenders, or the Requisite Lenders);
(viii) LEGAL OPINIONS. To the extent available at the Closing
Date, the Agent shall have received favorable opinions of counsel to the
Company and the parties signatory to the REIT Guaranty Documents, and
addressed to the Agent and the Lenders which complies with the opinion
requirements set forth on EXHIBIT J in a form approved by Agent;
(ix) COSTS; EXPENSES; FEES. To the extent demand has been made
therefor, payment of all costs, expenses, and accrued and unpaid fees
(including legal fees and expenses) to the extent then due and payable on the
Closing Date, including any arising under Sections 2.10, 3.01 and 10.04, all
accrued fees, costs and expenses due or unpaid under the Previous Credit
Agreement; and
(x) OTHER DOCUMENTS. To the extent available at the Closing
Date, such other approvals, opinions, or documents as the Agent or the
Requisite Lenders may reasonably request.
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(b) DEFERRED CONDITIONS. Any agreement by the Lenders to defer
the delivery of any of the items described in Section 4.01 above because a
particular item to be delivered is not available on the Closing Date shall
not be deemed an election by the Lenders to waive the delivery of such items;
to the contrary, all parties agree that the Company shall be responsible, and
the Company hereby covenants, to deliver to the Lenders no later than ten
(10) Business Days after the date this Agreement becomes effective, all of
the items to be delivered by the Company as described in Section 4.01 which
were not delivered to the Agent or the Lenders on or prior to the Closing
Date. Without affecting the Company's ability to maintain hereunder existing
balances arising from borrowings under the Previous Credit Agreement until
the expiration of the applicable interest period therefor, under no
circumstances shall the Company have the right to borrow, continue or convert
any Loan after such ten (10) Business Day period unless and until all such
items have been duly delivered within such ten (10) Business Day period
required above.
4.02 CONDITIONS TO EACH LOAN. The obligation of each Lender to make
any Loan (including its first Loan) is subject to the satisfaction of the
following conditions precedent:
(a) BORROWING NOTICE. The Agent shall have received in the case
of a Loan (with, in the case of the first Loan only, a copy for each Lender)
a Borrowing Notice or Notice of Conversion/Continuation in compliance with
the terms of Section 2.03 or Section 2.04, as applicable;
(b) OTHER DOCUMENTS. The Agent shall have received such other
approvals, opinions and documents as the Agent or any Lender may reasonably
request;
(c) COLLATERAL VALUE. The Outstanding Amount shall not, as a
result of the making, continuation or conversion of such Loan, exceed the
Borrowing Base;
(d) REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Company, the REIT and their respective Subsidiaries
contained in the Loan Documents, including Article V of this Agreement, shall
be true and correct on and as of the date such Loan is made, with the same
effect as if made on and as of such date;
(e) NO EXISTING DEFAULT. No Default or Event of Default shall
exist or shall result from the making, continuation or conversion of such
Loan;
(f) NO MATERIAL ADVERSE EFFECT. No act, omission, change,
occurrence or event which has a Material Adverse Effect shall have occurred
since the Closing Date;
(g) NO FUTURE ADVANCE NOTICE. Neither the Agent nor any Lender
shall have received from the Company, the REIT or any Subsidiary thereof, any
notice that any Collateral Document will no longer secure, or that the REIT
Guaranty Documents will no longer guaranty, future Loans to be made under
this Agreement; and
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(h) DOCUMENTATION REGARDING THE NHP-RELATED REAL ESTATE
ACQUISITION AGREEMENT. Prior to the initial Loan for acquisition costs under
the NHP-Related Real Estate Acquisition Agreement, the Agent shall have
received a copy of the NHP-Related Real Estate Acquisition Agreement,
certified by a duly authorized Responsible Officer as being true, correct and
complete, together with (i) evidence of the transfer and delivery of the
NHP-Related Real Estate Assets to the Company, (ii) evidence of the
unconditional and permanent waiver by NHP and any other Person of any right
of first refusal or similar right with respect to such transfer (and any
future transfer of such assets), (iii) such other documents and information
concerning the NHP-Related Real Estate Assets as the Agent or any Lender may
request, and (iv) evidence of the validity of the transfer thereof to the
Company by the NHP Shareholders and Phemus Corp. and of the power and
authority of the persons acting for the NHP Shareholders and Phemus Corp. to
consummate such transfer.
Each Borrowing Notice and Notice of Continuation/Conversion submitted by the
Company hereunder shall constitute a representation and warranty by the
Company hereunder, as of the date of such notice and as of the date of the
making, continuation or conversion of the corresponding Loan, that the
applicable conditions in this Section 4.02 have been satisfied.
4.03 CONVERSION CONDITIONS. The Company shall have the right to
convert the Revolving Facility into the Term Loan at any time during the term
of the Revolving Facility by giving no less than ninety (90) days prior
written notice to the Agent, so long as the following conditions
(collectively, the "Conversion Conditions") are satisfied:
(a) REPRESENTATIONS AND WARRANTIES. All representations,
warranties and certifications of the Company, the REIT and their respective
Subsidiaries in the Loan Documents or delivered pursuant thereto shall be
true and correct on and as of the Conversion Date, before and after giving
effect to the conversion, as though made on such date;
(b) NO EXISTING DEFAULT. No Default or Event of Default shall
have occurred and be continuing as of the date such notice is given or as of
the Conversion Date or would result from such conversion;
(c) OUTSTANDING AMOUNT. The Outstanding Amount of the Term Loan
upon the Conversion Date shall not exceed the Term Loan Borrowing Base, and
all Letters of Credit shall have expired or been cancelled;
(d) NO MATERIAL ADVERSE EFFECT. No act, omission, change,
occurrence or event which has a Material Adverse Effect shall have occurred
since the Closing Date;
(e) CERTIFICATE. The Agent shall have received and approved a
certificate signed by at least two (2) Responsible Officers, dated as of the
Conversion Date, stating that:
(i) the representations and warranties of the Company
contained in Article V hereof and in the Loan Documents are true and correct
on and as of the Conversion Date, before and after giving effect to the
conversion, as though made on and as of such date;
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(ii) no Default or Event of Default exists or would result
from the conversion;
(iii) there has occurred since the Closing Date no act,
omission, change or occurrence that would result in a Material Adverse Effect;
(iv) the Outstanding Amount of the Term Loan as of the
Conversion Date does not exceed the Term Loan Borrowing Base, and certifying
to the Term Loan Amount, Term Loan Limit and Term Loan Percentage for each
Borrowing Base Property, and the amount of the Term Loan Borrowing Base; and
(v) all conditions to the conversion of the Revolving
Facility to the Term Loan pursuant to this Agreement have been satisfied
(other than those based on the approval of the Agent, the Requisite Lenders,
or the Lenders).
(f) RE-APPRAISALS. If the Requisite Lenders shall have determined
within twenty (20) days after the Agent's receipt of the Company's notice of
election to convert the Revolving Facility into the Term Loan to cause the
Borrowing Base Properties to be reappraised pursuant to Section 2.13(c), the
Agent and the Requisite Lenders shall have received and approved of such
re-Appraisals prior to the Conversion Date;
(g) EVIDENCE REGARDING BORROWING BASE. The Company shall have
delivered to the Agent, and the Agent and the Requisite Lenders shall have
approved such rent rolls, operating statements and other financial materials
relating to the Borrowing Base Properties as may be necessary to determine
the Term Loan Amount and Term Loan Limit for each Borrowing Base Property and
the Term Loan Borrowing Base;
(h) COLLATERAL DOCUMENT SUPPLEMENTS; TITLE ENDORSEMENTS. If
required by Requisite Lenders, (i) the Company shall have executed and
delivered, and there shall have been recorded in accordance with applicable
Requirements of Law, such supplements to the Collateral Documents, in form
and substance satisfactory to the Agent and the Requisite Lenders, reflecting
the conversion of the Revolving Facility into the Term Loan and (ii) the
Title Insurer shall have delivered endorsements to the Title Policies
insuring the continued first Lien priority following such conversion of the
Mortgages encumbering the Borrowing Base Properties, subject to no Liens or
exceptions other than Permitted Exceptions; and
(i) CONVERSION FEE. The Company shall have paid, on or prior to
the Conversion Date, to the Agent for the ratable benefit of the Lenders then
party hereto the conversion fee set forth in Section 2.10(c) above.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Lender that:
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5.01 EXISTENCE AND POWER. The Company is a Delaware limited
partnership, the REIT is a Maryland corporation, and each of the Company, the
REIT and each Management Entity and Subsidiary:
(a) ORGANIZATION. Is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization;
(b) POWER AND AUTHORITY. Has the power and authority and all
governmental licenses, authorizations, consents and approvals to own its
Properties, to carry on its business and to execute, deliver, and perform its
obligations under, the Loan Documents to which it is a party;
(c) DUE QUALIFICATION. Is duly qualified as a foreign
corporation, partnership, trust or other organization, and licensed and in
good standing under the laws of each jurisdiction where its ownership, lease
or operation of its Properties or the conduct of its business requires such
qualification; and
(d) COMPLIANCE WITH LEGAL REQUIREMENTS. Is in substantial
compliance with all material Requirements of Law applicable to it.
5.02 AUTHORIZATION; NO CONFLICT. The execution, delivery and
performance by the Company, the REIT and any of their Subsidiaries of this
Agreement, and any other Loan Document to which such Person is party, have
been duly authorized by all necessary partnership, corporate or other
organizational action, and do not and will not:
(a) ORGANIZATIONAL DOCUMENTS. Contravene the terms of any of such
Person's Organizational Documents;
(b) CONTRACTUAL OBLIGATIONS. Conflict with, or result in any
breach or contravention of, or the creation of any Lien (other than pursuant
to the Loan Documents) under, any document evidencing any Contractual
Obligation to which such Person is a party or any order, injunction, writ or
decree of any Governmental Authority to which such Person or its Properties
are subject; or
(c) REQUIREMENTS OF LAW. Violate any material Requirement of Law
applicable to it.
5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority (except for recordings in connection with the Liens
granted to the Agent under the Collateral Documents) is necessary or required
in connection with the execution, delivery or performance by, or enforcement
against, the Company, the REIT, or any of their Subsidiaries of this
Agreement or any other Loan Document.
5.04 BINDING EFFECT. This Agreement and each other Loan Document to
which the Company, the REIT, or any of their Subsidiaries is a party
constitute the legal, valid and binding obligations of such Person,
enforceable against such Person in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy,
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insolvency, or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability.
5.05 LITIGATION. Except as specifically disclosed in SCHEDULE 5.05,
there are no actions, suits, proceedings, claims or disputes pending, or to
the Knowledge of the Company, threatened or contemplated, at law, in equity,
in arbitration or before any Governmental Authority, against the Company, the
REIT, any Management Entity, any of their Subsidiaries or any of their
respective Properties, which (a) purport to affect or pertain to this
Agreement, or any other Loan Document, or any of the transactions
contemplated hereby or thereby, or (b) if determined adversely to any such
Person, would reasonably be expected to have a Material Adverse Effect. No
injunction, writ, temporary restraining order or any other order of any
nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution, delivery and performance of
this Agreement or any other Loan Document, or directing that the transactions
provided for herein or therein not be consummated as herein or therein
provided.
5.06 TITLE TO PROPERTIES. The Company and Wholly-Owned Subsidiaries
have good record and marketable title in fee simple to all real property
necessary or used in the ordinary conduct of the business of the Company, the
REIT and their Subsidiaries, taken as a whole, except for such defects in
title as could not, individually or in the aggregate, have a Material Adverse
Effect. The Company, the REIT and their Subsidiaries have good title to all
of their other Properties subject to no Liens, other than Permitted Liens.
The Company and Wholly-Owned Subsidiaries have good and marketable title to
the Collateral subject to no Liens except Permitted Exceptions.
5.07 SUBSIDIARIES; INTERESTS IN OTHER ENTITIES; CHANGES IN
ORGANIZATIONAL STRUCTURE. Except for the NHP Interests, neither the Company,
nor the REIT, nor any of their respective Subsidiaries has any interest in
any corporation, partnership or other entity, except as disclosed in the
Organizational Chart and except for Subsidiaries or Unconsolidated
Partnerships hereafter formed or acquired in compliance with Section 7.07,
and except for changes permitted under Sections 7.06, 7.07 and 7.08 hereof.
5.08 FINANCIAL CONDITION. All financial statements delivered by the
Company or the REIT hereunder: (a) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; and (b) are complete, accurate and fairly
present the financial condition of the REIT as of the dates thereof and
results of operations for the periods covered thereby. All Form 10K filings
and Form 10Q filings delivered by the Company or the REIT show all material
indebtedness and other liabilities, direct or contingent, of the Company and
its Subsidiaries, the Properties of the Company and the Borrowing Base
Properties as of the date thereof, including liabilities for taxes, material
commitments and Contingent Obligations. Since December 31, 1996, there has
been no act, omission, change or event which has had a Material Adverse
Effect.
5.09 TAXES. The Company and its Subsidiaries have filed all Federal
and other material tax returns and reports required to be filed. Except as
disclosed in the SEC Report, (i) all tax returns filed by the Company and its
Subsidiaries are complete and correct; (ii) the Company and its Subsidiaries
have paid all Federal and other material taxes, assess-
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ments, fees and other governmental charges for which they are liable (whether
or not reflected on any tax returns) and have fully satisfied any taxes,
assessments, fees, and other governmental charges levied or imposed upon them
or their Properties, income or assets or otherwise due and payable, except
those which are being contested in good faith by appropriate proceedings and
for which adequate reserves have been provided in accordance with GAAP and no
Notice of Lien has been filed or recorded; (iii) there is no proposed tax
assessment against the Company or any of its Subsidiaries which would, if the
assessment were made, have a Material Adverse Effect; and (iv) the Company
and its Subsidiaries have no primary, secondary or other liability for taxes
of any kind arising with respect to any individual, trust, corporation,
partnership or other entity as to which the Company or any of its
Subsidiaries is directly or indirectly liable for taxes of any kind incurred
by such individual or entity either as a transferee, or pursuant to Treasury
Regulations section 1.1502-6, or pursuant to any other Requirement of Law.
Neither the Company nor any of its Affiliates is (nor has it ever been) a
party to any tax sharing agreement.
5.10 ERISA COMPLIANCE.
(a) SCHEDULE 5.10 lists all Plans and separately identifies Plans
intended to be Qualified Plans and Multiemployer Plans. All written
descriptions thereof provided to the Agent and the Lenders are true and
complete in all material respects.
(b) Each Qualified Plan, and to the best knowledge of the Company
each Multiemployer Plan, is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state law,
including all requirements under the Code or ERISA for filing reports (which
are true and correct in all material respects as of the date filed), and
benefits have been paid in accordance with the provisions of the Plan.
(c) Each Qualified Plan and, and to the best knowledge of the
Company, Multiemployer Plan has been determined by the IRS to qualify under
Section 401 of the Code, and the trusts created thereunder have been
determined to be exempt from tax under the provisions of Section 501 of the
Code, and to the best knowledge of the Company nothing has occurred which
would cause the loss of such qualification or tax-exempt status.
(d) Except as specifically disclosed in SCHEDULE 5.10, there is no
outstanding liability under Title IV of ERISA with respect to any Qualified
Plan maintained or sponsored by the Company or any ERISA Affiliate, nor to
the best knowledge of the Company, with respect to any Multiemployer Plan to
which the Company or any ERISA Affiliate contributes or is obligated to
contribute.
(e) Except as specifically disclosed in SCHEDULE 5.10, no
Qualified Plan subject to Title IV of ERISA, and to the best knowledge of the
Company, no Multiemployer Plan has any Unfunded Pension Liability.
(f) Except as specifically disclosed in SCHEDULE 5.10, no member
of the Controlled Group has ever represented, promised or contracted (whether
in oral or written form) to any current or former employee (either
individually or to employees as a group) that such current or former
employee(s) would be provided, at any cost to any member of the
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Controlled Group, with life insurance or employee welfare plan benefits
(within the meaning of section 3(1) of ERISA) following retirement or
termination of employment. To the extent that any member of the Controlled
Group has made any such representation, promise or contract, such member has
expressly reserved the right to amend or terminate such life insurance or
employee welfare plan benefits with respect to claims not yet incurred.
(g) Members of the Controlled Group have complied in all material
respects with the notice and continuation coverage requirements of Section
4980B of the Code.
(h) Except as specifically disclosed in SCHEDULE 5.10, no ERISA
Event has occurred or is reasonably expected to occur with respect to any
Qualified Plan, or, to the best knowledge of the Company, any Multiemployer
Plan.
(i) There are no pending or, to the Knowledge of the Company,
threatened claims, actions or lawsuits, other than routine claims for
benefits in the usual and ordinary course, asserted or instituted against (i)
any Plan maintained or sponsored by the Company or its assets, (ii) any
member of the Controlled Group with respect to any Qualified Plan, or (iii)
any fiduciary with respect to any Plan for which the Company may be directly
or indirectly liable, through indemnification obligations or otherwise.
(j) Except as specifically disclosed in SCHEDULE 5.10, neither the
Company nor any ERISA Affiliate has incurred nor reasonably expects to incur
(i) any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Section
4201 or 4243 of ERISA with respect to a Multiemployer Plan or (ii) any
liability under Title IV of ERISA (other than premiums due and not delinquent
under Section 4007 of ERISA) with respect to a Plan.
(k) Except as specifically disclosed in SCHEDULE 5.10, neither the
Company nor any ERISA Affiliate has transferred any Unfunded Pension
Liability to a Person other than the Company or an ERISA Affiliate or
otherwise engaged in a transaction that could be subject to Section 4069 or
4212(c) of ERISA.
(l) No member of the Controlled Group has engaged, directly or
indirectly, in a non-exempt prohibited transaction (as defined in Section
4975 of the Code or Section 406 of ERISA) in connection with any Plan which
could reasonably be expected to have a Material Adverse Effect.
5.11 ENVIRONMENTAL MATTERS.
(a) ENVIRONMENTAL LAWS. Except as disclosed in SCHEDULE 5.11 or
in the SEC Report, the operations and Properties of the Company, the REIT,
the Management Entities and their Subsidiaries comply in all respects with
all Environmental Laws, except such non-compliance affecting Properties other
than the Borrowing Base Properties as would not (if enforced in accordance
with Environmental Laws) result in liability in excess of $250,000 in the
aggregate.
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(b) ENVIRONMENTAL PERMITS. Except as described in SCHEDULE 5.11
or in the SEC Report, the Company, the REIT, the Management Entities and
their Subsidiaries have obtained and maintained all material licenses,
permits, authorizations and registrations required under any Environmental
Law ("Environmental Permits"). All such Environmental Permits are in good
standing, and each such Person is in compliance with all terms and conditions
thereof.
(c) ORDERS. Except as specifically disclosed in SCHEDULE 5.11 or
in the SEC Report, there are no outstanding written orders from or agreements
with any Governmental Authority nor any judicial or docketed administrative
proceedings respecting any Environmental Law, Environmental Claim or
Hazardous Material to which the Company, the REIT, any Management Entity, any
of their Subsidiaries, or any of such Person's Properties or operations, is
subject.
(d) HAZARDOUS MATERIALS. Except as disclosed in SCHEDULE 5.11 or
in the SEC Report, there are no Hazardous Materials or other conditions or
circumstances existing with respect to any Property, or arising from
operations prior to the Closing Date, that would reasonably be expected to
give rise to Environmental Claims for any such condition, circumstance or
Property. In addition, (i) there are not located on the Properties
underground storage tanks (x) that are not properly registered or permitted
under applicable Environmental Laws, or (y) that are leaking or emitting
Hazardous Materials whether on-or off-site, and (ii) the Company, the REIT,
the Management Entities and their Subsidiaries have notified all of their
employees of the existence, if any, of any health hazard arising from the
conditions of their employment to the extent required under any Environmental
Laws and have met all notification requirements under Title III of CERCLA and
all other Environmental Laws.
5.12 COLLATERAL DOCUMENTS. When executed, delivered and recorded
pursuant hereto, the Collateral Documents shall be effective to create in
favor of the Agent, for the benefit of the Lenders, legal, valid and
enforceable first-priority Liens in the Collateral and the proceeds thereof,
subject only to the Permitted Exceptions. As required by Section 2.13(a),
all action, including (a) the recording of Mortgages and Assignment of Leases
and (b) the filing of UCC financing statements and other security perfection
documents in all appropriate jurisdictions, shall have been taken that is
necessary or appropriate to perfect the Agent's Lien, for the benefit of the
Lenders, in the Collateral. All representations and warranties of the
Company and any other Person party to any Collateral Documents that are
contained therein are true and correct.
5.13 REGULATED ENTITIES. None of the Company, the REIT, any Management
Entity, or any of their Subsidiaries is (a) an "investment company" within
the meaning of the Investment Company Act of 1940; or (b) subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or
any other Federal or state statute or regulation limiting its ability to
incur Indebtedness.
5.14 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the Loans
are intended to be and shall be used solely for the purposes set forth in and
permitted by Sections
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2.01(b) and Section 6.10, and are intended to be and shall be used in
compliance with Section 7.12.
5.15 REIT AND TAX STATUS; STOCK EXCHANGE LISTING. The REIT currently
has REIT Status and has maintained REIT Status on a continuous basis since
its formation. The Company is not an association taxable as a corporation
under the Code. The shares of common Stock of the REIT are listed on the
NYSE.
5.16 INSURANCE. The Company, the REIT, the Management Entities, their
Subsidiaries and the Properties are insured with financially sound and
reputable insurance companies, in such amounts, with such deductibles and
covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar Properties in localities where the
Company and the Management Entities operate.
5.17 NO DEFAULT. No Default or Event of Default exists or would result
from the incurring of any Obligations by the Company. Neither the Company,
nor the REIT, nor any Management Entity, nor any of their Subsidiaries is in
default under or with respect to any Contractual Obligation in any respect
which, individually or together with all such other defaults, would
reasonably be expected to have a Material Adverse Effect.
5.18 [Intentionally Deleted.]
5.19 NOT A "FOREIGN PERSON." Neither the Company nor any Wholly-Owned
Subsidiary which owns a Borrowing Base Property is a "foreign person" within
the meaning of Section 1445(f)(3) of the Code.
5.20 DEFECTS. Except as disclosed to and approved in writing by the
Requisite Lenders, to the Knowledge of the Company, there exist no material
defects that would make any Borrowing Base Property unsuitable for the
present or contemplated use of such Borrowing Base Property. Except as
disclosed to and approved in writing by the Requisite Lenders, to the
Knowledge of the Company, there are no abnormal hazards, including but not
limited to earth movement or slippage, affecting any Borrowing Base Property.
5.21 PROPERTY DOCUMENTS. The Company has delivered to the Agent,
copies of all easement agreements, reciprocal easement agreements, management
agreements, service contracts, and other agreements, instruments and
documents and all amendments thereof (whether or not recorded) which affect
in any material respect the Company's or any Wholly-Owned Subsidiary's
interest in any Borrowing Base Property (except apartment leases).
5.22 CONDEMNATION. No condemnation proceeding involving any Borrowing
Base Property or any portion thereof or parking facility used in connection
therewith has been commenced or, to the Knowledge of the Company, is
contemplated by any Governmental Authority, nor has any portion of any
Borrowing Base Property or any parking facility used in connection therewith
been damaged due to fire or other casualty.
5.23 VIOLATION OF LAWS; PERMITS. None of the Borrowing Base Properties
are being operated in violation of (a) any Requirements of Law or (b) any
building permits,
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restrictions of record, or any agreement affecting any such property or part
thereof, or (c) any judgment, decree or order applicable to such property.
To the Knowledge of the Company, all governmental permits (including, without
limitation, building permits and certificates of occupancy) necessary under
applicable Requirements of Law to lawfully construct, own, lease, occupy, use
and operate each Borrowing Base Property and the improvements thereon,
including, but not limited to, all applicable environmental and zoning laws,
ordinances and regulations, have been obtained.
5.24 UTILITIES. Each Borrowing Base Property has adequate water, gas,
telephone, electrical supply, storm and sanitary sewerage facilities and
means of access to and from public streets or highways.
5.25 LEASES. Except for apartment leases and other Permitted
Exceptions, there are no leases affecting any Borrowing Base Property. No
rent has been collected more than one month in advance under any such
apartment lease other than in the Ordinary Course of Business. No such lease
or any interest therein is subject to any present assignment or pledge (other
than, as provided in Section 2.13(a), to the Agent for the ratable benefit of
the Lenders). All rent due to date under each lease has been collected in
the Ordinary Course of Business and no concession has been granted to any
lessee in the form of a waiver, release, reduction, discount or other
alteration of rent due or to become due, other than in the Ordinary Course of
Business. The interest of the lessee under each such lease is as lessee
only, with no options to purchase or rights of first refusal.
5.26 FULL DISCLOSURE. None of the representations or warranties made
by the Company, the REIT, the Management Entity or any Subsidiary in the Loan
Documents as of the date such representations and warranties are made or
deemed made, and none of the statements contained in each exhibit, report,
statement or certificate furnished by or on behalf of any such Person in
connection with the Loan Documents, contains any untrue statement of a
material fact or omits any material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they are made, not misleading. There is no fact, to the
Knowledge of the Company, which materially and adversely affects the
business, operations, properties, assets or condition (financial or
otherwise) of the Company, the REIT, the Management Entities, or any of the
Subsidiaries which has not been disclosed herein or in other documents,
certificates and statements furnished to the Agent and each Lender hereunder
or pursuant hereto. The copies of all documents delivered to the Agent
and/or the Lenders from time to time in connection with this Agreement are
and shall be true and complete copies of the originals thereof and have not
been or shall not be amended except as disclosed to the Agent and/or the
Lenders, as applicable.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as any Lender shall have
any Commitment hereunder, or any Loan or other obligation shall remain unpaid
or unsatisfied, unless the Requisite Lenders waive compliance in writing:
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6.01 FINANCIAL INFORMATION. The Company shall deliver to the Agent and
to each Lender, in form and detail satisfactory to the Agent and the Lenders:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, but not
later than ninety (90) days after the end of each fiscal year, a copy of the
audited consolidated balance sheet of the REIT as of the end of such year and
the related consolidated statements of operations, stockholders' equity
(where applicable) and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous year, including the
REIT's SEC Form 10K for such period, and accompanied by the unqualified
opinion of a nationally-recognized independent public accounting firm stating
that such consolidated financial statements present fairly the financial
position for the periods indicated, in conformity with GAAP, and applied on a
basis consistent with prior years;
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available, but not
later than forty-five (45) days after the end of each of the first three (3)
fiscal quarters of each year, a copy of the unaudited consolidated balance
sheet of the REIT as of the end of such quarter and the related consolidated
statements of operations, stockholders' equity (where applicable) and cash
flows for the period commencing on the first day and ending on the last day
of such quarter, including the REIT's SEC Form 10Q for such period, and
accompanied by a certificate signed by at least two (2) Responsible Officers
stating that such financial statements are complete and correct and present
fairly the financial position for the periods indicated, in conformity with
GAAP for interim financial statements, and applied on a basis consistent with
prior quarters;
(c) MONTHLY OPERATING STATEMENTS FOR BORROWING BASE PROPERTIES. As
soon as available, but not later than forty-five (45) days after the end of
each calendar month, a monthly operating statement for each Borrowing Base
Property (in a format and with such detail as the Agent may require);
(d) COMPANY PLANS AND PROJECTIONS. Not less than ninety (90) days
after the beginning of each fiscal year, copies of (A) the Company's business
plan for the current and the succeeding three (3) fiscal years, (B) the
Company's annual budgets (including capital expenditure budgets) and
projections for the Borrowing Base Properties; and (C) the Company's
financial projections for the current and the succeeding three (3) fiscal
years, as prepared by the Company's Chief Financial Officer and in a format
and with such detail as the Agent may reasonably require;
(e) QUARTERLY CONSOLIDATED OPERATING STATEMENTS. To the extent
not otherwise provided in disclosure documents filed with the SEC and
delivered to the Agent hereunder, as soon as available, but not later than
forty-five (45) days after the end of each fiscal quarter, a quarterly
consolidated operating statement for all of the Properties of the Company and
its Subsidiaries (in a format and with such detail as the Agent may require),
accompanied by a certificate signed by at least two (2) Responsible Officers
certifying that the information contained therein, subject to audit, is
complete and correct to the Knowledge of the Company; and
(f) FINANCIAL STATEMENTS AND OTHER INFORMATION FOR NHP. Until the
NHP Combination Date, within five (5) days after the receipt thereof by the
Acquisition Sub,
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the Company, the REIT or any Subsidiary thereof, such periodic, quarterly,
annual and special financial statements, reports, proxy statements and other
information as may be received by any such Person in its capacity as a
shareholder in NHP, and within five (5) days after the delivery of any
thereof by any such Person, copies of any reports, proxy statements, tender
or exchange offers or other information provided by such Person to NHP or to
the shareholders thereof to the SEC in respect of such Person's ownership of
or intentions or proposals with respect to NHP.
6.02 CERTIFICATES; OTHER INFORMATION. The Company shall furnish to the
Agent with sufficient copies for each Lender:
(a) ACCOUNTING CERTIFICATES. Concurrently with the delivery of
the financial statements referred to in Section 6.01(a), a certificate of the
independent certified public accountants reporting on such financial
statements stating that, in making the examination necessary therefor, no
knowledge was obtained of any Default or Event of Default, except as
specified in such certificate;
(b) OFFICERS' CERTIFICATES. Concurrently with the delivery of the
financial statements referred to in Sections 6.01(a) and 6.01(b) above, a
compliance certificate, substantially in the form of EXHIBIT K, signed by at
least two (2) Responsible Officers (i) stating that, to the best of such
officers' knowledge, each of the Company, the REIT and their respective
Subsidiaries, during such period, has observed or performed all of its
covenants and other agreements, and satisfied every condition contained in
this Agreement and the other Loan Documents to be observed, performed or
satisfied by it, and that such officers have no knowledge of any Default or
Event of Default except as specified in such certificate; (ii) showing in
detail the calculations supporting such statement for such period in respect
of the covenants in Section 7.09 and 7.16; (iii) showing in detail the
calculation of the Borrowing Base for such period on an asset-by-asset basis;
and (iv) certifying that none of the Collateral is required to be excluded as
Collateral pursuant to Section 2.13(b);
(c) PERIODIC REPORTS AND FILINGS; PRESS RELEASES. Promptly after
the same are sent or released, copies of all reports, proxy statements and
financial statements which the REIT sends to its shareholders and copies of
all press releases made by the Company and the REIT, promptly after the same
are filed, copies of all financial statements and regular, periodical or
special reports which the REIT may make to, or file with, the SEC or any
successor or similar Governmental Authority and promptly after the same are
received, copies of any reports prepared by analysts for or with respect to
the Company or the REIT;
(d) ACCOUNTANTS' REPORTS. Promptly after the same are received,
copies of all reports which the independent certified public accountants of
the Company or the REIT deliver to the Company or the REIT; and
(e) OTHER INFORMATION. Promptly, revisions to the Organizational
Chart and such additional financial and other information as the Agent may
from time to time reasonably request.
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6.03 NOTICES. The Company shall promptly (and in no event later than
ten (10) days after the Company has reason to know of the same) notify the
Agent and each Lender of:
(a) DEFAULT; EVENT OF DEFAULT. The occurrence of any Default or
Event of Default, and of the occurrence or existence of any event or
circumstance that is likely to become a Default or Event of Default. Each
notice under this Section 6.03(a) shall describe with particularity the
clause or provision of this Agreement or other Loan Documents that have been
breached or violated.
(b) LITIGATION. The commencement of, or any material development
in, any litigation, arbitration or proceeding affecting the Company, the
REIT, any Management Entity or any Subsidiary (i) in which the amount of
damages claimed is $2,000,000 or more, (ii) in which injunctive or similar
relief is sought and which, if adversely determined, would reasonably be
expected to have a Material Adverse Effect, (iii) in which the relief sought
is an injunction or other stay of the performance of any Loan Document or
(iv) required to be reported to the SEC pursuant to the Exchange Act;
(c) ENVIRONMENTAL MATTERS. (i) Any and all material enforcement,
cleanup, removal or other governmental or regulatory actions instituted,
completed or threatened against the Company, the REIT, any Management Entity
or any of their Subsidiaries or any of their Properties pursuant to any
Environmental Laws, (ii) all other material Environmental Claims, and (iii)
any environmental or similar condition on any real property adjoining or in
the vicinity of the Properties of the Company, the REIT, any Management
Entity or any of their Subsidiaries that could reasonably be anticipated to
cause such Properties (or any portion thereof) to be subject to any material
restrictions on ownership, occupancy, transferability or use under any
Environmental Laws;
(d) ERISA. The occurrence of any of the following ERISA events
affecting the Company or any member of its Controlled Group, together with a
copy of any notice with respect to such event that may be required to be
filed with any Governmental Authority and any notice delivered by a
Governmental Authority to the Company or any member of its Controlled Group
with respect to such event:
(i) an ERISA Event where the aggregate liability is likely
to exceed $1,000,000;
(ii) the adoption of any new Plan that is subject to Title
IV of ERISA or Section 412 of the Code by any member of the Controlled Group;
(iii) the adoption of any amendment to a Plan that is subject
to Title IV of ERISA or Section 412 of the Code, if such amendment results in
a material increase in benefits or unfunded liabilities; or
(iv) the commencement of contributions by any member of the
Controlled Group to any Plan that is subject to Title IV of ERISA or Section
412 of the Code;
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(e) MATERIAL ADVERSE EFFECTS. The occurrence of any act, omission,
change or event which has a Material Adverse Effect subsequent to the date of
the most recent audited financial statements of the Company and the REIT
delivered to the Agent pursuant to Section 6.01(a);
(f) EXCLUDED COLLATERAL. The occurrence of any event or circumstance
that causes, or is likely to cause, any Borrowing Base Property to be
excluded as Collateral pursuant to Section 2.13(b) above;
(g) MATERIAL TRANSACTIONS OR OCCURRENCES. The consummation of any
material Investment or Disposition, of any material issuance of Stock of the
REIT (other than upon the tender of any Units for redemption or upon the
conversion of any shares of the REIT's Class B Common Stock into shares of
the REIT's Class A Common Stock) or Units, of any incurrence of material
Indebtedness or of any other material transaction entered into, or the
commencement of any material Development Activity, by the Company, the REIT,
any Management Entity or any of their Subsidiaries; and change in any
executive officer of the REIT;
(h) FAILURE TO QUALIFY AS A REIT. The failure of the REIT to maintain
REIT Status or of any Subsidiary of the REIT to maintain its status as a
qualified REIT subsidiary under the Code;
(i) ACCOUNTING CHANGES. Any material change in the Company's or the
REIT's accounting policies or financial reporting practices;
(j) LEGAL COMPLIANCE. Any material notice received from any
Governmental Authority asserting that any Borrowing Base Property is not in
compliance with any Requirements of Law; and
(k) CROSS-DEFAULT. Any notice received by the Company, the REIT, any
Management Entity or any of their Subsidiaries of any default under any
Indebtedness or Guaranty Obligation described in Section 8.01(e). Each
notice pursuant to this section shall be accompanied by a written statement,
signed by at least two (2) Responsible Officers, setting forth details of the
occurrence referred to therein and the provisions of this Agreement affected,
and stating what action the Company or the REIT proposes to take with respect
thereto.
6.04 PRESERVATION OF EXISTENCE, ETC.. The Company shall, and shall
cause the REIT, the Management Entities and each of their Subsidiaries to,
(a) preserve and maintain in full force and effect its partnership, corporate
or other organizational existence and good standing under the laws of its
state or jurisdiction of organization, and (b) preserve and maintain itn full
force and effect all rights, privileges, qualifications, permits, licenses
and franchises necessary or desirable in the normal conduct of its business.
6.05 MAINTENANCE OF PROPERTY. The Company shall maintain, and shall
cause the REIT, the Management Entities and each of their Subsidiaries to
maintain, and preserve all of their Properties, including Properties
constituting Collateral, in good working order and condition in accordance
with the Company's past practices, ordinary wear and tear excepted.
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6.06 INSURANCE. In addition to insurance requirements set forth in the
Collateral Documents, the Company shall maintain, and shall cause the REIT,
the Management Entities and each of their Subsidiaries to maintain, with
financially sound and reputable independent insurers, insurance with respect
to their Properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or a similar
business, of such types and in such amounts as are customarily carried under
similar circumstances by such other Persons; including workers' compensation
insurance, public liability and property and casualty insurance (which amount
shall not be reduced in the absence of 30 days' prior notice to the Agent).
Upon the request of the Agent, the Company shall furnish such Agent, with
sufficient copies for each Lender, at reasonable intervals (but not more than
the twice per calendar year) a certificate signed by at least two (2)
Responsible Officers (and, if requested by such Agent, any insurance broker
of the Company or the REIT) setting forth the nature and extent of all
insurance maintained by the Company, the REIT, the Management Entities and
each of their Subsidiaries in accordance with this Section 6.06 or any
Collateral Documents (and which, in the case of a certificate of a broker,
was placed through such broker).
6.07 PAYMENT OF OBLIGATIONS. The Company shall, and shall cause the
REIT, the Management Entities and each of their Subsidiaries to, pay and
discharge as the same shall become due and payable and otherwise comply with,
all their respective obligations and liabilities, including (a) all tax
liabilities, assessments and governmental charges or levies upon it or its
Properties, unless the same are being contested in good faith by appropriate
proceedings and adequate reserves in accordance with GAAP are being
maintained by the Company or such Person, (b) all lawful claims which, if
unpaid, would by law become a Lien upon its Properties, including Properties
constituting Collateral, (c) all Indebtedness, as and when due and payable,
but subject to any subordination provisions contained in any instrument or
agreement evidencing such Indebtedness, and (d) all Contractual Obligations.
6.08 COMPLIANCE WITH LAWS. The Company shall comply, and shall cause
the REIT, the Management Entities and each of their Subsidiaries to comply in
all material respects with all Requirements of Law of any Governmental
Authority having jurisdiction over it or its business, including, without
limitation, all securities laws and regulations.
6.09 ENVIRONMENTAL LAWS. The Company shall, and shall cause the REIT,
the Management Entities and each of their Subsidiaries to, conduct its
operations and keep and maintain its Properties in compliance in all material
respects with all Environmental Laws. Upon the written request of the Agent
or any Lender, the Company shall submit, and cause the REIT, the Management
Entities and each of their Subsidiaries to submit, to the Agent and the
Lenders, at the Company's sole cost and expense, at reasonable intervals, a
report providing an update of the status of any environmental, health or
safety compliance, hazard or liability issue identified in any notice or
report required pursuant to Section 6.03(c), that could, individually or in
the aggregate, result in liability in excess of $1,000,000.
6.10 USE OF PROCEEDS. The Company shall use the proceeds of the
Revolving Loans solely in accordance with Section 2.01(b) above.
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6.11 MAINTENANCE OF REIT STATUS; STOCK EXCHANGE LISTING. The Company
shall cause the REIT at all times to maintain its REIT Status and to maintain
its common Stock listed on the NYSE, the American Stock Exchange, or Nasdaq
Stock Exchange. The Company shall cause each Wholly-Owned Subsidiary to
comply with all requirements applicable under the Code to REIT subsidiaries.
6.12 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Company shall
maintain, and shall cause the REIT, the Management Entities and each of their
Subsidiaries to maintain, proper books of record and account, in which full,
true and correct entries in conformity with GAAP consistently applied shall
be made of all financial transactions and matters involving the Properties
and business of the Company, the REIT, the Management Entities and each of
their Subsidiaries. The Company shall permit, and shall cause the REIT, the
Management Entities and each of their Subsidiaries to permit, representatives
of the Agent or any Lender to visit and inspect any of their respective
Properties, to conduct audits of the Collateral, to examine their respective
corporate, financial and operating records, and make copies thereof or
abstracts therefrom, and to discuss their respective affairs, finances and
accounts with their respective directors, officers, and independent public
accountants, all at the expense of the Company and at any time during normal
business hours and as often as may be reasonably desired, upon no less than
forty-eight (48) hours advance notice to the Company; PROVIDED, HOWEVER, when
an Event of Default exists, the Agent or any Lender may visit and inspect at
the expense of the Company such Properties at any time during business hours
and without advance notice.
6.13 FURTHER ASSURANCES.
(a) FULL DISCLOSURE. The Company will ensure that all other
written information, exhibits and reports furnished to any Agent or Lender by
the Company, the REIT, any Management Entity or any of their Subsidiaries do
not contain any untrue statement of a material fact and do not and will not
omit to state any material fact or any fact necessary to make the statements
contained therein not misleading in light of the circumstances in which made,
and will promptly disclose to the Agent and the Lenders and correct any
defect or error that may be discovered therein or in any Loan Document or in
the execution, acknowledgment or recordation thereof.
(b) FURTHER ACTS. Promptly upon request by the Agent or the
Requisite Lenders, the Company shall (and shall cause the REIT, each Management
Entity and each of their Subsidiaries to) do, execute, acknowledge, deliver,
record, re-record, file, re-file, register and re-register, any and all such
further acts, deeds, conveyances, security agreements, mortgages, deeds of
trust, assignments, estoppel certificates, financing statements and
continuations thereof, termination statements, notices of assignment, transfers,
certificates, assurances and other instruments that the Agent or such Lenders,
as the case may be, may reasonably require from time to time in order (i) to
carry out more effectively the purposes of this Agreement or any other Loan
Document, (ii) to subject to the Liens created by any of the Collateral
Documents any of the Collateral, (iii) to perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and the Liens
intended to be created thereby, and (iv) to better assure, convey, grant,
assign, transfer, preserve, protect and confirm
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to the Agent and Lenders the rights granted or now or hereafter intended to
be granted under any Loan Document, or any other document executed in
connection herewith or therewith.
(c) ADDITIONAL GUARANTIES. Promptly upon the formation by the
REIT of any Wholly-Owned Subsidiary of the REIT which is a qualified REIT
subsidiary under the Code, the REIT shall cause such Wholly-Owned Subsidiary
to deliver to the Agent for the ratable benefit of the Lenders a guaranty of
the Obligations in the form attached hereto as EXHIBIT G; provided, however,
solely with respect to any such Wholly-Owned Subsidiary that does not own a
Borrowing Base Property, such guaranty shall not be required if such
Wholly-Owned Subsidiary is prohibited from issuing such guaranty under its
then-current financing arrangements.
6.14 COMMUNICATION WITH ACCOUNTANTS. While any Event of Default is
continuing, the Company authorizes the Agent and any Lender to communicate
directly with the Company's independent accountants and authorizes such
accountants to disclose to such Persons any and all financial statements and
other information of any kind, including the substance of any oral
information or conversation that such accountants may have with respect to
the business, financial condition and other affairs of the Company.
6.15 SOLVENCY. The Company shall at all times be, and shall cause the
REIT, each Management Entity and each of their Subsidiaries to be, Solvent.
6.16 COVENANTS RELATING TO BORROWING BASE PROPERTIES. The Company
hereby agrees as follows:
(a) MAINTENANCE. The Company shall maintain each Borrowing Base
Property in good order and condition in accordance with the Company's past
practices.
(b) LEASES. The Company shall not enter into any lease of any
Borrowing Base Property other than apartment leases or other ordinary course
leases consistent with past practice and having terms of less than one (1)
year on market terms. The Company shall deliver to the Agent a copy of the
standard lease forms utilized for the Borrowing Base Properties from time to
time.
(c) MATERIAL AGREEMENTS. The Company shall obtain the prior
written approval of the Agent and the Requisite Lenders prior to entering into
any reciprocal easement or similar agreement, ground lease or any other material
agreement affecting any Borrowing Base Property.
(d) MANAGEMENT CONTRACTS. The Company shall obtain the prior
written approval of the Agent and the Requisite Lenders prior to entering into
any property management agreement with a Person other than the Company, one of
the Management Entities, or any of their Subsidiaries, or replacing the property
manager for any Borrowing Base Property with a Person other than the Company,
one of the Management Entities, or any of their Subsidiaries. The Company shall
cause all property management contracts affecting Borrowing Base Properties to
permit termination of the manager (whether such manager is one of the Management
Entities or otherwise) by the owner within thirty days' written notice, without
penalty, and the Company shall not permit the management fee payable under any
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such property management agreement to exceed three percent (3%) of gross
receipts from such property per fiscal year.
(e) CONSTRUCTION. The Company shall obtain the prior written
approval of the Agent and the Requisite Lenders prior to entering into any
major construction or renovation affecting a Borrowing Base Property and
shall discharge all mechanic's liens resulting from any such construction or
renovation.
(f) LIENS. The Company shall keep each Borrowing Base Property at
all times free and clear of all Liens (unless such Liens are bonded and
thereby released of record in a manner satisfactory to the Agent), except for
Permitted Exceptions or other matters approved by the Agent and the Requisite
Lenders.
ARTICLE VII
NEGATIVE COVENANTS
The Company hereby covenants and agrees that, so long as any Lender
shall have any Commitment hereunder, or any Loan or other Obligation shall
remain unpaid or unsatisfied, unless the Requisite Lenders waive compliance
in writing:
7.01 LIENS. Neither the Company, nor the REIT, nor any Management
Entity, nor any of their Subsidiaries shall, directly or indirectly, make,
create, incur, assume or suffer to exist any Lien upon or with respect to any
part of its Property, whether now owned or hereafter acquired, other than the
following ("PERMITTED LIENS"):
(a) EXISTING LIENS. Liens on the Properties of the Company or its
Subsidiaries (other than Liens on the Collateral in favor of the Agent for
the ratable benefit of the Lenders) securing Indebtedness described in
SCHEDULE 7.02 or any refinancing thereof permitted under Section 7.02(a)
below;
(b) CERTAIN LIENS. Liens created under any Loan Document or
created pursuant to the Bridge Loan Agreement or the Acquisition Sub
Financing Documents;
(c) TAX LIENS. Liens for taxes, fees, assessments or other
governmental charges which are not delinquent or remain payable without
penalty, or to the extent that non-payment thereof is permitted by Section
6.07, provided that no Notice of Lien has been filed or recorded;
(d) BANKER'S LIENS. Liens arising solely by virtue of any
statutory or common-law provision relating to banker's liens, rights of
setoff or similar rights and remedies as to deposit accounts or other funds
maintained with a creditor depository institution; PROVIDED that (i) such
deposit account is not a dedicated cash collateral account and is not subject
to restrictions against access by the depositor in excess of those set forth
by regulations promulgated by the Federal Reserve Board, and (ii) such
deposit account is not intended by the depositor to provide collateral to the
depository institution;
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(e) OTHER STATUTORY LIENS. Carriers', warehousemen's, mechanics',
landlords', materialmen's, repairmen's or other similar Liens arising in the
Ordinary Course of Business, against Properties other than the Borrowing Base
Properties, which are not delinquent or remain payable without penalty or
which are being contested in good faith and by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the
Property subject thereto;
(f) EMPLOYMENT-RELATED LIENS. Liens (other than any Lien imposed
by ERISA) consisting of pledges or deposits required in the Ordinary Course
of Business in connection with workers' compensation, unemployment insurance
and other social security legislation;
(g) JUDGMENT LIENS. Liens against Properties other than the
Borrowing Base Properties consisting of judgment or judicial attachment
liens, provided that the enforcement of such Liens is effectively stayed or
bonded;
(h) EASEMENTS, ETC. Liens against Properties other than the
Borrowing Base Properties consisting of easements, rights-of-way,
restrictions and other similar title exceptions incurred in the Ordinary
Course of Business which do not in any case materially detract from the value
of the Property subject thereto or interfere with the ordinary conduct of the
businesses of the Company, the REIT and the Subsidiaries; and
(i) LIENS SECURING FINANCING. Liens securing Indebtedness
permitted under Section 7.02(f), (g) or (h) below on real and personal
properties not constituting Collateral and not constituting ownership
interests in the Company or any of the Subsidiaries of the Company or the
REIT.
Nothing contained in this Agreement shall restrict the granting of
Liens by the Acquisition Sub unless such Liens are prohibited under the
Acquisition Sub Financing Documents.
7.02 INDEBTEDNESS. Neither the Company, nor the REIT, nor any
Management Entity, nor any of their Subsidiaries shall create, incur, assume,
suffer to exist, or otherwise become or remain directly or indirectly liable
with respect to, any Indebtedness except the following ("PERMITTED
INDEBTEDNESS"):
(a) EXISTING INDEBTEDNESS. Indebtedness of the Company and its
Subsidiaries outstanding on the Closing Date and described in SCHEDULE 7.02;
(b) CERTAIN INDEBTEDNESS. Indebtedness incurred pursuant to this
Agreement or pursuant to the Bridge Loan Agreement or the Acquisition Sub
Financing Documents;
(c) ACCOUNTS PAYABLE. Accounts payable to trade creditors for
goods and services and current operating liabilities (not the result of the
borrowing of money) incurred in the Ordinary Course of Business in accordance
with customary terms and paid within the specified time, unless contested in
good faith by appropriate proceedings and reserved for in accordance with
GAAP;
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(d) CONTINGENT OBLIGATIONS. Indebtedness consisting of Contingent
Obligations permitted by Section 7.03;
(e) INTRA-COMPANY DEBT. Subject to Section 7.09, Intra-Company
Debt, provided that the obligor and obligee thereof have subordinated the
repayment thereof to the repayment of the Obligations pursuant to a
subordination agreement in form and substance approved by the Requisite
Lenders;
(f) "ENGLISH" AND "BALCOR" REFINANCINGS. Indebtedness of the
Company incurred to refinance the debt secured by the Properties commonly
known as the "English" and "Balcor" portfolios, as previously disclosed to
the Lenders prior to the date hereof;
(g) ADDITIONAL INDEBTEDNESS. Indebtedness of the Company or a
Subsidiary of the Company that does not own any Borrowing Base Properties for
borrowed money owed to a non-Affiliate of the Company which (i) is not
secured by the Collateral; and (ii) is on such terms and in such amount that,
upon the incurrence of such Indebtedness, the Company will be in compliance
with the terms of Section 7.16 below; and
(h) REIT INDEBTEDNESS. Indebtedness of the REIT which (i) is not
secured by the Collateral; and (ii) is on such terms and in such amount that,
upon the incurrence of such Indebtedness, the Company will be in compliance
with the terms of Section 7.16 below.
Nothing contained in this Section 7.02 shall be deemed to excuse any
lack of compliance by Company, the REIT, or any Subsidiary with the terms of
Section 7.16 below.
7.03 CONTINGENT OBLIGATIONS. Neither the Company, nor the REIT, nor any
of their Subsidiaries shall create, incur, assume or suffer to exist any
Contingent Obligations except:
(a) ORDINARY COURSE ENDORSEMENTS. Endorsements for collection or
deposit in the Ordinary Course of Business;
(b) RATE CONTRACTS. Unsecured Rate Contracts entered into by the
Company with respect to variable rate Indebtedness permitted hereunder;
(c) LETTER OF CREDIT REIMBURSEMENT OBLIGATIONS. Reimbursement
obligations of the Company or of Subsidiaries that do not own Borrowing Base
Properties under letters of credit provided that such obligations (i) are not
secured by the Collateral; and (ii) are on such terms and in such amount
that, upon the incurrence of such obligations and assuming that all
conditions for drawing on such letters of credit have been complied with, the
Company will be in compliance with the terms of Section 7.16 below; and
(d) EXCEPTIONS TO NONRECOURSE GUARANTIES. Contingent Obligations
of the REIT, the Company and their Subsidiaries consisting of "exceptions to
nonrecourse" guaranties of nonrecourse Indebtedness otherwise permitted under
Section 7.02 or of other Indebtedness permitted under Section 7.02.
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7.04 LEASE OBLIGATIONS. Neither the Company, nor the REIT, nor any of
their Subsidiaries shall create or suffer to exist any obligations for the
payment of rent for any Property under a lease or agreement to lease that is
not a Capital Lease, except for:
(a) EXISTING LEASES. Leases in existence on the Closing Date (and
any renewal, extension or refinancing thereof); or
(b) ORDINARY COURSE LEASES. Leases entered into after the Closing
Date in the Ordinary Course of Business and at market rates and terms.
7.05 DISPOSITION OF PROPERTIES. Neither the Company, nor the REIT, nor
any of their Subsidiaries shall, directly or indirectly:
(a) make any Disposition of any Borrowing Base Property, or enter
into any agreement to do so, provided, however, so long as no Default or
Event of Default is then continuing, the Company shall have the right to sell
or refinance a Borrowing Base Property (i) on or before the Conversion Date
by paying to the Agent for distribution to the Lenders an amount equal to the
amount which would be required to be paid to the Lenders so that the
Outstanding Amount of the Revolving Loan immediately after such sale or
refinance would not exceed the Revolving Loan Borrowing Base (calculated
without including the Borrowing Base Property so sold or refinanced as one of
the Borrowing Base Properties), and upon receipt of such payment, the Agent
shall release such Borrowing Base Property as Collateral hereunder, and (ii)
following the Conversion Date by paying to the Agent for distribution to the
Lenders an amount equal to the greater of the Term Loan Amount for such
Borrowing Base Property or the amount which would be required to be paid to
the Lenders so that the Outstanding Amount of the Term Loan immediately after
such sale or refinance would not exceed the Term Loan Borrowing Base
(calculated without including the Borrowing Base Property so sold or
refinanced as one of the Borrowing Base Properties), and upon receipt of such
payment, the Agent shall release such Borrowing Base Property as Collateral
hereunder;
(b) make any Disposition of its interest in any Management Entity,
or enter into any agreement to do so; or
(c) make any Disposition of any other Property, or enter into any
agreement to do so, unless in the case of this clause (c) such Disposition is
at fair market value, and at the time of the Disposition no Event of Default
exists.
Nothing contained in this Agreement shall restrict Dispositions by the
Acquisition Sub unless such Dispositions are prohibited under the Acquisition
Sub Credit Agreement.
7.06 CONSOLIDATIONS AND MERGERS. Neither the Company, nor the REIT, nor
any of their Subsidiaries shall merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its Properties (whether
now owned or hereafter acquired) to or in favor of any Person; except as
follows:
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(a) Subsidiaries of the Company or of the REIT may merge,
consolidate with or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or
substantially all of any of their Properties (whether now owned or hereafter
acquired) to or in favor of the Company or another Subsidiary of the Company
or of the REIT;
(b) Subsidiaries of the REIT may merge, consolidate with or into,
or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of any
of their Properties (whether now owned or hereafter acquired) to or in favor
of the REIT; and
(c) A Subsidiary of the Company may merge with NHP so long as such
Subsidiary is the surviving entity.
Notwithstanding the foregoing, no Subsidiary shall merge,
consolidate with or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or
substantially all of its Properties (whether now owned or hereafter acquired)
to or in favor of another Subsidiary if such transaction would result in a
violation of any covenant in this Agreement.
7.07 LIQUIDATIONS; MATERIAL ORGANIZATION CHANGES; NEW SUBSIDIARIES.
(a) Neither the Company, nor the REIT, nor any Management Entity,
nor any Subsidiary which owns a Borrowing Base Property, is a Guarantor
Subsidiary or owns any stock in NHP shall liquidate, wind-up or dissolve, or
amend its Organizational Documents in any respect which is, in the opinion of
the Requisite Lenders, materially adverse to the interests of the Lenders;
provided that the Acquisition Sub or any Subsidiary which owns stock in NHP
may be dissolved so long as the assets thereof are contributed, prior to the
end of the calendar quarter in which such dissolution takes place, to
Management Entities. Without limiting the foregoing, under no circumstances
shall the Organizational Documents of the REIT and the Company be changed so
as to eliminate the transferability of Units of the Company for common Stock
in the REIT on a one-to-one basis.
(b) Neither the REIT nor any Subsidiary shall issue any preferred
Stock; provided however, the REIT or any Subsidiary may issue preferred Stock
provided that: (i) such Stock has no mandatory redemption feature, has no
redemption feature which is exercisable at the option of the holder thereof,
and if such Stock has any redemption feature which is exercisable at the
option of the issuer thereof, the issuance thereof and the exercise of any
such rights shall have been approved by the Lenders in writing prior thereto;
and (ii) any distributions with respect thereto shall comply with the
provisions of this Agreement (including, without limitation, Section 7.09).
(c) No Subsidiary shall own or acquire a Borrowing Base Property
unless such Subsidiary is a Wholly-Owned Subsidiary in which the Company owns
at least a 98% interest (either directly or indirectly) and in which the REIT
owns not more than a 2% interest (either directly or indirectly other than
through its interest in the Company and its Subsidiaries) and such Subsidiary
shall have delivered a guaranty of the Obligations to the Agent in form and
substance acceptable to the Agent. Notwithstanding anything to the
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contrary contained in Section 7.07(d), the Agent and Lenders acknowledge and
agree (i) that the partnership interests in Somerset, Utah L.P., a Colorado
limited partnership ("SOMERSET L.P."), are not owned 98% either directly or
indirectly by the Company, and 2% either directly or indirectly by the REIT,
(ii) that notwithstanding such ownership of Somerset L.P., so long as the
Company owns, either directly or indirectly, no less than 76% of the
partnership interest therein and the REIT owns, either directly or
indirectly, no more than 24% of the partnership interest therein, the
Property owned by Somerset L.P. on the date hereof shall be eligible for
inclusion as a Borrowing Base Property if accepted by the Lenders pursuant to
the terms of this Agreement and the Company shall not be deemed to be in
violation of this Agreement as a result of such ownership of Somerset L.P.
(d) The Company shall own not less than ninety-five percent (95%)
of the interests in the capital and profits of each Management Entity now
existing or hereafter acquired or formed.
(e) In no event shall the Company cause or permit any change in
the organizational structure of the Company, the REIT or any of their
respective Subsidiaries from that which is reflected in the Organizational
Chart which is, in the sole opinion of the Requisite Lenders, material and
adverse, without the prior written consent of the Lenders, except for mergers
permitted under Section 7.06, and changes in the equity structure of
Subsidiaries and the formation or acquisition of Subsidiaries in accordance
with this Section 7.07 and 7.08 hereof.
7.08 INVESTMENTS. Neither the Company, nor the REIT, nor any Management
Entity, nor any of their Subsidiaries shall directly or indirectly own or
acquire any assets or make any Investments (or incur any Contractual
Obligation or enter into any letter of intent to make any Investments) other
than:
(i) cash and Cash Equivalents;
(ii) multi-family apartment projects in fee simple or
partnership or joint venture interests therein;
(iii) ownership interests in Management Entities formed
or acquired pursuant to this Agreement, provided in each case the same are
engaged in managing multi-family apartment projects;
(iv) prior to the NHP Combination Date, the ownership of
the stock in NHP by Acquisition Sub;
(v) other assets not described elsewhere in this
Section 7.08, provided that the aggregate Carrying Value of such interests
shall not at any time exceed twenty-five percent (25%) of the Carrying Value
of the total assets owned by the Company, the REIT, and their Subsidiaries.
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7.09 RESTRICTED PAYMENTS AND DEMANDS.
(a) Neither the Company nor the REIT shall declare or make, or
permit any of their respective Subsidiaries to declare or make, any
distribution of any Properties, including cash, rights, obligations, or
partnership interests or units, on account of any partnership interests,
Units or Stock, or purchase, redeem or otherwise acquire for value any of its
partnership interests, Units or Stock, now or hereafter outstanding to any
Person other than the Company, the REIT or a Wholly-Owned Subsidiary, (all of
the foregoing, collectively, "distributions"), except (a) for the exchange of
common Stock of the REIT for Units; (b) that if no Default or Event of
Default exists under Section 8.01(a) or under Section 8.01(c) as a result of
a breach of Section 7.16, the REIT, the Company and all such Subsidiaries may
make distributions during any twelve (12) month period in an amount in the
aggregate which does not exceed the greater of 80% of Funds From Operations
for such period or such amount as may be necessary to maintain REIT Status.
(b) Under no circumstances shall the REIT or the Company permit any
Subsidiary to make a demand under any Intra-Company Debt which is payable
upon demand at any time after the Conversion Date; nor permit any payment to
be made with respect to Intra-Company Debt while any Event of Default is
continuing.
7.10 TRANSACTIONS WITH AFFILIATES. Neither the Company, nor the REIT,
nor any Management Entity, nor any of their Subsidiaries shall enter into any
transaction with any Affiliate of the Company or of any such Person (other
than Wholly-Owned Subsidiary or a Management Entity), except (a) as expressly
permitted by this Agreement, the Acquisition Sub Financing Documents or the
Organizational Documents for the Acquisition Sub, or (b) in the Ordinary
Course of Business and pursuant to the reasonable requirements of the
business of the Company or such Person; in each case (a) and (b), upon fair
and reasonable terms no less favorable to such Person than would obtain in a
comparable arm's-length transaction with a Person not such an Affiliate.
7.11 SPECIAL COVENANTS RELATING TO THE REIT. The REIT shall not, nor
shall the Company cause or permit the REIT to:
(a) Make any disposition of or encumber, pledge or hypothecate,
whether directly or indirectly, all or any portion of its interest in the
Company or any Subsidiary which owns a Borrowing Base Property at any time or
any rights to distributions or dividends therefrom other than to the Company
or a Wholly-Owned Subsidiary;
(b) At any time and for any reason, fail to own, either directly or
through one or more Wholly-Owned Subsidiaries of the REIT, more than 50% of
the partnership interests in the Company;
(c) Fail for any reason whatsoever, whether voluntarily or
involuntarily, either directly or through one or more Wholly-Owned
Subsidiaries of the REIT, to be the sole general partner of the Company at
any time;
(d) Use Net Issuance Proceeds for any purpose other than to make
capital contributions to GP Corp and LP Corp immediately upon the receipt
thereof by the
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REIT for immediate contribution thereof to the Company, to repay Permitted
Indebtedness, or as required by the Acquisition Sub Financing Documents;
(e) Cease to have its Common Stock listed on the NYSE, the American
Stock Exchange, or the Nasdaq Stock Exchange; or
(f) Cease to have REIT Status or fail to comply with the
requirements of the Code relating to qualified REIT subsidiaries in respect
of its ownership of any Subsidiary of the REIT to the extent required under
the Code.
7.12 USE OF PROCEEDS. The Company shall not use any portion of the Loan
proceeds, directly or indirectly, (a) to purchase or carry Margin Stock, (b)
to repay or otherwise refinance indebtedness of the Company or others
incurred to purchase or carry Margin Stock, (c) to extend credit for the
purpose of purchasing or carrying any Margin Stock, (d) to acquire any
security in any transaction that is subject to Section 13 or 14 of the
Exchange Act, or (e) for any purpose other than those permitted by Section
6.10.
7.13 TAXATION OF THE COMPANY. The Company shall at all times be taxed
as a partnership under the Code and not as an association taxable as a
corporation.
7.14 ERISA. The Company shall not and shall not permit the REIT, or any
of their Subsidiaries to, (a) terminate any Plan subject to Title IV of ERISA
so as to result in any material (in the opinion of the Agent) liability to
the Company or any ERISA Affiliate (i.e., $1,000,000 or more), (b) permit to
exist any ERISA Event or any other event or condition, which presents the
risk of a material (in the opinion of the Agent) liability to any member of
the Controlled Group, (c) make a complete or partial withdrawal (within the
meaning of ERISA Section 4201) from any Multiemployer Plan so as to result in
any material (in the opinion of the Agent) liability to the Company or any
ERISA Affiliate, (d) enter into any new Plan or modify any existing Plan so
as to increase its obligations thereunder which could result in any material
(in the opinion of the Agent) liability to any member of the Controlled
Group, or (e) permit the present value of all nonforfeitable accrued benefits
under any Plan (using the actuarial assumptions utilized by the PBGC upon
termination of a Plan) materially (in the opinion of the Agent) to exceed the
fair market value of Plan assets allocable to such benefits, all determined
as of the most recent valuation date for each such Plan.
7.15 PREPAYMENTS. Neither the REIT nor the Company nor any Subsidiary
shall, while the Term Loan is outstanding, prepay any Indebtedness other than
the Term Loan; provided, however, a prepayment of Indebtedness shall be
permitted in connection with the refinancing thereof so long as the maximum
principal amount of the loan so used to prepay any such Indebtedness does not
exceed the amount of such Indebtedness being prepaid.
7.16 FINANCIAL COVENANTS.
(a) The Company shall not permit the Net Worth of the REIT and its
Subsidiaries on a consolidated basis to be less at any time than $400,000,000
plus 75% of the Net Issuance Proceeds of all issuances of Stock or Units
after the Closing Date.
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(b) The Company shall not permit the ratio of Consolidated Total
Indebtedness to Gross Asset Value to exceed 0.60-to-1.00 at any time.
(c) The Company shall not permit the Consolidated
EBITDA-to-Interest Ratio computed for any fiscal quarter or year to be less
than 2.00-to-1.00.
(d) The Company shall not permit the Consolidated EBITDA-to-Fixed
Charges Ratio computed for any fiscal quarter or year to be less than
1.80-to-1.00.
(e) The Company will ensure that at all times during which any
outstanding balance exists under the Bridge Loan Agreement, an aggregate
amount of $2,500,000 will (i) remain undrawn under this Agreement but
available for borrowing hereunder; or (ii) be held by the Company in the form
of Cash Equivalents not subject to any Lien.
7.17 ACCOUNTING CHANGES. Neither the Company nor the REIT shall make
any significant change in accounting treatment or reporting practices, except
as required by GAAP, or change its fiscal year.
7.18 TRANSFERS OF NON-OWNED INTERESTS IN THE MANAGEMENT ENTITIES. In no
event shall all or any portion of the interests in the Management Entities or
any rights therein held by Persons other than the Company be sold,
transferred, encumbered, hypothecated, voluntarily or involuntarily, without
the prior written consent of the Requisite Lenders, except for transfers by
Executive Officers resulting from the death or disability of any such
Executive Officer or occurring after such Executive Officer is no longer an
employee of the Company, the REIT, or any of their Subsidiaries.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 EVENT OF DEFAULT. Any of the following shall constitute an "Event
of Default":
(a) NON-PAYMENT. The Company, the REIT, or any Subsidiary shall
fail to pay, (i) when and as required to be paid herein, any amount of
principal of any Loan, or (ii) within five days after the same shall become
due, any amount of interest on any Loan or any fee or other amount payable
hereunder or pursuant to any other Loan Document; or
(b) REPRESENTATION OR WARRANTY. Any representation or warranty by
the Company, the REIT, any Management Entity or any Subsidiary made or deemed
made herein, in any Loan Document, or in any certificate, document or
financial or other statement by the Company, the REIT, any Management Entity
or any Subsidiary, or any Responsible Officer, furnished at any time under
this Agreement, or in or under any Loan Document, shall prove to have been
incorrect in any material respect on or as of the date made or deemed made; or
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(c) SPECIFIC DEFAULTS. The Company, the REIT, any of their
subsidiaries or any Management Entity shall fail to perform or observe any
term, covenant or agreement contained in Section 6.06, Section 6.10, Section
6.11 and/or in Article VII; provided that, in the case of a violation of the
terms governing the maximum amount of distributions during any twelve
(12)-month period set forth in Section 7.09(b), such failure shall not
constitute an Event of Default if, by the end of the third month after such
twelve (12)-month period, such violation no longer exists, of such Section,
so long as no distributions were made during such twelve (12)-month period in
violation of the provisions of Section 7.09(b) which prohibit distributions
while certain Defaults or Events of Default exist; or
(d) OTHER DEFAULTS. The Company, the REIT, any of their
Subsidiaries or any Management Entity shall fail to perform or observe any
other term or covenant contained in this Agreement or any Loan Document, and
such default shall continue uncured for a period of 20 days after the earlier
of (i) the date upon which a Responsible Officer knew or received written
notice of such failure or (ii) the date upon which written notice thereof is
given to the Company by Agent or any Lender; or
(e) CROSS-DEFAULT.
(i) The Company, the REIT, any of their Subsidiaries or
any Management Entity or, at anytime prior to the NHP Combination Date, NHP
shall fail, after any applicable cure period:
(A) to make any payment (and which uncured
failure to pay is continuing) in respect of any Indebtedness or Guaranty
Obligation when due which in the aggregate exceeds $2,000,000 individually or
in the aggregate (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) (other than a payment with respect to
Intra-Company Debt where the obligee has not commenced pursuing its
remedies); or
(B) to perform or observe any other condition
or covenant, or any other event shall occur or condition exist, under any
agreement or instrument relating to any such Indebtedness or Guaranty
Obligation, if the effect of such failure, event or condition is to cause, or
to permit the holder or holders of such Indebtedness or the beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause, such
Indebtedness to be declared to be due and payable prior to its stated
maturity, or such Guaranty Obligation to become payable or cash collateral in
respect thereof to be demanded; or
(C) to perform or observe any condition or
covenant of the Intra-Company Loan Subordination Agreement.
(It is being understood that, for purposes of clauses (A) and (B) above, no
failure by the REIT to pay or perform any obligation with respect to an
Intra-Company Loan shall be deemed a breach or default hereunder if such
failure to pay or perform is in compliance with the Intra-Company Loan
Subordination Agreement.) Notwithstanding the foregoing, an event described
in clauses (A) or (B) occurring as a result of a default by NHP under the NHP
Revolving Credit Agreement, or any documents securing or relating to the
credit facility
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arising thereunder, or any amendment of any of the foregoing, shall not
constitute an Event of Default hereunder unless such default has not been
cured by the earlier of (x) thirty (30) days after the declaration of default
by the lead agent thereunder or (y) the date on which the lead agent or any
lender thereunder shall commence any significant collection action or measure
(including, without limitation, the commencement of a lawsuit or the exercise
of offset rights); or
(ii) an "Event of Default" (as such term is defined in
the Bridge Loan Agreement or the Acquisition Sub Financing Documents) occurs
and is continuing; or
(f) BANKRUPTCY OR INSOLVENCY. The Company, the REIT, any of their
Subsidiaries or any Management Entity or, at any time prior to the NHP
Combination Date, NHP shall (i) become insolvent, or generally fail to pay,
or admit in writing its inability to pay, its debts as they become due,
subject to applicable grace periods, if any, whether at stated maturity or
otherwise; (ii) voluntarily cease to conduct its business in the ordinary
course; (iii) commence any Insolvency Proceeding with respect to itself; or
(iv) take any action to effectuate or authorize any of the foregoing; or
(g) INVOLUNTARY PROCEEDINGS. (i) Any Insolvency Proceeding shall
be commenced or filed against the Company, the REIT, any of their
Subsidiaries, or any Management Entity or, at any time prior to the NHP
Combination Date, NHP or any writ, judgment, warrant of attachment, execution
or similar process, shall be issued or levied against a substantial part of
such Person's Properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded within sixty
(60) days after commencement, filing or levy; (ii) the Company, the REIT, any
of their Subsidiaries or, at any time prior to the NHP Combination Date, NHP
shall admit the material allegations of a petition against it in any
Insolvency Proceeding, or an order for relief (or similar order under
non-U.S. law) is ordered in any Insolvency Proceeding; or (iii) the Company,
the REIT, any of their Subsidiaries or any Management Entity or, at any time
prior to the NHP Combination Date, NHP shall acquiesce in the appointment of
a receiver, trustee, custodian, conservator, liquidator, mortgagee in
possession (or agent therefor), or other similar Person for itself or a
substantial portion of its Property or business; or
(h) ERISA. (i) A member of the Controlled Group shall fail to
pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under a
Multiemployer Plan; (ii) the Company or an ERISA Affiliate shall fail to satisfy
its contribution requirements under Section 412(c)(11) of the Code, whether or
not it has sought a waiver under Section 412(d) of the Code; (iii) in the case
of an ERISA Event involving the withdrawal from a Plan of the Company or any
ERISA Affiliate which is a "substantial employer" (as defined in Section
4001(a)(2) or Section 4062(e) of ERISA), the withdrawing employer's
proportionate share of that Plan's Unfunded Pension Liabilities is more than
$1,000,000; (iv) in the case of an ERISA Event involving the complete or partial
withdrawal of the Company or an ERISA Affiliate from a Multiemployer Plan, the
withdrawing employer has incurred a withdrawal liability in an aggregate amount
exceeding $1,000,000; (v) in the case of an ERISA Event not described in clause
(iii) or (iv),
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the Unfunded Pension Liabilities of the relevant Plan or Plans exceed
$1,000,000; (vi) a Plan that is intended to be qualified under Section 401(a)
of the Code shall lose its qualification, and the loss can reasonably be
expected to impose on members of the Controlled Group liability (for
additional taxes, to Plan participants, or otherwise) in the aggregate amount
of $1,000,000 or more; (vii) the commencement or increase of contributions
to, or the adoption of or the amendment of a Plan by, a member of the
Controlled Group shall result in a net increase in unfunded liabilities to
the Controlled Group in excess of $1,000,000; (viii) any member of the
Controlled Group engages in or otherwise becomes liable for a non-exempt
prohibited transaction and the initial tax or additional tax under section
4975 of the Code relating thereto might reasonably be expected to exceed
$1,000,000; (ix) a violation of section 404 or 405 of ERISA or the exclusive
benefit rule under section 401(a) of the Code if such violation might
reasonably be expected to expose a member or members of the Controlled Group
to monetary liability in excess of $1,000,000; (x) any member of the
Controlled Group is assessed a tax under section 4980B of the Code in excess
of $1,000,000; or (xi) the occurrence of any combination of events listed in
clauses (iii) through (x) that involves a potential liability, net increase
in aggregate Unfunded Pension Liabilities, unfunded liabilities, or any
combination thereof, in excess of $1,000,000.
(i) MONETARY JUDGMENTS. One or more final (non-interlocutory)
judgments, orders or decrees shall be entered against the Company, the REIT,
any of their Subsidiaries or any Management Entity or, at any time prior to
the NHP Combination Date, NHP involving individually or in the aggregate a
liability (not fully covered by insurance) of $1,000,000 or more, and the
same shall remain unvacated and unstayed pending appeal for a period of
thirty (30) days after the entry thereof; or
(j) NON-MONETARY JUDGMENTS. Any non-monetary judgment, order or
decree shall be rendered against the Company, the REIT, any of their
Subsidiaries or any Management Entity or, at any time prior to the NHP
Combination Date, NHP that has or would reasonably be expected to have a
Material Adverse Effect, and there shall be any period of ten (10) consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
(k) COLLATERAL AND GUARANTY DOCUMENTS.
(i) Any provision of any Collateral Document shall for any
reason (other than pursuant to the terms thereof) cease to be valid and
binding on or enforceable against the Company or other Person party thereto
(except to the extent that the same results solely from an act or omission of
the Agent or the Lenders), or the Company or such Person shall so state in
writing or bring an action to limit its obligations or liabilities
thereunder; or
(ii) Any Collateral Document shall for any reason (other than
pursuant to the terms thereof) cease to create a valid security interest in
the Collateral purported to be covered thereby, or such security interest
shall for any reason cease to be a perfected and first-priority security
interest subject only to Permitted Liens except for releases of Collateral
permitted by this Agreement; or
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(iii) Any party to a Collateral Document (other than the
Agent or Lenders) shall fail to perform or observe any term or covenant
contained in such Collateral Document, and such failure shall continue uncured
for a period of 20 days after the earlier of (A) the date upon which a
Responsible Officer knew or received written notice of such failure or (B) the
date upon which written notice thereof is given to the Company by the Agent, or
any other event or condition shall occur or exist under a Collateral Document
that constitutes an "Event of Default" as defined therein; or
(iv) The REIT or any Guarantor Subsidiary shall fail to perform
or observe (A) any term, covenant or agreement in Section 1, 9, or 12(a)
through (g), inclusive, of the guaranty in the REIT Guaranty Documents or
incorporated from Sections 6.06, 6.10 and 6.11 and Article VII of the Credit
Agreement into Section 12(h) of such guaranty, or (B) any other term,
covenant or agreement in the REIT Guaranty Documents, and such failure shall
continue unremedied for a period of 20 days after the earlier of (I) the date
upon which a Responsible Officer knew or received written notice of such
failure or (II) the date upon which written notice thereof is given to the
Company or the REIT (or any Subsidiary party thereto) by the Agent; or the
REIT Guaranty Documents shall for any reason be partially (including with
respect to future advances) or wholly revoked or invalidated, or otherwise
cease to be in full force and effect; or the REIT (or any Subsidiary party
thereto) shall contest in any manner the validity or enforceability thereof
or deny that the REIT (or any Subsidiary party thereto) has any further
liability or obligation thereunder.
(l) MATERIAL ADVERSE EFFECT. There shall occur any act, omission,
change, occurrence or event which has a Material Adverse Effect; or
(m) OWNERSHIP. (i) Any Person, or a group of related Persons, shall
acquire (a) beneficial ownership of in excess of 50% of the outstanding
voting Stock of the REIT or other voting interest having ordinary voting
power to elect a majority of the directors, managers or trustees of the REIT
(irrespective of whether at the time stock of any other class or classes
shall have or might have voting power by reason of the happening of any
contingency) or (b) all or substantially all of the Properties of the Company
or the REIT, or (ii) a majority of the Board of Directors of the REIT, at any
time, shall be composed of Persons other than (a) Persons who were members of
the Board of Directors on the date of this Agreement, or (b) Persons who
subsequently become members of the Board of Directors and who either (x) are
appointed or recommended for election with the affirmative vote of a majority
of the directors in office as of the date of this Agreement or (y) are
appointed or recommended for election with the affirmative vote of a majority
of the Board of Directors of the REIT then in office; or
(n) MATERIAL LICENSES OR PERMITS. The Company, the REIT, or any of
their Subsidiaries shall lose, through suspension, termination, impoundment,
revocation, failure to renew or otherwise, any material license or permit; or
(o) ENVIRONMENTAL LIENS. The Company, the REIT, or any of their
Subsidiaries or any of their respective properties shall become subject to
one or more Liens for costs or damages in excess of $1,000,000 individually
or in the aggregate under any Environmental Law and such Liens shall remain
in place for thirty (30) days after the creation
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thereof, or any Borrowing Base Property shall become subject to one or more
Liens in any amount under any Environmental Law and such Liens shall remain
in place for thirty (30) days after the creation thereof; or
(p) INTRA-COMPANY DEBT. If at any time after the incurrence of any
Intra-Company Debt, the Company, the REIT, or any Wholly-Owned Subsidiary is
not the holder of such Intra-Company Debt; or if any modification or
amendment with respect to the payment terms of any Intra-Company Debt is
entered into without the prior written consent of the Requisite Lenders; or
if, at any time after the Conversion Date, the holder of any Intra-Company
Debt demands any payment whatsoever thereon; or
(q) PREFERRED STOCK. If at any time there shall occur any event which
would permit the holders of any class of preferred Stock of the REIT to elect
more than one director to the Board of Directors of the REIT.
8.02 REMEDIES.
If any Event of Default occurs, the Agent shall, at the request of, or
may, with the consent of, the Requisite Lenders:
(a) TERMINATION OF COMMITMENT. Declare the Commitment of each Lender
to make Loans to be terminated, whereupon such Commitments shall forthwith be
terminated;
(b) ACCELERATION. Declare (i) the unpaid principal amount of all
outstanding Loans and all interest accrued and unpaid thereon, and (ii) all
other amounts owing or payable hereunder or under any other Loan Document to
be immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived;
(c) OBLIGATIONS UNDER LETTERS OF CREDIT. Declare forthwith due and
payable all obligations of the Company with respect to the Letters of Credit,
including, without limitation, all unreimbursed drawings under the Letters of
Credit and the aggregate contingent obligation of the Company to reimburse
Agent and Lenders for the available amount which could at any time be drawn
under the Letters of Credit (even if such amount is not then able to be drawn
pursuant to the terms of the Letters of Credit), without presentment, demand,
protest, notice of dishonor, notice of intent to demand or to accelerate
payment, notice of acceleration or notice of any other kind, all of which are
hereby expressly waived, and upon such declaration the same shall become
immediately due and payable, and Agent (upon the request or with the consent
of Requisite Lenders) may enforce all obligations of the Company with respect
to the Letters of Credit to Agent and the Lenders under the Loan Documents
and exercise any and all other remedies granted to Agent and the Lenders at
law, in equity or otherwise. In addition, Agent (upon the request or with
the consent of Requisite Lenders) may: (i) exercise any remedy available to
Agent or the Lenders under any Loan Document; and/or (ii) take whatever
action at law or in equity may appear necessary or appropriate to collect any
amount due or thereafter to become due or to enforce performance and
observance of all Obligations of the Company with respect to the Letters of
Credit. Any amounts delivered by the Company on account of the aggregate
contingent obligation of
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Account Party to reimburse Lenders for the available amount which could at
any time be drawn under the Letters of Credit shall be held by the Agent as
cash collateral for the Obligations with respect to the Letters of Credit; and
(d) OTHER REMEDIES. Exercise on behalf of itself and the Lenders all
rights and remedies available to it and the Lenders under the Loan Documents
or applicable law; PROVIDED, however, that upon the occurrence of any event
specified in Section 8.01(f) or 8.01(g) (in the case of clause (i) of Section
8.01(g) upon the expiration of the sixty (60)-day period mentioned therein),
the Commitment of each Lender to make Loans shall automatically terminate,
and the unpaid principal amount of all outstanding Loans and interest accrued
and unpaid thereon, and all other amounts owing or payable hereunder as
aforesaid shall automatically become due and payable without further act of
any Agent or Lender.
8.03 RIGHTS NOT EXCLUSIVE. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
ARTICLE IX
THE AGENT
9.01 APPOINTMENT AND AUTHORIZATION. Each Lender hereby irrevocably
appoints, designates and authorizes the Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan Document
and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, Agent shall not have any duties or
responsibilities except those expressly set forth herein, nor shall Agent
have or be deemed to have any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist on the part of Agent. Notwithstanding anything to the
contrary herein, Issuing Lender shall act on behalf of the Lenders with
respect to the Letters of Credit (and all conditions precedent applicable to
the issuance or extension thereof), until such time and except for so long as
the Agent may elect to act for the Issuing Lender with respect thereto;
PROVIDED, HOWEVER, that the Issuing Lender shall have all of the benefits and
immunities (i) for acts taken or omissions suffered by the Issuing Lender in
connection with Letters of Credit as fully as if the term "Agent", as used in
this Article IX, included the Issuing Lender with respect to such acts or
omissions, and (ii) as additionally provided in this Agreement with respect
to the Issuing Lender.
9.02 DELEGATION OF DUTIES. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for
the negligence or misconduct of any agent or attorney-in-fact that it selects
with reasonable care.
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9.03 LIABILITY OF AGENT. The Agent, its respective Affiliates, or their
respective officers, directors, employees, agents, or attorneys-in-fact (all
of the foregoing being collectively referred to as the "Agent-Related
Persons") shall not (a) be liable for any action taken or omitted to be taken
by any of them under or in connection with this Agreement or any other Loan
Document (except for its own gross negligence or willful misconduct), or (b)
be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by the Company, the REIT, any
Management Entity or Subsidiary or any Affiliate of any such Person, or any
officer thereof, contained in this Agreement or in any other Loan Document,
or in any certificate, report, statement or other document referred to or
provided for in, or received by the Agent under or in connection with, this
Agreement or any other Loan Document, or for the value of any Collateral or
the validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement, any other Loan Document, or for any failure of the Company,
the REIT or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the Properties, books or
records of the Company, the REIT, any Management Entity or Subsidiary or
Affiliates thereof.
9.04 RELIANCE BY AGENT.
(a) GENERALLY. The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telecopy, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to the Company), independent accountants and other experts selected
by the Agent. The Agent shall be fully justified in failing or refusing to
take any action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Requisite Lenders as it
deems appropriate and, if it so requests, it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any
such action. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Requisite Lenders, and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all of the Lenders.
(b) CONDITIONS PRECEDENT. For purposes of determining compliance with
the conditions specified in Sections 4.01 and 4.02 (as to the initial
borrowing hereunder), each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with
each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to such Lender, unless an officer
of the Agent responsible for the transactions contemplated by the Loan
Documents shall have received notice from such Lender prior to the initial
borrowing specifying its objection thereto and either such objection shall
not have been withdrawn by notice to the Agent to that effect or such Lender
shall not have made available to the Agent the Lender's ratable portion of
such borrowing.
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9.05 NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default, except with
respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Lenders, unless the Agent
shall have received written notice from a Lender or the Company referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default." In the event that the Agent receives
such a notice, the Agent shall give notice thereof to the Lenders. The Agent
shall take such action with respect to such Default or Event of Default as
shall be requested by the Requisite Lenders in accordance with Article VIII;
PROVIDED, HOWEVER, that unless and until the Agent shall have received any
such request, it may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Lenders.
9.06 CREDIT DECISION. Each Lender expressly acknowledges that none of the
Agent-Related Persons has made any representation or warranty to such Lender
and that no act by the Agent hereinafter taken, including any review of the
affairs of the Company, the REIT, any Management Entity or Subsidiary, shall
be deemed to constitute any representation or warranty by the Agent to any
Lender. Each Lender represents to the Agent that such Lender has,
independently and without reliance upon the Agent and based on such documents
and information as such Lender has deemed appropriate, made its own appraisal
of and investigation into the business, prospects, operations, Properties,
financial and other condition and creditworthiness of the Company, the REIT,
any Management Entity or Subsidiary, and all applicable lender regulatory
laws relating to the transactions contemplated thereby, and made its own
decision to enter into this Agreement and extend credit to the Company
hereunder. Each Lender also represents that it will, independently and
without reliance upon the Agent and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigations as it
deems necessary to inform itself as to the business, prospects, operations,
Properties, financial and other condition and creditworthiness of the
Company, the REIT, the Management Entities and the Subsidiaries. Except for
notices, reports and other documents expressly herein required to be
furnished to the Lenders by the Agent, Agent shall have no duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, Properties, financial and
other condition or creditworthiness of the Company, the REIT, the Management
Entities and the Subsidiaries which may come into the possession of any of
the Agent-Related Persons.
9.07 INDEMNIFICATION. The Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so) ratably
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of
any kind whatsoever which may at any time (including at any time following
the repayment of the Loans) be imposed on, incurred by or asserted against
any such Person in any way relating to or arising out of this Agreement or
any document contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by
any such Person under or in connection with any of the foregoing; PROVIDED,
HOWEVER, that no Lender shall be liable for the payment to the Agent-
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Related Persons of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender shall reimburse
the Agent upon demand (to the extent the Agent is not reimbursed upon demand
by the Company, unless the Agent is legally restricted from making such
demand upon the Company, in which case demand need not be made upon the
Company) for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities under, this
Agreement, any other Loan Document, or any document contemplated by or
referred to herein to the extent that the Agent is not reimbursed for such
expenses by or on behalf of the Company. Without limiting the generality of
the foregoing, if the IRS or any authority of the United States or other
jurisdiction asserts a claim that the Agent did not properly withhold tax
from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered or was not properly executed, or because
such Lender failed to notify the Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason), such Lender shall indemnify the Agent fully for all
amounts paid, directly or indirectly, by the Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Agent under this Section 9.07,
together with all costs, expenses and attorneys' fees (including allocated
costs for in-house legal services). The obligation of the Lenders in this
Section shall survive the payment of all Obligations.
9.08 AGENT IN INDIVIDUAL CAPACITY. BofA (and any other Lender that may
hereafter serve as Agent) and each of their respective Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory or other business with, the Company, the REIT, the
Management Entities and the Subsidiaries and Affiliates as though BofA (or
any other such Lender) were not the agent hereunder and without notice to the
Lenders. With respect to its Loans, BofA (and any other Lender that may
hereafter serve as Agent), shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though each of
them were not an agent, and the terms "Lender" and "Lenders" shall include
BofA (and any other Lender that may hereafter serve as Agent), in its
individual capacity.
9.09 SUCCESSOR AGENTS. The Agent may resign as Agent upon 30 days' notice
to the Lenders. If an Agent shall resign under this Agreement, the Requisite
Lenders shall appoint from among the Lenders a successor Agent for the
Lenders, which successor Agent shall, if no Default or Event of Default
exists hereunder, be subject to the approval of the Company. If no successor
Agent is appointed prior to the effective date of the resignation of the
retiring Agent, the retiring Agent shall appoint, after consulting with the
Lenders and the Company, a successor Agent. Upon the acceptance of its
appointment as successor Agent hereunder, such successor Agent shall succeed
to all the rights, powers and duties of the retiring Agent, and the term
"Agent" shall mean such successor Agent, and the retiring Agent's rights,
powers and duties as Agent shall be terminated. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article IX and
Sections 10.04 and 10.05
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shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was an Agent under this Agreement.
9.10 COLLATERAL MATTERS.
(a) PERFECTION. The Agent is authorized on behalf of all the Lenders,
without the necessity of any notice to or further consent from the Lenders,
from time to time to take any action with respect to any Collateral or the
Collateral Documents which may be necessary to perfect and maintain perfected
the security interest in and Liens upon the Collateral granted pursuant to
the Collateral Documents.
(b) RELEASE. Upon request by the Agent at any time, the Lenders will
confirm in writing the Agent's authority to release particular types or items
of Collateral pursuant to Section 2.13(e) or any other provision of the Loan
Documents. The Agent shall be completely protected in taking any action
directed by all the Lenders in response to such request and shall incur no
liability to the Company or any Lender for failing to take any action as to
which all of the Lenders do not concur.
(c) NO OTHER COLLATERAL. Each Lender agrees with and in favor of each
other (which agreement shall not be for the benefit of the Company, the REIT,
the Management Entities or any Subsidiaries) that the Company's obligation to
such Lender under this Agreement and the other Loan Documents is not and
shall not be secured by any real property collateral now or hereafter
acquired by such Lender other than the Collateral hereunder.
ARTICLE X
MISCELLANEOUS
10.01 AMENDMENTS AND WAIVERS.
(a) GENERALLY. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure therefrom, shall be effective unless the same shall be in writing
and signed by the Requisite Lenders, and then such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
(b) MATTERS REQUIRING UNANIMOUS CONSENT. Notwithstanding the terms of
Section 10.01(a), no amendment or waiver of any provision of this Agreement
or any other Loan Document, no agreement to forebear from acting upon any
departure by the Company therefrom, and no consent with respect to any
departure by the Company therefrom, shall be effective to do any of the
following, unless the same is in writing and signed by all the Lenders:
(i) increase the Commitment of any Lender;
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(ii) postpone or delay any date fixed for any payment of
principal, interest, fees or other amounts due hereunder or under any Loan
Document whether by acceleration or otherwise;
(iii) reduce the principal of, or the rate of interest specified
herein on, any Loan, or any fees or other amounts payable hereunder or under
any Loan Document;
(iv) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans required for the Lenders or any of them
to take any action hereunder;
(v) amend Section 2.15 (Sharing of Payments, Etc.), Section 6.10
(Use of Proceeds), Section 8.02 (Remedies), Section 10.15 (Governing Law and
Jurisdiction) or this Section 10.01;
(vi) release any portion of the Collateral except as provided in
Section 2.13(b), Section 2.13(d), Section 2.13(e), Section 7.05 and as
otherwise may be provided in applicable Collateral Documents or except where
the consent of the Requisite Lenders only is specifically provided for; or
(vii) release any guarantor from liability under the REIT Guaranty
Documents.
(c) MATTERS REQUIRING AGENTS' CONSENT. Notwithstanding the terms of
Section 10.01(a), no amendment or waiver of any provision of this Agreement
or any other Loan Document, and no consent with respect to any departure by
the Company therefrom, shall be effective to affect the rights or duties of
the Agent under this Agreement or any other Loan Document, unless the same is
in writing and signed by the Agent.
10.02 NOTICES.
(a) DELIVERY. All notices, requests and other communications provided
for hereunder shall be in writing (including, unless the context expressly
otherwise provides, telegraphic, telex, facsimile transmission or cable
communication) and mailed, telegraphed, telexed or delivered, (i) if to the
Company, to its address specified on the signature pages hereof, (ii) if to
any Lender, to its Domestic Lending Office, and (iii) if to Agent, to its
address specified on the signature pages hereof; or, as to the Company or the
Agent, to such other address as shall be designated by such party in a
written notice to the other parties, and as to each other party, at such
other address as shall be designated by such party in a written notice to the
Company and the Agent.
(b) RECEIPT. All such notices and communications shall, when
transmitted by overnight delivery, telegraphed, telecopied by facsimile,
telexed or cabled, be effective when delivered for overnight delivery or to
the telegraph company, transmitted by telecopier, confirmed by telex
answerback or delivered to the cable company, respectively, or if delivered,
upon delivery, except that notices pursuant to Article II or VIII shall not
be effective until actually received by the Agent.
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(c) RELIANCE. The Company acknowledges and agrees that any
agreement of the Agent and the Lenders under Article II to receive certain
notices by telephone and facsimile is solely for the convenience and at the
request of the Company. The Agent and the Lenders shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by the Company
to give such notice, and the Agent and the Lenders shall not have any liability
to the Company or any other Person on account of any action taken or not taken
by the Agent and the Lenders in reliance upon such telephonic or facsimile
notice. The obligation of the Company to repay the Loans shall not be affected
in any way or to any extent by any failure by the Agent and the Lenders to
receive written confirmation of any telephonic or facsimile notice or the
receipt by the Agent and the Lenders of a confirmation which is at variance with
the terms understood by the Agent and the Lenders to be contained in the
telephonic or facsimile notice.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of any Agent or Lender, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege.
10.04 COSTS AND EXPENSES. The Company shall, whether or not the
transactions contemplated hereby shall be consummated:
(a) FACILITY EXPENSES. Pay or reimburse the Agent on demand for all
costs and expenses incurred in connection with the development, preparation
or delivery of, and any amendment, supplement, waiver or modification to,
this Agreement, any Loan Document and any other documents prepared in
connection herewith or therewith, the consummation of the transactions
contemplated hereby and thereby, and any proposal for additions to the
Borrowing Base Properties, and the syndication of this Agreement to other
Lenders, as well as all costs of the Agent and the Issuing Lender in
connection with the issuance of Letters of Credit (including, without
limitation, title insurance premiums and charges, survey costs, recording
costs and taxes, travel and due diligence expenses incurred by
representatives of the Agent, and the reasonable Attorney Costs incurred by
the Agent with respect thereto, and with respect to the Letters of Credit,
amendment fees, drawing fees, check fees, foreign currency fees, and other
fees and costs the Issuing Lender normally charges in connection therewith);
(b) ENFORCEMENT EXPENSES. Pay or reimburse the Agent and Lenders on
demand for all reasonable costs and expenses incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies (including in connection with any "workout" or restructuring
regarding the Loans) under this Agreement, any other Loan Document, and any
such other documents, including reasonable Attorney Costs incurred by the
Agent and Lender; and
(c) COLLATERAL EXPENSES. Pay or reimburse the Agent on demand for all
Appraisals pursuant to Section 2.13(c) (including the allocated cost of
internal appraisal services), audits, environmental inspections and reviews
(including the allocated costs of such
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internal services), search and filing costs, fees and expenses, incurred or
sustained by the Agent in connection with the matters referred to under
paragraphs (a) and (b) of this Section.
10.05 INDEMNITY. The Company shall indemnify and hold harmless the
Agent, each Lender and each of their respective officers, directors,
employees, counsel, agents and attorneys-in-fact (each, an "Indemnified
Person") from and against and pay them for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses or disbursements (including Attorney Costs) of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement and any other Loan
Documents, or the transactions contemplated hereby and thereby, and with
respect to any investigation, litigation or proceeding related to this
Agreement or the Loans or the use of the proceeds thereof, whether or not any
Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); PROVIDED, that the Company shall have no
obligation hereunder to any Indemnified Person with respect to Indemnified
Liabilities arising from the gross negligence or willful misconduct of such
Indemnified Person. The agreements in this Section 10.05 shall survive
payment of all other Obligations.
10.06 MARSHALLING; PAYMENTS SET ASIDE. Neither the Agent nor any Lender
shall be under any obligation to marshall any assets in favor of the Company
or any other Person or against or in payment of any or all of the
Obligations. To the extent that the Company makes a payment or payments to
the Agent or any Lender, or the Agent or any Lender enforces its Liens or
exercises its rights of setoff, and such payment or payments or the proceeds
of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
to be repaid to a trustee, receiver or any other party in connection with any
Insolvency Proceeding, or otherwise, then to the extent of such recovery the
obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not
been made or such enforcement or setoff had not occurred.
10.07 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of the Agent and each Lender, which may be withheld in
their sole and absolute discretion.
10.08 ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) ASSIGNMENTS. Subject to the further provisions of this Section
10.08(a), any Lender may, with the written consent of the Agent, which
consent shall not be unreasonably withheld, at any time assign and delegate
to one or more Eligible Assignees (provided that no written consent of the
Agent shall be required in connection with any assignment and delegation by a
Lender to a Lender Affiliate of such Lender) (each an "Assignee") all, or any
ratable part of all, of the Loans, the Letter of Credit Liability, the
Commitments and the other rights and obligations of such Lender hereunder, in
a minimum amount of $5,000,000 and in additional increments of $250,000, so
long as such Lender concurrently transfers to such Assignee the same
proportionate share of its interests and
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obligations with respect to Commitment under (and as such term is defined in)
the Bridge Loan Agreement; PROVIDED, HOWEVER, that the Company and the Agent
may continue to deal solely and directly with such Lender in connection with
the interest so assigned to an Assignee until (A) written notice of such
assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the
Company and the Agent by such Lender and the Assignee; (B) such Lender and
its Assignee shall have delivered to the Company and the Agent an Assignment
and Acceptance in the form of EXHIBIT L ("Assignment and Acceptance")
together with any Note or Notes subject to such assignment; (C) such Lender
shall have paid to the Agent, for its own account, an assignment fee in the
amount of $1500, if the Assignee is a Lender (without giving effect to the
Assignment), and $3000 in all other cases; and (D) such Lender shall have
delivered to the Agent such documents as may be required by Section 3.01(f).
Any such assignment requiring the approval of the Agent shall also require
the approval of the Company (such approval not to be unreasonably withheld or
delayed), provided that the Company's failure to approve or disapprove such
assignment within five days' after receiving written notice thereof shall be
deemed approval by the Company of such assignment, and provided further, that
no such approval from the Company shall be required during the continuation
of a Default or Event of Default.
(b) RIGHTS OF ASSIGNEE. From and after the date that the Agent
notifies the assignor Lender that the Agent has received an executed
Assignment and Acceptance and payment of the assignment fee specified in
Section 10.08(a), (i) the Assignee thereunder shall, subject to Section
10.08(a), be a party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assignor Lender shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights and be released from its obligations
under the Loan Documents.
(c) REPLACEMENT NOTES. Within thirty (30) Business Days after its
receipt of notice by the Agent that the Agent has received an executed
Assignment and Acceptance and payment of the processing fee, the Company
shall execute and deliver to the Agent, new Notes evidencing such Assignee's
assigned Loans and Commitment and, if the assignor Lender has retained a
portion of its Loans and its Commitment, replacement Notes in the principal
amount of the Loans retained by the assignor Lender (such Notes to be in
exchange for, but not in payment of, the Notes held by such Lender).
Immediately upon each Assignee's making its payment under the Assignment and
Acceptance, this Agreement shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitment of the assigning
Lender PRO TANTO.
(d) PARTICIPATIONS. Any Lender may at any time sell to one or more
commercial lenders (a "Participant") participating interests in any Loans,
Letter of Credit Liability and Commitment of that Lender and the other
interests of that Lender (the "originating Lender") hereunder and under the
other Loan Documents so long as such Lender concurrently transfers to such
Participant the same proportionate share of its interests and
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obligations with respect to commitment under (and as such term is defined in)
the Bridge Loan Agreement; PROVIDED, HOWEVER, that (i) the originating
Lender's obligations under this Agreement shall remain unchanged, (ii) the
originating Lender shall remain solely responsible for the performance of
such obligations, (iii) the Company and the Agent shall continue to deal
solely and directly with the originating Lender in connection with the
originating Lender's rights and obligations under this Agreement and the
other Loan Documents, (iv) no Lender shall transfer or grant any
participating interest under which the Participant shall have rights to
approve any amendment to, or any consent or waiver with respect to, this
Agreement or any other Loan Document, except to the extent such amendment,
consent or waiver would require unanimous consent as described in the FIRST
PROVISO to Section 10.01; and (v) the Company shall have approved the
transfer or grant of any participating interest in any Loans, Letter of
Credit Liability and Commitment of the originating Lender to a Participant
that has not theretofore previously held a participating interest therein
(such approval not to be unreasonably withheld or delayed), provided that the
Company's failure to approve or disapprove in writing such Participant within
five days' after receiving written notice thereof shall be deemed approval by
the Company of such transfer or grant to such Participant, and provided
further, that no such approval from the Company shall be required during the
continuation of a Default or Event of Default. In the case of any such
participation, the Participant shall not have any rights under this
Agreement, or any of the other Loan Documents, and all amounts payable by the
Company hereunder shall be determined as if such Lender had not sold such
participation; except that, if amounts outstanding under this Agreement are
due and unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall be
deemed to have the right of setoff in respect of its participating interest
in amounts owing under this Agreement to the same extent as if the amount of
its participating interest were owing directly to it as a Lender under this
Agreement.
(e) ASSIGNMENTS TO FEDERAL RESERVE BANK. Notwithstanding any other
provision contained in this Agreement or any other Loan Document to the
contrary, any Lender may assign all or any portion of the Loans or Notes held
by it to any Federal Reserve Bank or the United States Treasury as collateral
security pursuant to Regulation A of the Board of Governors of the Federal
Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Loans or Notes
made by the Company to or for the account of the assigning and/or pledging
Lender in accordance with the terms of this Agreement shall satisfy the
Company's obligations hereunder in respect of such assigned Loans or Notes to
the extent of such payment. No such assignment shall release the assigning
Lender from its obligations hereunder.
10.09 SETOFF. In addition to any rights and remedies of the Lenders
provided by law, if an Event of Default exists, each Lender is authorized at
any time and from time to time, without prior notice to the Company, any such
notice being waived by the Company to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other indebtedness at any time
owing to, such Lender to or for the credit or the account of the Company
against any and all obligations owing to such Lender, now or hereafter
existing, irrespective of whether the Agent or such Lender shall have made
demand under this Agreement or any Loan Document and whether such obligations
may be contingent or unmatured. Each Lender
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agrees to promptly notify the Company and the Agent after any such setoff and
application made by such Lender; PROVIDED, HOWEVER, that the failure to give
such notice shall not affect the validity of such setoff and application.
The rights of each Lender under this Section 10.09 are in addition to the
other rights and remedies (including other rights of setoff) that such Lender
may have. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE, OR
ATTEMPT TO EXERCISE, ANY RIGHT OF SETOFF, BANKER'S LIEN, OR THE LIKE, AGAINST
ANY DEPOSIT ACCOUNT OR PROPERTY OF THE COMPANY, THE REIT, ANY MANAGEMENT
ENTITY OR ANY SUBSIDIARY HELD OR MAINTAINED BY ANY LENDER, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE REQUISITE LENDERS.
10.10 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Lender shall
notify the Agent in writing of any changes in the address to which notices to
such Lender should be directed, of addresses of its Offshore Lending Office,
of payment instructions in respect of all payments to be made to it hereunder
and of such other administrative information as the Agent shall reasonably
request.
10.11 COUNTERPARTS. This Agreement may be executed by one or more of the
parties to this Agreement in any number of separate counterparts, each of
which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the
same instrument. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Company and the Agent.
10.12 SEVERABILITY. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not
in any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required
hereunder.
10.13 NO THIRD PARTIES BENEFITED. This Agreement is made and entered
into for the sole protection and legal benefit of the Company, the Agent and
the Lenders, and their permitted successors and assigns, and no other Person
shall be a direct or indirect legal beneficiary of, or have any direct or
indirect cause of action or claim in connection with, this Agreement or any
of the other Loan Documents. No Agent or Lender shall have any obligation to
any Person not a party to this Agreement or the other Loan Documents.
10.14 TIME. Time is of the essence of each term and provision of this
Agreement and each of the other Loan Documents.
10.15 GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF COLORADO; PROVIDED
THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL
LAW.
10.16 WAIVER OF JURY TRIAL. THE COMPANY, THE AGENT, AND THE LENDERS EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION,
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PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES
AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE. SUBJECT TO SECTION 10.17 BELOW, THE COMPANY, THE
AGENT, AND THE LENDERS EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION
SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL
BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM
OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE
VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR
ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
10.17 ARBITRATION.
(a) MANDATORY ARBITRATION. Any controversy or claim between or among
the parties arising out of or relating to this Agreement, the Loan Documents,
and any claim based on or arising from an alleged tort, shall at the request
of any party be determined by arbitration. The arbitration shall be
conducted in Los Angeles, California, in accordance with the United States
Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law
provision in this Agreement, and under the Commercial Rules of the American
Arbitration Association (the "AAA"). The arbitrator(s) shall give effect to
statutes of limitation in determining any claim. Any controversy concerning
whether an issue is arbitrable shall be determined by the arbitrator(s).
Judgment upon the arbitration award may be entered in any court having
jurisdiction. The institution and maintenance of an action for judicial
relief or pursuit of a provisional or ancillary remedy shall not constitute a
waiver of the right of any party, including the plaintiff, to submit the
controversy or claim to arbitration if any other party contests such action
for judicial relief.
(b) PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No provision of
this Section 10.17 shall limit the right of any party to this Agreement to
exercise self-help remedies such as setoff, foreclosure against or sale of
any real or personal property collateral or security, or to obtain
provisional or ancillary remedies from a court of competent jurisdiction
before, after, or during the pendency of any arbitration or other proceeding.
The exercise of a remedy does not waive the right of either party to resort
to arbitration.
10.18 NOTICE OF CLAIMS; CLAIMS BAR. THE COMPANY HEREBY AGREES
THAT IT SHALL GIVE PROMPT WRITTEN NOTICE TO THE AGENT OF ANY CLAIM OR CAUSE OF
ACTION IT BELIEVES IT HAS, OR MAY SEEK TO ASSERT OR ALLEGE AGAINST THE AGENT OR
ANY LENDER, WHETHER SUCH CLAIM IS BASED IN LAW OR EQUITY, ARISING UNDER OR
RELATED TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR TO THE LOANS
(OR THE COLLATERAL THEREFOR), OR ANY ACT OR OMISSION TO ACT BY THE AGENT OR ANY
LENDER WITH RESPECT HERETO OR THERETO, AND THAT IF THE COMPANY SHALL FAIL TO
GIVE SUCH PROMPT NOTICE TO THE AGENT WITH
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REGARD TO ANY SUCH CLAIM OR CAUSE OF ACTION, THE COMPANY SHALL BE DEEMED TO
HAVE WAIVED, AND SHALL BE FOREVER BARRED FROM BRINGING OR ASSERTING, SUCH
CLAIM OR CAUSE OF ACTION IN ANY ARBITRATION OR ANY SUIT, ACTION OR PROCEEDING
IN ANY COURT OR BEFORE ANY GOVERNMENTAL AGENCY.
10.19 ENTIRE AGREEMENT. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding between the
Company, the Agent and the Lenders. Accordingly, this Agreement, together
with the other Loan Documents, supersedes all prior or contemporaneous
agreements and understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof, except for any prior arrangements made
with respect to the payment by the Company of (or any indemnification for)
any fees, costs, expenses, liabilities, damages or claims payable to or
incurred (or to be incurred) by or on behalf of the Agent or the Lenders.
10.20 INTERPRETATION. This Agreement, together with the other Loan
Documents, is the result of negotiations between and has been reviewed by
counsel to the Agent, the Lenders and the Company and other parties, and is
the product of all parties hereto. Accordingly, this Agreement and the other
Loan Documents shall not be construed against the Lenders or the Agent merely
because of the Agent's or Lender's involvement in the preparation of such
documents and agreements.
10.21 EXCULPATION OF LENDERS. No Lender undertakes or assumes any
responsibility or duty to the Company or any third party to select, review,
inspect, examine, supervise, pass judgment upon or inform the Company or any
third party of the existence, quality, adequacy or suitability of: (a) any
appraisals of any Collateral, (b) any environmental report, or (c) any other
matters or items, including, but not limited to, engineering, soils and
seismic reports which are contemplated in the Loan Documents. Any such
selection, review, inspection, examination and the like is solely for the
purpose of protecting the Lenders' security and preserving the Lenders'
rights under the Loan Documents, and shall not render any Lender liable to
the Company or any third party for the existence, sufficiency, accuracy,
completeness or legality thereof. No Lender owes any duty of care to protect
or inform the Company or any third party against negligent, faulty,
inadequate or defective building or construction or the existence of any
environmentally hazardous condition affecting any Collateral.
10.22 RELATIONSHIP. Nothing herein contained shall in any manner be
construed as creating any relationship between the Agent and the Lenders, on
the one hand, and the Company, on the other hand, other than as creditor and
debtor. The Company agrees to indemnify, protect, defend and hold the Agent
and each Lender harmless from and against any and all losses, liabilities,
damages, and costs and expenses (including, but not limited to, reasonable
attorneys' fees and disbursements, including reasonably allocated costs of
in-house counsel) resulting from any other construction of the parties'
relationship.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first written above.
COMPANY
AIMCO PROPERTIES, L.P.,
a Delaware limited partnership
By: AIMCO -GP, Inc., a Delaware corporation,
its general partner
By:
--------------------------------------
Peter K. Kompaniez
Vice President
Notices to be sent to:
1873 South Bellaire Street
17th Floor
Denver, Colorado 80222
Attention: Peter K. Kompaniez,
Vice Chairman
Facsimile: (303) 757-8735
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AGENT
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
Notices to be sent to:
Bank of America National Trust and Savings
Association CRESG #1357
555 South Flower Street, 6th Floor
Los Angeles, CA 90071
Att'n: M. Harvey
Telephone: 213/228-4013
Facsimile: 213/228-5389
Payments to be made to:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
333 S. Beaudry Ave.
Loan Accounting Dept #1503
Los Angeles, CA 90017
ABA #: 121 000 358
Credit Account #: 15031-00407
Attention: Maria Mora
Ref: AIMCO Secured Revolver
103
<PAGE>
B OF A
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION,
as a Lender and as the Issuing Lender
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
Notices to be sent to:
Bank of America National Trust and Savings
Association CRESG #1357
555 South Flower Street, 6th Floor
Los Angeles, CA 90071
Att'n: M. Harvey
Telephone: 213/228-4013
Facsimile: 213/228-5389
Payments to be made to:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
333 S. Beaudry Ave.
Loan Accounting Dept #1503
Los Angeles, CA 90017
ABA #: 121 000 358
Credit Account #: 15031-00407
Attention: Maria Mora
Ref: AIMCO Secured Revolver
104
<PAGE>
SCHEDULES
Schedule 1.01A Initial Borrowing Base Properties
Schedule 1.01B Intra-Company Indebtedness
Schedule 2.01 Revolving and Term Commitments of the Lenders
Schedule 5.05 Litigation
Schedule 5.07 Organizational Chart
Schedule 5.10 ERISA Disclosures
Schedule 5.11 Environmental Disclosures
Schedule 7.02 Indebtedness
EXHIBITS
EXHIBIT A Assignment of Leases and Rents
EXHIBIT B Borrowing Notice
EXHIBIT C Environmental Indemnity Agreement
EXHIBIT D Mortgage/Deed of Trust
EXHIBIT E Note
EXHIBIT F Notice of Conversion/Continuation
EXHIBIT G Guaranty
EXHIBIT H Form of Letter of Credit
EXHIBIT I Borrowing Base Property Closing Certificate
Exhibit J Opinion Requirements
EXHIBIT K Compliance Certificate
EXHIBIT L Assignment and Acceptance
EXHIBIT M Additional Lender Agreement
105
<PAGE>
SCHEDULE 1.01A
INITIAL BORROWING BASE PROPERTIES
PROPERTIES STATE
- ---------- ------
Peachtree Park Apt. Georgia
Somerset Village Utah
Tustin Woods California
Sycamore California
Timbermill Texas
Brentwood Texas
Sunkatcher Florida
Chesapeake Texas
Dolphin's Landing Texas
106
<PAGE>
SCHEDULE 1.01B
INTRA-COMPANY INDEBTEDNESS
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Lender Borrower Date of Note Principal Amount
- ------ -------- ------------ ----------------
AIMCO Properties Apartment 9/6/95 3,000,000
Finance Corp Investment and
Management
Company
- -------------------------------------------------------------------------------
AIMCO Holdings Apartment 9/29/95 2,000,000
QRS, Inc. Investment and
Management
Company
- -------------------------------------------------------------------------------
AIMCO Properties Apartment 9/12/95 95,387,690
Finance Investment and
Partnership, L.P. Management
Company
- -------------------------------------------------------------------------------
AIMCO/OTC QRS, Apartment 7/1/96 3,885,860
Inc. Investment and
Management
Company
- -------------------------------------------------------------------------------
AIMCO Properties, Apartment 7/1/96 388,586
L.P. Investment and
Management
Company
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
107
<PAGE>
SCHEDULE 2.01
REVOLVING AND TERM COMMITMENTS OF THE INITIAL LENDERS
- -------------------------------------------------------------------------------
Revolving Commitment Permanent Commitment
Bank of America
National Trust
and Savings
Association $60,000,000 $60,000,000
----------- -----------
Total Initial
Commitments $60,000,000 $60,000,000
108
<PAGE>
SCHEDULE 5.05
LITIGATION
On November 6, 1996, Apartment Investment and Management Company ("AIMCO")
and certain of its subsidiaries were named as defendants in a suit entitled
HENRY A. ALKER, ET. AL. V. J.W. ENGLISH, ET. AL., Case No. C-96-4025-CW,
U.S.D.C. (N.D. Cal.) (the "English Action"). The complaint, brought by five
limited partners in certain partnerships (the "Partnerships") which were
formerly controlled by John Wesley English ("English"), alleges that (i) in
connection with the acquisition by AIMCO of the general partnership interests
in the Partnerships, AIMCO conspired with English to breach his fiduciary
duties to the plaintiffs, and (ii) the offering materials used by AIMCO in
connection with offers for the limited partnership interests in the
Partnerships contained misleading statements or omissions. The plaintiffs
made an application for a temporary restraining order, which was denied by
the Court on November 7, 1996. A status conference on this issue has been
set for May 23, 1997. In addition, plaintiffs' counsel has made a proposal
to dismiss this case without prejudice. AIMCO is considering its response to
that proposal.
109
<PAGE>
SCHEDULE 5.07
ORGANIZATIONAL CHART
110
<PAGE>
SCHEDULE 5.10
ERISA DISCLOSURES
AIMCO
Employee Benefit Plans
"Property Asset Management's Employee Benefit Plan"
A. MEDICAL/LIFE
Self insured program
First Health - Processor
Sun Life - Excess risk
B MEDICAL SAVINGS ACCOUNTS
Golden Rule
C. DENTAL
Self Insured
First Health - Processor
D. LONG-TERM DISABILITY
Unum Life Insurance Company of America
AIMCO Properties, L.P. (successor in interest to Property Asset Management
LLC) 401 Employeee Savings Plan
401K Plan
Principal Financial Group
111
<PAGE>
SCHEDULE 5.11
ENVIRONMENTAL DISCLOSURES
The Company's Montecito property in Austin, Texas, is located adjacent
to, and may be partially on, land that was used as landfill. Low levels of
methane and other landfill gas have been detected at Montecito. The
remediation of the land fill gas is now substantially complete. The
environmental authorities have preliminarily approved the methane gas
remediation efforts. Should further actionable levels of methane gas be
detected, a proposed contingent plan of passive methane gas venting may be
implemented.
Reference is made to AIMCO's Annual Report on Form 10-K for the year
ended December 31, 1996 for additional discussion of environmental matters
relating to AIMCO and the Company.
112
<PAGE>
SCHEDULE 7.02
INDEBTEDNESS
113
<PAGE>
EXHIBIT A
FORM OF ASSIGNMENT OF LEASES AND RENTS(1)
Recording Requested By
And When Recorded Mail To:
Bank of America N.T. & S.A.
CRESG #1357
555 South Flower Street, 6th Floor
Los Angeles, California 90071
Att'n: M. Harvey ([NAME OF PROPERTY])
Loan No.: AIMCO - [LOAN REFERENCE NO.]
- -------------------------------------------------------------------------------
(Space above Line for Recorder's Use)
ASSIGNMENT OF LEASES AND RENTS
1. ASSIGNMENT. FOR VALUE RECEIVED,
[NAME OF ENTITY OWNING THE PROPERTY TO BE ENCUMBERED], a _________________
("Assignor"), with an address at 1873 South Bellaire Street, 17th Floor,
Denver, Colorado 80222, hereby assigns, sells, transfers and sets over to
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association, as Agent for the Lenders (in such capacity, "Assignee") under
that certain Amended and Restated Credit Agreement, dated as of May 5, 1997
(as it may from time to time be amended or restated, the "Credit Agreement"),
among [ASSIGNOR/AIMCO PROPERTIES, L.P., A DELAWARE LIMITED PARTNERSHIP
("COMPANY")], the lenders from time to time party to the Credit Agreement
(the "Lenders"; which Lenders included the lenders listed on EXHIBIT B
attached hereto), and Bank of America National Trust and Savings Association,
in its capacity as one of the Lenders and as Agent for the Lenders, all right,
title and interest of the landlord, whether now existing or hereafter acquired,
to and under the following:
(a) All leases (including subleases), occupancy agreements,
license and concession agreements (collectively, together with the
extensions, renewals, modifications, replacements and guaranties referred to
in paragraphs (b) and (c) below, called the "Leases") now or hereafter
covering all or any part of the real property (the "Property") located in
[NAME OF CITY, NAME OF STATE], which is more fully described in EXHIBIT A
attached hereto and incorporated herein by this reference;
1
<PAGE>
(b) All extensions, renewals, modifications or replacements of the
Leases;
(c) Any and all guaranties of the obligations of the lessees,
occupants and licensees under the Leases (hereinafter such lessees, occupants
and licensees are referred to collectively as the "lessees" and individually
as a "lessee"), whether now existing or hereafter executed or granted, and
all extensions and renewals of said guaranties; and
(d) Any rents (including, without limitation, any percentage or
other rents based upon the sales of a Lessee), royalties, issues, profits,
revenue, income, license fees and other benefits at any time accruing by
virtue of the Leases and all proceeds thereof, including, without limitation,
all revenues from the parking of vehicles on the Property (hereinafter called
"Rents and Profits").
Each initially capitalized term used but not defined herein shall have
the meaning ascribed to such term in the Credit Agreement.
2. PURPOSE. Assignor's purpose in making this Assignment is to
relinquish to Assignee any and all rights of Assignor to collect and enjoy
the Rents and Profits so as to facilitate the satisfaction, in such order of
priority as may be provided in the Credit Agreement, of the obligations (the
"Secured Obligations") secured by that certain Deed of Trust, Assignment of
Leases and Rents, Security Agreement and Fixture Filing (the "Deed of
Trust"), of substantially even date herewith, made by Assignor, as trustor,
in favor of Assignee, as beneficiary, which Deed of Trust encumbers the
Property and is to be recorded substantially concurrently with the
recordation hereof.
3. LICENSE TO COLLECT. The parties intend that this Assignment shall
be a present, absolute and unconditional assignment and shall, immediately
upon execution, give Assignee the right to collect the Rents and Profits and
to apply them in payment of all sums payable by Assignor under each of the
Secured Obligations as provided above. However, Assignee hereby grants to
Assignor a license to collect, use and enjoy, subject to the provisions set
forth below and in the Deed of Trust, the Rents and Profits as they
respectively become due and to enforce the Leases, so long as no Event of
Default has occurred and is continuing. In addition, Assignor shall have
those rights and obligations with respect to the Leases as are set forth in
the Deed of Trust and the Credit Agreement. Nothing contained herein, nor
any collection of Rents and Profits by Assignee or by a receiver, shall be
construed to make Assignee a "mortgagee-in-possession" of the Property so
long as Assignee has not itself entered into actual possession of the
Property.
4. DIRECTION TO EACH LESSEE. Upon the occurrence and during the
continuation of any Event of Default, this Assignment shall constitute a
direction to and full authority to each lessee under any Lease and each
guarantor of any Lease to pay all Rents and Profits to Assignee without proof
of the default relied upon. Assignor hereby irrevocably authorizes each
lessee and guarantor to rely upon and comply with any notice or demand by
Assignee for the payment to Assignee of any Rents and Profits due or to
become due.
2
<PAGE>
5. REPRESENTATIONS AND WARRANTIES. Assignor represents and warrants
as to each Lease now covering all or any part of the Property that, except as
previously disclosed to the Assignee in writing:
(a) such Lease is in full force and effect;
(b) no default exists on the part of Assignor or, to the best
knowledge of Assignor, on the part of the lessee thereunder;
(c) no Rents and Profits (except for any security deposits or
other amounts specifically described in the Leases as in effect on the date
hereof) have been collected more than one month in advance;
(d) no lessee under any Lease, to the best knowledge of Assignor,
has any defense, setoff or counterclaim against Assignor;
(e) no Lease or any interest therein is currently assigned or
pledged to any Person other than the Assignee; and
(f) all Rents and Profits due to date under any Lease have been
collected and no material concession has been granted to any lessee in the
form of a waiver, release, reduction, discount or other alteration of Rents
and Profits due or to become due.
6. AGREEMENTS AS TO THE LEASES. Assignor agrees with respect to each
Lease:
(a) SECURITY DEPOSITS. If the Lease provides for a security
deposit paid by the lessee to Assignor, this Assignment transfers to Assignee
all of Assignor's right, title and interest in and to the security deposit;
provided that Assignor shall have the right to retain said security deposit
so long as no Event of Default has occurred and is continuing; and provided
further that Assignee shall not have any obligation to the lessee with
respect to such security deposit except to the extent that Assignee comes
into actual possession and control of said deposit.
(b) MERGER. Each Lease shall remain in full force and effect
despite any merger of the interest of Assignor and any lessee thereunder, to
the extent permitted under applicable law.
(c) COLLECTION BEFORE DUE. Assignor shall not collect any Rents
and Profits in advance of the date on which they become due under the terms
of any Lease, other than in the ordinary course of business.
(d) DISCOUNTS. Assignor shall not discount any future accruing
Rents and Profits, other than in the ordinary course of business.
(e) FURTHER ASSIGNMENTS. Except as under the Credit Agreement,
Assignor shall not execute any further assignment of any of the Rents and
Profits or any interest therein or suffer or permit any such assignment to
occur by operation of law.
3
<PAGE>
(f) SUBORDINATION. Except as expressly permitted under the Credit
Agreement, Assignor shall not request, consent to, agree to or accept a
subordination of any Lease to any mortgage, deed of trust or other
encumbrance (except, with Assignee's consent, those in favor of Assignee), or
any other lease or concession agreement, now or hereafter affecting the
Property or any part thereof, or permit conversion of any Lease to a sublease.
(g) PERFORMANCE OF OBLIGATIONS. Assignor shall faithfully perform
and discharge all of its material obligations under the Leases. Assignor
shall appear in and defend, at no cost to Assignee, any action or proceeding
arising under or in any manner connected with any Lease. If requested by
Assignee, following any Event of Default and during the continuation thereof,
Assignor shall enforce each Lease and all remedies available to Assignor
against the lessee in the case of default under the Lease by the lessee.
(h) FUTURE LEASES. Upon request by Assignee, Assignor shall
provide to Assignee a true and correct copy of each executed Lease as
provided in the Credit Agreement. Any such Lease shall be deemed included in
this Assignment.
(i) ESTOPPEL CERTIFICATES. Assignor shall use good faith efforts
to deliver to Assignee, promptly upon request, but in no event more
frequently than once a year, duly executed estoppel certificates from any one
or more lessees as required by Assignee attesting to such facts regarding the
Lease as Assignee may reasonably require, including, but not limited to,
attestations that each Lease covered thereby is in full force and effect with
no defaults thereunder on the part of any party, and that the lessee claims
no defense or offset against the full and timely performance of its
obligations under the Lease.
(j) INDEMNITY. Nothing herein shall be construed to impose any
liability or obligation on Assignee under or with respect to any Lease.
Assignor shall defend, indemnify and hold Assignee harmless for, from and
against any and all liabilities, losses, damages, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses,
including the reasonably allocated costs of in-house counsel) (collectively,
"Liabilities") which Assignee may incur under any Lease or by reason of this
Assignment, including, without limitation, Liabilities resulting from the
negligence of Assignee, but excluding Liabilities resulting from gross
negligence or willful misconduct by Assignee, and of and from any and all
claims and demands whatsoever which may be asserted against Assignee by
reason of any alleged obligations to be performed or discharged by Assignee
under any Lease or this Assignment, including, without limitation,
Liabilities resulting from the negligence of Assignee, but excluding
Liabilities resulting from gross negligence or willful misconduct by
Assignee. Should Assignee incur any liability, loss, damage, cost or expense
covered hereby under any Lease or by reason of this Assignment, including,
without limitation, Liabilities resulting from the negligence of Assignee,
but excluding Liabilities resulting from gross negligence or willful
misconduct by Assignee, Assignor shall reimburse Assignee for the amount
thereof pursuant to Section 7 below. THE INDEMNIFICATIONS GIVEN BY ASSIGNOR
HEREUNDER INCLUDE, WITHOUT LIMITATION, INDEMNIFICATIONS FOR LIABILITIES
RESULTING FROM THE NEGLIGENCE OF ASSIGNEE.
7. PAYMENT BY ASSIGNOR. Assignor further agrees to reimburse Assignee
for any cost or expense incurred by Assignee to protect the interests of
Assignee hereunder,
4
<PAGE>
within five (5) days after written demand for payment is given to Assignor by
Assignee. Assignor also agrees to reimburse Assignee for all of Assignee's
other costs incurred hereunder for which Assignor is obligated to reimburse
or indemnify Assignee within thirty (30) days after written demand for such
reimbursement is given to Assignor by Assignee. Any such sum shall bear
interest at the interest rate set forth in Section 2.09(c) of the Credit
Agreement until paid if it is not paid when due.
8. RIGHTS OF ASSIGNEES. Assignor hereby grants the following rights:
(a) CREDITORS OF LESSEES. Assignee shall be deemed to be creditor
of each lessee in respect of any assignment for the benefit of creditors and
any bankruptcy, arrangement, reorganization, insolvency, dissolution,
receivership or other debtor-relief proceedings affecting such lessee
(without obligation on the part of Assignee, however, to file timely claims
in such proceedings or otherwise pursue creditor's rights therein).
(b) PROTECTION OF SECURITY Assignee shall have the right (but not
the obligation), upon any Event of Default, so long as such Event of Default
is continuing, to take any action as Assignee may deem necessary or
appropriate to protect Assignee's security, including, but not limited to,
appearing in any action or proceeding and performing any obligations of the
lessor under any Lease, and Assignor agrees to pay all reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees) incurred
by Assignee in connection therewith, pursuant to Section 7 above.
(c) REMEDIES. Upon any Event of Default, so long as such Event of
Default is continuing, Assignee shall have the right to apply the Rents and
Profits to charges for taxes, insurance, improvements, maintenance and other
items relating to the operation of the Property. Assignee shall also have
upon the occurrence and during the continuance of any such Event of Default
all other rights and remedies provided to it under any of the Loan Documents,
all rights and remedies of a secured creditor under the Uniform Commercial
Code, and all other rights and remedies otherwise available at law or in
equity or by statute. However, neither the assignment set forth above nor any
other provision of the Deed of Trust shall impose upon Assignee any duty to
produce any revenues, fees, rents, issues, profits, license fees or benefits
or cause Assignee to (i) be responsible for performing any of the obligations
of the Assignor under any Lease, or (ii) be responsible or liable for any
waste or for any dangerous or defective conditions of the Property, for
negligence in the management, upkeep, repair or control of the Property or
any other act or omission by any other person excluding, however, any such
liability incurred after Assignee obtains possession of the Property which
results solely from Assignee's gross negligence or willful misconduct.
9. SUPPLEMENT TO DEED OF TRUST. This Assignment is intended to be
supplementary to and not in substitution for or in derogation of any
assignment of leases, rents and other property contained in the Deed of Trust
or in any other document. Failure of Assignee to avail itself of any terms,
covenants or conditions of this Assignment for any period of time or for any
reason shall not constitute a waiver thereof.
10. CONTINUATION OF TERMS. Notwithstanding any future modification of
the terms of any of the Loan Documents, this Assignment and the rights and
benefits hereby
5
<PAGE>
assigned and granted shall continue in favor of Assignee in accordance with
the terms of this Assignment.
11. SUCCESSORS AND ASSIGNS. This Assignment shall be binding upon and
inure to the benefit of the permitted successors and assigns of the parties
hereto under the Credit Agreement (including, without limitation, in the case
of Assignee, any third parties now or hereafter acquiring any interest in any
of the Loan Documents, whether by virtue of assignment, participation or
otherwise). The words "Assignor," "Assignee," "lessee" and "guarantor,"
wherever used herein, shall include the persons and entities named or
referred to herein or in any Lease, and designated as such and their
respective heirs, legal representatives, successors and assigns, provided
that any action taken by the named Agent or any successor designated as such
by an instrument recorded in the Official Records of the county in which the
Property is located referring to this Assignment shall be sufficient for all
purposes notwithstanding that Assignee may have theretofore assigned or
participated any interest in any of the Loan Documents to a third party. All
words and phrases shall be taken to include the singular or plural number,
and the masculine, feminine or neuter gender, as may fit the case.
12. MODIFICATIONS. Any change, amendment, modification, abridgement,
cancellation, or discharge of this Assignment or any term or provision hereof
shall be invalid without the written consent of Assignee.
13. RELEASE. Upon recordation of a recorded satisfaction or release of
the Deed of Trust, this Assignment shall be void and of no further effect,
and thereupon Assignee shall execute and deliver to Assignor any instruments
which may be reasonably necessary or appropriate to terminate this Assignment.
14. NOTICES. All notices hereunder shall be given in accordance with
the Credit Agreement.
15. SEVERABILITY. If any provision hereof is determined to be illegal
or unenforceable for any reason, the remaining provisions hereof shall not be
affected thereby.
16. GOVERNING LAW. This Assignment and the rights and remedies of
Assignee as provided herein shall be governed by and construed in accordance
with the internal laws of the State of Texas, without regard to principles of
conflicts of law.
17. DISPUTE ARBITRATION. Disputes arising under this Assignment shall
be governed by the arbitration provisions of Section 10.17 of the Credit
Agreement.
IN WITNESS WHEREOF, the undersigned Assignor has executed this
Assignment as of the _____ day of ___________, 1996.
"ASSIGNOR"
[INSERT NAME OF APPLICABLE ASSIGNOR]
6
<PAGE>
EXHIBIT A
LEGAL DESCRIPTION
All of that certain real property together with all easement, rights and
appurtenances thereto, and all improvements now or hereafter located thereon,
situated in the City of [NAME OF CITY], County of [NAME OF COUNTY], State of
[NAME OF STATE] and described as follows:
7
<PAGE>
EXHIBIT B
SCHEDULE OF LENDERS
As of __________, the lenders party to the Credit Agreement are as follows:
8
<PAGE>
STATE OF _____________ )
)
COUNTY OF ___________ )
[INSERT APPLICABLE ACKNOWLEDGEMENT]
9
<PAGE>
ENDNOTE
In connection with any request to include the Property as a "Borrowing
Base Property" under the Credit Agreement, the form of Assignment of Leases
and Rents attached hereto shall be modified prior to execution to conform to
comments from Agent's local counsel in the jurisdiction in which the Property
is located (including without limitation applicable state law provisions with
respect to method of foreclosure and other remedies, governing law, and
usury), and such further additions or revisions required by Agent necessary
or appropriate to reflect the Assignor's relationship to the obligations
being secured under the Assignment of Leases and Rents.
10
<PAGE>
EXHIBIT B
BORROWING NOTICE
, 1997
Bank of America National Trust
and Savings Association, as Agent
CRESG #1357
555 South Flower Street, 6th Floor
Los Angeles, California 90071
Attn: Unit Manager
Re: Amended and Restated Credit Agreement dated as of May 5, 1997 (as the
same may be amended, modified or supplemented from time to time, the
"Agreement"), among AIMCO PROPERTIES, L.P., a Delaware limited
partnership (the "Company"), the lenders from time to time party to the
Agreement (the "Lenders"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as one of the Lenders, and BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent (the "Agent") for the Lenders
Ladies and Gentlemen:
Reference is made to the Agreement. Capitalized terms used in this
Borrowing Notice without definition have the meanings specified in the
Agreement.
Pursuant to Section 2.03 of the Agreement, notice is hereby given that
the Company desires that the Lenders make the loan described in attached
SCHEDULE 1 (the "Loan"). In connection therewith, the Company and the
undersigned Responsible Officers of the Company hereby certify that:
(1) COLLATERAL VALUE. The Outstanding Amount shall not, after
giving effect to the making of the Loan, exceed the Borrowing Base;
(2) REPRESENTATIONS AND WARRANTIES. All representations and
warranties of the Company contained in the Loan Documents, including those
contained in Article V of the Agreement, are true and correct as of the date
hereof and shall be true and correct in all material respects on the date of
the Loan, both before and after giving effect to the Loan; PROVIDED, HOWEVER,
that the representations and warranties of the Company set forth in Section
5.08 of the Agreement shall be deemed to be made with respect to the
financial statements most recently delivered to the Agent and the Lenders
pursuant to Section 6.01 of the Agreement;
1
<PAGE>
(3) NO DEFAULT/EVENT OF DEFAULT. No Default or Event of Default
exists as of the date hereof or will result from the making of the Loan;
(4) USE OF PROCEEDS. The proceeds of the Loan will be used only
as permitted under Sections 2.01(b), 6.10 and 7.12 of the Agreement; and
(5) NO MATERIAL ADVERSE EFFECT. No act, omission, change or event
which has a Material Adverse Effect has occurred since the Closing Date.
(6) MINIMUM AVAILABILITY. If an outstanding balance exists under
the Bridge Loan Agreement, an aggregate amount of at least $2,500,000 (i)
remains undrawn under the Credit Agreement but available for borrowing
thereunder, or (ii) is held by the Company in the form of Cash Equivalents
not subject to any Lien.
AIMCO PROPERTIES, L.P.,
a Delaware limited partnership
By: AIMCO-GP, INC.
a Delaware corporation,
its general partner
By:
------------------------------------
Name:
----------------------------------
Its:
-----------------------------------
By:
------------------------------------
Name:
----------------------------------
Its:
-----------------------------------
2
<PAGE>
SCHEDULE 1
to Borrowing Notice
REQUESTED LOAN
AMOUNT OF REQUESTED LOAN: $
---------
- -------------------------------------------------------------------------------
(must be $1,000,000 or a multiple of $100,000 in excess thereof)
DESIGNATION OF INTEREST RATE:
(Portion of requested Loan to be funded as Base Rate Loan and/or LIBOR Loan):
(1) BASE RATE LOAN. The following Base Rate Loan:
Amount: $
---------
- -------------------------------------------------------------------------------
Requested Borrowing Date:
----------------------------
(must be a Business Day at least two (2) Business Days after date of notice)
(2) LIBOR LOAN. The following LIBOR Loan:
(there must not, after giving effect to the requested Loan, be more than
five (5) different LIBOR Loans in effect)
Amount: $
---------
- -------------------------------------------------------------------------------
Requested Borrowing Date:
----------------------------
(must be a Business Day at least three (3) Business Days after date of notice)
Interest Period: ----------------------------
(1, 2, 3, or 6 months)
(3) LETTER OF CREDIT:
Amount: $
---------
- -------------------------------------------------------------------------------
3
<PAGE>
EXHIBIT C
FORM OF UNSECURED INDEMNITY AGREEMENT
UNSECURED INDEMNITY AGREEMENT
This Unsecured Indemnity Agreement ("Agreement") is made as of
_____________, 1997, by [NAME OF ENTITY OWNING THE PROPERTY TO BE ENCUMBERED
BY THE DEED OF TRUST/AIMCO PROPERTIES, L.P., A DELAWARE LIMITED PARTNERSHIP],
a ___________________ ("Indemnitor") in favor of (i) LENDER OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking association, as
Agent for the Lenders (in such capacity, "Indemnitee") under that certain
Amended and Restated Credit Agreement, dated as of May 5, 1997 (as it may
from time to time be amended or restated, the "Credit Agreement"), among
[INDEMNITOR/AIMCO PROPERTIES, L.P., A DELAWARE LIMITED PARTNERSHIP
("COMPANY")], the lenders from time to time party to the Credit Agreement (the
"Lenders"), and Bank of America National Trust and Savings Association, in
its capacity as one of the Lenders and as Agent for the Lenders, and (ii) the
other Indemnified Parties (as hereinafter defined). Each initially
capitalized term used but not defined herein shall have the meaning
attributed to such term in the Credit Agreement.
FACTUAL BACKGROUND
A. Indemnitor is executing this Agreement to induce the Lenders to make
advances, from time to time, of up to $100,000,000 in the aggregate under a
revolver-to-term credit facility (the "Facility") pursuant to the Credit
Agreement.
B. The Facility is evidenced by promissory notes issued to the Lenders
(collectively the "Note"), and is secured by, among other things, deeds of
trust or mortgages (the "Deeds of Trust") encumbering each of the Borrowing
Base Properties. The property identified on EXHIBIT A attached hereto (the
"Property") is one of the Borrowing Base Properties.
C. In connection with obtaining the Deeds of Trust as security for the
Facility, the Lenders may potentially become subject to certain costs, risks
and liabilities with respect to the Property. Among other things, the
Lenders may become subject to liabilities or alleged liabilities relating to
environmental conditions as an "owner" or "operator" under applicable
environmental law. These costs and liabilities may arise before or after
repayment of the Facility, and before or after foreclosure under the Deeds of
Trust. Because these costs and liabilities, if they occur, will be the
result of the Lenders' agreement to make the Facility, and in consideration
of that agreement, Indemnitee, as Agent for the Lenders, and Indemnitor have
agreed as set forth below.
I. DEFINITIONS
In addition to any terms defined elsewhere in this Agreement, as used in
this Agreement:
1.1 "Hazardous Substance" means any substance, material or waste
(including petroleum and petroleum products) which is or becomes designated,
classified or regulated as
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being "toxic" or "hazardous" or a "pollutant," or which is or becomes
similarly designated, classified or regulated, under any federal, state or
local law, regulation or ordinance.
1.2 "Indemnified Costs" means all actual or threatened liabilities,
claims, actions, causes of action, judgments, orders, damages (including
foreseeable and unforeseeable consequential damages), costs, expenses, fines,
penalties and losses (including sums paid in settlement of claims and all
consultant, expert and legal fees and expenses of Indemnitee's counsel),
including those incurred in connection with any investigation of site
conditions or any clean-up, remedial, removal or restoration work (whether of
the Property or any other property), or any resulting damages, harm or
injuries to the person or property of any third parties or to any natural
resources, AND INCLUDING THOSE INDEMNIFIED COSTS WHICH RESULT FROM THE SOLE,
JOINT OR CONCURRENT NEGLIGENCE, OR COMPARATIVE NEGLIGENCE OF SUCH INDEMNIFIED
PARTY OR ANY OTHER INDEMNIFIED PARTY OR ATTRIBUTABLE TO THE STRICT LIABILITY
OR NO FAULT LIABILITY OF SUCH INDEMNIFIED PARTY OR ANY OTHER INDEMNIFIED
PARTY (BUT EXCLUDING ANY SUCH INDEMNIFIED COSTS WHICH RESULT FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PARTY OR ANY OTHER
INDEMNIFIED PARTY).
1.3 "Indemnified Parties" means and includes Indemnitee and each of the
Lenders, their respective parents, subsidiaries and affiliated companies,
assignees of any of the Lenders' interest in the Facility or the Loan
Documents, any successor under the Credit Agreement, owners of participation
or other interests in the Facility or the Loan Documents, the Trustee or any
substitute Trustee under the Deed of Trust, any purchasers of the Property at
any foreclosure sale or from Indemnitee or any of its affiliates, and the
officers, directors, employees, attorneys and agents of each of them.
II. UNSECURED INDEMNITY AGREEMENT
2.1 NOT SECURED BY DEEDS OF TRUST. Notwithstanding any provision of
the Credit Agreement, the Deeds of Trust or any other Loan Document, the
rights of the Indemnified Parties under this Agreement shall not be secured
by the Deeds of Trust or any other Collateral Document.
2.2 INDEMNITY REGARDING HAZARDOUS SUBSTANCES. Indemnitor indemnifies,
defends and holds the Indemnified Parties harmless for, from and against any
and all Indemnified Costs directly or indirectly arising out of or resulting
from any Hazardous Substance being present or released in, on or around any
part of the Property, or in the soil, groundwater or soil vapor on or under
the Property, including:
(a) any claim for such Indemnified Costs asserted by any federal,
state or local governmental agency, including the United States Environmental
Protection Agency and the Texas Department of Health, and including any claim
that any Indemnified Party is liable for any such Indemnified Costs as an
"owner" or "operator" of the Property under any law relating to Hazardous
Substances; and
(b) any such Indemnified Costs claimed against any Indemnified
Party by any person other than a governmental agency, including any person
who may purchase or lease all or any portion of the Property from Indemnitor,
from any Indemnified Party, or from
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any other purchaser or lessee; any person who may at any time have any
interest in all or any portion of the Property; any person who may at any
time be responsible for any clean-up costs or other Indemnified Costs
relating to the Property; and any person claiming to have been injured in any
way as a result of exposure to any Hazardous Substance; and
(c) any such Indemnified Costs which any Indemnified Party
reasonably believes at any time must be incurred to comply with any law,
judgment, order, regulation or regulatory directive relating to Hazardous
Substances, or which any Indemnified Party reasonably believes at any time
must be incurred to protect the public health or safety; and
(d) any such Indemnified Costs resulting from currently existing
conditions in, on or around the Property, whether known or unknown by
Indemnitor or the Indemnified Parties at the time this Agreement is executed,
and any such Indemnified Costs resulting from the activities of Indemnitor,
Indemnitor's tenants, or any other person in, on or around the Property.
2.3 INDEMNITY REGARDING CONSTRUCTION AND OTHER RISKS. Indemnitor
indemnifies, defends and holds the Indemnified Parties harmless for, from and
against any and all Indemnified Costs directly or indirectly arising out of
or resulting from construction of any improvements on the Property, including
any defective workmanship or materials; or any failure to satisfy any
requirements of any laws, regulations, ordinances, governmental policies or
standards, reports, subdivision maps or development agreements that apply or
pertain to the Property; or breach of any representation or warranty made or
given by Indemnitor to any of the Indemnified Parties or to any prospective
or actual buyer of all or any portion of the Property; or any claim or cause
of action of any kind by any party that any Indemnified Party is liable for
any act or omission of Indemnitor or any other person or entity in connection
with the ownership, sale, operation or development of the Property.
2.4 DEFENSE OF INDEMNIFIED PARTIES. Upon demand by any Indemnified
Party, Indemnitor shall defend any investigation, action or proceeding
involving any Indemnified Costs which is brought or commenced against any
Indemnified Party, whether alone or together with Indemnitor or any other
person, all at Indemnitor's own cost and by counsel to be approved by the
Indemnified Party in the exercise of its reasonable judgment. In the
alternative, any Indemnified Party may elect to conduct its own defense at
the expense of Indemnitor.
2.5 REPRESENTATION AND WARRANTY REGARDING HAZARDOUS SUBSTANCES. Before
signing this Agreement, Indemnitor researched and inquired into the previous
uses and owners of the Property. Based on that due diligence, Indemnitor
represents and warrants that to the best of its knowledge, no Hazardous
Substance has been disposed of or released, or otherwise now exists, in, on,
under or around the Property, except as Indemnitor has disclosed to
Indemnitee in writing prior to the date hereof.
2.6 COMPLIANCE REGARDING HAZARDOUS SUBSTANCES. Indemnitor has
complied, and shall comply and cause all tenants and any other persons who
may come upon the Property to comply, with all laws, regulations and
ordinances governing or applicable to Hazardous Substances, including those
requiring disclosures to prospective and actual buyers of all or any
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portion of the Property. Indemnitor also has complied and shall comply with
the recommendations of any qualified environmental engineer or other expert
which apply or pertain to the Property.
2.7 NOTICES REGARDING HAZARDOUS SUBSTANCES. Indemnitor shall promptly
notify Indemnitee if it knows, suspects or believes there may be any
Hazardous Substance in or around the Property, or in the soil, groundwater or
soil vapor on or under the Property, or that Indemnitor or the Property may
be subject to any threatened or pending investigation by any governmental
agency under any law, regulation or ordinance pertaining to any Hazardous
Substance.
2.8 SITE VISITS, OBSERVATIONS AND TESTING. The Indemnified Parties and
their agents and representatives shall have the right at any reasonable time
to enter, upon prior written notice and, if any such entry would subject
Indemnitor to any laws requiring prior notice to tenants or other occupants
of said Property, in a manner that would reasonably enable Indemnitor to
provide such notice in conformance with any such law, and visit the Property
for the purposes of observing the Property, taking and removing soil or
groundwater samples, and conducting tests on any part of the Property. The
Indemnified Parties have no duty, however, to visit or observe the Property
or to conduct tests, and no site visit, observation or testing by any
Indemnified Party shall impose any liability on any Indemnified Party. In no
event shall any site visit, observation or testing by any Indemnified Party
be a representation that Hazardous Substances are or are not present in, on
or under the Property, or that there has been or shall be compliance with any
law, regulation or ordinance pertaining to Hazardous Substances or any other
applicable governmental law. Neither Indemnitor nor any other party is
entitled to rely on any site visit, observation or testing by any Indemnified
Party. The Indemnified Parties owe no duty of care to protect Indemnitor or
any other party against, or to inform Indemnitor or any other party of, any
Hazardous Substances or any other adverse condition affecting the Property.
Any Indemnified Party shall give Indemnitor reasonable notice before entering
the Property. The Indemnified Party shall make reasonable efforts to avoid
interfering with any third party's use of the Property in exercising any
rights provided in this Section.
2.9 COSTS AND EXPENSES. Indemnitor agrees to pay all costs and
expenses, including reasonable attorneys' fees, which may be incurred by any
Indemnified Party in any effort to enforce any term of this Agreement,
including all such costs and expenses which may be incurred by any
Indemnified Party in any legal action, reference or arbitration proceeding.
From the time(s) incurred until paid in full to the Indemnified Party, those
sums shall bear interest at the rate of interest for Base Rate Loans.
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III. GENERAL PROVISIONS
3.1 INTENTIONALLY OMITTED.
3.2 RESERVATION OF OTHER RIGHTS AND REMEDIES. Nothing in this
Agreement shall be construed to limit any claim or right which any
Indemnified Party may otherwise have at any time against Indemnitor or any
other person arising from any source other than this Agreement, including any
claim for fraud, misrepresentation, waste or breach of contract other than
this Agreement, and any rights of contribution or indemnity under federal or
state environmental law or other applicable law, regulation or ordinance.
3.3 DELAY; CUMULATIVE REMEDIES. If any Indemnified Party delays in
exercising or fails to exercise any right or remedy against Indemnitor, that
alone shall not be construed as a waiver of such right or remedy. All
remedies of any Indemnified Party against Indemnitor are cumulative.
3.4 RULES OF CONSTRUCTION. In this Agreement, the word "person"
includes any individual, company, trust or other legal entity of any kind.
If this Agreement is executed by more than one person, the word "Indemnitor"
includes all such persons. The word "include(s)" means "include(s), without
limitation," and the word "including" means "including, but not limited to."
When the context and construction so require, all words used in the singular
shall be deemed to have been used in the plural and vice versa. All headings
appearing in this Agreement are for convenience only and shall be disregarded
in construing this Agreement.
3.5 ARBITRATION.
(a) MANDATORY ARBITRATION. Any controversy or claim between
or among the parties, including those arising out of or relating to this
Agreement, and any claim based on or arising from an alleged tort, shall at
the request of any party be determined by arbitration. The arbitration shall
be conducted in Los Angeles, California, in accordance with the United States
Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law
provision in this Agreement, and under the Commercial Rules of the American
Arbitration Association (the "AAA"). The arbitrator(s) shall give effect to
statutes of limitation in determining any claim. Any controversy concerning
whether an issue is arbitrable shall be determined by the arbitrator(s).
Judgment upon the arbitration award may be entered in any court having
jurisdiction. The institution and maintenance of an action for judicial
relief or pursuit of a provisional or ancillary remedy shall not constitute a
waiver of the right of any party, including the plaintiff, to submit the
controversy or claim to arbitration if any other party contests such action
for judicial relief.
(b) PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No
provision of this Section 3.5 shall limit the right of any party to this
Agreement to exercise self-help remedies such as setoff, foreclosure against
or sale of any real or personal property collateral or security, or to obtain
provisional or ancillary remedies from a court of competent jurisdiction
before, after, or during the pendency of any arbitration or other proceeding.
The exercise of a remedy does not waive the right of either party to resort
to arbitration.
<PAGE>
3.6 SEVERABILITY. Every provision of this Agreement is intended to
be severable. In the event any term, provision, section or subsection of
this Agreement is declared to be illegal or invalid, for any reason
whatsoever, by a court of competent jurisdiction, such illegality or
invalidity shall not affect the other terms, provisions, sections or
subsections of this Agreement, which shall remain binding and enforceable.
3.7 IN-HOUSE COUNSEL FEES. Whenever Indemnitor is obligated to pay
or reimburse any Indemnified Party for any attorneys' fees, those fees shall
include the reasonably allocated costs for services of in-house counsel.
3.8 INTEGRATION; MODIFICATIONS. The Loan Documents, including this
Agreement, (a) integrate all the terms and conditions mentioned in or
incidental to this Agreement, (b) supersede all oral negotiations and prior
writings with respect to their subject matter, and (c) are intended by the
parties as the final expression of the agreement with respect to the terms
and conditions set forth in the Loan Documents and as the complete and
exclusive statement of the agreed terms. No representation, understanding,
promise or condition shall be enforceable against any party unless it is
contained in the Loan Documents. This Agreement may not be modified except in
a writing signed by both Indemnitee and Indemnitor.
3.9 HEIRS, SUCCESSORS AND ASSIGNS; PARTICIPATIONS. The provisions
of this Agreement shall bind and benefit the heirs, executors,
administrators, legal representatives, successors and assigns of Indemnitor
and the Indemnified Parties; provided, however, that Indemnitor may not
assign this Agreement, or assign or delegate any of its rights or obligations
under this Agreement, without the prior written consent of Indemnitee and the
Requisite Lenders in each instance. Each Lender in its sole discretion may
sell or assign participations or other interests in the Facility and this
Agreement, in whole or in part, all without notice to or the consent of
Indemnitor and without affecting Indemnitor's obligations under this
Agreement. Also without notice to or the consent of Indemnitor, each Lender
may disclose any and all information in its possession concerning Indemnitor
or this Agreement to any actual or prospective purchaser of any securities
issued or to be issued by such Lender, and to any actual or prospective
purchaser or assignee of any participation or other interest in the Facility
and this Agreement.
3.10 NOTICES. All notices given under this Agreement shall be in
writing and shall be given by personal delivery, overnight receipted courier
(such as Federal Express), or by registered or certified United States mail,
postage prepaid, sent to each party at its address set forth in the Credit
Agreement. Notices shall be effective upon receipt or when proper delivery is
refused. Addresses for notice may be changed by either party by notice to
each other party in accordance with this Section 3.10.
3.11 MISCELLANEOUS. The liability of all persons who are in any
manner obligated under this Agreement shall be joint and several. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of __________.
INDEMNITOR:
[INSERT NAME OF APPLICABLE INDEMNITOR]
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EXHIBIT A
PROPERTY DESCRIPTION
[TO BE ADDED]
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ENDNOTES
In connection with any request to include the Property as a "Borrowing
Base Property" under the Credit Agreement, the form of Unsecured Indemnity
Agreement attached hereto shall be modified prior to execution to conform to
comments from Agent's local counsel in the jurisdiction in which the Property
is located (including without limitation applicable state law provisions with
respect to the enforcement thereof and other remedies, applicable
environmental statutes, and governing law), and such further additions or
revisions required by Agent necessary or appropriate to reflect the
Indemnitor's relationship to the obligations being indemnified, including if
the Indemnitor is other than AIMCO Properties L.P. the following provisions:
__. RIGHTS OF LENDER. Indemnitor authorizes Agent or any Lender to
perform any or all of the following acts at any time in its sole discretion,
all without notice to Indemnitor and without affecting Indemnitor's
obligations under this Agreement:
(a) Agent or any Lender may alter any terms of the Facility or any
part of it, including renewing, compromising, extending or accelerating, or
otherwise changing the time for payment of, or increasing or decreasing the
rate of interest on, the Facility or any part of it.
(b) Agent or any Lender may take and hold security for the
Facility or this Agreement, accept additional or substituted security for
either, and subordinate, exchange, enforce, waive, release, compromise, fail
to perfect and sell or otherwise dispose of any such security.
(c) Agent or any Lender may direct the order and manner of any
sale of all or any part of any security now or later to be held for the
Facility or this Agreement, and Agent or any Lender may also bid at any such
sale.
(d) Agent or any Lender may apply any payments or recoveries from
Company, Indemnitor or any other source, and any proceeds of any security, to
Company's obligations under the Loan Documents in such manner, order and
priority as Agent or such Lender may elect.
(e) Agent or any Lender may release Company of its liability for the
Facility or any part of it.
(f) Agent or any Lender may substitute, add or release any one or
more guarantors or endorsers.
(g) In addition to the Facility, Agent or any Lender may extend
other credit to Company, and may take and hold security for the credit so
extended, all without affecting Indemnitor's liability under this Agreement.
__. ABSOLUTE INDEMNITY. Indemnitor expressly agrees that until the
Facility is paid and performed in full and each and every term, covenant and
condition of this Agreement is fully performed, Indemnitor shall not be
released by or because of:
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(a) Any act or event which might otherwise discharge, reduce, limit
or modify Indemnitor's obligations under this Agreement;
(b) Any waiver, extension, modification, forbearance, delay or
other act or omission of Agent or any Lender, or its failure to proceed
promptly or otherwise as against Company, Indemnitor or any security;
(c) Any action, omission or circumstance which might increase the
likelihood that Indemnitor may be called upon to perform under this Agreement or
which might affect the rights or remedies of Indemnitor as against Company; or
(d) Any dealings occurring at any time between Company and Agent
or any Lender, whether relating to the Facility or otherwise. Indemnitor
hereby expressly waives and surrenders any defense to its liability under
this Agreement based upon any of the foregoing acts, omissions, agreements,
waivers or matters. It is the purpose and intent of this Agreement that the
obligations of Indemnitor under it shall be absolute and unconditional under
any and all circumstances.
__. INDEMNITOR'S WAIVERS. Indemnitor waives:
(a) All statutes of limitations as a defense to any action or
proceeding brought against Indemnitor by Agent or any Lender, to the fullest
extent permitted by law;
(b) Any right it may have to require Agent or any Lender to
proceed against Company, proceed against or exhaust any security held from
Company, or pursue any other remedy in Agent's or such Lender's power to
pursue;
(c) Any defense based on any claim that Indemnitor's obligations
exceed or are more burdensome than those of Company;
(d) Any defense based on: (i) any legal disability of Company,
(ii) any release, discharge, modification, impairment or limitation of the
liability of Company to Agent or any Lender from any cause, whether consented
to by Agent or any Lender or arising by operation of law or from any
bankruptcy or other voluntary or involuntary proceeding, in or out of court,
for the adjustment of debtor-creditor relationships ("Insolvency Proceeding")
and (iii) any rejection or disaffirmance of the Facility, or any part of it,
or any security held for it, in any such Insolvency Proceeding;
(e) Any defense based on any action taken or omitted by Agent or
any Lender in any Insolvency Proceeding involving Company, including any
election to have Agent's or such Lender's claim allowed as being secured,
partially secured or unsecured, any extension of credit by Agent or any
Lender to Company in any Insolvency Proceeding, and the taking and holding by
Agent or any Lender of any security for any such extension of credit;
(f) All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices of
acceptance of this Agreement and
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of the existence, creation, or incurring of new or additional indebtedness,
and demands and notices of every kind; and
(g) Any defense based on or arising out of any defense that
Company may have to the payment or performance of the Facility or any part of
it.
__. WAIVERS OF SUBROGATION AND OTHER RIGHTS.
(a) During the existence of an Event of Default, Agent or any
Lender in its sole discretion, without prior notice to or consent of
Indemnitor, may elect to: (i) foreclose either judicially or nonjudicially
against any real or personal property security it may hold for the Facility,
(ii) accept a transfer of any such security in lieu of foreclosure, (iii)
compromise or adjust the Facility or any part of it or make any other
accommodation with Company or Indemnitor, or (iv) exercise any other remedy
against Company or any security. No such action by Agent or any Lender shall
release or limit the liability of Indemnitor, who shall remain liable under
this Agreement after the action, even if the effect of the action is to
deprive Indemnitor of any subrogation rights, rights of indemnity, or other
rights to collect reimbursement from Company for any sums paid to Agent or
any Lender, whether contractual or arising by operation of law or otherwise.
Indemnitor expressly agrees that under no circumstances shall it be deemed to
have any right, title, interest or claim in or to any real or personal
property to be held by Agent or any Lender or any third party after any
foreclosure or transfer in lieu of foreclosure of any security for the
Facility.
(b) Regardless of whether Indemnitor may have made any payments to
Agent or any Lender, Indemnitor hereby waives: (i) all rights of subrogation,
all rights of indemnity, and any other rights to collect reimbursement from
Company for any sums paid to Agent or any Lender, whether contractual or
arising by operation of law (including the United States Bankruptcy Code or
any successor or similar statute) or otherwise, (ii) all rights to enforce
any remedy that Agent or any Lender may have against Company, and (iii) all
rights to participate in any security now or later to be held by Agent or any
Lender for the Facility, in each case until the full and indefeasible payment
and performance of all Obligations under (and as defined in) each of the
Credit Agreement and the Bridge Loan Agreement, and all obligations of the
Indemnitor hereunder.
__. REVIVAL AND REINSTATEMENT. If Agent or any Lender is required to
pay, return or restore to Company or any other person any amounts previously
paid on the Facility because of any Insolvency Proceeding of Company, any
stop notice or any other reason, the obligations of Indemnitor shall be
reinstated and revived and the rights of Agent or any Lender shall continue
with regard to such amounts, all as though they had never been paid.
__. CONDITION OF PROPERTY. Before signing this Agreement, Indemnitor
investigated the present and former condition, uses and ownership of the
Property, and such other matters as Indemnitor deemed appropriate to assure
itself of Company's ability to discharge its obligations under the Loan
Documents. Indemnitor assumes full responsibility for that due diligence, as
well as for keeping informed of all matters which may affect the present and
future condition of the Property. Neither Agent nor any Lender has any duty
to disclose to Indemnitor any information which Agent or any Lender may have
or receive about the
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condition or uses of the Property, or any other circumstances bearing on
Company's ability to perform its obligations to Agent or any Lender.
__. FINANCIAL INFORMATION. Indemitor shall keep true and correct
financial books and records, using generally accepted accounting principles
consistently applied, or such other accounting principles as the Requisite
Lenders in their reasonable judgment may find acceptable from time to time.
Indemnitor represents, warrants and covenants to Agent and the Lenders that
all financial information with respect to the Indemnitor delivered or to be
delivered to Agent and the Lenders by the Company with respect to Indemnitor
under Section 6.01 of the Credit Agreement is or shall be true and correct
and fairly presents or will fairly present the financial position of the
Indemnitor for the applicable period. Indemnitor shall promptly provide
Agent and the Lenders with any additional audited financial information that
Indemnitor may obtain, and such other information concerning its affairs and
properties as Agent or any Lender may reasonably request, including, without
limitation, signed copies of any tax returns if requested Agent or the
Lenders.
__. Indemnitor's Representations and Warranties. Indemnitor represents
and warrants that:
(a) All financial statements delivered to Agent or the Lenders
were or will be prepared in accordance with generally accepted accounting
principles, or such other accounting principles as may be acceptable to Agent
and the Requisite Lenders at the time of their preparation, consistently
applied; and
(b) There has been no material adverse change in Indemnitor's
financial condition since the dates of the statements most recently furnished
to Agent or the Lenders.
(c) All representations and warranties given on behalf of or with
respect to Indemnitor contained in Article V of the Credit Agreement, in
Article V of the Bridge Loan Agreement and in any other Loan Document or
certification made in connection with the Credit Agreement or Bridge Loan
Agreement are true and correct.
__. ADDITIONAL AND INDEPENDENT OBLIGATIONS. Indemnitor's obligations
under this Agreement are in addition to Indemnitor's obligations under any
other existing or future agreements or guaranties, each of which shall remain
in full force and effect until it is expressly modified or released in a
writing signed by Agent and the Lenders. Indemnitor's obligations under this
Agreement are independent of those of Company under the Loan Documents and
any indemnity agreements signed by Company. Agent or any Lender may bring a
separate action, or commence a separate reference or arbitration proceeding
against Indemnitor without first proceeding against Company, any other person
or any security that Agent or any Lender may hold, and without pursuing any
other remedy. Agent's and the Lenders' rights under this Agreement shall not
be exhausted by any action by Agent or any Lender.
__. NO RELEASE. Indemnitor shall not be released from its obligations
under this Agreement except by a writing signed by Agent and the Lenders.
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__. CONSIDERATION. Indemnitor acknowledges that it expects to benefit
from the Lenders' extension of the Facility to Company because of its
relationship to Company, and that it is executing this Agreement in
consideration of that anticipated benefit.
INDEMNITOR:
[ENTITY]
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EXHIBIT D ______
FORM OF DEED OF TRUST1
Recording Requested By And
When Recorded Mail to:
Bank of America N.T. & S.A.
CRESG #1357
555 South Flower Street, 6th Floor
Los Angeles, California 90071
Att'n: M. Harvey ([NAME OF PROPERTY])
Loan No.: AIMCO - [LOAN REFERENCE NO.]
[THIS FORM IS FOR USE WITH BORROWING BASE PROPERTIES
LOCATED IN THE STATE OF TEXAS]
- -------------------------------------------------------------------------------
(Space above this line for Recorder's Use)
(Attention County Clerk: This instrument covers goods that are or will be
fixtures on the real property described herein. It is to be recorded as a
real estate mortgage and indexed as both a real estate mortgage and a fixture
financing statement. The mailing address of the Trustor (Debtor) and the
Beneficiary (Secured Party) are next to the signatures on this document).
DEED OF TRUST, ASSIGNMENT OF LEASES
AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING
THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING (this "Deed of Trust") is made as of
the ___ day of ________, 199__, by
[NAME OF ENTITY OWNING THE PROPERTY TO BE ENCUMBERED], a ____________________
(herein "Trustor"), the owner of the real property described hereinbelow,
whose address is 1873 South Bellaire Street, 17th Floor, Denver, Colorado
80222, to [NAME OF TRUSTEE], whose address is
_____________________________________________ (herein "Trustee"), for the
benefit of BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national
banking association whose address is 555 S. Flower Street, 6th Floor, Los
Angeles, California 90071, Att'n: Manager -- Unit 1357, as beneficiary, as
Agent for the Lenders under the Credit Agreement described below (in such
capacity, "Beneficiary"). (Capitalized terms used but not defined herein
shall have the meanings set forth in the Credit Agreement.)
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Pursuant to that certain Amended and Restated Credit Agreement,
dated as of May 5, 1997 (as it may from time to time be amended or restated,
herein the "Credit Agreement"), among
[TRUSTOR/AIMCO PROPERTIES, L.P., AS BORROWER ("COMPANY")], the lenders from
time to time party to the Credit Agreement (the "Lenders"), and Bank of
America National Trust and Savings Association, a national banking
association, in its capacity as one of the Lenders and as Agent for the
Lenders, the Lenders have agreed to make available to Company a revolving
line of credit in the maximum amount of $100,000,000 which may, under certain
terms and conditions, be converted into a term loan (collectively, the
"Facility"). As of ________, the Lenders party to the Credit Agreement are
set forth on EXHIBIT B attached hereto. The indebtedness of Company under
the Facility shall bear interest at the variable rate or rates set forth in
the Credit Agreement and shall be evidenced by the Notes. Under the
Facility, Letters of Credit in the maximum aggregate amount at any time
outstanding of $2,000,000 may be issued by Bank of America National Trust and
Savings Association as the "Issuing Lender" for the account of
[TRUSTOR/COMPANY].
In consideration of the foregoing, Trustor hereby irrevocably
grants, mortgages, conveys, bargains, sells, transfers and assigns to
Trustee, its successors and assigns, in trust, for the use and benefit of the
Beneficiary with power of sale and right of entry and possession as provided
below, all of the following described property, and any future estate, right,
title and interest of Trustor with respect thereto (herein, all of the
property described in clauses (A) through (R) below is referred to as the
"Mortgaged Property"):
(A) The real property (herein, the "Land") described in the
attached EXHIBIT A which is incorporated into this Deed of Trust by
reference, and all minerals, oil, gas and other hydrocarbon substances on the
property, as well as all development rights, air rights, water, water rights,
and water stock relating to the Land.
(B) All present and future structures, buildings and improvements
of any kind on the Land; all fixtures, machinery, equipment, building
materials, appliances and goods of every nature whatsoever now or hereafter
located in, or on, or attached or affixed to, or used or intended to be used
in connection with, the Land, including, but not limited to, all heating,
lighting, laundry, incinerating, gas, electric and power equipment, engines,
pipes, pumps, tanks, motors, conduits, switchboards, plumbing, lifting,
cleaning, fire prevention, fire extinguishing, refrigerating, ventilating,
and communications apparatus, air cooling and air conditioning apparatus,
elevators and escalators and related machinery and equipment, shades,
awnings, blinds, curtains, drapes, attached floor coverings, including rugs
and carpeting, television, radio and music cable antennae and systems,
screens, storm doors and windows, stoves, refrigerators, dishwashers and
other installed appliances, attached cabinets, partitions, ducts and
compressors, and trees, plants and other items of landscaping; all supplies,
equipment, furniture, furnishings and apparatus used in the operation of the
apartment project on the Land, including, but not limited to, communication
systems, and visual and electronic surveillance systems; all swimming pool
heaters and equipment, recreational equipment and maintenance supplies used
in connection with the Land; all of the foregoing of which, including
replacements and additions thereto, shall, to the fullest extent permitted by
law and for the purposes of this Deed of Trust, be deemed to be part and
parcel of, and appropriated to the use of, the Land and, whether affixed or
annexed thereto or not, be deemed conclusively to be real property and
conveyed by this Deed of Trust, and Trustor agrees to execute and
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deliver, from time to time, such further instruments and documents as may be
required by Beneficiary to confirm the lien of this Deed of Trust on any of
the foregoing (herein the "Improvements").
(C) All appurtenances of the Land and all rights of Trustor in and
to any streets, roads or public places, easements or rights of way, relating
to or affording ingress and egress to the Land.
(D) all public and private utility connections to the Land or
Improvements, and all wastewater capacity reservations and similar rights and
reservations of any kind or character covering the Land or Improvements
issued or which may be issued by any governmental agencies having
jurisdiction thereof, and all other rights relating to sewage treatment
capacity, water capacity and utilities serving the Land or Improvements.
(E) All existing and future leases, subleases, subtenancies,
licenses, occupancy agreements and concessions ("leases") relating to the use
and enjoyment of all or any part of the Land and Improvements, and any and
all guaranties and other agreements relating to or made in connection with
any of such leases, which, together with the Rents and Profits (as defined
below), are absolutely, presently and unconditionally assigned to Beneficiary
pursuant to Section 1.06 below.
(F) All proceeds, including all claims to and demands for them, of
the voluntary or involuntary conversion of any of the Land, Improvements or
the other property described above into cash or liquidated claims, including
proceeds of all present and future fire, hazard or casualty insurance
policies (whether or not required to be maintained hereunder) and all
condemnation awards or payments now or later to be made by any public body or
decree by any court of competent jurisdiction for any taking or in connection
with any condemnation or eminent domain proceeding, and all causes of action
and their proceeds for any damage or injury to the Land, Improvements or the
other property described above or any part of them, or breach of warranty in
connection with the construction of the Improvements, including causes of
action arising in tort, contract, fraud or concealment of a material fact
(all of the foregoing, collectively, "Proceeds").
Trustor also hereby grants to Beneficiary a security interest in
all of the following described property, whether now or hereafter existing,
and in which Trustor now has or hereafter obtains any right, title, estate or
interest:
(G) All existing and future goods located on the Land which are
now or in the future owned by Trustor and used in the operation or occupancy
of the Land or in any construction on the Land but which are not effectively
made real property under Clause (B) above, including, but not limited to, all
appliances, furniture and furnishings, building service equipment, and
building materials, supplies and equipment.
(H) All deposit accounts of Trustor which are maintained with
Beneficiary. Beneficiary shall hold such security interest and lien pursuant
to the Uniform Commercial Code of the state where such account is located and
shall be entitled to all rights, powers and
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remedies of a secured party thereunder and otherwise available at law or in
equity with respect thereto.
(I) All general intangibles relating to the development or use or
operation of the Land, including, but not limited to, all governmental
licenses, permits, variances, approvals and authorizations relating to
construction on the Land or relating to the approval or use or operation of
the project on the Land, all contracts, contract rights, agreements,
commissions, undertakings and arrangements relating to the use or operation
of the project on the Land (including, without limitation, all property
development, management, maintenance, repair or other service contracts
relating to the Land and the Improvements and the purchase and sale agreement
pursuant to which Trustor acquired the Land and Improvements), all names
under or by which the Land or any of the Improvements may at any time be
operated or known and all rights to carry on business under any such names or
any variant thereof, and all trademarks and goodwill in any way relating to
the Land.
(J) All plans and specifications prepared for construction of the
Land and Improvements or operations to be conducted on the Land and all
studies, data and drawings related thereto; and also all contracts and
agreements of Trustor relating to the aforesaid plans and specifications or
to the aforesaid studies, data and drawings, or to the Land and Improvements.
(K) All water stock relating to the Land, all shares of stock or
other evidence of ownership of any part of the Land that is owned by Trustor
in common with others, and all documents of membership in any owners' or
members' association or similar group having responsibility for managing or
operating any part of the Land.
(L) All reserves, deferred payments, deposits, refunds, cost
savings, accounts, accounts receivable and payments of any kind relating to
the construction or operations on the Land, and all present and future
accounts and other rights of Trustor to the payment of money, no matter how
evidenced, which arise from the use or operation of the Land and all writings
evidencing such accounts and other rights.
(M) All Proceeds.
(N) To the extent they are assignable or transferable, all
warranties and guarantees, whether now existing or hereafter arising,
relating to the Land or the Improvements.
(O) All leases, to the extent assignable, whether now existing or
hereafter arising (collectively, the "Personal Property Leases"), of all
tangible personal property owned by Trustor and installed in, affixed to,
placed upon, or used or useful in connection with the Land or the
Improvements thereon, and all replacements thereof, additions thereto and
substitutions therefor.
(P) All books and records pertaining to any and all of the
property described above, including computer-readable memory and any computer
hardware or software necessary to access and process such memory ("Books and
Records").
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(Q) All proceeds of, additions and accretions to, substitutions and
replacements for, and changes in any of the property described above.
TO HAVE AND TO HOLD the Mortgaged Property, unto Trustee, forever,
to secure the payment of the indebtedness and performance of the obligations
described below, and Trustor does hereby bind Trustor and Trustor's heirs,
personal representatives, successors and assigns, to warrant and forever
defend the Mortgaged Property unto Trustee, forever, against the claim or
claims of all persons whomsoever claiming or to claim the same, or any part
thereof.
FOR THE PURPOSE OF SECURING, in such order of priority as may be
set forth in the Credit Agreement, the following (collectively, the "Secured
Obligations"):
(a) The payment and performance when due of
[COMPANY'S/TRUSTOR'S] indebtedness and obligations under the Notes in the
maximum aggregate principal amount of $100,000,000 executed by
[COMPANY/TRUSTOR]and delivered to the Lenders pursuant to the Credit
Agreement, with a scheduled revolving maturity date of August 31, 1998 (which
date may be extended for three (3) years if [COMPANY/TRUSTOR] exercises its
rights to convert the Revolving Facility into the Term Loan in accordance
with the Credit Agreement), and all extensions, renewals, modifications and
replacements thereof; such obligations include, without limitation,
[TRUSTOR'S/COMPANY'S] obligation, upon any Event of Default, to pay to the
Issuing Lender the aggregate contingent obligation of [COMPANY/TRUSTOR] to
pay to the Issuing Lender the stated amount of the Letters of Credit which
could at any time be drawn under the Letters of Credit then outstanding (even
if such amount is not then able to be drawn pursuant to the terms of such
Letters of Credit) as provided in the Credit Agreement, with interest thereon
and all later charges, costs and fees as provided therein and under all
extensions, renewals, modifications and replacements thereof, with interest
thereon and all later charges, costs and fees as provided therein;
(b) The payment and performance when due of
[COMPANY'S/TRUSTOR'S] indebtedness and obligations under the Credit
Agreement, and all extensions, renewals, modifications and replacements
thereof;
(c) The payment and performance when due of Trustor's
indebtedness and obligations under this Deed of Trust, and all extensions,
renewals, modifications and replacements hereof;
(d) The payment when due of all sums which may be advanced by
or otherwise be due to Trustee or Beneficiary under any provision of this
Deed of Trust or to protect the security of this Deed of Trust, with interest
thereon at the rate provided herein;
(e) The payment and performance when due of
[COMPANY'S/TRUSTOR'S] indebtedness and obligations under the Loan Documents
other than under any REIT Guaranty Document and any Environmental Indemnity
Agreement, and under any and all pledge agreements, supplemental agreements,
assignments and all instruments of indebtedness or security now or hereafter
executed by [COMPANY/TRUSTOR] in connection with the Loan
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Documents (other than as stated above), or for the purpose of supplementing
or amending any of the foregoing; and
(f) The payment when due of the principal of and interest on
all other future loans or advances made by the Beneficiary to or for the
account of [COMPANY/TRUSTOR] (or any successor in interest to
[COMPANY/TRUSTOR] as the owner of all or any part of the Mortgaged Property)
when the promissory note evidencing the loan or advance or the specifically
states that it is secured by this Deed of Trust (herein "Future Advances"),
including all extensions, renewals and modifications of any Future Advances.
The Credit Agreement evidences a revolving credit facility and there
may be repayment and disbursements of principal from time to time. It
is expressly agreed that the outstanding principal balance under the
Facility may, from time to time, be reduced to a zero balance without
such repayment operating to extinguish the lien, security title and
security interest created by this Deed of Trust. This Deed of Trust
shall remain in full force and effect as to any subsequent future
advances after such zero balance without loss of priority until the
Secured Obligations are paid in full and satisfied and all Letters of
Credit have expired or been cancelled and all agreements between
[COMPANY/TRUSTOR] and Beneficiary for further advances have been
terminated and this Deed of Trust is reconveyed. Trustor waives the
operation of any applicable statute, law, or regulation having a
contrary effect.
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ARTICLE I
COVENANTS OF TRUSTOR
To Protect The Security Of This Deed Of Trust, Trustor Covenants And
Agrees As Follows:
1.01 PERFORMANCE OF OBLIGATIONS SECURED. Trustor shall promptly pay
and perform the Secured Obligations payable by Trustor in accordance with
their terms. All sums so payable by Trustor shall be paid without demand,
counterclaim, offset, deduction or defense. Trustor waives all rights now or
hereinafter conferred by statute or otherwise to any such demand,
counterclaim, offset, deduction or defense.
1.02 INSURANCE. Trustor shall keep the Mortgaged Property insured
with an all-risk policy insuring against loss or damage by fire with extended
coverage and against any other risks or hazards which, in the opinion of
Beneficiary should be insured against, in an amount not less than the full
insurable value thereof on a replacement cost basis, with an inflation guard
endorsement, with a company or companies and in such form and with such
endorsements as may be approved or required by Beneficiary, including, if
applicable, boiler explosion coverage and sprinkler leakage coverage;
provided, however, Trustor shall not be required to obtain earthquake or
flood insurance with respect to the Mortgaged Property if obtaining the same
would be commercially unreasonable unless, in the case of earthquake
insurance, the Mortgaged Property is identified on an Alquist-Priolo
Earthquake Map (or equivalent for properties located outside of California)
as lying within an earthquake fault zone, or in the case of flood insurance,
the Mortgage Property is situated in an area designated as a "special flood
hazard area" or similar designation under applicable law , in which case
Beneficiary may require that Trustor obtain such applicable insurance as
provided herein. Upon written request from Beneficiary, Trustor shall
provide earthquake insurance with such companies as Beneficiary may
reasonably approve, in such an amount and form as Beneficiary may require.
All losses under said insurance shall be payable to Beneficiary and shall be
applied in the manner provided in Section 1.03 hereof. Trustor shall also
carry comprehensive general public liability insurance and twelve (12)
months' business interruption insurance in such form and amounts and with
such companies as are satisfactory to Beneficiary. Trustor shall also carry
insurance against flood if required by the Federal Flood Disaster Protection
Act of 1973 and regulations issued thereunder. All hazard, flood and other
all-risk and business interruption insurance policies shall be endorsed with
a standard noncontributory mortgagee clause in favor of and in form
acceptable to Beneficiary, and may be cancelled or modified only upon not
less than ten (10) days' prior written notice to Beneficiary, and all
comprehensive general public liability insurance policies may be cancelled or
modified only upon not less than thirty (30) days' prior written notice to
Beneficiary. If the zoning, building or other land use laws or ordinances
governing the Mortgaged Property do not permit the rebuilding or restoration
of all of the Mortgaged Property in the event of damage or destruction, then
the above-mentioned insurance policy shall also contain, in addition to the
requirements in the preceding sentences, a Contingent Liability from
Operation of Building Laws Endorsement or such other endorsements which
insure against loss occasioned by the enforcement of any state or municipal
law or ordinance regulating the construction or repair of the Mortgaged
Property and in force at the time such loss occurs, which necessitates the
demolition of any portion of the Mortgaged Property not damaged by the
peril(s) insured
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against, together with a Demolition Cost Endorsement or such other
endorsement which covers the actual cost of demolishing such undamaged
portion of the Mortgaged Property and clearing the site thereof. All of the
above-mentioned insurance policies or certificates of such insurance
satisfactory to Beneficiary, in its sole discretion, together with receipts
for the payment of premiums thereon, shall be delivered to and held by
Beneficiary, which delivery shall constitute assignment to Beneficiary of all
return premiums to be held as additional security hereunder. All renewal and
replacement policies shall be delivered to Beneficiary at least fifteen (15)
days before the expiration of the expiring policies. Beneficiary shall not
by the fact of approving, disapproving, accepting, preventing, obtaining or
failing to obtain any insurance, incur any liability for or with respect to
the amount of insurance carried, the form or legal sufficiency of insurance
contracts, solvency of insurance companies, or payment or defense of
lawsuits, and Trustor hereby expressly assumes full responsibility therefor
and all liability, if any, with respect thereto.
1.03 CONDEMNATION AND INSURANCE PROCEEDS.
(a) Trustor hereby absolutely and irrevocably assigns to
Beneficiary, and authorizes the payor to pay to Beneficiary, the following
claims, causes of action, awards, payments, rights to payment and other
Proceeds, including, without limitation, the following:
(i) All awards of damages and all other compensation
payable directly or indirectly because of a condemnation, proposed
condemnation or taking for public or private use which affects all or part of
the Property or any interest in it; and
(ii) All other awards, claims and causes of action, arising
out of any warranty affecting all or any part of the Property, or for damage
or injury to or decrease in value of all or part of the Property or any
interest in it; and
(iii) All proceeds of any insurance policies payable
because of loss sustained to all or part of the Property; and
(iv) All interest which may accrue on any of the foregoing.
(b) Trustor shall immediately notify Beneficiary in writing if:
(i) Any damage occurs or any injury or loss is sustained
in the amount of $100,000 or more to all or part of the Property, or any
action or proceeding relating to any such damage, injury or loss is
commenced; or
(ii) Any offer is made, or any action or proceeding is
commenced, which relates to any actual or proposed condemnation or taking of
all or part of the Property.
(c) If Beneficiary chooses to do so, and upon notice to
Trustor, Beneficiary may in its own name appear in or prosecute any action or
proceeding to enforce any cause of action based on warranty, or for damage,
injury or loss to all or part of the Property, and Beneficiary may make any
compromise or settlement of the action or proceeding. Beneficiary, if it so
chooses, may participate in any action or proceeding relating to
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condemnation or taking of all or part of the Property, and may join Trustor
in adjusting any loss covered by insurance.
(d) All Proceeds of these assigned claims, other property and
rights which Trustor may receive or be entitled to shall be paid to
Beneficiary. In each instance, Beneficiary shall apply such Proceeds first
toward reimbursement of all of Beneficiary's reasonable costs and expenses of
recovering the Proceeds, including reasonable attorneys' fees. If, in any
instance, each and all of the following conditions are satisfied in
Beneficiary's reasonable judgment, Beneficiary shall permit Trustor to use
the balance of such proceeds ("Net Claims Proceeds") to pay costs of
repairing or reconstructing the Property in the manner described below:
(i) The plans and specifications, cost breakdown,
construction contract, construction schedule, contractor and payment and
performance bond for the work of repair or reconstruction must all be
acceptable to Beneficiary.
(ii) Beneficiary must receive evidence satisfactory to it
that after repair or reconstruction, the Property would be at least as
valuable as it was immediately before the damage or condemnation occurred.
(iii) The Net Claims Proceeds must be sufficient in
Beneficiary's determination to pay for the total cost of repair or
reconstruction, including all associated development costs and interest
projected to be payable on the Secured Obligations until the repair or
reconstruction is complete; or Trustor must provide its own funds in an
amount equal to the difference between the Net Claims Proceeds and a
reasonable estimate, made by Trustor and found acceptable by Beneficiary, of
the total cost of repair or reconstruction.
(iv) Beneficiary must receive evidence satisfactory to it
that after the repair or reconstruction is complete the Mortgaged Property
will be of the same or better type and quality as immediately prior to any
damage or loss, and shall be leaseable to tenants for the same uses as prior
to any such damage or loss.
(v) No default or Event of Default shall have occurred and
be continuing.
If Beneficiary finds that such conditions have been met, Beneficiary shall
hold the Net Claims Proceeds and any funds which Trustor is required to
provide in a noninterest-bearing account and shall disburse them to Trustor
to pay costs of repair or reconstruction upon presentation of evidence
reasonably satisfactory to Beneficiary that repair or reconstruction has been
completed satisfactorily and lien-free; provided, however, prior to the
completion of all repairs or reconstruction to the Mortgaged Property,
Beneficiary may from time to time disburse Net Claims Proceeds for repair and
reconstruction work that has been performed upon satisfactory evidence of the
completion of such work in a satisfactory and lien-free condition (including,
without limitation, appropriate mechanics' lien releases), if in
Beneficiary's reasonable discretion, it determines that, after any such
disbursement, sufficient Net Claims Proceeds will remain to satisfactorily
complete all repair and reconstruction work to the Mortgaged
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Property, without any liens. However, if Beneficiary finds that one or more
of such conditions have not been satisfied, Beneficiary may apply the Net
Claims Proceeds to pay or prepay (without premium) some or all of the Secured
Obligations in such order and proportions as Beneficiary in its sole
discretion may choose.
(e) Trustor hereby specifically, unconditionally and
irrevocably waives all rights of a property owner for allocation of
condemnation proceeds between a property owner and a lienholder.
1.04 TAXES, LIENS AND OTHER ITEMS. Trustor shall pay, prior to
delinquency, all taxes, bonds, assessments, fees, liens, charges, fines,
impositions and any and all other items which are attributable to or affect
the Mortgaged Property and which may attain a priority over this Deed of
Trust unless Trustor shall be required to make payment to Beneficiary on
account of such items pursuant to Section 1.05 hereof. If requested by
Beneficiary, prior to the delinquency of any such taxes or other items,
Trustor shall furnish Beneficiary with receipts indicating such taxes and
other items have been paid. Trustor shall promptly discharge any lien which
has attained or may attain priority over this Deed of Trust.
1.05 FUNDS FOR TAXES AND INSURANCE. In the event that Trustor fails
to meet any of its obligations under Sections 1.02 and 1.04 as and when they
become due or any other Event of Default (as hereinafter defined) shall occur
hereunder, then Beneficiary may, at its option to be exercised upon thirty
(30) days' written notice to Trustor, require the deposit with Beneficiary or
its designee by Trustor, on the first day of each month, of an amount
sufficient to discharge such obligations of Trustor. The determination of
the amount payable and of the fractional part thereof to be deposited with
Beneficiary each month shall be made by Beneficiary in its sole discretion.
Said amounts shall be held by Beneficiary or its designee not in trust and
not as agent of Trustor and shall not bear interest, and shall be applied to
the payment of the obligations in respect to which the amounts were deposited
in such order or priority as Beneficiary shall determine. If at any time
within thirty (30) days prior to the due date of any of the aforementioned
obligations the amounts then on deposit therefor shall be insufficient for
the payment of such obligation in full, Trustor shall within ten (10) days
after demand deposit the amount of the deficiency with Beneficiary. If the
amounts deposited are in excess of the actual obligations for which they were
deposited, Beneficiary may refund any such excess, or, at its option, may
hold the same in a reserve account, not in trust and not bearing interest,
and reduce proportionately the required monthly deposits for the ensuing year.
All amounts so deposited shall be held by Beneficiary or its designee
as additional security for the sums secured by this Deed of Trust and upon the
occurrence of an Event of Default hereunder Beneficiary may, in its sole and
absolute discretion and without regard to the adequacy of the security
hereunder, apply such amounts or any portion thereof to any part of the
indebtedness secured hereby. Any such application of said amounts or any
portion thereof to any indebtedness secured hereby shall not be construed to
cure or waive any default or notice of default hereunder or invalidate any act
done pursuant to any such default or notice.
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If Beneficiary requires deposits to be made pursuant to this Section,
Trustor shall deliver to Beneficiary all tax bills, bond and assessment
statements, statements of insurance premiums, and statements for any other
obligations referred to above as soon as the same are received by Trustor.
Beneficiary shall have the right to transfer all of its interest in
all amounts deposited under this Section to the purchaser or assignee of its
interest herein, and Beneficiary shall thereupon be released and have no
further liability hereunder for the application of such deposits, and Trustor
shall look solely to such purchaser or assignee for such application and for
all responsibility relating to such deposits.
1.06 RENTS AND PROFITS.
(a) All of Trustor's interest in and rights under any leases or
other occupancy agreements pertaining to the Mortgaged Property now existing
or hereafter entered into and all of the rents, royalties, issues, profits,
revenue, income and other benefits of the Mortgaged Property arising from the
use or enjoyment of all or any portion thereof or from any lease or agreement
pertaining thereto now exiting or hereafter entered into (herein the "Rents
and Profits"), whether now due, past due, or to become due, and including all
prepaid rents and security deposits, are hereby absolutely, presently and
unconditionally assigned and conveyed to Beneficiary, to be applied by
Beneficiary in payment of the Secured Obligations. Prior to the occurrence
of any Event of Default, Trustor shall have a license to collect and, except
to the extent limited by the terms of the Credit Agreement, use and enjoy all
Rents and Profits, which license shall be terminable at the sole option of
Beneficiary, without regard to the adequacy of its security hereunder and
without notice to or demand upon Trustor, upon the occurrence and during the
continuance of any Event of Default. It is understood and agreed that
neither the foregoing assignment of Rents and Profits nor the exercise by
Beneficiary of any of its rights or remedies under Article III hereof shall
be deemed to make Beneficiary a "mortgagee-in-possession" or otherwise
responsible or liable in any manner with respect to the Mortgaged Property or
the use, occupancy, enjoyment or operation of all or any portion thereof,
unless and until Beneficiary, in person or by agent, assumes actual
possession thereof. Appointment of a receiver for the Mortgaged Property by
any court at the request of Beneficiary or by agreement with Trustor, or the
entering into possession of any part of the Mortgaged Property by such
receiver, shall not be deemed to make Beneficiary a mortgagee-in-possession
or otherwise responsible or liable in any manner with respect to the
Mortgaged Property or the use, occupancy, enjoyment or operation of all or
any portion thereof. Upon the occurrence of any Event of Default, this shall
constitute a direction to and full authority to each lessee under any lease
and each guarantor of any lease to pay all Rents and Profits to Beneficiary
without proof of the Event of Default relied upon. Trustor hereby
irrevocably authorizes each lessee and guarantor to rely upon and comply with
any notice or demand by Beneficiary for the payment to Beneficiary of any
Rents and Profits due or to become due.
(b) Trustor shall not execute any lease or other occupancy
agreement of any part of the Mortgaged Property unless such lease or
agreement is made at market terms on forms previously approved by
Beneficiary, and shall at all times fully perform the obligations of the
lessor under all such leases. Trustor shall not execute any further
assignment of any of the Rents and Profits or any interest therein or suffer
or permit any such
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assignment to occur by operation of law. Trustor shall at any time or from
time to time, upon request of Beneficiary, transfer and assign to Beneficiary
in such form as may be satisfactory to Beneficiary, Trustor's interest in any
lease, subject to and upon the condition, however, that if an Event of
Default is not existing hereunder, Trustor shall have a license to collect
and receive all Rents and Profits under such lease upon accrual, but not
prior thereto, as set forth in Section 1.06 (a). Whenever requested by
Beneficiary, Trustor shall furnish to Beneficiary a certificate of Trustor
setting forth the names of all lessees under any leases the terms of their
respective leases, the space occupied, the rents payable thereunder, and the
dates through which any and all rents have been paid.
(c) Without the prior written consent of Beneficiary, Trustor
shall not (i) accept prepayments of rent exceeding one month under any leases
of any part of the Mortgaged Property other than in the ordinary course of
business; (ii) consent to the assignment or subletting of the whole or any
portion of any lessee's interest under any lease other than in the ordinary
course of business; (iii) create or permit any lien or encumbrance which,
upon foreclosure, would be superior to any such leases; or (iv) in any other
manner impair Beneficiary's rights and interest with respect to the Rents and
Profits.
(d) Beneficiary shall have the right to assign Trustor's right,
title and interest in any leases to any subsequent holder of this Deed of
Trust or any participating interest therein or to any person acquiring title
to all or any part of the Mortgaged Property through foreclosure or
otherwise. Any subsequent assignee shall have all the rights and powers
herein provided to Beneficiary. Upon the occurrence and during the
continuation of any Event of Default, Beneficiary shall have the right to
execute new leases of any part of the Mortgaged Property, including leases
that extend beyond the term of this Deed of Trust. Upon the occurrence and
during the continuation of any Event of Default, Beneficiary shall have the
authority, as Trustor's attorney-in-fact, such authority being coupled with
an interest and irrevocable, to sign the name of Trustor and to bind Trustor
on all papers and documents relating to the operation, leasing and
maintenance of the Mortgaged Property.
(e) If any part of any automobile parking areas included within
the Mortgaged Property is taken by condemnation or before such areas are
otherwise reduced, Trustor shall use its commercially reasonable efforts to
provide parking facilities in kind, size and location to comply with all
leases, and before making any contract for such substitute parking
facilities, Trustor shall furnish to Beneficiary satisfactory assurance of
completion thereof, free of liens and in conformity with all governmental
zoning, land use and environmental regulations.
1.07 SECURITY AGREEMENT. This Deed of Trust is intended to be a
security agreement pursuant to the Uniform Commercial Code for (i) any and
all items of personal property specified above as part of the Mortgaged
Property which, under applicable law, may be subject to a security interest
pursuant to the Uniform Commercial Code and which are not herein effectively
made part of the real property, and (ii) any and all items of property
specified above as part of the Mortgaged Property which, under applicable
law, constitute fixtures and may be subject to a security interest under
Section 9-313 of the Uniform Commercial Code; and Trustor hereby grants
Beneficiary a security interest in said property, and in all additions
thereto, substitutions therefor and proceeds thereof, for the purpose of
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securing the Secured Obligations. Trustor agrees to execute and deliver
financing and continuation statements covering said property from time to
time and in such form as Beneficiary may require to perfect and continue the
perfection of the Beneficiary's lien or security interest with respect to
said property. Trustor shall pay all costs of filing such statements and
renewals and releases thereof and shall pay all reasonable costs and expenses
of any record searches for financing statements Beneficiary may reasonably
require. Upon the occurrence and during the continuation of any Event of
Default hereunder, Beneficiary shall have the rights and remedies of a
secured party under the Uniform Commercial Code, as well as all other rights
and remedies available at law or in equity, and, at Beneficiary's option,
Beneficiary may also invoke the remedies provided in Article III of this Deed
of Trust as to such property.
1.08 FURTHER ENCUMBRANCES OR SALES.
(a) If the Trustor shall take any of the following actions,
except as provided in the Credit Agreement, without the prior written consent
of Beneficiary being first had and obtained, such action shall constitute an
Event of Default hereunder and under the Credit Agreement: if Trustor shall
execute or deliver any pledge, security agreement, deed to secure debt
mortgage, deed of trust or other instrument of hypothecation, covering all or
any portion of the Mortgaged Property or any interest therein, or if Trustor
shall sell, contract to sell, lease with option to purchase, convey, transfer
or otherwise dispose of all or any portion of the Mortgaged Property or any
interest therein (including, without limitation, any condominium estate or
unit therein), whether voluntarily or involuntarily, by operation of law or
otherwise (including, without limitation, any foreclosure sale or deed in
lieu of foreclosure under any mortgage or deed of trust the lien of which is
junior to the lien of this Deed of Trust, whether or not Beneficiary has
approved such mortgage or deed of trust).
(b) Notwithstanding Section 1.08(a), Trustor may from time to
time replace items of personal property and fixtures constituting a part of
the Mortgaged Property, provided that: (i) the replacements for such items
of personal property or fixtures are of equivalent value and quality; (ii)
Trustor has good and clear title to such replacement property free and clear
of any and all liens, encumbrances, security interests, ownership interests,
claims of title (contingent or otherwise), or charges of any kind, or the
rights of any conditional sellers, vendors or any other third parties in or
to such replacement property have been expressly subordinated at no cost to
Beneficiary to the lien of this Deed of Trust in a manner satisfactory to
Beneficiary; and (iii) at the option of Beneficiary, Trustor provides at no
cost to Beneficiary a satisfactory opinion of counsel to the effect that this
Deed of Trust constitutes a valid and subsisting first lien on and security
interest in such replacement property and is not subject to being
subordinated or the priority thereof affected under any applicable law.
1.09 PRESERVATION AND MAINTENANCE OF MORTGAGED PROPERTY. Trustor
shall keep the Mortgaged Property and every part thereof in good condition
and repair, and shall not, except for ordinary wear and tear, permit or
commit any waste, impairment, or deterioration of the Mortgaged Property, or
commit, suffer or permit any act upon or use of the Mortgaged Property in
material violation of law or applicable order of any governmental authority,
whether now existing or hereafter enacted and whether foreseen or unforeseen,
or in violation of any covenants, conditions or restrictions affecting the
Mortgaged Property, or
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bring or keep any article upon any of the Mortgaged Property or cause or
permit any condition to exist thereon which would be prohibited by or could
invalidate any insurance coverage maintained, or required hereunder to be
maintained, by Trustor on or with respect to any part of the Mortgaged
Property, and Trustor further shall do all other acts which from the
character or use of the Mortgaged Property may be reasonably necessary to
protect the security hereof, the specific enumerations herein not excluding
the general. Trustor shall underpin and support, when necessary, any
building, structure or other improvement situated on the Mortgaged Property
and shall not remove or demolish any building on the Mortgaged Property.
Except as otherwise provided in the Credit Agreement, Trustor shall complete
or restore and repair promptly and in a good workmanlike manner any building,
structure or improvement which may be constructed, damaged or destroyed
thereon and pay when due all claims for labor performed and materials
furnished therefor, whether or not insurance or other proceeds are available
to cover in whole or in part the costs of any such completion, restoration or
repair; provided, however, that Trustor shall not demolish, remove, expand or
extend any building, structure or improvement on the Mortgaged Property, nor
construct, restore, add to or alter any such building, structure or
improvement, nor consent to or permit any of the foregoing to be done,
without in each case obtaining the prior written consent of Beneficiary
thereto. Trustor shall notify Beneficiary immediately in writing of any
damage to the Mortgaged Property in excess of $100,000.00.
Trustor shall not drill or extract or enter into any lease for the
drilling for or extraction of oil, gas or other hydrocarbon substances or any
mineral of any kind or character on or from the Mortgaged Property or any
part thereof without first obtaining Beneficiary's written consent.
Trustor shall faithfully abide by, perform and discharge in all
material respects each and every obligation, covenant, requirement, or
condition with respect to the Mortgaged Property, or portion thereof.
1.10 OFFSET CERTIFICATES. Trustor, within ten (10) days after
request, shall furnish a written statement duly acknowledged of all amounts
due on any indebtedness secured hereby, and stating whether any offsets or
defenses exist against the Secured Obligations and covering such other
matters with respect to any such indebtedness as Beneficiary may reasonably
require.
1.11 TRUSTEE'S COSTS AND EXPENSES; GOVERNMENTAL CHARGES. Trustor
shall pay all costs, fees and expenses of Trustee, its agents and counsel in
connection with the performance of its duties hereunder, including without
limitation the cost of any trustee's sale guaranty or other title insurance
coverage ordered in connection with any sale or foreclosure proceedings
hereunder, and shall pay all taxes (except federal and state income taxes) or
other governmental charges or impositions imposed by any governmental
authority on Trustee or Beneficiary by reason of its interest in the Credit
Agreement or this Deed of Trust.
1.12 PROTECTION OF SECURITY; COSTS AND EXPENSES.
Trustor agrees that, at any time and from time to time, it will
execute and deliver all such further documents and do all such other acts and
things as Beneficiary may
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reasonably request in writing in order to protect the security and priority
of the lien created hereby. Trustor shall appear in and defend any action or
proceeding purporting to affect the security hereof or the rights or powers
of Beneficiary or Trustee, and shall pay all costs and expenses, including
without limitation cost of evidence of title and reasonable attorneys' fees
(including, without limitation, the reasonable allocated cost of internal
counsel), in any such action or proceeding in which Beneficiary or Trustee
may appear, and in any suit brought by Beneficiary to foreclose this Deed of
Trust or to enforce or establish any other rights or remedies of Beneficiary
hereunder. If Trustor fails to perform any of the covenants or agreements
contained in this Deed of Trust, or if any action or proceeding is commenced
which affects Beneficiary's interest in the Mortgaged Property or any part
thereof, including, but not limited to, eminent domain, code enforcement, or
proceedings or any nature whatsoever under any federal or state law, whether
now existing or hereafter enacted or amended, relating to bankruptcy,
insolvency, arrangement, reorganization or other form of debtor relief, then
Beneficiary or Trustee may, but without obligation to do so and without
notice to or demand upon Trustor and without releasing Trustor from any
obligation hereunder, make such appearances, disburse such sums and take such
action as Beneficiary or Trustee deems necessary or appropriate to protect
Beneficiary's interest, including, but not limited to, disbursement of
reasonable attorneys' fees, entry upon the Mortgaged Property to make repairs
or take other action to protect the security hereof, and payment, purchase,
contest or compromise of any encumbrance, charge or lien which in the
judgment of either Beneficiary or Trustee appears to be prior or superior
hereto. Trustor further agrees to pay all reasonable expenses of Beneficiary
(including reasonable fees and disbursements of counsel) incident to the
protection of the rights of Beneficiary hereunder, or to enforcement or
collection of payment of any Secured Obligation, whether by judicial or
nonjudicial proceedings, or in connection with any bankruptcy, insolvency,
arrangement, reorganization or other debtor relief proceeding of Trustor, or
otherwise. Any amounts disbursed by Beneficiary or Trustee pursuant to this
Section shall be a Secured Obligation secured by this Deed of Trust and each
of the Loan Documents as of the date of disbursement and shall bear interest
at the post-maturity interest rate provided for in Section 2.09(c) of the
Credit Agreement. All such amounts shall be payable by Trustor immediately
without demand. Nothing contained in this Section shall be construed to
require Beneficiary or Trustee to incur any expense, make any appearance, or
take any other action. Attorneys' fees of Beneficiary reimbursable hereunder
shall include, without limitation, all fees and disbursements of any law firm
or other external counsel, the allocated cost of internal legal services and
all disbursements of internal counsel.
1.13 FIXTURE FILING. This Deed of Trust constitutes a financing
statement filed as a fixture filing in the Official Records of the County
Recorder of the county in which the Mortgaged Property is located with
respect to any and all fixtures included within the term "Mortgaged Property"
as used herein and with respect to any goods or other personal property that
may now be or hereafter become such fixtures.
ARTICLE II
EVENTS OF DEFAULT
The occurrence of any Event of Default, as such term is defined in
the Credit Agreement, shall constitute an event of default ("Event of
Default") hereunder.
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ARTICLE III
REMEDIES
Upon the occurrence of any Event of Default, Trustee and Beneficiary
shall have the following rights and remedies:
3.01 ACCELERATION. Beneficiary may declare the entire indebtedness
secured hereby (if not then due and payable), including, without limitation,
any unpaid draws under the Letters of Credit, and unless such Letters of
Credit have been surrendered to the Issuing Lender for cancellation, the
aggregate contingent obligation of [COMPANY/TRUSTOR] to pay to the Issuing
Lender the stated amount of the Letters of Credit then outstanding which
could at any time be drawn under the Letters of Credit (even if such amount
is not then able to be drawn pursuant to the terms of such Letters of Credit)
as provided in the Credit Agreement, and accrued and unpaid interest thereon,
to be due and payable immediately, without notice of intention to accelerate,
notice of acceleration or notice of any kind or nature whatsoever, demand or
presentment, all of which are hereby expressly waived by Trustor.
3.02 ENTRY. Irrespective of whether Beneficiary exercises the option
provided in Section 3.01 above, Beneficiary in person or by agent or by
court-appointed receiver may enter upon, take possession of, manage and
operate the Mortgaged Property or any part thereof and do all things
necessary or appropriate in Beneficiary's sole discretion in connection
therewith, including without limitation making and enforcing, and if the same
be subject to modification or cancellation, modifying or cancelling leases
upon such terms or conditions as Beneficiary deems proper, obtaining and
evicting tenants, and fixing or modifying rents, contracting for and making
repairs and alterations, and doing any and all other acts which Beneficiary
deems proper to protect the security hereof; and either with or without so
taking possession, in its own name or in the name of Trustor, sue for or
otherwise collect and receive the Rents and Profits, including those past due
and unpaid, and apply the same less costs and expenses of operation and
collection, including reasonable attorneys' fees, upon any indebtedness
secured hereby, and in such order as Beneficiary may determine. Upon request
of Beneficiary, Trustor shall assemble and make available to Beneficiary at
the site of the real property covered hereby any of the Mortgaged Property
which has been removed therefrom. The entering upon and taking possession of
the Mortgaged Property, or any part thereof, and the collection of any Rents
and Profits and the application thereof as aforesaid shall not cure or waive
any default theretofore or thereafter occurring or affect any notice or
default hereunder or invalidate any act done pursuant to any such default or
notice, and, notwithstanding continuance in possession of the Mortgaged
Property or any part thereof by Beneficiary, Trustor or a receiver, and the
collection, receipt and application of the Rents and Profits, Beneficiary
shall be entitled to exercise every right provided for in this Deed of Trust
or by law or in equity upon or after the occurrence of a default, including
without limitation the right to exercise the power of sale. Any of the
actions referred to in this Section may be taken by Beneficiary irrespective
of whether any notice of default or election to sell has been given hereunder
and without regard to the adequacy of the security for the Secured
Obligations.
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3.03 JUDICIAL ACTION. Beneficiary may bring an action in any court
of competent jurisdiction to foreclose this instrument or to enforce any of
the covenants and agreements hereof and shall have the right to join Trustor
as a party in any such action.
3.04 POWER OF SALE. The Trustee, at the request of Beneficiary,
shall sell at public venue the Mortgaged Property or any part thereof or any
interest therein, to the highest bidder, for cash, all in accordance with and
as required by the Texas Property Code, as then amended. Any notices,
postings and filings required by the Texas Property Code, as then amended,
may be performed or given by Trustee or Beneficiary or by any agent acting in
their or its behalf, unless the Texas Property Code, as then amended,
requires otherwise. Trustor designates as Trustor's address for the purposes
of such notice, the address set out on page 1 of this Deed of Trust, and each
other debtor, if any, obligated to pay the debts secured hereby agrees that
such address shall likewise constitute such other debtor's address for such
notice, unless a different address is designated by such other debtor; no
change of such address or designation of a different address shall be binding
on Beneficiary until fifteen (15) days after Beneficiary has received notice
of such change sent to Beneficiary by certified mail, postage prepaid, return
receipt requested, addressed to Beneficiary at the address for Beneficiary
set out herein (or to such other address as Beneficiary may have designated
by notice given as above provided to Trustor and such other debtors). Any
change of address of Beneficiary shall be effective fifteen (15) business
days after written notice thereof addressed to Trustor and sent by certified
mail, postage prepaid, return receipt requested, has been deposited in the
care and custody of the United States Postal Service. In connection with any
sale or sales hereunder, Beneficiary may elect to treat any of the Mortgaged
Property which consists of a right in action or which is property that can be
severed from the real property covered hereby or any improvements thereon
without causing structural damage thereto as if the same were personal
property, and dispose of the same in accordance with applicable law, separate
and apart from the sale of real property. Where the Mortgaged Property
consists of real and personal property or fixtures, whether or not such
personal property is located on or within the real property, Beneficiary may
elect in its discretion to exercise its rights and remedies against any or
all of the real property, personal property, and fixtures in such order and
manner as is now or hereafter permitted by applicable law. Should
Beneficiary elect to sell any portion of the Mortgaged Property which is real
property or which is personal property or fixtures that Beneficiary has
elected to sell together with real property in accordance with the laws
governing a sale of real property, Beneficiary or Trustee shall give such
notice of default and election to sell as may then be required by law.
Thereafter, upon the expiration of such time and the giving of such notice of
sale as may then be required by law, and without the necessity of any demand
on Trustor, Trustee, at the time and place specified in the notice of sale,
shall sell said real property or part thereof at public auction to the
highest bidder for cash in lawful money of the United States or in such other
manner as Beneficiary shall direct which is not prohibited by applicable law.
Trustee may, and upon request of Beneficiary shall, from time to time,
postpone any sale hereunder by public announcement thereof at the time and
place noticed therefor. If the Mortgaged Property consists of several lots,
parcels or items of property, Beneficiary may: (i) designate the order in
which such lots, parcels or items shall be offered for sale or sold, or (ii)
elect to sell such lots, parcels or items through a single sale, or through
two or more successive sales, or in any other manner Beneficiary deems in its
best interest. Any person, including Trustor, Trustee or Beneficiary, may
purchase at any sale hereunder, and Beneficiary shall have the right to
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purchase at any sale hereunder by crediting upon the bid price the amount of
all or any part of the Secured Obligations, including, without limitation,
any unpaid draws under the Letters of Credit, and unless such Letters of
Credit have been surrendered to the Issuing Lender for cancellation, the
aggregate contingent obligation of [COMPANY/TRUSTOR] to pay to the Issuing
Lender the stated amount of the Letters of Credit then outstanding which
could at any time be drawn under the Letters of Credit (even if such amount
is not then able to be drawn pursuant to the terms of such Letters of Credit)
as provided in the Credit Agreement. Should Beneficiary desire that more
than one sale or other disposition of the Mortgaged Property be conducted,
Beneficiary may, at its option, cause the same to be conducted
simultaneously, or successively, on the same day, or at such different days
or times and in such order as Beneficiary may deem to be in the Beneficiary's
best interests, and no such sale shall terminate or otherwise affect the lien
of this Deed of Trust on any part of the Mortgaged Property not sold until
all Secured Obligations have been fully paid. In the event Beneficiary
elects to dispose of the Mortgaged Property through more than one sale,
Trustor agrees to pay the costs and expenses of each such sale and of any
judicial proceedings wherein the same may be made, including reasonable
compensation to Trustee and Beneficiary, their agents and counsel, and to pay
all expenses, liabilities and advances made or incurred by Trustee in
connection with such sale or sales, together with interest on all such
advances made by Trustee at the lower of the post-maturity interest rate
provided for in Section 2.00(c) of the Credit Agreement or the maximum rate
permitted by law to be charged by Trustee. Beneficiary may sell the
Mortgaged Property for any amount it deems acceptable, whether or not such
amount is equal to the Secured Obligations, or otherwise. Trustor authorizes
and empowers Trustee, upon any sale hereunder, to execute and deliver to the
purchaser or purchasers a good and sufficient deed or deeds conveying the
property so sold, with covenant of general warranty binding on Trustor and
Trustor's legal representatives, successors and assigns, whereupon such
purchaser or purchasers shall be let into immediate possession.
The recitals contained in any deed(s) or other instrument(s) given in
connection with any such foreclosure sale and/or any affidavit(s) of a
person(s) knowledgeable of the facts as to compliance with the requirements
of such sale, shall be prima facie evidence of such facts and it shall not be
necessary to prove in any court the existence of such facts. All
prerequisites and requirements of any sale or sales shall be conclusively
presumed to have been performed and all persons subsequently dealing with the
property so conveyed, including without limitation, the purchaser(s) thereof,
shall be fully protected in relying upon the truthfulness of such recitals or
affidavits.
Upon any foreclosure sale hereunder, Trustor shall immediately
surrender and deliver possession to the purchaser. If Trustor fails to do
so, Trustor shall be a tenant at will of the purchaser and such purchaser
shall have the right to bring an action of forcible entry and detainer.
3.05 PROCEEDS OF SALE. The proceeds of any sale made under or by
virtue of this Article III, together with all other sums which then may be
held by Trustee or Beneficiary under this Deed of Trust, whether under the
provisions of this Article III or otherwise, shall be applied as follows:
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FIRST: To the payment of the costs and expenses of sale and of
any judicial proceedings wherein the same may be made, including reasonable
compensation to Trustee and Beneficiary, their agents and counsel, and to the
payment of all expenses, liabilities and advances made or incurred by Trustee
under this Deed of Trust, together with interest on all advances made by
Trustee at the lower of the post-maturity interest rate provided for in
Section 2.09(c) of the Credit Agreement or the maximum rate permitted by law
to be charged.
SECOND: To the payment of any and all sums expended by
Beneficiary under the terms hereof, not then repaid with accrued interest at
the post-maturity rate provided for in Section 2.09(c) of the Credit
Agreement or the maximum rate permitted by law.
THIRD: To the payment of all other Secured Obligations,
including, without limitation, the aggregate contingent obligation of
[COMPANY/TRUSTOR] to pay to the Issuing Lender the stated amount of the
Letters of Credit then outstanding which could at any time be drawn under the
Letters of Credit (even if such amount is not then able to be drawn pursuant
to the terms of such Letters of Credit) as provided in the Credit Agreement.
FOURTH: The remainder, if any, to the person or persons legally
entitled thereto.
3.06 WAIVER OF MARSHALLING. Trustor, for itself and for all persons
hereafter claiming through or under it or who may at any time hereafter
become holders of liens junior to the lien of this Deed of Trust, hereby
expressly waives and releases all rights to direct the order in which any of
the Mortgaged Property shall be sold in the event of any sale or sales
pursuant hereto and to have any of the Mortgaged Property and/or any other
property now or hereafter constituting security for any of the Secured
Obligations marshalled upon any foreclosure of this Deed of Trust or of any
other security for any of the Secured Obligations.
3.07 REMEDIES CUMULATIVE. No remedy herein conferred upon or
reserved to Trustee or Beneficiary is intended to be exclusive of any other
remedy herein or by law provided, by each shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing
at law or in equity or by statute. No delay or omission of Trustee or
Beneficiary to exercise any right or power accruing upon any Event of Default
shall impair any right or power or shall be construed to be a waiver of any
Event of Default or any acquiescence therein; and every power and remedy
given by this Deed of Trust to Trustee or Beneficiary may be exercised from
time to time as often as may be deemed expedient by Trustee or Beneficiary.
If there exists additional security for the performance of the Secured
Obligations, Beneficiary, at its sole option, and without limiting or
affecting any of its rights or remedies hereunder, may exercise any of the
rights and remedies to which it may be entitled hereunder either concurrently
with whatever rights and remedies it may have in connection with such other
security or in such order as it may determine. Any application of any
amounts or any portion thereof held by Beneficiary at any time as additional
security hereunder to any Secured Obligations shall not extend or postpone
the due dates of any payments due from Trustor hereunder or under the Credit
Agreement, any Future Advances or any of the Loan Documents, or change the
amounts of any such payments or otherwise be
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construed to cure or waive any default or notice of default hereunder or
invalidate any act done pursuant to any such default or notice.
ARTICLE IV
MISCELLANEOUS
4.01 SEVERABILITY. In the event any one or more of the provisions
contained in this Deed of Trust shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Deed of Trust,
but this Deed of Trust shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
4.02 CERTAIN CHARGES. Trustor agrees to pay Beneficiary for each
statement of Beneficiary as to the Secured Obligations furnished at Trustor's
request, the maximum fee allowed by law, or if there be no maximum fee, then
such reasonable fee as is charged by Beneficiary as of the time said
statement is furnished. Trustor further agrees to pay the charges of
Beneficiary for any other service rendered Trustor, or on its behalf,
connected with this Deed of Trust or the indebtedness secured hereby,
including without limitation the delivery to an escrow holder of a request
for reconveyance of this Deed of Trust, transmitting to an escrow holder
moneys secured hereby, changing its records pertaining to this Deed of Trust
and the Secured Obligations to show a new owner of the Mortgaged Property,
and replacing an existing policy of insurance held hereunder with another
such policy.
4.03 NOTICES. All notices given hereunder or in connection herewith
shall be given or made, and shall be effective, in accordance with the
provisions governing notices set forth in the Credit Agreement, except that
service of any notice of default or notice of sale provided or required by
law shall, if mailed, be deemed effective on the date of mailing.
4.04 TRUSTOR NOT RELEASED. Extension of the time for payment or
modification of the terms of payment of any Secured Obligation granted by
Beneficiary to any successor in interest of Trustor shall not operate to
release, in any manner, the liability of the original Trustor. Beneficiary
shall not be required to commence proceedings against such successor or
refuse to extend time for payment or otherwise modify the terms of payment of
the Secured Obligations by reason of any demand made by the original Trustor.
Without affecting the liability of any person, including Trustor, for the
payment of any Secured Obligation, or the lien of this Deed of Trust on the
remainder of the Mortgaged Property for the full amount of any such
indebtedness and liability unpaid, Beneficiary and Trustee are respectively
empowered as follows: Beneficiary may from time to time and without notice
(a) release any person liable for the payment of any of the Secured
Obligations, (b) extend the time or otherwise alter the terms of payment of
any of the Secured Obligations, (c) accept additional real or personal
property of any kind as security therefor, whether evidenced by deeds of
trust, mortgages, security agreement or any other instruments of security or
(d) alter, substitute or release any property securing the any Secured
Obligation; Trustee may, at any time, and from time to time, upon the written
request of Beneficiary (e) consent to the making of any map or plat of the
Mortgaged Property or any part thereof, (f) join in granting any easement or
creating any restriction thereon, (g) join in any subordination or other
agreement
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affecting this Deed of Trust or the lien or charge hereof, or (h) reconvey,
without any warranty, all or part of the Mortgaged Property.
4.05 INSPECTION. Beneficiary may at any reasonable time or times
make or cause to be made entry upon and inspection of the Mortgaged Property
or any part thereof in person or by agent.
4.06 INDEMNITY. Without limiting any applicable indemnification
provisions of the Credit Agreement or set forth in any Environmental
Indemnity Agreement, Trustor hereby agrees to indemnify, defend, and hold
harmless Beneficiary and each of the Lenders, and their respective officers,
directors, shareholders, partners, agents, successors and assigns
(collectively, the "Indemnified Parties"), from and against any and all
claims, demands, liabilities, losses, lawsuits, judgments and costs and
expenses ("Liabilities") (including, without limitation, attorneys' fees and
costs, including reasonably allocated costs of in-house counsel) which
Beneficiary or any of the other Indemnified Parties may incur as a result of,
or in connection with, this Deed of Trust or the exercising of Beneficiary's
rights hereunder, INCLUDING WITHOUT LIMITATION LIABILITIES RESULTING FROM THE
NEGLIGENCE OF BENEFICIARY, but excluding Liabilities resulting from
Beneficiary's gross negligence or willful misconduct.
4.07 STATUTE OF LIMITATIONS. The pleading of any statute of
limitations as a defense to any and all obligations secured by this Deed of
Trust is hereby waived to the fullest extent permitted by law.
4.08 INTERPRETATION. Wherever used in this Deed of Trust, unless the
context otherwise indicates a contrary intent, or unless otherwise
specifically provided herein, the word "Trustor" shall mean and include both
Trustor and any subsequent owner or owners of the Mortgaged Property, and the
word "Beneficiary" shall mean and include not only Bank of America National
Trust and Savings Association, as Agent for the Lenders, but also any
successor to Beneficiary under the Credit Agreement, and any pledgee of or
participants in the indebtedness incurred pursuant to the Credit Agreement.
Whenever the context requires, the singular includes the plural and vice
versa and each gender includes each other gender. The captions and headings
of the Articles and Sections of this Deed of Trust are for convenience only
and are not to be used to interpret, define or limit the provisions hereof.
4.09 CONSENT; DELEGATION TO SUB-AGENTS. The granting or withholding
of consent by Beneficiary to any transaction as required by the terms hereof
shall not be deemed a waiver of the right to require consent to future or
successive transactions. Wherever a power of attorney is conferred upon
Beneficiary hereunder, it is understood and agreed that such power is
conferred with full power of substitution, and Beneficiary may elect in its
sole discretion to exercise such power itself or to delegate such power, or
any part thereof, to one or more sub-agents.
4.10 SUCCESSORS AND ASSIGNS. All of the grants, obligations,
covenants, agreements, terms, provisions and conditions herein shall run with
the land and shall apply to bind and inure to the benefit of, the heirs,
administrators, executors, legal representatives, successors and assigns of
Trustor and the successors in trust of Trustee and the endorsees,
transferees, successors and assigns of Beneficiary.
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4.11 GOVERNING LAW. This Deed of Trust, including the creating of
this Deed of Trust, the perfection of the lien or security interest in the
Mortgaged Property, and the rights and remedies of Beneficiary, and Trustee
as provided herein, shall be governed by and construed in accordance with the
internal laws of the state of Texas, without regard to principles of
conflicts of law. The Credit Agreement and the indebtedness arising
thereunder (including, without limitation, the right to hold Trustor liable
for any deficiency remaining after foreclosure or to bring suit upon the
indebtedness secured hereby without having first proceeded against the
Mortgaged Property or other collateral therefor) shall be governed by and
construed in accordance with the internal laws of the State of Colorado,
without regard to principles of conflicts of law.
4.12 SUBSTITUTION OF TRUSTEE. Beneficiary may remove Trustee at any
time or from time to time, with or without cause, and appoint a successor
trustee, and upon such appointment, all powers, rights, duties and authority
of Trustee, as aforesaid, shall thereupon become vested in such successor.
Beneficiary shall have full power to appoint, at any time and without any
formality other than by written instrument executed by Beneficiary, a
substitute trustee, and, if desired by Beneficiary, several substitute
trustees in succession, each of whom shall succeed to all the estate, rights,
powers and duties of Trustee named herein, and no notice of such appointment
need be given to Trustor or to any other person or filed for record in any
public office. Such appointment may be executed by Beneficiary or any agent
of Beneficiary and such appointment shall be conclusively presumed to be
executed with authority and shall be valid and sufficient without proof of
any action by the board of directors or any executive officer of Beneficiary.
Neither Trustee nor any substitute trustee shall be liable to Trustor
for any reason or under any theory, except for fraud or intentional
misconduct done in bad faith, actually proved by Trustor. Trustor agrees to
indemnify, defend and hold harmless Trustee and any substitute trustee for
any liability or cause of action involving Trustee or any substitute trustee
arising out of the indebtedness secured hereby, this Deed of Trust or the
Mortgaged Property, including, without limitation, environmental liability
and liability resulting from the negligence or gross negligence of Trustee or
any substitute trustee.
4.13 TIME OF ESSENCE; NO WAIVER. Time is declared to be of the
essence in this Deed of Trust. No failure or delay by Beneficiary in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. No waiver, consent or
approval of any kind by Beneficiary shall be effective unless contained in a
writing signed and delivered by such party. No notice to or demand on
Trustor in any case shall entitle Trustor to any other notice or demand in
similar or other circumstances, nor shall such notice of demand constitute a
waiver of the rights of Beneficiary to any other or further actions.
4.14 DISPUTE ARBITRATION. Disputes arising under the Deed of Trust
shall be governed by the arbitration provisions of Section 10.17 of the
Credit Agreement.
4.15 INTEREST. It is the intent of the parties hereto to comply
strictly with applicable usury laws, if any; accordingly, notwithstanding any
provision to the contrary
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<PAGE>
herein or in any of the other documents securing the payment of the
indebtedness hereby secured or otherwise relating thereto, in no event shall
this Deed of Trust or such documents require or permit the payment, charging,
taking, reserving, collection or receiving of any sums constituting interest
under applicable laws which exceed the maximum amount permitted by such laws.
If any such excess interest is contracted for, charged, taken, reserved,
collected or received in any of the documents securing the payment of such
debts or otherwise relating thereto, or in any communication by Beneficiary
or any other person to Trustor or any other party liable for payment thereof,
or in the event all or part of the principal or interest thereof shall be
prepaid or accelerated, so that under any of such circumstances or under any
other circumstances whatsoever the amount of interest contracted for,
charged, taken, reserved, collected or received on the amount of principal
actually outstanding from time to time shall exceed the maximum amount of
interest permitted by applicable usury laws, then in any such event it is
agreed as follows: (i) the provisions of this paragraph shall govern and
control, (ii) neither Trustor nor any other person or entity now or hereafter
liable for the payment of the Secured Obligations shall be obligated to pay
the amount of such interest to the extent such interest is in excess of the
maximum amount of interest permitted by applicable usury laws, (iii) any such
excess which is or has been received notwithstanding this paragraph shall be
credited against the then unpaid principal balance of the Secured
Obligations, or if the Secured Obligations have been or would be paid in
full, refunded to the Trustor, and (iv) the provisions of this Deed of Trust,
the Credit Agreement and the other Loan Documents (as defined in the Credit
Agreement), and any other communication to the Trustor, shall immediately be
deemed reformed and such excess interest reduced, without the necessity of
executing any other document, to the maximum lawful rate allowed under
applicable laws as construed by courts having jurisdiction hereof or thereof.
Without limiting the foregoing, all calculations of the rate of interest
contracted for, charged, taken, reserved, or received in connection herewith
which are made for the purpose of determining whether such rate exceeds the
maximum lawful rate shall be made to the extent permitted by applicable laws
by amortizing, prorating, allocating and spreading during the period of the
full term of the loan, including all prior and subsequent renewals and
extensions, all interest at any time contracted for, charged, taken,
reserved, or received. The terms of this paragraph shall be deemed to be
incorporated in every loan document, security instrument, and communication
relating to the Secured Obligations.
4.16 WAIVER. To the fullest extent not prohibited by law, Trustor
hereby irrevocably and unconditionally waives and releases all benefits and
rights that may accrue to Trustor by any present or future law (including,
without limitation, Sections 51.003, 51.004 or 51.005 of the Texas Property
Code) which would permit Trustor and other persons against whom recovery of
deficiencies is sought, or guarantors independently (even absent the initiation
of deficiency proceeds against them) to present competent evidence of the fair
market value of the Mortgaged Property as of the date of foreclosure and offset
against any deficiency the amount by which the foreclosure sale price is
determined to be less than such fair market value. Trustor agrees that this
release and waiver creates an irrebuttable presumption that the proceeds
received by the Trustee from any foreclosure sale conducted pursuant to the
terms hereof (whether by credit or cash bid) are equal to the fair market value
of the Mortgaged Property for purposes of calculating deficiencies owed by
Trustor pursuant to the terms of the Note, any guarantors, and others against
whom recovery of a deficiency is sought.
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Alternatively, in the event this waiver is determined by a court of
competent jurisdiction to be unenforceable, the following shall be the basis
for the finder of fact's determination of the fair market value of the
Mortgaged Property as of the date of the foreclosure sale in proceedings
governed by Sections 51.003, 51.004 and 51.005 of the Texas Property Code,
if applicable:
(a) The Mortgaged Property shall be valued in an "as is" condition
as of the date of the foreclosure sale, without any assumption or expectation
that the Mortgaged Property will be repaired or improved in any manner before
a resale of the Mortgaged Property after foreclosure;
(b) The valuation shall be based upon an assumption that the
purchaser at foreclosure sale desires a prompt resale of the Mortgaged
Property for cash (but no later than twelve months) following the foreclosure
sale;
(c) All reasonable closing costs customarily borne by the seller in
a commercial real estate transaction should be deducted from the gross fair
market value of the Mortgaged Property, including, without limitation,
brokerage commissions, title insurance, a survey of the Mortgaged Property,
tax prorations, attorney's fees, and marketing costs;
(d) The gross fair market value of the Mortgaged Property shall be
further discounted to account for any estimated holding costs associated with
maintaining the Mortgaged Property pending sale, including, without
limitation utility expenses, property management fees, taxes and assessments
(to the extent not accounted for in subparagraph (c) above), and other
maintenance expenses; and
(e) Any expert opinion testimony given or considered in connection
with a determination of the fair market value of the Mortgaged Property must
be given by persons having at least five (5) years experience in appraising
property similar to the Mortgaged Property and who have conducted and
prepared a complete written appraisal of the Mortgaged Property taking into
consideration the factors set forth above.
THE WRITTEN INSTRUMENTS AND OTHER DOCUMENTS EVIDENCING, RELATING TO
AND SECURING THE SECURED OBLIGATIONS CONSTITUTE A WRITTEN LOAN AGREEMENT
WHICH REPRESENTS 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.
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IN WITNESS WHEREOF, the undersigned executed this Deed of Trust as of
the day and year first hereinabove written.
TRUSTOR: [INSERT NAME OF APPLICABLE TRUSTOR]
By: ___________________,
a __________ corporation,
[General Partner]
By:________________________
Name:______________________
Its:_______________________
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EXHIBIT A
DESCRIPTION OF THE PROPERTY
All that certain real property, together with all appurtenances
thereto and all improvements now or hereafter located thereon, situated in
the City of ________, County of _________, State of __________, and described
as follows:
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EXHIBIT B
SCHEDULE OF LENDERS
As of ________, the lenders party to the Credit Agreement are as
follows:
27
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ACKNOWLEDGEMENT
STATE OF _____________ )
)
COUNTY OF ____________ )
[INSERT APPLICABLE ACKNOWLEDGEMENT]
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ENDNOTE
In connection with any request to include the Mortgaged Property as
a "Borrowing Base Property" under the Credit Agreement, the form of Deed of
Trust attached hereto shall be modified prior to execution to conform to
comments from Agent's local counsel in the jurisdiction in which the
Mortgaged Property is located (including without limitation applicable and
customary provisions for such state with respect to method of foreclosure and
other remedies, governing law, and usury), and such further additions or
revisions required by Agent necessary or appropriate to reflect the Trustor's
relationship to the obligations being secured under the Deed of Trust,
including without limitation, entitling the document a "THIRD PARTY" Deed of
Trust and the following provisions:
Section ____ TRUSTOR'S THIRD PARTY WAIVERS.
(a) RIGHTS OF BENEFICIARY. Trustor authorizes Beneficiary or any
Bank to perform any or all of the following acts at any time in its sole
discretion, all without notice to Trustor, without affecting Trustor's
obligations under this Deed of Trust or any other Loan Documents and without
affecting the Liens and encumbrances against the Mortgaged Property in favor of
Beneficiary:
(i) Subject to the Credit Agreement, Beneficiary or any Bank
may alter any terms of the Secured Obligations or any part thereof,
including renewing, compromising, extending or accelerating, or
otherwise changing the time for payment of, or increasing or
decreasing the rate of interest on, the Secured Obligations or any
part thereof.
(ii) Beneficiary or any Bank may take and hold security for the
Secured Obligations, accept additional or substituted security, and
subordinate, exchange, enforce, waive, release, compromise, fail to
perfect and sell or otherwise dispose of any such security.
(iii) Beneficiary or any Bank may direct the order and manner
of any sale of all or any part of any security now or later to be
held for the Secured Obligations, and Beneficiary or any Bank may
also bid at any such sale.
(iv) Beneficiary or any Bank may apply any payments or
recoveries from Company, Trustor or any other source, and any
proceeds of any security, to the obligations under the Loan
Documents in such manner, order and priority as Beneficiary or such
Bank may elect.
(v) Beneficiary or any Bank may release Company or any other
Person of its liability for the Secured Obligations or any part
thereof.
(vi) Beneficiary or any Bank may substitute, add or release any
one or more guarantors or endorsers.
(vii) In addition to the Secured Obligations, Beneficiary or
any Bank may extend other credit to Company, and may take and hold
security for the credit so extended, all without affecting Trustor's
liability hereunder or under the other Loan
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<PAGE>
Documents and without affecting the liens and encumbrances against
the Mortgaged Property hereunder or under the other Loan Documents.
(b) ABSOLUTE OBLIGATIONS. Trustor expressly agrees that until all
Secured Obligations are paid and performed in full and each and every term,
covenant and condition of this Deed of Trust and each other Loan Document to
which Trustor is a party is fully performed, Trustor shall not be released of
its obligations, waivers and agreements set forth herein or in any other Loan
Document nor shall the validity, enforceability or priority of the liens and
encumbrances against the Mortgaged Property in favor of Beneficiary be
affected in any manner by or because of:
(i) Any act or event which might otherwise discharge, reduce,
limit or modify Trustor's obligations hereunder or under the other
Loan Documents or the liens and encumbrances against the Mortgaged
Property in favor of Beneficiary;
(ii) Any waiver, extension, modification, forbearance, delay or
other act or omission of Beneficiary or any Bank or any failure to
proceed promptly or otherwise as against Company, Trustor, or any
other Person or any security;
(iii) Any action, omission or circumstance which might increase
the likelihood that Beneficiary or any Bank might enforce the rights
granted under this Deed of Trust or under the other Loan Documents
or which might affect the rights or remedies of Trustor as against
Company; or
(iv) Any dealings occurring at any time between Company and
Agent or any Bank, whether relating to the Secured Obligations or
otherwise.
Trustor hereby expressly waives and surrenders any defense to the
performance of the obligations under this Deed of Trust and under all other
Loan Documents or to the enforcement of the liens and encumbrances against
the Mortgaged Property in favor of Beneficiary based upon any of the
foregoing acts, omissions, agreements, waivers or matters described in this
subsection. It is the purpose and intent of this Deed of Trust that the
obligations of Trustor under this Deed of Trust and under all other Loan
Documents shall be absolute and unconditional under any and all circumstances.
(c) TRUSTOR'S WAIVERS. Trustor waives:
(i) All statutes of limitations as a defense to any action or
proceeding brought against Trustor or the Mortgaged Property by
Beneficiary or any Bank, to the fullest extent permitted by law;
(ii) Any right it may have to require Beneficiary or any Bank
to proceed against Company or any other Person, proceed against or
exhaust any security held from Company or any Person, or pursue any
other remedy in Beneficiary's or such Bank's power to pursue;
(iii) Any defense based on any claim that Trustor's obligations
exceed or are more burdensome than those of Company;
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(iv) Any defense: (A) based on any legal disability of Company,
(B) based on any release, discharge, modification, impairment or
limitation of the liability of Company to Beneficiary or any Bank
from any cause, whether consented to by Beneficiary or arising by
operation of law, (C) arising out of or able to be asserted as a
result of any case, action or proceeding before any court or other
Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or
relief of Company or any of its affiliates , or any general
assignment for the benefit of creditors, composition, marshalling of
assets for creditors or other, similar arrangement in respect of its
creditors generally or any substantial portion of its creditors; in
each case as undertaken under any U.S. Federal or State law (each of
the foregoing described in this clause (C) being referred to herein
as an "Insolvency Proceeding"); or (D) arising from any rejection or
disaffirmance of the Secured Obligations, or any part thereof, or
any security held therefor, in any such Insolvency Proceeding;
(v) Any defense based on any action taken or omitted by
Beneficiary or any Bank in any Insolvency Proceeding involving
Company, including any election to have Beneficiary's or such Bank's
claim allowed as being secured, partially secured or unsecured, any
extension of credit by Beneficiary or any Bank to Company in any
Insolvency Proceeding, and the taking and holding by Beneficiary or
such Bank of any security for any such extension of credit;
(vi) All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor,
notices of intention to accelerate, notices of acceleration, notices
of acceptance of this Deed of Trust or any other Loan Document and
of the existence, creation, or incurring of new or additional
indebtedness, and demands and notices of every kind; and
(vii) Any defense based on or arising out of any defense that
Company or any of its affiliates may have to the payment or performance
of the Secured Obligations.
(d) WAIVERS OF SUBROGATION AND OTHER RIGHTS.
(i) Upon any Event of Default, in its sole discretion, without
prior notice to or consent of Trustor, Beneficiary or any Bank may
elect to: (A) foreclose either judicially or nonjudicially against
any Collateral for the Secured Obligations, (B) accept a transfer of
any such Collateral for the Secured Obligations in lieu of foreclosure,
(C) subject to the Credit Agreement, compromise or adjust the Secured
Obligations or any part thereof or make any other accommodation with
Company or any Person, or (D) exercise any other remedy against
Company or any Collateral for the Secured Obligations. No such action
by Beneficiary or any Bank shall release or limit Beneficiary's or
the Banks' rights hereunder or under the other Loan Documents, even
if the effect of the action is to deprive Trustor of any subrogation
rights, rights of indemnity, or other rights to collect reimbursement
from Company or any other Person for any sums paid to Beneficiary or
such Bank, whether contractual or arising by operation of law or
otherwise. Trustor understands and acknowledges that if Beneficiary
forecloses judicially or nonjudicially against any real property
security for the Secured Obligations other than the Mortgaged
Property (herein, "Other Mortgagor Property"), such foreclosure could
impair or destroy any right or ability that Trustor may have to seek
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reimbursement, contribution or indemnification from the Company or
others based on any right Trustor may have of subrogation,
reimbursement, contribution or indemnification for any amounts paid
by Trustor under this Deed of Trust. Trustor further understands
and acknowledges that such potential impairment or destruction of
Trustor's rights, if any, may entitle Trustor to assert a defense to
this Deed of Trust. By executing this Deed of Trust, Trustor
freely, irrevocably and unconditionally: (i) waives and relinquishes
that defense and agrees that Trustor will be liable under this Deed
of Trust even though Beneficiary may foreclose judicially or
nonjudicially against any Other Mortgagor Property; (ii) agrees that
Trustor will not assert that defense in any action or proceeding
which Beneficiary or any Bank may commence to enforce this Deed of
Trust; and (iii) acknowledges and agrees that Beneficiary and each
Bank is relying on this waiver in providing the Facility and that
this waiver is a material part of the consideration which
Beneficiary and each Bank is receiving therefor. Trustor expressly
agrees that under no circumstances shall it be deemed to have any
right, title, interest or claim in or to any real or personal
property to be held by Beneficiary or any third party after any
foreclosure or transfer in lieu of foreclosure of any security for
the Secured Obligations.
(ii) Regardless of whether Trustor may have made any payments
to Beneficiary, Trustor forever waives: (A) all rights of
subrogation, all rights of indemnity, and any other rights to
collect reimbursement from Company on account of the Mortgaged
Property encumbered by this Deed of Trust, whether contractual or
arising by operation of law (including the United States Bankruptcy
Code or any successor or similar statute) or otherwise; (B) all
rights to enforce any remedy that Beneficiary or any Bank may have
against Company or any Person granting collateral for the Secured
Obligations; and (C) all rights to participate in any Collateral now
or later to be held by Beneficiary.
(e) REVIVAL AND REINSTATEMENT. If Beneficiary or any Bank is
required to pay, return or restore to Company or any other Person any amounts
previously paid under the Loan Documents because of any Insolvency Proceeding
of Company, any stop notice or any other reason, the obligations of Trustor
shall be reinstated and revived and the rights of Beneficiary and such Bank
shall continue with regard to such amounts, all as though they had never been
paid.
(f) ELECTION OF REMEDIES. Without limiting the foregoing, Trustor
waives all rights and defenses arising out of an election of remedies by the
Beneficiary or any Bank even though that election of remedies, such as a
nonjudicial foreclosure with respect to security for a Secured Obligation,
has destroyed the Trustor's rights of subrogation and reimbursement against
Company by operation of law or otherwise.
(g) ADDITIONAL OBLIGATIONS. Trustor's obligations under this Deed of
Trust are in addition to Trustor's obligations under any other existing or
future agreements, each of which shall remain in full force and effect until it
is expressly modified or released in a writing signed by Beneficiary with any
required consent of the Banks. Beneficiary may exercise its remedies hereunder,
without first proceeding against Company, any other Person or any Collateral
that Beneficiary may hold, and without pursuing any other remedy. Beneficiary's
rights under this Deed of Trust shall not be exhausted by any action by
Beneficiary until all Secured Obligations have been paid and performed in full.
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(h) CONSIDERATION. Trustor acknowledges: that it expects to
benefit from the Banks' extension of the credit under the Loan Documents to
Company because of its relationship to Company; that it is receiving
substantial benefits (which are reasonably equivalent consideration for
Trustor's execution hereof) from the transaction of which that extension of
indebtedness forms a part; and that it is executing this Deed of Trust in
consideration of those benefits.
(i) RIGHTS OF AGENT AND BANK. As between Agent and the Banks only,
nothing contained in this Section __ shall alter the rights and obligations
among Agent and the Banks set forth in the Credit Agreement.
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EXHIBIT E
FORM OF PROMISSORY NOTE
[1]
$[1] [1]
FOR VALUE RECEIVED, AIMCO Properties, L.P., a Delaware limited partnership
(the "Company"), promises to pay to the order of [3] ("Lender") the principal
amount of [4] ($ [3] ) or, if less, the aggregate amount of Loans (as
such term and all other capitalized terms used but not defined herein are
defined in the Credit Agreement referred to below) made by the Lender to the
Company pursuant to the Credit Agreement referred to below, outstanding on
the Revolving Facility Maturity Date or, if the Company duly converts the
Revolving Facility to the Term Loan pursuant to the Credit Agreement, on the
Term Loan Maturity Date.
The Company also promises to make principal payments and interest on
the unpaid principal amount hereof from the date hereof until paid at the
rates and at the times which shall be determined in accordance with the
provisions of the Credit Agreement.
All payments of principal and interest in respect of this Note shall
be made in lawful money of the United States of America in same day funds at
the Payment Office. Until notified of the transfer of this Note, the Company
shall be entitled to deem the Lender or such person who has been so
identified by the transferor in writing to the Company as the holder of this
Note, as the owner and holder of this Note. The Lender and any subsequent
holder of this Note agrees that before disposing of this Note, or any part
hereof, it will make a notation hereon of all principal payments previously
made hereunder of the date to which interest hereon has been paid on the
schedule attached hereto, if any; PROVIDED, HOWEVER, that the failure to make
notation of any payment made on this Note shall not limit or otherwise affect
the obligation of the Company hereunder with respect to payments of principal
or interest on this Note.
This Note is referred to in, and is entitled to the benefits of, the
Amended and Restated Credit Agreement dated as of May 5, 1997 (the "CREDIT
AGREEMENT") among the Company, the lenders from time to time party thereto, and
Bank of America National Trust and Savings Association, as Agent (the "Agent").
The Credit Agreement, among other things, (i) provides for the making of loans
(the "LOANS") by the Lender to the Company from time to time in an aggregate
amount first above mentioned, the indebtedness of the Company resulting from
each such Loan being evidenced by this Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for
______________
[1] Insert amount of the Lender's Commitment in numbers.
[2] Insert date of Initial Loan.
[3] Insert name of Lender.
[4] Insert amount of the Lender's Commitment in words.
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mandatory and optional prepayments on account of principal hereof and certain
principal payments prior to the maturity hereof upon the terms and conditions
therein specified.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the
currency herein prescribed.
The Company promises to pay all costs and expenses, including
reasonable attorneys' fees, incurred in the collection and enforcement of
this Note. The Company hereby waives diligence, presentment, and protest,
and except as provided in the Credit Agreement, demand and notice of every
kind and, to the full extent permitted by law, the right to plead any statute
of limitations as a defense to any demand hereunder.
This Note shall be governed by, and construed in accordance with,
the laws of the state of Colorado without giving effect to its choice of law
doctrine.
IN WITNESS WHEREOF, the Company has caused this Note to be executed and
delivered by its duly authorized officer, as of the date and place first above
written.
AIMCO PROPERTIES, L.P.,
a Delaware limited partnership
By: AIMCO-GP, INC.,
a Delaware corporation,
its general partner
By:. . . . . . . . . . . . . . . . . .
Name: ________________________________
Its: . . . . . . . . . . . . . . . . .
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TRANSACTIONS ON NOTE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
AMOUNT OF AMOUNT OF INTEREST
LOAN PRINCIPAL PRINCIPAL INTEREST PAID NOTATION
DATE MADE PAID BALANCE PAID THROUGH MADE BY
=====================================================================================================
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
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EXHIBIT F
NOTICE OF CONVERSION/CONTINUATION
__________________, 199___
Bank of America National Trust
and Savings Association, as Agent
CRESD #1357
555 South Flower Street, 6th Floor
Los Angeles, California 90071
Attn: Unit Manager
Re: Amended and Restated Credit Agreement dated as of May 5, 1997 (as the
same may be amended, modified or supplemented from time to time, the
"Agreement"), by and among AIMCO PROPERTIES, L.P., a Delaware limited
partnership (the "Company"), the lenders from time to time party to the
Agreement (the "Lenders"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as one of the Lenders, and BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent (the "Agent")
Ladies and Gentlemen:
Reference is made to the Agreement. Capitalized terms used in
this Notice of Conversion/Continuation without definition have the meanings
specified in the Agreement.
Pursuant to Section 2.04 of the Agreement, the Company hereby
elects to convert or continue the loans described in attached SCHEDULE 1 (the
"Loans"). In connection therewith, the Company and the undersigned
Responsible Officers of the Company hereby certify that:
(1) COLLATERAL VALUE. The Outstanding Amount shall
not, after giving effect to the conversion/continuation of the Loan, exceed
the Borrowing Base;
(2) REPRESENTATIONS AND WARRANTIES. All
representations and warranties of the Company contained in the Loan
Documents, including those contained in Article V of the Agreement, are true
and correct in all material respects as of the date hereof and shall be true
and correct on the date of the continuation/conversion of the Loan, both
before and after giving effect to such continuation/conversion; PROVIDED,
HOWEVER, that the representations and warranties of the Company set forth in
Section 5.08 of the Agreement shall be deemed to be made with respect to the
financial statements most recently delivered to the Agent and the Lenders
pursuant to Section 6.01 of the Agreement;
(3) NO DEFAULT/EVENT OF DEFAULT. No Default or Event
of Default exists as of the date hereof or will result from the
continuation/conversion of the Loan; and
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(4) NO MATERIAL ADVERSE EFFECT. No act, omission,
change or event which has a Material Adverse Effect has occurred since the
Closing Date.
AIMCO PROPERTIES, L.P., a Delaware limited
partnership
By: AIMCO-GP, INC.
a Delaware corporation,
its general partner
By:_________________________________
Name: ______________________________
Its:________________________________
By:_________________________________
Name: ______________________________
Its:________________________________
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SCHEDULE 1
to Notice of Conversion/Continuation
LOAN TO BE CONVERTED OR CONTINUED
A. All conversions and continuations must be of a Loan, or portion thereof,
in a principal amount of $1,000,000 or a multiple of $100,000 in excess
thereof.
B. Conversions/continuations to a LIBOR Loan under paragraphs (2) and (3)
below are not permitted if, after giving effect to thereto, (a) there
would be more than five (5) different LIBOR Loans in effect, or (b) the
aggregate outstanding principal amount of all LIBOR Loans would be
reduced to be less than $1,000,000.
(1) CONVERSION OF A LIBOR LOAN INTO A BASE RATE LOAN.
The following LIBOR Loan to a Base Rate Loan:
Amount: $ . . . . . . . . . . .
Requested Conversion Date: . . . . . . . . . . . .
(must be a Business Day at least two (2)
Business Days after date of notice)
Last day of current Interest Period: ______________________
(2) CONVERSION OF A BASE RATE LOAN INTO A LIBOR LOAN.
The following Base Rate Loan to a LIBOR Loan:
Amount: $ . . . . . . . . . . .
Requested Conversion Date: . . . . . . . . . . . .
(must be a Business Day at least three
(3) Business Days after date of notice)
Requested Interest Period: . . . . . . . . . . . .
(1, 2, 3, or 6 months)
(3) CONTINUATION OF A LIBOR LOAN INTO A SUBSEQUENT INTEREST
PERIOD.
The following LIBOR Loan into a subsequent Interest Period:
Amount: $ . . . . . . . . . . .
Last day of current Interest Period: . . . . . . . . . . . .
(must be a Business Day at least three
(3) Business Days after date of notice)
Requested Interest Period: . . . . . . . . . . . .
(1, 2, 3, or 6 months)
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EXHIBIT G
PAYMENT GUARANTY
This Payment Guaranty ("Guaranty") is made as of May 5, 1997,
by APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation,
AIMCO-GP, INC., a Delaware corporation, AIMCO-LP, INC., a Delaware
corporation, AIMCO HOLDINGS, L.P., a Delaware limited partnership, AIMCO
HOLDINGS QRS, INC., a Delaware corporation, AIMCO SOMERSET, INC., a Delaware
corporation, and AIMCO/OTC QRS, INC., a Delaware corporation (each of the
foregoing is referred to herein as "Guarantor") in favor of BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION ("BofA"), as the agent for itself and
the lenders ("Lenders") from time to time party to the Revolving Credit
Agreement (as hereinafter defined) and also as the agent for itself and the
lenders from time to time party to the Bridge Loan Agreement (as defined
below) (in such capacity, the "Agent").
FACTUAL BACKGROUND
Guarantor is executing this Guaranty (i) to induce the Lenders
to make a $100,000,000 revolver to term credit facility available to AIMCO
Properties L.P., a Delaware limited partnership (the "Company") in accordance
with the Amended and Restated Credit Agreement (the "Revolving Credit
Agreement"), dated of even date herewith, by and among Company, BofA (as
Agent (as defined under the Revolving Credit Agreement) and as a Lender) and
the other Lenders from time to time party thereto and (ii) to induce the
Lenders to make a $25,000,000 bridge loan facility available to the Company
in accordance with the Credit Agreement (Bridge Loan) (the "Bridge Loan
Agreement"), dated of even date herewith, by and among the Company, BofA (as
Agent (as defined under the Bridge Loan Agreement) and as a Lender) and the
other Lenders from time to time party thereto. Capitalized terms used but
not defined herein shall have the meanings set forth in the Revolving Credit
Agreement. As used herein, the term "Facility" shall refer individually to
each of the credit facilities available to the Company under the Revolving
Credit Agreement and the Bridge Loan Agreement and shall refer collectively
to all such credit facilities.
GUARANTY
1. GUARANTY OF LOAN. Guarantor absolutely, unconditionally
and irrevocably guaranties to Agent and the Lenders the full payment of the
Indebtedness (as hereinafter defined), and unconditionally agrees to pay to
Agent and the Lenders the full amount of the Indebtedness. This is a
guaranty of payment, not of collection. If Company defaults in the payment
when due of the Indebtedness or any part of it, Guarantor shall in lawful
money of the United States pay to Agent and the Lenders, on demand, all sums
due and owing on the Indebtedness, including all interest, charges, fees and
other sums, costs and expenses.
2. LOAN. In this Guaranty, the term "Indebtedness" is broadly
defined to mean and include all primary, secondary, direct, indirect, fixed and
contingent obligations of Company to pay principal, interest, prepayment
charges, breakage costs, late charges, loan
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fees and any other fees, charges, sums, costs and expenses which may be owing
at any time under the Loan Documents (as such term is defined both in the
Revolving Credit Agreement and in the Bridge Loan Agreement), and shall
include, without limitation, all liabilities and obligations of the Company
with respect to Letters of Credit issued under the Revolving Credit
Agreement, as any or all of such obligations may from time to time be
modified, amended, extended or renewed. If the amount outstanding under the
Indebtedness is determined by a court of competent jurisdiction or in any
arbitration proceeding described in Section 10.17 of the Revolving Credit
Agreement, that determination shall be conclusive and binding on Guarantor,
regardless of whether Guarantor was a party to the proceeding in which the
determination was made or not.
3. RIGHTS OF AGENT AND THE LENDERS. Guarantor authorizes
Agent or any Lender to perform any or all of the following acts at any time
in its sole discretion, all without notice to Guarantor and without affecting
Guarantor's obligations under this Guaranty:
(a) Agent or the Requisite Lenders may alter any terms
of the Indebtedness or any part of it, including renewing, compromising,
extending or accelerating, or otherwise changing the time for payment of, or
increasing or decreasing the rate of interest on, the Indebtedness or any
part of it.
(b) Agent or any Lender may take and hold security for
the Indebtedness or this Guaranty, accept additional or substituted security
for either, and subordinate, exchange, enforce, waive, release, compromise,
fail to perfect and sell or otherwise dispose of any such security in
accordance with the terms of the Indebtedness.
(c) Agent or any Lender may direct the order and manner
of any sale of all or any part of any security now or later to be held for
the Indebtedness or this Guaranty, and Agent or any Lender may also bid at
any such sale.
(d) Agent or any Lender may apply any payments or
recoveries from Company, Guarantor or any other source, and any proceeds of
any security, to Company's obligations under the Loan Documents in such
manner, order and priority as Agent or such Lender may elect, whether or not
those obligations are guarantied by this Guaranty or secured at the time of
the application.
(e) Agent or any Lender may release Company of its
liability for the Indebtedness or any part of it.
(f) Agent or any Lender may substitute, add or release
any one or more Guarantors, other guarantors or endorsers.
(g) In addition to the Indebtedness, Agent or any Lender
may extend other credit to Company, and may take and hold security for the
credit so extended, all without affecting Guarantor's liability under this
Guaranty.
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4. GUARANTY TO BE ABSOLUTE. Guarantor expressly agrees that
until the Indebtedness is paid and performed in full and each and every term,
covenant and condition of this Guaranty is fully performed, Guarantor shall
not be released by or because of:
(a) Any act or event which might otherwise discharge,
reduce, limit or modify Guarantor's obligations under this Guaranty;
(b) Any waiver, extension, modification, forbearance,
delay or other act or omission of Agent or any Lender, or its failure to
proceed promptly or otherwise as against Company, Guarantor or any security;
(c) Any action, omission or circumstance which might
increase the likelihood that Guarantor may be called upon to perform under
this Guaranty or which might affect the rights or remedies of Guarantor as
against Company;
(d) Any dealings occurring at any time between Company
and Agent or any Lender, whether relating to the Indebtedness or otherwise; or
(e) Any action of Agent or any Lender described in
Section 3 above.
Guarantor hereby acknowledges that absent this Section 4,
Guarantor might have a defense to the enforcement of this Guaranty as a
result of one or more of the foregoing acts, omissions, agreement, waivers or
matters. Guarantor hereby expressly waives and surrenders any defense to its
liability under this Guaranty based upon any of the foregoing acts,
omissions, agreements, waivers or matters. It is the purpose and intent of
this Guaranty that the obligations of Guarantor under it shall be absolute
and unconditional under any and all circumstances.
5. GUARANTOR'S WAIVERS. Guarantor waives:
(a) All statutes of limitations as a defense to any
action or proceeding brought against Guarantor by Agent or any Lender, to the
fullest extent permitted by law;
(b) Any right it may have to require Agent or any
Lender to proceed against Company, proceed against or exhaust any security
held from Company, or pursue any other remedy in Agent's or any Lender's
power to pursue;
(c) Any defense based on any claim that Guarantor's
obligations exceed or are more burdensome than those of Company;
(d) Any defense based on: (i) any legal disability of
Company, (ii) any release, discharge, modification, impairment or limitation
of the liability of Company to Agent or any Lender from any cause, whether
consented to by Agent or any Lender or arising by operation of law or from
any bankruptcy or other voluntary or involuntary proceeding, in or out of
court, for the adjustment of debtor-creditor relationships ("Insolvency
Proceeding") and (iii) any rejection or disaffirmance of the Indebtedness, or
any part of it, or any security held for it, in any such Insolvency
Proceeding;
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(e) Any defense based on any action taken or omitted by
Agent or any Lender in any Insolvency Proceeding involving Company, including
any election to have Agent's or that Lender's claim allowed as being secured,
partially secured or unsecured, any extension of credit by Lender to Company
in any Insolvency Proceeding, and the taking and holding by Agent or any
Lender of any security for any such extension of credit;
(f) All presentments, demands for performance, notices
of nonperformance, protests, notices of protest, notices of dishonor, notices
of acceptance of this Guaranty and of the existence, creation, or incurring
of new or additional indebtedness, and demands and notices of every kind
except for any demand or notice by Agent or any Lender to Guarantor expressly
provided for in Section 1;
(g) Any defense based on or arising out of any defense
that Company may have to the payment or performance of the Indebtedness or
any part of it; and
(h) Any defense based on or arising out of any action of
Agent or any Lender described in Sections 3 or 4 above.
6. WAIVERS OF SUBROGATION AND OTHER RIGHTS.
(a) During the existence of an Event of Default by
Company, Agent or any Lender, without prior notice to or consent of
Guarantor, may elect to: (i) foreclose either judicially or nonjudicially
against any real or personal property security it may hold for the
Indebtedness, (ii) accept a transfer of any such security in lieu of
foreclosure, (iii) compromise or adjust the Indebtedness or any part of it or
make any other accommodation with Company or Guarantor, or (iv) exercise any
other remedy against Company or any security. No such action by Agent or any
Lender shall release or limit the liability of Guarantor, who shall remain
liable under this Guaranty after the action, even if the effect of the action
is to deprive Guarantor of any subrogation rights, rights of indemnity, or
other rights to collect reimbursement from Company for any sums paid to Agent
or any Lender, whether contractual or arising by operation of law or
otherwise. Guarantor expressly agrees that under no circumstances shall it
be deemed to have any right, title, interest or claim in or to any real or
personal property to be held by Agent or any Lender or any third party after
any foreclosure or transfer in lieu of foreclosure of any security for the
Indebtedness.
(b) Regardless of whether Guarantor may have made any
payments to Lender, Guarantor hereby waives: (i) all rights of subrogation,
all rights of indemnity, and any other rights to collect reimbursement from
Company for any sums paid to Agent or any Lender, whether contractual or
arising by operation of law (including the United States Bankruptcy Code or
any successor or similar statute) or otherwise, (ii) all rights to enforce
any remedy that Lender may have against Company, and (iii) all rights to
participate in any security now or later to be held by Agent or any Lender
for the Indebtedness, in each case until the full and indefeasible payment
and performance of all Indebtedness, and all obligations of the Guarantors
hereunder.
(c) Guarantor waives all rights and defenses arising out
of an election of remedies by the Agent or any Lender, even though that
election of remedies may
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affect Guarantor's rights of subrogation and reimbursement against the
Company by the operation of law or otherwise. In addition, Guarantor waives
all rights and defenses that Guarantor may have because the Company's
indebtedness is secured by real property. This means, among other things:
(1) Agent and the Lenders may collect from
Guarantor without first foreclosing on any real or personal property
collateral pledged by the Company.
(2) If Agent forecloses on any real property
collateral pledged by the Company:
(A) The amount of the indebtedness may be
reduced only by the price for which that collateral is sold at the
foreclosure sale, even if the collateral is worth more than the sale price.
(B) Agent and the Lenders may collect from
Guarantor even if Agent or any Lender, by foreclosing on the real property
collateral, has destroyed or affected any right Guarantor may have to collect
from the Company.
This is an unconditional and irrevocable waiver of any rights
and defenses Guarantor may have because the Company's indebtedness is secured
by real property.
7. REVIVAL AND REINSTATEMENT. If Agent or any Lender is
required to pay, return or restore to Company or any other person any amounts
previously paid on the Indebtedness because of any Insolvency Proceeding of
Company, any stop notice or any other reason, the obligations of Guarantor
shall be reinstated and revived and the rights of Agent and such Lender shall
continue with regard to such amounts, all as though they had never been paid.
8. INFORMATION REGARDING BORROWER. Before signing this
Guaranty, Guarantor investigated the financial condition and business
operations of Company and such other matters as Guarantor deemed appropriate
to assure itself of Company's ability to discharge its obligations under the
Loan Documents. Guarantor assumes full responsibility for that due diligence,
as well as for keeping informed of all matters which may affect Company's
ability to pay and perform its obligations to the Agent and the Lenders.
Neither Agent nor any Lender has any duty to disclose to Guarantor any
information which such party may have or receive about Company's financial
condition, business operations, or any other circumstances bearing on its
ability to perform.
9. SUBORDINATION. Any rights of Guarantor, whether now
existing or later arising, to receive payment on account of any indebtedness
(including interest) owed to it by Company or any Subsidiary thereof or to
receive any payment from Company or any such Subsidiary other than those
payments or distributions permitted under Sections 7.08(b) and 7.09 of the
Revolving Credit Agreement shall at all times be subordinate as to lien and
time of payment and in all other respects to the full and prior repayment of
the Indebtedness. Guarantor shall not be entitled to enforce or receive
payment of any sums hereby subordinated until the Indebtedness has been paid
and performed in full and any such sums received in
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violation of this Guaranty shall be received by Guarantor in trust for the
Agent and the Lenders.
10. FINANCIAL INFORMATION. Guarantor shall keep true and
correct financial books and records, using generally accepted accounting
principles consistently applied, or such other accounting principles as the
Requisite Lenders in their reasonable judgment may find acceptable from time
to time. Guarantor represents, warrants and covenants to Agent and the
Lenders that all financial information with respect to the Guarantor
delivered or to be delivered to Agent and the Lenders by the Company with
respect to Guarantor under Section 6.01 of the Revolving Credit Agreement is
or shall be true and correct and fairly presents or will fairly present the
financial position of the Guarantor for the applicable period. Guarantor
shall promptly provide Agent and the Lenders with any additional audited
financial information that Guarantor may obtain, and such other information
concerning its affairs and properties as Agent or any Lender may reasonably
request, including, without limitation, signed copies of any tax returns if
requested Agent or the Lenders.
11. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor
represents and warrants that:
(a) All financial statements delivered to Agent or the
Lenders were or will be prepared in accordance with generally accepted
accounting principles, or such other accounting principles as may be
acceptable to the Requisite Lenders at the time of their preparation,
consistently applied;
(b) There has been no material adverse change in
Guarantor's financial condition since the dates of the statements most
recently furnished to Agent and the Lenders; and
(c) All representations and warranties given on behalf of
or with respect to Guarantor contained in Article V of the Revolving Credit
Agreement, in Article V of the Bridge Loan Agreement and in any other Loan
Document or certification made in connection with the Revolving Credit
Agreement or Bridge Loan Agreement are true and correct.
12. COVENANTS OF GUARANTOR. Guarantor covenants and agrees
that it shall comply with and perform all covenants given on behalf of or
with respect to Guarantor (whether expressly or as a Subsidiary) contained in
Articles VI and VII of the Revolving Credit Agreement, Articles VI and VII of
the Bridge Loan Agreement and in all other Loan Documents.
13. INTENTIONALLY OMITTED.
14. REFERENCE AND ARBITRATION.
(a) MANDATORY ARBITRATION. Any controversy or claim
between or among the parties, including those arising out of or relating to
this Guaranty or the Loan Documents and any claim based on or arising from an
alleged tort, shall at the request of any party be determined by arbitration.
The arbitration shall be conducted in Los Angeles,
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California, in accordance with the United States Arbitration Act (Title 9,
U.S. Code), notwithstanding any choice of law provision in this Guaranty, and
under the Commercial Rules of the American Arbitration Association (the
"AAA"). The arbitrator(s) shall give effect to statutes of limitation in
determining any claim. Any controversy concerning whether an issue is
arbitrable shall be determined by the arbitrator(s). Judgment upon the
arbitration award may be entered in any court having jurisdiction. The
institution and maintenance of an action for judicial relief or pursuit of a
provisional or ancillary remedy shall not constitute a waiver of the right of
any party, including the plaintiff, to submit the controversy or claim to
arbitration if any other party contests such action for judicial relief.
(b) PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE.
No provision of this Section 14 shall limit the right of any party to
exercise self-help remedies such as setoff, foreclosure against or sale of
any real or personal property collateral or security, or to obtain
provisional or ancillary remedies from a court of competent jurisdiction
before, after, or during the pendency of any arbitration.
15. AUTHORIZATION; NO VIOLATION. Guarantor is authorized to
execute, deliver and perform under this Guaranty, which is a valid, binding,
and enforceable obligation of Guarantor in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting creditor's rights generally. The
execution, delivery and performance of this Guaranty are not in violation of
any applicable law, regulation or ordinance, or any order or ruling of any
court or governmental agency applicable to the Guarantor. The Guaranty does
not conflict with, or constitute a breach or default under, any agreement to
which Guarantor is a party.
16. ADDITIONAL AND INDEPENDENT OBLIGATIONS. Guarantor's
obligations under this Guaranty are in addition to its obligations under any
future guaranties, each of which shall remain in full force and effect until
it is expressly modified or released in a writing signed by Agent and
consented to by the Lenders. Guarantor's obligations under this Guaranty are
independent of those of Company on the Indebtedness. Agent or the Lenders
may bring a separate action, or commence a separate arbitration proceeding
against Guarantor without first proceeding against Company, any other person
or any security that Agent or any Lender may hold, and without pursuing any
other remedy. None of Agent's or any Lender's rights under this Guaranty
shall be exhausted by any action by Agent or any Lender until the
Indebtedness has been paid and performed in full in cash.
17. NO WAIVER; CONSENTS; CUMULATIVE REMEDIES. Each waiver by
Agent or the Lenders must be in writing, and no waiver shall be construed as
a continuing waiver. No waiver shall be implied from Agent's or any Lender's
delay in exercising or failure to exercise any right or remedy against
Company, Guarantor or any security. Consent by Agent or the Lenders to any
act or omission by Company or Guarantor shall not be construed as a consent
to any other or subsequent act or omission, or as a waiver of the requirement
for Agent's or the Lenders' consent to be obtained in any future or other
instance. All remedies of Agent and each Lender against Company and Guarantor
are cumulative.
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18. NO RELEASE. Except as otherwise provided in Section 1,
Guarantor shall not be released, in whole or in part, from its obligations
under this Guaranty except by a writing signed by Agent and all the Lenders.
19. HEIRS, SUCCESSORS AND ASSIGNS; PARTICIPATIONS. The terms
of this Guaranty shall bind and benefit the heirs, legal representatives,
successors and assigns of Agent, the Lenders and Guarantor; provided,
however, that Guarantor may not assign this Guaranty, or assign or delegate
any of its rights or obligations under this Guaranty, without the prior
written consent of Agent in each instance. Without notice to or the consent
of Guarantor, Agent and any Lender may disclose any and all information in
its possession concerning Guarantor, this Guaranty and any security for this
Guaranty to any actual or prospective purchaser of any securities issued or
to be issued by Agent or such Lender, and to any actual or prospective
purchaser or assignee of any participation or other interest in the
Indebtedness and this Guaranty.
20. NOTICES.
(a) DELIVERY. All notices, requests and other
communications provided for hereunder shall be in writing (including, unless
the context expressly otherwise provides, telegraphic, telex, facsimile
transmission or cable communication) and mailed, telegraphed, telexed or
delivered to its address specified on the signature pages hereof, or to such
other address as shall be designated by such party in a written notice to the
other party.
(b) RECEIPT. All such notices and communications
shall, when transmitted by overnight delivery, telegraphed, telecopied by
facsimile, telexed or cabled, be effective when delivered for overnight
delivery or to the telegraph company, transmitted by telecopier, confirmed by
telex answerback or delivered to the cable company, respectively, or if
delivered, upon delivery.
(c) RELIANCE. Agent and each Lender shall be entitled
to rely on the authority of any person purporting to be a person authorized
by Guarantor to give such notice, and neither Agent nor any Lender shall have
any liability to Guarantor or any other person on account of any action taken
or not taken by Agent or such Lender in reliance upon such telephonic or
facsimile notice. The obligation of Guarantor hereunder shall not be
affected in any way or to any extent by any failure by Lender to receive
written confirmation of any telephonic or facsimile notice or the receipt by
Agent or a Lender of a confirmation which is at variance with the terms
understood by Agent or such Lender to be contained in the telephonic or
facsimile notice.
21. RULES OF CONSTRUCTION. In this Guaranty, the word
"Company" includes both the named Company and any other person who at any
time assumes or otherwise becomes primarily liable for all or any part of the
obligations of the named Company on the Indebtedness. The word "person"
includes any individual, company, trust or other legal entity of any kind.
If this Guaranty is executed by more than one person, the word "Guarantor"
includes all such persons. The word "include(s)" means "include(s), without
limitation," and the word "including" means "including, but not limited to."
When the context and construction so require, all words used in the singular
shall be deemed to have been used in the plural
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and vice versa. No listing of specific instances, items or matters in any
way limits the scope or generality of any language of this Guaranty. All
headings appearing in this Guaranty are for convenience only and shall be
disregarded in construing this Guaranty.
22. GOVERNING LAW. This Guaranty shall be governed by, and
construed in accordance with, the laws of the State of Colorado, without
regard to its choice of law rules.
23. COSTS AND EXPENSES. If any lawsuit or arbitration is
commenced which arises out of, or which relates to this Guaranty, the Loan
Documents or the Indebtedness, the prevailing party shall be entitled to
recover from each other party such sums as the court or arbitrator may
adjudge to be reasonable attorneys' fees (including allocated costs for
services of in-house counsel) in the action or proceeding, in addition to
costs and expenses otherwise allowed by law. In all other situations,
including any Insolvency Proceeding, Guarantor agrees to pay all of the
Agent's and each Lender's costs and expenses, including attorneys' fees
(including allocated costs for services of the Agent's and each Lender's
in-house counsel) which may be incurred in any effort to collect or enforce
the Indebtedness or any part of it or any term of this Guaranty. Without
limiting any rights of the Agent or Lenders under the Revolving Credit
Agreement or the Bridge Loan Agreement, all amounts of any kind due and
payable under this Guaranty (whether for principal, interest, and other costs
under the Indebtedness, or for costs, fees, and expenses for which the
Guarantors are directly responsible hereunder, or otherwise) shall accrue
interest from the time the Agent or the Lenders make demand therefor
hereunder until paid in full in cash to such Agent or the Lenders at the Base
Rate, as defined in the Revolving Credit Agreement, plus three (3%)
percentage points, except to the extent that any such amounts are then
accruing interest under the Indebtedness, in which case such Base Rate plus
3% interest rate shall not be applied if the effect would be to compound the
interest to which such obligations are subject to under the Indebtedness.
24. CONSIDERATION. Guarantor acknowledges that it expects to
benefit from Lenders' extension of the Facility to Company because of its
relationship to Company, because such Facility is essential to the business
of the Company and because a portion of the Indebtedness will be available
for the Company to pay certain expenses intended to be incurred by Guarantor
in connection with the conduct by Guarantor of its business. Guarantor is
executing this Guaranty in consideration of these anticipated benefits.
25. INTEGRATION; MODIFICATIONS. This Guaranty (a) integrates
all the terms and conditions mentioned in or incidental to this Guaranty, (b)
supersedes all oral negotiations and prior writings with respect to its
subject matter, and (c) is intended by Guarantor, Agent and the and Lenders
as the final expression of the agreement with respect to the terms and
conditions set forth in this Guaranty and as the complete and exclusive
statement of the terms agreed to by Guarantor, Agent and the Lenders. No
representation, understanding, promise or condition shall be enforceable
against any party hereto unless it is contained in this Guaranty. This
Guaranty may not be modified except in a writing signed by both Agent (with
the consent of the Requisite Lenders) and Guarantor. No course of prior
dealing, usage of trade, parol or extrinsic evidence of any nature shall be
used to supplement, modify or vary any of the terms hereof. As between Agent
and the Lenders only, nothing contained in this Guaranty
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shall alter the rights and obligations among Agent and the Lenders set forth
in the Credit Agreement.
26. MISCELLANEOUS. The illegality or unenforceability of one
or more provisions of this Guaranty shall not affect any other provision.
Time is of the essence in the performance of this Guaranty by Guarantor. The
obligations of each Guarantor under this Guaranty shall be joint and several.
Guarantors:
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY,
a Maryland corporation
By:
Peter K. Kompaniez
Vice Chairman
AIMCO-GP, INC.,
a Delaware corporation
By:
Peter K. Kompaniez
Vice President
AIMCO-LP, INC.,
a Delaware corporation
By:
Peter K. Kompaniez
Vice President
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AIMCO HOLDINGS, LP,
a Delaware limited partnership
By: AIMCO HOLDINGS QRS, INC.,
a Delaware corporation,
General Partner
By:
Peter K. Kompaniez
Vice President
AIMCO HOLDINGS QRS, INC.,
a Delaware corporation
By:
Peter K. Kompaniez
Vice President
Address Where Notices to Guarantors
are to be Sent:
AIMCO SOMERSET, INC., 1873 South Bellaire Street
a Delaware corporation 17th Floor
Denver, Colorado 90071
By:
Peter K. Kompaniez
Vice President
Address Where Notices to Agent
are to be Sent:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
AIMCO/OTC QRS, INC., 555 South Flower Street, 6th Floor
a Delaware corporation Los Angeles, California 90071
Att'n: Manager - Unit #1357
By:
Peter K. Kompaniez Addresses Where Notices to the
Vice President Lenders are to be Sent:
Per the Credit Agreement
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EXHIBIT H
LETTER OF CREDIT APPLICATION
[see attached]
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EXHIBIT I
BORROWING BASE PROPERTY CLOSING CERTIFICATE
(PURSUANT TO SECTION 2.13 OF THE CREDIT AGREEMENT)
Reference is made to Section 2.13 of the Amended and Restated
Credit Agreement dated as of May 5, 1997 (as the same may be amended,
supplemented or modified from time to time, the "Credit Agreement") among
AIMCO Properties, L.P., a Delaware limited partnership ("Company"), the
lenders from time to time party to the Credit Agreement (the "Lenders"), BANK
OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as one of the Lenders, and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent (the
"Agent") for the Lenders. All capitalized terms used but not defined herein
having the meanings set forth in the Credit Agreement. The Company
represents, warrants, certifies and covenants in favor of the Agent and the
Lenders as follows:
1. All conditions precedent set forth in Section 2.13(a)(iii)
of the Credit Agreement with respect to the addition of the properties
identified on SCHEDULE 1 attached hereto (the "New Properties") (other than
those based solely upon the approval of the Agent, the Requisite Lenders or
the Lenders) have been satisfied with respect to the New Properties.
2. All financial and operating information delivered to the
Agent and the Lenders pursuant to Section 2.13(a)(ii), subject to audit, is
complete and correct to the knowledge of the Company and sets forth in detail
the calculation of the Revolving Facility Debt Service Coverage-Based
Principal Limit with the addition of the New Properties.
3. None of the New Properties, if included in the Collateral,
would be required to be excluded as Collateral pursuant to Section 2.13(b) of
the Credit Agreement.
4. The representations and warranties of the Company and the
REIT contained in Article V of the Credit Agreement and in the other Loan
Documents are true and correct as of the date hereof.
5. No Default or Event of Default exists or would result from
the proposed borrowing.
6. There has occurred since December 31, 1996, no act,
omission, change or occurrence which would have a Material Adverse Effect.
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IN WITNESS WHEREOF, the undersigned, being duly authorized,
have executed this Certificate on behalf of the Company as of _________, 1997
AIMCO PROPERTIES, L.P., a
Delaware limited partnership
By: AIMCO-GP, INC.
a Delaware corporation,
its general partner
By: . . . . . . . . . . . . .
Name: . . . . . . . . . . . .
Its: . . . . . . . . . . . . .
By: . . . . . . . . . . . . .
Name: . . . . . . . . . . . .
Its: . . . . . . . . . . . . .
2
<PAGE>
SCHEDULE 1
to
Certificate of AIMCO Properties, L.P.
BORROWING BASE PROPERTY
1
<PAGE>
EXHIBIT J
OPINION REQUIREMENTS
[see attached]
2
<PAGE>
EXHIBIT K
COMPLIANCE CERTIFICATE
____________, 1997
Bank of America National Trust and
Savings Association, as Agent
CRESG #1357
555 South Flower Street, 6th Floor
Los Angeles, California 90071
Attn: Unit Manager
Re: Amended and Restated Credit Agreement, dated as of May 5, 1997
(as amended, modified, supplemented, restated, or renewed from
time to time, the "Credit Agreement"), by and between AIMCO
PROPERTIES, L.P., a Delaware limited partnership (the "Company"),
the lenders from time to time party to the Credit Agreement (the
"Lenders"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, a national banking association, as one of the
Lenders, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, a national banking association, as Agent for the
Lenders ("Agent")
Ladies and Gentlemen:
Reference is made to the Credit Agreement. Each initially capitalized
term not defined in this Compliance Certificate (including the schedules and
other attachments hereto, this "Certificate") shall have the meaning ascribed
to such term in the Credit Agreement.
Pursuant to Section 6.02(b) of the Credit Agreement, the undersigned
hereby certifies to Agent and each of the Lenders that, to the best of the
undersigned's knowledge after diligent inquiry, the information furnished in
the attached schedules, including, without limitation, each of the
calculations in attached SCHEDULE 1 and the related attachments with respect
to (a) the covenants of the Company in Sections 7.09 and 7.16 of the Credit
Agreement and (b) the Borrowing Base is true, correct and complete in all
material respects as of the last day of the fiscal period subject to the
financial statements being delivered to the Lender pursuant to Section 6.01
of the Credit Agreement together with this Certificate (such statements the
"Financial Statements" and the periods covered thereby the "Reporting
Periods") and for such Reporting Period.
The undersigned hereby further certifies to Agent and each of the Lenders
that, to the best of the undersigned's knowledge after diligent inquiry:
(1) REVIEW OF FINANCIAL CONDITION. The undersigned has reviewed
the terms of the Credit Agreement, including, without limitation, the
representations and warranties set forth in Article V thereof and the
covenants set forth in Article VI and VII thereof, and has made, or caused to
be made under his or her supervision, a review in reasonable detail of the
transactions and condition of the Company, the REIT, and their respective
Subsidiaries during the Reporting Periods. The Financial Statements
accurately present
1
<PAGE>
the financial position of the Company, the REIT, and their respective
Subsidiaries as of the date thereof and for the Reporting Periods covered
thereby.
(2) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company, the REIT, and their respective Subsidiaries
contained in the Loan Documents, including those contained in Article V of
the Agreement, are true and correct in all material respects as of the date
hereof and were true and correct at all times during the Reporting Periods;
(3) COVENANTS. During the Reporting Period, the Company, the
REIT, and their respective Subsidiaries observed and performed all of their
respective covenants and other agreements under the Loan Documents, and
satisfied each of the conditions contained therein to be observed, performed
or satisfied by the Company, the REIT, and their respective Subsidiaries;
(4) NO DEFAULT; EVENT OF DEFAULT. [Except as expressly set forth
in attached SCHEDULE 2,] no Default or Event of Default exists as of the date
hereof or existed at any time during the Reporting Period. [SCHEDULE 2 sets
forth a true, correct and complete description of the nature and period of
existence of each Default or Event of Default that exists as of the date hereof
or existed at any time during the Reporting Periods and the actions that the
Company, the REIT, or their respective Subsidiaries have taken, are taking and
propose to take with respect thereto];
(5) NO EXCLUDED COLLATERAL. No adjustment in the Borrowing Base
is required under Section 2.13(b) of the Agreement; and
(6) MINIMUM AVAILABILITY. If an outstanding balance exists under
the Bridge Loan Agreement, an aggregate amount of at least $2,500,000 (i)
remains undrawn under the Credit Agreement but available for borrowing
thereunder, or (ii) is held by the Company in the form of Cash Equivalents not
subject to any Lien.
IN WITNESS WHEREOF, this Certificate is executed by the undersigned this
____ day of ____________, 19__.
AIMCO PROPERTIES, L.P., a Delaware
limited partnership
By: AIMCO-GP, Inc.,
a Delaware corporation
Its general partner
By: _________________________________________________
Name: _______________________________
Title: _______________________________
By: _________________________________________________
Name: _______________________________
Title: _______________________________
2
<PAGE>
SCHEDULE 1
to Compliance Certificate
COVENANT COMPLIANCE
As of __________________, 199_
and for the period from _____________, 199_
to _____________, 199_
FINANCIAL COVENANTS
NET WORTH (SECTION 7.16(A)) AS OF ___________, 199__
[Net Worth not to be less than $400,000,000 plus 75% of Net Issuance
Proceeds of equity securities since Closing Date]
Gross Asset Value
Net Operating Income
from all apartment
projects 100% owned
by the Company or
the Wholly-Owned
Subsidiaries from
the commencement of
the then current
year through the end
of the most recent
quarter (A-1) $____________
Annualization of (A-1)
(Insert fraction used
here: _______) (A-2) $____________
Item (A-2) capitalized
at the Apartment Property
Cap Rate (9.60%) (A-3) $____________
Company's or
Subsidiaries' share
of Net Operating
Income from all
apartment projects
not 100% owned by
the Company or any
Subsidiary from the
commencement of the
then current year
through the end of
the most recent
quarter (A-4) $____________
Annualization of (A-4)
3
<PAGE>
4) (Insert fraction (A-5) $____________
used here: _______)
Item (A-5)
capitalized at the
Apartment Property
Cap Rate (9.60%) (A-6) $____________
Unconsolidated net
income of Management
Entities for the (A-7) $______________
period from the
commencement date of
the then current
year through the end
of the most recent
quarter
Annualization of (A-7)
(insert fraction
used here: (A-8) $______________
__________)
Item (A-8)
multiplied by 6.5 (A-9) $______________
Unconsolidated net
income of
Unconsolidated
Partnerships for the
period from the
commencement date of
the then current
year through the end
of the most recent
quarter (A-10) $_____________
Annualization of
(A-10) (insert fraction
here: __________) (A-11)
$_____________
Item (A-11)
multiplied by 6.5 (A-12)
$______________
Acquisition Sub's
share of EBITDA of
NHP for the period
from the
commence-
4
<PAGE>
ment date of the then
current
year through the end
of the most recent
quarter (A-13)
$______________
Annualization of (A-13)
(insert fraction
here: __________) (A-14)
$______________
Item (A-14)
multiplied by 6.0 (A-15)
$______________
All cash (including
Restricted Cash) and
the fair market
value of all Cash
Equivalents held as
of the last day of
such quarter (A-16) $
Total Gross Asset Value
(sum of Items (A-3), (A-6),
(A-9), (A-2), (A-15) and
(A-16)) (A-17) $______________
Liabilities (as determined in
accordance with GAAP) of the
Company, the REIT, and their
respective Subsidiaries on a
consolidated basis (B)$____________
Net Worth ((A-17) minus (B)) (C-1) $____________
Net Issuance Proceeds from all
Stock and Units issued since
the Closing Date (___, 1997),
multiplied by 75% (C-2) $____________
Covenant compliance? (Item
(C-1) must not be less than
(C-3) _______ (yes or no)
5
<PAGE>
$400,000,000 plus item (C-2))
CONSOLIDATED TOTAL INDEBTEDNESS TO GROSS ASSET VALUE (SECTION 7.16(B))
AS OF _____________ , 199__
[not to exceed 60% at any time]
Total Indebtedness
All outstanding Indebtedness (including
its share of Indebtedness of partnerships
and joint ventures) and in the case of
letters of credit Indebtedness available
to be drawn, of the Company, the REIT,
and their respective Subsidiaries
(D-1) $____________
Acquisition Sub's Pro Rata Share (__%) of all
outstanding Indebtedness (including its share
of Indebtedness of partnerships and joint
ventures) and in the case of letters of credit
Indebtedness available to be drawn, of NHP.
(D-2) $
Consolidated Total Indebtedness (D-3) $___________
Gross Asset Value (A-17) (E) $___________
Ratio of Total Indebtedness to Gross
Asset Value ((D-3) divided by (E))
(F) $____________
Covenant compliance? (Item (F) must
be less than or equal to 60%) (G) ______ (yes or no)
CONSOLIDATED EBITDA-TO-INTEREST RATIO (SECTION 7.16(C)) FOR THE PERIOD FROM
_________ , 199__ TO __________, 199__
[not to be less than 2.00:1.00 for any fiscal quarter or year]
EBITDA with respect to the
REIT and its Subsidiaries
(on a consolidated basis)
6
<PAGE>
Net Income (or Net
Loss)(without giving effect
to extraordinary gains or
losses) (H-1) $____________
Interest Expense (H-2) $____________
Real estate depreciation (H-3) $____________
Amortization expenses
relating to intangibles (H-4) $____________
Accrued income taxes (H-5) $____________
EBITDA for REIT and its Subsidiaries (sum (H-6) $____________
of Items (H-1)+(H-2)+(H-3)+(H-4)+(H-5))
EBITDA with respect
to NHP (on a consolidated
basis)
Net Income (or Net
Loss)(without giving effect
to extraordinary gains or
losses) for NHP (H-7) $____________
Interest Expense for NHP (H-8) $____________
Real estate depreciation (H-9) $____________
for NHP
Amortization expenses
relating to intangibles
for NHP (H-10) $____________
Accrued income taxes for (H-11) $____________
NHP
EBITDA for NHP (sum of Items (H-7) + (H-8) +
(H-9) + (H-10) + (H-11)) (H-12) $____________
7
<PAGE>
Acquisition Sub's Pro Rata Share (___%)
of EBITDA for NHP (H-12) (H-13) $____________
Consolidated EBITDA ((H-6) + (H-13)) (I) $____________
Imputed Capital Expenditures
For any four consecutive
quarters, an amount equal
to the average number of
apartment units owned by the
Company, its Subsidiaries
and the REIT during such
period (J-1) _____________
Item (I-1), multiplied by
$300, and for any period
less than four consecutive
quarters, an appropriate
proration of such amount (J-2) $____________
Consolidated EBITDA less
Imputed Capital Expenditures
(Item (I) minus Item (J-2)) (K)
$___________
Net Interest Expense for
REIT, Company and
Subsidiaries (K-1)
$____________
Acquisition Sub's Pro Rata
Share (__%) of Net Interest
Expense for NHP (K-2)
$____________
Consolidated Interest Expense (K-3) $____________
Consolidated
EBITDA-to-Interest Ratio
(Item (K) divided by Item
(K-3)) (L) _____________
8
<PAGE>
Covenant compliance? (Item
(L) must not be less than
2.00:1.00) (M) ______ (yes or no)
CONSOLIDATED EBITDA-TO-FIXED CHARGES RATIO (SECTION 7.16(D)) FOR THE PERIOD
FROM
_________ , 199__ TO __________, 199__
[not to be less than 1.80:1.00 for any fiscal quarter or year]
Consolidated EBITDA minus
Imputed Capital Expenditures
(Item (K)) (N) $_____________
Consolidated Interest
Expense (Item (K-3)) (O) $_____________
Amortization
Scheduled Amortization of
the Company, its Subsidiaries,
and the REIT (i.e., current
portion (due within 12 months)
of all regularly scheduled
amortization payments due under
long-term fully amortizing
mortgage Indebtedness) (P-1) $______________
Acquisition Sub's Pro
Rata Share (__%) of
Scheduled Amortization
of NHP (P-2) $______________
Consolidated Scheduled
Amortization (sum of
(Items (P-1)+(P-2)) (P-3) $______________
Dividends payable and
carried over on preferred
stock of the REIT (P-4) $______________
Consolidated EBITDA-to-
Fixed Charges Ratio (Item
9
<PAGE>
(N)divided by the sum of (Q) ________________
Items (O)+(P-3)+(P-4))
Covenant Compliance? (Item (Q)
must not be less than
1.80:1.00) (R) _______ (yes or no)
DISTRIBUTIONS (SECTION 7.09) FOR THE PERIOD FROM
_________ , 199__ TO __________, 199__ (four consecutive quarters)
[not to exceed 80% of Funds From Operations]
Funds From Operations
With respect to the Company,
the REIT, and their Subsidiaries
on a consolidated basis, net
income calculated in accordance
with GAAP, excluding gains or
losses from debt restructuring
and sales of property, plus real
estate depreciation and
amortization, plus amortization
associated with the purchase of
property management companies,
and after adjustments for
unconsolidated partnerships and
joint ventures (S-1) $_______________
80% of Item (S-1) (S-2) $_______________
Distributions (as defined in
Section 7.09 of the Credit
Agreement) made to Persons
other than Company, REIT and
Wholly-Owned Subsidiaries (T) $________________
Total distributions (as defined
in Section 7.09 of the Credit
Agreement) of the Company and
Subsidiaries during any 12 month
period (Item (T)) shall not
exceed 80% of Funds from Operations
(Item (S-2)) (U) ________ (yes or no)
If greater in order to maintain REIT
status, explain _____________________
10
<PAGE>
NON-CORE ASSETS (SECTION 7.08(a)(vi))
[not to exceed 25% of Carrying Value of all assets]
Carrying Value of cash and cash
equivalents, multi-family apartment
projects owned in fee simple, ownership
interests in permitted Subsidiaries
and Management Entities, NHP
Interests (V-1) $ ____________
Carrying Value of all assets owned
by the REIT, the Company, and
their Subsidiaries (V-2) $ ____________
Covenant compliance? Item (V-2)
minus Item (V-1) must not exceed
25% of Item (V-2) (W) _________(yes or no?)
BORROWING BASE AS OF __________, 199___
Revolving Facility Borrowing Base(1)
Revolving Availability:
Revolving Commitment (_________)
Bridge Loans outstanding (_________)
Funded Intra-Company Debt (_________)
Total $ _________ (X-1)$ ____________
Value of Collateral (based on appraisal) - totals of
Columns (B-1) and (B-2) from Table 1 attached (X-2) $ _________
Value of Collateral (based on coverage) - Totals of
Column (C) from Table 1 attached (X-3) $ _________
Revolving Facility Borrowing Base (lesser of (X-1),
(X-2) or (X-3)) (X-4) $ _________
Outstanding Advances plus outstanding Letter of
Credit Liability (Y) $ _________
Covenant Compliance? (Item (Y) may not exceed
Item (X-4)) (Z) ______ (yes or no)
-----------------
-----------------
11
<PAGE>
SCHEDULE 2
to Compliance Certificate
DEFAULTS; EVENTS OF DEFAULT
____________, 199_
Condition(s) or event(s) constituting a Default or Event of Default:
_______________________
______________________________________________________________________________
PERIOD OF EXISTENCE:
- -------------------
Remedial actions taken or proposed to be taken with respect to each such Default
or Event of Default: ___________________________________________________________
12
<PAGE>
TABLE 1
TO COMPLIANCE CERTIFICATE
REVOLVING FACILITY BORROWING BASE
For period ending __________, 19 ____
<TABLE>
<CAPTION>
(A) (B-1) (B-2) (C)
<S> <C> <C> <C>
Applicable Advance Rate(2)
--------------------------
Name of Borrowing Base of Appraised Value (less Loan Amount @
- ---------------------- ------------------------ -------------
Property assessment liens) Pledged Cash Applicable Coverage Factor(1)
-------- ----------------- ------------ -----------------------------
1.
2.
3.
4.
Total
Revolving Facility Borrowing Base equals the lesser of:
(1) Revolving Availability
(2) Sum of (B-1) plus (B-2) for all Borrowing Base Properties
(3) Sum of (C) for all Borrowing Base Properties
</TABLE>
13
<PAGE>
TABLE 2
TO COMPLIANCE CERTIFICATE
TERM LOAN BORROWING BASE
For period ending __________, 19 ____
Term Loan Borrowing Base equals the lesser of the following:
(A) Outstanding Balance of the
Revolving Facility on the Conversion
Date* $_________________
(B) Maximum Term Loan
Amount under Section 4.03 of the
Credit Agreement* $_________________
(C) Lesser of Term Loan Limit
or Term Loan Amount for each of
the Borrowing Base Properties* $_________________
(D) Aggregate Commitment,
minus the outstanding amount of
any Funded Intra-Company Debt $_________________
*as further reduced by the
cumulative amortization payments
required to be made through such
date under Section 2.06(c)
14
<PAGE>
EXHIBIT L
ASSIGNMENT AND ACCEPTANCE AGREEMENT
_________________, 1997
This ASSIGNMENT AND ACCEPTANCE AGREEMENT ("Agreement") is entered into
by _______________________________________________________________, as Assignor
("Assignor") and _____________________________________________________ as
Assignee ("Assignee"). Capitalized terms used in this Agreement without
definition have the meanings specified in the Revolving Credit Agreement
described below.
RECITALS
A. Assignor is party to the Amended and Restated Credit Agreement
dated as of May 5, 1997 (as the same may be amended, modified or supplemented
from time to time, the "Revolving Credit Agreement"), among AIMCO PROPERTIES,
L.P., a Delaware limited partnership (the "Company"), the Lenders, including
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as one of the Lenders,
and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent (the
"Agent") for the Lenders;
B. Pursuant to the Revolving Credit Agreement, Assignor has committed
to make loans ("Revolving Loans") to the Company and to participate in Letter
of Credit Liability in an aggregate amount not to exceed $__________
("Assignor's Revolving Commitment") and the Lenders have committed to make
loans to the Company and to participate in Letter of Credit Liability, in an
aggregate amount not to exceed the current $__________ (the "Aggregate
Revolving Commitment" thereunder);
C. As of the date hereof, Assignor has made Revolving Loans to the
Company under the Credit Agreement in the aggregate principal outstanding
amount of $___________ ("Assignor's Outstanding Revolving Loans") and has
participated in Letter of Credit Liability in the amount of $____________,
and the Lenders have made Revolving Loans to the Company under the Revolving
Credit Agreement in the aggregate principal outstanding amount of $_________
and have participated in Letter of Credit Liability in the aggregate amount
of $____________;
D. Assignor is party to the Amended and Restated Credit Agreement
(Bridge Loan) dated as of May 5, 1997 (as the same may be amended, modified
or supplemented from time to time, the "Bridge Loan Agreement"), among the
Company, the Lenders, and the Agent;
1
<PAGE>
E. Pursuant to the Bridge Loan Agreement, Assignor has committed to
make loans ("Bridge Loans") to the Company in an aggregate amount not to
exceed $__________, ("Assignor's Bridge Commitment") and the Lenders have
committed to make loans to the Company, in an aggregate amount not to exceed
$25,000,000 (the "Aggregate Bridge Commitment");
F. As of the date hereof, Assignor has made Bridge Loans to the
Company under the Bridge Loan Agreement in the aggregate principal
outstanding amount of $___________ ("Assignor's Outstanding Bridge Loans" and
collectively with Assignor's Outstanding Revolving Loans, "Assignor's
Outstanding Loans"), the Lenders have made Bridge Loans to the Company under
the Bridge Loan Agreement in the aggregate principal outstanding amount of
$_________ and the Lenders have made Bridge Loans to the Company under the
Bridge Loan Agreement in the aggregate principal outstanding amount of $
___________; and
G. Assignor wishes to assign to Assignee [part of] the rights and
obligations of Assignor under the Revolving Credit Agreement in respect of
Assignor's Revolving Commitment in an amount equal to $____________ and in
respect of Assignor's Bridge Commitment in an amount equal to $___________,
together with a portion equal to Assignee's Percentage Share (as defined
below) of Assignor's Outstanding Loans and the Letter of Credit Liability
(the "Assigned Amount") on the terms and subject to the conditions set forth
herein and Assignee wishes to accept assignment of such rights and to assume
such obligations from Assignor on such terms and subject to such conditions.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. ASSIGNMENT AND ACCEPTANCE.
(a) Subject to the terms and conditions of this Agreement, upon
the Effective Date (as hereinafter defined) (i) Assignor hereby sells,
transfers and assigns to Assignee, and (ii) Assignee hereby purchases,
assumes and undertakes from Assignor, without recourse and without
representation or warranty (except as provided in this Agreement),
_____________% (the "Assignee's Percentage Share") of (A) Assignor's
Revolving Commitment (representing ___________% of the $__________ current
Aggregate Revolving Commitment of all Lenders), (B) the existing Letter of
Credit Liability, (C) Assignor's Bridge Commitment (representing ____% of the
$25,000,000 Aggregate Bridge Commitment of all Lenders), and (D) all related
rights, benefits, obligations, liabilities and indemnities of Assignor under
and in connection with the Revolving Credit Agreement and the Bridge Loan
Agreement.
(b) With effect on and after the Effective Date (as defined in
Section 5), Assignee shall be a party to the Revolving Credit Agreement and
the Bridge Loan Agreement and succeed to all of the rights and be obligated
to perform all of the obligations of a Lender under the Revolving Credit
Agreement and the Bridge Loan Agreement with a Revolving Commitment equal to
$__________ and a Bridge Commitment of $_____________. Assignee agrees that
it will perform in accordance with their terms all of
2
<PAGE>
the obligations which by the terms of the Revolving Credit Agreement and the
Bridge Loan Agreement are required to be performed by it as a Lender. It is
the intent of the parties hereto that, as of the Effective Date, the
Revolving Commitment of Assignor shall be reduced by an amount equal to
$____________ and that the Bridge Commitment of Assignor shall be reduced by
an amount equal to $____________, and Assignor shall relinquish its rights
and be released from its obligations under the Credit Agreement and the
Bridge Loan Agreement to the extent such obligations have been assumed by
Assignee.
(c) After giving effect to the assignment and assumption, on the
Effective Date, Assignee's Revolving Commitment will be $_____________, its
Bridge Commitment will be $____________ and Assignee's Revolving and Bridge
Commitment Percentages will each be _____________%.
(d) After giving effect to the assignment and assumption, on the
Effective Date, Assignor's Commitment will be $______________, its Bridge
Commitment will be $____________ and Assignor's Revolving and Bridge Commitment
Percentages will each be ______________%.
2. PAYMENTS.
As consideration for the sale, assignment and transfer contemplated in
Section 1, Assignee shall pay to Assignor on the Effective Date in immediately
available funds an amount equal to $_____________, representing Assignee's
Percentage Share of the principal amount of Assignor's Outstanding Loans, and
shall assume all Assignee's Revolving Commitment Percentage of all Letter of
Credit Liability.
3. REALLOCATION OF PAYMENTS.
Any interest, fees and other payments accrued to the Effective Date with
respect to the Assignor's Revolving Commitment and Bridge Loan Commitment and
Assignor's Outstanding Loans shall be for the account of Assignor. Any
interest, fees and other payments accrued on and after the Effective Date
with respect to the Assigned Amount shall be for the account of Assignee.
Each of Assignor and Assignee agrees that it will (a) hold in trust for the
other party, any interest, fees and other amounts which it may receive to
which the other party is entitled, pursuant to the preceding sentences and
(b) promptly upon receipt, pay to the other party any such amounts which it
may receive.
3
<PAGE>
4. INDEPENDENT CREDIT DECISION.
Assignee (a) acknowledges that it has received a copy of the Revolving
Credit Agreement and the Bridge Loan Agreement and the Schedules and Exhibits
thereto, together with copies of the most recent financial statements referred
to in Section 6.01 of each of the Revolving Credit Agreement and the Bridge Loan
Agreement, and such other documents and information as it has deemed appropriate
to make its own credit and legal analysis and decision to enter into this
Agreement; and (b) agrees that it will, independently and without reliance upon
Assignor, any Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit and legal decisions in taking or not taking action under the Revolving
Credit Agreement and the Bridge Loan Agreement.
5. EFFECTIVE DATE; NOTICES.
(a) As between Assignor and Assignee, the effective date for this
Agreement shall be ___________199__ (the "Effective Date"); PROVIDED that the
following conditions precedent have been satisfied on or before the Effective
Date:
(i) this Agreement shall be executed and delivered by
Assignor and Assignee;
(ii) Assignee shall pay to Assignor all amounts due to
Assignor under this Agreement;
(iii) to the extent required under Section 10.08(a) of each of
the Revolving Credit Agreement and the Bridge Loan Agreement, the consent of
the Agent and the Company shall have been duly obtained (or, in the case of
the Company, been deemed obtained) and shall be in full force and effect as
of the Effective Date;
(iv) Assignee shall have complied with Section 3.01(f) of
each of the Revolving Credit Agreement and the Bridge Loan Agreement (if
applicable); and
(b) Promptly following the execution of this Agreement, Assignor
shall deliver to the Company and the Agent for acknowledgment by the Agent, a
Notice of Assignment in the form of attached SCHEDULE 1.
6. AGENT.
(a) Assignee hereby acknowledges such powers delegated to the
Agent pursuant to the terms of the Credit Agreement and the Bridge Loan
Agreement.
(b) Assignee shall assume no duties or obligations held by the
Agent under the Revolving Credit Agreement or the Bridge Loan Agreement.
4
<PAGE>
7. WITHHOLDING TAX.
Assignee agrees to comply with Section 3.01(f) of each of the Revolving
Credit Agreement and the Bridge Loan Agreement (if applicable).
8. REPRESENTATIONS AND WARRANTIES.
(a) Assignor represents and warrants that (i) it is duly organized
and existing and it has the full power and authority to take, and has taken,
all action necessary to execute and deliver this Agreement and any other
documents required or permitted to be executed or delivered by it in
connection with this Agreement and to fulfill its obligations hereunder; (ii)
no notices to, or consents, authorizations or approvals of, any Person are
required (other than any already given or obtained) for its due execution,
delivery and performance of this Agreement, and apart from any agreements or
undertakings or filings required by the Revolving Credit Agreement and the
Bridge Loan Agreement, no further action by, or notice to, or filing with,
any Person is required of it for such execution, delivery or performance;
(iii) this Agreement has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of Assignor, enforceable
against Assignor in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles; and (iv) it is the legal and beneficial owner
of the interest being assigned by it hereunder and that such interest is free
and clear of any Lien or other adverse claim;
(b) Assignor makes no representation or warranty in connection
with, and assumes no responsibility with respect to:
(i) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Revolving Credit Agreement, the Bridge Loan
Agreement, any other Loan Document (as defined in both the Revolving
Credit Agreement and the Bridge Loan Agreement), or any other instrument
or document furnished in connection therewith;
(ii) any statements, warranties or representations made in or in
connection with the Revolving Credit Agreement, the Bridge Loan Agreement,
any other Loan Document, or any other instrument or document furnished in
connection therewith; or
(iii) the solvency, financial condition or financial statements of the
Company, or the performance or observance by the Company, of any of its
respective obligations under the Revolving Credit Agreement, the Bridge
Loan Agreement, any other Loan Document, or any other instrument or
document furnished in connection therewith.
(c) Assignee represents and warrants that (i) it is duly organized
and existing and it has full power and authority to take, and has taken, all
action necessary to execute and deliver this Agreement and any other
documents required or permitted to be executed or delivered by it in
connection with this Agreement, and to fulfill its obligations
5
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hereunder; (ii) no notices to, or consents, authorizations or approvals of,
any Person are required (other than any already given or obtained) for its
due execution, delivery and performance of this Agreement; and apart from any
agreements or undertakings or filings required by the Revolving Credit
Agreement or the Bridge Loan Agreement, no further action by, or notice to,
or filing with, any Person is required of it for such execution, delivery or
performance; (iii) this Agreement has been duly executed and delivered by it
and constitutes the legal, valid and binding obligation of Assignee,
enforceable against Assignee in accordance with the terms hereof, subject, as
to enforcement, to bankruptcy, insolvency, moratorium, reorganization and
other laws of general application relating to or affecting creditors' rights
and to general equitable principles; and (iv) it is an Eligible Assignee.
9. FURTHER ASSURANCES.
Assignor and Assignee each hereby agrees to execute and deliver such
other instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Agreement,
including the delivery of any notices or other documents or instruments to the
Company or the Agent, which may be required in connection with the assignment
and assumption contemplated hereby.
10. MISCELLANEOUS.
(a) Any amendment or waiver of any provision of this Agreement
shall be in writing and signed by the parties hereto. No failure or delay by
either party hereto in exercising any right, power or privilege hereunder
shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Agreement shall be without prejudice to any rights with
respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any set-off
or counterclaim.
(c) Assignor and Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution
and performance of this Agreement.
(d) This Agreement may be executed in any number of counterparts
and all of such counterparts taken together shall be deemed to constitute one
and the same instrument.
(e) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ______________. PROVIDED HOWEVER
THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL
LAW.
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IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment
and Acceptance Agreement to be executed and delivered by their duly authorized
officers as of the date first above written.
______________________________________, Assignor
By:_______________________________________
Name _____________________________________
Title: ___________________________________
Address:
________________________________________, Assignee
By:_______________________________________
Name _____________________________________
Title: ______________________________________
Address:
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SCHEDULE 1
to Assignment and Acceptance
NOTICE OF ASSIGNMENT AND ACCEPTANCE
________________, 199__
Bank of America National Trust and
Savings Association, as Agent
CRESG #1357
555 South Flower Street, 6th Floor
Los Angeles, California 90071
Attention: Unit Manager
AIMCO Properties, L.P.,
a Delaware limited partnership
1873 South Bellaire Street, 17th Floor
Denver, Colorado 80222
Attention: Peter Kompaniez, Vice Chairman
Re: Amended and Restated Credit Agreement, dated as of
___________1997 (as the same may be amended, modified or
supplemented from time to time, the "Revolving Credit
Agreement"), and Amended and Restated Credit Agreement
(Bridge Loan), dated as of ________, 1996 (as the same may
be amended, modified or supplemented from time to time, the
"Bridge Loan Agreement"), among AIMCO PROPERTIES, L.P., a
Delaware limited partnership (the "Company"), the lenders
from time to time party to the Credit Agreement (the
"Lenders"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as one of the Lenders, and BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent (the
"Agent") for the Lenders.
Ladies and Gentlemen:
Reference is made to the Revolving Credit Agreement and Bridge Loan
Agreement. Capitalized terms used in this Notice of Assignment and Acceptance
without definition have the meanings specified in the Revolving Credit
Agreement.
1. We hereby give notice to the Company and to the Agent of the
assignment by _____________________ ("Assignor") ______________________
("Assignee") of __________% of the right, title and interest of Assignor in and
to the Revolving Credit Agreement and the Bridge Loan Agreement, including,
without limitation, the right, title and interest of Assignor in and to:
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(A) Assignor's Commitment under and as such term is defined in
the Revolving Credit Agreement (the "Revolving Commitment") (representing
___________% of the $__________ current Aggregate Revolving Commitment of all
Lenders),
(B) Assignor's Commitment Percentage of the outstanding loans
under the Revolving Credit Agreement (representing an amount equal to
$____________ as of the Effective Date), (C) the existing Letter of Credit
Liability,
(C) Assignor's Commitment under and as such term is defined in
the Bridge Loan Agreement (the "Bridge Commitment") (representing ____% of the
$25,000,000 Aggregate Bridge Commitment of all Lenders),
(D) Assignor's Commitment Percentage (as such term is defined in
the Bridge Loan Agreement) of the outstanding loans under the Bridge Loan
Agreement (representing an amount equal to $____________ as of the Effective
Date), and
(E) all related rights, benefits, obligations, liabilities and
indemnities of Assignor under and in connection with the Revolving Credit
Agreement and the Bridge Loan Agreement.
Before giving effect to the assignment and assumption, on the
Effective Date, Assignor's Revolving Commitment was $______________, its Bridge
Commitment was $____________ and Assignor's Revolving and Bridge Commitment
Percentages were each ______________%. After giving effect to the assignment
and assumption, on the Effective Date, Assignor's Commitment will be
$______________, its Bridge Commitment will be $____________ and Assignor's
Revolving and Bridge Commitment Percentages will each be ______________%. After
giving effect to the assignment and assumption, on the Effective Date,
Assignee's Revolving Commitment will be $_____________, its Bridge Commitment
will be $____________ and Assignee's Revolving and Bridge Commitment Percentages
will each be _____________%.
2. Assignee agrees that, upon receiving the consent of the Agent and
the Company to such assignment, Assignee will be bound by the terms of the
Revolving Credit Agreement and the Bridge Loan Agreement as fully and to the
same extent as if Assignee were the Lender originally holding the interest so
assigned to it under the Revolving Credit Agreement and the Bridge Loan
Agreement.
3. The following administrative details apply to Assignee:
(A) Notice Address:
Assignee name:
Address:
Att'n:
Telephone:
Telecopier:
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(B) Payment Instructions:
ABA No.
Account No.
At:
Reference:
Att'n:
10
<PAGE>
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<PAGE>
IN WITNESS WHEREOF, Assignor and Assignee have caused this Notice of
Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.
Very truly yours,
[Assignor]
By:
---------------------------
Title:
------------------------
[Assignee]
By:
---------------------------
Title:
------------------------
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent
By:
------------------------------
Title:
---------------------------
[Add Company's Signature Block if Company's Consent is required]
AIMCO PROPERTIES, L.P., a Delaware limited partnership
By: Aimco - GP, Inc., a Delaware corporation
Its General Partner
By:
------------------------------
Title:
---------------------------
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<PAGE>
EXHIBIT M
FORM OF
ADDITIONAL LENDER AGREEMENT
THIS ADDITIONAL LENDER AGREEMENT (the "Additional Lender Agreement") is
made and dated as of ___________ __, 19__ by ____________________________
_______________________________________ (the "Additional Lender"), BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BofA"), as "Agent" under the
Agreement referred to in Recital A below (in such capacity, the "Agent"), and
AIMCO PROPERTIES, L.P. (the "Company").
RECITALS
A. The Additional Lender desires to become a "Lender" under (1) that
certain Amended and Restated Credit Agreement dated as of May 5, 1997 (as
amended, extended and restated from time to time, the "Revolving Credit
Agreement"), by and among the Agent, the Lenders currently participating therein
(the "Existing Lenders"), the Issuing Lender named therein, and the Company and
(2) the Bridge Loan Agreement. Capitalized terms not otherwise defined herein
shall have the meanings set forth in both the Revolving Credit Agreement and in
the Bridge Loan Agreement.
B. Pursuant to Section 2.01(a)(iv) of the Revolving Credit Agreement and
Section __ of the Bridge Loan Agreement, the Additional Lender has agreed to
become a Lender under the Revolving Credit Agreement and in the Bridge Loan
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
AGREEMENT
1. The Additional Lender hereby acknowledges and agrees that from and
after _________ ___, ____ (the "Adjustment Date") it will be a
"Lender" under the Revolving Credit Agreement and in the Bridge Loan
Agreement and the other Loan Documents with all the rights and
benefits and with all the obligations of the Existing Lenders
thereunder. With limiting the generality of the foregoing, on the
Adjustment Date the Lender shall fund its Commitment Percentage of the
outstanding Revolving Loans in accordance with Section ___ of the
Revolving Credit Agreement, and its full Bridge Commitment Percentage
of the outstanding Bridge Loans in accordance with Section __ of the
Bridge Loan Agreement.
2. The Company hereby agrees to pay to the Additional Lender a facility
fee in an amount of one percent (1.0%) of the Revolving Commitment (as
defined in the Revolving Credit Agreement) of such Additional Lender
on the Adjustment Date.
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3. Additional Lender agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Revolving
Credit Agreement and the Bridge Loan Agreement are required to be
performed by it as a Lender. No reduction in the Commitements of the
Existing Lenders shall result from this Additional Lender Agreement.
4. Any interest, fees and other payments accrued to the Adjustment Date
with respect to the any of the Existing Lenders' Revolving Commitments
and Bridge Loan Commitments and any outstanding amounts due under the
Revolving Credit Agreement and the Bridge Loan Agreement shall be for
the account of the Exisitng Lenders.
5. Additional Lender (a) acknowledges that it has received a copy of the
Revolving Credit Agreement and the Bridge Loan Agreement and the
Schedules and Exhibits thereto, together with copies of the most
recent financial statements referred to in Section 6.01 of each of the
Revolving Credit Agreement and the Bridge Loan Agreement, and such
other documents and information as it has deemed appropriate to make
its own credit and legal analysis and decision to enter into this Additional
Lender Agreement; and (b) agrees that it will, independently and without
reliance upon the Agent or any of the Existing Lenders, and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit and legal decisions in taking or not taking
action under the Revolving Credit Agreement and the Bridge Loan Agreement.
6. Additional Lender hereby acknowledges such powers delegated to the
Agent pursuant to the terms of the Credit Agreement and the Bridge
Loan Agreement.
7. Additional Lender shall assume no duties or obligations held by the
Agent under the Revolving Credit Agreement or the Bridge Loan
Agreement.
8. Additional Lender agrees to comply with Section 3.01(f) of each of the
Revolving Credit Agreement and the Bridge Loan Agreement (if
applicable).
9. Additional Lender represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take,
and has taken, all action necessary to execute and deliver this Additional
Lender Agreement and any other documents required or permitted to be
executed or delivered by it in connection with this Additional Lender
Agreement, and to fulfill its obligations hereunder; (ii) no notices to, or
consents, authorizations or approvals of, any Person are required (other
than any already given or obtained) for its due execution, delivery and
performance of this Additional Lender Agreement; and apart from any
agreements or undertakings or filings required by the Revolving Credit
Agreement or the Bridge Loan Agreement, no further action by, or notice to,
or filing with, any Person is required of it for such execution, delivery or
performance; (iii) this Additional Lender Agreement has been duly executed
and delivered by it and constitutes the legal, valid and binding obligation
of Additional Lender, enforceable against Additional Lender in accordance
with the terms hereof, subject, as to enforcement, to bankruptcy,
insolvency, moratorium, reorganization and other laws of general application
relating to or affecting creditors' rights and to general equitable
principles; and (iv) it is an Eligible Additional Lender.
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<PAGE>
10. Additional Lender hereby agrees to execute and deliver such other
instruments, and take such other action, as either party or any
Existing Lender may reasonably request in connection with the
transactions contemplated by this Additional Lender Agreement.
11. Any amendment or waiver of any provision of this Additional Lender
Agreement shall be in writing and signed by the parties hereto. No
failure or delay by either party hereto in exercising any right, power
or privilege hereunder shall operate as a waiver thereof and any
waiver of any breach of the provisions of this Additional Lender
Agreement shall be without prejudice to any rights with respect to any
other or further breach thereof.
12. Additional Lender shall each pay its own costs and expenses incurred
in connection with the negotiation, preparation, execution and
performance of this Additional Lender Agreement.
13. This Agreement may be executed in any number of counterparts and all
of such counterparts taken together shall be deemed to constitute one
and the same instrument.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF ______________. PROVIDED HOWEVER THAT THE
AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL
LAW.
15. The Domestic Lending Office of the Additional Lender shall initially
be as set forth beneath its signature below.
16. This Additional Lender Agreement shall be governed by and construed
and interpreted in accordance with the laws of the State of _______.
17. This Additional Lender Agreement shall be effective when executed by
each of the parties hereto and acknowledged and agreed to by the Agent
under the Agreement in the space provided below.
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EXECUTED as of the date and year first above written.
ADDITIONAL LENDER: [____________NAME___]
By:
------------------------------
Title:
---------------------------
Address:
-------------------------
Attn:
----------------------------
COMPANY: AIMCO PROPERTIES, L.P.
By:
------------------------------
Title:
---------------------------
AGENT: [Illegible]
By:
------------------------------
Title:
---------------------------
[1] Insert place of delivery of Note.
1 Adjustments are required to the certificate if the Revolving Facility is
converted to the Term Loan.
2 Applicable advance rate: 75% (until ______________, 1997); 60%
thereafter.
3 Applicable coverage factor: 1.20 (until ____________, 1997); 1.30
thereafter.
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<PAGE>
PROMISSORY NOTE
May 5, 1997
$100,000,000 Los Angeles, California
FOR VALUE RECEIVED, AIMCO Properties, L.P., a Delaware limited
partnership (the "Company"), promises to pay to the order of BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION ("Lender") the principal amount of ONE
HUNDRED MILLION AND NO/100 DOLLARS ($100,000,000) or, if less, the aggregate
amount of Loans (as such term and all other capitalized terms used but not
defined herein are defined in the Credit Agreement referred to below) made by
the Lender to the Company pursuant to the Credit Agreement referred to below,
outstanding on the Revolving Facility Maturity Date or, if the Company duly
converts the Revolving Facility to the Term Loan pursuant to the Credit
Agreement, on the Term Loan Maturity Date.
The Company also promises to make principal payments and interest on the
unpaid principal amount hereof from the date hereof until paid at the rates
and at the times which shall be determined in accordance with the provisions
of the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Payment Office. Until notified of the transfer of this Note, the Company
shall be entitled to deem the Lender or such person who has been so
identified by the transferor in writing to the Company as the holder of this
Note, as the owner and holder of this Note. The Lender and any subsequent
holder of this Note agrees that before disposing of this Note, or any part
hereof, it will make a notation hereon of all principal payments previously
made hereunder of the date to which interest hereon has been paid on the
schedule attached hereto, if any; PROVIDED, HOWEVER, that the failure to make
notation of any payment made on this Note shall not limit or otherwise affect
the obligation of the Company hereunder with respect to payments of principal
or interest on this Note.
This Note is referred to in, and is entitled to the benefits of, the
Amended and Restated Credit Agreement (Revolver-to-Term Loan) dated as of May
5, 1997 (the "CREDIT AGREEMENT") among the Company, the lenders from time to
time party thereto, and Bank of America National Trust and Savings
Association, as Agent (the "Agent"). The Credit Agreement, among other
things, (i) provides for the making of loans (the "LOANS") by the Lender to
the Company from time to time in an aggregate amount first above mentioned,
the indebtedness of the Company resulting from each such Loan being evidenced
by this Note, and (ii) contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events and also for mandatory and
optional prepayments on account of principal hereof and certain principal
payments prior to the maturity hereof upon the terms and conditions therein
specified.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
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No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the
currency herein prescribed.
The Company promises to pay all costs and expenses, including reasonable
attorneys' fees, incurred in the collection and enforcement of this Note. The
Company hereby waives diligence, presentment, and protest, and except as
provided in the Credit Agreement, demand and notice of every kind and, to the
full extent permitted by law, the right to plead any statute of limitations
as a defense to any demand hereunder.
This Note shall be governed by, and construed in accordance with, the
laws of the state of Colorado without giving effect to its choice of law
doctrine.
IN WITNESS WHEREOF, the Company has caused this Note to be executed and
delivered by its duly authorized officer, as of the date and place first
above written.
AIMCO PROPERTIES, L.P.,
a Delaware limited partnership
By: AIMCO-GP, INC.,
a Delaware corporation,
its general partner
By: /s/ Peter K. Kompaniez
------------------------------
Peter K. Kompaniez
Vice President
2
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TRANSACTIONS ON NOTE
- --------------------------------------------------------------------------------
AMOUNT OF
AMOUNT OF PRINCIPAL PRINCIPAL INTEREST PAID NOTATION
DATE LOAN MADE PAID BALANCE INTEREST PAID THROUGH MADE BY
- --------------------------------------------------------------------------------
3
<PAGE>
PAYMENT GUARANTY
This Payment Guaranty ("Guaranty") is made as of May 5, 1997, by
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation, AIMCO-GP,
INC., a Delaware corporation, AIMCO-LP, INC., a Delaware corporation, AIMCO
HOLDINGS, L.P., a Delaware limited partnership, AIMCO HOLDINGS QRS, INC., a
Delaware corporation, AIMCO SOMERSET, INC., a Delaware corporation, and
AIMCO/OTC QRS, INC., a Delaware corporation (each of the foregoing is referred
to herein as "Guarantor") in favor of BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION ("BofA"), as the agent for itself and the lenders ("Lenders") from
time to time party to the Revolving Credit Agreement (as hereinafter defined)
and also as the agent for itself and the lenders from time to time party to the
Bridge Loan Agreement (as defined below) (in such capacity, the "Agent").
FACTUAL BACKGROUND
Guarantor is executing this Guaranty (i) to induce the Lenders to make
a $100,000,000 revolver to term credit facility available to AIMCO Properties
L.P., a Delaware limited partnership (the "Company") in accordance with the
Amended and Restated Credit Agreement (the "Revolving Credit Agreement"), dated
of even date herewith, by and among Company, BofA (as Agent (as defined under
the Revolving Credit Agreement) and as a Lender) and the other Lenders from time
to time party thereto and (ii) to induce the Lenders to make a $25,000,000
bridge loan facility available to the Company in accordance with the Credit
Agreement (Bridge Loan) (the "Bridge Loan Agreement"), dated of even date
herewith, by and among the Company, BofA (as Agent (as defined under the Bridge
Loan Agreement) and as a Lender) and the other Lenders from time to time party
thereto. Capitalized terms used but not defined herein shall have the meanings
set forth in the Revolving Credit Agreement. As used herein, the term "Facility"
shall refer individually to each of the credit facilities available to the
Company under the Revolving Credit Agreement and the Bridge Loan Agreement and
shall refer collectively to all such credit facilities.
GUARANTY
1. GUARANTY OF LOAN. Guarantor absolutely, unconditionally and
irrevocably guaranties to Agent and the Lenders the full payment of the
Indebtedness (as hereinafter defined), and unconditionally agrees to pay to
Agent and the Lenders the full amount of the Indebtedness. This is a guaranty of
payment, not of collection. If Company defaults in the payment when due of the
Indebtedness or any part of it, Guarantor shall in lawful money of the United
States pay to Agent and the Lenders, on demand, all sums due and owing on the
Indebtedness, including all interest, charges, fees and other sums, costs and
expenses.
2. LOAN. In this Guaranty, the term "Indebtedness" is broadly defined
to mean and include all primary, secondary, direct, indirect, fixed and
contingent obligations of Company to pay principal, interest, prepayment
charges, breakage costs, late charges, loan fees and any other fees, charges,
sums, costs and expenses which may be owing at any time under the Loan
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Documents (as such term is defined both in the Revolving Credit Agreement and in
the Bridge Loan Agreement), and shall include, without limitation, all
liabilities and obligations of the Company with respect to Letters of Credit
issued under the Revolving Credit Agreement, as any or all of such obligations
may from time to time be modified, amended, extended or renewed. If the amount
outstanding under the Indebtedness is determined by a court of competent
jurisdiction or in any arbitration proceeding described in Section 10.17 of the
Revolving Credit Agreement, that determination shall be conclusive and binding
on Guarantor, regardless of whether Guarantor was a party to the proceeding in
which the determination was made or not.
3. RIGHTS OF AGENT AND THE LENDERS. Guarantor authorizes Agent or any
Lender to perform any or all of the following acts at any time in its sole
discretion, all without notice to Guarantor and without affecting Guarantor's
obligations under this Guaranty:
(a) Agent or the Requisite Lenders may alter any terms of the
Indebtedness or any part of it, including renewing, compromising, extending or
accelerating, or otherwise changing the time for payment of, or increasing or
decreasing the rate of interest on, the Indebtedness or any part of it.
(b) Agent or any Lender may take and hold security for the
Indebtedness or this Guaranty, accept additional or substituted security for
either, and subordinate, exchange, enforce, waive, release, compromise, fail to
perfect and sell or otherwise dispose of any such security in accordance with
the terms of the Indebtedness.
(c) Agent or any Lender may direct the order and manner of any sale
of all or any part of any security now or later to be held for the Indebtedness
or this Guaranty, and Agent or any Lender may also bid at any such sale.
(d) Agent or any Lender may apply any payments or recoveries from
Company, Guarantor or any other source, and any proceeds of any security, to
Company's obligations under the Loan Documents in such manner, order and
priority as Agent or such Lender may elect, whether or not those obligations are
guarantied by this Guaranty or secured at the time of the application.
(e) Agent or any Lender may release Company of its liability for
the Indebtedness or any part of it.
(f) Agent or any Lender may substitute, add or release any one or
more Guarantors, other guarantors or endorsers.
(g) In addition to the Indebtedness, Agent or any Lender may
extend other credit to Company, and may take and hold security for the credit
so extended, all without affecting Guarantor's liability under this Guaranty.
4. GUARANTY TO BE ABSOLUTE. Guarantor expressly agrees that until the
Indebtedness is paid and performed in full and each and every term, covenant and
condition of this Guaranty is fully performed, Guarantor shall not be released
by or because of:
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<PAGE>
(a) Any act or event which might otherwise discharge, reduce, limit or
modify Guarantor's obligations under this Guaranty;
(b) Any waiver, extension, modification, forbearance, delay or other
act or omission of Agent or any Lender, or its failure to proceed promptly or
otherwise as against Company, Guarantor or any security;
(c) Any action, omission or circumstance which might increase the
likelihood that Guarantor may be called upon to perform under this Guaranty or
which might affect the rights or remedies of Guarantor as against Company;
(d) Any dealings occurring at any time between Company and Agent or
any Lender, whether relating to the Indebtedness or otherwise; or
(e) Any action of Agent or any Lender described in Section 3 above.
Guarantor hereby acknowledges that absent this Section 4, Guarantor
might have a defense to the enforcement of this Guaranty as a result of one or
more of the foregoing acts, omissions, agreement, waivers or matters. Guarantor
hereby expressly waives and surrenders any defense to its liability under this
Guaranty based upon any of the foregoing acts, omissions, agreements, waivers or
matters. It is the purpose and intent of this Guaranty that the obligations of
Guarantor under it shall be absolute and unconditional under any and all
circumstances.
5. GUARANTOR'S WAIVERS. Guarantor waives:
(a) All statutes of limitations as a defense to any action or
proceeding brought against Guarantor by Agent or any Lender, to the fullest
extent permitted by law,
(b) Any right it may have to require Agent or any Lender to proceed
against Company, proceed against or exhaust any security held from Company, or
pursue any other remedy in Agent's or any Lender's power to pursue;
(c) Any defense based on any claim that Guarantor's obligations exceed
or are more burdensome than those of Company;
(d) Any defense based on: (i) any legal disability of Company, (ii)
any release, discharge, modification, impairment or limitation of the liability
of Company to Agent or any Lender from any cause, whether consented to by Agent
or any Lender or arising by operation of law or from any bankruptcy or other
voluntary or involuntary proceeding, in or out of court, for the adjustment of
debtor-creditor relationships ("Insolvency Proceeding") and (iii) any rejection
or disaffirmance of the Indebtedness, or any part of it, or any security held
for it, in any such Insolvency Proceeding;
(e) Any defense based on any action taken or omitted by Agent or any
Lender in any Insolvency Proceeding involving Company, including any election
to have Agent's or that Lender's claim allowed as being secured, partially
secured or unsecured, any extension of credit by
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Lender to Company in any Insolvency Proceeding, and the taking and holding by
Agent or any Lender of any security for any such extension of credit;
(f) All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices of
acceptance of this Guaranty and of the existence, creation, or incurring of new
or additional indebtedness, and demands and notices of every kind except for any
demand or notice by Agent or any Lender to Guarantor expressly provided for in
Section 1;
(g) Any defense based on or arising out of any defense that Company
may have to the payment or performance of the Indebtedness or any part of it;
and
(h) Any defense based on or arising out of any action of Agent or any
Lender described in Sections 3 or 4 above.
6. WAIVERS OF SUBROGATION AND OTHER RIGHTS.
(a) During the existence of an Event of Default by Company, Agent or
any Lender, without prior notice to or consent of Guarantor, may elect to: (i)
foreclose either judicially or nonjudicially against any real or personal
property security it may hold for the Indebtedness, (ii) accept a transfer of
any such security in lieu of foreclosure, (iii) compromise or adjust the
Indebtedness or any part of it or make any other accommodation with Company or
Guarantor, or (iv) exercise any other remedy against Company or any security. No
such action by Agent or any Lender shall release or limit the liability of
Guarantor, who shall remain liable under this Guaranty after the action, even if
the effect of the action is to deprive Guarantor of any subrogation rights,
rights of indemnity, or other rights to collect reimbursement from Company for
any sums paid to Agent or any Lender, whether contractual or arising by
operation of law or otherwise. Guarantor expressly agrees that under no
circumstances shall it be deemed to have any right, title, interest or claim in
or to any real or personal property to be held by Agent or any Lender or any
third party after any foreclosure or transfer in lieu of foreclosure of any
security for the Indebtedness.
(b) Regardless of whether Guarantor may have made any payments to
Lender, Guarantor hereby waives: (i) all rights of subrogation, all rights of
indemnity, and any other rights to collect reimbursement from Company for any
sums paid to Agent or any Lender, whether contractual or arising by operation of
law (including the United States Bankruptcy Code or any successor or similar
statute) or otherwise, (ii) all rights to enforce any remedy that Lender may
have against Company, and (iii) all rights to participate in any security now or
later to be held by Agent or any Lender for the Indebtedness, in each case until
the full and indefeasible payment and performance of all Indebtedness, and all
obligations of the Guarantors hereunder.
(c) Guarantor waives all rights and defenses arising out of an
election of remedies by the Agent or any Lender, even though that election of
remedies may affect Guarantor's rights of subrogation and reimbursement against
the Company by the operation of law or otherwise. In addition, Guarantor waives
all rights and defenses that Guarantor may have
4
<PAGE>
because the Company's indebtedness is secured by real property. This means,
among other things:
(1) Agent and the Lenders may collect from Guarantor without
first foreclosing on any real or personal property collateral pledged by the
Company.
(2) If Agent forecloses on any real property collateral pledged
by the Company:
(A) The amount of the indebtedness may be reduced only by
the price for which that collateral is sold at the foreclosure sale, even if
the collateral is worth more than the sale price.
(B) Agent and the Lenders may collect from Guarantor even if
Agent or any Lender, by foreclosing on the real property collateral, has
destroyed or affected any right Guarantor may have to collect from the
Company.
This is an unconditional and irrevocable waiver of any rights and
defenses Guarantor may have because the Company's indebtedness is secured by
real property.
7. REVIVAL AND REINSTATEMENT. If Agent or any Lender is required to
pay, return or restore to Company or any other person any amounts previously
paid on the Indebtedness because of any Insolvency Proceeding of Company, any
stop notice or any other reason, the obligations of Guarantor shall be
reinstated and revived and the rights of Agent and such Lender shall continue
with regard to such amounts, all as though they had never been paid.
8. INFORMATION REGARDING BORROWER. Before signing this Guaranty,
Guarantor investigated the financial condition and business operations of
Company and such other matters as Guarantor deemed appropriate to assure itself
of Company's ability to discharge its obligations under the Loan Documents.
Guarantor assumes full responsibility for that due diligence, as well as for
keeping informed of all matters which may affect Company's ability to pay and
perform its obligations to the Agent and the Lenders. Neither Agent nor any
Lender has any duty to disclose to Guarantor any information which such party
may have or receive about Company's financial condition, business operations, or
any other circumstances bearing on its ability to perform.
9. SUBORDINATION. Any rights of Guarantor, whether now existing or
later arising, to receive payment on account of any indebtedness (including
interest) owed to it by Company or any Subsidiary thereof or to receive any
payment from Company or any such Subsidiary other than those payments or
distributions permitted under Sections 7.08(b) and 7.09 of the Revolving Credit
Agreement shall at all times be subordinate as to lien and time of payment and
in all other respects to the full and prior repayment of the Indebtedness.
Guarantor shall not be entitled to enforce or receive payment of any sums hereby
subordinated until the Indebtedness has been paid and performed in full and any
such sums received in violation of this Guaranty shall be received by Guarantor
in trust for the Agent and the Lenders.
5
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10. FINANCIAL INFORMATION. Guarantor shall keep true and correct
financial books and records, using generally accepted accounting principles
consistently applied, or such other accounting principles as the Requisite
Lenders in their reasonable judgment may find acceptable from time to time.
Guarantor represents, warrants and covenants to Agent and the Lenders that all
financial information with respect to the Guarantor delivered or to be delivered
to Agent and the Lenders by the Company with respect to Guarantor under Section
6.01 of the Revolving Credit Agreement is or shall be true and correct and
fairly presents or will fairly present the financial position of the Guarantor
for the applicable period. Guarantor shall promptly provide Agent and the
Lenders with any additional audited financial information that Guarantor may
obtain, and such other information concerning its affairs and properties as
Agent or any Lender may reasonably request, including, without limitation,
signed copies of any tax returns if requested Agent or the Lenders.
11. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor
represents and warrants that:
(a) All financial statements delivered to Agent or the Lenders
were or will be prepared in accordance with generally accepted accounting
principles, or such other accounting principles as may be acceptable to the
Requisite Lenders at the time of their preparation, consistently applied;
(b) There has been no material adverse change in Guarantor's
financial condition since the dates of the statements most recently furnished
to Agent and the Lenders; and
(c) All representations and warranties given on behalf of or with
respect to Guarantor contained in Article V of the Revolving Credit
Agreement, in Article V of the Bridge Loan Agreement and in any other Loan
Document or certification made in connection with the Revolving Credit
Agreement or Bridge Loan Agreement are true and correct.
12. COVENANTS OF GUARANTOR. Guarantor covenants and agrees that it
shall comply with and perform all covenants given on behalf of or with
respect to Guarantor (whether expressly or as a Subsidiary) contained in
Articles VI and VII of the Revolving Credit Agreement, Articles VI and VII of
the Bridge Loan Agreement and in all other Loan Documents.
13. INTENTIONALLY OMITTED.
14. REFERENCE AND ARBITRATION.
(a) MANDATORY ARBITRATION. Any controversy or claim between or
among the parties, including those arising out of or relating to this
Guaranty or the Loan Documents and any claim based on or arising from an
alleged tort, shall at the request of any party be determined by arbitration.
The arbitration shall be conducted in Los Angeles, California, in accordance
with the United States Arbitration Act (Title 9, U.S. Code), notwithstanding
any choice of law provision in this Guaranty, and under the Commercial Rules
of the American Arbitration Association (the "AAA"). The arbitrator(s) shall
give effect to statutes of limitation in determining any claim. Any
controversy concerning whether an issue is arbitrable shall be determined by
the
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<PAGE>
arbitrator(s). Judgment upon the arbitration award may be entered in any court
having jurisdiction. The institution and maintenance of an action for judicial
relief or pursuit of a provisional or ancillary remedy shall not constitute a
waiver of the right of any party, including the plaintiff, to submit the
controversy or claim to arbitration if any other party contests such action for
judicial relief.
(b) PROVISIONAL REMEDIES SELF-HELP AND FORECLOSURE. No provision
of this Section 14 shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain provisional or ancillary
remedies from a court of competent jurisdiction before, after, or during the
pendency of any arbitration.
15. AUTHORIZATION; NO VIOLATION. Guarantor is authorized to execute,
deliver and perform under this Guaranty, which is a valid, binding, and
enforceable obligation of Guarantor in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting creditor's rights generally. The
execution, delivery and performance of this Guaranty are not in violation of any
applicable law, regulation or ordinance, or any order or ruling of any court or
governmental agency applicable to the Guarantor. The Guaranty does not conflict
with, or constitute a breach or default under, any agreement to which Guarantor
is a party.
16. ADDITIONAL AND INDEPENDENT OBLIGATIONS. Guarantor's obligations
under this Guaranty are in addition to its obligations under any future
guaranties, each of which shall remain in full force and effect until it is
expressly modified or released in a writing signed by Agent and consented to by
the Lenders. Guarantor's obligations under this Guaranty are independent of
those of Company on the Indebtedness. Agent or the Lenders may bring a separate
action, or commence a separate arbitration proceeding against Guarantor without
first proceeding against Company, any other person or any security that Agent or
any Lender may hold, and without pursuing any other remedy. None of Agent's or
any Lender's rights under this Guaranty shall be exhausted by any action by
Agent or any Lender until the Indebtedness has been paid and performed in full
in cash.
17. NO WAIVER; CONSENTS; CUMULATIVE REMEDIES. Each waiver by Agent or
the Lenders must be in writing, and no waiver shall be construed as a continuing
waiver. No waiver shall be implied from Agent's or any Lender's delay in
exercising or failure to exercise any right or remedy against Company, Guarantor
or any security. Consent by Agent or the Lenders to any act or omission by
Company or Guarantor shall not be construed as a consent to any other or
subsequent act or omission, or as a waiver of the requirement for Agent's or the
Lenders' consent to be obtained in any future or other instance. All remedies of
Agent and each Lender against Company and Guarantor are cumulative.
18. NO RELEASE. Except as otherwise provided in Section 1, Guarantor
shall not be released, in whole or in part, from its obligations under this
Guaranty except by a writing signed by Agent and all the Lenders.
7
<PAGE>
19. HEIRS, SUCCESSORS AND ASSIGNS; PARTICIPATION. The terms of this
Guaranty shall bind and benefit the heirs, legal representatives, successors and
assigns of Agent, the Lenders and Guarantor; provided, however, that Guarantor
may not assign this Guaranty, or assign or delegate any of its rights or
obligations under this Guaranty, without the prior written consent of Agent in
each instance. Without notice to or the consent of Guarantor, Agent and any
Lender may disclose any and all information in its possession concerning
Guarantor, this Guaranty and any security for this Guaranty to any actual or
prospective purchaser of any securities issued or to be issued by Agent or such
Lender, and to any actual or prospective purchaser or assignee of any
participation or other interest in the Indebtedness and this Guaranty.
20. NOTICES.
(a) DELIVERY. All notices, requests and other communications
provided for hereunder shall be in writing (including, unless the context
expressly otherwise provides, telegraphic, telex, facsimile transmission or
cable communication) and mailed, telegraphed, telexed or delivered to its
address specified on the signature pages hereof, or to such other address as
shall be designated by such party in a written notice to the other party.
(b) RECEIPT. All such notices and communications shall, when
transmitted by overnight delivery, telegraphed, telecopied by facsimile,
telexed or cabled, be effective when delivered for overnight delivery or to
the telegraph company, transmitted by telecopier, confirmed by telex
answerback or delivered to the cable company, respectively, or if delivered,
upon delivery.
(c) RELIANCE. Agent and each Lender shall be entitled to rely on
the authority of any person purporting to be a person authorized by Guarantor
to give such notice, and neither Agent nor any Lender shall have any
liability to Guarantor or any other person on account of any action taken or
not taken by Agent or such Lender in reliance upon such telephonic or
facsimile notice. The obligation of Guarantor hereunder shall not be affected
in any way or to any extent by any failure by Lender to receive written
confirmation of any telephonic or facsimile notice or the receipt by Agent or
a Lender of a confirmation which is at variance with the terms understood by
Agent or such Lender to be contained in the telephonic or facsimile notice.
21. RULES OF CONSTRUCTION. In this Guaranty, the word "Company"
includes both the named Company and any other person who at any time assumes or
otherwise becomes primarily liable for all or any part of the obligations of the
named Company on the Indebtedness. The word "person" includes any individual,
company, trust or other legal entity of any kind. If this Guaranty is executed
by more than one person, the word "Guarantor" includes all such persons. The
word "include(s)" means "include(s), without limitation," and the word
"including" means "including, but not limited to." When the context and
construction so require, all words used in the singular shall be deemed to have
been used in the plural and vice versa. No listing of specific instances, items
or matters in any way limits the scope or generality of any language of this
Guaranty. All headings appearing in this Guaranty are for convenience only and
shall be disregarded in construing this Guaranty.
8
<PAGE>
22. GOVERNING LAW. This Guaranty shall be governed by, and construed
in accordance with, the laws of the State of _____________, without regard to
its choice of law rules.
23. COSTS AND EXPENSES. If any lawsuit or arbitration is commenced
which arises out of, or which relates to this Guaranty, the Loan Documents or
the Indebtedness, the prevailing party shall be entitled to recover from each
other party such sums as the court or arbitrator may adjudge to be reasonable
attorneys' fees (including allocated costs for services of in-house counsel) in
the action or proceeding, in addition to costs and expenses otherwise allowed by
law. In all other situations, including any Insolvency Proceeding, Guarantor
agrees to pay all of the Agent's and each Lender's costs and expenses, including
attorneys' fees (including allocated costs for services of the Agent's and each
Lender's in-house counsel) which may be incurred in any effort to collect or
enforce the Indebtedness or any part of it or any term of this Guaranty. Without
limiting any rights of the Agent or Lenders under the Revolving Credit Agreement
or the Bridge Loan Agreement, all amounts of any kind due and payable under this
Guaranty (whether for principal, interest, and other costs under the
Indebtedness, or for costs, fees, and expenses for which the Guarantors are
directly responsible hereunder, or otherwise) shall accrue interest from the
time the Agent or the Lenders make demand therefor hereunder until paid in full
in cash to such Agent or the Lenders at the Base Rate, as defined in the
Revolving Credit Agreement, plus three (3%) percentage points, except to the
extent that any such amounts are then accruing interest under the Indebtedness,
in which case such Base Rate plus 3% interest rate shall not be applied if the
effect would be to compound the interest to which such obligations are subject
to under the Indebtedness.
24. CONSIDERATION. Guarantor acknowledges that it expects to benefit
from Lenders' extension of the Facility to Company because of its relationship
to Company, because such Facility is essential to the business of the Company
and because a portion of the Indebtedness will be available for the Company to
pay certain expenses intended to be incurred by Guarantor in connection with the
conduct by Guarantor of its business. Guarantor is executing this Guaranty in
consideration of these anticipated benefits.
25. INTEGRATION; MODIFICATIONS. This Guaranty (a) integrates all the
terms and conditions mentioned in or incidental to this Guaranty, (b) supersedes
all oral negotiations and prior writings with respect to its subject matter, and
(c) is intended by Guarantor, Agent and the and Lenders as the final expression
of the agreement with respect to the terms and conditions set forth in this
Guaranty and as the complete and exclusive statement of the terms agreed to by
Guarantor, Agent and the Lenders. No representation, understanding, promise or
condition shall be enforceable against any party hereto unless it is contained
in this Guaranty. This Guaranty may not be modified except in a writing signed
by both Agent (with the consent of the Requisite Lenders) and Guarantor. No
course of prior dealing, usage of trade, parol or extrinsic evidence of any
nature shall be used to supplement, modify or vary any of the terms hereof. As
between Agent and the Lenders only, nothing contained in this Guaranty shall
alter the rights and obligations among Agent and the Lenders set forth in the
Credit Agreement.
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<PAGE>
26. MISCELLANEOUS. The illegality or unenforceability of one or more
provisions of this Guaranty shall not affect any other provision. Time is of the
essence in the performance of this Guaranty by Guarantor. The obligations of
each Guarantor under this Guaranty shall be joint and several.
Guarantors:
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY,
a Maryland corporation
By: /s/ Peter K. Kompaniez
------------------------------------
Peter K. Kompaniez
Vice Chairman
AIMCO-GP, INC.,
a Delaware corporation
By: /s/ Peter K. Kompaniez
------------------------------------
Peter K. Kompaniez
Vice President
AIMCO-LP, INC.,
a Delaware corporation
By: /s/ Peter K. Kompaniez
------------------------------------
Peter K. Kompaniez
Vice President
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AIMCO HOLDINGS, LP,
a Delaware limited partnership
By: AIMCO HOLDINGS QRS, INC.,
a Delaware corporation,
General Partner
By: /s/ Peter K. Kompaniez
---------------------------------------
Peter K. Kompaniez
Vice President
AIMCO HOLDINGS QRS, INC.,
a Delaware corporation
By: /s/ Peter K. Kompaniez
---------------------------------------
Peter K. Kompaniez
Vice President
Address Where Notices to Guarantors are
to be Sent:
AIMCO SOMERSET, INC.,
a Delaware corporation 1873 South Bellaire Street
17th Floor
By: /s/ Peter K. Kompaniez Denver, Colorado 90071
--------------------------------
Peter K. Kompaniez
Vice President
Address Where Notices to Agent are
to be Sent:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
AIMCO/OTC QRS, INC., 555 South Flower Street, 6th Floor
a Delaware corporation Los Angeles, California 90071
Att'n: Manager - Unit #1357
By: /s/ Peter K. Kompaniez
--------------------------------
Peter K.Kompaniez
Vice President Addresses Where Notices to the Lenders
are to be Sent:
Per the Credit Agreement
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<PAGE>
Amended and Restated Revolving Credit Agreement
(Bridge Loan Facility)
among
AIMCO Properties, L.P.,
a Delaware limited partnership,
Bank of America National Trust and Savings Association,
as the Agent,
and
Bank of America National Trust and Savings Association
as the initial Lender
May 5, 1997
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.........................................................1
1.01 Defined Terms.........................................................1
1.02 Other Definitional Provisions.........................................8
1.03 Accounting Principles................................................10
ARTICLE II THE FACILITY......................................................10
2.01 Amounts and Terms of Bridge Commitments..............................10
2.02 Note.................................................................11
2.03 Procedure for Borrowing..............................................11
2.04 Conversion and Continuation Elections................................13
2.05 Optional Prepayments.................................................15
2.06 Mandatory Prepayments of Loans.......................................15
2.07 Application of Proceeds..............................................15
2.08 Repayment............................................................15
2.09 Interest.............................................................15
2.10 Fees.................................................................16
2.11 Computation of Fees and Interest.....................................16
2.12 Payments by the Company..............................................17
2.13 Security.............................................................17
2.14 Loan and Funded Project Conditions...................................18
2.15 Payments by the Banks to the Agent...................................20
2.16 Sharing of Payments, Etc.............................................21
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY...........................21
3.01 Taxes................................................................21
3.02 Illegality...........................................................24
3.03 Increased Costs and Reduction of Return..............................25
3.04 Funding Losses.......................................................25
3.05 Inability to Determine Rates.........................................26
3.06 Certificates of Lender...............................................26
3.07 Survival.............................................................26
ARTICLE IV CONDITIONS PRECEDENT..............................................26
4.01 Conditions of First Loan.............................................26
4.02 Conditions to Each Loan..............................................27
ARTICLE V REPRESENTATIONS AND WARRANTIES.....................................28
5.01 Representations under the Revolving Credit Agreement.................28
5.02 Title to the Funded Projects.........................................28
5.03 Governmental Authorization...........................................28
5.07 Certain Representations Concerning Funded Projects...................29
5.05 Equity Interests Pledge Agreements...................................29
5.06 Use of Proceeds; Margin Regulations..................................29
5.07 Not a "Foreign Person................................................29
5.08 Full Disclosure......................................................29
ARTICLE VI AFFIRMATIVE COVENANTS.............................................30
6.01 Financial Information................................................30
6.02 Certificates; Other Information......................................30
6.03 Notices..............................................................30
6.04 Insurance............................................................31
6.05 Environmental Laws...................................................31
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6.06 Use of Proceeds......................................................31
6.07 Inspection of Property and Books and Records.........................31
6.08 Additional Guaranties................................................32
6.09 Covenants Relating to Funded Projects................................32
6.10 Payment of Obligations...............................................32
6.11 Further Assurances...................................................33
6.12 Covenant to Indemnify Regarding Construction and Other Risks.........33
6.13 Indemnity Regarding Hazardous Substances.............................34
ARTICLE VII NEGATIVE COVENANTS...............................................36
7.01 Liens................................................................36
7.02 Disposition of Funded Projects.......................................36
7.03 Use of Proceeds......................................................36
ARTICLE VIII EVENTS OF DEFAULT...............................................36
8.01 Event of Default.....................................................36
8.02 Remedies.............................................................38
8.03 Rights Not Exclusive.................................................38
ARTICLE IX THE AGENT.........................................................38
9.01 Appointment and Authorization........................................38
9.02 Delegation of Duties.................................................39
9.03 Liability of Agent...................................................39
9.04 Reliance by Agent....................................................39
9.05 Notice of Default....................................................40
9.06 Credit Decision......................................................40
9.07 Indemnification......................................................41
9.08 Agent in Individual Capacity.........................................41
9.09 Successor Agents.....................................................42
9.10 Collateral Matters...................................................42
ARTICLE X MISCELLANEOUS......................................................42
10.01 Amendments and Waivers..............................................42
10.02 Notices.............................................................43
10.03 No Waiver; Cumulative Remedies......................................44
10.04 Costs and Expenses..................................................44
10.05 Indemnity...........................................................45
10.06 Marshalling; Payments Set Aside.....................................45
10.07 Successors and Assigns..............................................45
10.08 Assignments, Participations, etc....................................45
10.09 Setoff..............................................................47
10.10 Notification of Addresses, Lending Offices, Etc.....................48
10.11 Counterparts........................................................48
10.12 Severability........................................................48
10.13 No Third Parties Benefited..........................................48
10.14 Time................................................................48
10.15 Governing Law.......................................................48
10.16 Waiver of Jury Trial................................................48
10.17 Arbitration.........................................................49
10.18 Notice of Claims; Claims Bar........................................49
10.19 Entire Agreement....................................................50
10.20 Interpretation......................................................50
10.21 Exculpation of Banks................................................50
10.22 Relationship........................................................50
ii
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AMENDED AND RESTATED CREDIT AGREEMENT
(Bridge Loan)
This AMENDED AND RESTATED CREDIT AGREEMENT (BRIDGE LOAN) (this
"Agreement") is entered into as of May 5, 1997, among AIMCO PROPERTIES, L.P., a
Delaware limited partnership (the "Company"), the lenders from time to time
party to this Agreement (the "Lenders"), BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as one of the Lenders ("BofA"), and BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent (the "Agent").
A. Pursuant to that certain Credit Agreement, dated as of
August 12, 1996, by and between BofA, as a lender and the agent, and the
Company, as amended (as so amended, the "Previous Credit Agreement"), BofA made
available to the Company a bridge loan facility in the amount of up to Twenty-
Five Million Dollars ($25,000,000).
B. BofA, the Lenders and the Company desire to replace the
Previous Credit Agreement with this Agreement thereby making available to the
Company a bridge loan facility upon the terms and conditions set forth in this
Agreement. Upon the Closing Date (as defined below), the lending commitments of
any Lender to the Company under the Previous Credit Agreement shall be
cancelled.
C. As of the date hereof, the outstanding principal balance
under the Previous Credit Agreement is $4,119,739.
D. Concurrently herewith, the Lenders, the Company, and the
Agent are entering into that certain Amended and Restated Credit Agreement
(Secured Revolver-to-Term Facility), which makes available to the Company a
revolver-to-term credit facility in an amount not to exceed One Hundred Million
Dollars ($100,000,000) (the "Revolving Credit Agreement).
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01 DEFINED TERMS. Capitalized terms used but not defined
herein have the meanings set forth in the Revolving Credit Agreement. In
addition to the terms defined elsewhere in this Agreement, the following terms
have the following meanings:
"AFFILIATE" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall
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be deemed to control another Person if the controlling Person possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the ownership of
voting securities, by contract or otherwise. Without limitation, any director,
executive officer or beneficial owner of five percent (5%) or more of the equity
of a Person shall, for the purposes of this Agreement, be deemed to control the
other Person. In no event shall any Lender be deemed an "Affiliate" of the
Company.
"AGENT" means Bank of America National Trust and Savings
Association, in its capacity as Agent, and any successor Agent appointed
hereunder.
"AGENT-RELATED PERSONS" has the meaning specified in Section 9.03.
"AGGREGATE BRIDGE COMMITMENT" means the combined Bridge
Commitments of the Lenders, in the amount of up to $25,000,000 which amount upon
the date hereof is $15,000,000 but may be increased in accordance with Section
2.01(c) below to up to $25,000,000.
"AGREEMENT" means this Revolving Credit Agreement (Bridge Loan),
as amended, supplemented or modified from time to time.
"APPLICABLE MARGIN" means
(a) with respect to Base Rate Loans, [0.0%]; and
(b) with respect to LIBOR Loans, the Applicable LIBOR
Margin then in effect under the Revolving Credit Agreement plus 0.25%.
"ASSIGNEE" has the meaning specified in Section 10.08(a).
"ASSIGNMENT AND ACCEPTANCE" has the meaning specified in Section
10.08(a).
"ATTORNEY COSTS" means and includes all reasonable fees and
disbursements of any law firm or other external counsel, the allocated cost of
internal legal services and all disbursements of internal counsel.
"LENDER" means each of the lenders party to this Agreement, and
includes BofA in its individual capacity.
"LENDER AFFILIATE" means a Person that is engaged primarily in the
business of commercial lending and is a Subsidiary of a Lender or of a Person of
which a Lender is a Subsidiary.
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"BANKRUPTCY CODE" means the Federal Bankruptcy Reform Act of 1978
(12 U.S.C. Section 101, ET. SEQ.), as amended from time to time.
"BASE RATE" means the higher of:
(a) the annual rate of interest publicly announced from
time to time by the Reference Lender as its "reference" rate. The "reference"
rate is a rate set based upon various factors including the Reference Lender's
costs and desired return, general economic conditions, and other factors, and is
used as reference points for pricing some loans. Any change in the Base Rate
shall take effect on the day specified in the public announcement of such
change; or
(b) one-half of one percent (0.5%) per annum above the
latest Federal Funds Rate.
"BASE RATE LOAN" means a Loan that bears interest based on the
Base Rate.
"BOFA" means Bank of America National Trust and Savings
Association, other than in its capacity as the Agent hereunder.
"BORROWING NOTICE" means a notice given by the Company to the
Agent pursuant to Section 2.03, in substantially the form of EXHIBIT A.
"BRIDGE AVAILABILITY" shall mean at any time the Bridge
Commitment, minus the outstanding balance of all Loans at such time.
"BRIDGE COMMITMENT" means the amount set forth opposite each
Lender's name in SCHEDULE 2.01 (such amount as the same may be reduced or
increased as a result of one or more assignments pursuant to Section 10.08).
"BRIDGE COMMITMENT PERCENTAGE" means, as to any Lender, the
percentage equivalent of such Lender's Bridge Commitment divided by the
Aggregate Bridge Commitment.
"BRIDGE FACILITY" has the meaning specified in Section 2.01(a).
"BRIDGE FACILITY MATURITY DATE" means the earlier of (i) the
Conversion Date, (ii) the date on which the Aggregate Commitment under (and as
such term is defined in) the Revolving Credit Agreement is reduced to zero, and
(iii) August 12, 1998; subject, however, to earlier acceleration pursuant to the
provisions of the Loan Documents.
"BUSINESS DAY" means any day other than a Saturday, Sunday or
other day on which commercial lenders are authorized or required by law to close
in New York City or the city in which the Agent's office charged with
administration of the Loans is
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located; except in cases in which it relates to any LIBOR Loan, in which cases
"Business Day" means such a day on which dealings are carried on in the London
dollar interbank market.
"CAPITAL ADEQUACY REGULATION" means any guideline, request or
directive of any central lender or other Governmental Authority having
jurisdiction, or any other law, rule or regulation, whether or not having the
force of law, regarding capital adequacy of any Lender or of any corporation
controlling a Lender.
"CLOSING DATE" means the date on which all conditions precedent
set forth in Section 4.01 are satisfied or waived by all Lenders; said date
shall occur no later than the Closing Date under the Revolving Credit Agreement.
"COLLATERAL" means all property interests, now owned or hereafter
acquired, of the Company or any Wholly-Owned Subsidiary in or upon which a Lien
now or hereafter exists in favor of the Agent on behalf of the Lenders hereunder
or under the Equity Interests Pledge Documents.
"DEFAULT" means any event or circumstance which, with the giving
of notice, the lapse of time, or both, would (if not cured or otherwise
remedied) constitute an Event of Default.
"DISPOSITION" means the sale, lease, conveyance, transfer,
encumbrance, mortgage, hypothecation or other disposition of (whether in one or
a series of transactions) any Funded Project or portion thereof or interest
therein.
"DOLLARS", "DOLLARS" and "$" each mean lawful money of the United
States.
"DOMESTIC LENDING OFFICE" means, with respect to each Lender, the
office of that Lender designated as such on the signature pages hereto or such
other office of a Lender as it may from time to time specify in writing to the
Company and the Agent.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized under
the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000, (b) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or a political subdivision of
any such country, and having a combined capital and surplus of at least
$100,000,000, provided that such commercial bank is acting through a branch or
agency located in the country in which it is organized or another country which
is also a member of the OECD, and (c) any Lender Affiliate.
"EQUITY INTERESTS PLEDGE AGREEMENTS" shall mean the pledge
agreements delivered from time to time pursuant to Section 2.13.
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"EQUITY INTERESTS PLEDGE DOCUMENTS" means, collectively, (a) the
Equity Interests Pledge Agreements delivered by the Company or any Wholly-Owned
Subsidiary to the Agent for the benefit of the Lenders pursuant hereto, (b) all
financing statements (or comparable documents) now or hereafter filed in
accordance with the UCC (or comparable law) against the Company or any Wholly-
Owned Subsidiary as debtor in favor of the Lenders or the Agent for the benefit
of the Lenders as secured party pursuant to the Equity Interests Pledge
Agreements, and (c) any amendments, supplements, modifications, renewals,
replacements, consolidations, substitutions and extensions of any of the
foregoing.
"EVENT OF DEFAULT" means any of the events or circumstances
specified in Section 8.01.
"EVENT OF LOSS" means, with respect to any Funded Project, any of
the following: (a) any loss, destruction or damage of such Funded Project, (b)
any pending or threatened institution of any proceedings for the condemnation or
seizure of such Funded Project or for the exercise of any right of eminent
domain, or (c) any actual condemnation, seizure or taking, by exercise of the
power of eminent domain or otherwise, of such Funded Project, or confiscation of
such property or requisition of the use of such Funded Project.
"FEDERAL FUNDS RATE" means, for any period, the rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)". If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotation") for such day under the caption "Federal Funds Effective Rate". If
on any relevant day the appropriate rate for such previous day is not yet
published in either H.15(519) or the Composite 3:30 p.m. Quotations, the rate
for such day will be the arithmetic mean of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York time) on that
day by each of three (3) leading brokers of Federal funds transactions in New
York City selected by the Agent.
"FUNDED PROJECT" means any one of the Initial Funded Projects or
any other multi-family apartment project with respect to which the Company or a
Wholly-Owned Subsidiary owns or will, prior to or simultaneously upon the
release of any Loan funds hereunder on account thereof, acquire a fee simple
estate, subject only to normal and customary title exceptions, and which has
been approved by the Lenders in accordance with Section 2.14 below. A project
shall cease being a "Funded Project" hereunder in accordance with Section 7.02
hereof.
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"INDEMNIFIED COST" has the meaning specified in Section 6.10.
"INDEMNIFIED LIABILITIES" has the meaning specified in Section
10.05.
"INDEMNIFIED PARTY" has the meaning specified in Section 6.10.
"INDEMNIFIED PERSON" has the meaning specified in Section 10.05.
"INDIVIDUAL BRIDGE LOAN LIMITATION" has the meaning set forth in
Section 2.14(b).
"INDIVIDUAL BRIDGE LOAN MATURITY DATE" means, with respect to each
Loan, the date which is the earlier of (i) sixty (60) days after the
disbursement of such Loan, (ii) the Bridge Facility Maturity Date or (iii) in
the case of the Initial Funded Projects, the date designated as such on SCHEDULE
1.01 attached hereto, subject, however, to earlier acceleration pursuant to the
provisions of the Loan Documents.
"INITIAL FUNDED PROJECTS" means the multi-family apartment
projects so designated on SCHEDULE 1.01 attached hereto.
"INTEREST PAYMENT DATE" means, with respect to any Base Rate Loan
and any LIBOR Loan, the thirtieth day and the sixtieth day after each Loan has
been funded, unless such Loan is sooner repaid in full.
"INTEREST PERIOD" means, with respect to any LIBOR Loan, the
period commencing on the Business Day on which the Loan is disbursed or on the
Pricing Conversion Date on which the Loan is continued as or converted to the
LIBO Rate and ending on the date one (1) or two (2) months thereafter, as
selected by the Company in its Borrowing Notice or Notice of
Conversion/Continuation; PROVIDED that:
(a) if any Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to carry
such Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Business Day;
(b) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar month at the end of such
Interest Period; and
(c) no Interest Period for any Loan shall extend beyond
the Individual Bridge Loan Maturity Date for that Loan.
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"KNOWLEDGE OF THE COMPANY" means the actual knowledge (after
reasonable inquiry) of any of the officers of the Company or the REIT and each
other Person with executive responsibility for any aspect of the Company's or
the REIT's business.
"LENDING OFFICE" means, with respect to any Lender, the office or
offices of the Lender specified as its "Lending Office" opposite its name on the
signature pages hereto, or such other office or offices of the Lender as it may
from time to time specify in writing to the Company and the Agent.
"LIBO RATE" means, for each Interest Period for any LIBOR Loan, an
interest rate per annum (rounded upward to the nearest 1/100th of 1%) determined
pursuant to the following formula:
LIBO Rate = LIBOR
-------------------------
1.00 - Reserve Percentage
Where,
(i) "LIBOR" means the per annum rate of interest,
rounded upward, if necessary, to the nearest 1/16th of one percent (0.0625%), at
which the Reference Lender's London branch, London, England, would offer U.S.
dollar deposits in amounts and for periods comparable to those of the applicable
LIBOR Loan and Interest Period to major lenders in the London U.S. dollar inter-
lender market at approximately 11:00 a.m., London time, on the first Business
Day after the Borrowing Notice or Notice of Conversion/Continuation for such
LIBOR Loan is delivered to the Agent; and
(ii) "RESERVE PERCENTAGE" means the total of the maximum
reserve percentages from time to time for determining the reserves to be
maintained by member lenders of the Federal Reserve System for Eurocurrency
Liabilities, as defined in Federal Reserve Board Regulation D, whether or not
applicable to any Lender. The Reserve Percentage shall be expressed in decimal
form and rounded upward, if necessary, to the nearest 1/100th of one percent,
and shall include marginal, emergency, supplemental, special and other reserve
percentages.
"LIBOR LOAN" means a Loan that bears interest based on the LIBO
Rate.
"LOAN" has the meaning specified in Section 2.01(a).
"LOAN DOCUMENTS" means this Agreement, the Equity Interests Pledge
Documents and the REIT Guaranty Documents.
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"MATERIAL ADVERSE EFFECT" means a material adverse change in, or a
material adverse effect upon, any of (a) the assets, operations, business,
condition (financial or otherwise), or prospects of the Company, the REIT and
their respective Subsidiaries, taken as a whole, (b) the ability of the Company,
the REIT and their respective Subsidiaries to perform under any Loan Document
and avoid any Event of Default, (c) the ability of the REIT and the Subsidiaries
party thereto to perform under the REIT Guaranty Documents.
"NOTE" means a promissory note of the Company payable to the order
of a Lender in substantially the form of EXHIBIT B, evidencing the aggregate
indebtedness of the Company to such Lender resulting from Loans made by such
Lender.
"NOTICE OF CONVERSION/CONTINUATION" means a notice given by the
Company to the Agent pursuant to Section 2.04, in substantially the form of
EXHIBIT C.
"OBLIGATIONS" means all Loans, and other Indebtedness, advances,
debts, liabilities, obligations, covenants and duties owed by the Company, the
REIT or any of their respective Subsidiaries to the Agent, any Lender, or any
other Person required to be indemnified under any Loan Document, of any kind or
nature, present or future, whether or not evidenced by any note, guaranty or
other instrument, arising under this Agreement or under any other Loan Document,
whether or not for the payment of money, whether arising by reason of an
extension of credit, loan, guaranty, indemnification or in any other manner,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired.
"OTHER TAXES" has the meaning specified in Section 3.01(b).
"OUTSTANDING AMOUNT" means the aggregate principal amount of all
outstanding Loans.
"PARTICIPANT" has the meaning specified in Section 10.08(d).
"PAYMENT OFFICE" means the address for payments set forth on the
signature page hereto in relation to the Agent or such other address as the
Agent may from time to time specify in accordance with Section 10.02.
"PRICING CONVERSION DATE" means any date on which the Company
elects to (a) convert a Base Rate Loan to a LIBOR Loan or a LIBOR Loan to a Base
Rate Loan or (b) continue an existing LIBOR Loan for an additional Interest
Period.
"REFERENCE LENDER" means BofA.
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"REIT" means Apartment Investment and Management Company, a
Maryland corporation.
"REIT GUARANTY DOCUMENTS" shall mean a guaranty of the
Obligations, in the form of EXHIBIT D attached hereto, and such other documents
relating to such guaranty as the Agent may require, duly executed by the REIT,
AIMCO-GP, Inc., AIMCO-LP, Inc., AIMCO Holdings, L.P., AIMCO Holdings QRS, Inc.,
AIMCO Somerset, Inc., and AIMCO/OTC QRS, Inc., together with the guaranties
delivered pursuant to Section 6.08.
"REQUISITE LENDERS" means, as of any date of determination, (a) if
there is one Lender hereunder, that Lender, and (b) if there are two (2) or more
Lenders hereunder, then two (2) or more Lenders (for purposes of counting
Lenders, BofA and all affiliates of BofA collectively count as one Lender, and
in order to qualify as one of the two (2) necessary Lenders, a Lender must hold
a minimum Bridge Commitment of $5,000,000), holding at least sixty-six and two-
thirds percent (66-2/3%) of the outstanding balance of the Loans, or, if there
are no Loans outstanding, having at least sixty-six and two thirds percent
(66-2/3%) of the Aggregate Bridge Commitment.
"TAXES" has the meaning specified in Section 3.01(a).
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary of the Company or the
REIT one hundred percent (100%) of the Stock or other equity or other beneficial
interests (in the case of Persons other than corporations) is owned directly or
indirectly by (i) the Company and/or (ii) the REIT, and which in each such case
has been formed in accordance with Section 7.07 of the Revolving Credit
Agreement; provided, however, that where such term is qualified with respect to
a specific Person (e.g., "Wholly-Owned Subsidiary of the REIT") such term means
a Subsidiary (i) one hundred percent (100%) of the Stock or other equity or
other beneficial interests (in the case of Persons other than corporations) is
owned directly or indirectly by such Person, and (ii) which is formed in
compliance with Sections 7.07 of the Revolving Credit Agreement.
1.02 OTHER DEFINITIONAL PROVISIONS.
(a) DEFINED TERMS. Unless otherwise specified herein or
therein, all terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto. The meaning of defined terms shall be equally applicable to the
singular and plural forms of the defined terms. Terms (including uncapitalized
terms) not otherwise defined herein but defined in the UCC shall have the
meanings set forth therein.
(b) THE AGREEMENT. The words "hereof", "herein",
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and section, schedule and
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exhibit references are to this Agreement unless otherwise specified.
(c) CERTAIN COMMON TERMS.
(i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and
means "including without limitation."
(iii) The term "ratably" means, at any time that
Loans may be outstanding, in accordance with the amount of the outstanding Loans
of the respective Lenders; and, at any time that no Loans are outstanding, in
accordance with the outstanding Bridge Commitments of the respective Lenders.
(d) PERFORMANCE; TIME. Whenever any performance
obligation hereunder (other than a payment obligation) is stated to be due or
required to be satisfied on a day other than a Business Day, such performance
shall be made or satisfied on the next succeeding Business Day. In the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including"; the words "to" and "until" each mean
"to but excluding," and the word "through" means "to and including". If any
provision of this Agreement refers to any action taken or to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
interpreted to encompass any and all means, direct or indirect, of taking, or
not taking, such action.
(e) CONTRACTS. Unless otherwise expressly provided
herein, references to agreements and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document.
(f) LAWS. References to any statute or regulation are
to be construed as including all statutory and regulatory provisions
consolidating, amending or replacing the statute or regulation.
(g) CAPTIONS. The captions and headings of this
Agreement are for convenience of reference only and shall not affect the
construction of this Agreement.
(h) INDEPENDENCE OF PROVISIONS. The parties acknowledge
that this Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters, and
that such limitations, tests and measurements are cumulative and must each be
performed, except as expressly stated to the contrary in this Agreement.
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1.03 ACCOUNTING PRINCIPLES.
(a) GAAP. Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
(b) FISCAL YEAR; QUARTER. References herein to "fiscal
year" and "fiscal quarter" refer to such fiscal periods of the Company.
ARTICLE II
THE FACILITY
2.01 AMOUNTS AND TERMS OF BRIDGE COMMITMENTS.
(a) BRIDGE LOANS. Subject to the terms and conditions
of this Agreement and the Note, each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make loans to the Company (each such loan,
a "Loan" and all such loans collectively, the "Bridge Facility") from time to
time on any Business Day during the period from the Closing Date until the
Bridge Facility Maturity Date, in such amounts as the Company may request that
do not exceed (i) in the aggregate, the lesser of (A) such Lender's Bridge
Commitment, or (B) such Lender's Bridge Commitment Percentage of the Bridge
Availability, or (ii) with respect to any single Funded Project, such Lender's
Bridge Commitment Percentage of the Individual Bridge Loan Limitation for such
Funded Project as determined in accordance with Section 2.13 hereof. Each Loan
shall be in a principal amount at least equal to One Million Dollars
($1,000,000) and integral multiples of $100,000 in excess thereof. No Loans
shall be made after the Bridge Facility Maturity Date. Within the foregoing
limitations, and subject to the other terms and conditions hereof, the Company
may borrow under this Section 2.01(a), repay or prepay pursuant to Section 2.05
and reborrow pursuant to this Section 2.01(a). In the event that any Lender
increases its "Commitment" under (and as such term is defined in) the Revolving
Credit Agreement, or any Additional Lender (as so defined) increases the
Aggregate Commitment (as so defined) thereunder, pursuant to Section 2.01(a)(iv)
thereof, then automatically upon the effectiveness of such increase under the
Revolving Credit Agreement, the Bridge Commitments of the Lenders shall be
adjusted as provided in SCHEDULE 2.01, and any such Additional Lender shall,
automatically upon the adjustment date under the Additional Lender Agreement (as
so defined) delivered by it, become a lender party to this Agreement.
(b) BRIDGE CREDIT USAGE. The Company shall use the
proceeds of all Loans for the purposes described in Section 2.14(a) hereof.
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(c) INCREASE IN COMMITMENTS. The Agent may from time to
time prior to the Bridge Loan Maturity Date arrange an increase in the Aggregate
Bridge Commitment in accordance with this Section 2.01(c); provided, that the
aggregate amount of all such Aggregate Bridge Commitment increases shall not
exceed $10,000,000 and in no event shall the Aggregate Bridge Commitment exceed
$25,000,000. Agent may arrange either for an existing Lender to increase its
Commitment or arrange for one or more lenders not a party to this Agreement, but
qualifying as an Eligible Assignee (each such person, an "Additional Lender"),
to assume such additional Commitment(s) (provided that any Additional Lender
shall have a Commitment of not less than $1,250,000) by becoming a party to this
Agreement by signing an Additional Lender Agreement (in substantially the form
attached to the Revolving Credit Agreement) and such other documentation as the
Agent may reasonably request to effectuate such transaction. If, after giving
effect to any increase in the Bridge Loan Commitments as aforesaid, the
respective Bridge Commitment Percentages of the Lenders are not the same as the
respective Bridge Commitment Percentages of the Lenders immediately prior to
such increase, the Company shall prepay any outstanding Loans, together with
interest thereon and any amounts due pursuant to Section 3.04, effective as of
the date of such increase, which payments shall be applied in accordance with
each Lender's Bridge Commitment Percentage prior to giving effect to such
increase, and may reborrow such Bridge Loans from each Lender in accordance with
each Lender's revised Bridge Commitment Percentage after giving effect to such
increase. The Agent and the Lenders shall use reasonable efforts to effect any
such increase so as to minimize amounts due pursuant to Section 3.04. Increases
in Bridge Commitments pursuant to this Section shall be made concurrently with
Commitments under the Revolving Credit Agreement, as more fully described
therein.
2.02 NOTE. The Loans made by each Lender shall be evidenced by a
Note dated the Closing Date payable to the order of that Lender in an amount
equal to its Bridge Commitment. Each Lender shall endorse on the schedules
annexed to the Note, the date, amount and maturity of each Loan made by it and
the amount of each payment of principal made by the Company with respect
thereto. Each Lender is irrevocably authorized by the Company to endorse its
Note, and each Lender's record shall be conclusive absent manifest error;
PROVIDED, HOWEVER, that the failure of a Lender to make, or an error in making,
a notation thereon with respect to any Loan shall not limit or otherwise affect
the obligations of the Company hereunder or under any such Note to such Lender.
As of the Closing Date, the Notes shall evidence each Lender's Bridge Commitment
Percentage of the outstanding advances made under the Previous Credit Agreement
(together with all accrued interest thereon as of the date hereof and all
interest accruing hereafter), which advances shall, for all purposes hereof, be
deemed to have been made under this Agreement and shall be subject to the terms
and conditions hereof. All such advances shall be evidenced by the Notes and
shall be secured by the Collateral Documents and shall bear interest at
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the rates and for the remainder of the Interest Periods established under the
Previous Credit Agreement.
2.03 PROCEDURE FOR BORROWING.
(a) BORROWING NOTICE. Each Loan shall be made upon the
irrevocable written notice (including notice via facsimile confirmed immediately
by a telephone call) of the Company in the form of a Borrowing Notice, as
follows:
(i) DESIGNATION OF INTEREST RATE. The Company
shall have the right to elect that a Loan be made as a LIBOR Loan or a Base Rate
Loan; PROVIDED that, unless the Agent shall otherwise agree in writing, the
Company may not elect that a Loan be made as a LIBOR Loan if after giving effect
to such Loan there shall be more than five (5) different LIBOR Loans
outstanding.
(ii) APPROVAL OF FUNDED PROJECT. The Company
shall have delivered to the Lenders the notice and other information required
under, and the Lenders shall have approved the Funded Project to which such Loan
relates in accordance with, Section 2.14 below.
(iii) TIMING OF NOTICE. Each Borrowing Notice
shall be submitted to and received by the Agent prior to 9:00 a.m. (California
time) (A) at least three (3) Business Days prior to the specified borrowing
date, in the case of LIBOR Loans; and (B) at least one (1) Business Day prior to
the specified borrowing date, in the case of Base Rate Loans.
(iv) CONTENTS OF NOTICE. Each Borrowing Notice
shall set forth the following information with respect to the Loan subject
thereto:
(A) a single, specific borrowing date,
which shall be a Business Day;
(B) a single, exact amount for the Loan,
which for any LIBOR Loan, shall be in an aggregate minimum principal amount of
$1,000,000 or any multiple of $100,000 in excess thereof;
(C) whether the Loan is to be made as a
LIBOR Loan or a Base Rate Loan;
(D) if the Loan is to be made as a LIBOR
Loan, the applicable Interest Period. If a Borrowing Notice shall fail to
specify the applicable Interest Period for any LIBOR Loan requested, such Loan
will instead be made as a Base Rate Loan;
(E) subject to 2.03(c) with respect to
Loans for Initial Funded Projects, the address and wiring in-
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structions for the escrow closing the acquisition of the Funded Project to which
the Loan will be applied.
(b) NOTICE TO LENDERS. Upon receipt of a Borrowing
Notice conforming with the terms of Section 2.03(a), the Agent shall promptly
notify each Lender thereof and of the amount of such Lender's Bridge Commitment
Percentage of the Loan described therein.
(c) FUNDING OF BRIDGE COMMITMENT. Each Lender shall
make the amount of its Bridge Commitment Percentage of the Loan described in any
Borrowing Notice available to the Agent for the account of the Company at the
Payment Office by 9:00 a.m. (California time) on the borrowing date specified
therein in funds immediately available to the Agent. Unless any applicable
condition specified in Article IV has not been satisfied, such funds shall then
be made available to the Company by the Agent in the aggregate of the amounts
made available to the Agent by the Lenders (in like funds as received by the
Agent), either (i) in the case of a Funded Project to be acquired in part with
the proceeds of such Loan, at the escrow closing for the acquisition of such
Funded Project or (ii) in the case of any other Funded Project, by crediting the
account of the Company. Notwithstanding the foregoing, with respect to any
Funded Project encumbered by any Liens securing Indebtedness, the Agent may, in
its sole discretion, either fund the applicable Loan proceeds into an escrow, if
applicable, or disburse such Loan proceeds directly to the account of the
creditor whose Lien is being concurrently repaid upon satisfactory evidence that
on or before such repayment the Lien will be released or reconveyed.
(d) FREQUENCY OF BORROWINGS. No more than four (4)
Borrowing Notices may be given in any calendar month.
2.04 CONVERSION AND CONTINUATION ELECTIONS.
(a) NOTICE OF CONVERSION/CONTINUATION. Each conversion
or continuation of an outstanding Base Rate Loan or LIBOR Loan shall be made
upon the irrevocable written notice (including notice via facsimile confirmed
immediately by a telephone call) of the Company in the form of a Notice of
Conversion/Continuation, as follows:
(i) DESIGNATION OF INTEREST RATE. The Company
shall have the right to make the following elections with respect to the
conversion or continuation of any outstanding Base Rate Loan or LIBOR Loan:
(A) to convert, on any Business Day, any
Base Rate Loan, in a minimum principal amount of $1,000,000 or an integral
multiple of $100,000 in excess thereof, into a LIBOR Loan; or
(B) to convert, on the last day of any
Interest Period with respect to a LIBOR Loan (or, on any other
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day of any Interest Period, upon payment of any loss or expense incurred or
sustained by any Lender with respect to the early termination of such LIBOR Loan
prior to the last day of the Interest Period as provided in Section 3.04), such
LIBOR Loan into a Base Rate Loan; or
(C) to continue, on the last day of any
Interest Period with respect to a LIBOR Loan (or, on any other day of any
Interest Period, upon payment any loss or expense incurred or sustained by any
Lender with respect to the early termination of such LIBOR Loan prior to the
last day of the Interest Period as provided in Section 3.04), such LIBOR Loan
(or any part thereof in a minimum principal amount of $1,000,000 or an integral
multiple of $100,000 in excess thereof) for a subsequent Interest Period;
PROVIDED, that unless the Agent shall otherwise agree in writing, the Company
may not elect to have any outstanding LIBOR Loan or Base Rate Loan (or any
portion thereof) continued as or converted into a LIBOR Loan if (A) a Default or
Event of Default shall exist, (B) after giving effect to the such continuation
or conversion there shall be more (i) than five different LIBOR Loans
outstanding or (ii) the aggregate outstanding principal amount of all LIBOR
Loans shall have been reduced, by payment, prepayment, or partial conversion to
less than $1,000,000.
(ii) TIMING OF NOTICE. Each Notice of
Conversion/Continuation shall be submitted to and received by the Agent prior to
9:00 a.m. (California time): (A) at least three (3) Business Days prior to the
Pricing Conversion Date of any outstanding Loan to be converted into or
continued as a LIBOR Loan; and (B) at least one (1) Business Day prior to the
Pricing Conversion Date of any outstanding Loan to be converted into or
continued as a Base Rate Loan.
(iii) CONTENTS OF NOTICE. The Notice of
Conversion/Continuation shall set forth the following information with respect
to the Loan subject thereto:
(A) the Pricing Conversion Date, which
shall be a Business Day;
(B) the amount of the LIBOR Loan or Base
Rate Loan to be converted or continued;
(C) whether such Loan is to be converted
into/continued as a LIBOR Loan or a Base Rate Loan; and
(D) if such Loan (or any portion thereof)
is to be converted into/continued as a LIBOR Loan, the applicable Interest
Period.
(b) AUTOMATIC CONVERSIONS. Any outstanding LIBOR Loan
shall automatically convert to a Base Rate Loan, effective
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on the last day of the applicable Interest Period, if as of such date:
(i) DEFAULT; EVENT OF DEFAULT. A Default or
Event of Default shall exist;
(ii) FAILURE TO PROVIDE NOTICE. The Company shall
have failed to submit a Notice of Conversion/Continuation for such Loan in
compliance with the terms of Section 2.04(a); or
(iii) FAILURE TO MAINTAIN MINIMUM LOANS. If the
aggregate outstanding principal amount of LIBOR Loans having the same Interest
Period shall have been reduced, by payment, prepayment, or partial conversion to
be less than $1,000,000.
(c) NOTICE TO LENDERS. Upon receipt of a Notice of
Conversion/Continuation conforming with the terms of Section 2.04(a), or an
automatic conversion pursuant to Section 2.04(b), the Agent shall promptly
notify each Lender thereof. All conversions and continuations shall be made pro
rata according to the respective outstanding principal amounts of the Loans
converted or continued.
2.05 OPTIONAL PREPAYMENTS. Subject to Section 3.04, the Company
may, at any time and from time to time, ratably prepay Loans in whole or in
part, in an aggregate minimum amount of $1,000,000 or an integral multiple of
$100,000 in excess thereof, upon (a) at least three (3) Business Days' prior
notice, if the Loans to be prepaid are LIBOR Loans, and (b) at least one
Business Day's prior notice, if the Loans to be prepaid are Base Rate Loans.
Such notice of prepayment shall specify (i) the amount of such prepayment, (ii)
the date of such prepayment, which shall be a Business Day, and (iii) whether
such prepayment is of LIBOR Loans, Base Rate Loans, or any combination thereof.
Such notice shall not thereafter be revocable by the Company and the Agent shall
promptly notify each Lender thereof and of such Lender's Bridge Commitment
Percentage of such prepayment. If a prepayment notice is given, the payment
amount specified therein shall be due and payable on the date specified therein,
together with accrued interest to such date on the amount prepaid and any
amounts required to be paid pursuant to Section 3.04.
2.06 MANDATORY PREPAYMENTS OF LOANS . If at any time the
Outstanding Amount exceeds the then applicable Bridge Availability, the Company
shall, within three (3) days thereafter, prepay Loans in an amount sufficient to
reduce the Outstanding Amount to the then applicable Bridge Availability.
2.07 APPLICATION OF PROCEEDS. Unless otherwise instructed by
the Company, any prepayments pursuant to Section 2.05 or Section 2.06 made (i)
on a day other than the last day of an Interest Period for any Loan shall be
applied first to any Base Rate Loans then outstanding and then to any LIBOR
Loans then outstanding, in the inverse order of such LIBOR Loans' stated
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maturities and (ii) on the last day of an Interest Period for any LIBOR Loan
shall be applied first to such maturing LIBOR Loan, then to any Base Rate Loans
outstanding, and then to any other LIBOR Loans then outstanding, in the inverse
order of such LIBOR Loans' stated maturities.
2.08 REPAYMENT. Subject to Section 2.06, the Company shall
repay each Loan on the applicable Individual Bridge Loan Maturity Date.
2.09 INTEREST.
(a) RATES. Subject to Section 2.09(c), each Loan shall
bear interest on the outstanding principal amount thereof from the date such
Loan is made until the date such Loan becomes due, at a rate per annum equal to
the LIBO Rate or the Base Rate, as the case may be, PLUS the Applicable Margin.
(b) PAYMENT DATES. Interest on each Loan shall be
payable in arrears on each Interest Payment Date and the Individual Bridge Loan
Maturity Date. Interest shall also be payable on the date of any prepayment of
Loans pursuant to Section 2.05 or Section 2.06 for the portion of the Loans so
prepaid. During the existence of any Event of Default, interest shall be
payable on demand.
(c) DEFAULT RATES. While any Event of Default exists or
after acceleration and during the continuation thereof, and after as well as
before any entry of judgment thereon, the Company shall pay interest (after as
well as before judgment to the extent permitted by law) on all outstanding
Obligations at a rate per annum which is determined by increasing the Applicable
Margin then in effect by three percent (3%) per annum; PROVIDED, HOWEVER, that,
on and after the expiration of the Interest Period applicable to any LIBOR Loan
outstanding on the date of occurrence of such Event of Default or acceleration,
the outstanding Obligations shall, during the continuation of such Event of
Default or after acceleration and during the continuation thereof, bear interest
at a fluctuating rate per annum equal to the Base Rate plus three percent (3%).
(d) LIMITATIONS FOR APPLICABLE LAW. Anything herein to
the contrary notwithstanding, payments of interest shall not be required, for
any period for which interest is computed hereunder, to the extent (but only to
the extent) that contracting for or receiving such payments by the respective
Lender would be contrary to the provisions of any law applicable to such Lender
limiting the highest rate of interest which may be lawfully contracted for,
charged or received by such Lender, and in such event the Company shall pay such
Lender interest at the highest rate permitted by applicable law.
2.10 FEES. The Company shall pay to the Agent for the account
of each Lender ratably a fee equal to .25% of the amount of each Loan not
prepaid or repaid on or prior to the Individual
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Bridge Loan Maturity Date thereof using the proceeds of a Revolving Loan under
the Revolving Credit Agreement. Such fee shall be due and payable on the date
of such payment or prepayment or, if such Loan has not been paid in full on the
Individual Bridge Loan Maturity Date therefor, on such Individual Bridge Loan
Maturity Date.
2.11 COMPUTATION OF FEES AND INTEREST.
(a) COMPUTATION PERIOD. All computations of fees and
interest under this Agreement shall be made on the basis of a 360-day year and
actual days elapsed. Interest and fees shall accrue during each period for
which interest or fees are computed from the first day thereof to the last day
thereof.
(b) NOTICE. The Agent shall, with reasonable
promptness, notify the Company and the Lenders of each determination of a LIBO
Rate, PROVIDED that no failure to do so shall relieve the Company of any
obligation hereunder. Any change in the interest rate on a Loan resulting from
a change in the Reserve Percentage (as defined in the definition of "LIBO Rate")
shall become effective as of the opening of business on the day on which such
change becomes effective. The Agent shall with reasonable promptness notify the
Company and the Lenders of the effective date and the amount of each such
change, PROVIDED that no failure to do so shall relieve the Company of any
obligation hereunder. Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Company and the Lenders in the absence of manifest error.
(c) DETAIL OF CALCULATION. The Agent shall, at the
request of the Company or any Lender, deliver to the Company or such Lender, as
the case may be, a statement showing the quotations used by the Agent in
determining any interest rate.
2.12 PAYMENTS BY THE COMPANY.
(a) TERMS OF PAYMENTS. All payments (including
prepayments) to be made by the Company on account of principal, interest, fees
and other amounts required hereunder shall be made without setoff or
counterclaim and shall, except as otherwise expressly provided herein, be made
to the Agent for the ratable account of the Lenders at the Payment Office, in
dollars and in immediately available funds, no later than 9:00 a.m. (California
time) on the date specified herein. The Agent shall promptly distribute to each
Lender such Lender's Bridge Commitment Percentage (or other applicable share as
expressly provided herein) of such principal, interest, fees or other amounts
(in like funds as received). Any payment which is received by the Agent later
than 9:00 a.m. (California time) shall be deemed to have been received on the
immediately succeeding Business Day, and any applicable interest or fee shall
continue to accrue.
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(b) BUSINESS DAYS. Whenever any payment hereunder shall
be stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall be
included in the computation of interest or fees, as the case may be; subject to
the provisions set forth in the definition of "Interest Period".
(c) RELIANCE OF AGENT ON PAYMENTS BY THE COMPANY.
Unless the Agent shall have received notice from the Company prior to the date
on which any payment is due to the Lenders hereunder that the Company will not
make such payment in full, the Agent may assume that the Company has made such
payment in full to the Agent on such date, and the Agent may (but shall not be
required to), in reliance upon such assumption, cause to be distributed to each
Lender on such due date the amount then due such Lender. If and to the extent
the Company shall not have made such payment in full to the Agent, each Lender
shall repay to the Agent on demand such amount distributed to such Lender,
together with interest thereon for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to the
Agent, at the Federal Funds Rate as in effect for each such day.
2.13 SECURITY. In connection with the acquisition of a Funded
Project by or for a Wholly-Owned Subsidiary using Loan proceeds, the Company
shall deliver to the Agent a Equity Interests Pledge Agreement pledging to the
Agent for the ratable benefit of the Lenders all of the Stock (or other equity
or beneficial interest if such Person is not a corporation) in such Wholly-Owned
Subsidiary owned by the Company, the REIT and any other Wholly-Owned Subsidiary,
substantially in the form of EXHIBIT E hereto, together with financing
statements or stock certificates, as applicable, and such legal opinions or
other evidence as the Agent may require to assure or confirm that the Agent
holds for the benefit of the Lenders a duly perfected, first-priority Lien on
such Stock (or other interests).
2.14 LOAN AND FUNDED PROJECT CONDITIONS.
(a) PURPOSE OF LOANS. Any Loan funds advanced with
respect to an Initial Funded Project shall be applied by the Company first to
repay Indebtedness secured by Liens on the applicable Initial Funded Project,
and then for general working capital purposes. The proceeds of all Loans
advanced for Funded Projects other than the Initial Funded Projects shall be
used by the Company solely as a source of short term bridge financing for Funded
Projects owned or to be acquired by the Company or any Wholly-Owned Subsidiary.
The Company shall not use any Loan for any purpose other than as described in
this Section 2.14(a). Each Loan to be used for acquisition of a Funded Project
shall be funded directly into the escrow at a title company approved by Agent
for the Company's acquisition of such Funded Project and shall be released
therefrom only in accordance with instructions approved by the Agent.
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(b) LIMITATION ON AMOUNT; ACCEPTANCE BY THE LENDERS. No
Loan shall exceed fifty percent (50%) of the acquisition cost (exclusive of
prorations and closing costs), as certified to the Lenders by the Company in the
applicable Borrowing Notice, for the Funded Project designated in the applicable
Borrowing Notice to be acquired or financed with the proceeds of such Loan (such
limitation, the "INDIVIDUAL BRIDGE LOAN LIMITATION"). The Company shall deliver
to the Agent at least thirty (30) days prior written notice of its intention to
request a Loan hereunder for acquisition or financing of a proposed Funded
Project. Prior to the making of any Loan, the Lenders shall have the right, in
their sole discretion, after performing such due diligence as the Lenders desire
in their sole discretion, to approve or disapprove the use of a Loan hereunder
for acquisition or financing of any proposed Funded Project. The Lenders shall
not unreasonably withhold their acceptance of an apartment project owned, or to
be acquired, in fee simple by the Company or any Wholly-Owned Subsidiary offered
as a Funded Project hereunder if, through the due diligence contemplated hereby,
the Lenders determine that the project is of a quality and character, and is
located in a geographical market, which is consistent with the then-current or
any previous Funded Projects hereunder and with the then current or previous
Borrowing Base Properties under the Revolving Credit Agreement or under the
Previous Credit Agreement. Prior to the Lenders' approval of any Loan, the
Company shall at its sole expense provide the Lenders with all requested due
diligence materials and information with respect to the Funded Project proposed
to be acquired or financed with the proceeds of such Loan, which materials and
information shall be in a form acceptable to the Lenders in their sole
discretion, and shall be provided at least thirty (30) days prior to the date on
which Borrower intends to request a Loan for acquisition or financing of such
proposed Funded Project. Such materials and information shall include, without
limitation, the following:
(i) a preliminary title report and an ALTA survey
meeting the Agent's customary requirements;
(ii) an environmental site assessment with respect
to such Funded Project, dated as of a recent date, prepared by a qualified firm
acceptable to the Agent, identifying any conditions or operations on such
property that are not in compliance with any Environmental Laws and any
Hazardous Materials located thereon, showing Estimated Remediation Costs, if
any, and stating that there are no conditions on such property or other items
requiring further investigation or remediation, and any follow-on or
supplemental report required by the Agent, together with the Agent's standard
form Environmental Questionnaire and Disclosure Statement completed by the
Company;
(iii) current, certified rent roll and other
reports of the financial and operating results (for the most recent 12-month
period) and projections for the property in such format as the Agent may
require;
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(iv) if required by the Agent, evidence of the
zoning, subdivision and entitlements status of the property, including, without
limitation, copies of the certificate of occupancy and any other material
permits, licenses or approvals required for the property;
(v) a copy of the purchase and sale agreement(s)
by which the Company or such Wholly-Owned Subsidiary has acquired or is to
acquire the property; and
(vi) such other items as the Agent may reasonably
request.
The Company acknowledges that the review of the due diligence materials
described in this Section 2.14(b) will require advance notice to the Agent and
the Lenders, and the Company undertakes to provide as much advance notice as
possible to achieve timely review of such materials.
(c) CONDITIONS TO INCLUSION OF PROPOSED FUNDED PROJECTS.
Each of the following conditions must be satisfied (or waived by the Agent in
writing) prior to the Lenders' agreement to advance a Loan in connection with
the acquisition or financing of any apartment project as a proposed Funded
Project:
(A) ACCEPTANCES. The Lenders shall have
agreed to accept the apartment project offered by the Company for inclusion as a
Funded Project in the Lenders' sole and absolute discretion in accordance with
Section 2.14(b) above, and the Agent shall have so notified the Company in
writing. Any such acceptance shall be subject to the satisfaction of the other
conditions set forth in this Section 2.14(c). Each apartment project designated
in this Agreement as an Initial Funded Project shall be subject to the same
conditions for acceptance as a Funded Project as other projects hereafter
offered by the Company for inclusion as a Funded Project.
(B) INSURANCE. The Company shall have
provided the Agent with evidence satisfactory to the Requisite Lenders that the
Company has obtained adequate casualty insurance and liability insurance with
respect to such Funded Project;
(C) OFFICERS' CERTIFICATE. The Company
shall have delivered to the Agent a certificate of two Responsible Officers
substantially in the form of EXHIBIT F confirming (i) that all conditions
precedent set forth in this Section 2.14(c) (other than those based solely upon
the approval of the Agent, the Lenders, or the Requisite Lenders) have been
satisfied with respect to such project; (ii) that all financial and operating
information delivered to the Agent pursuant to Section 2.14(b), subject to
audit, is complete and correct to the knowledge of the Company and setting forth
in detail the calculation which would be required for the calculation of the
Revolving Facility Debt Service Coverage-Based Principal Limit for such project
under the Revolving Credit Agreement; (iii) that the
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Company would not be required to prepay any Loan with respect to such Funded
Project pursuant to Section 2.14(d); and (iv) the Company's purchase price for
the property, upon which the Agent and the Lenders shall be entitled to rely;
and
(D) EQUITY INTERESTS PLEDGE AGREEMENT.
The Company shall have delivered to the Agent a Equity Interests Pledge
Agreement if required pursuant to Section 2.13, together with such legal
opinions or other evidence to confirm the Lien thereof as further provided in
Section 2.13.
Under no circumstances shall the Agent or the Lenders have or be
deemed to have any Lien on any Funded Project as security for the Obligations.
(d) MANDATORY PREPAYMENT FOR FUNDED PROJECT. The
Company shall be required to prepay in full all Loans advanced with respect to
the acquisition of a Funded Project:
(i) Within ten (10) days after demand from the
Agent to the Company following the occurrence of any one of the following
events:
(A) any Event of Loss with respect to such
Funded Project; or
(B) the occurrence of an adverse change in
the environmental condition of the Funded Project from that described in the
materials described in Section 2.14(b)(ii) above;
(ii) Immediately upon any Disposition of such
Funded Project or any portion thereof or interest therein.
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2.15 PAYMENTS BY THE LENDERS TO THE AGENT.
(a) RELIANCE OF AGENT ON PAYMENTS BY THE LENDERS.
Unless the Agent shall have received notice from a Lender on the Closing Date
or, with respect to each borrowing after the Closing Date, at least one Business
Day prior to the date of any proposed borrowing, that such Lender will not make
available to the Agent for the account of the Company the amount of that
Lender's Bridge Commitment Percentage of the Loan to be funded on such date, the
Agent may assume that each Lender has made such amount available to the Agent on
the borrowing date, and the Agent may (but shall not be required to), in
reliance upon such assumption, make available to the Company a corresponding
amount on such date. If and to the extent any Lender shall not have made its
full amount available to the Agent and the Agent in such circumstances has made
available to the Company such amount, that Lender shall on the next Business Day
following the date of such borrowing make such amount available to the Agent,
together with interest at the Federal Funds Rate for and determined as of each
day during such period. A certificate of the Agent submitted to any Lender with
respect to amounts owing under this Section 2.15(a) shall be conclusive, absent
manifest error. If such amount is so made available, such payment to the Agent
shall constitute such Lender's Loan (as of the date of the borrowing) for all
purposes of this Agreement. If such amount is not made available to the Agent
on the next Business Day following the borrowing date, the Agent shall notify
the Company of such failure to fund and, upon demand by the Agent, the Company
shall pay such amount to the Agent for the Agent's account, together with
interest thereon for each day elapsed since the date of such borrowing, at a
rate per annum equal to the interest rate applicable at the time to the Loans
comprising such borrowing.
(b) OBLIGATIONS OF AGENT; LENDER. The failure of any
Lender to make any Loan on any date of borrowing shall not relieve any other
Lender of any obligation hereunder to make a Loan on the date of such borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Loan to be made by such other Lender on the date of any borrowing.
2.16 SHARING OF PAYMENTS, ETC. If, other than as expressly
contemplated elsewhere herein, any Lender shall obtain on account of the Loans
made by it any payment (whether voluntary, involuntary, through exercise of any
right of setoff, or otherwise) in excess of its Bridge Commitment Percentage of
payments on account of the Loans obtained by all the Lenders, such Lender shall
forthwith (a) notify the Agent of such fact, and (b) purchase from the other
Lenders such participations in the Loans made by them as shall be necessary to
cause such purchasing Lender to share the excess payment ratably with each of
them; PROVIDED, HOWEVER, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Lender, such purchase shall to that
extent be rescinded and each other Lender shall repay to the purchasing Lender
the purchase price paid thereto together with a percentage (calculated by
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dividing (i) the amount of such paying Lender's required repayment by (ii) the
total amount so recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount
so recovered. The Company agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section 2.16 may, to the fullest extent
permitted by law, exercise all of such purchasing Lender's rights of payment
(including the right of setoff, but subject to Section 10.08) with respect to
such participation as fully as if such purchasing Lender were the direct
creditor of the Company in the amount of such participation. The Agent shall
keep records (which shall be conclusive and binding in the absence of manifest
error) of participations purchased pursuant to this Section 2.16 and shall in
each case notify the Lenders following any such purchases.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Subject to Section 3.01(g), any and all payments by
the Company to the Agent or the Lenders under this Agreement shall be made free
and clear of, and without deduction or withholding for, any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding such taxes (including income taxes
or franchise taxes) as are imposed on or measured by the recipient's net income
by the jurisdiction under the laws of which the recipient is organized or
maintains a Lending Office, or otherwise does business, or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
(b) In addition, the Company shall pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made hereunder or from the
execution, delivery, recordation or registration of, or otherwise with respect
to, this Agreement or any other Loan Documents (hereinafter referred to as
"Other Taxes").
(c) The Company shall indemnify and hold harmless the
Agent and each Lender for the full amount of Taxes or Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 3.01) paid by the Agent or such Lender and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Payment under this indemnification shall be made within
thirty (30) days from the date the Agent or any Lender makes written demand
therefor.
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(d) If the Company shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to the Agent or any Lender, then, subject to Section 3.01(g):
(i) the sum payable shall be increased as
necessary so that, after making all required deductions (including deductions
applicable to additional sums payable under this Section 3.01) the Agent or such
Lender, as the case may be, receives an amount equal to the sum it would have
received had no such deductions been made;
(ii) the Company shall make such deductions; and
(iii) the Company shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.
(e) Within 30 days after the date of any payment by the
Company of Taxes or Other Taxes, the Company shall furnish to the Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to the Agent.
(f) Each Lender which is a foreign person (i.e., a
person other than a United States person for United States Federal income tax
purposes) agrees that:
(i) such Lender shall, no later than the Closing
Date (or, in the case of a Lender which becomes a party hereto pursuant to
Section 10.08 after the Closing Date, the date upon which such Lender becomes a
party hereto), deliver to the Company through the Agent two (2) accurate and
complete signed originals of Internal Revenue Service Form 4224 or any successor
thereto ("Form 4224"), or two (2) accurate and complete signed originals of
Internal Revenue Service Form 1001 or any successor thereto ("Form 1001"), as
appropriate, in each case indicating that the Lender is on the date of delivery
thereof entitled to receive payments of principal, interest and fees under this
Agreement free from withholding of United States Federal income tax;
(ii) if at any time such Lender makes any changes
necessitating a new form, such Lender shall with reasonable promptness deliver
to the Company through the Agent in replacement for, or in addition to, the
forms previously delivered by such Lender hereunder, two (2) accurate and
complete signed originals of Form 4224, or two (2) accurate and complete signed
originals of Form 1001, as appropriate, in each case indicating that such Lender
is on the date of delivery thereof entitled to receive payments of principal,
interest and fees under this Agreement free from withholding of United States
Federal income tax;
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(iii) such Lender shall, before or promptly after
the occurrence of any event (including the passing of time but excluding any
event mentioned in (ii) above) requiring a change in or renewal of the most
recent Form 4224 or Form 1001 previously delivered by such Lender, deliver to
the Company through the Agent two (2) accurate and complete original signed
copies of Form 4224 or Form 1001, as appropriate, in replacement of the forms
previously delivered by such Lender; and
(iv) such Lender shall, promptly upon the
Company's reasonable request to that effect, deliver to the Company such other
forms or similar documentation as may be required from time to time by any
applicable law, treaty, rule or regulation in order to establish such Lender's
tax status for withholding purposes.
(g) The Company shall not be required to pay any
additional amounts in respect of United States Federal or state income tax
pursuant to Section 3.01(d) to any Lender or any duly appointed assignee for the
account of any Lending Office of such Lender or such assignee:
(i) if the obligation to pay such additional
amounts arises as a result of a failure by such Lender or assignee to comply
with its obligations under Section 3.01(f) in respect of such Lending Office;
(ii) if such Lender or assignee shall have
delivered to the Company a Form 4224 in respect of such Lending Office pursuant
to Section 3.01(f), and such Lender or assignee shall not at any time be
entitled to exemption from deduction or withholding of United States Federal
income tax in respect of payments by the Company hereunder for the account of
such Lending Office for any reason other than a change in United States law or
regulations or in the official interpretation of such law or regulations by any
governmental authority charged with the interpretation or administration thereof
(whether or not having the force of law) after the date of delivery of such Form
4224; or
(iii) if such Lender or assignee shall have
delivered to the Company a Form 1001 in respect of such Lending Office pursuant
to Section 3.01(f), and such Lender or assignee shall not at any time be
entitled to reduction, partial exemption or exemption from deduction or
withholding of United States federal income tax in respect of payments by the
Company hereunder for the account of such Lending Office for any reason other
than a change in United States law or regulations or any applicable tax treaty
or regulations or in the official interpretation of such law, treaty or
regulations by any governmental authority charged with the interpretation or
administration thereof (whether or not having the force of law) after the date
of delivery of such Form 1001.
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(h) If, at any time, the Company requests any Lender to
deliver any forms or other documentation pursuant to Section 3.01(f)(iv), then
the Company shall, on demand of such Lender, through the Agent reimburse such
Lender for any costs and expenses (including Attorney Costs) reasonably incurred
by such Lender in the preparation or delivery of such forms or other
documentation.
(i) If the Company is required to pay additional amounts
to the Agent or any Lender pursuant to Section 3.01(d), then such Lender shall
use its reasonable best efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office so as to
eliminate any such additional payment by the Company which may thereafter accrue
if such change in the judgment of such Lender is not otherwise disadvantageous
to such Lender.
3.02 ILLEGALITY.
(a) If any Lender shall determine that the introduction
of any Requirement of Law or any change therein or in the interpretation or
administration thereof has made it unlawful, or that any central bank or other
Governmental Authority has asserted that it is unlawful, for such Lender or its
Lending Office to make LIBOR Loans, then, on notice thereof by such Lender to
the Company through the Agent, the obligation of such Lender to make LIBOR Loans
shall be suspended until such Lender shall have notified the Agent and the
Company that the circumstances giving rise to such determination no longer
exist.
(b) If any Lender shall reasonably determine that it is
unlawful to maintain any LIBOR Loan, the Company shall notify Lender that the
Company shall either (i) prepay in full all LIBOR Loans of such lender then
outstanding, together with interest accrued thereon, or (ii) elect to convert in
accordance with Section 2.04 all LIBOR Loans then outstanding, after payment to
such Lender of all interest accrued thereon, into Base Rate Loans, either on the
last day of the Interest Period thereof if such Lender may lawfully continue to
maintain such LIBOR Loans to such day, or immediately if such Lender may not
lawfully continue to maintain such LIBOR Loans, together with any amounts
required to be paid in connection therewith pursuant to Section 3.04.
(c) If the obligation of any Lender to make or maintain
LIBOR Loans has been terminated, the Company may elect, by giving notice to such
Lender through the Agent, that all Loans which would otherwise be made by such
Lender as LIBOR Loans shall instead be made as Base Rate Loans.
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3.03 INCREASED COSTS AND REDUCTION OF RETURN.
(a) If any Lender shall determine that, due to either
(i) the introduction of or any change in or in the interpretation of any
Requirement of Law or (ii) the compliance with any guideline or request from any
central bank or other Governmental Authority (whether or not having the force of
law), there shall be any increase in the cost to such Lender of agreeing to make
or of making, funding or maintaining any LIBOR Loans hereunder, then the Company
shall be liable for, and shall from time to time, upon written demand therefor
by such Lender (with a copy of such demand to the Agent), which demand shall set
forth the basis of such increased cost in reasonable detail, pay to the Agent
for the account of such Lender, such additional amounts as are sufficient to
compensate such Lender for such increased costs.
(b) If any Lender shall have reasonably determined that
(i) the introduction of any Capital Adequacy Regulation, (ii) any change in any
Capital Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or (iv) compliance with any Capital Adequacy Regulation by such Lender
(or its Lending Office) or any corporation controlling such Lender, effects or
would effect an increase in the amount of capital required or expected to be
maintained by such Lender or any corporation controlling such Lender (taking
into consideration such Lender's or such corporation's policies with respect to
capital adequacy and such Lender's desired return on capital), then, upon
written demand of such Lender (with a copy to the Agent), which demand shall set
forth in reasonable detail the basis for any such increase in required capital,
the Company shall immediately pay to such Lender, from time to time as specified
by such Lender, additional amounts sufficient to compensate such Lender for such
increase.
(c) If any Lender shall have determined that any of the
events described in Sections 3.03(a) or 3.03(b) affects or would affect an
increase in cost or reduction of return resulting in an additional Obligations
hereunder, such Lender shall, with reasonable promptness, notify the Company and
the Agent of such determination, PROVIDED that no failure to do so shall relieve
the Company of any Obligation hereunder.
3.04 FUNDING LOSSES. The Company agrees to reimburse each
Lender for, and to hold each Lender harmless from, any loss or expense that such
Lender may sustain or incur as a consequence of:
(a) the failure of the Company to make any required
payment or prepayment of principal of any LIBOR Loan or Base Rate Loan
(including payments to be made after any acceleration thereof);
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(b) the failure of the Company to borrow, continue or
convert a Loan after the Company has given (or is deemed to have given) a
Borrowing Notice or a Notice of Conversion/Continuation;
(c) the failure of the Company to make any prepayment
after the Company has given a notice in accordance with Section 2.05;
(d) the prepayment of a LIBOR Loan on a day which is not
the last day of the Interest Period with respect thereto; or
(e) the conversion of any LIBOR Loan to a Base Rate Loan
on a day that is not the last day of the Interest Period with respect thereto;
such amount or amounts to include an amount equal to the excess, if any, of (a)
the amount of interest that would have accrued on the amount not paid, not
borrowed, not prepaid, prepaid, or converted for the period from the date of
such failure to pay, failure to borrow, failure to prepay, prepayment, or
conversion to the last day of then current Interest Period (or in the case of a
failure to borrow, the Interest Period which would have commenced on the date of
such failure) at the interest rate applicable to that LIBOR Loan, over (b) the
amount of interest that would accrue to the Lender on such amount at the LIBO
Rate in effect on such date by placing such amount on deposit for a comparable
period with leading lenders in the London interbank market.
3.05 INABILITY TO DETERMINE RATES. If the Agent shall have
determined that for any reason adequate and reasonable means do not exist for
ascertaining the LIBO Rate for any requested Interest Period with respect to a
proposed LIBOR Loan or that the LIBO Rate applicable pursuant to Section 2.09(a)
for any requested Interest Period with respect to a proposed LIBOR Loan does not
adequately and fairly reflect the cost to such Lenders of funding such Loan, the
Agent will forthwith give notice of such determination to the Company and each
Lender. Thereafter, the obligation of the Lenders to make or maintain LIBOR
Loans hereunder shall be suspended until the Agent revokes such notice in
writing. Upon receipt of such notice, the Company may revoke any Borrowing
Notice or Notice of Conversion/Continuation then submitted by it. If the
Company does not revoke such notice, the Lenders shall make, convert or continue
the Loans, as proposed by the Company, in the amount specified in the applicable
notice submitted by the Company, but such Loans shall be made, converted or
continued as Base Rate Loans instead of LIBOR Loans.
3.06 CERTIFICATES OF LENDERS. Any Lender claiming reimbursement
or compensation pursuant to this Article III, shall deliver to the Company (with
a copy to the Agent) a certificate setting forth in reasonable detail a summary
of the basis of such demand and the amount payable to such Lender hereunder.
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3.07 SURVIVAL. The agreements and obligations of the Company in
this Article III shall survive the payment of all other obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 CONDITIONS OF FIRST LOAN. The obligation of each Lender to
make its first Loan hereunder is subject to the condition that the Agent shall
have received on or before the Closing Date, the following, in the case of
agreements, documents and other instruments, in form and substance satisfactory
to the Agent, each Lender and their respective counsel in their sole discretion
and in sufficient copies for each Lender:
(a) BRIDGE AGREEMENT AND NOTES. This Agreement executed
by the Company, the Agent and each of the Lenders, a Note executed by the
Company in favor of each of the Lenders, and the REIT Guaranty Documents
executed by the guarantors thereunder; the Notes shall be dated the Closing
Date;
(b) CERTIFICATE. A certificate signed by a duly
authorized Responsible Officer, dated as of the Closing Date, stating that:
(i) the representations and warranties of the
Company and the REIT contained in Article V hereof and of the Company, the REIT
and their Subsidiaries contained in the Loan Documents are true and correct on
and as of such date, as though made on and as of such date;
(ii) no Default or Event of Default exists or
would result from the initial borrowing;
(iii) there has occurred since December 31, 1996 no
act, omission, change or occurrence which would have a Material Adverse Effect;
and
(iv) all conditions precedent set forth in this
Section 4.01 have been satisfied (other than those based solely on the approval
of the Agent, the Lenders or the Requisite Lenders);
(c) LEGAL OPINIONS. The Agent shall have received an
opinion of Colorado counsel to the Company and addressed to the Agent and the
Lenders in form acceptable to Agent;
(d) COSTS; EXPENSES; FEES. To the extent demand has
been made therefor, payment of all costs, expenses, and accrued and unpaid fees
(including legal fees and expenses) to the extent then due and payable on the
Closing Date, including any arising under Sections 2.10, 3.01 and 10.04 and all
accrued fees, costs and expenses due or unpaid under the Previous Credit
Agreement;
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(e) REVOLVING CREDIT AGREEMENT. The Revolving Credit
Agreement shall have become effective; and
(f) OTHER DOCUMENTS. Such other approvals, opinions, or
documents as the Agent or the Requisite Lenders may reasonably request.
4.02 CONDITIONS TO EACH LOAN. The obligation of each Lender to
make any Loan (including its first Loan) is subject to the satisfaction of the
following conditions precedent:
(a) BORROWING NOTICE. The Agent shall have received in
the case of a Loan (with, in the case of the first Loan only, a copy for each
Lender) a Borrowing Notice or Notice of Conversion/Continuation in compliance
with the terms of Section 2.03 or Section 2.04, as applicable;
(b) OTHER DOCUMENTS. The Agent shall have received such
other approvals, opinions and documents as the Agent or any Lender may
reasonably request;
(c) AVAILABILITY LIMITS. The Outstanding Amount shall
not, as a result of the making, continuation or conversion of such Loan, exceed
the Bridge Availability;
(d) REPRESENTATIONS AND WARRANTIES. The representations
and warranties made by the Company, the REIT and their respective Subsidiaries
contained in the Loan Documents, including Article V of this Agreement, shall be
true and correct on and as of the date such Loan is made, with the same effect
as if made on and as of such date;
(e) NO EXISTING DEFAULT. No Default or Event of Default
shall exist or shall result from the making, continuation or conversion of such
Loan;
(f) NO MATERIAL ADVERSE EFFECT. No act, omission,
change, occurrence or event which has a Material Adverse Effect shall have
occurred since the Closing Date; and
(g) NO FUTURE ADVANCE NOTICE. Neither the Agent nor any
Lender shall have received from the Company, the REIT or any Subsidiary thereof,
any notice that any Pledge Agreement will no longer secure, or that the REIT
Guaranty Documents will no longer guaranty, future Loans to be made under this
Agreement.
Each Borrowing Notice and Notice of Continuation/Conversion submitted by the
Company hereunder shall constitute a representation and warranty by the Company
hereunder, as of the date of such notice and as of the date of the making,
continuation or conversion of the corresponding Loan, that the conditions in
this Section 4.02 have been satisfied.
ARTICLE V
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REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Lender
that:
5.01 REPRESENTATIONS UNDER THE REVOLVING CREDIT AGREEMENT. All
of the representations and warranties of the Company under the Revolving Credit
Agreement are true and correct (as if the terms "Loan Documents" and
"Obligations" as used in the Revolving Credit Agreement included not only the
"Loan Documents" and "Obligations" as defined therein but also the "Loan
Documents" and "Obligations" as defined herein).
5.02 TITLE TO THE FUNDED PROJECTS. The Company and the Wholly-
Owned Subsidiaries have good record and marketable title in fee simple to any
Funded Projects owned thereby, subject only to title exceptions disclosed to and
approved by the Lenders pursuant to Section 2.14(b).
5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority (except for recordings in connection with the Liens
granted to the Agent under the Equity Interests Pledge Documents) is necessary
or required in connection with the execution, delivery or performance by, or
enforcement against, the Company or any of its Subsidiaries of this Agreement or
any other Loan Document.
5.04 CERTAIN REPRESENTATIONS CONCERNING FUNDED PROJECTS. The
representations of the Company under Sections 5.11 and 5.20 through 5.25,
inclusive, of the Revolving Credit Agreement made with respect to the Borrowing
Base Properties are true and correct as if made herein with respect to the
Funded Projects.
5.05 EQUITY INTERESTS PLEDGE AGREEMENTS. When executed and
delivered pursuant hereto, the Equity Interests Pledge Agreements shall be
effective to create in favor of the Agent, for the benefit of the Lenders,
legal, valid and enforceable first-priority Liens in the Collateral described
therein and the proceeds thereof. All action shall have been taken that is
necessary or appropriate to perfect the Agent's Lien, for the benefit of the
Lenders, in the Collateral. All representations and warranties of the Company
and any other Person party thereto contained in any Equity Interests Pledge
Documents are true and correct.
5.06 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the
Loans are intended to be and shall be used solely for the purposes set forth in
and permitted by Sections 2.01(b) and Section 6.06, and are intended to be and
shall be used in compliance with Section 7.03.
5.07 NOT A "FOREIGN PERSON." Neither the Company nor any
Wholly-Owned Subsidiary which owns a Funded Project is a
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"foreign person" within the meaning of Section 1445(f)(3) of the Internal
Revenue Code.
5.08 FULL DISCLOSURE. None of the representations or warranties
made by the Company, the REIT, the Management Entity or any Subsidiary in the
Loan Documents as of the date such representations and warranties are made or
deemed made, and none of the statements contained in each exhibit, report,
statement or certificate furnished by or on behalf of any such Person in
connection with the Loan Documents, contains any untrue statement of a material
fact or omits any material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they
are made, not misleading. There is no fact, to the Knowledge of the Company,
which materially and adversely affects the business, operations, properties,
assets or condition (financial or otherwise) of the Company, the REIT, the
Management Entities, or any of the Subsidiaries which has not been disclosed
herein or in other documents, certificates and statements furnished to the Agent
and each Lender hereunder or pursuant hereto. The copies of all documents
delivered to the Agent and/or the Lenders from time to time in connection with
this Agreement are and shall be true and complete copies of the originals
thereof and have not been or shall not be amended except as disclosed to the
Agent and/or the Lenders, as applicable.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as any Lender
shall have any Bridge Commitment hereunder, or any Loan or other obligation
shall remain unpaid or unsatisfied, unless the Requisite Lenders waive
compliance in writing:
6.01 FINANCIAL INFORMATION. In addition to providing the
financial information required under Section 6.01 of the Revolving Credit
Agreement, the Company shall deliver to the Agent, in form and detail
satisfactory to the Agent and the Lenders, such information with respect to the
Funded Projects as is required thereunder with respect to the Borrowing Base
Properties.
6.02 CERTIFICATES; OTHER INFORMATION. The Company shall furnish
to the Agent with sufficient copies for each Lender:
(a) ACCOUNTING CERTIFICATES. Concurrently with the
delivery of the annual financial statements required under Section 6.01(a) of
the Revolving Credit Agreement, a certificate of the independent certified
public accountants reporting on such financial statements stating that, in
making the examination necessary therefor, no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
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(b) OFFICERS' CERTIFICATES. Concurrently with the
delivery of the quarterly and annual financial statements required under
Sections 6.01(a) and (b) of the Revolving Credit Agreement, a compliance
certificate, substantially in the form of EXHIBIT G, signed by at least two
(2) Responsible Officers stating that, to the best of such officers'
knowledge, each of the Company, the REIT and their respective Subsidiaries,
during such period, has observed or performed all of its covenants and other
agreements, and satisfied every condition contained in this Agreement and the
other Loan Documents to be observed, performed or satisfied by it, and that
such officers have no knowledge of any Default or Event of Default except as
specified in such certificate. Notwithstanding anything to the contrary
contained herein and without limiting the Banks' other rights and remedies,
if such certificate is not provided on the due date therefor, the Company
shall be prohibited from any further borrowings under the Bridge Facility
until such certificate is provided, and the Company shall make successive,
cumulative payments in the amount of ten percent (10%) of the outstanding
balance of the Loans at the end of each seven (7) day period during which the
Company continues to fail to provide such certificate after the due date
therefor;
(c) OTHER INFORMATION. Promptly, such additional
financial and other information as the Agent may from time to time reasonably
request.
6.03 NOTICES. The Company shall promptly (and in no event later
than ten (10) days after the Company has reason to know of the same) notify the
Agent and each Lender of:
(a) DEFAULT; EVENT OF DEFAULT. The occurrence of any
Default or Event of Default, and of the occurrence or existence of any event or
circumstance that is likely to become a Default or Event of Default;
(b) LEGAL COMPLIANCE. Any material notice received from
any Governmental Authority asserting that any Funded Project is not in
compliance with any Requirements of Law;
(c) DEFAULT; EVENT OF DEFAULT. The occurrence of any
Default or Event of Default, and of the occurrence or existence of any event or
circumstance that is likely to become a Default or Event of Default;
(d) MATERIAL ADVERSE EFFECT. The occurrence of any act,
development or other matter which would reasonably be expected to have a
Material Adverse Effect; and
(e) EVENTS REQUIRING MANDATORY PREPAYMENT. The
occurrence of any event or circumstance that causes, or is likely to cause, the
Company's obligation to prepay a Loan to arise under Section 2.14(d).
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6.04 INSURANCE. The Company shall maintain, and shall cause
each Wholly-Owned Subsidiary to maintain, with financially sound and reputable
independent insurers, insurance with respect to the Funded Products against loss
or damage of the kinds customarily insured against by Persons engaged in the
same or a similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons; including workers'
compensation insurance, public liability and property and casualty insurance
(which amount shall not be reduced in the absence of 30 days' prior notice to
the Agent).
6.05 ENVIRONMENTAL LAWS. The Company shall, and shall cause
each Wholly-Owned Subsidiary to, keep and maintain its Funded Projects in
compliance in all material respects with all Environmental Laws.
6.06 USE OF PROCEEDS. The Company shall use the proceeds of the
Loans solely in accordance with Section 2.01(b) above.
6.07 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Company
shall maintain, and shall cause each Wholly-Owned Subsidiary to maintain, proper
books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied shall be made of all financial
transactions and matters involving the Funded Projects. The Company shall
permit, and shall cause each Wholly-Owned Subsidiary to permit, representatives
of the Agent or any Lender to visit and inspect any of its Funded Projects, to
conduct audits thereof, to examine their respective corporate, financial and
operating records, and make copies thereof or abstracts therefrom, all at the
expense of the Company and at any time during normal business hours and as often
as may be reasonably desired, upon no less than forty-eight (48) hours advance
notice to the Company; PROVIDED, HOWEVER, when an Event of Default exists, the
Agent or any Lender may visit and inspect at the expense of the Company such
Funded Projects at any time during business hours and without advance notice.
6.08 ADDITIONAL GUARANTIES. Promptly upon the formation by the
REIT of any Wholly-Owned Subsidiary of the REIT, the REIT shall cause such
Wholly-Owned Subsidiary to deliver to the Agent for the ratable benefit of the
Lenders a guaranty of the Obligations in the form attached hereto as EXHIBIT D.
6.09 COVENANTS RELATING TO FUNDED PROJECTS. The Company hereby
agrees as follows:
(a) MAINTENANCE. The Company shall maintain each Funded
Project in good order and condition in accordance with the Company's past
practices.
(b) LEASES. The Company shall not enter into any lease
of any Funded Project other than apartment leases or other ordinary course
leases consistent with past practice and having
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terms of less than one (1) year on market terms. The Company shall deliver to
the Agent a copy of the standard lease forms utilized for the Funded Project
from time to time.
(c) MATERIAL AGREEMENTS. The Company shall obtain the
prior written approval of the Agent and the Requisite Lenders prior to entering
into any reciprocal easement or similar agreement, ground lease or any other
material agreement affecting any Funded Project.
(d) MANAGEMENT CONTRACTS. The Company shall obtain the
prior written approval of the Agent and the Requisite Lenders prior to entering
into any property management agreement with a Person other than the Company, one
of the Management Entities or any of their Subsidiaries, or replacing the
property manager for any Funded Project with a Person other than the Company,
one of the Management Entities or any of their Subsidiaries. The Company shall
cause all property management contracts affecting Funded Projects to permit
termination of the manager (whether such manager is one of the Management
Entities or otherwise) by the owner within thirty days' written notice, without
penalty, and the Company shall not permit the management fee payable under any
such property management agreement to exceed three percent (3%) of gross
receipts from such property per fiscal year.
(e) CONSTRUCTION. The Company shall obtain the prior
written approval of the Agent and the Requisite Lenders prior to entering into
any major construction or renovation affecting a Funded Project and shall
discharge all mechanic's liens resulting from any such construction or
renovation.
(f) LIENS. The Company shall keep each Funded Project
at all times free and clear of all Liens (unless such Liens are bonded and
thereby released of record in a manner satisfactory to the Agent), except for
title exceptions disclosed to and approved by the Lenders pursuant to Section
2.14(b)(i).
6.10 PAYMENT OF OBLIGATIONS. The Company shall, and shall cause
each Wholly-Owned Subsidiary to, pay and discharge as the same shall become due
and payable and otherwise comply with, all their respective obligations and
liabilities, including (a) all tax liabilities, assessments and governmental
charges or levies upon it or its Funded Projects, unless the same are being
contested in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP are being maintained by the Company or such Person, (b) all
lawful claims which, if unpaid, would by law become a Lien upon its Funded
Projects, (c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness, and (d) all Contractual Obligations.
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6.11 FURTHER ASSURANCES.
(a) FULL DISCLOSURE. The Company will ensure that all
other written information, exhibits and reports furnished to any Agent or Lender
by the Company or any Wholly-Owned Subsidiary do not contain any untrue
statement of a material fact and do not and will not omit to state any material
fact or any fact necessary to make the statements contained therein not
misleading in light of the circumstances in which made, and will promptly
disclose to the Agent and the Lenders and correct any defect or error that may
be discovered therein or in any Loan Document or in the execution,
acknowledgment or recordation thereof.
(b) FURTHER ACTS. Promptly upon request by the Agent or
the Requisite Lenders, the Company shall (and shall cause each Wholly-Owned
Subsidiary to) do, execute, acknowledge, deliver, record, re-record, file, re-
file, register and re-register, any and all such further acts, deeds,
conveyances, security agreements, mortgages, deeds of trust, assignments,
estoppel certificates, financing statements and continuations thereof,
termination statements, notices of assignment, transfers, certificates,
assurances and other instruments that the Agent or such Lenders, as the case may
be, may reasonably require from time to time in order (i) to carry out more
effectively the purposes of this Agreement or any other Loan Document, (ii) to
subject to the Liens created by any of the Equity Interests Pledge Documents any
of the Collateral, (iii) to perfect and maintain the validity, effectiveness and
priority of any of the Equity Interests Pledge Documents and the Liens intended
to be created thereby, and (iv) to better assure, convey, grant, assign,
transfer, preserve, protect and confirm to the Agent and Lenders the rights
granted or now or hereafter intended to be granted under any Loan Document, or
any other document executed in connection herewith or therewith.
6.12 COVENANT TO INDEMNIFY REGARDING CONSTRUCTION AND OTHER
RISKS. The Company hereby indemnifies, defends and holds the Agent and the
Lenders and their respective affiliates, assignees, successors, officers,
directors, employees and agents (collectively, the "Indemnified Parties")
harmless from and against any and all Indemnified Costs (defined below) directly
or indirectly arising out of or resulting from construction of any improvements
on any of the Funded Projects, including any defective workmanship or materials;
or any failure to satisfy any requirements of any laws, regulations, ordinances,
governmental policies or standards, reports, subdivision maps or development
agreements that apply or pertain to any of the Funded Projects; or breach of any
representation or warranty made or given by the Company to any of the
Indemnified Parties or to any prospective or actual buyer of all or any portion
of any of the Funded Projects; or any claim or cause of action of any kind by
any party that any Indemnified Party is liable for any act or omission of the
Company, its Subsidiaries or any other person or entity in connection with the
ownership, sale, operation or
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development of any of the Funded Projects. Upon demand by any Indemnified
Party, the Company shall defend any investigation, action or proceeding
involving any Indemnified Costs which is brought or commenced against any
Indemnified Party, whether alone or together with the Company or any other
person, all at the Company's own cost and by counsel to be approved by the
Indemnified Party in the exercise of its reasonable judgment. In the
alternative, any Indemnified Party may elect to conduct its own defense at the
expense of the Company. As used in this Agreement, "Indemnified Costs" means
all actual or threatened liabilities, claims, actions, causes of action,
judgments, orders, damages (including foreseeable and unforeseeable
consequential damages), costs, expenses, fines, penalties and losses (including
sums paid in settlement of claims and all consultant, expert and legal fees and
expenses of the relevant Indemnified Party's counsel), including those incurred
in connection with any repair or restoration work of the real property owned by
the Company, or any resulting damages, harm or injuries to the person or
property of any third parties or to any natural resources. The foregoing
indemnity shall not cover any Indemnified Costs which arise as the result of the
gross negligence or willful misconduct of any Indemnified Party. Any
Indemnified Parties who are not parties to this Agreement are also intended
beneficiaries of this Section, as well as the Agent and the Lenders.
6.13 INDEMNITY REGARDING HAZARDOUS SUBSTANCES.
(a) INDEMNITY. The Company hereby indemnifies, defends
and holds the Indemnified Parties harmless from and against any and all
Indemnified Costs directly or indirectly arising out of or resulting from any
Hazardous Substance being present or released in, on or around any part of any
Funded Project, or in the soil, groundwater or soil vapor on or under any Funded
Project, including:
(i) Any claim for such Indemnified Costs asserted
by any federal, state or local governmental agency, including the United States
Environmental Protection Agency and the California Department of Health
Services, and including any claim that any Indemnified Party is liable for any
such Indemnified Costs as an "owner" or "operator" of any Funded Project under
any law relating to Hazardous Substances; and
(ii) Any such Indemnified Costs claimed against
any Indemnified Party by any person other than a governmental agency, including
any person who may purchase or lease all or any portion of any Funded Project
from the Company or its Subsidiaries, from any Indemnified Party, or from any
other purchaser or lessee; any person who may at any time have any interest in
all or any portion of the any Funded Project; any person who may at any time be
responsible for any clean-up costs or other Indemnified Costs relating to any
Funded Project; and any person claiming to have been injured in any way as a
result of exposure to any Hazardous Substance; and
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(iii) Any such Indemnified Costs which any
Indemnified Party reasonably believes at any time must be incurred to comply
with any law, judgment, order, regulation or regulatory directive relating to
Hazardous Substances, or which any Indemnified Party reasonably believes at any
time must be incurred to protect the public health or safety; and
(iv) Any such Indemnified Costs resulting from
currently existing conditions in, on or around any Funded Project, whether known
or unknown by the Company, its Subsidiaries or the Indemnified Parties at the
time each Funded Project is acquired, and any such Indemnified Costs resulting
from the activities of the Company, it Subsidiaries or the tenants of either of
them, or any other person in, on or around any Funded Project.
(b) NO INDEMNITY FOR GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. Notwithstanding anything contained in this Agreement which may be
construed to the contrary, the Company and its Subsidiaries shall have no
obligation to indemnify any Indemnified Party for any Indemnified Costs arising
out of the gross negligence or willful misconduct of an Indemnified Party.
(c) DEFENSE OF INDEMNIFIED PARTIES. Upon demand by any
Indemnified Party, the Company and its Subsidiaries shall defend any
investigation, action or proceeding involving any Indemnified Costs which is
brought or commenced against any Indemnified Party, whether alone or together
with the Company or any other person, all at the Company's own, cost and by
counsel to be approved by the Indemnified Party in the exercise of its
reasonable judgment. In the alternative, any Indemnified Party may elect to
conduct its own defense at the expense of the Company and its Subsidiaries.
(d) COMPLIANCE REGARDING HAZARDOUS SUBSTANCES. The
Company shall, and shall cause its Subsidiaries to, comply and cause all tenants
and any other persons who may come upon any Funded Project to comply, with all
laws, regulations and ordinances governing or applicable to Hazardous
Substances, including those requiring disclosures to prospective and actual
buyers of all or any portion of any Funded Project. The Company also shall, and
shall also cause its Subsidiaries to, comply with the recommendations of any
qualified environmental engineer or other expert which apply or pertain to any
Funded Project.
(e) NOTICES REGARDING HAZARDOUS SUBSTANCES. The Company
shall, and shall cause its Subsidiaries to, promptly notify the Agent if it
knows, suspects or believes there may be any Hazardous Substance in or around
any Funded Project, or in the soil, groundwater or soil vapor on or under such
Funded Project, or that the Company, any of its Subsidiaries or any Funded
Project may be subject to any threatened or pending investigation by any
governmental agency under any law, regulation or ordinance pertaining to any
Hazardous Substance.
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(f) SITE VISITS, OBSERVATIONS AND TESTING. The
Indemnified Parties and their agents and representatives shall have the right at
any reasonable time to enter and visit any Funded Project for the purposes of
observing the Funded Project, taking and removing soil or groundwater samples,
and conducting tests on any part of the Funded Project. The Indemnified Parties
have no duty, however, to visit or observe the any Funded Project or to conduct
tests, and no site visit, observation or testing by any Indemnified Party shall
impose any liability on any Indemnified Party. In no event shall any site
visit, observation or testing by any Indemnified Party be a representation that
Hazardous Substances are or are not present in, on or under any Funded Project,
or that there has been or shall be compliance with any law, regulation or
ordinance pertaining to Hazardous Substances or any other applicable
governmental law. Neither the Company, its Subsidiaries nor any other party is
entitled to rely on any site visit, observation or testing by any Indemnified
Party. The Indemnified Parties owe no duty of care to protect the Company or
any other party against, or to inform the Company, its Subsidiaries or any other
party of, any Hazardous Substances or any other adverse condition affecting any
Funded Project. Any Indemnified Party shall give the Company reasonable notice
before entering any Funded Project. The Indemnified Party shall make reasonable
efforts to avoid interfering with the Company's or any tenant's use of any
Funded Project in exercising any rights provided for in this Section. Each
Indemnified Party will use reasonable business practices in conducting its site
visits, observations and testing.
ARTICLE VII
NEGATIVE COVENANTS
The Company hereby covenants and agrees that, so long as any
Lender shall have any Bridge Commitment hereunder, or any Loan or other
Obligation shall remain unpaid or unsatisfied, unless the Requisite Lenders
waive compliance in writing:
7.01 LIENS. Neither the Company nor any Wholly-Owned Subsidiary
shall, directly or indirectly, make, create, incur, assume or suffer to exist
any Lien upon or with respect to any part of its Funded Projects, whether now
owned or hereafter acquired, other than the title exceptions disclosed to and
approved by the Lenders pursuant to Section 2.14(b)(i).
7.02 DISPOSITION OF FUNDED PROJECTS. The Company shall not, and
shall not suffer or permit any of its Subsidiaries to, directly or indirectly,
make any Disposition of any Funded Project or any portion thereof or interest
therein; provided, however, so long as no Default or Event of Default is then
continuing, the Company shall have the right to make a Disposition of any Funded
Project by paying to the Agent for distribution to the Lenders an amount equal
to the greater of the Loan applicable to such Funded Project or the amount which
would be required to be paid to the Lenders so that the Outstanding Amount
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of the Bridge Loan immediately after such Disposition would not exceed the
Bridge Availability (calculated without including the Funded Project to which
such Disposition would be effective), and upon receipt of such payment, such
project shall no longer be deemed a "Funded Project" hereunder..
7.03 USE OF PROCEEDS. The Company shall not use any portion of
the Loan proceeds, directly or indirectly, (a) to purchase or carry Margin
Stock, (b) to repay or otherwise refinance indebtedness of the Company or others
incurred to purchase or carry Margin Stock, (c) to extend credit for the purpose
of purchasing or carrying any Margin Stock, (d) to acquire any security in any
transaction that is subject to Section 13 or 14 of the Exchange Act, or (e) for
any purpose other than those permitted by Section 6.06.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 EVENT OF DEFAULT. Any of the following shall constitute an
"Event of Default":
(a) NON-PAYMENT. The Company shall fail to pay,
(i) when and as required to be paid herein, any amount of principal of any Loan,
or (ii) within five days after the same shall become due, any amount of interest
on any Loan or any fee or other amount payable hereunder or pursuant to any
other Loan Document; or
(b) REPRESENTATION OR WARRANTY. Any representation or
warranty by the Company, the REIT, any Management Entity or any Subsidiary made
or deemed made herein, in any Loan Document, or in any certificate, document or
financial or other statement by the Company, the REIT, any Management Entity or
any Subsidiary, or any Responsible Officer, furnished at any time under this
Agreement, or in or under any Loan Document, shall prove to have been incorrect
in any material respect on or as of the date made or deemed made; or
(c) SPECIFIC DEFAULTS. The Company shall fail to
perform or observe any term, covenant or agreement contained in Section 2.01(b)
or in Article VII; or
(d) OTHER DEFAULTS. The Company shall fail to perform
or observe any other term or covenant contained in this Agreement or any Loan
Document, and such default shall continue unremedied for a period of 20 days
after the earlier of (i) the date upon which a Responsible Officer knew or
received written notice of such failure or (ii) the date upon which written
notice thereof is given to the Company by any Agent or Lender; or
(e) CROSS-DEFAULT. An "Event of Default" (as such term
is defined in the Revolving Credit Agreement) occurs and is continuing; or
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(f) COLLATERAL AND GUARANTY DOCUMENTS.
(i) Any provision of a Pledge Agreement shall for
any reason (other than pursuant to the terms thereof) cease to be valid and
binding on or enforceable against the Company or other Person party thereto
(except to the extent that the same results solely from an act or omission of
the Agent or the Lenders), or the Company or such Person shall so state in
writing or bring an action to limit its obligations or liabilities thereunder;
or
(ii) Any Pledge Agreement shall for any reason
(other than pursuant to the terms thereof) cease to create a valid security
interest in the Collateral purported to be covered thereby, or such security
interest shall for any reason cease to be a perfected and first-priority
security interest; or
(iii) Any party to a Pledge Agreement (other than
the Agent or Lenders) shall fail to perform or observe any term or covenant
contained in such Pledge Agreement, and such failure shall continue unremedied
for a period of 20 days after the earlier of (A) the date upon which a
Responsible Officer knew or received written notice of such failure or (B) the
date upon which written notice thereof is given to the Company by the Agent, or
any other event or condition shall occur or exist under a Pledge Agreement that
constitutes an "Event of Default" as defined therein; or
(g) ENVIRONMENTAL LIENS. Any Funded Project shall
become subject to one or more Liens in any amount under any Environmental Law
and such Liens shall remain in place for thirty (30) days after the creation
thereof.
8.02 REMEDIES.
If any Event of Default occurs, the Agent shall, at the
request of, or may, with the consent of, the Requisite Lenders:
(a) TERMINATION OF BRIDGE COMMITMENT. Declare the
Bridge Commitment of each Lender to make Loans to be terminated, whereupon such
Bridge Commitments shall forthwith be terminated;
(b) ACCELERATION. Declare (i) the unpaid principal
amount of all outstanding Loans and all interest accrued and unpaid thereon, and
(ii) all other amounts owing or payable hereunder or under any other Loan
Document to be immediately due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby expressly waived; and
(c) OTHER REMEDIES. Exercise on behalf of itself and
the Lenders all rights and remedies available to it and the Lenders under the
Loan Documents or applicable law;
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PROVIDED, however, that upon the occurrence of any event specified in Section
8.01(f) or 8.01(g) of the Revolving Credit Agreement (and in the case of clause
(i) of said Section 8.01(g) upon the expiration of the sixty (60)-day period
mentioned therein), the Bridge Commitment of each Lender to make Loans shall
automatically terminate, and the unpaid principal amount of all outstanding
Loans and interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder as aforesaid shall automatically become due and payable
without further act of any Agent or Lender.
8.03 RIGHTS NOT EXCLUSIVE. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are not exclusive of
any other rights, powers, privileges or remedies provided by law or in equity,
or under any other instrument, document or agreement now existing or hereafter
arising.
ARTICLE IX
THE AGENT
9.01 APPOINTMENT AND AUTHORIZATION. Each Lender hereby
irrevocably appoints, designates and authorizes the Agent to take such action on
its behalf under the provisions of this Agreement and each other Loan Document
and to exercise such powers and perform such duties as are expressly delegated
to it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary contained elsewhere in this Agreement or in any other Loan
Document, Agent shall not have any duties or responsibilities except those
expressly set forth herein, nor shall Agent have or be deemed to have any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist on the part of Agent.
9.02 DELEGATION OF DUTIES. Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
9.03 LIABILITY OF AGENT. The Agent, its respective Affiliates,
or their respective officers, directors, employees, agents, or attorneys-in-fact
(all of the foregoing being collectively referred to as the "Agent-Related
Persons") shall not (a) be liable for any action taken or omitted to be taken by
any of them under or in connection with this Agreement or any other Loan
Document (except for its own gross negligence or willful misconduct), or (b) be
responsible in any manner to any of the Lenders for any recital, statement,
representation or warranty made by the Company, the REIT, any Management Entity
or Subsid-
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iary or any Affiliate of any such Person, or any officer thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by Agent
under or in connection with, this Agreement or any other Loan Document, or for
the value of any Collateral or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, any other Loan Document, or for
any failure of the Company, the REIT or any other party to any Loan Document to
perform its obligations hereunder or thereunder. No Agent-Related Person shall
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the Properties,
books or records of the Company, the REIT, any Management Entity or Subsidiary
or Affiliates thereof.
9.04 RELIANCE BY AGENT.
(a) GENERALLY. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, telecopy, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Company), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Requisite Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Requisite Lenders, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of the
Lenders.
(b) CONDITIONS PRECEDENT. For purposes of determining
compliance with the conditions specified in Sections 4.01 and 4.02 (as to the
initial borrowing hereunder), each Lender that has executed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with
each document or other matter required thereunder to be consented to or approved
by or acceptable or satisfactory to such Lender, unless an officer of the Agent
responsible for the transactions contemplated by the Loan Documents shall have
received notice from such Lender prior to the initial borrowing specifying its
objection thereto and either such objection shall not have been withdrawn by
notice to the Agent to that effect or such Lender shall not have made available
to the Agent the Lender's ratable portion of such borrowing.
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9.05 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Lenders, unless the Agent shall
have received written notice from a Lender or the Company referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Lenders. The Agent shall
take such action with respect to such Default or Event of Default as shall be
requested by the Requisite Lenders in accordance with Article VIII; PROVIDED,
HOWEVER, that unless and until the Agent shall have received any such request,
it may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable or in the best interest of the Lenders.
9.06 CREDIT DECISION. Each Lender expressly acknowledges that
none of the Agent-Related Persons has made any representation or warranty to
such Lender and that no act by the Agent hereinafter taken, including any review
of the affairs of the Company, the REIT, any Management Entity or Subsidiary,
shall be deemed to constitute any representation or warranty by the Agent to any
Lender. Each Lender represents to the Agent that such Lender has, independently
and without reliance upon the Agent and based on such documents and information
as such Lender has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, Properties, financial
and other condition and creditworthiness of the Company, the REIT, any
Management Entity or Subsidiary, and all applicable lender regulatory laws
relating to the transactions contemplated thereby, and made its own decision to
enter into this Agreement and extend credit to the Company hereunder. Each
Lender also represents that it will, independently and without reliance upon the
Agent and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, Properties, financial and
other condition and creditworthiness of the Company, the REIT, the Management
Entities and the Subsidiaries. Except for notices, reports and other documents
expressly herein required to be furnished to the Lenders by the Agent, Agent
shall have no duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, Properties,
financial and other condition or creditworthiness of the Company, the REIT, the
Management Entities and the Subsidiaries which may come into the possession of
any of the Agent-Related Persons.
9.07 INDEMNIFICATION. The Lenders shall indemnify upon demand
the Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation
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of the Company to do so) ratably from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind whatsoever which may at any time
(including at any time following the repayment of the Loans) be imposed on,
incurred by or asserted against any such Person in any way relating to or
arising out of this Agreement or any document contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by any such Person under or in connection with any of
the foregoing; PROVIDED, HOWEVER, that no Lender shall be liable for the payment
to the Agent-Related Persons of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender shall reimburse
the Agent upon demand (to the extent the Agent is not reimbursed upon demand by
the Company, unless the Agent is legally restricted from making such demand upon
the Company, in which case demand need not be made upon the Company) for its
ratable share of any costs or out-of-pocket expenses (including Attorney Costs)
incurred by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein to the extent that the Agent
is not reimbursed for such expenses by or on behalf of the Company. Without
limiting the generality of the foregoing, if the IRS or any authority of the
United States or other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered or was not properly executed, or
because such Lender failed to notify the Agent of a change in circumstances
which rendered the exemption from, or reduction of, withholding tax ineffective,
or for any other reason), such Lender shall indemnify the Agent fully for all
amounts paid, directly or indirectly, by the Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Agent under this Section 9.07,
together with all costs, expenses and attorneys' fees (including allocated costs
for in-house legal services). The obligation of the Lenders in this Section
shall survive the payment of all Obligations.
9.08 AGENT IN INDIVIDUAL CAPACITY. BofA (and any other Lender
that may hereafter serve as Agent) and each of their respective Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory or other business with, the Company, the REIT, the Management
Entities and the Subsidiaries and Affiliates as though BofA (or any other such
Lender) were not the agent hereunder and without notice to the Lenders. With
respect to its Loans, BofA (and any other Lender that may hereafter serve as
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Agent), shall have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though each of them were not an agent, and
the terms "Lender" and "Lenders" shall include BofA (and any other Lender that
may hereafter serve as Agent), in its individual capacity.
9.09 SUCCESSOR AGENTS. The Agent may resign as Agent upon 30
days' notice to the Lenders. If an Agent shall resign under this Agreement, the
Requisite Lenders shall appoint from among the Lenders a successor Agent for the
Lenders, which successor Agent shall, if no Default or Event of Default exists
hereunder, be subject to the approval of the Company. If no successor Agent is
appointed prior to the effective date of the resignation of the retiring Agent,
the retiring Agent shall appoint, after consulting with the Lenders and the
Company, a successor Agent. Upon the acceptance of its appointment as successor
Agent hereunder, such successor Agent shall succeed to all the rights, powers
and duties of the retiring Agent, and the term "Agent" shall mean such successor
Agent, and the retiring Agent's rights, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article IX and Sections 10.04 and 10.05 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was an
Agent under this Agreement.
9.10 COLLATERAL MATTERS.
(a) PERFECTION. The Agent is authorized on behalf of
all the Lenders, without the necessity of any notice to or further consent from
the Lenders, from time to time to take any action with respect to any Collateral
or the Equity Interests Pledge Documents which may be necessary to perfect and
maintain perfected the security interest in and Liens upon the Collateral
granted pursuant to the Equity Interests Pledge Documents.
(b) NO OTHER COLLATERAL. Each Lender agrees with and in
favor of each other (which agreement shall not be for the benefit of the
Company, the REIT, the Management Entities or any Subsidiaries) that the
Company's obligation to such Lender under this Agreement and the other Loan
Documents is not and shall not be secured by any real property collateral now or
hereafter acquired by such Lender other than the Collateral hereunder.
ARTICLE X
MISCELLANEOUS
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10.01 AMENDMENTS AND WAIVERS.
(a) Generally. No amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent with respect to any
departure therefrom, shall be effective unless the same shall be in writing and
signed by the Requisite Lenders, and then such amendment, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
(b) MATTERS REQUIRING UNANIMOUS CONSENT. Not
withstanding the terms of Section 10.01(a), no amendment or waiver of any
provision of this Agreement or any other Loan Document, no agreement to forebear
from acting upon any departure by the Company therefrom, and no consent with
respect to any departure by the Company therefrom, shall be effective to do any
of the following unless the same is in writing and signed by all the Lenders:
(i) increase the Bridge Commitment of any Lender;
(ii) postpone or delay any date fixed for any
payment of principal, interest, fees or other amounts due hereunder or under any
Loan Document whether by acceleration or otherwise;
(iii) reduce the principal of, or the rate of
interest specified herein on, any Loan, or any fees or other amounts payable
hereunder or under any Loan Document;
(iv) change the percentage of the Bridge
Commitments or of the aggregate unpaid principal amount of the Loans required
for the Lenders or any of them to take any action hereunder;
(v) amend Section 2.16 (Sharing of Payments,
Etc.), Section 6.10 (Use of Proceeds), Section 8.02 (Remedies), Section 10.15
(Governing Law and Jurisdiction) or this Section 10.01;
(vi) release any portion of the Collateral except
for the release, upon the written request of the Company, and with the consent
of the Requisite Lenders, of the Stock in a Wholly-Owned Subsidiary upon the
repayment of all Loans made with respect to the acquisition of Funded Projects
by such Subsidiary; or
(vii) release any guarantor from liability under
the REIT Guaranty Documents.
(c) MATTERS REQUIRING AGENTS' CONSENT. Notwithstanding
the terms of Section 10.01(a), no amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure by the Company there-
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from, shall be effective to affect the rights or duties of the Agent under
this Agreement or any other Loan Document unless the same is in writing and
signed by the Agent.
10.02 NOTICES.
(a) DELIVERY. All notices, requests and other
communications provided for hereunder shall be in writing (including, unless the
context expressly otherwise provides, telegraphic, telex, facsimile transmission
or cable communication) and mailed, telegraphed, telexed or delivered, (i) if to
the Company, to its address specified on the signature pages hereof, (ii) if to
any Lender, to its Domestic Lending Office, and (iii) if to Agent, to its
address specified on the signature pages hereof; or, as to the Company or the
Agent, to such other address as shall be designated by such party in a written
notice to the other parties, and as to each other party, at such other address
as shall be designated by such party in a written notice to the Company and the
Agent.
(b) RECEIPT. All such notices and communications shall,
when transmitted by overnight delivery, telegraphed, telecopied by facsimile,
telexed or cabled, be effective when delivered for overnight delivery or to the
telegraph company, transmitted by telecopier, confirmed by telex answerback or
delivered to the cable company, respectively, or if delivered, upon delivery,
except that notices pursuant to Article II or VIII shall not be effective until
actually received by the Agent.
(c) RELIANCE. The Company acknowledges and agrees that
any agreement of the Agent and the Lenders under Article II to receive certain
notices by telephone and facsimile is solely for the convenience and at the
request of the Company. The Agent and the Lenders shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by the Company
to give such notice, and the Agent and the Lenders shall not have any liability
to the Company or any other Person on account of any action taken or not taken
by the Agent and the Lenders in reliance upon such telephonic or facsimile
notice. The obligation of the Company to repay the Loans shall not be affected
in any way or to any extent by any failure by the Agent and the Lenders to
receive written confirmation of any telephonic or facsimile notice or the
receipt by the Agent and the Lenders of a confirmation which is at variance with
the terms understood by the Agent and the Lenders to be contained in the
telephonic or facsimile notice.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and
no delay in exercising, on the part of any Agent or Lender, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
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10.04 COSTS AND EXPENSES. The Company shall, whether or not the
transactions contemplated hereby shall be consummated:
(a) FACILITY EXPENSES. Pay or reimburse the Agent on
demand for all costs and expenses incurred in connection with the development,
preparation or delivery of, and any amendment, supplement, waiver or
modification to, this Agreement, any Loan Document and any other documents
prepared in connection herewith or therewith, the consummation of the
transactions contemplated hereby and thereby, and any proposal for consideration
of potential Funded Projects, including, without limitation, title insurance
company charges, survey costs, recording costs and taxes, travel expenses
incurred by representatives of the Agent, and the reasonable Attorney Costs
incurred by the Agent with respect thereto;
(b) ENFORCEMENT EXPENSES. Pay or reimburse the Agent
and Lenders on demand for all costs and expenses incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies (including in connection with any "workout" or restructuring regarding
the Loans) under this Agreement, any other Loan Document, and any such other
documents, including reasonable Attorney Costs incurred by the Agent and Lender;
and
(c) COLLATERAL EXPENSES. Pay or reimburse the Agent on
demand for all audits, environmental inspections and reviews (including the
allocated costs of such internal services), search and filing costs, fees and
expenses, incurred or sustained by the Agent in connection with the matters
referred to under paragraphs (a) and (b) of this Section.
10.05 INDEMNITY. The Company shall indemnify and hold harmless
the Agent, each Lender and each of their respective officers, directors,
employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person")
from and against and pay them for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, charges, expenses or
disbursements (including Attorney Costs) of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement and any other Loan Documents, or the transactions contemplated
hereby and thereby, and with respect to any investigation, litigation or
proceeding related to this Agreement or the Loans or the use of the proceeds
thereof, whether or not any Indemnified Person is a party thereto (all the
foregoing, collectively, the "Indemnified Liabilities"); PROVIDED, that the
Company shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities arising from the gross negligence or willful
misconduct of such Indemnified Person. The agreements in this Section 10.05
shall survive payment of all other Obligations.
10.06 MARSHALLING; PAYMENTS SET ASIDE. Neither the Agent nor any
Lender shall be under any obligation to marshall
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any assets in favor of the Company or any other Person or against or in payment
of any or all of the Obligations. To the extent that the Company makes a
payment or payments to the Agent or any Lender, or the Agent or any Lender
enforces its Liens or exercises its rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party in connection
with any Insolvency Proceeding, or otherwise, then to the extent of such
recovery the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such enforcement or setoff had not occurred.
10.07 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Agent and each Lender, which may be withheld in their
sole and absolute discretion.
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10.08 ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) ASSIGNMENTS. Subject to the further provisions of
this Section 10.08(a), any Lender may, with the written consent of the Agent,
which consent shall not be unreasonably withheld, at any time assign and
delegate to one or more Eligible Assignees (provided that no written consent of
the Agent shall be required in connection with any assignment and delegation by
a Lender to a Lender Affiliate of such Lender) (each an "Assignee") all, or any
ratable part of all, of the Loans, the Bridge Commitments and the other rights
and obligations of such Lender hereunder, in a minimum amount of $1,250,000 and
in additional increments of $62,500 so long as such Lender concurrently
transfers to such Assignee the same proportionate share of its interests and
obligations with respect to its Revolving Commitment under (and as such term is
defined in) the Revolving Credit Agreement) PROVIDED, HOWEVER, that the Company
and the Agent may continue to deal solely and directly with such Lender in
connection with the interest so assigned to an Assignee until (A) written notice
of such assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Company
and the Agent by such Lender and the Assignee; (B) such Lender and its Assignee
shall have delivered to the Company and the Agent an Assignment and Acceptance
in the form of EXHIBIT H ("Assignment and Acceptance") together with any Note or
Notes subject to such assignment; (C) such Lender shall have paid to the Agent,
for its own account, an assignment fee in the amount of $1500, if the Assignee
is a Lender (without giving effect to the Assignment), and $3000 in all other
cases; and (D) such Lender shall have delivered to the Agent such documents as
may be required by Section 3.01(f). Any such assignment requiring the approval
of the Agent shall also require the approval of the Company (such approval not
to be unreasonably withheld or delayed), provided that the Company's failure to
approve or disapprove such assignment within five days' after receiving written
notice thereof shall be deemed approval by the Company of such assignment, and
provided further, that no such approval from the Company shall be required
during the continuation of a Default or Event of Default.
(b) RIGHTS OF ASSIGNEE. From and after the date that
the Agent notifies the assignor Lender that the Agent has received an executed
Assignment and Acceptance and payment of the assignment fee specified in Section
10.08(a), (i) the Assignee thereunder shall, subject to Section 10.08(a), be a
party hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Lender under the Loan Documents, and (ii) the assignor
Lender shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Loan Documents.
(c) REPLACEMENT NOTES. Within thirty (30) Business Days
after its receipt of notice by the Agent that the
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<PAGE>
Agent has received an executed Assignment and Acceptance and payment of the
processing fee, the Company shall execute and deliver to the Agent, new Notes
evidencing such Assignee's assigned Loans and Bridge Commitment and, if the
assignor Lender has retained a portion of its Loans and its Bridge Commitment,
replacement Notes in the principal amount of the Loans retained by the assignor
Lender (such Notes to be in exchange for, but not in payment of, the Notes held
by such Lender). Immediately upon each Assignee's making its payment under the
Assignment and Acceptance, this Agreement shall be deemed to be amended to the
extent, but only to the extent, necessary to reflect the addition of the
Assignee and the resulting adjustment of the Bridge Commitments arising
therefrom. The Bridge Commitment allocated to each Assignee shall reduce such
Bridge Commitment of the assigning Lender PRO TANTO.
(d) PARTICIPATIONS. Any Lender may at any time sell to
one or more commercial lenders (a "Participant") participating interests in any
Loans and Bridge Commitment of that Lender and the other interests of that
Lender (the "originating Lender") hereunder and under the other Loan Documents
so long as such Lender concurrently transfers to such Participant the same
proportionate share of its interests and obligations with respect to its
Revolving Commitment under (and as such term is defined in) the Revolving Credit
Agreement; PROVIDED, HOWEVER, that (i) the originating Lender's obligations
under this Agreement shall remain unchanged, (ii) the originating Lender shall
remain solely responsible for the performance of such obligations, (iii) the
Company and the Agent shall continue to deal solely and directly with the
originating Lender in connection with the originating Lender's rights and
obligations under this Agreement and the other Loan Documents, (iv) no Lender
shall transfer or grant any participating interest under which the Participant
shall have rights to approve any amendment to, or any consent or waiver with
respect to, this Agreement or any other Loan Document, except to the extent such
amendment, consent or waiver would require unanimous consent as described in the
FIRST PROVISO to Section 10.01; and (v) the Company shall have approved the
transfer or grant of any participating interest in any Loans and Bridge
Commitment of the originating Lender to a Participant that has not theretofore
previously held a participating interest therein (such approval not to be
unreasonably withheld or delayed), provided that the Company's failure to
approve or disapprove in writing such Participant within five days' after
receiving written notice thereof shall be deemed approval by the Company of such
transfer or grant to such Participant, and provided further, that no such
approval from the Company shall be required during the continuation of a Default
or Event of Default. In the case of any such participation, the Participant
shall not have any rights under this Agreement, or any of the other Loan
Documents, and all amounts payable by the Company hereunder shall be determined
as if such Lender had not sold such participation; except that, if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event
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<PAGE>
of Default, each Participant shall be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement.
(e) ASSIGNMENTS TO FEDERAL RESERVE BANK.
Notwithstanding any other provision contained in this Agreement or any other
Loan Document to the contrary, any Lender may assign all or any portion of the
Loans or Notes held by it to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating Circular issued by
such Federal Reserve Bank, provided that any payment in respect of such assigned
Loans or Notes made by the Company to or for the account of the assigning and/or
pledging Lender in accordance with the terms of this Agreement shall satisfy the
Company's obligations hereunder in respect of such assigned Loans or Notes to
the extent of such payment. No such assignment shall release the assigning
Lender from its obligations hereunder.
10.09 SETOFF.
In addition to any rights and remedies of the Lenders provided by
law, if an Event of Default exists, each Lender is authorized at any time and
from time to time, without prior notice to the Company, any such notice being
waived by the Company to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held by, and other indebtedness at any time owing to, such
Lender to or for the credit or the account of the Company against any and all
obligations owing to such Lender, now or hereafter existing, irrespective of
whether the Agent or such Lender shall have made demand under this Agreement or
any Loan Document and whether such obligations may be contingent or unmatured.
Each Lender agrees to promptly notify the Company and the Agent after any such
setoff and application made by such Lender; PROVIDED, HOWEVER, that the failure
to give such notice shall not affect the validity of such setoff and
application. The rights of each Lender under this Section 10.09 are in addition
to the other rights and remedies (including other rights of setoff) that such
Lender may have. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE, OR
ATTEMPT TO EXERCISE, ANY RIGHT OF SETOFF, BANKER'S LIEN, OR THE LIKE, AGAINST
ANY DEPOSIT ACCOUNT OR PROPERTY OF THE COMPANY, THE REIT, ANY MANAGEMENT ENTITY
OR ANY SUBSIDIARY HELD OR MAINTAINED BY ANY LENDER, WITHOUT THE PRIOR WRITTEN
CONSENT OF THE REQUISITE LENDERS.
10.10 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each
Lender shall notify the Agent in writing of any changes in the address to which
notices to such Lender should be directed, of addresses of its Offshore Lending
Office, of payment instructions in respect of all payments to be made to it
hereun-
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<PAGE>
der and of such other administrative information as the Agent shall reasonably
request.
10.11 COUNTERPARTS. This Agreement may be executed by one or
more of the parties to this Agreement in any number of separate counterparts,
each of which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Company and the Agent.
10.12 SEVERABILITY. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
10.13 NO THIRD PARTIES BENEFITED. This Agreement is made and
entered into for the sole protection and legal benefit of the Company, the Agent
and the Lenders, and their permitted successors and assigns, and no other Person
shall be a direct or indirect legal beneficiary of, or have any direct or
indirect cause of action or claim in connection with, this Agreement or any of
the other Loan Documents. No Agent or Lender shall have any obligation to any
Person not a party to this Agreement or the other Loan Documents.
10.14 TIME. Time is of the essence of each term and provision of
this Agreement and each of the other Loan Documents.
10.15 GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
COLORADO; PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.
10.16 WAIVER OF JURY TRIAL. THE COMPANY, THE AGENT, AND THE
LENDERS EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES
AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE. SUBJECT TO SECTION 10.17 BELOW, THE COMPANY, THE
AGENT, AND THE LENDERS EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL
BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
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<PAGE>
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
10.17 ARBITRATION.
(a) MANDATORY ARBITRATION. Any controversy or claim
between or among the parties arising out of or relating to this Agreement, the
Loan Documents, and any claim based on or arising from an alleged tort, shall at
the request of any party be determined by arbitration. The arbitration shall be
conducted in Los Angeles, California, in accordance with the United States
Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law
provision in this Agreement, and under the Commercial Rules of the American
Arbitration Association (the "AAA"). The arbitrator(s) shall give effect to
statutes of limitation in determining any claim. Any controversy concerning
whether an issue is arbitrable shall be determined by the arbitrator(s).
Judgment upon the arbitration award may be entered in any court having
jurisdiction. The institution and maintenance of an action for judicial relief
or pursuit of a provisional or ancillary remedy shall not constitute a waiver of
the right of any party, including the plaintiff, to submit the controversy or
claim to arbitration if any other party contests such action for judicial
relief.
(b) PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No
provision of this Section 10.17 shall limit the right of any party to this
Agreement to exercise self-help remedies such as setoff, foreclosure against or
sale of any real or personal property collateral or security, or to obtain
provisional or ancillary remedies from a court of competent jurisdiction before,
after, or during the pendency of any arbitration or other proceeding. The
exercise of a remedy does not waive the right of either party to resort to
arbitration.
10.18 NOTICE OF CLAIMS; CLAIMS BAR. THE COMPANY HEREBY AGREES
THAT IT SHALL GIVE PROMPT WRITTEN NOTICE TO THE AGENT OF ANY CLAIM OR CAUSE OF
ACTION IT BELIEVES IT HAS, OR MAY SEEK TO ASSERT OR ALLEGE AGAINST THE AGENT OR
ANY LENDER, WHETHER SUCH CLAIM IS BASED IN LAW OR EQUITY, ARISING UNDER OR
RELATED TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR TO THE LOANS
(OR THE COLLATERAL THEREFOR), OR ANY ACT OR OMISSION TO ACT BY THE AGENT OR ANY
LENDER WITH RESPECT HERETO OR THERETO, AND THAT IF THE COMPANY SHALL FAIL TO
GIVE SUCH PROMPT NOTICE TO THE AGENT WITH REGARD TO ANY SUCH CLAIM OR CAUSE OF
ACTION, THE COMPANY SHALL BE DEEMED TO HAVE WAIVED, AND SHALL BE FOREVER BARRED
FROM BRINGING OR ASSERTING, SUCH CLAIM OR CAUSE OF ACTION IN ANY ARBITRATION OR
ANY SUIT, ACTION OR PROCEEDING IN ANY COURT OR BEFORE ANY GOVERNMENTAL AGENCY.
10.19 ENTIRE AGREEMENT. This Agreement, together with the other
Loan Documents, embodies the entire Agreement and understanding between the
Company, the Agent and the Lenders. Accordingly, this Agreement, together with
the other Loan Documents, supersedes all prior or contemporaneous agreements and
56
<PAGE>
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof, except for any prior arrangements made with respect
to the payment by the Company of (or any indemnification for) any fees, costs or
expenses payable to or incurred (or to be incurred) by or on behalf of the Agent
or the Lenders.
10.20 INTERPRETATION. This Agreement together with the other
Loan Documents is the result of negotiations between and has been reviewed by
counsel to the Agent, the Lenders and the Company and other parties, and is the
product of all parties hereto. Accordingly, this Agreement and the other Loan
Documents shall not be construed against the Lenders or the Agent merely because
of the Agent's or Lender's involvement in the preparation of such documents and
agreements.
10.21 EXCULPATION OF LENDERS. No Lender undertakes or assumes
any responsibility or duty to the Company or any third party to select, review,
inspect, examine, supervise, pass judgment upon or inform the Company or any
third party of the existence, quality, adequacy or suitability of: (a) any
appraisals of any Funded Project, (b) any environmental report related to a
Funded Project, or (c) any other matters or items, including, but not limited
to, engineering, soils and seismic reports which are related to a Funded
Project. Any such selection, review, inspection, examination and the like is
solely for the purpose of protecting the Banks' interests and preserving the
Banks' rights under the Loan Documents, and shall not render any Lender liable
to the Company or any third party for the existence, sufficiency, accuracy,
completeness or legality thereof. No Lender owes any duty of care to protect or
inform the Company or any third party against negligent, faulty, inadequate or
defective building or construction or the existence of any environmentally
hazardous condition affecting any Funded Project.
10.22 RELATIONSHIP. Nothing herein contained shall in any manner
be construed as creating any relationship between the Agent and the Lenders, on
the one hand, and the Company, on the other hand, other than as creditor and
debtor. The Company agrees to indemnify, protect, defend and hold the Agent and
each Lender harmless from and against any and all losses, liabilities, damages,
and costs and expenses (including, but not limited to, reasonable attorneys'
fees and disbursements, including reasonably allocated costs of in-house
counsel) resulting from any other construction of the parties' relationship.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the day and year first written above.
COMPANY
AIMCO PROPERTIES, L.P.,
a Delaware limited partnership
By: AIMCO -GP, Inc., a Delaware
corporation, its general partner
By: . . . . . . . . . . . . . . . .
Peter K. Kompaniez,
Vice President
Notices to be sent to:
1873 South Bellaire Street
17th Floor
Denver, Colorado 80222
Attention: Peter K. Kompaniez,
Vice Chairman
Facsimile: (307) 757-8735
58
<PAGE>
AGENT
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By:________________________________
Name: _____________________________
Title:_____________________________
Notices to be sent to:
Bank of America National Trust and
Savings Association CRESG #1357
555 South Flower Street, 6th Floor
Los Angeles, CA 90071
Att'n: M. Harvey
Telephone: 213/228-4013
Facsimile: 213/228-5389
Payments to be made to:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
333 S. Beaudry Ave.
Loan Accounting Dept #1503
Los Angeles, CA 90017
ABA #: 121 000 358
Credit Account #: 15031-00407
Attention: Maria Mora
Ref: AIMCO Bridge Loan
59
<PAGE>
B OF A
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Lender
By: . . . . . . . . . . . . . . . .
Name: . . . . . . . . . . . . . . .
Title:. . . . . . . . . . . . . . .
Notices to be sent to:
Bank of America National Trust and
Savings Association CRESG #1357
555 South Flower Street, 6th Floor
Los Angeles, CA 90071
Att'n: M. Harvey
Telephone: 213/228-4013
Facsimile: 213/228-5389
Payments to be made to:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
333 S. Beaudry Ave.
Loan Accounting Dept #1503
Los Angeles, CA 90017
ABA #: 121 000 358
Credit Account #: 15031-00407
Attention: Maria Mora
Ref: AIMCO Bridge Loan
60
<PAGE>
SCHEDULES
Schedule 1.01 Initial Funded Projects
Schedule 2.01 Bridge Commitments of the Lenders
EXHIBITS
EXHIBIT A Borrowing Notice
EXHIBIT B Note
EXHIBIT C Notice of Conversion/Continuation
EXHIBIT D Guaranty
EXHIBIT E Equity Interests Pledge Agreement
EXHIBIT F Funded Project Closing Certificate
EXHIBIT G Compliance Certificate
EXHIBIT H Assignment and Acceptance
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<PAGE>
Schedule 1.01
INITIAL FUNDED PROJECTS
(AS OF MAY 5, 1997)
Individual Bridge Loan
Initial Funded Project Maturity Date Therefor*
---------------------- -----------------------
NONE
* This date should match the Individual Bridge Loan Maturity Date for the
initial Funded Project applicable under the Previous Credit Agreement.
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<PAGE>
Schedule 2.01
BRIDGE COMMITMENTS
Lender Commitment
------ ----------
BofA $15,000,000.00
Total $15,000,000.00
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<PAGE>
EXHIBIT A
INITIAL BORROWING NOTICE
___________, 1997
Bank of America National Trust
and Savings Association, as Agent
CRESD #1357
555 South Flower Street, 6th Floor
Los Angeles, California 90071
Attn: Unit Manager
Re: Amended and Restated Credit Agreement (Bridge Loan), dated as of May 5,
1997 (as the same may be amended, modified or supplemented from time to
time, the "Agreement"), among AIMCO PROPERTIES, L.P., a Delaware limited
partnership (the "Company"), the banks from time to time party to the
Agreement (the "Banks"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as one of the Banks, and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent (the "Agent") for the Banks
Ladies and Gentlemen:
Reference is made to the Agreement. Capitalized terms used in this
Borrowing Notice without definition have the meanings specified in the
Agreement.
Pursuant to Section 2.03 of the Agreement, notice is hereby given that the
Company desires that the Banks make the loan described in attached SCHEDULE 1
(the "Loan"). In connection therewith, the Company and the undersigned
Responsible Officers of the Company hereby certify that:
(1) ACQUISITION COST. The amount of the Loan hereby requested does
not exceed 50% of the acquisition cost (exclusive of prorations and closing
costs) of the Funded Project to which the Loan will be applied;
(2) REPRESENTATIONS AND WARRANTIES. All representations and
warranties of the Company contained in the Loan Documents, including those
contained in Article V of the Agreement, are true and correct as of the date
hereof and shall be true and correct in all material respects on the date of the
Loan, both before and after giving effect to the Loan; PROVIDED, HOWEVER, that
the representations and warranties of the Company set forth in Section 5.01
(with respect to the representation and warranty made under Section 5.08 of the
Agreement) shall be deemed to be made with respect to the financial statements
most recently delivered to the Agent and the Banks pursuant to Section 6.01 of
the Agreement;
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<PAGE>
(3) NO DEFAULT/EVENT OF DEFAULT. No Default or Event of Default
exists as of the date hereof or will result from the making of the Loan;
(4) USE OF PROCEEDS. The proceeds of the Loan will be used only as
permitted under Sections 2.01(b) and 6.06 of the Agreement; and
(5) NO MATERIAL ADVERSE EFFECT. No act, omission, change or event
which has a Material Adverse Effect has occurred since the Closing Date.
AIMCO PROPERTIES, L.P.,
a Delaware limited partnership
By: AIMCO-GP, INC.
a Delaware corporation, its general
partner
By:. . . . . . . . . . . . . . . .
Name:. . . . . . . . . . . . . . .
Its: . . . . . . . . . . . . . . .
By:. . . . . . . . . . . . . . . .
Name:. . . . . . . . . . . . . . .
Its: . . . . . . . . . . . . . . .
2
<PAGE>
SCHEDULE 1
to Borrowing Notice
REQUESTED LOAN
AMOUNT OF REQUESTED LOAN: $. . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(must be $1,000,000 or a multiple of
$100,000 in excess thereof)
DESIGNATION OF INTEREST RATE:
(Portion of requested Loan to be funded as Base Rate Loan and/or LIBOR Loan):
(1) BASE RATE LOAN. The following Base Rate Loan:
Amount: $. . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Requested Borrowing Date:. . . . . . . . . . . . . . . . . . . . . . . . .
(must be a Business Day at least two (2) Business Days after date of
notice)
(2) LIBOR LOAN. The following LIBOR Loan:
(there must not, after giving effect to the requested Loan, be more than
five (5) different LIBOR Loans in effect, and the Interest Period must not
extend beyond the Individual Bridge Loan Maturity Date for such Loan)
Amount: $. . . . . . . . . . . . . . . . .
...........................................................................
Requested Borrowing Date: . . . . . . . . . . . . . . . . .
(must be a Business Day at least three (3) Business Days after date of
notice)
Interest Period: . . . . . . . . . . . . . . . . .
(1 or 2 months)
3
<PAGE>
EXHIBIT B
PROMISSORY NOTE
Los Angeles, California
$25,000,000.00 ________, 1997
FOR VALUE RECEIVED, AIMCO Properties, L.P., a Delaware limited partnership
(the "Company"), promises to pay to the order of BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION ("Bank") the principal amount of TWENTY FIVE MILLION
DOLLARS AND NO/100 ($25,000,000.00) or, if less, the aggregate amount of Loans
(as such term and all other capitalized terms used but not defined herein are
defined in the Amended and Restated Credit Agreement referred to below) made by
the Bank to the Company pursuant to the Amended and Restated Credit Agreement
referred to below, outstanding on the Bridge Facility Maturity Date.
The Company also promises to make principal payments and interest on the
unpaid principal amount hereof from the date hereof until paid at the rates and
at the times which shall be determined in accordance with the provisions of the
Amended and Restated Credit Agreement, including, without limitation, the
repayment of Loans no later than the applicable Individual Bridge Loan Maturity
Date.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Payment Office. Until notified of the transfer of this Note, the Company shall
be entitled to deem the Bank or such person who has been so identified by the
transferor in writing to the Company as the holder of this Note, as the owner
and holder of this Note. The Bank and any subsequent holder of this Note agrees
that before disposing of this Note, or any part hereof, it will make a notation
hereon of all principal payments previously made hereunder of the date to which
interest hereon has been paid on the schedule attached hereto, if any; PROVIDED,
HOWEVER, that the failure to make notation of any payment made on this Note
shall not limit or otherwise affect the obligation of the Company hereunder with
respect to payments of principal or interest on this Note.
This Note is referred to in, and is entitled to the benefits of, the
Amended and Restated Credit Agreement (Bridge Loan), dated as of May 5, 1997
(the "AMENDED AND RESTATED CREDIT AGREEMENT"), among the Company, the financial
institutions named therein, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Agent (the "Agent"). The Amended and Restated Credit Agreement,
among other things, (i) provides for the making of loans (the "LOANS") by the
Bank to the Company from time to time in an aggregate amount first above
mentioned, the indebtedness of the Company resulting from each such Loan being
evidenced by this Note, and (ii) contains provisions for acceleration of the
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<PAGE>
maturity hereof upon the happening of certain stated events and also for
mandatory and optional prepayments on account of principal hereof and certain
principal payments prior to the maturity hereof upon the terms and conditions
therein specified.
The terms of this Note are subject to amendment only in the manner provided
in the Amended and Restated Credit Agreement.
No reference herein to the Amended and Restated Credit Agreement and no
provision of this Note or the Amended and Restated Credit Agreement shall alter
or impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of and interest on this Note at the place, at the respective
times, and in the currency herein prescribed.
The Company promises to pay all costs and expenses, including reasonable
attorneys' fees, incurred in the collection and enforcement of this Note. The
Company hereby waives diligence, presentment, and protest, and except as
provided in the Amended and Restated Credit Agreement, demand and notice of
every kind and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder.
This Note shall be governed by, and construed in accordance with, the laws
of the state of Colorado without giving effect to its choice of law doctrine.
IN WITNESS WHEREOF, the Company has caused this Note to be executed and
delivered by its duly authorized officer, as of the date and place first above
written.
AIMCO PROPERTIES, L.P.,
a Delaware limited partnership
By: AIMCO-GP, INC.,
a Delaware corporation,
its general partner
By: . . . . . . . . . . . . . . .
Its: . . . . . . . . . . . .
2
<PAGE>
TRANSACTIONS ON NOTE
- --------------------------------------------------------------------------------
AMOUNT
AMOUNT OF PRIN- INTEREST
OF LOAN CIPAL PRINCIPAL INTEREST PAID NOTATION
DATE MADE PAID BALANCE PAID THROUGH MADE BY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3
<PAGE>
EXHIBIT C
NOTICE OF CONVERSION/CONTINUATION
__________________, 1997
Bank of America National Trust
and Savings Association
CRESD #1357
555 South Flower Street, 6th Floor
Los Angeles, California 90071
Attn: Unit Manager
Re: Amended and Restated Credit Agreement (Bridge Loan), dated as of May 5,
1997 (as the same may be amended, modified or supplemented from time to
time, the "Agreement"), by and among AIMCO PROPERTIES, L.P., a Delaware
limited partnership (the "Company"), the banks from time to time party to
the Agreement (the "Banks"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as one of the Banks, and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent (the "Agent")
Ladies and Gentlemen:
Reference is made to the Agreement. Capitalized terms used in this
Notice of Conversion/Continuation without definition have the meanings specified
in the Agreement.
Pursuant to Section 2.04 of the Agreement, the Company hereby elects
to convert or continue the loans described in attached SCHEDULE 1 (the "Loans").
In connection therewith, the Company and the undersigned Responsible Officers of
the Company hereby certify that:
(1) REPRESENTATIONS AND WARRANTIES. All representations and
warranties of the Company contained in the Loan Documents, including those
contained in Article V of the Agreement, are true and correct in all material
respects as of the date hereof and shall be true and correct on the date of the
continuation/conversion of the Loan, both before and after giving effect to such
continuation/conversion; PROVIDED, HOWEVER, that the representations and
warranties of the Company set forth in Section 5.01 (with respect to the
representation and warranty made under Section 5.08 of the Agreement) shall be
deemed to be made with respect to the financial statements most recently
delivered to the Agent and the Banks pursuant to Section 6.01 of the Agreement;
(2) NO DEFAULT/EVENT OF DEFAULT. No Default or Event of Default
exists as of the date hereof or will result from the continuation/conversion of
the Loan; and
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<PAGE>
(4) NO MATERIAL ADVERSE EFFECT. No act, omission, change or
event which has a Material Adverse Effect has occurred since the Closing Date.
AIMCO PROPERTIES, L.P., a Delaware limited
partnership
By: AIMCO-GP, INC.
a Delaware corporation, its general
partner
By:__________________________________
_____ . . . . . . . . . . . . . . . . .
Name: _______________________________
Its:_________________________________
_____ . . . . . . . . . . . . . . . . .
By:__________________________________
_____ . . . . . . . . . . . . . . . . .
Name: _______________________________
Its:_________________________________
_____ . . . . . . . . . . . . . . . . .
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<PAGE>
SCHEDULE 1
to Notice of Conversion/Continuation
LOAN TO BE CONVERTED OR CONTINUED
A. All conversions and continuations must be of a Loan, or portion thereof, in
a principal amount of $1,000,000 or a multiple of $100,000 in excess
thereof.
B. Conversions/continuations to a LIBOR Loan under paragraphs (2) and (3)
below are not permitted if, after giving effect to thereto, (a) there would
be more than five (5) different LIBOR Loans in effect, or (b) the aggregate
outstanding principal amount of all LIBOR Loans would be reduced to be less
than $1,000,000.
(1) CONVERSION OF A LIBOR LOAN INTO A BASE RATE LOAN.
The following LIBOR Loan to a Base Rate Loan:
Amount: $ . . . . . . .
Requested Conversion Date: . . . . . . . .
(must be a Business Day at least two (2)
Business Days after date of notice)
Last day of current Interest Period:. . . . .
_________________
(2) CONVERSION OF A BASE RATE LOAN INTO A LIBOR LOAN.
The following Base Rate Loan to a LIBOR Loan:
Amount: $ . . . . . . .
Requested Conversion Date: . . . . . . . .
(must be a Business Day at least three
(3) Business Days after date of notice)
Requested Interest Period: . . . . . . . .
(1 or 2 months)
(3) CONTINUATION OF A LIBOR LOAN INTO A SUBSEQUENT INTEREST PERIOD.
The following LIBOR Loan into a subsequent Interest Period:
Amount: $ . . . . . . .
Last day of current Interest Period:. . . . .
(must be a Business Day at least three
(3) Business Days after date of notice)
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Requested Interest Period: . . . . . . . .
(1 month)
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EXHIBIT D
PAYMENT GUARANTY
This Payment Guaranty ("Guaranty") is made as of May 5, 1997, by
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation, AIMCO-GP,
INC., a Delaware corporation, AIMCO-LP, INC., a Delaware corporation, AIMCO
HOLDINGS, L.P., a Delaware limited partnership, AIMCO HOLDINGS QRS, INC., a
Delaware corporation, AIMCO SOMERSET, INC., a Delaware corporation, and
AIMCO/OTC QRS, INC., a Delaware corporation (each of the foregoing is referred
to herein as "Guarantor") in favor of BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION ("BofA"), as the agent for itself and the lenders
("Lenders") from time to time party to the Revolving Credit Agreement (as
hereinafter defined) and also as the agent for itself and the lenders from time
to time party to the Bridge Loan Agreement (as defined below) (in such capacity,
the "Agent").
FACTUAL BACKGROUND
Guarantor is executing this Guaranty (i) to induce the Lenders to make
a $100,000,000 revolver to term credit facility available to AIMCO Properties
L.P., a Delaware limited partnership (the "Company") in accordance with the
Amended and Restated Credit Agreement (the "Revolving Credit Agreement"), dated
of even date herewith, by and among Company, BofA (as Agent (as defined under
the Revolving Credit Agreement) and as a Lender) and the other Lenders from time
to time party thereto and (ii) to induce the Lenders to make a $25,000,000
bridge loan facility available to the Company in accordance with the Credit
Agreement (Bridge Loan) (the "Bridge Loan Agreement"), dated of even date
herewith, by and among the Company, BofA (as Agent (as defined under the Bridge
Loan Agreement) and as a Lender) and the other Lenders from time to time party
thereto. Capitalized terms used but not defined herein shall have the meanings
set forth in the Revolving Credit Agreement. As used herein, the term
"Facility" shall refer individually to each of the credit facilities available
to the Company under the Revolving Credit Agreement and the Bridge Loan
Agreement and shall refer collectively to all such credit facilities.
GUARANTY
1. GUARANTY OF LOAN. Guarantor absolutely, unconditionally and
irrevocably guaranties to Agent and the Lenders the full payment of the
Indebtedness (as hereinafter defined), and unconditionally agrees to pay to
Agent and the Lenders the full amount of the Indebtedness. This is a guaranty
of payment, not of collection. If Company defaults in the payment when due of
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the Indebtedness or any part of it, Guarantor shall in lawful money of the
United States pay to Agent and the Lenders, on demand, all sums due and owing on
the Indebtedness, including all interest, charges, fees and other sums, costs
and expenses.
2. LOAN. In this Guaranty, the term "Indebtedness" is broadly
defined to mean and include all primary, secondary, direct, indirect, fixed and
contingent obligations of Company to pay principal, interest, prepayment
charges, breakage costs, late charges, loan fees and any other fees, charges,
sums, costs and expenses which may be owing at any time under the Loan Documents
(as such term is defined both in the Revolving Credit Agreement and in the
Bridge Loan Agreement), and shall include, without limitation, all liabilities
and obligations of the Company with respect to Letters of Credit issued under
the Revolving Credit Agreement, as any or all of such obligations may from time
to time be modified, amended, extended or renewed. If the amount outstanding
under the Indebtedness is determined by a court of competent jurisdiction or in
any arbitration proceeding described in Section 10.17 of the Revolving Credit
Agreement, that determination shall be conclusive and binding on Guarantor,
regardless of whether Guarantor was a party to the proceeding in which the
determination was made or not.
3. RIGHTS OF AGENT AND THE LENDERS. Guarantor authorizes Agent or
any Lender to perform any or all of the following acts at any time in its sole
discretion, all without notice to Guarantor and without affecting Guarantor's
obligations under this Guaranty:
(a) Agent or the Requisite Lenders may alter any terms of the
Indebtedness or any part of it, including renewing, compromising, extending or
accelerating, or otherwise changing the time for payment of, or increasing or
decreasing the rate of interest on, the Indebtedness or any part of it.
(b) Agent or any Lender may take and hold security for the
Indebtedness or this Guaranty, accept additional or substituted security for
either, and subordinate, exchange, enforce, waive, release, compromise, fail to
perfect and sell or otherwise dispose of any such security in accordance with
the terms of the Indebtedness.
(c) Agent or any Lender may direct the order and manner of any
sale of all or any part of any security now or later to be held for the
Indebtedness or this Guaranty, and Agent or any Lender may also bid at any such
sale.
(d) Agent or any Lender may apply any payments or recoveries
from Company, Guarantor or any other source, and any proceeds of any security,
to Company's obligations under the Loan Documents in such manner, order and
priority as Agent or such
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Lender may elect, whether or not those obligations are guarantied by this
Guaranty or secured at the time of the application.
(e) Agent or any Lender may release Company of its liability for
the Indebtedness or any part of it.
(f) Agent or any Lender may substitute, add or release any one
or more Guarantors, other guarantors or endorsers.
(g) In addition to the Indebtedness, Agent or any Lender may
extend other credit to Company, and may take and hold security for the credit so
extended, all without affecting Guarantor's liability under this Guaranty.
4. GUARANTY TO BE ABSOLUTE. Guarantor expressly agrees that until
the Indebtedness is paid and performed in full and each and every term, covenant
and condition of this Guaranty is fully performed, Guarantor shall not be
released by or because of:
(a) Any act or event which might otherwise discharge, reduce,
limit or modify Guarantor's obligations under this Guaranty;
(b) Any waiver, extension, modification, forbearance, delay or
other act or omission of Agent or any Lender, or its failure to proceed promptly
or otherwise as against Company, Guarantor or any security;
(c) Any action, omission or circumstance which might increase
the likelihood that Guarantor may be called upon to perform under this Guaranty
or which might affect the rights or remedies of Guarantor as against Company;
(d) Any dealings occurring at any time between Company and Agent
or any Lender, whether relating to the Indebtedness or otherwise; or
(e) Any action of Agent or any Lender described in Section 3
above.
Guarantor hereby acknowledges that absent this Section 4,
Guarantor might have a defense to the enforcement of this Guaranty as a result
of one or more of the foregoing acts, omissions, agreement, waivers or matters.
Guarantor hereby expressly waives and surrenders any defense to its liability
under this Guaranty based upon any of the foregoing acts, omissions, agreements,
waivers or matters. It is the purpose and intent of this Guaranty that the
obligations of Guarantor under it shall be absolute and unconditional under any
and all circumstances.
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5. GUARANTOR'S WAIVERS. Guarantor waives:
(a) All statutes of limitations as a defense to any action or
proceeding brought against Guarantor by Agent or any Lender, to the fullest
extent permitted by law;
(b) Any right it may have to require Agent or any Lender to
proceed against Company, proceed against or exhaust any security held from
Company, or pursue any other remedy in Agent's or any Lender's power to pursue;
(c) Any defense based on any claim that Guarantor's obligations
exceed or are more burdensome than those of Company;
(d) Any defense based on: (i) any legal disability of Company,
(ii) any release, discharge, modification, impairment or limitation of the
liability of Company to Agent or any Lender from any cause, whether consented to
by Agent or any Lender or arising by operation of law or from any bankruptcy or
other voluntary or involuntary proceeding, in or out of court, for the
adjustment of debtor-creditor relationships ("Insolvency Proceeding") and (iii)
any rejection or disaffirmance of the Indebtedness, or any part of it, or any
security held for it, in any such Insolvency Proceeding;
(e) Any defense based on any action taken or omitted by Agent or
any Lender in any Insolvency Proceeding involving Company, including any
election to have Agent's or that Lender's claim allowed as being secured,
partially secured or unsecured, any extension of credit by Lender to Company in
any Insolvency Proceeding, and the taking and holding by Agent or any Lender of
any security for any such extension of credit;
(f) All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices of
acceptance of this Guaranty and of the existence, creation, or incurring of new
or additional indebtedness, and demands and notices of every kind except for any
demand or notice by Agent or any Lender to Guarantor expressly provided for in
Section 1;
(g) Any defense based on or arising out of any defense that
Company may have to the payment or performance of the Indebtedness or any part
of it; and
(h) Any defense based on or arising out of any action of Agent
or any Lender described in Sections 3 or 4 above.
6. WAIVERS OF SUBROGATION AND OTHER RIGHTS.
(a) During the existence of an Event of Default by Company,
Agent or any Lender, without prior notice to or
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consent of Guarantor, may elect to: (i) foreclose either judicially or
nonjudicially against any real or personal property security it may hold for the
Indebtedness, (ii) accept a transfer of any such security in lieu of
foreclosure, (iii) compromise or adjust the Indebtedness or any part of it or
make any other accommodation with Company or Guarantor, or (iv) exercise any
other remedy against Company or any security. No such action by Agent or any
Lender shall release or limit the liability of Guarantor, who shall remain
liable under this Guaranty after the action, even if the effect of the action is
to deprive Guarantor of any subrogation rights, rights of indemnity, or other
rights to collect reimbursement from Company for any sums paid to Agent or any
Lender, whether contractual or arising by operation of law or otherwise.
Guarantor expressly agrees that under no circumstances shall it be deemed to
have any right, title, interest or claim in or to any real or personal property
to be held by Agent or any Lender or any third party after any foreclosure or
transfer in lieu of foreclosure of any security for the Indebtedness.
(b) Regardless of whether Guarantor may have made any payments
to Lender, Guarantor hereby waives: (i) all rights of subrogation, all rights of
indemnity, and any other rights to collect reimbursement from Company for any
sums paid to Agent or any Lender, whether contractual or arising by operation of
law (including the United States Bankruptcy Code or any successor or similar
statute) or otherwise, (ii) all rights to enforce any remedy that Lender may
have against Company, and (iii) all rights to participate in any security now or
later to be held by Agent or any Lender for the Indebtedness, in each case until
the full and indefeasible payment and performance of all Indebtedness, and all
obligations of the Guarantors hereunder.
(c) Guarantor waives all rights and defenses arising out of an
election of remedies by the Agent or any Lender, even though that election of
remedies may affect Guarantor's rights of subrogation and reimbursement against
the Company by the operation of law or otherwise. In addition, Guarantor waives
all rights and defenses that Guarantor may have because the Company's
indebtedness is secured by real property. This means, among other things:
(1) Agent and the Lenders may collect from Guarantor
without first foreclosing on any real or personal property collateral pledged by
the Company.
(2) If Agent forecloses on any real property collateral
pledged by the Company:
(A) The amount of the indebtedness may be reduced only
by the price for which that collateral is sold at the foreclosure sale, even if
the collateral is worth more than the sale price.
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(B) Agent and the Lenders may collect from Guarantor
even if Agent or any Lender, by foreclosing on the real property collateral, has
destroyed or affected any right Guarantor may have to collect from the Company.
This is an unconditional and irrevocable waiver of any rights and
defenses Guarantor may have because the Company's indebtedness is secured by
real property.
7. REVIVAL AND REINSTATEMENT. If Agent or any Lender is required to
pay, return or restore to Company or any other person any amounts previously
paid on the Indebtedness because of any Insolvency Proceeding of Company, any
stop notice or any other reason, the obligations of Guarantor shall be
reinstated and revived and the rights of Agent and such Lender shall continue
with regard to such amounts, all as though they had never been paid.
8. INFORMATION REGARDING BORROWER. Before signing this Guaranty,
Guarantor investigated the financial condition and business operations of
Company and such other matters as Guarantor deemed appropriate to assure itself
of Company's ability to discharge its obligations under the Loan Documents.
Guarantor assumes full responsibility for that due diligence, as well as for
keeping informed of all matters which may affect Company's ability to pay and
perform its obligations to the Agent and the Lenders. Neither Agent nor any
Lender has any duty to disclose to Guarantor any information which such party
may have or receive about Company's financial condition, business operations, or
any other circumstances bearing on its ability to perform.
9. SUBORDINATION. Any rights of Guarantor, whether now existing or
later arising, to receive payment on account of any indebtedness (including
interest) owed to it by Company or any Subsidiary thereof or to receive any
payment from Company or any such Subsidiary other than those payments or
distributions permitted under Sections 7.08(b) and 7.09 of the Revolving Credit
Agreement shall at all times be subordinate as to lien and time of payment and
in all other respects to the full and prior repayment of the Indebtedness.
Guarantor shall not be entitled to enforce or receive payment of any sums hereby
subordinated until the Indebtedness has been paid and performed in full and any
such sums received in violation of this Guaranty shall be received by Guarantor
in trust for the Agent and the Lenders.
10. FINANCIAL INFORMATION. Guarantor shall keep true and correct
financial books and records, using generally accepted accounting principles
consistently applied, or such other accounting principles as the Requisite
Lenders in their reasonable judgment may find acceptable from time to time.
Guarantor represents, warrants and covenants to Agent and the Lenders that all
financial information with respect to the Guarantor delivered or to be delivered
to Agent and the Lenders by the Company with
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respect to Guarantor under Section 6.01 of the Revolving Credit Agreement is or
shall be true and correct and fairly presents or will fairly present the
financial position of the Guarantor for the applicable period. Guarantor shall
promptly provide Agent and the Lenders with any additional audited financial
information that Guarantor may obtain, and such other information concerning its
affairs and properties as Agent or any Lender may reasonably request, including,
without limitation, signed copies of any tax returns if requested Agent or the
Lenders.
11. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents
and warrants that:
(a) All financial statements delivered to Agent or the Lenders
were or will be prepared in accordance with generally accepted accounting
principles, or such other accounting principles as may be acceptable to the
Requisite Lenders at the time of their preparation, consistently applied;
(b) There has been no material adverse change in Guarantor's
financial condition since the dates of the statements most recently furnished to
Agent and the Lenders; and
(c) All representations and warranties given on behalf of or
with respect to Guarantor contained in Article V of the Revolving Credit
Agreement, in Article V of the Bridge Loan Agreement and in any other Loan
Document or certification made in connection with the Revolving Credit Agreement
or Bridge Loan Agreement are true and correct.
12. COVENANTS OF GUARANTOR. Guarantor covenants and agrees that it
shall comply with and perform all covenants given on behalf of or with respect
to Guarantor (whether expressly or as a Subsidiary) contained in Articles VI and
VII of the Revolving Credit Agreement, Articles VI and VII of the Bridge Loan
Agreement and in all other Loan Documents.
13. INTENTIONALLY OMITTED.
14. REFERENCE AND ARBITRATION.
(a) MANDATORY ARBITRATION. Any controversy or claim between or
among the parties, including those arising out of or relating to this Guaranty
or the Loan Documents and any claim based on or arising from an alleged tort,
shall at the request of any party be determined by arbitration. The arbitration
shall be conducted in Los Angeles, California, in accordance with the United
States Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law
provision in this Guaranty, and under the Commercial Rules of the American
Arbitration Association (the "AAA"). The arbitrator(s) shall give effect to
statutes of limitation in determining any claim. Any controversy concerning
whether an issue is arbitrable shall be determined by
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the arbitrator(s). Judgment upon the arbitration award may be entered in any
court having jurisdiction. The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.
(b) PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No
provision of this Section 14 shall limit the right of any party to exercise
self-help remedies such as setoff, foreclosure against or sale of any real or
personal property collateral or security, or to obtain provisional or ancillary
remedies from a court of competent jurisdiction before, after, or during the
pendency of any arbitration.
15. AUTHORIZATION; NO VIOLATION. Guarantor is authorized to execute,
deliver and perform under this Guaranty, which is a valid, binding, and
enforceable obligation of Guarantor in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting creditor's rights generally. The
execution, delivery and performance of this Guaranty are not in violation of any
applicable law, regulation or ordinance, or any order or ruling of any court or
governmental agency applicable to the Guarantor. The Guaranty does not conflict
with, or constitute a breach or default under, any agreement to which Guarantor
is a party.
16. ADDITIONAL AND INDEPENDENT OBLIGATIONS. Guarantor's obligations
under this Guaranty are in addition to its obligations under any future
guaranties, each of which shall remain in full force and effect until it is
expressly modified or released in a writing signed by Agent and consented to by
the Lenders. Guarantor's obligations under this Guaranty are independent of
those of Company on the Indebtedness. Agent or the Lenders may bring a separate
action, or commence a separate arbitration proceeding against Guarantor without
first proceeding against Company, any other person or any security that Agent or
any Lender may hold, and without pursuing any other remedy. None of Agent's or
any Lender's rights under this Guaranty shall be exhausted by any action by
Agent or any Lender until the Indebtedness has been paid and performed in full
in cash.
17. NO WAIVER; CONSENTS; CUMULATIVE REMEDIES. Each waiver by Agent
or the Lenders must be in writing, and no waiver shall be construed as a
continuing waiver. No waiver shall be implied from Agent's or any Lender's
delay in exercising or failure to exercise any right or remedy against Company,
Guarantor or any security. Consent by Agent or the Lenders to any act or
omission by Company or Guarantor shall not be construed as a consent to any
other or subsequent act or omission, or as a waiver of the requirement for
Agent's or the Lenders' consent to
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be obtained in any future or other instance. All remedies of Agent and each
Lender against Company and Guarantor are cumulative.
18. NO RELEASE. Except as otherwise provided in Section 1, Guarantor
shall not be released, in whole or in part, from its obligations under this
Guaranty except by a writing signed by Agent and all the Lenders.
19. HEIRS, SUCCESSORS AND ASSIGNS; PARTICIPATIONS. The terms of this
Guaranty shall bind and benefit the heirs, legal representatives, successors and
assigns of Agent, the Lenders and Guarantor; provided, however, that Guarantor
may not assign this Guaranty, or assign or delegate any of its rights or
obligations under this Guaranty, without the prior written consent of Agent in
each instance. Without notice to or the consent of Guarantor, Agent and any
Lender may disclose any and all information in its possession concerning
Guarantor, this Guaranty and any security for this Guaranty to any actual or
prospective purchaser of any securities issued or to be issued by Agent or such
Lender, and to any actual or prospective purchaser or assignee of any
participation or other interest in the Indebtedness and this Guaranty.
20. NOTICES.
(a) DELIVERY. All notices, requests and other communications
provided for hereunder shall be in writing (including, unless the context
expressly otherwise provides, telegraphic, telex, facsimile transmission or
cable communication) and mailed, telegraphed, telexed or delivered to its
address specified on the signature pages hereof, or to such other address as
shall be designated by such party in a written notice to the other party.
(b) RECEIPT. All such notices and communications shall, when
transmitted by overnight delivery, telegraphed, telecopied by facsimile, telexed
or cabled, be effective when delivered for overnight delivery or to the
telegraph company, transmitted by telecopier, confirmed by telex answerback or
delivered to the cable company, respectively, or if delivered, upon delivery.
(c) RELIANCE. Agent and each Lender shall be entitled to rely
on the authority of any person purporting to be a person authorized by Guarantor
to give such notice, and neither Agent nor any Lender shall have any liability
to Guarantor or any other person on account of any action taken or not taken by
Agent or such Lender in reliance upon such telephonic or facsimile notice. The
obligation of Guarantor hereunder shall not be affected in any way or to any
extent by any failure by Lender to receive written confirmation of any
telephonic or facsimile notice or the receipt by Agent or a Lender of a
confirmation
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which is at variance with the terms understood by Agent or such Lender to be
contained in the telephonic or facsimile notice.
21. RULES OF CONSTRUCTION. In this Guaranty, the word "Company"
includes both the named Company and any other person who at any time assumes or
otherwise becomes primarily liable for all or any part of the obligations of the
named Company on the Indebtedness. The word "person" includes any individual,
company, trust or other legal entity of any kind. If this Guaranty is executed
by more than one person, the word "Guarantor" includes all such persons. The
word "include(s)" means "include(s), without limitation," and the word
"including" means "including, but not limited to." When the context and
construction so require, all words used in the singular shall be deemed to have
been used in the plural and vice versa. No listing of specific instances, items
or matters in any way limits the scope or generality of any language of this
Guaranty. All headings appearing in this Guaranty are for convenience only and
shall be disregarded in construing this Guaranty.
22. GOVERNING LAW. This Guaranty shall be governed by, and construed
in accordance with, the laws of the State of Colorado, without regard to its
choice of law rules.
23. COSTS AND EXPENSES. If any lawsuit or arbitration is commenced
which arises out of, or which relates to this Guaranty, the Loan Documents or
the Indebtedness, the prevailing party shall be entitled to recover from each
other party such sums as the court or arbitrator may adjudge to be reasonable
attorneys' fees (including allocated costs for services of in-house counsel) in
the action or proceeding, in addition to costs and expenses otherwise allowed by
law. In all other situations, including any Insolvency Proceeding, Guarantor
agrees to pay all of the Agent's and each Lender's costs and expenses, including
attorneys' fees (including allocated costs for services of the Agent's and each
Lender's in-house counsel) which may be incurred in any effort to collect or
enforce the Indebtedness or any part of it or any term of this Guaranty.
Without limiting any rights of the Agent or Lenders under the Revolving Credit
Agreement or the Bridge Loan Agreement, all amounts of any kind due and payable
under this Guaranty (whether for principal, interest, and other costs under the
Indebtedness, or for costs, fees, and expenses for which the Guarantors are
directly responsible hereunder, or otherwise) shall accrue interest from the
time the Agent or the Lenders make demand therefor hereunder until paid in full
in cash to such Agent or the Lenders at the Base Rate, as defined in the
Revolving Credit Agreement, plus three (3%) percentage points, except to the
extent that any such amounts are then accruing interest under the Indebtedness,
in which case such Base Rate plus 3% interest rate shall not be applied if the
effect would be to compound the interest to which such obligations are subject
to under the Indebtedness.
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24. CONSIDERATION. Guarantor acknowledges that it expects to benefit
from Lenders' extension of the Facility to Company because of its relationship
to Company, because such Facility is essential to the business of the Company
and because a portion of the Indebtedness will be available for the Company to
pay certain expenses intended to be incurred by Guarantor in connection with the
conduct by Guarantor of its business. Guarantor is executing this Guaranty in
consideration of these anticipated benefits.
25. INTEGRATION; MODIFICATIONS. This Guaranty (a) integrates all the
terms and conditions mentioned in or incidental to this Guaranty, (b) supersedes
all oral negotiations and prior writings with respect to its subject matter, and
(c) is intended by Guarantor, Agent and the and Lenders as the final expression
of the agreement with respect to the terms and conditions set forth in this
Guaranty and as the complete and exclusive statement of the terms agreed to by
Guarantor, Agent and the Lenders. No representation, understanding, promise or
condition shall be enforceable against any party hereto unless it is contained
in this Guaranty. This Guaranty may not be modified except in a writing signed
by both Agent (with the consent of the Requisite Lenders) and Guarantor. No
course of prior dealing, usage of trade, parol or extrinsic evidence of any
nature shall be used to supplement, modify or vary any of the terms hereof. As
between Agent and the Lenders only, nothing contained in this Guaranty shall
alter the rights and obligations among Agent and the Lenders set forth in the
Credit Agreement.
26. MISCELLANEOUS. The illegality or unenforceability of one or more
provisions of this Guaranty shall not affect any other provision. Time is of
the essence in the performance of this Guaranty by Guarantor. The obligations
of each Guarantor under this Guaranty shall be joint and several.
Guarantors:
APARTMENT INVESTMENT AND MAN-
AGEMENT COMPANY,
a Maryland corporation
By:. . . . . . . . . . . . . .
Peter K. Kompaniez
Vice Chairman
AIMCO-GP, INC.,
a Delaware corporation
By:. . . . . . . . . . . . . .
Peter K. Kompaniez
Vice President
AIMCO-LP, INC.,
a Delaware corporation
By:. . . . . . . . . . . . . .
Peter K. Kompaniez
Vice President
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AIMCO HOLDINGS, LP,
a Delaware limited partnership
By: AIMCO HOLDINGS QRS, INC.,
a Delaware corporation,
General Partner
By: . . . . . . . . . . . . . . .
Peter K. Kompaniez
Vice President
AIMCO HOLDINGS QRS, INC.,
a Delaware corporation
By: . . . . . . . . . . . . . . .
Peter K. Kompaniez
Vice President
Address Where Notices to Guar-
antors are to be Sent:
AIMCO SOMERSET, INC., 1873 South Bellaire Street
a Delaware corporation 17th Floor
Denver, Colorado 90071
By: . . . . . . . . . . . . . . .
Peter K. Kompaniez
Vice President
Address Where Notices to Agent
are to be Sent:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
AIMCO/OTC QRS, INC., 555 South Flower Street, 6th
Floor
a Delaware corporation Los Angeles, California 90071
Att'n: Manager - Unit #1357
By: . . . . . . . . . . . . . . .
Peter K. Kompaniez Addresses Where Notices to the
Vice President Lenders are to be Sent:
Per the Credit Agreement
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Equity Interests Security Agreement
for Bridge Loan Agreement
EXHIBIT E
EQUITY INTERESTS SECURITY AGREEMENT(1)
(Bridge Loan)
THIS EQUITY INTERESTS SECURITY AGREEMENT ("Security Agreement") is
made and dated as of this _____ day of _________, 1997, by [AIMCO PROPERTIES,
L.P., A DELAWARE LIMITED PARTNERSHIP][APARTMENT INVESTMENT AND MANAGEMENT
COMPANY, A MARYLAND CORPORATION][INSERT NAME OF EACH OTHER HOLDER OF STOCK OR
OTHER EQUITY INTERESTS IN THE WHOLLY-OWNED SUBSIDIARY, THE STOCK OR OTHER
INTERESTS IN WHICH ARE INTENDED TO BE ENCUMBERED HEREBY] ("Debtor"), and Bank of
America National Trust and Savings Association, a national banking association,
as Agent ("Secured Party") for the banks ("Banks") from time to time party to
the Amended and Restated Credit Agreement described below. Capitalized terms
used but not defined herein shall have the meanings set forth in the Amended and
Restated Credit Agreement.
RECITALS
A. The Banks have extended credit to or for the benefit of
[DEBTOR][AIMCO PROPERTIES, L.P., A DELAWARE LIMITED PARTNERSHIP ("BORROWER")],
on the terms and subject to the conditions set forth in the Amended and Restated
Credit Agreement (Bridge Loan), dated as of May 5, 1997 (as amended, modified,
waived or replaced from time to time, the "Amended and Restated Credit
Agreement"). Secured Party is the agent for the Banks.
B. Pursuant to the Amended and Restated Credit Agreement, Debtor has
agreed to pledge and to grant to Secured Party a security interest in and lien
upon the Collateral (as defined in Paragraph 2 below) as security for all
Obligations, for the ratable benefit of the Banks.
C. Debtor is the owner of Stock, partnership interests, membership
interests or other equity or beneficial interests in [INSERT HERE THE NAME OF
THE WHOLLY-OWNED SUBSIDIARY, THE STOCK OR OTHER INTERESTS IN WHICH ARE INTENDED
TO BE ENCUMBERED HEREBY], a _____________ [corporation][limited
partnership][limited liability company] (the "Wholly-Owned Subsidiary"),
consisting of the interests described on SCHEDULE 1 attached hereto.
NOW, THEREFORE, in consideration of the above Recitals and for other
good and valuable consideration, the receipt and
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adequacy of which are hereby acknowledged, Debtor hereby agrees as follows:
AGREEMENT
1. GRANT OF SECURITY INTEREST. Debtor hereby pledges and grants to
Secured Party a security interest in the property described in Paragraph 2 below
(collectively and severally, the "Collateral") to secure payment and performance
of the Obligations.
2. COLLATERAL. The Collateral shall consist of the following,
whether now existing or hereafter arising:
(a) SECURITIES. All shares of capital stock, partnership
interests, membership interests or other equity or beneficial interests in the
Wholly-Owned Subsidiary held by Debtor, and all related securities, warrants,
options or rights to receive any capital stock, partnership interests,
membership interests or other equity or beneficial interests. All of the
foregoing are collectively referred to herein as the "Pledged Equity Interests";
(b) CERTIFICATES. All certificates (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital, or
issued in connection with any reorganization), options or rights, whether as an
addition to, in substitution of, as evidence of, or in exchange for, any of the
Pledged Equity Interests;
(c) DISTRIBUTIONS, DIVIDENDS, ETC. All rights of Debtor as a
shareholder, partner, member or other holder of any equity or beneficial
interest in the Wholly-Owned Subsidiary, including, without limitation, all
management and voting rights, all rights to distributions, dividends, the
payment of money or the distribution of other property from the Wholly-Owned
Subsidiary (including, without limitation, all rights to receive profits or
surplus of, or other distributions or compensation by way of income, return of
capital or any liquidating or other distribution from the Wholly-Owned
Subsidiary and whether such distributions or payments are on account of Debtor's
interest as a shareholder, partner, member or other holder of any equity or
beneficial interest in the Wholly-Owned Subsidiary, as a creditor of the Wholly-
Owned Subsidiary, or otherwise), and all rights to any tax allocations, capital
and income accounts or other rights to the assets of the Wholly-Owned Subsidiary
held by Debtor or accruing to Debtor under the Organizational Documents for the
Wholly-Owned Subsidiary or under applicable law. All such rights are
collectively referred to as the "Pledged Rights";
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(d) BOOKS AND RECORDS. All present and future books and records
relating to the Collateral to the extent Debtor has rights therein, including,
without limitation, books of account and ledgers of every kind and nature, all
electronically recorded data relating to the Collateral or the business thereof,
all receptacles and containers for such records, and all files and
correspondence relating thereto; and
(e) PROCEEDS. All proceeds of the foregoing Collateral. For
purposes of this Security Agreement, the term "proceeds" includes whatever is
receivable or received when Collateral or proceeds is sold, collected, exchanged
or otherwise disposed of, whether such disposition is voluntary or involuntary,
and includes, without limitation, all rights to payment, including return
premiums, with respect to any insurance relating thereto.
Nothing contained herein shall be deemed to render Secured Party
or any Bank responsible for any liabilities or obligations of Debtor with
respect to the Pledged Equity Interests or any other portion of the Collateral.
3. OBLIGATIONS. The obligations secured by this Security Agreement
shall consist of the Obligations as such term is defined in the Amended and
Restated Credit Agreement.
4. REPRESENTATIONS AND WARRANTIES. Debtor hereby represents,
warrants and covenants with Secured Party that:
(a) REGARDING DEBTOR. All representations and warranties of
[[DEBTOR] [BORROWER] regarding Debtor as [the REIT] [a Subsidiary] and]
regarding the Wholly-Owned Subsidiary (either expressly or as a Wholly-Owned
Subsidiary) set forth in the Amended and Restated Credit Agreement are
incorporated herein by this reference and are true and correct as if made on the
date hereof.
(b) OWNERSHIP OF COLLATERAL. Debtor is the sole owner of and
has good title to the Collateral (or, in the case of after-acquired Collateral,
at the time Debtor acquires rights in the Collateral, will be the owner thereof)
and is the record and beneficial owner of the Pledged Equity Interests included
in the Collateral described on SCHEDULE 1;
(c) PRIORITY. Except for the security interests in favor of
Secured Party hereunder, no Person has (or, in the case of after-acquired
Collateral, at the time Debtor acquires rights therein, will have) any right,
title, claim or interest (by way of security interest or other lien or charge)
in, against or to the Collateral;
(d) ACCURACY OF INFORMATION. All information heretofore, herein
or hereafter supplied to Secured Party by or
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on behalf of Debtor with respect to the Collateral is or will be true and
correct;
(e) DELIVERY OF DOCUMENTS, ETC. Debtor has delivered to Secured
Party (i) true and correct copies of the Organizational Documents for the
Wholly-Owned Subsidiary, (ii) all instruments, documents, chattel paper and
other items of Collateral in which a security interest is or may be perfected by
possession, and (iii) any certificated Pledged Equity Interests together with
such additional writings, including, without limitation, assignments and stock
powers, with respect thereto as Secured Party shall have requested; and
(f) PLEDGED SHARES. The Pledged Equity Interests have been
validly issued and are fully paid and nonassessable; and there are no
outstanding options, warrants or other agreements with respect thereto. The
Pledged Equity Interests, together with such interests pledged to Agent
concurrently herewith by other affiliates of [BORROWER] [DEBTOR] constitute all
of the issued and outstanding shares, partnership interests, membership
interests and the equity and beneficial interests in the Wholly-Owned
Subsidiary.
(g) ORGANIZATIONAL DOCUMENTS. The terms of the Organizational
Documents for the Wholly-Owned Subsidiary have not been modified or waived in
any respect from such documents delivered to Secured Party pursuant to
Section 4(e)(i) above.
(h) SET-OFF. Neither the Wholly-Owned Subsidiary nor any of the
other shareholders, partners, members or other holders of equity or beneficial
interests in the Wholly-Owned Subsidiary has any defense, set-off, claim or
counterclaim against Debtor which can be asserted against Secured Party, whether
in any proceeding to enforce Secured Party's rights in the Collateral or
otherwise.
(i) NO DEFAULT. There is no default by Debtor under the
Organizational Documents for the Wholly-Owned Subsidiary nor has any event
occurred which, with the passage of time or giving of notice, or both, would
constitute a default thereunder.
5. COVENANTS AND AGREEMENTS OF DEBTOR. In addition to all covenants
and agreements of Debtor set forth in any other agreement with Secured Party,
which are incorporated herein by this reference, Debtor hereby agrees:
(a) MAINTENANCE OF COLLATERAL. Debtor agrees to do all acts
that may be necessary to maintain, preserve and protect the Collateral.
(b) USE OF COLLATERAL. Debtor agrees not to use or permit any
Collateral to be used unlawfully or in violation of
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any provision of the Loan Documents, or any applicable statute, regulation or
ordinance covering the Collateral.
(c) TAXES. Debtor agrees to pay all taxes, assessments,
charges, encumbrances and liens now or hereafter imposed upon or affecting any
Collateral prior to the time the same become delinquent, except for those being
contested in good faith by appropriate proceedings and for which the Debtor has
provided adequate reserves.
(d) FINANCING STATEMENTS. Debtor agrees to procure, execute and
deliver from time to time any endorsements, assignments, financing statements
and other writings reasonably deemed necessary or appropriate by Secured Party
to perfect, maintain and protect its security interest hereunder and the
priority thereof and to deliver promptly to Secured Party all originals of
Collateral or proceeds consisting of chattel paper or instruments.
(e) ACTIONS. Debtor agrees to appear in and defend any action
or proceeding which may affect its title to or Secured Party's interest in the
Collateral.
(f) USE OF PROCEEDS. Debtor agrees, if the Banks give value to
enable Debtor to acquire rights in or the use of any Collateral, to use such
value for such purpose.
(g) RECORDS. Debtor agrees to keep separate, accurate and
complete records of the Collateral and to provide Secured Party with such
records and such other reports and information relating to the Collateral as
Secured Party may reasonably request from time to time.
(h) SALE OR ENCUMBRANCE. Debtor agrees not to surrender or lose
possession of (other than to Secured Party), sell, encumber, or otherwise
dispose of or transfer any Collateral or right or interest therein and,
notwithstanding any provision of the Organizational Documents, to keep the
Collateral free of all levies and security interests or other Liens, charges,
preferences or priorities, except those approved in writing by Secured Party.
(i) PROCEEDS. Debtor agrees to account fully for and promptly
deliver to Secured Party, in the form received, all proceeds of the Collateral
received (except such as Debtor may be entitled to retain pursuant to clause (p)
below, endorsed to Secured Party as appropriate, and until so delivered all
proceeds shall be held by Debtor in trust for Secured Party, separate from all
other property of Debtor and identified as the property of Secured Party.
(j) LOCATION OF RECORDS. Debtor agrees to keep the records
concerning the Collateral at the location set forth
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in Section 19 below and not to remove the records concerning the Collateral from
such location without the prior written consent of Secured Party.
(k) DISSOLUTION. Debtor agrees not to permit or take any action
to dissolve or terminate the Wholly-Owned Subsidiary.
(l) COMPLIANCE WITH LAWS. To comply with all laws, regulations
and ordinances relating to the possession, operation, maintenance and control of
the Collateral.
(m) SAFEKEEPING. That such care as Secured Party gives to the
safekeeping of its own property of like kind shall constitute reasonable care of
such Collateral when in Secured Party's possession.
(n) PAYMENT OF SECURED PARTY'S COSTS AND EXPENSES. To reimburse
Secured Party upon demand for any reasonable costs and expenses, including,
without limitation, reasonable attorneys' fees, Secured Party may incur while
exercising any right, power or remedy provided by this Security Agreement or by
law, all of which costs and expenses are included in the Obligations secured
hereby.
(o) NOTICE OF CHANGES. To give Secured Party thirty (30) days
prior written notice of any change in Debtor's residence or chief place of
business or legal name or trade name(s) or style(s) set forth in Section 19 of
this Security Agreement.
(p) DIVIDENDS ON PLEDGED RIGHTS AND PLEDGED EQUITY INTERESTS.
To account fully for and promptly deliver to Secured Party, in the form
received, any dividend or any other distribution on account of its Pledged
Rights and Pledged Equity Interests, if any, whether in cash, securities or
property by way of stock-split, spin-off, split-up or reclassification,
combination of shares or the like, or in case of any reorganization,
consolidation or merger; provided, however, that until any Event of Default
shall exist, Debtor shall be entitled to retain any cash dividends legally paid
in accordance with the Amended and Restated Credit Agreement on account of
pledged rights or Pledged Equity Interests.
(q) AMENDMENT OF ORGANIZATIONAL DOCUMENTS. Not to amend or
permit the amendment of the articles of incorporation, by-laws or other
Organizational Documents of the Wholly-Owned Subsidiary and not to take any
action, or permit any action to be taken which would dissolve or terminate the
Wholly-Owned Subsidiary.
(r) COMPLIANCE WITH AMENDED AND RESTATED CREDIT AGREEMENT. To
cause the Wholly-Owned Subsidiary to comply with
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all the terms of the Amended and Restated Credit Agreement pursuant to which
[BORROWER] [DEBTOR] has agreed to cause the Wholly-Owned Subsidiary, either
expressly or as a Wholly-Owned Subsidiary, to take or refrain from taking any
action.
6. AUTHORIZED ACTION BY SECURED PARTY. Debtor hereby agrees that
from time to time, without presentment, notice or demand, and without affecting
or impairing in any way the rights of Secured Party with respect to the
Collateral, the obligations of Debtor hereunder or the Obligations, Secured
Party may, but shall not be obligated to and shall incur no liability to Debtor
or any third party for failure to take any act which Debtor is obligated by this
Security Agreement to do, during the existence of an Event of Default, exercise
such rights and powers as Debtor might exercise with respect to the Collateral,
and Debtor hereby irrevocably appoints Secured Party as its attorney-in-fact to,
during the existence of an Event of Default, exercise such rights and powers,
including without limitation: (i) collect by legal proceedings or otherwise and
endorse, receive and receipt for all dividends, interest, payments, proceeds and
other sums and property now or hereafter payable on or on account of the
Collateral; (ii) enter into any extension, reorganization, deposit, merger,
consolidation or other agreement pertaining to, or deposit, surrender, accept,
hold or apply other property in exchange for the Collateral; (iii) insure,
process and preserve the Collateral; (iv) transfer the Collateral to its own or
its nominee's name; (v) make any compromise or settlement, and take any action
it deems advisable, with respect to the Collateral; and (vi) to notify any
account Debtor on any Collateral to make payment directly to Secured Party.
7. DEFAULT. An "Event of Default" as defined in the Amended and
Restated Credit Agreement shall constitute an Event of Default hereunder ("Event
of Default").
8. REMEDIES. Upon the occurrence and during the continuance of any
such Event of Default, Secured Party may, at its option, and, except as
expressly provided in the Amended and Restated Credit Agreement, without notice
to or demand on Debtor and in addition to all rights and remedies available to
Secured Party under any other agreement do any one or more of the following:
(a) GENERAL ENFORCEMENT. Foreclose or otherwise enforce Secured
Party's security interest in any manner permitted by law, or provided for in
this Security Agreement;
(b) SALE, ETC. Sell, lease or otherwise dispose of any
Collateral at one or more public or private sales at Secured Party's place of
business or any other place or places, including, without limitation, any
broker's board or securities exchange, whether or not such Collateral is present
at the place
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of sale, for cash or credit or future delivery, on such terms and in such manner
as Secured Party may determine;
(c) COSTS OF REMEDIES. Recover from Debtor all costs and
expenses, including, without limitation, reasonable attorneys' fees, incurred or
paid by Secured Party in exercising any right, power or remedy provided by this
Security Agreement or by law with respect to the Collateral;
(d) ASSEMBLY OF COLLATERAL. Require Debtor to assemble the
Collateral and make it available to Secured Party at a place to be designated by
Secured Party;
(e) TAKE POSSESSION OF COLLATERAL. Enter onto property where
Collateral is located and take possession thereof with or without judicial
process. Debtor expressly waives any constitutional or other right to a
judicial hearing prior to the time Secured Party takes possession of the
Collateral upon default as provided herein;
(f) VOTE OF PLEDGED EQUITY INTERESTS. Vote or consent, and in
connection therewith Debtor grants to Secured Party a proxy to vote or to
consent, with respect to Pledged Equity Interests or Pledged Rights;
(g) MANNER OF SALE OF PLEDGED EQUITY INTERESTS. Restrict the
prospective bidders or purchasers of Pledged Equity Interests or Pledged Rights
in this paragraph to persons or entities who (i) will represent and agree that
they are purchasing for their own account, for investment, and not with a view
to the distribution or sale of any of the Pledged Equity Interests or Pledged
Rights; and (ii) satisfy the offeree and purchaser requirements for a valid
private placement transaction under Section 4(2) of the Securities Act of 1933,
as amended (the "Act"), and under all applicable Securities and Exchange
Commission releases, rules and regulations. Debtor agrees that disposition of
any of the Pledged Equity Interests or Pledged Rights, if any, pursuant to any
private sale made as provided above may be at prices and on other terms less
favorable than if the Pledged Equity Interests or Pledged Rights were sold at
public sale, and that Secured Party has no obligation to delay the sale of any
Pledged Equity Interests or Pledged Rights for public sale under the Act.
Debtor agrees that a private sale or sales made under the foregoing
circumstances shall be deemed to have been made in a commercially reasonable
manner. In the event that Secured Party elects to sell the Pledged Equity
Interests or Pledged Rights, or part of them, and there is a public market for
the Pledged Equity Interests or Pledged Rights, in a public sale, Debtor shall,
upon demand by Secured Party, use its best efforts to register and qualify the
Pledged Equity Interests and/or Pledged Rights, under the Act and all state Blue
Sky or securities laws required by the proposed terms of sale, and all expenses
thereof shall be payable by Debtor, including, but not limited
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to, all costs of (i) registration or qualification of, under the Act or any
state Blue Sky or securities laws or pursuant to any applicable rule or
regulation issued pursuant thereto, any Pledged Equity Interests or Pledged
Rights, and (ii) sale of such Pledged Shares, including, but not limited to,
brokers' or underwriters' commissions, fees or discounts, accounting and legal
fees, costs of printing and other expenses of transfer and sale. If any
consent, approval or authorization of any state, municipal or other governmental
department, agency or authority shall be necessary to effectuate any sale or
other disposition of Pledged Equity Interests or Pledged Rights, or any part
thereof, Debtor will execute such applications and other instruments as may be
required in connection with securing any such consent, approval or
authorization, and will otherwise use its best efforts to secure the same;
(h) MANNER OF SALE OF COLLATERAL OTHER THAN PLEDGED EQUITY
INTERESTS. Debtor shall be given five (5) business days' prior notice of the
time and place of any public sale or of the time after which any private sale or
other intended disposition of the Collateral other than Pledged Equity Interests
is to be made, which notice Debtor hereby agrees shall be deemed reasonable
notice thereof; and
(i) APPLICATION OF RECEIPTS. Secured Party shall apply all sums
received or collected from or on account of the Collateral, including, without
limitation, the proceeds of any sale thereof, to the payment of the costs and
expenses incurred in preserving and enforcing the rights of Secured Party in
effecting a sale of such Collateral (including, without limitation, reasonable
attorneys' fees and legal expenses, including fees and expenses of in-house
counsel) and to the payment of the Obligations in such order and manner as
Secured Party, in its sole discretion, elects.
9. DELIVERY TO AND RIGHTS OF PURCHASER. Upon any sale or other
disposition pursuant to this Security Agreement, Secured Party shall have the
right to deliver, assign and transfer to the purchaser thereof the Collateral or
portion thereof so sold or disposed of. Each purchaser at any such sale or
other disposition (including Secured Party) shall hold the Collateral free from
any claim or right of whatever kind, including any equity or right of redemption
of Debtor, and Debtor specifically waives (to the extent permitted by law), upon
any such sale or disposition pursuant to this Security Agreement, all rights of
redemption, stay or appraisal which it has or may have under any rule of law or
statute now existing or hereafter adopted.
10. COLLECTION OF COLLATERAL PAYMENTS.
(a) COLLECTION OF PAYMENTS. Debtor shall, at its sole cost and
expense, take all reasonable and necessary action to obtain payment, when due
and payable, of all sums due or to
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become due with respect to any Collateral ("Collateral Payments" or a
"Collateral Payment"), including, without limitation, the taking of such action
with respect thereto as Secured Party may request, or, in the absence of such
request, as Debtor may reasonably deem advisable; provided, however, that Debtor
shall not, without the prior written consent of Secured Party, grant or agree to
any rebate, refund, compromise or extension with respect to any Collateral
Payment. Upon the request of Secured Party during the existence of an Event of
Default, Debtor will notify and direct any account Debtor who is or might become
obligated to make any Collateral Payment, to make payment thereof to Secured
Party (or to Debtor in care of Secured Party) at such address as Secured Party
may designate. Debtor will reimburse Secured Party promptly upon demand for all
out-of-pocket costs and expenses, including reasonable attorneys' fees and
litigation expenses, incurred by Secured Party in seeking to collect its
Collateral Payment.
(b) PAYMENTS IN TRUST. If an Event of Default shall occur and
be continuing, upon the request of Secured Party, Debtor will, forthwith upon
receipt, transmit and deliver to Secured Party, in the form received, all cash,
checks, drafts and other instruments for the payment of money (properly endorsed
where required so that such items may be collected by Secured Party) which may
be received by Debtor at any time as payment on account of any Collateral
Payment and if such request shall be made, until delivery to Secured Party, such
items will be held in trust for Secured Party and will not be commingled by
Debtor with any of its other funds or property. Thereafter, Secured Party is
hereby authorized and empowered to endorse the name of Debtor on any check,
draft or other instrument for the payment of money received by Secured Party on
account of any Collateral Payment if Secured Party believes such endorsement is
necessary or desirable for purposes of collection.
(c) INDEMNIFICATION. Debtor hereby indemnifies and saves
harmless Secured Party and its agents, officers and employees from and against
all liabilities and reasonable expenses on account of any adverse claim asserted
against Secured Party relating to any moneys received by Secured Party on
account of any of Debtor's Collateral Payments following the occurrence of an
Event of Default, and such obligation of Debtor shall continue in effect after
and notwithstanding the discharge of the Obligations and the release of the
security interest granted in Paragraph 1 above.
11. CUMULATIVE RIGHTS. The rights, powers and remedies of Secured
Party under this Security Agreement shall be in addition to all rights, powers
and remedies given to Secured Party by virtue of any statute or rule of law, the
Agreement or any other agreement, all of which rights, powers and remedies shall
be cumulative and may be exercised successively or concur-
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rently without impairing Secured Party's security interest in the Collateral.
12. WAIVER. Any waiver, forbearance or failure or delay by Secured
Party in exercising any right, power or remedy shall not preclude the further
exercise thereof, and every right, power or remedy of Secured Party shall
continue in full force and effect until such right, power or remedy is
specifically waived in a writing executed by Secured Party. Debtor waives any
right to require Secured Party to proceed against any person or to exhaust any
Collateral or to pursue any remedy in Secured Party's power.
13. SETOFF. Debtor agrees that Secured Party may exercise its rights
of setoff with respect to the Obligations in the same manner as if the
Obligations were unsecured.
14. BINDING UPON SUCCESSORS. All rights of each party hereto shall
inure to the benefit of its successors and assigns, and all obligations of each
party hereto shall bind its successors and assigns.
15. ENTIRE AGREEMENT; SEVERABILITY. This Security Agreement contains
the entire security agreement between Secured Party and Debtor. If any of the
provisions of this Security Agreement shall be held invalid or unenforceable,
this Security Agreement shall be construed as if not containing those provisions
and the rights and obligations of the parties hereto shall be construed and
enforced accordingly.
16. CHOICE OF LAW. This Security Agreement shall be construed in
accordance with and governed by the laws of the State of Colorado, and, where
applicable and except as otherwise defined herein, terms used herein shall have
the meanings given them in the Uniform Commercial Code of such state. Any
disputes or claims relating to this Security Agreement shall be resolved by
arbitration in accordance with the terms and conditions set forth in the Amended
and Restated Credit Agreement.
17. AMENDMENT. This Security Agreement may not be amended or
modified except by a writing signed by each of the parties hereto.
18. NOTICES. Communications provided for herein shall be in writing
and shall be delivered, mailed, postage prepaid or communicated in accordance
with the Amended and Restated Credit Agreement.
19. ADDRESS; TRADE NAMES; RECORDS. Debtor represents that its chief
place of business is ________________________________________, Denver, Colorado,
_____, that "__________________________________________" constitutes the only
trade name or style used by Debtor; and that
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Debtor's records concerning the Collateral are kept at Debtor's chief place of
business listed above.
20. CAPTIONS. All captions used in this Security Agreement are for
convenience only and shall not affect the construction of this Security
Agreement.
21. MODIFICATIONS. No modification or amendment of this Security
Agreement shall be effective unless in writing and signed by the parties sought
to be charged or bound hereby.
EXECUTED as of this _____ day of _______________, 1997.
PLEDGOR:
------------------------------------
By:. . . . . . . . . . . . . .
Name:. . . . . . . . . . . . .
Title: . . . . . . . . . . . .
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ENDNOTE
(1) In connection with any request to include an apartment project as a
"Funded Project" under the Credit Agreement, the form of Equity Interests
Security Agreement attached hereto shall be modified prior to execution to
conform to comments from Secured Party's local counsel in the jurisdiction in
which the Collateral is located (including without limitation applicable and
customary provisions for such state with respect to method of foreclosure and
other remedies, and governing law), and such further additions or revisions
required by Secured Party necessary or appropriate to reflect the Debtor's
relationship to the obligations being secured under the Equity Interests
Security Agreement, including without limitation, the following provisions:
Section ____ DEBTOR'S THIRD PARTY WAIVERS.
(a) RIGHTS OF SECURED PARTY. Debtor authorizes Secured Party or any
Bank to perform any or all of the following acts at any time in its sole
discretion, all without notice to Debtor, without affecting Debtor's obligations
under this Security Agreement or any other Loan Documents and without affecting
the Liens and encumbrances against the Collateral in favor of Secured Party:
(i) Subject to the Credit Agreement, Secured Party or any Bank
may alter any terms of the Obligations or any part thereof, including
renewing, compromising, extending or accelerating, or otherwise changing
the time for payment of, or increasing or decreasing the rate of interest
on, the Obligations or any part thereof.
(ii) Secured Party or any Bank may take and hold security for the
Obligations, accept additional or substituted security, and subordinate,
exchange, enforce, waive, release, compromise, fail to perfect and sell or
otherwise dispose of any such security.
(iii) Secured Party or any Bank may direct the order and
manner of any sale of all or any part of any security now or later to be
held for the Obligations, and Secured Party or any Bank may also bid at any
such sale.
(iv) Secured Party or any Bank may apply any payments or
recoveries from Company, Debtor or any other source, and any proceeds of
any security, to the obligations under the Loan Documents in such manner,
order and priority as Secured Party or such Bank may elect.
(v) Secured Party or any Bank may release Company or any other
Person of its liability for the Obligations or any part thereof.
(vi) Secured Party or any Bank may substitute, add or release any
one or more guarantors or endorsers.
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(vii) In addition to the Obligations, Secured Party or any
Bank may extend other credit to Company, and may take and hold security for
the credit so extended, all without affecting Debtor's liability hereunder
or under the other Loan Documents and without affecting the liens and
encumbrances against the Collateral hereunder or under the other Loan
Documents.
(b) ABSOLUTE OBLIGATIONS. Debtor expressly agrees that until all
Obligations are paid and performed in full and each and every term, covenant and
condition of this Security Agreement and each other Loan Document to which
Debtor is a party is fully performed, Debtor shall not be released of its
obligations, waivers and agreements set forth herein or in any other Loan
Document nor shall the validity, enforceability or priority of the liens and
encumbrances against the Collateral in favor of Secured Party be affected in any
manner by or because of:
(i) Any act or event which might otherwise discharge, reduce,
limit or modify Debtor's obligations hereunder or under the other Loan
Documents or the liens and encumbrances against the Collateral in favor of
Secured Party;
(ii) Any waiver, extension, modification, forbearance, delay or
other act or omission of Secured Party or any Bank or any failure to
proceed promptly or otherwise as against Company, Debtor, or any other
Person or any security;
(iii) Any action, omission or circumstance which might
increase the likelihood that Secured Party or any Bank might enforce the
rights granted under this Security Agreement or under the other Loan
Documents or which might affect the rights or remedies of Debtor as against
Company; or
(iv) Any dealings occurring at any time between Company and
Secured Party or any Bank, whether relating to the Obligations or
otherwise.
Debtor hereby expressly waives and surrenders any defense to the
performance of the obligations under this Security Agreement and under all other
Loan Documents or to the enforcement of the liens and encumbrances against the
Collateral in favor of Secured Party based upon any of the foregoing acts,
omissions, agreements, waivers or matters described in this subsection. It is
the purpose and intent of this Security Agreement that the obligations of Debtor
under this Security Agreement and under all other Loan Documents shall be
absolute and unconditional under any and all circumstances.
(c) DEBTOR'S WAIVERS. Debtor waives:
(i) All statutes of limitations as a defense to any action or
proceeding brought against Debtor or the Collateral by Secured Party or any
Bank, to the fullest extent permitted by law;
(ii) Any right it may have to require Secured Party or any Bank
to proceed against Company or any other Person, proceed against or exhaust
any security held from Company or any Person, or pursue any other remedy in
Secured Party's or such Bank's power to pursue;
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(iii) Any defense based on any claim that Debtor's
obligations exceed or are more burdensome than those of Company;
(iv) Any defense: (A) based on any legal disability of Company,
(B) based on any release, discharge, modification, impairment or limitation
of the liability of Company to Secured Party or any Bank from any cause,
whether consented to by Secured Party or arising by operation of law, (C)
arising out of or able to be asserted as a result of any case, action or
proceeding before any court or other Governmental Authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up or relief of Company or any of its affiliates , or
any general assignment for the benefit of creditors, composition,
marshalling of assets for creditors or other, similar arrangement in
respect of its creditors generally or any substantial portion of its
creditors; in each case as undertaken under any U.S. Federal or State law
(each of the foregoing described in this clause (C) being referred to
herein as an "Insolvency Proceeding"); or (D) arising from any rejection or
disaffirmance of the Obligations, or any part thereof, or any security held
therefor, in any such Insolvency Proceeding;
(v) Any defense based on any action taken or omitted by Secured
Party or any Bank in any Insolvency Proceeding involving Company, including
any election to have Secured Party's or such Bank's claim allowed as being
secured, partially secured or unsecured, any extension of credit by Secured
Party or any Bank to Company in any Insolvency Proceeding, and the taking
and holding by Secured Party or such Bank of any security for any such
extension of credit;
(vi) All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices
of intention to accelerate, notices of acceleration, notices of acceptance
of this Security Agreement or any other Loan Document and of the
existence, creation, or incurring of new or additional indebtedness, and
demands and notices of every kind; and
(vii) Any defense based on or arising out of any defense that
Company or any of its affiliates may have to the payment or performance of
the Obligations.
(d) WAIVERS OF SUBROGATION AND OTHER RIGHTS.
(i) Upon any Event of Default, in its sole discretion, without
prior notice to or consent of Debtor, Secured Party or any Bank may elect
to: (A) foreclose against any Collateral for the Obligations, (B) accept a
transfer of any such Collateral for the Obligations in lieu of foreclosure,
(C) subject to the Credit Agreement, compromise or adjust the Obligations
or any part thereof or make any other accommodation with Company or any
Person, or (D) exercise any other remedy against Company or any Collateral
for the Obligations. No such action by Secured Party or any Bank shall
release or limit Secured Party's or the Banks' rights hereunder or under
the other Loan Documents, even if the effect of the action is to deprive
Debtor of any subrogation rights, rights of indemnity, or other rights to
collect reimbursement from Company or any other Person for any sums paid to
Secured Party or such Bank, whether contractual or arising by operation of
law or otherwise. Debtor expressly agrees that under no circumstances
shall it be deemed to have any right, title, interest or claim in or to any
real or personal
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<PAGE>
property to be held by Secured Party or any third party after any
foreclosure or transfer in lieu of foreclosure of any security for the
Obligations.
(ii) Regardless of whether Debtor may have made any payments to
Secured Party, Debtor forever waives: (A) all rights of subrogation, all
rights of indemnity, and any other rights to collect reimbursement from
Company on account of the Collateral encumbered by this Security Agreement,
whether contractual or arising by operation of law (including the United
States Bankruptcy Code or any successor or similar statute) or otherwise;
(B) all rights to enforce any remedy that Secured Party or any Bank may
have against Company or any Person granting collateral for the Obligations;
and (C) all rights to participate in any Collateral now or later to be hald
by Secured Party.
(e) REVIVAL AND REINSTATEMENT. If Secured Party or any Bank is
required to pay, return or restore to Company or any other Person any amounts
previously paid under the Loan Documents because of any Insolvency Proceeding of
Company, any stop notice or any other reason, the obligations of Debtor shall be
reinstated and revived and the rights of Secured Party and such Bank shall
continue with regard to such amounts, all as though they had never been paid.
(f) ELECTION OF REMEDIES. Without limiting the foregoing, Debtor
waives all rights and defenses arising out of an election of remedies by the
Secured Party or any Bank even though that election of remedies has destroyed
the Debtor's rights of subrogation and reimbursement against Company by
operation of law or otherwise.
(g) ADDITIONAL OBLIGATIONS. Debtor's obligations under this Security
Agreement are in addition to Debtor's obligations under any other existing or
future agreements, each of which shall remain in full force and effect until it
is expressly modified or released in a writing signed by Secured Party with any
required consent of the Banks. Secured Party may exercise its remedies
hereunder, without first proceeding against Company, any other Person or any
Collateral that Secured Party may hold, and without pursuing any other remedy.
Secured Party's rights under this Security Agreement shall not be exhausted by
any action by Secured Party until all Obligations have been paid and performed
in full.
(h) CONSIDERATION. Debtor acknowledges: that it expects to benefit
from the Banks' extension of the credit under the Loan Documents to Company
because of its relationship to Company; that it is receiving substantial
benefits (which are reasonably equivalent consideration for Debtor's execution
hereof) from the transaction of which that extension of indebtedness forms a
part; and that it is executing this Security Agreement in consideration of those
benefits.
(i) RIGHTS OF SECURED PARTY AND BANK. As between Secured Party and the Banks
only, nothing contained in this Section __ shall alter the rights and
obligations among Secured Party and the Banks set forth in the Credit Agreement.
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EXHIBIT F
FUNDED PROJECT CLOSING CERTIFICATE
(PURSUANT TO SECTION 2.14 OF THE BRIDGE LOAN AGREEMENT)
Reference is made to Section 2.14 of the Amended and Restated Credit
Agreement (Bridge Loan), dated as of May 5, 1997 (as the same may be amended,
supplemented or modified from time to time, the "Bridge Loan Agreement") among
AIMCO Properties, L.P., a Delaware limited partnership ("Company"), the banks
from time to time party to the Bridge Loan Agreement (the "Banks"), BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as one of the Banks, and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent (the "Agent") for the
Banks. All capitalized terms used but not defined herein having the meanings
set forth in the Bridge Loan Agreement. The Company represents, warrants,
certifies and covenants in favor of the Agent and the Banks as follows:
1. All conditions precedent set forth in Section 2.14(c) of the
Bridge Loan Agreement with respect to the addition of the properties identified
on SCHEDULE 1 attached hereto (the "New Properties") (other than those based
solely upon the approval of the Agent, the Requisite Banks or the Banks) have
been satisfied with respect to the New Properties.
2. All financial and operating information delivered to the Agent
and the Banks pursuant to Section 2.14(b) of the Bridge Loan Agreement, subject
to audit, is complete and correct to the knowledge of the Company and sets forth
in detail the calculation of the Revolving Facility Debt Service Coverage-Based
Principal Limit under the Amended and Restated Credit Agreement (as defined in
the Bridge Loan Agreement) with the addition of the New Properties.
3. The Company would not be required to prepay any Loan with respect
to a New Property, if included as a Funded Project, pursuant to Section 2.14(d)
of the Bridge Loan Agreement.
4. The acquisition costs set forth on SCHEDULE 1 with respect to
each of the New Properties are true and correct.
5. The representations and warranties of the Company and the REIT
contained in Article V of the Bridge Loan Agreement and in the other Loan
Documents are true and correct as of the date hereof.
6. No Default or Event of Default exists or would result from the
proposed borrowing.
7. There has occurred since December 31, 1996, no act, omission,
change or occurrence which would have a Material Adverse Effect.
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IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Certificate on behalf of the Company as of __________, 1997.
AIMCO PROPERTIES, L.P.,
a Delaware limited partnership
By: AIMCO-GP, INC.
a Delaware corporation, its general partner
By:. . . . . . . . . . . . . . . . . . . . .
Its: . . . . . . . . . . . . . . . . . . . .
By:. . . . . . . . . . . . . . . . . . . . .
Its: . . . . . . . . . . . . . . . . . . . .
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SCHEDULE 1
to
Certificate of AIMCO Properties, L.P.
FUNDED PROJECT
NAME AND ADDRESS OF NEW PROPERTIES PURCHASE PRICE
- ---------------------------------- --------------
3
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EXHIBIT G
COMPLIANCE CERTIFICATE
____________, 1997
Bank of America National Trust and
Savings Association, as Agent for
the Banks from time to time party to
the Amended and Restated Credit Agreement
Re: Amended and Restated Credit Agreement (Bridge Loan), dated as of
May 5, 1997 (as amended, modified, supplemented, restated, or
renewed from time to time, the "Amended and Restated Credit
Agreement"), by and between AIMCO PROPERTIES, L.P., a Delaware
limited partnership (the "Company"), the banks from time to time
party to the Amended and Restated Credit Agreement (the "Banks),
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national
banking association, as one of the Banks, and BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association, as Agent for the Banks ("Agent")
Ladies and Gentlemen:
Reference is made to the Amended and Restated Credit Agreement. Each
initially capitalized term not defined in this Compliance Certificate (including
the schedules and other attachments hereto, this "Certificate") shall have the
meaning ascribed to such term in the Amended and Restated Credit Agreement.
Pursuant to Section 6.02(b) of the Amended and Restated Credit Agreement,
the undersigned hereby certifies to Agent and each of the Banks that, to the
best of the undersigned's knowledge after diligent inquiry:
(1)REVIEW OF FINANCIAL CONDITION. The undersigned has reviewed the
terms of the Amended and Restated Credit Agreement, including, without
limitation, the representations and warranties set forth in Article V thereof
and the covenants set forth in Article VI and VII thereof, and has made, or
caused to be made under his or her supervision, a review in reasonable detail of
the transactions and condition of the Company, the REIT, and their respective
Subsidiaries during the reporting periods (the "Reporting Periods") covered by
the financial statements being delivered concurrently to the Bank pursuant to
the Section 6.01 of the Amended and Restated Credit Agreement (the "Financial
Statements"). The Financial Statements accurately present the financial
position of the Company, the REIT, and their respective Subsidiaries as of the
date thereof and for the Reporting Periods covered thereby.
(2)REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company, the REIT, and their respective Subsidiaries contained in the
Loan Documents, including those contained in Article V of the Agreement, are
true and correct in all material respects as of the date hereof and were true
and correct at all times during the Reporting Periods;
(3)COVENANTS. During the Reporting Period, the Company, the REIT, and
their respective Subsidiaries observed and performed all of their respective
covenants and other agreements under the Loan Documents, and satisfied each of
the conditions contained therein
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to be observed, performed or satisfied by the Company, the REIT, and their
respective Subsidiaries;
(4)NO DEFAULT; EVENT OF DEFAULT. [Except as expressly set forth in
attached SCHEDULE 2,] no Default or Event of Default exists as of the date
hereof or existed at any time during the Reporting Period. [SCHEDULE 2 sets
forth a true, correct and complete description of the nature and period of
existence of each Default or Event of Default that exists as of the date hereof
or existed at any time during the Reporting Periods and the actions that the
Company, the REIT, or their respective Subsidiaries have taken, are taking and
propose to take with respect thereto].
IN WITNESS WHEREOF, this Certificate is executed by the undersigned this
____ day of ____________, 19__.
AIMCO PROPERTIES, L.P., a Delaware limited
partnership
By: AIMCO-GP, Inc.,
a Delaware corporation
Its general partner
By:
----------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
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EXHIBIT H
ASSIGNMENT AND ACCEPTANCE AGREEMENT
_________________, 1997
This ASSIGNMENT AND ACCEPTANCE AGREEMENT ("Agreement") is entered into
by _______________________________________________________________, as Assignor
("Assignor") and _____________________________________________________ as
Assignee ("Assignee"). Capitalized terms used in this Agreement without
definition have the meanings specified in the Revolving Credit Agreement
described below.
RECITALS
A. Assignor is party to the Amended and Restated Credit Agreement
dated as of May 5, 1997 (as the same may be amended, modified or supplemented
from time to time, the "Revolving Credit Agreement"), among AIMCO PROPERTIES,
L.P., a Delaware limited partnership (the "Company"), the Lenders, including
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as one of the Lenders,
and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent (the
"Agent") for the Lenders;
B. Pursuant to the Revolving Credit Agreement, Assignor has
committed to make loans ("Revolving Loans") to the Company and to participate in
Letter of Credit Liability in an aggregate amount not to exceed $__________
("Assignor's Revolving Commitment") and the Lenders have committed to make loans
to the Company and to participate in Letter of Credit Liability, in an aggregate
amount not to exceed the current $__________ (the "Aggregate Revolving
Commitment" thereunder);
C. As of the date hereof, Assignor has made Revolving Loans to the
Company under the Credit Agreement in the aggregate principal outstanding amount
of $___________ ("Assignor's Outstanding Revolving Loans") and has participated
in Letter of Credit Liability in the amount of $____________, and the Lenders
have made Revolving Loans to the Company under the Revolving Credit Agreement in
the aggregate principal outstanding amount of $_________ and have participated
in Letter of Credit Liability in the aggregate amount of $____________;
D. Assignor is party to the Amended and Restated Credit Agreement
(Bridge Loan) dated as of May 5, 1997 (as the same may be amended, modified or
supple-
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mented from time to time, the "Bridge Loan Agreement"), among the Company, the
Lenders, and the Agent;
E. Pursuant to the Bridge Loan Agreement, Assignor has committed to
make loans ("Bridge Loans") to the Company in an aggregate amount not to exceed
$__________, ("Assignor's Bridge Commitment") and the Lenders have committed to
make loans to the Company, in an aggregate amount not to exceed $25,000,000 (the
"Aggregate Bridge Commitment");
F. As of the date hereof, Assignor has made Bridge Loans to the
Company under the Bridge Loan Agreement in the aggregate principal outstanding
amount of $___________ ("Assignor's Outstanding Bridge Loans" and collectively
with Assignor's Outstanding Revolving Loans, "Assignor's Outstanding Loans"),
the Lenders have made Bridge Loans to the Company under the Bridge Loan
Agreement in the aggregate principal outstanding amount of $_________ and the
Lenders have made Bridge Loans to the Company under the Bridge Loan Agreement in
the aggregate principal outstanding amount of $ ___________; and
G. Assignor wishes to assign to Assignee [part of] the rights and
obligations of Assignor under the Revolving Credit Agreement in respect of
Assignor's Revolving Commitment in an amount equal to $____________ and in
respect of Assignor's Bridge Commitment in an amount equal to $___________,
together with a portion equal to Assignee's Percentage Share (as defined below)
of Assignor's Outstanding Loans and the Letter of Credit Liability (the
"Assigned Amount") on the terms and subject to the conditions set forth herein
and Assignee wishes to accept assignment of such rights and to assume such
obligations from Assignor on such terms and subject to such conditions.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. ASSIGNMENT AND ACCEPTANCE.
(a) Subject to the terms and conditions of this Agreement, upon
the Effective Date (as hereinafter defined) (i) Assignor hereby sells, transfers
and assigns to Assignee, and (ii) Assignee hereby purchases, assumes and
undertakes from Assignor, without recourse and without representation or
warranty (except as provided in this Agreement), _____________% (the "Assignee's
Percentage Share") of (A) Assignor's Revolving Commitment (representing
___________% of the $__________ current Aggregate Revolving Commitment of all
Lenders), (B) the existing Letter of Credit Liability, (C) Assignor's Bridge
Commitment (representing ____% of the $25,000,000 Aggregate Bridge Commitment of
all Lenders), and (D) all related rights, benefits, obligations, liabilities and
indemnities of Assignor under and in connection with the Revolving Credit
Agreement and the Bridge Loan Agreement.
(b) With effect on and after the Effective Date (as defined in
Section 5), Assignee shall be a party to the Revolving Credit Agreement and the
Bridge Loan Agreement and succeed to all of the rights and be obligated to
perform all of the obligations
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of a Lender under the Revolving Credit Agreement and the Bridge Loan Agreement
with a Revolving Commitment equal to $__________ and a Bridge Commitment of
$_____________. Assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Revolving Credit
Agreement and the Bridge Loan Agreement are required to be performed by it as a
Lender. It is the intent of the parties hereto that, as of the Effective Date,
the Revolving Commitment of Assignor shall be reduced by an amount equal to
$____________ and that the Bridge Commitment of Assignor shall be reduced by an
amount equal to $____________, and Assignor shall relinquish its rights and be
released from its obligations under the Credit Agreement and the Bridge Loan
Agreement to the extent such obligations have been assumed by Assignee.
(c) After giving effect to the assignment and assumption, on the
Effective Date, Assignee's Revolving Commitment will be $_____________, its
Bridge Commitment will be $____________ and Assignee's Revolving and Bridge
Commitment Percentages will each be _____________%.
(d) After giving effect to the assignment and assumption, on the
Effective Date, Assignor's Commitment will be $______________, its Bridge
Commitment will be $____________ and Assignor's Revolving and Bridge Commitment
Percentages will each be ______________%.
2. PAYMENTS.
As consideration for the sale, assignment and transfer contemplated in
Section 1, Assignee shall pay to Assignor on the Effective Date in immediately
available funds an amount equal to $_____________, representing Assignee's
Percentage Share of the principal amount of Assignor's Outstanding Loans, and
shall assume all Assignee's Revolving Commitment Percentage of all Letter of
Credit Liability.
3. REALLOCATION OF PAYMENTS.
Any interest, fees and other payments accrued to the Effective Date
with respect to the Assignor's Revolving Commitment and Bridge Loan Commitment
and Assignor's Outstanding Loans shall be for the account of Assignor. Any
interest, fees and other payments accrued on and after the Effective Date with
respect to the Assigned Amount shall be for the account of Assignee. Each of
Assignor and Assignee agrees that it will (a) hold in trust for the other party,
any interest, fees and other amounts which it may receive to which the other
party is entitled, pursuant to the preceding sentences and (b) promptly upon
receipt, pay to the other party any such amounts which it may receive.
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4. INDEPENDENT CREDIT DECISION.
Assignee (a) acknowledges that it has received a copy of the Revolving
Credit Agreement and the Bridge Loan Agreement and the Schedules and Exhibits
thereto, together with copies of the most recent financial statements referred
to in Section 6.01 of each of the Revolving Credit Agreement and the Bridge Loan
Agreement, and such other documents and information as it has deemed appropriate
to make its own credit and legal analysis and decision to enter into this
Agreement; and (b) agrees that it will, independently and without reliance upon
Assignor, any Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit and legal decisions in taking or not taking action under the Revolving
Credit Agreement and the Bridge Loan Agreement.
5. EFFECTIVE DATE; NOTICES.
(a) As between Assignor and Assignee, the effective date for
this Agreement shall be ___________199__ (the "Effective Date"); PROVIDED that
the following conditions precedent have been satisfied on or before the
Effective Date:
(i) this Agreement shall be executed and delivered by
Assignor and Assignee;
(ii) Assignee shall pay to Assignor all amounts due to
Assignor under this Agreement;
(iii) to the extent required under Section 10.08(a) of each
of the Revolving Credit Agreement and the Bridge Loan Agreement, the consent of
the Agent and the Company shall have been duly obtained (or, in the case of the
Company, been deemed obtained) and shall be in full force and effect as of the
Effective Date;
(iv) Assignee shall have complied with Section 3.01(f) of
each of the Revolving Credit Agreement and the Bridge Loan Agreement (if
applicable); and
(b) Promptly following the execution of this Agreement, Assignor
shall deliver to the Company and the Agent for acknowledgment by the Agent, a
Notice of Assignment in the form of attached SCHEDULE 1.
6. AGENT.
(a) Assignee hereby acknowledges such powers delegated to the
Agent pursuant to the terms of the Credit Agreement and the Bridge Loan
Agreement.
(b) Assignee shall assume no duties or obligations held by the
Agent under the Revolving Credit Agreement or the Bridge Loan Agreement.
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7. WITHHOLDING TAX.
Assignee agrees to comply with Section 3.01(f) of each of the
Revolving Credit Agreement and the Bridge Loan Agreement (if applicable).
8. REPRESENTATIONS AND WARRANTIES.
(a) Assignor represents and warrants that (i) it is duly
organized and existing and it has the full power and authority to take, and has
taken, all action necessary to execute and deliver this Agreement and any other
documents required or permitted to be executed or delivered by it in connection
with this Agreement and to fulfill its obligations hereunder; (ii) no notices
to, or consents, authorizations or approvals of, any Person are required (other
than any already given or obtained) for its due execution, delivery and
performance of this Agreement, and apart from any agreements or undertakings or
filings required by the Revolving Credit Agreement and the Bridge Loan
Agreement, no further action by, or notice to, or filing with, any Person is
required of it for such execution, delivery or performance; (iii) this Agreement
has been duly executed and delivered by it and constitutes the legal, valid and
binding obligation of Assignor, enforceable against Assignor in accordance with
the terms hereof, subject, as to enforcement, to bankruptcy, insolvency,
moratorium, reorganization and other laws of general application relating to or
affecting creditors' rights and to general equitable principles; and (iv) it is
the legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any Lien or other adverse claim;
(b) Assignor makes no representation or warranty in connection
with, and assumes no responsibility with respect to:
(i) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Revolving Credit Agreement, the Bridge
Loan Agreement, any other Loan Document (as defined in both the
Revolving Credit Agreement and the Bridge Loan Agreement), or any
other instrument or document furnished in connection therewith;
(ii) any statements, warranties or representations made in or in
connection with the Revolving Credit Agreement, the Bridge Loan
Agreement, any other Loan Document, or any other instrument or
document furnished in connection therewith; or
(iii) the solvency, financial condition or financial statements of
the Company, or the performance or observance by the Company, of any
of its respective obligations under the Revolving Credit Agreement,
the Bridge Loan Agreement, any other Loan Document, or any other
instrument or document furnished in connection therewith.
(c) Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute and deliver this Agreement and any other
documents required or permitted to be
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executed or delivered by it in connection with this Agreement, and to fulfill
its obligations hereunder; (ii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Agreement; and apart
from any agreements or undertakings or filings required by the Revolving Credit
Agreement or the Bridge Loan Agreement, no further action by, or notice to, or
filing with, any Person is required of it for such execution, delivery or
performance; (iii) this Agreement has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of Assignee, enforceable
against Assignee in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles; and (iv) it is an Eligible Assignee.
9. FURTHER ASSURANCES.
Assignor and Assignee each hereby agrees to execute and deliver such
other instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Agreement,
including the delivery of any notices or other documents or instruments to the
Company or the Agent, which may be required in connection with the assignment
and assumption contemplated hereby.
10. MISCELLANEOUS.
(a) Any amendment or waiver of any provision of this Agreement
shall be in writing and signed by the parties hereto. No failure or delay by
either party hereto in exercising any right, power or privilege hereunder shall
operate as a waiver thereof and any waiver of any breach of the provisions of
this Agreement shall be without prejudice to any rights with respect to any
other or further breach thereof.
(b) All payments made hereunder shall be made without any set-
off or counterclaim.
(c) Assignor and Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution and
performance of this Agreement.
(d) This Agreement may be executed in any number of counterparts
and all of such counterparts taken together shall be deemed to constitute one
and the same instrument.
(e) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ______________. PROVIDED HOWEVER THAT
THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
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IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment
and Acceptance Agreement to be executed and delivered by their duly authorized
officers as of the date first above written.
, Assignor
------------------------------------
By:
---------------------------------------
Name
-------------------------------------
Title:
-------------------------------------
Address:
, Assignee
----------------------------------------
By:
---------------------------------------
Name
-------------------------------------
Title:
------------------------------------
Address:
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SCHEDULE 1
to Assignment and Acceptance
NOTICE OF ASSIGNMENT AND ACCEPTANCE
________________, 199__
Bank of America National Trust and
Savings Association, as Agent
CRESG #1357
555 South Flower Street, 6th Floor
Los Angeles, California 90071
Attention: Unit Manager
AIMCO Properties, L.P.,
a Delaware limited partnership
1873 South Bellaire Street, 17th Floor
Denver, Colorado 80222
Attention: Peter Kompaniez, Vice Chairman
Re: Amended and Restated Credit Agreement, dated as of
___________1997 (as the same may be amended, modified or
supplemented from time to time, the "Revolving Credit
Agreement"), and Amended and Restated Credit Agreement
(Bridge Loan), dated as of ________, 1996 (as the same may
be amended, modified or supplemented from time to time, the
"Bridge Loan Agreement"), among AIMCO PROPERTIES, L.P., a
Delaware limited partnership (the "Company"), the lenders
from time to time party to the Credit Agreement (the
"Lenders"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as one of the Lenders, and BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent (the
"Agent") for the Lenders.
Ladies and Gentlemen:
Reference is made to the Revolving Credit Agreement and Bridge Loan
Agreement. Capitalized terms used in this Notice of Assignment and Acceptance
without definition have the meanings specified in the Revolving Credit
Agreement.
1. We hereby give notice to the Company and to the Agent of the
assignment by _____________________ ("Assignor") ______________________
("Assignee") of __________% of the right, title and interest of Assignor in and
to the Revolving Credit Agreement and the Bridge Loan Agreement, including,
without limitation, the right, title and interest of Assignor in and to:
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(A) Assignor's Commitment under and as such term is defined in
the Revolving Credit Agreement (the "Revolving Commitment") (representing
___________% of the $__________ current Aggregate Revolving Commitment of all
Lenders),
(B) Assignor's Commitment Percentage of the outstanding loans
under the Revolving Credit Agreement (representing an amount equal to
$____________ as of the Effective Date), (C) the existing Letter of Credit
Liability,
(C) Assignor's Commitment under and as such term is defined in
the Bridge Loan Agreement (the "Bridge Commitment") (representing ____% of the
$25,000,000 Aggregate Bridge Commitment of all Lenders),
(D) Assignor's Commitment Percentage (as such term is defined in
the Bridge Loan Agreement) of the outstanding loans under the Bridge Loan
Agreement (representing an amount equal to $____________ as of the Effective
Date), and
(E) all related rights, benefits, obligations, liabilities and
indemnities of Assignor under and in connection with the Revolving Credit
Agreement and the Bridge Loan Agreement.
Before giving effect to the assignment and assumption, on the
Effective Date, Assignor's Revolving Commitment was $______________, its Bridge
Commitment was $____________ and Assignor's Revolving and Bridge Commitment
Percentages were each ______________%. After giving effect to the assignment
and assumption, on the Effective Date, Assignor's Commitment will be
$______________, its Bridge Commitment will be $____________ and Assignor's
Revolving and Bridge Commitment Percentages will each be ______________%. After
giving effect to the assignment and assumption, on the Effective Date,
Assignee's Revolving Commitment will be $_____________, its Bridge Commitment
will be $____________ and Assignee's Revolving and Bridge Commitment Percentages
will each be _____________%.
2. Assignee agrees that, upon receiving the consent of the Agent and
the Company to such assignment, Assignee will be bound by the terms of the
Revolving Credit Agreement and the Bridge Loan Agreement as fully and to the
same extent as if Assignee were the Lender originally holding the interest so
assigned to it under the Revolving Credit Agreement and the Bridge Loan
Agreement.
9
<PAGE>
3. The following administrative details apply to Assignee:
(A) Notice Address:
Assignee name:
Address:
Att'n:
Telephone:
Telecopier:
(B) Payment Instructions:
ABA No.
Account No.
At:
Reference:
Att'n:
10
<PAGE>
IN WITNESS WHEREOF, Assignor and Assignee have caused this Notice of
Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.
Very truly yours,
[Assignor]
By: . . . . . . . . . . .
Title:. . . . . . . . . .
[Assignee]
By: . . . . . . . . . . .
Title:. . . . . . . . . .
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent
By: . . . . . . . . . .
Title: . . . . . . . . .
[Add Company's Signature Block if Company's Consent is required]
AIMCO PROPERTIES, L.P., a Delaware limited partnership
By: Aimco - GP, Inc., a Delaware corporation
Its General Partner
By: . . . . . . . . . .
Title: . . . . . . . . .
11
<PAGE>
PROMISSORY NOTE
Los Angeles, California
$25,000,000 May 5, 1997
FOR VALUE RECEIVED, AIMCO Properties, L.P., a Delaware limited
partnership (the "Company"), promises to pay to the order of BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION ("Bank") the principal amount of
TWENTY-FIVE MILLION AND NO/100 DOLLARS ($25,000,000) or, if less, the
aggregate amount of Loans (as such term and all other capitalized terms used
but not defined herein are defined in the Amended and Restated Credit
Agreement referred to below) made by the Bank to the Company pursuant to the
Amended and Restated Credit Agreement referred to below, outstanding on the
Bridge Facility Maturity Date.
The Company also promises to make principal payments and interest on
the unpaid principal amount hereof from the date hereof until paid at the rates
and at the times which shall be determined in accordance with the provisions of
the Amended and Restated Credit Agreement, including, without limitation, the
repayment of Loans no later than the applicable Individual Bridge Loan Maturity
Date.
All payments of principal and interest in respect of this Note shall
be made in lawful money of the United States of America in same day funds at the
Payment Office. Until notified of the transfer of this Note, the Company shall
bc entitled to deem the Bank or such person who has been so identified by the
transferor in writing to the Company as the holder of this Note, as the owner
and holder of this Note. The Bank and any subsequent holder of this Note agrees
that before disposing of this Note, or any part hereof, it will make a notation
hereon of all principal payments previously made hereunder of the date to which
interest hereon has been paid on the schedule attached hereto, if any; PROVIDED,
HOWEVER, that the failure to make notation of any payment made on this Note
shall not limit or otherwise affect the obligation of the Company hereunder with
respect to payments of principal or interest on this Note.
This Note is referred to in, and is entitled to the benefits of, the
Amended and Restated Credit Agreement (Bridge Loan), dated as of May 5, 1997
(the "AMENDED AND RESTATED CREDIT AGREEMENT"), among the Company, the financial
institutions named therein, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Agent (the "Agent"). The Amended and Restated Credit Agreement,
among other things, (i) provides for the making of loans (the "LOANS") by the
Bank to the Company from time to time in an aggregate amount first above
mentioned, the indebtedness of the Company resulting from each such Loan being
evidenced by this Note, and (ii) contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
mandatory and optional prepayments on account of principal hereof and certain
principal payments prior to the maturity hereof upon the terms and conditions
therein specified.
The terms of this Note are subject to amendment only in the manner
provided in the Amended and Restated Credit Agreement.
1
<PAGE>
No reference herein to the Amended and Restated Credit Agreement and
no provision of this Note or the Amended and Restated Credit Agreement shall
alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of and interest on this Note at the place,
at the respective times, and in the currency herein prescribed.
The Company promises to pay all costs and expenses, including
reasonable attorneys' fees, incurred in the collection and enforcement of this
Note. The Company hereby waives diligence, presentment, and protest, and except
as provided in the Amended and Restated Credit Agreement, demand and notice of
every kind and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder.
This Note shall be governed by, and construed in accordance with, the
laws of the state of Colorado without giving effect to its choice of law
doctrine.
IN WITNESS WHEREOF, the Company has caused this Note to be executed
and delivered by its duly authorized officer, as of the date and place first
above written.
AIMCO PROPERllES, L.P.,
a Delaware limited partnership
By: AIMCO-GP, INC.,
a Delaware corporation,
its general partner
By: /s/ Peter K. Kompaniez
-------------------------
Peter K. Kompaniez
Vice President
2
<PAGE>
TRANSACTIONS ON NOTE
- --------------------------------------------------------------------------------
AMOUNT OF
AMOUNT OF PRINCIPAL PRINCIPAL INTEREST NOTATION
DATE LOAN PAID BALANCE INTEREST PAID MADE BY
MADE PAID THROUGH
- --------------------------------------------------------------------------------
3
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 11,531
<SECURITIES> 0
<RECEIVABLES> 5,313
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 27,267<F1>
<PP&E> 869,931
<DEPRECIATION> 127,532
<TOTAL-ASSETS> 816,229
<CURRENT-LIABILITIES> 159,358<F2>
<BONDS> 0
0
0
<COMMON> 179
<OTHER-SE> 297,322
<TOTAL-LIABILITY-AND-EQUITY> 816,229
<SALES> 38,040
<TOTAL-REVENUES> 40,484<F3>
<CGS> (17,197)<F4>
<TOTAL-COSTS> (25,124)<F5>
<OTHER-EXPENSES> (351)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,452
<INCOME-PRETAX> 4,853
<INCOME-TAX> 0
<INCOME-CONTINUING> 4,853
<DISCONTINUED> 0
<EXTRAORDINARY> 269
<CHANGES> 0
<NET-INCOME> 4,584
<EPS-PRIMARY> 0.28
<EPS-DILUTED> 0.28
<FN>
<F1>Includes cash, restricted cash, accounts receivable.
<F2>Includes secured short-term financing, accounts payable and accrued
liabilities, resident security deposits, prepaid rents and unsecured
short-term financing.
<F3>Includes rental and other property revenues, management fees and other
income.
<F4>Includes property operating expenses, owned property management expense
and management and other expenses.
<F5>Includes CGS, depreciation, corporate overhead allocation, amortization of
management company goodwill and other assets deprecation and amortization.
</FN>
</TABLE>
