<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) August 16, 1999
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
---------------------------------------------------------
(Exact name of registrant as specified in its charter)
MARYLAND 1-13232 84-1259577
- --------------------------- ------------- -------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or File Number) Identification No.)
organization)
1873 SOUTH BELLAIRE STREET, SUITE 1700, DENVER, CO 80222-4348
- -------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 757-8101
NOT APPLICABLE
-----------------------------------------------------------
(Former name or Former Address, if Changed Since Last Report)
Page 1 of 5 Pages
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ITEM 5. OTHER EVENTS.
On August 16, 1999, AIMCO Properties, L.P. entered into a new secured
$300 million revolving credit facility (the "New Credit Facility") with a
syndicate of banks led by Bank of America, BankBoston, N.A., and First Union
National Bank. The New Credit Facility includes a swing line of up to $30
million. AIMCO Properties, L.P. is the borrower under the New Credit Facility,
but all obligations thereunder are guaranteed by Apartment Investment and
Management Company ("AIMCO") and certain of its subsidiaries. The obligations
under the New Credit Facility are secured by certain assets of AIMCO
Properties, L.P. The annual interest rate under the New Credit Facility is
based on either LIBOR or a base rate which is the higher of Bank of America's
reference rate or 0.5% over the federal funds rate, plus, in either case, an
applicable margin. The margin ranges between 2.05% and 2.55%, in the case of
LIBOR-based loans, and between 0.55% and 1.05%, in the case of base rate loans,
based upon a fixed charge coverage ratio. The New Credit Facility expires on
July 31, 2001 unless extended at the discretion of AIMCO Properties, L.P., at
which time the revolving facility would be converted into a term loan for up to
two successive one-year periods. The financial covenants contained in the New
Credit Facility require AIMCO to maintain a ratio of debt to gross asset value
of no more than 0.55 to 1.0, a ratio of total obligations (debt plus preferred
stock) to gross asset value of no more than 0.65 to 1.0, and an interest
coverage ratio of 2.25 to 1.0, and a fixed charge coverage ratio of at least
1.7 to 1.0 through September 31, 1999 and 1.75 to 1.0 thereafter. In addition,
the New Credit Facility limits AIMCO from distributing more than 80% of its
Funds From Operations (as defined) (or such amounts as may be necessary for
AIMCO to maintain its status as a REIT), imposes minimum net worth requirements
and contains other financial covenants.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
The following exhibits are filed with this report:
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<S> <C>
10.1 Credit Agreement (Secured Revolving Credit
Facility), dated as of August 16, 1999, among
AIMCO Properties, L.P., Bank of America, Bank
Boston, N.A., and First Union National Bank.
10.2 Borrower Pledge Agreement, dated as of August
16, 1999, between AIMCO Properties, L.P. and
Bank of America.
10.3 Form of Committed Loan Note, issued by AIMCO
Properties, L.P., to Bank of America,
BankBoston, N.A., and First Union National
Bank.
10.4 Form of Swing Line Note, issued by AIMCO
Properties, L.P. to Bank of America,
BankBoston, N.A., and First Union National
Bank.
10.5 Form of Payment Guaranty, by Apartment
Investment and Management Company, AIMCO/NHP
Holdings, Inc., NHP A&R Services, Inc., and
NHP Management Company.
</TABLE>
Page 2 of 5
<PAGE> 3
<TABLE>
<S> <C>
10.6 Form of Payment Guaranty of Non-Preferred
Stock Subsidiaries.
10.7 Form of Intra-Company Subordination Agreement,
by and among AIMCO Properties, L.P., Bank of
America, BankBoston, N.A., and First Union
National Bank.
</TABLE>
Page 3 of 5
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Dated: September 7, 1999
APARTMENT INVESTMENT
AND MANAGEMENT COMPANY
By: /s/ Patrick J. Foye
----------------------------
Patrick J. Foye
Executive Vice-President
Page 4 of 5
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
<S> <C>
10.1 Credit Agreement (Secured Revolving Credit
Facility), dated as of August 16, 1999, among
AIMCO Properties, L.P., Bank of America, Bank
Boston, N.A., and First Union National Bank.
10.2 Borrower Pledge Agreement, dated as of August
16, 1999, between AIMCO Properties, L.P. and
Bank of America.
10.3 Form of Committed Loan Note, issued by AIMCO
Properties, L.P., to Bank of America,
BankBoston, N.A., and First Union National
Bank.
10.4 Form of Swing Line Note, issued by AIMCO
Properties, L.P. to Bank of America,
BankBoston, N.A., and First Union National
Bank.
10.5 Form of Payment Guaranty, by Apartment
Investment and Management Company, AIMCO/NHP
Holdings, Inc., NHP A&R Services, Inc., and
NHP Management Company.
10.6 Form of Payment Guaranty of Non-Preferred
Stock Subsidiaries.
10.7 Form of Intra-Company Subordination Agreement,
by and among AIMCO Properties, L.P., Bank of
America, BankBoston, N.A., and First Union
National Bank.
</TABLE>
-------------------------
Certain schedules and supplemental materials to the exhibits have been
omitted but will be provided to the Securities and Exchange Commission upon
request.
Page 5 of 5
<PAGE> 1
EXHIBIT 10.1
================================================================================
CREDIT AGREEMENT
among
AIMCO PROPERTIES, L.P.,
as Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent and
Letter of Credit Issuing Lender,
BANKBOSTON, N.A.,
as Syndication Agent,
FIRST UNION NATIONAL BANK,
as Documentation Agent
and
THE OTHER FINANCIAL
INSTITUTIONS PARTY HERETO
Dated as of August 16, 1999
BANC OF AMERICA SECURITIES LLC
and
BANCBOSTON ROBERTSON STEPHENS INC.,
as
Co-Lead Arrangers,
and
BANC OF AMERICA SECURITIES LLC,
as
Sole Book Manager
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE(S)
-------
<S> <C> <C>
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS................................................................1
1.01 Defined Terms. ................................................................................1
1.02 Use of Certain Terms. ........................................................................38
1.03 Accounting Terms. ............................................................................38
1.04 Rounding. .....................................................................................38
1.05 Exhibits and Schedules. ......................................................................39
1.06 References to Agreements, Exhibits and Laws. .................................................39
SECTION 2. THE COMMITMENTS AND EXTENSIONS OF CREDIT.......................................................39
2.01 Committed Loans. .............................................................................39
2.02 Borrowings, Conversions and Continuations of Committed Loans...................................40
2.03 Swing Line Loans...............................................................................42
2.04 Borrowings of Swing Line Loans.................................................................42
2.05 Letters of Credit..............................................................................44
2.06 Prepayments; Mandatory Amortization............................................................49
2.07 Reduction or Termination of Commitments........................................................52
2.08 Principal and Interest; Default Rate...........................................................52
2.09 Fees...........................................................................................52
2.10 Computation of Interest and Fees...............................................................53
2.11 Making Payments................................................................................54
2.12 Funding Sources................................................................................55
2.13 Extension of Maturity Date.....................................................................55
2.14 Increase in Commitments........................................................................56
SECTION 3. TAXES, YIELD PROTECTION AND ILLEGALITY.........................................................58
3.01 Taxes..........................................................................................58
3.02 Illegality. ..................................................................................61
3.03 Inability to Determine Rates. ................................................................61
3.04 Increased Cost and Reduced Return; Capital Adequacy............................................62
3.05 Breakfunding Costs.............................................................................62
3.06 Matters Applicable to all Requests for Compensation............................................63
3.07 Survival.......................................................................................63
SECTION 4. CONDITIONS PRECEDENT TO EXTENSIONS OF CREDIT...................................................63
4.01 Conditions of Initial Extension of Credit......................................................63
4.02 Conditions to all Extensions of Credit.........................................................66
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 5. REPRESENTATIONS AND WARRANTIES.................................................................67
5.01 Existence and Qualification; Power.............................................................67
5.02 Power; Authorization; Enforceable Obligations..................................................67
5.03 No Legal Bar...................................................................................68
5.04 Financial Statements; No Material Adverse Effect...............................................68
5.05 Litigation.....................................................................................69
5.06 No Default.....................................................................................69
5.07 Ownership of Property; Liens...................................................................69
5.08 Taxes..........................................................................................69
5.09 Margin Regulations; Investment Company Act; Public Utility Holding Company Act; REIT and
Tax Status; Stock Exchange Listing.............................................................70
5.10 ERISA Compliance...............................................................................71
5.11 Intangible Assets..............................................................................72
5.12 Compliance With Laws...........................................................................73
5.13 Environmental Compliance.......................................................................73
5.14 Insurance......................................................................................74
5.15 Year 2000......................................................................................74
5.16 Subsidiaries; Interests in Other Entities; Changes in Organizational Structure.................74
5.17 Matters Relating to Collateral.................................................................75
5.18 Disclosure.....................................................................................76
SECTION 6. AFFIRMATIVE COVENANTS..........................................................................76
6.01 Financial Statements...........................................................................76
6.02 Certificates, Notices and Other Information....................................................78
6.03 Payment Obligations............................................................................81
6.04 Preservation of Existence......................................................................81
6.05 Maintenance of Properties......................................................................82
6.06 Maintenance of Insurance.......................................................................82
6.07 Compliance With Laws...........................................................................82
6.08 Inspection Rights..............................................................................83
6.09 Keeping of Records and Books of Account........................................................83
6.10 Compliance with ERISA..........................................................................83
6.11 Compliance With Agreements.....................................................................83
6.12 Use of Proceeds................................................................................83
6.13 Communication with Accountants.................................................................84
6.14 Maintenance of REIT Status; Stock Exchange Listing.............................................84
6.15 Solvency.......................................................................................84
6.16 Further Assurances.............................................................................84
6.17 Unconsolidated Partnership Distributions.......................................................85
</TABLE>
ii
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<TABLE>
<S> <C> <C>
SECTION 7. NEGATIVE COVENANTS.............................................................................86
7.01 Indebtedness...................................................................................86
7.02 Liens and Negative Pledges.....................................................................88
7.03 Fundamental Changes............................................................................89
7.04 Dispositions. ................................................................................91
7.05 Investments....................................................................................92
7.06 Lease Obligations..............................................................................93
7.07 Restricted Payments............................................................................93
7.08 ERISA..........................................................................................94
7.09 Change in Nature of Business...................................................................94
7.10 Transactions with Affiliates...................................................................94
7.11 Use of Proceeds................................................................................95
7.12 Transfers of Non-Owned Interests in the Management Entities....................................95
7.13 Limitations on Upstreaming.....................................................................95
7.14 Financial Covenants............................................................................96
7.15 Change in Auditors.............................................................................97
7.16 Special Covenants Relating to the REIT.........................................................97
7.17 Taxation of Borrower...........................................................................97
SECTION 8. EVENTS OF DEFAULT AND REMEDIES ................................................................98
8.01 Events of Default..............................................................................98
8.02 Remedies Upon Event of Default................................................................104
SECTION 9. ADMINISTRATIVE AGENT..........................................................................106
9.01 Appointment and Authorization of Administrative Agent.........................................106
9.02 Delegation of Duties..........................................................................106
9.03 Liability of Administrative Agent.............................................................107
9.04 Reliance by Administrative Agent..............................................................107
9.05 Notice of Default.............................................................................108
9.06 Credit Decision; Disclosure of Information by Administrative Agent............................108
9.07 Indemnification of Administrative Agent.......................................................109
9.08 Administrative Agent in Individual Capacity...................................................110
9.09 Successor Administrative Agent................................................................110
9.10 Co-Lead Agents................................................................................111
SECTION 10. MISCELLANEOUS......................................................................................111
10.01 Amendments; Consents..........................................................................111
10.02 Transmission and Effectiveness of Notices and Signatures......................................112
10.03 Attorney Costs, Expenses and Taxes............................................................113
10.04 Binding Effect; Assignment....................................................................114
10.05 Set-Off.......................................................................................116
10.06 Sharing of Payment............................................................................116
</TABLE>
iii
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<TABLE>
<S> <C> <C>
10.07 No Waiver; Cumulative Remedies................................................................117
10.08 Usury.........................................................................................118
10.09 Counterparts..................................................................................118
10.10 Integration...................................................................................118
10.11 Nature of Lenders' Obligations................................................................119
10.12 Survival of Representations and Warranties....................................................119
10.13 Indemnity by Borrower.........................................................................119
10.14 Nonliability of Lenders.......................................................................120
10.15 No Third Parties Benefited....................................................................121
10.16 Severability..................................................................................121
10.17 [Intentionally Omitted].......................................................................121
10.18 Headings. ..................................................................................121
10.19 Time of the Essence...........................................................................121
10.20 [Intentionally Omitted] ......................................................................121
10.21 Governing Law.................................................................................121
10.22 Waiver of Right to Trial by Jury..............................................................122
10.23 Exclusive Jurisdiction........................................................................122
10.24 Notice of Claims; Claims Bar..................................................................122
</TABLE>
iv
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EXHIBITS
Form of
A Request for Extension of Credit
B Compliance Certificate
C-1 Committed Loan Note
C-2 Swing Line Note
D Notice of Assignment and Acceptance
E [Intentionally omitted]
F Opinion of Counsel
G Borrower Pledge Agreement
H-1 REIT Guaranty Document (REIT and Preferred Stock Subsidiaries)
H-2 REIT Guaranty Document (Non-Preferred Stock Subsidiaries)
I Intra-Company Subordination Agreement
SCHEDULES
1.01A Construction/Renovation
1.01B GP Loans
1.01C Guarantors
1.01D Management Entities
2.01 Commitments and Pro Rata Shares
4.01 Indebtedness to be Refinanced
5.05 Litigation
5.08 Taxes
5.10 ERISA Compliance
5.13 Environmental Compliance
5.16 Organizational Chart
7.01(d) Existing Recourse Indebtedness
7.01(i) Other Existing Indebtedness
7.01(k) Existing Bond Indebtedness
7.01(m) Existing Cross-Collateralized and Cross-Defaulted Indebtedness
10.02 Offshore and Domestic Lending Offices, Addresses for Notices
v
<PAGE> 7
CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of August 16,
1999, by and among AIMCO PROPERTIES, L.P., a Delaware limited partnership
("Borrower"), each lender from time to time party hereto (collectively,
"Lenders" and individually, a "Lender"), BANK OF AMERICA, N.A. ("Bank of
America"), as Administrative Agent ("Administrative Agent"), Issuing Lender and
a Co-Lead Agent, BANKBOSTON, N.A. ("BankBoston"), as a Lender, a Co-Lead Agent,
and Syndication Agent, and FIRST UNION NATIONAL BANK ("First Union"), as a
Lender and Documentation Agent.
RECITAL
Borrower, the Lenders named therein, Bank of America, as agent, and
BankBoston, as documentation agent, have entered into that certain Amended and
Restated Credit Agreement, dated as of October 1, 1998 , as amended (as so
amended, the "Existing Credit Agreement"). Borrower wishes to refinance its
obligations under the Existing Credit Agreement by entering into this Agreement.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
SECTION 1.
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS.
As used in this Agreement, the following terms shall have the meanings
set forth below:
"Adjusted Total Corporate EBITDA" means, for any period, the Total
Corporate EBITDA for such period minus the Capital Expenditure Reserve as of the
last day of such period.
"Adjusted Total NOI" means, for any period, Borrower's, the Guarantors'
and their respective Subsidiaries' pro-rata share of Net Operating Income, less
the Capital Expenditure Reserve as of the last day of such period.
"Administrative Agent" means Bank of America, in its capacity as
Administrative agent under any of the Loan Documents, or any successor
administrative agent.
1
<PAGE> 8
"Administrative Agent's Office" means Administrative Agent's address
and, as appropriate, account as set forth on Schedule 10.02, or such other
address or account as Administrative Agent hereafter may designate by written
notice to Borrower and Lenders.
"Administrative Agent-Related Persons" means Administrative Agent
(including any successor agent), together with its Affiliates (including, in the
case of Administrative Agent, Banc of America Securities LLC), and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Affiliate", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with, that Person. A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power (a)
to vote 10% or more of the securities (on a fully diluted basis) having ordinary
voting power for the election of directors or managing general partners; or (b)
to direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.
"Agreement" means this Credit Agreement, as amended, restated,
extended, supplemented or otherwise modified in writing from time to time.
"Ancillary Services" means real property asset management, accounting,
ordering and inventory services and other property related services provided by
AIMCO/NHP Holdings, Inc. and NHP A&R Services, Inc. and any other entities so
designated by Borrower as a provider of Ancillary Services and acceptable to
Administrative Agent in its reasonable discretion.
"Applicable Margin" means, during the period from the Closing Date to
the Revolving Commitment Termination date, the following amounts per annum,
based upon the Fixed Charge Coverage Ratio as set forth in the most recent
Compliance Certificate received by Administrative Agent pursuant to Section
6.02(b); provided, however, that, until Administrative Agent receives the first
Compliance Certificate after the Closing Date, such amounts shall be those
indicated for pricing level 3 set forth below:
2
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APPLICABLE MARGIN
(IN BASIS POINTS PER ANNUM)
<TABLE>
<CAPTION>
FIXED CHARGE OFFSHORE BASE RATE
PRICING LEVEL COVERAGE RATIO RATE + +
<S> <C> <C> <C>
1 (3) 2.00:1 205 55
2 (3) 1.85:1 but < 2.00:1 230 80
3 < 1.85:1 255 105
</TABLE>
The Applicable Margin for all periods prior to the Revolving Commitment
Termination Date shall be in effect from the date the most recent Compliance
Certificate is received by Administrative Agent to but excluding the date the
next Compliance Certificate is received; provided, however, that if Borrower
fails to timely deliver the next Compliance Certificate, the Applicable Margin
from the date such Compliance Certificate was due to but excluding the date such
Compliance Certificate is received by Administrative Agent shall be the highest
pricing level set forth above, and, thereafter, the pricing level indicated by
such Compliance Certificate when received.
In the event that the Maturity Date is extended past the Revolving
Commitment Termination Date pursuant to Section 2.13, for all periods after the
Revolving Commitment Termination Date, the Applicable Margin for Base Rate Loans
shall be 125 basis points per annum and the Applicable Margin for Offshore Rate
Loans shall be 275 basis points per annum.
"Attorney Costs" means and includes all reasonable fees and
disbursements of any law firm or other external counsel and the allocated cost
of internal legal services and all disbursements of internal counsel.
"Audited Financial Statements" means the audited consolidated balance
sheets of the REIT and Borrower, in each case for the fiscal year ended December
31, 1998, and the related consolidated statements of income and cash flows for
such fiscal year of the REIT and Borrower.
"Bank of America" means Bank of America, N.A.
"BankBoston" means BankBoston, N.A.
"Base Rate" means a fluctuating rate per annum equal to the higher of
(a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect
for such day as publicly announced from time to time by Bank of America as its
"prime rate" in
3
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Charlotte, North Carolina. The prime rate is a rate set by Bank of America based
upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in the "prime rate" announced by Bank of America shall take
effect at the opening of business on the day specific in the public announcement
of such change.
"Base Rate Loan" means a Loan which bears interest based on the Base
Rate.
"Borrower" has the meaning set forth in the introductory paragraph
hereto.
"Borrower Party" means Borrower or any Person other than Lenders and
any Affiliates of Lenders, Administrative Agent, Issuing Lender, Syndication
Agent, Documentation Agent, or any Co-Lead Agent or Co-Lead Arranger from time
to time party to a Loan Document.
"Borrower Pledge Agreement" means the Borrower Pledge Agreement
executed and delivered by the Borrower on the Closing Date, substantially in the
form of Exhibit G annexed hereto, as such Borrower Pledge Agreement may
thereafter be amended, supplemented or otherwise modified from time to time.
"Borrowing" and "Borrow" each mean, a borrowing hereunder consisting of
Loans of the same type made on the same day and, other than in the case of Base
Rate Loans, having the same Interest Period.
"Business Day" means any day other than a Saturday, Sunday, or other
day on which commercial banks are authorized to close under the Laws of, or are
in fact closed in, the state where Lender's lending office is located and, if
such day relates to any Offshore Rate Loan, means any such day on which dealings
in Dollar deposits are conducted by and between banks in the offshore Dollar
interbank market.
"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 or Property
(including replacements, capitalized repairs and improvements during such
period, but excluding Enhancements and Initial Capital Expenditures) 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
4
<PAGE> 11
for such equipment being traded in at such time, or the amount of such proceeds,
as the case may be.
"Capital Expenditure Reserve" means as of any date of determination,
the product of (a) $400 per apartment unit (subject to adjustment as provided
below), and (b) the sum of (i) the number of apartment units owned by Borrower,
any Guarantors or any of their Wholly-Owned Subsidiaries during such period plus
(ii) the number of apartment units that constitute Non-Wholly Owned Properties
which is proportionate to the ownership interest of Borrower, any Guarantors or
any of their Wholly-Owned Subsidiaries in such Non-Wholly Owned Properties,
measured at the end of the most recent calendar quarter ending prior to such
date of determination. Administrative Agent shall review the Capital Expenditure
Reserve as of the last day of each calendar year and, based on such review,
shall adjust the per apartment unit charge in clause (a) hereof to the extent
necessary to cause the Capital Expenditure Reserve to equal or exceed the
Borrower's, any Guarantor's and their respective Subsidiaries' proportionate
ownership interest of actual Capital Expenditures, excluding Enhancements and
Initial Capital Expenditures, for the four calendar quarters preceding the date
of such review.
"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.
"Cash" means money, currency or a credit balance in any demand, time,
savings, passbook or like account with a bank, savings and loan association,
credit union or like organization, other than an account evidenced by a
negotiable certificate of deposit.
"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 term of not
more than three (3) months, issued by Administrative Agent, or by any
U.S. commercial bank (or any branch or agency of a non-U.S. bank
licensed to conduct
5
<PAGE> 12
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 Borrower, the REIT or any
Subsidiary (other than the Obligations and funds held by Bank of
America cash investments services, including without, limitation,
Nations Funds, FundsSweep and overnight repos) 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 term of not more than three
(3) months.
"Closing Date" means the date all the conditions precedent in Section
4.01 are satisfied or waived in accordance with Section 4.01.
"Co-Lead Agents" means Bank of America and BankBoston. The Co-Lead
Agents, in their capacity as a Co-Lead Agent, shall have no duties or
responsibilities in addition to those of a Lender as provided under this
Agreement.
"Co-Lead Arrangers" means Banc of America Securities LLC and BancBoston
Robertson Stephens Inc., in their capacity as co-lead arrangers hereunder.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means, collectively, all of the "Pledged Collateral" as
such term is defined in the Borrower Pledge Agreement.
"Collateral Documents" means the Borrower Pledge Agreement and all
other instruments or documents delivered by Borrower, the REIT, or any of their
Subsidiaries pursuant to this Agreement or any of the other Loan Documents in
order to grant to Administrative Agent, on behalf of Lenders, a Lien on any
real, personal or mixed property of that Person as security for the Obligations.
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<PAGE> 13
"Combined Commitments" has the meaning assigned to such term in the
definition of "Commitment". The initial Combined Commitments are
$300,000,000.
"Commitment" means, for each Lender, the obligation of such Lender to
make Extensions of Credit in an aggregate principal amount not exceeding the
amount set forth opposite such Lender's name on Schedule 2.01 at any one time
outstanding, as such amount may be reduced or adjusted from time to time in
accordance with this Agreement (collectively, the "Combined Commitments").
"Committed Loan" means a Loan of any type made to Borrower by Lenders
in accordance with its Pro Rata Share pursuant to Section 2.01, except as
otherwise provided herein.
"Committed Loan Note" means a promissory note made by Borrower in favor
of a Lender evidencing Committed Loans made by such Lender, substantially in the
form of Exhibit C-1 (collectively, the "Committed Loan Notes").
"Compliance Certificate" means a certificate in the form of Exhibit B,
properly completed and signed by a Responsible Officer of Borrower.
"Consolidated Interest Expense" means for any Person and for any
period, the Interest Expense of such Person and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means for any Person and for any period, the
net income (or loss) of such Person and its Subsidiaries on a consolidated basis
for such period taken as a single accounting period determined in conformity
with GAAP; provided that there shall be excluded (a) any after-tax gains or
losses attributable to dispositions of property, (b) (to the extent not included
in clause (a) above) any net extraordinary gains or net non-cash extraordinary
losses, and (c) income from Borrower's and its Subsidiaries' minority interests
in operating partnerships.
"Consolidated Net Worth" means, as any date of determination and
without double counting any item, the sum of the capital stock or other capital
equity interests and additional paid-in capital plus retained earnings (or minus
accumulated deficits) of the REIT, Borrower and their respective Subsidiaries on
a consolidated basis determined in conformity with GAAP.
"Consolidated Operations EBITDA" means, for any period, the sum of the
amounts for such period of (a) Consolidated Net Income, plus (b) Consolidated
Interest Expense, plus (c) total depreciation expense, plus (d) total
amortization expense, plus (e) provisions for taxes based on income, plus (f)
other non-cash items
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<PAGE> 14
reducing Consolidated Net Income arising in the ordinary course of business less
other non-cash items increasing Consolidated Net Income arising in the ordinary
course of business minus (g) the sum of (1) Borrower's and its Subsidiaries'
earnings or losses from unconsolidated partnerships and unconsolidated
subsidiaries plus (2) income from Borrower's and its Subsidiaries' minority
interests in other entities plus (3) interest income from intercompany notes,
all of the foregoing, except as otherwise noted, as determined on a consolidated
basis for Borrower and its Subsidiaries in conformity with GAAP.
"Construction/Renovation" means any New Construction or any substantial
rehabilitation, renovation and/or expansion by Borrower or any of its
Subsidiaries or unconsolidated subsidiaries of any multi-family Property which,
in the case of rehabilitation, renovation or expansion, involves the
repositioning or upgrading of such multi-family Property with respect to
comparable multi-family properties located in the proximate geographic area.
Properties under Construction/Renovation as of the Closing Date are listed on
Schedule 1.01A attached hereto.
"Continuation" and "Continue" mean, with respect to any Offshore Rate
Loan, the continuation of such Offshore Rate Loan as an Offshore Rate Loan on
the last day of the Interest Period for such Loan.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its property is bound.
"Controlled Group" means Borrower and all Persons (whether or not
incorporated) under common control or treated as a single employer with Borrower
pursuant to Section 414(b), (c), (m) or (o) of the Code.
"Conversion" and "Convert" mean, with respect to any Loan, the
conversion of such Loan from or into another type of Loan.
"Debt Securities" means any arrangement, bonds, debentures, notes or
other evidences of Indebtedness, secured or unsecured, convertible, subordinated
or otherwise, or in general any instruments commonly known as "securities" or
any certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
America, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States of America or
other
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<PAGE> 15
applicable jurisdictions from time to time in effect affecting the rights of
creditors generally.
"Default" means any event that, with the giving of any notice, the
passage of time, or both, would be an Event of Default.
"Default Rate" means an interest rate equal to the Base Rate plus the
Applicable Margin applicable to Base Rate Loans plus 3.0% per annum, to the
fullest extent permitted by applicable Laws; provided, however, that with
respect to an Offshore Rate Loan, the Default Rate shall be an interest rate
equal to the interest rate (including any Applicable Margin) otherwise
applicable to such Loan plus 3.0% per annum.
"Designated Deposit Account" means a deposit account to be maintained
by Borrower with Bank of America, as from time to time designated by Borrower by
written notification to Administrative Agent.
"Disposition", "Dispose", or "Disposed" means the sale, transfer,
license or other disposition (including any sale and leaseback transaction) of
any property, including, without limitation, any contract rights, or intangible
property or rights to receive revenue or cashflow, by any Person, including any
sale, assignment, transfer or other disposal with or without recourse of any
notes or accounts receivable or any rights and claims associated therewith.
"Dispositions" shall not include the incurrence of Ordinary Course Liens or the
transfer of Partnership Units to third party vendors or service providers in
lieu of cash payments and in consideration of services performed on behalf of
the REIT, Borrower or any Subsidiary thereof.
"Documentation Agent" means, as of the Closing Date, First Union
National Bank. Documentation Agent shall have no responsibilities or duties in
addition to those of a Lender as provided under this Agreement.
"Dollar" and "$" means lawful money of the United States of America.
"EBITDA" means, for any period, the sum determined in accordance with
GAAP, of the following, for any Person (a) the net income (or net loss) of such
Person during such period plus (b) all amounts on a consolidated basis treated
as expenses for 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 (i) extraordinary losses or extraordinary gains (including
gains or losses from the sale of Properties), (ii) any amortization of
capitalized financing expenses or charges related to restructuring
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<PAGE> 16
of Indebtedness (excluding such expenses or charges in connection with renewals
or extensions of existing Indebtedness in the Ordinary Course of Business), and
(iii) such Person's minority interests in operating partnerships.
"Eligible Assignee" means (a) a financial institution organized under
the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $500,000,000; (b) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development, or a political subdivision of any such
country, and having a combined capital and surplus of at least $500,000,000,
provided that such bank is acting through a branch or agency located in the
United States; (c) a Person that is primarily engaged in the business of
commercial banking and that is (i) a Subsidiary of a Lender, (ii) a Subsidiary
of a Person of which a Lender is a Subsidiary, or (iii) a Person of which a
Lender is a Subsidiary; (d) another Lender; and (e) any other person which is an
"accredited investor" (as defined in Regulation D under the Securities Act)
which extends credit or buys loans as one of its businesses, including insurance
companies, mutual funds and lease finance companies in each case with a capital
and surplus of at least $500,000,000; provided, however, that in no event may an
Affiliate of Borrower be an Eligible Assignee.
"Encumbered Property Debt Coverage Ratio" means, as of the last day of
any fiscal quarter, the ratio of (a) Adjusted Total NOI from all real property
assets subject to Liens during the four fiscal quarter period ending on such
date to (b) Borrower's, the Guarantors' and their Subsidiaries' pro rata share
of the aggregate debt service (including all scheduled principal and interest
payments, but excluding balloon payments) on all such real property assets
subject to Liens during such period.
"Enhancements" means any material item of Capital Expenditures (other
than an Initial Capital Expenditure) which adds a new feature or revenue source
to an existing Property and which is not properly characterized as an Ordinary
Course of Business Capital Expenditure.
"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,
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<PAGE> 17
leaks, discharges, emissions or releases) of any Hazardous Material at, in, or
from Property, whether or not owned by Borrower, or (b) any other circumstances
forming the basis of any violation, or alleged violation, of any Environmental
Law.
"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 Authority, in each case
relating to environmental, health, safety and land use matters applicable to any
property.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
any regulations issued pursuant thereto, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with Borrower within the meaning of Sections
414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes
of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by Borrower or any ERISA Affiliate from a Pension 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) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by Borrower or any ERISA Affiliate
from a Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or
the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) 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 Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon Borrower or
any ERISA Affiliate.
"Event of Default" means any of the events specified in Section 8.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Existing Letter of Credit" means each Letter of Credit (as defined in
the Existing Credit Agreement) outstanding on the Closing Date that has not
expired or been cancelled as of the Closing Date.
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<PAGE> 18
"Extension of Credit" means (a) the Borrowing of Loans, (b) the
Conversion or Continuation of any Loans, or (c) any Letter of Credit Action or
any other action which has the effect of increasing the amount of any Letter of
Credit, extending the maturity of any Letter of Credit or making any material
modification to any Letter of Credit or the reimbursement of drawings thereunder
(collectively, the "Extensions of Credit").
"exceptions to nonrecourse" means, with respect to Indebtedness secured
by mortgage loans which are not Recourse to the borrower thereof, the customary
exceptions to the nonrecourse nature of such mortgage loans which include
liability of the borrower and/or its principals for fraud, misrepresentations,
failure to insure, misapplication of insurance or condemnation proceeds and
waste, in each case with respect to the property encumbered by the mortgage
loan.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to Bank of America on
such day on such transactions as determined by Administrative Agent.
"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 Borrower pursuant to that certain Redemption
Agreement, dated as of April 15, 1996, between the REIT and Borrower, 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.
"Fixed Charge Coverage Ratio" means, as of any date of determination,
the ratio of (a) Adjusted Total Corporate EBITDA for the four fiscal quarter
period ending on such date to (b) Fixed Charges during such period.
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<PAGE> 19
"Fixed Charges" means, for any period, the sum of (i) Total Interest
Expense for such period, plus (ii) Total Scheduled Amortization for such period,
plus (iii) dividends accrued (whether or not declared or payable) on the
preferred Stock and/or preferred Partnership Units of the REIT, Borrower or any
of their Subsidiaries during such period.
"Free Corporate Cash Flow" means, for any period, Total Corporate
EBITDA for such period minus the sum of (a) Total Interest Expense for such
period (excluding interest paid or accrued in respect of the Obligations), plus
(b) Borrower's, the Guarantors' and their respective Subsidiaries' pro-rata
share of all repayments of principal of Indebtedness (excluding principal
amortization in respect of the Obligations) during such period, plus (c)
Borrower's, the Guarantors' and their respective Subsidiaries' pro-rata share of
taxes based on income paid for such period, plus (d) preferred dividends accrued
(whether or not declared or payable) on the preferred Stock and/or Partnership
Units of the REIT, Borrower or any of their Subsidiaries during such period,
plus (e) an amount equal to 95% of Borrower's Consolidated Net Income for the
period determined in accordance with GAAP, plus (f) the Capital Expenditure
Reserve as of the last day of such period of determination; provided, however,
that, for purposes of determining Free Corporate Cash Flow, in no event shall
any calculation of Total Corporate EBITDA include any Consolidated Net Income or
net income (or loss, as applicable) in respect of any Property which has been
Disposed of by Borrower, the REIT or any Subsidiary thereof, or any
unconsolidated partnership or subsidiary thereof.
"Funds From Operations" means, with respect to Borrower, 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 (excluding amortization
of financing costs), 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) together
with adjustments for the non-cash deferred portion of any income tax provision
for unconsolidated subsidiaries and the payment of dividends on preferred Stock,
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 and practices at
any date of determination in respect of a business conducting a business the
same as or similar to that of Borrower, including, without limitation, those set
forth in applicable bulletins, opinions, pronouncements, statements and
interpretations issued by the Accounting Principles Board, the American
Institute of Certified Public Accountants and the Financial Accounting Standard
Board, consistently applied.
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"Governing State" means the State of California.
"Governmental Authority" means (a) any international, foreign, federal,
state, county or municipal government, or political subdivision thereof, (b) any
governmental or quasi-governmental agency, authority, board, bureau, commission,
department, instrumentality, central bank or public body, or (c) any court,
administrative tribunal or public utility.
"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 Borrower.
"GP Loans" means that certain Indebtedness, whether secured or
unsecured, evidenced by promissory notes in an aggregate principal amount of
approximately $332,816,000 outstanding as of March 31, 1999 and such
Indebtedness is set forth in more detail on Schedule 1.01B hereto.
"Gross Asset Value" means as of any date of determination, the sum of
the following, determined for Borrower, the Guarantors and their respective
Subsidiaries:
(i) Cash (including Restricted Cash) and Cash
Equivalents of both consolidated and unconsolidated Persons,
which Cash and Cash Equivalents are owned, directly or
indirectly, by Borrower, the Guarantors or their respective
Subsidiaries as of such date of determination;
(ii) GP Loans valued at net realizable value as of
such date of determination determined in accordance with GAAP;
(iii) with respect to all real estate assets wholly
or partially owned by such Person(s) throughout the most
recent four calendar quarters ending on or prior to such date
of determination (other than Real Property Assets Under
Development), the Adjusted Total NOI attributable to such real
estate assets for such four quarter period divided by 9.5%;
(iv) with respect to all real estate assets wholly or
partially owned by such Person(s) on such date of
determination, but acquired less than four calendar quarters
but at least one calendar quarter preceding such date of
determination (other than Real Property Assets Under
Development), the Adjusted Total NOI attributable to such real
estate assets for the number of full calendar quarters that
such Person(s)
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<PAGE> 21
owned such assets measured on an annualized basis and divided
by 9.5%;
(v) with respect to all real estate assets owned by
such Person(s) on such date of determination, but acquired
less than one calendar quarter preceding such date of
determination (other than Real Property Assets Under
Development), 95% of the purchase price paid by such Person(s)
for such assets;
(vi) the gross book value of Real Property Assets
Under Development as of such date of determination; and
(vii) an amount equal to 400% of Management EBITDA
for the four consecutive fiscal quarter period preceding such
date of determination.
"Guarantor Subsidiary" means each Preferred Stock Subsidiary and each
other Subsidiary of Borrower and the REIT that executes and delivers a
counterpart of the REIT Guaranty Documents on the Closing Date or from time to
time thereafter pursuant to Section 6.16(c), and collectively are referred to
herein as the "Guarantor Subsidiaries".
"Guarantors" means, collectively, the REIT and the Guarantor
Subsidiaries, and each is a "Guarantor", and the Guarantors as of the Closing
Date are set forth on Schedule 1.01C attached hereto.
"Guaranty Obligation" means, as to any Person, any (a) guaranty by that
Person of Indebtedness of, or other obligation payable or performable by, any
other Person or (b) assurance, agreement, letter of responsibility, letter of
awareness, undertaking or arrangement given by that Person to an obligee of any
other Person with respect to the payment or performance of an obligation by, or
the financial condition of, such other Person, whether direct, indirect or
contingent, including any purchase or repurchase agreement covering such
obligation or any collateral security therefor, any agreement to provide funds
(by means of loans, capital contributions or otherwise) to such other Person,
any agreement to support the solvency or level of any balance sheet item of such
other Person or any "keep-well" or other arrangement of whatever nature given
for the purpose of assuring or holding harmless such obligee against loss with
respect to any obligation of such other Person; provided, however, that the term
Guaranty Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Guaranty
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, covered by such
Guaranty Obligation or, if not stated or
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<PAGE> 22
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the Person in good faith.
"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 Borrower 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.
"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 direct
or contingent obligations with respect to surety bonds, letters of credit,
bankers' acceptances and similar instruments (in each case, to the extent
material or noncontingent), (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 Swap Agreements, (h) all obligations (other than, in the case of the
REIT, the obligation to acquire Partnership 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 the date which is the one (1) year
anniversary of the then effective Maturity Date, (excluding, however, any such
preferred Stock which is convertible only into common Stock of the REIT) (i) any
direct or contingent obligations or liabilities under any equity forward
agreements or transactions or under any similar arrangements or transactions,
(j) all indebtedness referred to in
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clauses (a) through (i) 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 (k) all Guaranty Obligations in respect of
indebtedness or obligations of others of the kinds referred to in clauses (a)
through (i) above. "Indebtedness" shall also include such Person's share of the
Indebtedness of any partnership or joint venture in which such Person, directly
or indirectly, holds any interest, and any direct or indirect Recourse or
contingent obligations of such Person with respect to Indebtedness of such
partnership or joint venture in excess of its proportionate share. Solely for
purposes of Section 7.14 only, "Indebtedness" shall exclude security deposits,
accounts payable and accrued liabilities and any prepaid rent (as such terms are
defined under GAAP).
"Indemnified Liabilities" has the meaning set forth in Section 10.13.
"Initial Capital Expenditures" means Capital Expenditures incurred as
part of a program of spending to improve any Properties acquired after the
Closing Date; provided that such Initial Capital Expenditures are (x) identified
prior to any such acquisition of Property and (y) completed within one year
after the closing of such acquisition of Property.
"Interest Coverage Ratio" means, as of any date of determination, the
ratio of (a) Adjusted Total Corporate EBITDA for the four fiscal quarter period
ending on such date to (b) Total Interest Expense during such period.
"Interest Expense" means, for any Person and for any period, without
double counting any item, the sum of (x) gross interest expense paid in,
incurred or accrued during such period by such Person (including all
commissions, discounts, fees and other charges in connection with standby
letters of credit and similar instruments), including any amounts as capitalized
interest, plus (y) dividends paid in, incurred or accrued during such period by
such Person with respect to Trust Based Convertible Preferred Securities, plus
(z) the portion of the upfront costs and expenses for Swap Agreements entered
into by such Person (to the extent not included in gross interest expense)
fairly allocated to such Swap Agreements as expenses for such period, as
determined for such Person in accordance with GAAP; provided that all interest
expense accrued by Borrower, the REIT and their respective Subsidiaries during
such period, even if not payable on or before the Maturity Date, shall be
included with "Interest Expense". Notwithstanding the foregoing, amortization of
loan costs and interest accrued under any Intra-Company Debt shall not be
included within "Interest Expense" for any purposes hereof.
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<PAGE> 24
"Interest Payment Date" means (a) as to any Base Rate Loan and any
Swing Line Loan, the first Business Day of each calendar month; (b) as to any
Offshore Rate Loan, the last day of each relevant Interest Period and any date
that such Loan is prepaid in whole or in part; provided, however, that if any
Interest Period for an Offshore Rate Loan exceeds three months, interest shall
also be paid on the date which falls every three months after the beginning of
such Interest Period; and (c) as to all Loans, the Maturity Date; provided
further that interest accruing at the Default Rate shall be payable from time to
time at any time upon demand of Administrative Agent.
"Interest Period" means, for each Offshore Rate Loan, (a) initially,
the period commencing on the date such Offshore Rate Loan is disbursed,
Continued as, or Converted into, an Offshore Rate Loan and (b) thereafter, the
period commencing on the last day of the preceding Interest Period, and ending,
in each case, on the earlier of (x) the Maturity Date, or (y) one, two, three or
six months thereafter, as requested by Borrower; provided that:
(i) any Interest Period that would otherwise end on a
day that is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
(ii) any Interest Period which 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
(iii) unless Administrative Agent otherwise consents,
there may not be more than seven (7) Interest Periods in
effect at any time.
"Intra-Company Debt" means all Indebtedness (whether book-entry or
evidenced by a term, demand or other note or other instrument) owed by Borrower,
any Guarantor or any of their respective Subsidiaries to Borrower, any Guarantor
or any of their respective Subsidiaries; provided that all such Intra-Company
Debt owed by Borrower or any Guarantor shall be subordinated in right of payment
to the payment in full of the Obligations pursuant to the Intra-Company Loan
Subordination Agreement.
"Intra-Company Loan Subordination Agreement" means a Subordination
Agreement, in the form attached hereto as Exhibit I, with respect to
Intra-Company Debt (including the Finance Subsidiary Loan), in favor of
Administrative Agent for
18
<PAGE> 25
the ratable benefit of Lenders, and entered into by each of the Lenders
designated on Schedule 2.01 and Borrower.
"Investment" means, as to any Person, any acquisition or any investment
by such Person, whether by means of the purchase or other acquisition of Stock,
Partnership Units or other securities or Property of any other Person or by
means of a loan, creating a debt, capital contribution, guaranty or other debt
or equity participation or interest in any other Person, including any
partnership and joint venture interests in such other Person. For purposes of
covenant compliance, the amount of any Investment shall be the amount actually
invested as of any date of determination (taking into account any redemption,
repayment or partial liquidation thereof), without adjustment for subsequent
increases or decreases in the value of such Investment.
"IRS" means the Internal Revenue Service.
"Issuing Lender" means Bank of America, or any successor issuing lender
hereunder.
"Knowledge of Borrower" means the actual knowledge (after reasonable
inquiry) of any of the officers of Borrower or the REIT and each other Person
with executive responsibility for any aspect of Borrower's or the REIT's
business.
"Laws" or "Law" means, collectively, all international, foreign,
federal, state and local statutes, treaties, rules, guidelines, regulations,
ordinances, codes and administrative or judicial precedents or authorities,
including without limitation the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or
administration thereof, in each case whether or not having the force of law.
"Lender" means each lender from time to time party hereto and Issuing
Lender.
"Lending Office" means, as to any Lender, the office or offices of such
Lender described as such on Schedule 10.02, or such other office or offices as
such Lender may from time to time notify Borrower and Administrative Agent.
"Letter of Credit" means any letter of credit issued or outstanding
hereunder.
"Letter of Credit Action" means the issuance, supplement, amendment,
renewal, extension, modification or other action relating to a Letter of Credit.
19
<PAGE> 26
"Letter of Credit Application" means an application for a Letter of
Credit Action as shall at any time be in use by Issuing Lender.
"Letter of Credit Cash Collateral Account" means a blocked deposit
account at Bank of America with respect to which Borrower hereby grants a
security interest in such account to Administrative Agent for and on behalf of
Lenders as security for Letter of Credit Usage and with respect to which
Borrower agrees to execute and deliver from time to time such documentation as
Administrative Agent may reasonably request to further assure and confirm such
security interest.
"Letter of Credit Commitment" means, as of any date of determination,
an amount equal to the lesser of (x) $30,000,000 and (y) 10% of the Combined
Commitments then in effect.
"Letter of Credit Expiration Date" means the date which is the earlier
of (x) the one year anniversary of the date of issuance, extension or renewal of
such Letter of Credit and (y) thirty (30) days prior to the Revolving Commitment
Termination Date.
"Letter of Credit Usage" means, as at any date of determination, the
aggregate undrawn face amount of outstanding Letters of Credit plus the
aggregate amount of all drawings under the Letters of Credit honored by Issuing
Lender and not reimbursed to Issuing Lender by Borrower or converted into
Committed Loans.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement (in the nature of compensating balances, cash collateral accounts or
security interests), encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement of
any kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the Uniform Commercial Code or comparable Laws
of any jurisdiction), including the interest of a purchaser of accounts
receivable.
"Loan" means any advance made by any Lender to Borrower as provided in
Section 2 (collectively, the "Loans").
"Loan Documents" means this Agreement, the Collateral Documents, the
REIT Guaranty Documents, and any Note, certificate, fee letter, and other
instrument, document or agreement from time to time delivered in connection with
this Agreement.
"LP Corp" means AIMCO-LP, Inc., a Delaware corporation.
20
<PAGE> 27
"Management EBITDA" means, for any period, the sum, without
duplication, of (x) the aggregate amount of EBITDA for Borrower and its
Subsidiaries attributable to their management of multi-family apartment projects
or other real estate projects or provision of Ancillary Services during such
period, plus (y) Unconsolidated Subsidiaries EBITDA generated by the Management
Entities.
"Management Entity" means any Subsidiary of Borrower and/or the REIT
(i) which is primarily engaged in the business of managing multifamily apartment
projects or other real estate projects or providing Ancillary Services, and (ii)
whose assets (other than Intra-Company Debt) are not subject to any Liens (other
than Ordinary Course Liens), and "Management Entities" includes, without
limitation, the Persons listed on Schedule 1.01D.
"Margin Stock" has the meaning assigned to that term in Regulation U of
the Board of Governors of the Federal Reserve System as in effect from time to
time.
"Material Adverse Effect" means any set of circumstances or events
which (a) has or could reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of any Loan Document, or
(b) materially impairs or could reasonably be expected to materially impair the
ability of the Borrower Parties, taken as whole, to pay and/or perform the
Obligations.
"Material Entity" means any Person in which the REIT, Borrower or any
of their Subsidiaries owns any equity interest which generates 1.5% or more of
Total Corporate EBITDA.
"Maturity Date" means July 31, 2001, as it may be earlier terminated or
extended in accordance with the terms hereof.
"Minimum Amount" means, with respect to each of the following actions,
the minimum amount and any multiples in excess thereof set forth opposite such
action:
<TABLE>
<CAPTION>
TYPE OF ACTION MINIMUM MULTIPLES IN
AMOUNT EXCESS THEREOF
----------------------------------------------------------------------------
<S> <C> <C>
Borrowing of, prepayment of, $2,000,000 $500,000
or Conversion into, Base Rate
Loans (other than Swing Line
Loans)
</TABLE>
21
<PAGE> 28
<TABLE>
<S> <C> <C>
Borrowing of or prepayment of $1,000,000 $500,000
Swing Line Loans
Borrowing of, prepayment of, $5,000,000 $1,000,000
Continuation of, or Conversion
into, Offshore Rate Loans
Reduction in Commitments $5,000,000 $1,000,000
Assignments $5,000,000 $1,000,000
</TABLE>
"Moody's" means Moody's Investors Service, a Delaware corporation, and
its successors and assigns.
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA.
"Negative Pledge" means a Contractual Obligation that restricts Liens
on property.
"Net Disposition Proceeds" means, with respect to any Disposition of
any real Property, Subsidiary, Management Entity or material property management
contract, Cash payments (including any Cash received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only as
and when so received) received from such Disposition, net of any bona fide
direct costs incurred in connection with such Disposition, including (i) income
taxes reasonably estimated to be actually payable within two years of the date
of such Disposition as a result of any gain recognized in connection with such
Disposition and (ii) payment of the outstanding principal amount of, premium or
penalty, if any, and interest on any Indebtedness (other than the Loans) that is
secured by a Lien on the Stock or assets in question and that is required to be
repaid under the terms thereof as a result of such Disposition.
"Net Issuance Proceeds" means, in respect of any issuance of Stock,
Partnership Units or Debt Securities by Borrower, the REIT or any of their
respective Subsidiaries, the proceeds in Cash or Cash Equivalents (or, for
purposes of Section 7.14(g), in the case of any issuance of Partnership Units in
exchange for Property, the fair market value of the Property so acquired)
received by Borrower, 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 Borrower, the REIT or any Affiliate of Borrower 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
22
<PAGE> 29
Indebtedness secured by any Property, the portion of such proceeds used to repay
Indebtedness previously incurred and secured by the same Property.
"Net Operating Income" means, for any period, as to any Property (a)
all gross revenues received from the operation of such Property during such
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 and, without double counting, real estate taxes and insurance
premiums paid or accrued on account of such Property (whether by direct payment
or by deposit into reserves for future payment), or, to the extent applicable
for purposes of calculating Net Operating Income, the applicable prior owner of
such Property during such period with respect to such Property (exclusive of
Capital Expenditures). When calculating Net Operating Income, there shall be no
deduction for any non cash items, such as depreciation.
"Net Refinancing Proceeds" means the aggregate amount of any
Refinancing Indebtedness incurred in excess of the aggregate principal amount
(or if issued with original issue discount, an aggregate issue price) then
outstanding of the Indebtedness being refinanced by such Refinancing
Indebtedness, plus fees, underwriting discounts, premiums, unpaid accrued
interest and other costs and expenses incurred in connection with such
Refinancing Indebtedness.
"New Construction" means the development and construction of any new
multi-family Property by Borrower, any Guarantor or any of their respective
Subsidiaries and shall not include any renovations, rehabilitations or
expansions of existing multi-family Properties.
"Nonrecourse Debt Obligor" has the meaning given such term in Section
8.01(f)(B).
"Non-Wholly Owned Property" means the Property comprising a multifamily
apartment project the fee simple interest in which is not 100% owned, directly
or indirectly, by Borrower and/or its Wholly Owned Subsidiaries.
23
<PAGE> 30
"Notes" means, collectively, the Committed Loan Notes and the Swing
Line Note.
"Notice of Assignment and Acceptance" means a Notice of Assignment and
Acceptance substantially in the form of Exhibit D.
"NYSE" means the New York Stock Exchange.
"Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Borrower Party arising under any Loan
Document, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest that accrues after the commencement of any proceeding
under any Debtor Relief Laws by or against any Borrower Party or any Subsidiary
or Affiliate of any Borrower Party.
"Offshore Base Rate" has the meaning set forth in the definition of
Offshore Rate.
"Offshore Rate" means for any Interest Period with respect to any
Offshore Rate Loan, a rate per annum determined by Administrative Agent pursuant
to the following formula:
Offshore Rate = Offshore Base Rate
--------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Offshore Base Rate" means, for such Interest Period:
(a) the rate per annum (carried out to the fifth decimal
place) equal to the rate determined by Administrative Agent to be the
offered rate that appears on the page of the Telerate Screen that
displays an average British Bankers Association Interest Settlement
Rate (such page currently being page number 3750) for deposits in
Dollars (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of
such Interest Period, or
(b) in the event the rate referenced in the preceding
subsection (a) does not appear on such page or service or such page or
service shall cease to be available, the rate per annum (carried to the
fifth decimal place) equal to the rate determined by Administrative
Agent to be the offered rate on such
24
<PAGE> 31
other page or other service that displays an average British Bankers
Association Interest Settlement Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of
such Interest Period, or
(c) in the event the rates referenced in the preceding
subsections (a) and (b) are not available, the rate per annum
determined by Administrative Agent as the rate of interest at which
Dollar deposits (for delivery on the first day of such Interest Period)
in same day funds in the approximate amount of the applicable Offshore
Rate Loan and with a term equivalent to such Interest Period would be
offered by its London Branch to major banks in the offshore dollar
market at their request at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period.
"Eurodollar Reserve Percentage" means, for any day during any
Interest Period, the reserve percentage (expressed as a decimal,
rounded upward to the next 1/100th of 1%) in effect on such day,
whether or not applicable to any Lender, under regulations issued from
time to time by the Board of Governors of the Federal Reserve System
for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with
respect to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"). The Offshore Rate for each outstanding Offshore Rate
Loan shall be adjusted automatically as of the effective date of any
change in the Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Committed Loan bearing interest based on
the Offshore Rate.
"Ordinary Course Dispositions" means:
(a) Dispositions of obsolete or worn out Property or Property
no longer useful in any Borrower Party's business, whether now owned or
hereafter acquired, in the Ordinary Course of Business;
(b) Dispositions of Cash, Cash Equivalents, inventory and
other Property in the Ordinary Course of Business;
(c) Dispositions of Property to the extent that such property
is exchanged for credit against the purchase price of similar
replacement property, or the proceeds of such sale are reasonably
promptly applied to the purchase price of such replacement Property or
where Borrower or its
25
<PAGE> 32
Subsidiary determine in good faith that the failure to replace such
equipment will not be detrimental to the business of Borrower or such
Subsidiary; and
(d) Dispositions of assets or Property by any Subsidiary of
Borrower or the REIT to Borrower or another Wholly-Owned Subsidiary of
Borrower or the REIT;
(e) Dispositions of Property or Properties which generate Net
Disposition Proceeds of less than $1,000,000, provided the aggregate
amount of Net Disposition Proceeds generated by all such Dispositions
shall not exceed $10,000,000 during any four consecutive fiscal quarter
period;
provided, however, that no such Disposition shall be for less than the fair
market value of the property being disposed of.
"Ordinary Course Indebtedness" means:
(a) Indebtedness under the Loan Documents;
(b) Indebtedness under bonds supporting utility deposits or
insurance or other comparable security deposits or property taxes, in
each case incurred in the Ordinary Course of Business; and
(c) Indebtedness arising from the honoring of a check, draft
or similar instrument against insufficient funds.
"Ordinary Course Investments" means:
(a) Investments in Cash and Cash Equivalents;
(b) Investments consisting of advances to officers, directors
and employees of Borrower and its Subsidiaries for travel,
entertainment, relocation and analogous ordinary business purposes;
(c) Investments of Borrower in any of its Subsidiaries and
Investments of any Subsidiary of Borrower in Borrower or another
Subsidiary of Borrower;
(d) Investments consisting of or evidencing the extension of
credit to customers or suppliers of Borrower and its Subsidiaries in
the ordinary course of business and any Investments received in
satisfaction or partial satisfaction thereof; and
26
<PAGE> 33
(e) Investments consisting of Guaranty Obligations permitted
by Section 7.01.
"Ordinary Course Liens" means:
(a) Liens pursuant to any Loan Document;
(b) Liens for taxes not yet due or which are being contested
in good faith and by appropriate proceedings, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
(c) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith and by appropriate proceedings,
if adequate reserves with respect thereto are maintained on the books
of the applicable Person and deposits securing liability to insurance
carriers under insurance arrangements;
(d) pledges or deposits in connection with worker's
compensation, unemployment insurance and other social security
legislation;
(e) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(f) easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract
from the value of the property subject thereto or materially interfere
with the ordinary conduct of the business of any Borrower Party;
(g) attachment, judgment or other similar Liens arising in
connection with litigation or other legal proceedings (and not
otherwise a Default hereunder) in the ordinary course of business that
is currently being contested in good faith by appropriate proceedings,
adequate reserves have been set aside and no material Property is
subject to a material risk of loss or forfeiture and the claims in
respect of such Liens are fully covered by insurance (subject to
ordinary and customary deductibles);
27
<PAGE> 34
(h) statutory, contractual or common law landlords' Liens
under leases to which any Borrower Party is a party; and
(i) Liens securing reimbursement obligations with respect to
letters of credit and banker's acceptances which encumber only
documents and other property relating to such letters of credit and the
products and proceeds thereof.
"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, 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.
"Organization Documents" means, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws; (b) with respect to
any limited liability company, the articles of formation and operating
agreement; and (c) with respect to any partnership, joint venture or other form
of business entity, the partnership agreement and any agreement, filing or
notice with respect thereto filed with the secretary of state of the state of
its formation, in each case as amended from time to time.
"Organizational Chart" means the list of Subsidiaries attached as
Schedule 5.16 hereto showing the REIT, Borrower, all of their Subsidiaries and
their interests in the Management Entities and any unconsolidated subsidiaries
or Persons, as the same may be modified pursuant hereto.
"Outstanding Obligations" means, as of any date, and giving effect to
making any Extensions of Credit requested on such date and all payments,
repayments and prepayments made on such date, (x) during the period from the
Closing Date through and including the Revolving Commitment Termination Date,
the sum of (a) the aggregate outstanding principal amount of all Loans
(including Swing Line Loans), and (b) all Letter of Credit Usage, and (y) during
the period from but excluding the Revolving Commitment Termination Date through
and including the Maturity Date, the aggregate outstanding principal amount of
all Loans.
"Partnership Units" means the units of limited partnership interest in
the REIT, Borrower or any of their Subsidiaries, as the case may be, issued and
outstanding from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto established under ERISA.
28
<PAGE> 35
"Pension Plan" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by Borrower or any
ERISA Affiliates or to which Borrower or any ERISA Affiliate contributes or has
an obligation to contribute, 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 five plan years.
"Person" means any individual, trustee, corporation, general
partnership, limited partnership, limited liability company, joint stock
company, trust, unincorporated organization, bank, business association, firm,
joint venture, Governmental Authority, or other entity.
"Plan" means any employee benefit plan maintained or contributed to by
a Borrower Party or by any trade or business (whether or not incorporated) under
common control with a Borrower Party as defined in Section 4001(b) of ERISA and
insured by the PBGC under Title IV of ERISA.
"Preferred Stock Subsidiary" means any Person so identified as a
Preferred Stock Subsidiary by Borrower in the Organizational Chart, and
"Preferred Stock Subsidiaries" means all such Persons, collectively.
"Pro Rata Share" means, with respect to each Lender, the percentage of
the Combined Commitments set forth opposite the name of that Lender on Schedule
2.01.
"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 multiemployer
plan (as described in Section 4064(a) of ERISA) has made contributions and any
time during the immediately preceding period covering at least five (5) plan
years, but excluding any Multi-employer Plan.
"Real Property Assets Under Development" means, as of any date of
determination, Property owned by a Person and which, as of such date, is in
whole or part the subject of Construction/Renovation. Any such asset shall be
included in "Real Property Assets Under Development" only until the earlier of
(a) the date such property becomes Stabilized and (b) six months after the
completion of construction of such asset.
29
<PAGE> 36
"Recourse" means, with respect to any Indebtedness or Guaranty
Obligation of any Person, that such Indebtedness or Guaranty Obligation is
recourse to the assets and/or properties of such Person; provided, however, that
with respect to nonrecourse Indebtedness secured by real property which contains
limitations to the nonrecourse nature of the obligation, such limited
nonrecourse obligations shall be deemed "Recourse" if and to the extent the
nonrecourse exceptions are for liability of such Person for any of the following
under any applicable loan documentation: (a) fraud, waste, material
misrepresentation, or willful misconduct; (b) indemnification with respect to
environmental matters or failure to comply with Hazardous Materials laws; (c)
failure to maintain required insurance policies; (d) misapplication of insurance
proceeds, condemnation awards and tenant security deposits; (e) breach of
covenants relating to unpermitted transfers or encumbrances of real property or
other collateral; (f) misappropriation or misapplication of property income; (g)
breach of covenants relating to unpermitted transfers of interests in a Person;
(h) failure to deliver books and records; (i) failure to pay transfer fees or
changes; or (j) other matters substantially the same as those set forth in
clauses (a) through (i) above. An obligation of a Person that is without
Recourse to the assets and/or properties of such Person shall not be considered
a "Recourse" obligation unless any of the events or circumstances described in
clauses (a) through (j) above have occurred.
"Refinancing Indebtedness" means Indebtedness that is incurred to
refund, refinance, replace, renew, repay or extend (including pursuant to any
defeasance or discharge mechanism) any Indebtedness described in Sections 7.01
(d), (e) and (h).
"REIT" means Apartment Investment and Management Company, a
Maryland corporation.
"REIT Guaranty Documents" means a guaranty of the Obligations, in the
form of Exhibit H-1 and Exhibit H-2 attached hereto, and any documents relating
to the guaranty as Administrative Agent requires, duly executed by the REIT and
the Guarantor Subsidiaries, together with the guaranties delivered pursuant to
Section 6.16(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, and (b) the applicability to such Person and its shareholders of
the method of taxation provided for in Sections 857 et seq. of the Code.
"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, or a cessation of operations described in Section 4062(e)
of ERISA.
30
<PAGE> 37
"Request for Extension of Credit" means a written request substantially
in the form of Exhibit A duly completed and signed by a Responsible Officer, or
a telephonic request followed by such a written request, in each case delivered
to Administrative Agent by Requisite Notice. In the case of a request for a new
or amended Letter of Credit, the written Letter of Credit Application shall be
deemed to be the Request for Extension of Credit.
"Requisite Lenders" means (a) as of any date of determination if the
Commitments are then in effect, Lenders having in the aggregate more than 50% of
the Combined Commitments then in effect and (b) as of any date of determination
if the Commitments have then been terminated and there are Loans and/or Letter
of Credit Usage outstanding, Lenders holding Loans and Letter of Credit Usage
aggregating more than 50% of the aggregate outstanding principal amount of the
Loans and Letter of Credit Usage.
"Requisite Notice" means, unless otherwise provided herein, (a)
irrevocable written notice to the intended recipient or (b) except with respect
to Letter of Credit Actions (which must be in writing), irrevocable telephonic
notice to the intended recipient, promptly followed by a written notice to such
recipient by way of facsimile and by way of mail. Such notices shall be (i)
delivered to such recipient at the address or telephone number specified on
Schedule 10.02 or as otherwise designated by such recipient by Requisite Notice
to each other party hereto, and (ii) if made by any Borrower Party, given or
made by a Responsible Officer of such Borrower Party. Any written notice
delivered in connection with any Loan Document shall be in the form, if any,
prescribed in the applicable section hereof or thereof and may be delivered as
provided in Section 10.02. Any notice sent by other than hardcopy shall be
promptly confirmed by a telephone call to the recipient and, if requested by
Administrative Agent, by a manually-signed hardcopy thereof.
"Requisite Time" means, with respect to any of the actions listed
below, the time and date set forth below opposite such action (all times are
local time (standard or daylight) as observed in the Governing State):
31
<PAGE> 38
<TABLE>
<CAPTION>
TYPE OF ACTION TIME DATE OF ACTION
- ------------------------------------------- ------------------- ---------------------------------------
<S> <C> <C>
Delivery of Request for
Extension of Credit for, or
notice for:
Borrowing of, prepayment of, or 1 Business Day prior to such
Conversion into, Base Rate 9:00 a.m. Borrowing, prepayment or
Loans (other than Swing Line Conversion
Loans)
Borrowing of, or prepayment of 2:00 p.m. Same date as such Borrowing
Swing Line Loans or prepayment
Borrowing of, prepayment of, 10:00 a.m. 3 Business Days prior to such
Continuation of, or Conversion Borrowing, prepayment or
into, Offshore Rate Loans Conversion
Letter of Credit Action 10:00 a.m. 5 Business Days prior to such
action
Voluntary reduction in or 10:00 a.m. 5 Business Days prior to such
termination of Commitments reduction or termination
Payments by Lenders or 11:00 a.m. On date payment is due
Borrower to Administrative
Agent
</TABLE>
"Responsible Officer" means the president, chief financial officer,
treasurer or assistant treasurer of a Borrower Party. Any document or
certificate hereunder that is signed by a Responsible Officer of a Borrower
Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Borrower Party
and such Responsible Officer shall be conclusively presumed to have acted on
behalf of such Borrower Party.
"Restricted Cash" means any Cash pledged to other lenders by Borrower,
the REIT or any of their respective Subsidiaries or any other Person in which
Borrower, the REIT or any of their respective Subsidiaries have any equity
interest, as indicated in the line item for "restricted cash" in the REIT's
balance sheet from time to time, and Borrower's, the REIT's or their
Subsidiaries' pro rata shares of "restricted cash" of unconsolidated
partnerships and unconsolidated subsidiaries.
"Restricted Payment" means:
(a) the declaration or payment of any dividend or distribution
by Borrower or any of its Subsidiaries, either in cash or property, on
any shares of the capital stock of any class of Borrower or any of its
Subsidiaries
32
<PAGE> 39
(except dividends or other distributions payable solely in shares of
capital stock of Borrower or any of its Subsidiaries or payable by a
Subsidiary to Borrower or another wholly-owned Subsidiary of Borrower);
(b) the purchase, redemption or retirement by Borrower or any
of its Subsidiaries of any shares of its capital stock of any class or
any warrants, rights or options to purchase or acquire any shares of
its capital stock, whether directly or indirectly;
(c) any other payment or distribution by Borrower or any of
its Subsidiaries in respect of its capital stock, either directly or
indirectly; and
(d) any Investment other than an Investment otherwise
permitted under any Loan Document.
"Revolving Commitment Termination Date" means July 31, 2001.
"Revolving Loan" means a Loan of any type made to Borrower by Lenders
in accordance with their Pro Rata Shares pursuant to Section 2.01(a), except as
otherwise provided herein.
"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 all regularly scheduled amortization payments
paid or accrued on such Person's Indebtedness (exclusive of balloon payments).
"SEC" means the Securities and Exchange Commission, or any successor
thereto.
"SEC Report" means all filings on Form 10-K, Form 10-Q or Form 8-K with
the SEC made by the REIT pursuant to the Exchange Act and delivered to Agent
prior to the date hereof.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, and any successor statute.
"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 of the United States of America and, in the
alternative, for purposes of the
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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.
"Stabilized" means, with respect to any Property and as of any date of
determination, the date on which the occupancy level is at least eighty-five
percent (85%) for the most recent complete quarter.
"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" means, with respect to any Person, a corporation,
partnership, joint venture, limited liability company or other business entity
of which a majority of the shares of securities or other interests having
ordinary voting power for the election of directors or other governing body
(other than securities or interests having such power only by reason of the
happening of a contingency) are at the time beneficially owned, or the
management of which is otherwise controlled, directly, or indirectly through one
or more intermediaries, or both, by such Person.
"Supermajority Lenders" means (a) as of any date of determination if
the Commitments are then in effect, Lenders having in the aggregate more than
66-2/3% of the Combined Commitments then in effect and (b) as of any date of
determination if the Commitments have then been terminated and there are Loans
and/or Letter of Credit Usage outstanding, Lenders holding Loans and Letter of
Credit Usage aggregating more than 66-2/3% of the aggregate outstanding
principal amount of the Loans and Letter of Credit Usage.
"Swap Agreement" means (a) any and all rate swap transactions, basis
swaps, forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond price
or bond index swaps or options or forward bond or forward bond price or forward
bond index transactions, interest rate options, forward foreign exchange
transactions,
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cap transactions, floor transactions, collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, or any
other similar transactions or any combination of any of the foregoing (including
any options to enter into any of the foregoing), whether or not any such
transaction is governed by or subject to any master agreement, or (b) any and
all transactions of any kind, and the related confirmations, which are subject
to the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., or any
other master agreement (any such master agreement, together with any related
schedules, as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, a "Master Agreement"), including but not limited to
any such obligations or liabilities under any Master Agreement.
"Swing Line Commitment" means, as of any date of determination, an
amount equal to the lesser of (x) $30,000,000 and (y) 10% of the Combined
Commitments then in effect.
"Swing Line Lender" means Bank of America, or any Person serving as a
successor Administrative Agent hereunder, in its capacity as Swing Line Lender
hereunder.
"Swing Line Loan" means a Loan made to Borrower by Swing Line Lender
pursuant to Section 2.03.
"Swing Line Note" means a promissory note of Borrower payable to the
order of the Swing Line Lender in substantially the form of Exhibit C-2.
"Syndication Agent" means, as of the Closing Date, BankBoston, N.A. The
Syndication Agent shall have no responsibilities or duties in addition to those
of a Lender as provided under this Agreement.
"Term Loan" means a Loan of any type made to Borrower by Lenders in
accordance with their Pro Rata Shares pursuant to Section 2.01(b), except as
otherwise provided herein.
"Threshold Amount" means $5,000,000.
"to the best knowledge of" means, when modifying a representation,
warranty or other statement of any Person, that the fact or situation described
therein is known by such Person (or, in the case of a Person other than a
natural Person, known by any officer of such Person) making the representation,
warranty or other statement, or with the exercise of reasonable due diligence
under the circumstances (in accordance with the standard of what a reasonable
Person in
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similar circumstances would have done) would have been known by such Person (or,
in the case of a Person other than a natural Person, would have been known by an
officer of such Person).
"Total Corporate EBITDA" means, for any period, the sum of (a)
Consolidated Operations EBITDA for such period, plus (b) Unconsolidated
Subsidiaries EBITDA for such period, plus (c) Unconsolidated Partnerships EBITDA
for such period.
"Total Combined Debt" means, as of any date of determination and
without double counting any item, the sum of (a) the aggregate amount of all
Indebtedness of Borrower, the REIT and their respective consolidated
Subsidiaries as of such date, plus (b) the Borrower's, REIT's and their
Subsidiaries' pro-rata share of all Indebtedness of any unconsolidated Person in
which they have an equity interest. Notwithstanding the foregoing, Intra-Company
Debt, accounts payable, security deposits, accrued liabilities and prepaid rents
shall be excluded from the calculation of "Total Combined Debt."
"Total Interest Expense" means for any period, without double counting
any item, the sum of (a) Consolidated Interest Expense of the Borrower, the
Guarantors and their respective Subsidiaries for such period, plus (b) the
Borrower's, the Guarantors' and their respective Subsidiaries' pro-rata share of
Interest Expense for such period of unconsolidated Persons in which they have
any equity interest.
"Total Obligations" means as of any date, the sum of (a) Total Combined
Debt and (b) the aggregate liquidation preference of the preferred Stock issued
by Borrower and Guarantors; provided that the $75,000,000 in Class B preferred
stock issued by the REIT shall be excluded from the calculation of Total
Obligations as at any date that such Class B preferred stock remains fully
convertible to Borrower's common Stock at the option of the holder and
Borrower's common Stock traded at a market price during the five (5) trading
days preceding such date that exceeds $30.45 per share.
"Total Scheduled Amortization" means, for any period of determination,
and without double counting any item, the sum of (a) the Scheduled Amortization
for Borrower, the Guarantors and their respective Subsidiaries for such period
on a consolidated basis plus (b) the Borrower's, the Guarantors' and their
respective Subsidiaries' pro-rata share of Scheduled Amortization for such
period in respect of any unconsolidated Person in which they have an equity
interest.
"Trust Based Convertible Preferred Securities" means the 6.5% trust
based convertible preferred securities due September 30, 2016 with an aggregate
liquidation value of $149.5 million.
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"type", when used with respect to any Loan, means the designation of
whether such Loan is a Base Rate Loan or an Offshore Rate Loan.
"Unconsolidated Partnerships EBITDA" means, for any period, an amount
equal to the sum of the Borrower's and the Guarantors' pro-rata share of each of
the following: (a) the net income (or loss) for such period taken as a single
accounting period, plus (b) Interest Expense for such period, plus (c) total
depreciation and amortization expense for such period, plus (d) other non-cash
items reducing net income arising in the ordinary course of business less other
non-cash items increasing net income arising in the ordinary course of business
during such period minus (e) any gains with respect to the sale of any
Properties, all of the foregoing as determined in conformity with GAAP for the
unconsolidated partnerships in which Borrower or any Guarantor has an equity
interest.
"Unconsolidated Subsidiaries EBITDA" means, for any period, an amount
equal to the sum of the Borrower's and the Guarantors' pro-rata share of each of
the following: (a) the net income (or loss) for such period taken as a single
accounting period, plus (b) Interest Expense for such period, plus (c)
provisions for taxes based on income for such period, plus (d) total
depreciation and amortization expense for such period, plus (e) other non-cash
items reducing net income arising in the ordinary course of business less other
non-cash items increasing net income arising in the ordinary course of business
during such period minus (f) any gains with respect to the sale of any
Properties, all of the foregoing as determined in conformity with GAAP for the
unconsolidated subsidiaries in which Borrower or any Guarantor has an equity
interest.
"Unfunded Pension Liability" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Pension Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
"Unsecured Debt" means Indebtedness which is not secured by any Lien.
"Unsecured Debt Service Coverage Ratio" means, as of any date of
determination, the ratio of (a) the sum of (i) Adjusted Total NOI from all
unencumbered (other than Ordinary Course Liens) real property assets plus (ii)
Management EBITDA, in each case for the period of the four prior fiscal quarters
ending on such date to (b) Total Interest Expense relating to Unsecured Debt
during such period.
"Wholly-Owned Subsidiary" means a Subsidiary of Borrower and/or the
REIT of which 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
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or indirectly by (A) Borrower and/or (B) the REIT; 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 of which 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.
1.02 USE OF CERTAIN TERMS.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or
delivered pursuant hereto or thereto, unless otherwise defined therein.
(b) As used herein, unless the context requires otherwise, the
masculine, feminine and neuter genders and the singular and plural
include one another.
(c) The words "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. The word
"including" when used herein is not intended to be exclusive and means
"including, without limitation." References herein to a Section,
subsection or clause shall refer to the appropriate Section, subsection
or clause in this Agreement.
(d) The term "or" is disjunctive; the term "and" is
conjunctive. The term "shall" is mandatory; the term "may" is
permissive. Masculine terms also apply to females; feminine terms also
apply to males. The term "including" is by way of example and not
limitation.
1.03 ACCOUNTING TERMS.
All accounting terms not specifically or completely defined in this
Agreement shall be construed in conformity with, and all financial data required
to be submitted by this Agreement shall be prepared in conformity with, GAAP, as
in effect on the date hereof, except as otherwise specifically prescribed
herein.
1.04 ROUNDING.
Any financial ratios required to be maintained by Borrower pursuant to
this Agreement shall be calculated by dividing the appropriate component by the
other component, carrying the result to one place more than the number of places
by which such ratio is expressed in this Agreement and rounding the result up or
down
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to the nearest number (with a round-up if there is no nearest number) to the
number of places by which such ratio is expressed in this Agreement.
1.05 EXHIBITS AND SCHEDULES.
All exhibits and schedules to this Agreement, either as originally
existing or as the same may from time to time be supplemented, modified or
amended, are incorporated herein by this reference. A matter disclosed on any
Schedule shall be deemed disclosed on all Schedules.
1.06 REFERENCES TO AGREEMENTS, EXHIBITS AND LAWS.
Unless otherwise expressly provided herein, (a) references to
agreements (including the Loan Documents) and other contractual instruments
shall include all amendments and other modifications thereto (unless prohibited
by any Loan Document), and (b) references to any statute or regulation shall
include all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
SECTION 2.
THE COMMITMENTS AND EXTENSIONS OF CREDIT
2.01 COMMITTED LOANS.
(a) Subject to the terms and conditions set forth in this
Agreement, each Lender severally agrees to make, Convert and Continue
Committed Loans ("Revolving Loans") until the Revolving Commitment
Termination Date as Borrower may from time to time request; provided,
however, that the Outstanding Obligations of each Lender shall not
exceed such Lender's Commitment, and the Outstanding Obligations of all
Lenders shall not exceed the Combined Commitments at any time. Subject
to the foregoing and the other terms and conditions hereof, Borrower
may borrow, Convert, Continue, prepay and reborrow Revolving Loans
until the Revolving Commitment Termination Date as set forth herein
without premium or penalty.
(b) If the conditions to the extension of the initial Maturity
Date hereunder are satisfied pursuant to Section 2.13, all Revolving
Loans outstanding on the Revolving Commitment Termination Date, after
giving effect to any prepayment thereof made on such date, shall be
converted into term loans ("Term Loans") hereunder. No additional Term
Loans shall be made hereunder. Subject to the terms and conditions set
forth in this Agreement, each Lender severally agrees to Convert and
Continue Term Loans until the
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Maturity Date as Borrower may from time to time request; provided,
however, that the Outstanding Obligations of each Lender shall not
exceed such Lender's Commitment, and the Outstanding Obligations of all
Lenders shall not exceed the Combined Commitments at any time. Subject
to the foregoing and the other terms and conditions hereof, Borrower
may Convert, Continue, and prepay Term Loans until the Maturity Date as
set forth herein without premium or penalty. Term Loans that are repaid
or prepaid may not be reborrowed.
(c) Loans made by each Lender shall be evidenced by one or
more loan accounts or records maintained by such Lender in the Ordinary
Course of Business. Such Lender's Loans shall be evidenced by one or
more Notes, instead of or in addition to loan accounts. Each such
Lender may attach schedules to its Note(s) and endorse thereon the
date, amount and maturity of its Committed Loans and payments with
respect thereto. Such loan accounts, records or Notes shall be
conclusive absent manifest error of the amount of such Loans and
payments thereon. Any failure so to record or any error in doing so
shall not, however, limit or otherwise affect the obligation of
Borrower to pay any amount owing with respect to the Loans.
(d) Anything contained in this Agreement to the contrary
notwithstanding, the Committed Loans and the Combined Commitment shall
be subject to the following additional limitations:
(i) in no event shall the aggregate principal amount
of outstanding Committed Loans, the proceeds of which are used
to finance Construction/Renovation, exceed $100,000,000; and
(ii) in no event shall the Outstanding Obligations at
any time exceed the lesser of (x) the Combined Commitments
then in effect and (y) an amount equal to 300% of the Free
Corporate Cash Flow for the four fiscal quarter period most
recently ended on or before such time of determination.
2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF COMMITTED LOANS.
(a) Borrower may irrevocably request a Borrowing, Conversion
or Continuation of Committed Loans in a Minimum Amount therefor by
delivering a Request for Extension of Credit therefor by Requisite
Notice to Administrative Agent not later than the Requisite Time
therefor; provided, however, that Borrower may not make more than three
(3) Borrowings of Committed Loans in any given calendar month.
Immediately after any telephonic notice of a Borrowing, Borrower shall
provide Administrative
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Agent with a written notice thereof, signed by a Responsible Officer.
All Borrowings, Conversions and Continuations shall constitute Base
Rate Loans unless properly and timely otherwise designated as set forth
in the prior sentence.
(b) Following receipt of a Request for Extension of Credit,
Administrative Agent shall promptly notify each Lender of its Pro Rata
Share thereof by Requisite Notice. In the case of a Borrowing of Loans,
each Lender shall make the funds for its Loan available to
Administrative Agent at Administrative Agent's Office not later than
the Requisite Time therefor on the Business Day specified in such
Request for Extension of Credit. Upon satisfaction of the applicable
conditions set forth in Section 4, all funds so received shall be made
available to Borrower in like funds received.
(c) Administrative Agent shall promptly notify Borrower and
Lenders of the interest rate applicable to any Loan other than a Base
Rate Loan upon determination of same.
(d) Except as otherwise provided herein, an Offshore Rate Loan
may be Continued or Converted only on the last day of the Interest
Period for such Offshore Rate Loan. No Loans may be requested as,
Converted into or Continued as Offshore Rate Loans during the existence
of a Default or Event of Default. During the existence of a Default or
Event of Default, the Requisite Lenders may demand that any or all of
the then outstanding Offshore Rate Loans be Converted into Base Rate
Loans on the last day of the applicable Interest Period. Such
Conversion shall be effective upon the last day of the applicable
Interest Period and after notice has been given to Borrower and shall
continue so long as such Default or Event of Default continues to
exist.
(e) If a Loan is to be made on the same date that another Loan
is due and payable, Borrower or Lenders, as the case may be, shall make
available to Administrative Agent the net amount of funds giving effect
to both such Loans and the effect for purposes of this Agreement shall
be the same as if separate transfers of funds had been made with
respect to each such Loan.
(f) The failure of any Lender to make any Loan on any date
shall not relieve any other Lender of any obligation to make a Loan on
such date, but no Lender shall be responsible for the failure of any
other Lender to so make its Loan.
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2.03 SWING LINE LOANS.
(a) Subject to the terms and conditions set forth in this
Agreement, Swing Line Lender agrees to make Swing Line Loans until the
Revolving Commitment Termination Date as Borrower may from time to time
request; provided, however, that the aggregate outstanding principal
amount of Swing Line Loans shall not exceed the Swing Line Commitment
at any time; provided further that in no event shall the Outstanding
Obligations at any time exceed the lesser of (x) the Combined
Commitments then in effect and (y) an amount equal to 300% of the Free
Corporate Cash Flow for the four fiscal quarter period most recently
ended on or before such time of determination. Swing Line Loans shall
constitute Loans for all purposes hereunder. Subject to the foregoing
and the other terms and conditions hereof, Borrower may borrow, prepay
and reborrow Swing Line Loans as set forth herein until the Revolving
Commitment Termination Date without premium or penalty.
(b) Swing Line Loans made by Swing Line Lender shall be
evidenced by a loan account or records maintained by Swing Line Lender
in the Ordinary Course of Business. Upon the request of Swing Line
Lender, Swing Line Lender's Swing Line Loans may be evidenced by a
Swing Line Note, instead of or in addition to loan accounts. Swing Line
Lender may attach schedules to its Swing Line Note and endorse thereon
the date, amount and maturity of its Swing Line Loans and payments with
respect thereto. Such loan accounts, records or Swing Line Note shall
be conclusive absent manifest error of the amount of such Swing Line
Loans and payments thereon. Any failure so to record or any error in
doing so shall not, however, limit or otherwise affect the obligation
of Borrower to pay any amount owing with respect to the Swing Line
Loans.
2.04 BORROWINGS OF SWING LINE LOANS.
(a) Borrower may irrevocably request a Borrowing of Swing Line
Loans in a Minimum Amount therefor by delivering a Request for
Extension of Credit therefor by Requisite Notice to Administrative
Agent and Swing Line Lender not later than the Requisite Time therefor.
All Borrowings of Swing Line Loans shall constitute Base Rate Loans.
(b) Upon satisfaction of the applicable conditions set forth
in Section 4, Swing Line Lender shall make the funds for the Swing Line
Loan available to Borrower not later than the Requisite Time therefor
by deposit in such of Borrower's accounts with Swing Line Lender in Los
Angeles,
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California, as Borrower designates in writing, on the Business Day
specified in such Request for Extension of Credit.
(c) If necessary to meet Borrower's funding deadlines,
Administrative Agent may treat any Request for Extension of Credit as a
request for a Swing Line Loan from Borrower and Swing Line Lender may
fund it as a Swing Line Loan. Within two (2) Business Days after each
Swing Line Loan is funded, Swing Line Lender and Administrative Agent
shall request that each Lender, and each Lender shall, on the first
(1st) Business Day after such request is made, prepay one or more Swing
Line Loans in an amount equal to such Lender's Pro Rata Share of such
Swing Line Loans by funding under such Lender's Commitment, such
purchase to be made in accordance with the terms of Section 2.01 of
this Agreement just as if such Lender were funding a Base Rate Loan
directly to Borrower under its Commitment (such that all Lenders other
than Swing Line Lender shall fund only under their respective
Commitments). Unless Administrative Agent had actual knowledge when
Swing Line Lender funded a Swing Line Loan that Borrower had not
satisfied the conditions in this Agreement to obtain a borrowing, each
Lender's obligation to prepay the Swing Line Loans shall be absolute
and unconditional and shall not be affected by any circumstance,
including, without limitation (i) any set-off, counterclaim,
recoupment, defense, or other right which such Lender or any other
Person may have against Swing Line Lender or any other Person for any
reason whatsoever, (ii) the occurrence or continuance of a Default or
Event of Default or the termination of any Lender's Commitment, (iii)
the occurrence of any Material Adverse Effect, (iv) any breach of this
Agreement or any other Loan Document by Borrower, any Borrower Party,
Administrative Agent, or any other Lender, or (v) any other
circumstance, happening, or event whatsoever, whether or not similar to
any of the foregoing. Any portion of a Swing Line Loan not so prepaid
may be treated by Swing Line Lender as a Loan which was not funded by
the non-purchasing Lenders as contemplated in Section 2.11(d) of this
Agreement, and as a funding by Swing Line Lender under the Combined
Commitments in excess of Swing Line Lender's Commitment. Each Swing
Line Loan, once so prepaid, shall cease to be a Swing Line Loan for the
purposes of this Agreement, but shall be deemed a borrowing made under
the Combined Commitments and each Lender's Commitment; provided,
however, that so long as Bank of America is both Administrative Agent
and Swing Line Lender, no Lender shall be obligated to prepay any Swing
Line Loan for which Borrower has not satisfied the applicable
conditions precedent set forth in Section 4 hereof.
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2.05 LETTERS OF CREDIT.
(a) THE LETTER OF CREDIT COMMITMENT. Subject to the terms and
conditions hereof, at any time and from time to time from the Closing
Date through the Letter of Credit Expiration Date, Issuing Lender shall
take such Letter of Credit Actions under the Commitments as Borrower
may request; provided, however, that (i) the Outstanding Obligations of
each Lender shall not exceed such Lender's Commitment, (ii) the
Outstanding Obligations of all Lenders shall not exceed at any time the
lesser of (x) Combined Commitments at such time and (y) an amount equal
to 300% of the Free Corporate Cash Flow for the four fiscal quarter
period most recently ended on or before such time of determination, and
(iii) the Letter of Credit Usage shall not at any time exceed the
Letter of Credit Commitment at such time. Each Letter of Credit Action
shall be in a form reasonably acceptable to Issuing Lender and shall
not violate any policies of Issuing Lender. No Letter of Credit shall
expire after the Letter of Credit Expiration Date. If any Letter of
Credit Usage remains outstanding after the Letter of Credit Expiration
Date, Borrower shall, not later than the Letter of Credit Expiration
Date, deposit Cash in an amount equal to such Letter of Credit Usage in
a Letter of Credit Cash Collateral Account.
(b) REQUESTING LETTER OF CREDIT ACTIONS. Borrower may
irrevocably request a Letter of Credit Action by delivering a Letter of
Credit Application therefor to Issuing Lender, with a copy to
Administrative Agent (who shall notify Lenders), by Requisite Notice
not later than the Requisite Time therefor. Unless Administrative Agent
notifies Issuing Lender that such Letter of Credit Action is not
permitted hereunder or Issuing Lender determines that such Letter of
Credit Action is contrary to any Laws or policies of Issuing Lender or
does not otherwise conform to the requirements of this Agreement,
Issuing Lender shall effect such Letter of Credit Action. This
Agreement shall control in the event of any conflict with any Letter of
Credit Application. Upon the issuance of a Letter of Credit, each
Lender shall be deemed to have purchased a pro rata participation in
such Letter of Credit from Issuing Lender in an amount equal to that
Lender's Pro Rata Share.
(c) REIMBURSEMENT OF PAYMENTS UNDER LETTERS OF CREDIT.
Borrower shall reimburse Issuing Lender through Administrative Agent
for any payment that Issuing Lender makes under a Letter of Credit on
or before the date of such payment; provided, however, that if the
conditions precedent set forth in Section 4 can be satisfied, Borrower
may request a Borrowing of Committed Loans to reimburse Issuing Lender
for such payment on or before the date thereof by complying with
Section 2.02, or Borrower may allow a
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deemed Borrowing of Committed Loans which are Base Rate Loans to take
place on such payment date pursuant to subsection (e) below.
(d) FUNDING BY LENDERS WHEN ISSUING LENDER NOT REIMBURSED. If
Borrower fails to timely make the payment required pursuant to
subsection (c) above, Issuing Lender shall notify Administrative Agent
of such fact and the amount of such unreimbursed payment.
Administrative Agent shall promptly notify each Lender of its Pro Rata
Share of such amount by Requisite Notice. Each Lender shall make funds
in an amount equal its Pro Rata Share of such amount available to
Administrative Agent at Administrative Agent's Office not later than
the Requisite Time on the Business Day specified by Administrative
Agent. The obligation of each Lender to so reimburse Issuing Lender
shall be absolute and unconditional and shall not be affected by the
occurrence of an Event of Default or any other occurrence or event. Any
such reimbursement shall not relieve or otherwise impair the obligation
of Borrower to reimburse Issuing Lender for the amount of any payment
made by Issuing Lender under any Letter of Credit, together with
interest as provided herein.
(e) NATURE OF LENDERS' FUNDING. If the conditions precedent
set forth in Section 4 can be satisfied (except for the giving of a
Request for Extension of Credit) on the date Borrower is obligated to
make, but fails to make, a reimbursement of a payment under a Letter of
Credit, the funding by Lenders pursuant to subsection (d) above shall
be deemed to be part of a Borrowing of Committed Loans which are Base
Rate Loans (without regard to the Minimum Amount therefor) requested by
Borrower. If the conditions precedent set forth in Section 4 cannot be
satisfied on the date Borrower is obligated to make, but fails to make,
a reimbursement of a payment under a Letter of Credit, the funding by
Lenders pursuant to subsection (d) above shall be deemed to be a
funding by each Lender of its participation in such Letter of Credit,
and such funds shall be payable by Borrower upon demand and shall bear
interest at the Default Rate, and each Lender making such funding shall
thereupon acquire a pro rata participation, to the extent of such
reimbursement, in the claim of Issuing Lender against Borrower in
respect of such payment and shall share, in accordance with that pro
rata participation, in any payment made by Borrower with respect to
such claim.
(f) [INTENTIONALLY OMITTED]
(g) OBLIGATIONS ABSOLUTE. The obligation of Borrower to pay to
Issuing Lender the amount of any payment made by Issuing Lender under
any Letter of Credit shall be absolute, unconditional, and irrevocable.
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Without limiting the foregoing, Borrower's obligation shall not be
affected by any of the following circumstances:
(i) any lack of validity or enforceability of the
Letter of Credit, this Agreement, or any other agreement or
instrument relating thereto;
(ii) any amendment or waiver of or any consent to
departure from the Letter of Credit, this Agreement, or any
other agreement or instrument relating thereto;
(iii) the existence of any claim, setoff, defense, or
other rights which Borrower may have at any time against
Issuing Lender, Administrative Agent or any Lender, any
beneficiary of the Letter of Credit (or any persons or
entities for whom any such beneficiary may be acting) or any
other Person, whether in connection with the Letter of Credit,
this Agreement, or any other agreement or instrument relating
thereto, or any unrelated transactions;
(iv) any demand, statement, or any other document
presented under the 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 so long as any such document appeared to comply
with the terms of the Letter of Credit;
(v) payment by Issuing Lender in good faith under the
Letter of Credit against presentation of a draft or any
accompanying document which does not strictly comply with the
terms of the Letter of Credit; or any payment made by Issuing
Lender under any Letter of Credit to any Person purporting to
be a trustee in bankruptcy, debtor-in-possession, assignee for
the benefit of creditors, liquidator, receiver or other
representative of or successor to any beneficiary or any
transferee of any Letter of Credit, including any arising in
connection with any proceeding under any Debtor Relief Laws;
(vi) the existence, character, quality, quantity,
condition, packing, value or delivery of any Property
purported to be represented by documents presented in
connection with any Letter of Credit or for any difference
between any such Property and the character, quality,
quantity, condition, or value of such Property as described in
such documents;
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<PAGE> 53
(vii) the time, place, manner, order or contents of
shipments or deliveries of Property as described in documents
presented in connection with any Letter of Credit or the
existence, nature and extent of any insurance relative
thereto;
(viii) the solvency or financial responsibility of
any party issuing any documents in connection with a Letter of
Credit;
(ix) any failure or delay in notice of shipments or
arrival of any Property;
(x) any error in the transmission of any message
relating to a Letter of Credit not caused by Issuing Lender,
or any delay or interruption in any such message;
(xi) any error, neglect or default of any
correspondent of Issuing Lender in connection with a Letter of
Credit;
(xii) any consequence arising from acts of God, wars,
insurrections, civil unrest, disturbances, labor disputes,
emergency conditions or other causes beyond the control of
Issuing Lender;
(xiii) so long as Issuing Lender in good faith
determines that the document appears to comply with the terms
of the Letter of Credit, the form, accuracy, genuineness or
legal effect of any contract or document referred to in any
document submitted to Issuing Lender in connection with a
Letter of Credit; and
(xiv) where Issuing Lender has acted in good faith
and any other circumstances whatsoever.
In addition, Borrower will promptly examine a copy of each Letter of
Credit and amendments thereto delivered to it and, in the event of any claim of
noncompliance with Borrower's instructions or other irregularity, Borrower will
immediately notify Issuing Lender in writing. Borrower shall be conclusively
deemed to have waived any such claim against Issuing Lender and its
correspondents unless such notice is given as aforesaid.
(h) ROLE OF ISSUING LENDER. Each Lender and Borrower Party
agree that, in paying any drawing under a Letter of Credit, Issuing
Lender shall not have any responsibility to obtain any document (other
than any sight draft and certificates expressly required by the Letter
of Credit) or to ascertain or inquire as to the validity or accuracy of
any such document or the
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<PAGE> 54
authority of the Person executing or delivering any such document. No
Administrative Agent-Related Person nor any of the respective
correspondents, participants or assignees of Issuing Lender shall be
liable to any Lender for any action taken or omitted in connection
herewith at the request or with the approval of Lenders or the
Requisite Lenders, as applicable; any action taken or omitted in the
absence of gross negligence or willful misconduct; or the due
execution, effectiveness, validity or enforceability of any
document or instrument related to any Letter of Credit. Borrower hereby
assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided,
however, that this assumption is not intended to, and shall not,
preclude Borrower's pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other
agreement. No Administrative Agent-Related Person, nor any of the
respective correspondents, participants or assignees of Issuing Lender,
shall be liable or responsible for any of the matters described in
subsection (g) above. In furtherance and not in limitation of the
foregoing, Issuing Lender may accept documents that appear on their
face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary, and Issuing
Lender shall not be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or
assign a Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason.
(i) APPLICABILITY OF INTERNATIONAL STANDBY PRACTICES 1998.
Unless otherwise expressly agreed by Issuing Lender and Borrower when a
Letter of Credit is issued, the rules of the "International Standby
Practices 1998" or such later revision as may be published by the
Institute of International Banking Law and Practice, subject to
applicable Laws, shall be deemed a part of this Section and shall apply
to such Letter of Credit.
(j) FEES AND OTHER CHARGES. Borrower agrees to pay the
following amounts with respect to Letters of Credit issued hereunder:
(i) with respect to each Letter of Credit, a letter
of credit fee, payable to Administrative Agent for the account
of Lenders, equal to the Applicable Margin for Offshore Rate
Loans, stated as a percentage per annum, of the daily amount
available to be drawn under such Letter of Credit, each such
letter of credit fee to be payable in arrears on and to (but
excluding) each March 31, June 30, September 30 and December
31 of each year and computed on the basis of a 360-day year
for the actual number of days elapsed; and
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<PAGE> 55
(ii) with respect to the issuance, amendment or
transfer of each Letter of Credit and each payment of a
drawing made thereunder (without duplication of the fees
payable under clause (a) above), documentary and processing
charges payable directly to the applicable Issuing Lender for
its own account in accordance with such Issuing Lender's
standard schedule for such charges in effect at the time of
such issuance, amendment, transfer or payment, as the case may
be.
For purposes of calculating any fees payable under clause (a) of this
Section 2.05(j), the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination. Promptly upon receipt by Administrative Agent of any amount
described in clause (a) of this Section 2.05(j), Administrative Agent shall
distribute to each Lender its Pro Rata Share of such amount.
(k) EXISTING LETTERS OF CREDIT. Each Existing Letter of Credit
outstanding on the Closing Date shall be deemed to be a Letter of
Credit hereunder and all unpaid reimbursement obligations owed in
respect of amounts drawn on Existing Letters of Credit shall be
reimbursement obligations hereunder.
2.06 PREPAYMENTS; MANDATORY AMORTIZATION.
(a) Voluntary Prepayments.
Upon Requisite Notice to Administrative Agent not
later than the Requisite Time therefor, Borrower may at any
time and from time to time voluntarily prepay Committed Loans
and/or Swing Line Loans in part in the Minimum Amount therefor
or in full without premium or penalty. Administrative Agent
will promptly notify each Lender thereof and of such Lender's
Pro Rata Share of such prepayment. Any prepayment of an
Offshore Rate Loan shall be accompanied by all accrued
interest thereon, together with the costs set forth in Section
3.05.
(b) Mandatory Prepayments.
(i) Free Corporate Cash Flow. If at any time the
Outstanding Obligations exceeds the lesser of (x) the Combined
Commitments then in effect and (y) an amount equal to 300% of
the Free Corporate Cash Flow for the four fiscal quarter
period most recently ended on or before such time of
determination, then Borrower shall immediately prepay Loans in
an amount sufficient to reduce the
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<PAGE> 56
Outstanding Obligations to the lesser of (x) the Combined
Commitments then in effect and (y) an amount equal to 300% of
the Free Corporate Cash Flow for the four fiscal quarter
period most recently ended on or before such time of
determination.
(ii) Other Limitations on Combined Commitments. If
for any reason the Outstanding Obligations exceed the
Outstanding Obligations as reduced by this Section or because
of any limitation set forth in this Agreement or otherwise,
Borrower shall immediately prepay Loans and/or deposit Cash in
a Letter of Credit Cash Collateral Account in an aggregate
amount equal to such excess.
(iii) Net Issuance Proceeds. No later than the fourth
Business Day after the date of receipt by Borrower or any of
its Subsidiaries of Net Issuance Proceeds from the issuance of
Stock, Partnership Units or Debt Securities of Borrower or any
of its Subsidiaries after the Closing Date, Borrower shall
prepay the Loans in an aggregate amount equal to 100% of such
Net Issuance Proceeds.
(iv) Net Disposition Proceeds. No later than the
fourth Business Day after the date of receipt by the REIT,
Borrower, the Guarantors or any of their Subsidiaries of Net
Disposition Proceeds from any Disposition which is not an
Ordinary Course Disposition after the Closing Date, Borrower
shall prepay the Loans in an aggregate amount equal to 100% of
such Net Disposition Proceeds.
(v) Net Refinancing Proceeds. No later than the
fourth Business Day after the date of receipt by the REIT,
Borrower or any of their Subsidiaries of Net Refinancing
Proceeds from any Refinancing after the Closing Date, Borrower
shall prepay all Term Loans in an aggregate amount equal to
100% of such Net Refinancing Proceeds.
(c) Application of Prepayments.
(i) Unless otherwise instructed by Borrower, any
prepayments pursuant to Section 2.06(a) or Section 2.06(b)
made (1) 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 Offshore Rate Loans
then outstanding, in the forward order of such Offshore Rate
Loans' stated maturities and (2) on the last day of an
Interest Period for any Offshore Rate Loan shall be applied
first to such maturing Offshore Rate Loan, then to any Base
Rate Loans
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<PAGE> 57
outstanding, and then to any other Offshore Rate Loans then
outstanding, in the forward order of such Offshore Rate Loans'
stated maturities.
(ii) In the event that Borrower makes any extension
of the Maturity Date pursuant to Section 2.13, then any
prepayments pursuant to Section 2.06(a) or Section 2.06(b)
shall be applied to reduce the scheduled installments of
principal of the Loans set forth in Section 2.06(d) in inverse
order of maturity.
(d) Scheduled Repayments. In the event that Borrower makes any
extension of the Maturity Date pursuant to Section 2.13, Borrower shall
make principal payments on the Outstanding Obligations on each of the
following dates in the aggregate amount, expressed as a percentage of
the Lenders' aggregate principal amount of Outstanding Obligations
outstanding as of the first Extension Effective Date (as defined in
Section 2.13(b)), set forth opposite such date in the table set forth
below:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
SCHEDULED REPAYMENT SCHEDULED REPAYMENT SCHEDULED REPAYMENT
DATE OF OUTSTANDING OF OUTSTANDING
OBLIGATIONS IN THE EVENT OBLIGATIONS IN THE EVENT
OF ONE EXTENSION OF THE OF TWO EXTENSIONS OF
MATURITY DATE PURSUANT THE MATURITY DATE
TO SECTION 2.13 PURSUANT TO SECTION 2.13
- ----------------------------- ------------------------------------- ----------------------------------
<S> <C> <C>
October 31, 2001 8.33333% 8.33333%
January 31, 2002 8.33333% 8.33333%
April 30, 2002 8.33333% 8.33333%
July 31, 2002 75.00001% 8.33333%
- ----------------------------- ------------------------------------- ----------------------------------
October 31, 2002 n/a 8.33333%
January 31, 2003 n/a 8.33333%
April 30, 2003 n/a 8.33333%
July 31, 2003 n/a 41.66669%
- ----------------------------- ------------------------------------- ----------------------------------
TOTAL 100% 100%
- --------------------------------------------------------------------------------------------------------
</TABLE>
; provided that the Outstanding Obligations and other amounts owed hereunder
with respect to the Loans shall be paid in full no later than the Maturity Date
and the final installment payable by Borrower in respect of the Loans on such
date shall be in an amount sufficient to repay all amounts owing by Borrower
under this Agreement with respect to the Loans.
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<PAGE> 58
2.07 REDUCTION OR TERMINATION OF COMMITMENTS.
Upon Requisite Notice to Administrative Agent not later than the
Requisite Time therefor, Borrower may at any time and from time to time, without
premium or penalty, permanently and irrevocably reduce the Commitments in a
Minimum Amount therefor to an amount not less than the Outstanding Obligations
at such time or terminate the Commitments. Administrative Agent shall promptly
notify Lenders of any such request for reduction or termination of the
Commitments. Each Lender's Commitment shall be reduced by an amount equal to
such Lender's Pro Rata Share times the amount of such reduction.
2.08 PRINCIPAL AND INTEREST; DEFAULT RATE.
(a) If not sooner paid (including repayments pursuant to
Section 2.06), Borrower agrees to pay the outstanding principal amount
of each Loan on the Maturity Date.
(b) Subject to subsection (c) below, Borrower shall pay
interest on the unpaid principal amount of each Loan (before, during
and after a Default or an Event of Default, before and after maturity,
before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Laws) from the date borrowed until
paid in full (whether by acceleration or otherwise) on each applicable
Interest Payment Date at a rate per annum equal to the interest rate
determined in accordance with the definition of such type of Loan, plus
the Applicable Margin.
(c) If any amount payable by any Borrower Party under any Loan
Document is not paid when due (without regard to any applicable grace
periods), it shall thereafter bear interest (after as well as before
entry of judgment thereon to the extent permitted by law) at a
fluctuating interest rate per annum at all times equal to the Default
Rate. Accrued and unpaid interest on past due amounts (including,
without limitation, interest on past due interest) shall be payable
upon demand.
2.09 FEES.
(a) Facility Fee. Borrower shall pay to Administrative Agent,
for the account of each Lender pro rata according to its Pro Rata
Share, a facility fee equal to 0.200% per annum times the Combined
Commitments as in effect when such payment is due. The facility fee
shall be payable in advance on each annual anniversary of the Closing
Date to but excluding the Revolving Commitment Termination Date. No
facility fee shall be payable on or after any extension of the Maturity
Date pursuant to Section 2.13.
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Such facility fees are fully earned on the date paid. The facility fee
paid to each Lender is solely for its own account and is nonrefundable.
(b) Commitment Fees. Borrower shall from time to time pay to
Administrative Agent, for the account of each Lender pro rata according
to its Pro Rata Share, commitment fees in the amounts and on the dates
set forth in that certain letter between Borrower and Administrative
Agent dated August 16, 1999 concerning commitment fees. Such commitment
fees are fully earned on the date paid and are nonrefundable.
(c) Agency Fees. Borrower shall pay to Administrative Agent an
agency fee in such amounts and at such times as agreed upon by letter
agreement between Borrower and Administrative Agent and in the event of
any extension of the Maturity Date pursuant to Section 2.13, Borrower
shall continue to pay such agency fee to Administrative Agent in
accordance with such letter agreement. The agency fee is for the
services to be performed by Administrative Agent in acting as
Administrative Agent and is fully earned on the date paid. The agency
fee paid to Administrative Agent is solely for its own account and is
nonrefundable.
(d) Arrangement Fee. On the Closing Date, Borrower shall pay
to each Co-Lead Arranger an arrangement fee in the amount agreed upon
by letter agreement between Borrower and each Co-Lead Arranger. Such
arrangement fee is for the services of the Co-Lead Arranger in
arranging the credit facilities under this Agreement and is fully
earned on the date paid. The arrangement fee paid to each Co-Lead
Arranger is solely for its own account and is nonrefundable.
(e) Extension Fee. If the Maturity Date shall be extended in
accordance with Section 2.13, Borrower shall pay to Administrative
Agent the fees specified in Section 2.13(d).
2.10 COMPUTATION OF INTEREST AND FEES.
Computation of all types of interest and all fees shall be calculated
on the basis of a year of 360 days and the actual number of days elapsed, which
results in a higher yield to Lenders than a method based on a year of 365 or 366
days. Interest shall accrue on each Loan for the day on which the Loan is made,
and shall not accrue on a Loan, or any portion thereof, for the day on which the
Loan or such portion is paid, provided that any Loan that is repaid on the same
day on which it is made shall bear interest for one day.
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<PAGE> 60
2.11 MAKING PAYMENTS.
(a) Except as otherwise provided herein, all payments by
Borrower or any Lender shall be made to Administrative Agent at
Administrative Agent's Office not later than the Requisite Time for
such type of payment. All payments received after such Requisite Time
shall be deemed received on the next succeeding Business Day. All
payments shall be made in immediately available funds in lawful money
of the United States of America. All payments by Borrower shall be made
without condition or deduction for any counterclaim, defense,
recoupment or setoff.
(b) Upon satisfaction of any applicable terms and conditions
set forth herein, Administrative Agent shall promptly make any amounts
received in accordance with the prior subsection available in like
funds received as follows: (i) if payable to Borrower, by crediting the
Designated Deposit Account, and (ii) if payable to any Lender, by wire
transfer to such Lender at the address specified in Schedule 10.02, as
amended from time to time by such Lender.
(c) Subject to the definition of "Interest Period," if any
payment to be made by any Borrower Party shall come due on a day other
than a Business Day, payment shall instead be considered due on the
next succeeding Business Day, and such extension of time shall be
reflected in computing interest and fees.
(d) Except as otherwise provided in Section 2.05(c) with
respect to Borrower reimbursing drawings under Letters of Credit,
unless Borrower or any Lender has notified Administrative Agent prior
to the date any payment to be made by it is due, that it does not
intend to remit such payment, Administrative Agent may, in its
discretion, assume that Borrower or Lender, as the case may be, has
timely remitted such payment and may, in its discretion and in reliance
thereon, make available such payment to the Person entitled thereto. If
such payment was not in fact remitted to Administrative Agent in
immediately available funds, then:
(i) if Borrower failed to make such payment, each
Lender shall forthwith on demand repay to Administrative Agent
the amount of such assumed payment made available to such
Lender, together with interest thereon in respect of each day
from and including the date such amount was made available by
Administrative Agent to such Lender to the date such amount is
repaid to Administrative Agent at the Federal Funds Rate; and
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<PAGE> 61
(ii) if any Lender failed to make such payment,
Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender. If such
Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent
promptly shall notify Borrower, and Borrower shall pay such
corresponding amount to Administrative Agent. Administrative
Agent also shall be entitled to recover from such Lender
interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by
Administrative Agent to Borrower to the date such
corresponding amount is recovered by Administrative Agent, at
a rate per annum equal to the daily Federal Funds Rate.
Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any
rights which Administrative Agent or Borrower may have against
any Lender as a result of any default by such Lender
hereunder.
2.12 FUNDING SOURCES.
Nothing in this Agreement shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
2.13 EXTENSION OF MATURITY DATE.
(a) Not earlier than ninety (90) days prior to, nor later than
sixty (60) days prior to the Maturity Date then in effect, Borrower may
request by Requisite Notice made to Administrative Agent (who shall
promptly notify Lenders) a one year extension of the Maturity Date.
Such request shall include a certificate signed by a Responsible
Officer stating that (i) the representations and warranties contained
in Section 5 are true and correct on and as of the date of such
certificate and (ii) no Default or Event of Default exists.
(b) If the statements in such certificate are true and
correct, the Maturity Date shall be extended to the same date in the
following calendar year, effective as of a date to be determined by
Administrative Agent and Borrower (the "Extension Effective Date"), and
Administrative Agent shall promptly notify Lenders thereof. On or prior
to the Extension Effective Date, Borrower shall deliver to
Administrative Agent, in form and substance satisfactory to
Administrative Agent: (i) corporate resolutions and incumbency
certificates of Borrower and any Guarantor dated as of the Extension
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<PAGE> 62
Effective Date approving such extension, and (ii) new or amended Notes,
if requested by any new or affected Lender, evidencing such new or
extended Commitments.
(c) Only two extensions of the Maturity Date may be made, and
the Maturity Date shall not, in any event, be extended beyond July 31,
2003.
(d) Borrower shall pay to Administrative Agent, for the
account of each Lender pro rata according to its Pro Rata Share, an
extension fee equal to (i) in the case of the first extension of the
Maturity Date made pursuant to Section 2.13, 0.25% times the
Outstanding Obligations on the first day of the new extension period,
and (ii) in the case of the second extension of the Maturity Date made
pursuant to Section 2.13, 0.35% times the Outstanding Obligations on
the first day of the new extension period. The extension fee shall be
payable on the first day of the new extension period and such extension
fees are fully earned on the date paid. The extension fee paid to each
Lender is solely for its own account and is nonrefundable.
(e) This section shall supercede any provisions in Section
10.01 to the contrary.
2.14 INCREASE IN COMMITMENTS.
(a) Borrower may from time to time until sixty (60) days after
the Closing Date request an increase in the Combined Commitments up to
an aggregate of $300,000,000 upon Requisite Notice to Administrative
Agent (who shall promptly notify Lenders). Such request shall include a
certificate signed by a Responsible Officer stating that (i) the
representations and warranties contained in Section 5 are true and
correct on and as of the date of such certificate, and (ii) no Default
or Event of Default exists. Each Lender shall notify Administrative
Agent by Requisite Notice whether (x) it agrees to increase its
Commitment by an amount equal to or less than its Pro Rata Share of
such requested increase, or (y) it does not agree to any increase in
its Commitment. Any Lender not responding within the above time period
shall be deemed to have elected not to increase its Commitment.
Administrative Agent shall, after receiving notification from all
Lenders or the expiration of such period, whichever is earlier, notify
Borrower and Lenders of the results thereof.
(b) If any Lender declines, or is deemed to have declined, to
participate in any such increase to the full extent of its Pro Rata
Share thereof (a "Declining Lender"), Borrower may request, through
Administrative
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Agent, that one or more other Lenders or Eligible Assignees, in their
sole discretion, provide Commitment(s) equal to such shortfall pursuant
to Section 10.04.
(c) If any Commitments are increased in accordance with this
Section, Administrative Agent and Borrower shall determine the
effective date of such increase (the "Increase Effective Date"), and
Administrative Agent shall promptly notify Lenders thereof. On or prior
to the Increase Effective Date, Borrower shall deliver to
Administrative Agent, in form and substance satisfactory to
Administrative Agent: (i) corporate resolutions and incumbency
certificates of Borrower and any Guarantor dated as of the Increase
Effective Date approving such increase in sufficient copies for each
Lender, and (ii) new or amended Notes, if requested by any new or
affected Lender, evidencing such new or revised Commitments.
Administrative Agent shall distribute an amended Schedule 2.01 (which
shall thereafter be incorporated into this Agreement), to reflect any
changes in Lenders, the Commitments and each Lender's Pro Rata Share
thereof.
(d) On the Increase Effective Date of any increase in the
Commitments pursuant to this Section 2.14, Borrower (a) shall borrow
Committed Loans from each new or affected Lender that has increased its
Commitment and (ii) simultaneously therewith, repay Committed Loans
owed to each Lender in amounts such that, after giving effect to such
borrowings and repayments, the Committed Loans of each Lender shall be
in an amount directly proportional to such Lender's Pro Rata Share of
all Committed Loans outstanding after giving effect to such repayment.
Each such repayment shall be made together with all interest accrued on
such Committed Loans to the date of repayment. To the extent that any
such repayment results in loss or expenses to any Lender as a result of
the prepayment of any Offshore Loan on a date other than the last day
of the applicable Interest Period, Borrower shall be responsible for
such loss or expense pursuant to Section 3.05. Anything contained
herein or in the other Loan Documents to the contrary notwithstanding,
the parties hereto agree that the borrowings and repayments of
Committed Loans made pursuant to this Section 2.14(d) shall not be made
in proportion to each Lender's Pro Rata Share (as would otherwise be
required pursuant to Sections 2.01 and 2.02) but instead shall be made
in accordance with the terms of this Section 2.14(d) such that, after
giving effect thereto, the Committed Loans of each Lender shall be in
an amount directly proportional to such Lender's Pro Rata Share of all
Committed Loans then outstanding.
(e) This section shall supercede any provisions in Section
10.01 to the contrary.
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SECTION 3.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Any and all payments by Borrower to or for the account of
Administrative Agent or any Lender under any Loan Document shall be
made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in
the case of Administrative Agent and any Lender, taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction under
the Laws of which Administrative Agent or such Lender is organized,
maintains a Lending Office or otherwise does business, or any political
subdivision thereof (all such non-excluded taxes, duties, levies,
imposts, deductions, charges, withholdings, and liabilities being
hereinafter referred to as a "Tax" or "Taxes"). If Borrower shall be
required by any Laws to deduct any Taxes from or in respect of any sum
payable under any Loan Document to Administrative Agent or any Lender,
(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), Administrative Agent and
such Lender receives an amount equal to the sum it would have received
had no such deductions been made (such increase, an "Additional
Amount"), (ii) Borrower shall make such deductions, (iii) Borrower
shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable Laws, and (iv)
Borrower shall furnish to Administrative Agent (who shall forward the
same to such Lender) the original or a certified copy of a receipt
evidencing payment thereof.
(b) In addition, Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property
taxes or charges or similar levies which arise from any payment made
under any Loan Document or from the execution or delivery of, or
otherwise with respect to, any Loan Document (hereinafter referred to
as "Other Taxes").
(c) Borrower agrees to indemnify Administrative Agent and each
Lender for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section) paid by
Administrative Agent and such Lender and any liability (including
penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted unless and except to the extent
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such Taxes or Other Taxes were imposed solely as a result of the gross
negligence or willful misconduct of Administrative Agent or Lender.
(d) 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
after the Closing Date, the date upon which such Lender
becomes a party hereto), deliver to Borrower through
Administrative 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 Borrower through Administrative 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 Borrower
through Administrative 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 Borrower's
reasonable request to that effect, deliver to Borrower such
other forms or similar documentation as may be required from
time to time by any
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applicable law, treaty, rule or regulation in order to
establish such Lender's tax status for withholding purposes.
(e) Borrower shall not be required to pay any Additional
Amounts in respect of United States Federal or state income tax
pursuant to this Section 3.01 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 this Section 3.01 in respect
of such Lending Office;
(ii) if such Lender or assignee shall have delivered
to Borrower a Form 4224 in respect of such Lending Office
pursuant to this Section 3.01, 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 Borrower 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
(iii) if such Lender or assignee shall have delivered
to Borrower a Form 1001 in respect of such Lending Office
pursuant to this Section 3.01, 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 Borrower
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.
(f) If, at any time, Borrower requests any Lender to deliver
any forms or other documentation pursuant to this Section 3.01, then
Borrower shall, on demand of such Lender, through Administrative 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.
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(g) If Borrower is required to pay Additional Amounts to
Administrative Agent or any Lender pursuant to this Section 3.01, 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
Borrower which may thereafter accrue if such change in the judgment of
such Lender is not otherwise disadvantageous to such Lender.
3.02 ILLEGALITY.
If any Lender determines that any Laws have made it unlawful, or that
any Governmental Authority has asserted that it is unlawful, for any Lender or
its applicable Lending Office to make, maintain or fund Offshore Rate Loans, or
materially restricts the authority of such Lender to purchase or sell, or to
take deposits of, Dollars in the applicable offshore Dollar market, or to
determine or charge interest rates based upon the Offshore Rate, then, on notice
thereof by Lender to Borrower through Administrative Agent, any obligation of
that Lender to make Offshore Rate Loans shall be suspended until Lender notifies
Administrative Agent and Borrower that the circumstances giving rise to such
determination no longer exist. Upon receipt of such notice, Borrower shall, upon
demand from such Lender (with a copy to Administrative Agent), prepay or Convert
all Offshore Rate Loans of that Lender, either on the last day of the Interest
Period thereof, if Lender may lawfully continue to maintain such Offshore Rate
Loans to such day, or immediately, if Lender may not lawfully continue to
maintain such Offshore Rate Loans. Each Lender agrees to designate a different
Lending Office if such designation will avoid the need for such notice and will
not, in the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender.
3.03 INABILITY TO DETERMINE RATES.
If, in connection with any Extension of Credit involving any Offshore
Rate Loan, Administrative Agent determines that (a) Dollar deposits are not
being offered to banks in the applicable offshore Dollar market for the
applicable amount and Interest Period of the requested Offshore Rate Loan, (b)
adequate and reasonable means do not exist for determining the underlying
interest rate for such Offshore Rate Loan, or (c) such underlying interest rate
does not adequately and fairly reflect the cost to Lender of funding such
Offshore Rate Loan, Administrative Agent will promptly notify Borrower and all
Lenders. Thereafter, the obligation of all Lenders to make or maintain such
Offshore Rate Loan shall be suspended until Administrative Agent revokes such
notice. Upon receipt of such notice, Borrower may revoke any pending request for
a Borrowing of Offshore Rate Loans or, failing that, be deemed to have converted
such request into a request for a Borrowing of Base Rate Loans in the amount
specified therein.
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3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY.
(a) If any Lender determines that any Laws:
(i) subject such Lender to any Tax, duty, or other
charge with respect to any Offshore Rate Loans or its
obligation to make Offshore Rate Loans, or change the basis on
which Taxes are imposed on any amounts payable to such Lender
under this Agreement in respect of any Offshore Rate Loans;
(ii) shall impose or modify any reserve, special
deposit, or similar requirement (other than the reserve
requirement utilized in the determination of the Offshore
Rate) relating to any extensions of credit or other assets of,
or any deposits with or other liabilities or commitments of,
such Lender (including its Commitment); or
(iii) shall impose on such Lender or on the offshore
Dollar interbank market any other condition affecting this
Agreement or any of such extensions of credit or liabilities
or commitments;
and the result of any of the foregoing is to increase the cost to such Lender of
making, Converting into, Continuing, or maintaining any Offshore Rate Loans or
to reduce any sum received or receivable by such Lender under this Agreement
with respect to any Offshore Rate Loans, then from time to time upon demand of
such Lender (with a copy of such demand to Administrative Agent), Borrower shall
pay to such Lender such additional amounts as will compensate such Lender for
such increased cost or reduction.
(b) If any Lender determines that any change in or the
interpretation of any Laws have the effect of reducing the rate of
return on the capital of such Lender or compliance by such Lender (or
its Lending Office) or any corporation controlling such Lender as a
consequence of such Lender's obligations hereunder (taking into
consideration its policies with respect to capital adequacy and such
Lender's desired return on capital), then from time to time upon demand
of such Lender (with a copy to Administrative Agent), Borrower shall
pay to such Lender such additional amounts as will compensate such
Lender for such reduction.
3.05 BREAKFUNDING COSTS.
Upon demand of any Lender (with a copy to Administrative Agent) from
time to time, Borrower shall promptly compensate such Lender for and hold such
Lender harmless from any loss, cost or expense incurred by it as a result of:
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(a) any Continuation, Conversion, payment or prepayment of any
Offshore Rate Loan on a day other than the last day of the Interest
Period for such Loan (whether voluntary, mandatory, automatic, by
reason of acceleration, or otherwise); or
(b) any failure by Borrower (for a reason other than the
failure of such Lender to make a Loan) to prepay, borrow, Continue or
Convert any Offshore Rate Loan on the date or in the amount notified by
Borrower;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such
Offshore Rate Loan or from fees payable to terminate the deposits from which
such funds were obtained. Borrower shall also pay any customary administrative
fees charged by such Lender in connection with the foregoing.
3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.
A certificate of Administrative Agent claiming compensation under this
Section 3 and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of clearly demonstrable error. In
determining such amount, Administrative Agent may use any reasonable averaging
and attribution methods. For purposes of this Section 3, a Lender shall be
deemed to have funded each Offshore Rate Loan at the Offshore Base Rate used in
determining the Offshore Rate for such Loan by a matching deposit or other
borrowing in the offshore Dollar interbank market, whether or not such Offshore
Rate Loan was in fact so funded.
3.07 SURVIVAL.
All of Borrower's obligations under this Section 3 shall survive
termination of the Commitments and payment in full of all Obligations.
SECTION 4.
CONDITIONS PRECEDENT TO EXTENSIONS OF CREDIT
4.01 CONDITIONS OF INITIAL EXTENSION OF CREDIT.
The obligation of each Lender to make the initial Extension of Credit
is subject to satisfaction of the following conditions precedent:
(a) Unless waived by all Lenders (or by Administrative Agent
with respect to immaterial matters, or items specified in subsections
(iv) or
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(v) below, that the Borrower has given assurances satisfactory to
Administrative Agent that they will be delivered promptly following
the Closing Date), Administrative Agent's receipt of the following,
each of which shall be originals unless otherwise specified, each
properly executed by a Responsible Officer, each dated on or about the
Closing Date and each in form and substance satisfactory to
Administrative Agent and its legal counsel:
(i) executed counterparts of this Agreement and each
other Loan Document, sufficient in number for distribution to
Administrative Agent, Lenders and Borrower;
(ii) Committed Loan Notes executed by Borrower in
favor of each Lender requesting a Committed Loan Note, each in
a principal amount equal to that Lender's Pro Rata Share,
and, if requested by Swing Line Lender, a Swing Line Note
executed by Borrower in favor of Swing Line Lender;
(iii) such certificates of resolutions or other
action, incumbency certificates and/or other certificates of
Responsible Officers of each Borrower Party as Administrative
Agent may require to establish the identities of and verify
the authority and capacity of each Responsible Officer
thereof authorized to act as a Responsible Officer thereof;
(iv) such evidence as Administrative Agent may
reasonably require to verify that each Borrower Party is duly
organized or formed, validly existing, in good standing and
qualified to engage in business in each jurisdiction in which
it is required to be qualified to engage in business,
including, without limitation, certified copies of each
Borrower Party's Organization Documents, certificates of good
standing and/or qualification to engage in business, tax
clearance certificates, and the like;
(v) a certificate signed by a Responsible Officer of
Borrower certifying that (A) the conditions specified in
Sections 4.01(c) and 4.01(d) have been satisfied and (B) there
has been no event or circumstances since the date of the
Audited Financial Statements which has a Material Adverse
Effect;
(vi) an opinion of counsel to Borrower substantially
in the form of Exhibit F hereto;
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(vii) evidence satisfactory to Administrative Agent
that Borrower shall have (a) repaid in full, terminated or
refinanced, in each case on terms and conditions satisfactory
to Administrative Agent, all Indebtedness outstanding under
the Existing Credit Agreement and all of the other existing
Indebtedness to be refinanced described in Schedule 4.01, (b)
terminated any commitments to lend or make other extensions of
credit thereunder, (c) delivered to Administrative Agent all
documents or instruments necessary to release all Liens
securing such Indebtedness or other obligations of Borrower
and its Subsidiaries thereunder, and (d) made arrangements
satisfactory to Administrative Agent with respect to the
cancellation or renewal or replacement of any letters of
credit outstanding thereunder or the issuance of Letters of
Credit to support the obligations of Borrower and its
Subsidiaries with respect thereto;
(viii) evidence satisfactory to Administrative Agent
that Borrower shall have taken or caused to be taken all such
actions, executed and delivered or caused to be executed and
delivered all such agreements, documents and instruments, and
made or caused to be made all such filings and recordings that
may be necessary or, in the opinion of Administrative Agent,
desirable in order to create in favor of Administrative Agent,
for the benefit of Lenders, a valid and (upon such filing and
recording) perfected first priority security interest in the
entire Collateral. Such actions shall include the following:
(1) delivery to Administrative Agent of
accurate and complete schedules to all of the
applicable Collateral Documents; and
(2) delivery to Administrative Agent of (a)
certificates (which certificates shall be accompanied
by irrevocable undated stock powers, duly endorsed in
blank and otherwise satisfactory in form and
substance to Administrative Agent) representing all
capital stock pledged pursuant to the Borrower Pledge
Agreement and (b) all promissory notes or other
instruments (duly endorsed, where appropriate, in a
manner satisfactory to Administrative Agent)
evidencing any Collateral.
(ix) a pro forma Compliance Certificate for the
succeeding two years after the Closing Date, which shall be in
form and substance satisfactory to Administrative Agent; and
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(x) such other assurances, certificates, documents,
consents or opinions as Administrative Agent, Issuing Lender
or the Requisite Lenders reasonably may require.
(b) Any fees required to be paid on or before the Closing Date
shall have been paid, including all fees referred to in Section 2.09.
(c) The representations and warranties made by Borrower
herein, or which are contained in any certificate, document or
financial or other statement furnished at any time under or in
connection herewith or therewith, shall be correct on and as of the
Closing Date (other than any representations and warranties made as of
a specified date, which shall only be required to be correct as of such
specified date).
(d) Each Borrower Party shall be in compliance with all the
terms and provisions of the Loan Documents to which it is a party, and
no Default or Event of Default shall have occurred and be continuing.
(e) Unless waived by Administrative Agent, Borrower shall have
paid all Attorney Costs of Administrative Agent to the extent invoiced
prior to or on the Closing Date, plus such additional amounts of
Attorney Costs as shall constitute its reasonable estimate of Attorney
Costs incurred or to be incurred by it through the closing proceedings
(provided that such estimate shall not thereafter preclude final
settling of accounts between Borrower and Administrative Agent).
4.02 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
In addition to any applicable conditions precedent set forth elsewhere
in this Section 4 or in Section 2, the obligation of each Lender to make any
Extension of Credit is subject to the following conditions precedent:
(a) the representations and warranties of Borrower contained
in Section 5, or which are contained in any certificate, document or
financial or other statement furnished at any time under or in
connection herewith or therewith, shall be correct on and as of the
date of such Extension of Credit, except to the extent that such
representations and warranties specifically refer to any earlier date.
(b) no Default or Event of Default exists, or would result
from such proposed Extension of Credit.
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(c) Administrative Agent shall have timely received a Request
for Extension of Credit by Requisite Notice by the Requisite Time
therefor.
(d) Upon the request of Administrative Agent, Administrative
Agent shall have received a certificate of the REIT or Borrower, in
form and substance satisfactory to Administrative Agent, setting forth
the calculation of the Free Corporate Cash Flow as of the end of the
immediately preceding month, such calculation to be certified by a
Responsible Officer of the REIT or Borrower, as the case may be.
Each request for an Extension of Credit by Borrower shall be deemed to
be a representation and warranty that the conditions specified in Sections
4.02(a) and 4.02(b) have been satisfied and on and as of the date of such
Extension of Credit.
SECTION 5.
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Administrative Agent and Lenders
that:
5.01 EXISTENCE AND QUALIFICATION; POWER.
Each Borrower Party is a corporation, partnership, real estate
investment trust or limited liability company duly organized or formed, validly
existing and in good standing under the Laws of the state of its incorporation
or organization, has the power and authority and the legal right, and all
governmental licenses, authorizations, consents and approvals, to own and
operate its Properties, to lease the Properties it operates and to conduct its
business, is duly qualified and licensed and in good standing under the Laws of
each jurisdiction where its ownership, lease or operation of Properties or the
conduct of its business requires such qualification, except, with respect to
Borrower Parties that are not Management Entities, where a failure to be so
qualified would not reasonably be expected to have a Material Adverse Effect.
5.02 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each Borrower Party has the power and authority and the legal right to
make, deliver and perform each Loan Document to which it is a party and Borrower
has power and authority to borrow hereunder and has taken all necessary action
to authorize the borrowings on the terms and conditions of this Agreement and to
authorize the execution, delivery and performance of this Agreement and the
other Loan Documents to which it is a party. No approval, consent, exemption or
authorization of, filing with, notice to or other act by or in respect of any
Governmental
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Authority, is necessary or required in connection with the borrowings hereunder
or with the execution, delivery, performance, validity or enforceability of this
Agreement or any of the other Loan Documents. The Loan Documents have been duly
executed and delivered by each Borrower Party, and constitute a legal, valid and
binding obligation of each Borrower Party, enforceable against each Borrower
Party 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.
5.03 NO LEGAL BAR.
The execution, delivery, and performance by each Borrower Party of the
Loan Documents to which it is a party and compliance with the provisions thereof
have been duly authorized by all requisite action on the part of such Borrower
Party and do not and will not (a) violate or conflict with, or result in a
breach of, or require any consent under (i) any Organization Documents of such
Borrower Party or any of its Subsidiaries, (ii) any applicable material Laws,
rules, or regulations or any order, writ, injunction, or decree of any
Governmental Authority or arbitrator, or (iii) any Contractual Obligation of
such Borrower Party or any of its Subsidiaries or by which any of them or any of
their property is bound or subject, (b) constitute a default under any such
agreement or instrument, or (c) result in, or require, the creation or
imposition of any Lien on any of the Properties of such Borrower Party or any of
its Subsidiaries.
5.04 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) The Audited Financial Statements (i) were prepared in
accordance with GAAP, except as otherwise expressly noted therein;
(ii) are complete and accurate and fairly present the financial
condition of the REIT as of the date thereof and the results of
operations for the period covered thereby in accordance with GAAP,
except as otherwise expressly noted therein; and (iii) together with
the Form 10-K and Form 10-Q filings of the REIT, show all material
indebtedness and other liabilities, direct or contingent, of Borrower
and its Subsidiaries as of the date thereof, including liabilities for
taxes, material commitments, Contractual Obligations and Indebtedness
in accordance with GAAP or which are required to be disclosed under SEC
rules and regulations.
(b) Since the date of the Audited Financial Statements, there
has been no event or circumstance which has had a Material Adverse
Effect.
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5.05 LITIGATION.
Except as disclosed in Schedule 5.05, no litigation, investigation or
proceeding of or before an arbitrator or Governmental Authority is pending or,
to the Knowledge of Borrower, threatened by or against any Borrower Party or any
of its Subsidiaries or against any of their Properties or revenues 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) 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 NO DEFAULT.
Neither any Borrower Party nor any of their respective Subsidiaries are
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, and no Default or Event of
Default has occurred and is continuing or will result from the consummation of
this Agreement or any of the other Loan Documents, or the making of the
Extensions of Credit hereunder.
5.07 OWNERSHIP OF PROPERTY; LIENS.
Each Borrower Party and its Subsidiaries have valid fee or leasehold
interests in all real property necessary or used in the ordinary conduct of
their respective businesses, taken as a whole, and each Borrower Party and their
respective Subsidiaries have good and marketable title to all their other
Property, and none of such Property is subject to any Lien, except as permitted
in Section 7.02 and for such defects in title which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
5.08 TAXES.
Borrower and its Subsidiaries have filed all Federal and other material
tax returns and material reports that are required to be filed. Except as
disclosed in the SEC Report, (i) all tax returns filed by Borrower and its
Subsidiaries are complete and correct in all material respects; (ii) Borrower
and its Subsidiaries have paid all material taxes, assessments, fees and other
governmental charges for which they are liable and that are due and payable and
have fully satisfied any material 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
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are being contested in good faith by appropriate proceedings and for which
adequate reserves have been provided in accordance with GAAP and no material
"notice of lien" or similar document or instrument has been filed or recorded,
except with respect to any taxes not yet due or payable; (iii) there is no
proposed tax assessment against Borrower or any of its Subsidiaries which, if
the assessment were made, would reasonably be expected to have a Material
Adverse Effect; and (iv) Borrower 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 Borrower
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 Law. Neither
Borrower nor any of its Affiliates is (nor has it ever been) a party to any tax
sharing agreement other than as disclosed on Schedule 5.08.
5.09 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY
HOLDING COMPANY ACT; REIT AND TAX STATUS; STOCK EXCHANGE LISTING.
(a) No Borrower Party is engaged principally or as one of its
important activities, in the business of extending credit for the
purpose of "purchasing" or "carrying" "margin stock" within the
respective meanings of each of the quoted terms under Regulation U of
the Board of Governors of the Federal Reserve System as now and from
time to time hereafter in effect. No part of the proceeds of any
Extensions of Credit hereunder will be used for "purchasing" or
"carrying" "margin stock" as so defined or for any purpose which
violates, or which would be inconsistent with, the provisions of
Regulations U or X of such Board of Governors.
(b) No Borrower Party or any of its Subsidiaries (i) is a
"holding company," or a "subsidiary company" of a "holding company," or
an "affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company," within the meaning of the Public Utility Holding
Company Act of 1935, (ii) is or is required to be registered as an
"investment company" under the Investment Company Act of 1940 or (iii)
is subject to regulations under 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.
(c) Neither Borrower nor any Wholly-Owned Subsidiary is a
"foreign person" within the meaning of Section 1445(f)(3) of the Code.
(d) The REIT currently has REIT Status and has maintained REIT
Status on a continuous basis since its formation. Borrower is not an
association
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taxable as a corporation under the Code. The shares of common Stock of
the REIT are listed on the NYSE.
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 Administrative Agent and the
Lenders are true and complete in all material respects.
(b) Each Qualified Plan, and to the best knowledge of Borrower
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
Borrower, Multiemployer Plan has been determined by the IRS to qualify
under Section 401 of the Code, and the trusts created thereunder have
been deter mined to be exempt from tax under the provisions of Section
501 of the Code, and to the best knowledge of Borrower nothing has
occurred which would cause the loss of such qualification or tax-exempt
status.
(d) Except as disclosed in Schedule 5.10, neither Borrower nor
any ERISA Affiliate has any outstanding liability under Title IV of
ERISA with respect to any Qualified Plan maintained or sponsored by
Borrower or any ERISA Affiliate, nor to the best knowledge of Borrower,
with respect to any Multiemployer Plan to which Borrower or any ERISA
Affiliate contributes or is obligated to contribute.
(e) Except as disclosed in Schedule 5.10, no Qualified Plan
subject to Title IV of ERISA, and to the best knowledge of Borrower, no
Multiemployer Plan has any Unfunded Pension Liability.
(f) Except as 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
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,
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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 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 Borrower, any
Multiemployer Plan.
(i) There are no pending or, to the Knowledge of Borrower,
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 Borrower 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
Borrower may be directly or indirectly liable, through indemnification
obligations or otherwise.
(j) Except as disclosed in Schedule 5.10, neither Borrower 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 disclosed in Schedule 5.10, neither Borrower nor
any ERISA Affiliate has transferred any Unfunded Pension Liability to a
Person other than Borrower 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 would reasonably be expected to have a Material Adverse
Effect.
5.11 INTANGIBLE ASSETS.
Each Borrower Party and its Subsidiaries own, or possess the right to
use, all trademarks, trade names, copyrights, patents, patent rights,
franchises, licenses and other intangible assets that are used in the conduct of
their respective businesses as
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now operated, and none of such items, to the best knowledge of Borrower,
conflicts with the valid trademark, trade name, copyright, patent, patent right
or intangible asset of any other Person to the extent that such conflict would
reasonably be expected to have a Material Adverse Effect.
5.12 COMPLIANCE WITH LAWS.
Each Borrower Party and its Subsidiaries are in substantial compliance
in all material respects with all Laws that are applicable to it.
5.13 ENVIRONMENTAL COMPLIANCE.
(a) Environmental Laws. Except as disclosed in Schedule 5.13
or in the SEC Report, the operations and Properties of Borrower, the
REIT, the Management Entities and their Subsidiaries comply in all
respects with all Environmental Laws, except such non-compliance
affecting any Properties as would not result in liability which would
reasonably be expected to result in a Material Adverse Effect.
(b) Environmental Permits. Except as described in Schedule
5.13 or in the SEC Report, Borrower, 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, except, with respect to Persons
that are not Management Entities, where the failure to be in compliance
would not reasonably be expected to have a Material Adverse Effect.
(c) Orders. Except as specifically disclosed in Schedule 5.13
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 Borrower, the REIT,
any Management Entity, any of their Subsidiaries, or any of such
Person's Properties or operations that would reasonably be expected to
have a Material Adverse Effect.
(d) Hazardous Materials. Except as disclosed in Schedule 5.13
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 have a Material Adverse Effect. In addition,
(i) there are not located on the Properties
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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)
Borrower, 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
that would reasonably be expected to have a Material Adverse Effect.
5.14 INSURANCE.
The properties of each Borrower Party and its Subsidiaries are insured
with financially sound and reputable insurance companies not Affiliates of
Borrower, 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 such Borrower Party or such Subsidiary
operates.
5.15 YEAR 2000.
Borrower has (a) initiated a review and assessment of all areas within
its and each of its Subsidiaries' business and operations (including those
affected by customers and vendors) that could be adversely affected by the "Year
2000 Problem" (that is, the risk that computer applications and devices
containing imbedded computer chips used by any Borrower Party or any of its
Subsidiaries (or their respective customers and vendors) may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999), (b) developed a plan and
timeline for addressing the Year 2000 Problem on a timely basis, and (c) to
date, implemented that plan in accordance with that timetable. Based on the
foregoing, Borrower believes that all computer applications and devices
containing imbedded computer chips (including those of its and its Subsidiaries'
customers and vendors) that are material to its or any of its Subsidiaries'
business and operations are reasonably expected on a timely basis to be able to
perform properly date-sensitive functions for all dates before and after January
1, 2000 (that is, be "Year 2000 compliant"), except to the extent that a failure
to do so would not reasonably be expected to have a Material Adverse Effect.
5.16 SUBSIDIARIES; INTERESTS IN OTHER ENTITIES; CHANGES IN
ORGANIZATIONAL STRUCTURE.
Neither Borrower, nor the REIT, nor any of their respective
Subsidiaries has any interest in any corporation, partnership or other entity,
except (i) as disclosed in the Organizational Chart set forth as Schedule 5.16
(other than nondisclosures
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which, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect), and (ii) for interests acquired after the date
of this Agreement in compliance with Sections 7.03, 7.04 and 7.05 hereof.
5.17 MATTERS RELATING TO COLLATERAL.
(a) Creation, Perfection and Priority of Liens. The execution and
delivery of the Collateral Documents by Borrower and the other applicable
Borrower Parties, together with (i) the actions taken on or prior to the date
hereof pursuant to Section 4.01(viii), and (ii) the delivery to Administrative
Agent of any Pledged Collateral (as defined in the Borrower Pledge Agreement)
not delivered to Administrative Agent at the time of execution and delivery of
the Borrower Pledge Agreement (all of which Pledged Collateral has been so
delivered) are effective to create in favor of Administrative Agent for the
benefit of Lenders, as security for the respective Secured Obligations (as
defined in the Borrower Pledge Agreement in respect of any Pledged Collateral),
a valid and perfected first priority Lien on all of the Collateral, and all
filings and other actions necessary or desirable to perfect and maintain the
perfection and first priority status of such Liens have been duly made or taken
and remain in full force and effect, other than the filing or recording of any
UCC financing statements delivered to Administrative Agent for filing (but not
yet filed) and the periodic filing of UCC continuation statements in respect of
UCC financing statements filed by or on behalf of Administrative Agent.
(b) Governmental Authorizations. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by Borrower or
any other Borrower Party of the Liens purported to be created in favor of
Administrative Agent pursuant to any of the Collateral Documents or (ii) the
exercise by Administrative Agent of any rights or remedies in respect of any
Collateral (whether specifically granted or created pursuant to any of the
Collateral Documents or created or provided for by applicable law), except for
filings or recordings contemplated by Section 5.17(a) and except as may be
required, in connection with the disposition of any Pledged Collateral, by laws
generally affecting the offering and sale of securities.
(c) Absence of Third-Party Filings. Except such as may have been filed
in favor of Administrative Agent as contemplated by Section 5.17(a), no
effective UCC financing statement, fixture filing or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office;
(d) Margin Regulations. The pledge of the Pledged Collateral pursuant
to the Collateral Documents does not violate Regulation T, U or X of the Board
of Governors of the Federal Reserve System.
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(e) Information Regarding Collateral. All information supplied to
Administrative Agent by or on behalf of any Borrower Party with respect to any
of the Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
5.18 DISCLOSURE.
None of the representations or warranties made by Borrower, the REIT,
any 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 Borrower, which materially and
adversely affects the business, operations, properties, assets or condition
(financial or otherwise) of Borrower, the REIT, the Management Entities, and the
Subsidiaries, taken as a whole, that has not been disclosed herein, in the SEC
Reports, or in other documents, certificates and statements furnished to
Administrative Agent and each Lender hereunder or pursuant hereto. The copies
of all documents delivered to Administrative 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 Administrative Agent and/or the Lenders, as applicable.
SECTION 6.
AFFIRMATIVE COVENANTS
So long as any Extension of Credit remains unpaid, or any other
Obligation remains unpaid or unperformed, or any portion of the Commitments
remains outstanding, Borrower shall, and shall (except in the case of Borrower's
reporting covenants), cause each of its Subsidiaries or the REIT, as the case
may be, to:
6.01 FINANCIAL STATEMENTS.
Deliver to Administrative Agent and each Lender, in form and detail
satisfactory to Administrative Agent and the Requisite Lenders:
(a) as soon as available, but in any event within ninety (90)
days after the end of each fiscal year, consolidated balance sheets of
the REIT, Borrower and of the Preferred Stock Subsidiaries on a
combined basis, in
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each case as at the end of such fiscal year, and the related
consolidated statements of income and cash flows for such fiscal year,
including the REIT's and Borrower's SEC Form 10-K for such period,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, audited and accompanied
by a report and unqualified opinion of an independent certified public
accountant of nationally recognized standing reasonably acceptable to
the Requisite Lenders, which report and opinion shall be prepared in
accordance with GAAP and shall not be subject to any qualifications or
exceptions as to the scope of the audit nor to any qualifications and
exceptions (including possible errors generated by financial reporting
and related systems due to the Year 2000 problem) not reasonably
acceptable to the Requisite Lenders;
(b) as soon as available, but in any event within forty-five
(45) days after the end of each of the first three fiscal quarters of
each fiscal year, unaudited consolidated balance sheets of the REIT,
Borrower and of the Preferred Stock Subsidiaries on a combined basis,
in each case as at the end of such fiscal quarter, and the related
consolidated statements of income and cash flows for such fiscal
quarter and for the portion of the REIT's, Borrower's or such
Preferred Stock Subsidiaries' fiscal year then ended, as the case may
be, including the REIT's and Borrower's SEC Form 10-Q for such period,
all in reasonable detail and certified by at least two Responsible
Officers of the REIT, Borrower or such Preferred Stock Subsidiaries, as
the case may be, that such financial statements are complete and
correct and fairly present the financial condition, results of
operations and cash flows of the REIT, Borrower or such Preferred Stock
Subsidiaries, as the case may be, in accordance with GAAP, subject only
to normal year-end audit adjustments and the absence of footnotes;
(c) as soon as available, but in any event not less than
ninety (90) days after the beginning of each fiscal year, copies of
Borrower's business plan for such fiscal year in form and substance
satisfactory to Administrative Agent; and
(d) as soon as available, but in any event not less than
forty-five (45) days after the end of each fiscal quarter, the REIT's
consolidated financial projections for the current and the succeeding
three fiscal quarters, as prepared by the REIT's Chief Financial
Officer and in a format and with such detail as Administrative Agent
may require.
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6.02 CERTIFICATES, NOTICES AND OTHER INFORMATION.
Deliver to Administrative Agent and each Lender, in form and detail
satisfactory to Administrative Agent and the Requisite Lenders:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.01(a), a certificate of its independent
certified public accountants certifying such financial statement and
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default hereunder or, if any
such Default or Event of Default shall exist, stating the nature and
status of such event;
(b) concurrently with the delivery of the financial statements
referred to in Sections 6.01(a) and (b), (1) a duly completed
Compliance Certificate signed by a Responsible Officer of Borrower,
with such supporting information as may be requested by Administrative
Agent, and such Compliance Certificate shall also set forth the
aggregate book value of all Construction/Renovation (separating New
Construction from renovations, rehabilitations and expansions) and all
Real Property Assets Under Development, in each case including
information with respect to the aggregate expenditures made to date,
(2) an updated Schedule 1.01B (GP Loans), which updated schedule will
identify each GP Loan and, with respect to each such GP Loan, its
original amount, carrying value, write-off amount, pro rata share owned
(directly or indirectly) by Borrower and such other information as
Administrative Agent may reasonably request, (3) an updated Schedule
1.01C (Guarantors), which updated schedule will identify each Guarantor
and such Guarantor's pro rata share of Total Corporate EBITDA (provided
that the Management Entities' pro rata shares of Total Corporate EBITDA
may be combined for purposes of this updated Schedule 1.01C), and (4)
an updated Schedule 7.01(m) (Existing Cross-Collateralized and
Cross-Defaulted Indebtedness), which updated schedule will identify all
cross-collateralized and cross-defaulted Indebtedness of the REIT,
Borrower and their Subsidiaries and the aggregate outstanding principal
amount thereof;
(c) promptly after delivery by the Person providing the same,
copies of any detailed audit reports, management letters or
recommendations submitted to the board of directors (or the audit
committee of the board of directors) of the REIT by independent
accountants in connection with the accounts or books of the REIT or any
of its Subsidiaries, or any audit of any of them;
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(d) promptly after the same are available, copies of each
annual report, proxy or financial statement or other report or
communication sent to the stockholders of the REIT, and copies of all
annual, regular, periodic and special reports and registration
statements which the REIT may file or be required to file with the SEC
under Sections 13 or 15(d) of the Securities Exchange Act of 1934, and
not otherwise required to be delivered to Administrative Agent
pursuant hereto;
(e) promptly after the occurrence thereof, notice of any
Default or Event of Default, and the occurrence or existence of any
event or circumstance that is likely to become a Default or Event of
Default and each such notice shall describe with particularity the
clause or provision of this Agreement or other Loan Document that has
been breached or violated;
(f) promptly after the commencement thereof, notice of any
litigation, investigation or proceeding affecting any Borrower Party
(i) where the amount involved exceeds the Threshold Amount, (ii) in
which injunctive relief or similar relief is sought, which relief, if
granted, 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;
(g) promptly after the occurrence of any of the following
ERISA events affecting Borrower 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 Borrower or any member of its
Controlled Group with respect to such event, notice of any of the
following:
(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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(h) promptly after the occurrence thereof, notice of any
Material Adverse Effect;
(i) notice of any material change in accounting policies or
financial reporting practices by Borrower or any of its Subsidiaries;
(j) promptly after the occurrence thereof, notice of (i) any
and all material enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened against
Borrower, 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 Borrower, 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, in each case only to the extent any of the
foregoing would reasonably be expected to have a Material Adverse
Effect;
(k) promptly after the occurrence thereof, notice of the
consummation of any material Investment or Disposition, of any
material issuance of Stock of the REIT (other than upon the tender of
any Partnership Units for redemption or the conversion of any employee
stock options) or Partnership Units, of any incurrence of material
Indebtedness or of any other material transaction entered into, by
Borrower, the REIT, any Management Entity or any of their Subsidiaries;
and change in any executive officer of the REIT;
(l) promptly after the occurrence thereof, notice of the
failure of the REIT to maintain REIT Status or of any existing
Subsidiary of the REIT to maintain its status as a qualified REIT
subsidiary under the Code, if and to the extent required by applicable
law;
(m) upon the request of Administrative Agent, any subsequent
revisions to the Organizational Chart;
(n) promptly after receipt of any notice by Borrower, the
REIT, any Management Entity or any of their Subsidiaries of any default
under any Indebtedness or Guaranty Obligation described in Section
8.1(f), notice of such default; and
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(o) promptly, such other data and information as from time to
time may be reasonably requested by Administrative Agent, or, through
Administrative Agent or any Lender.
Each notice pursuant to Sections 6.02(e) through (l) and (n) shall be
accompanied by a statement of two (2) Responsible Officers of Borrower or the
REIT, as the case may be, setting forth details of the occurrence referred to
therein and, if applicable, the provisions of this Agreement affected, and
stating what action Borrower or the REIT, as the case may be, has taken and
proposes to take with respect thereto.
6.03 PAYMENT OBLIGATIONS.
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,
Ordinary Course Liens or levies imposed on any Borrower Party or its
Subsidiaries or on its income or profits or any of its Properties, except for
any such tax, assessment, charge or levy which is (i) an Ordinary Course Lien
under Subsection (b) of the definition of such term or (ii) being contested in
good faith by appropriate proceedings and adequate reserves in accordance with
GAAP are being maintained by Borrower or such Person, (b) all lawful claims
which, if unpaid, would by law become a Lien upon any Property of any Borrower
Party or its Subsidiaries, (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) payment and/or performance of
all Contractual Obligations (including any payments of preferred stock
dividends); provided, however, with respect to any Person that is not a
Management Entity, then only to the extent the failure to do any of the
foregoing could reasonably be expected to have a Material Adverse Effect.
6.04 PRESERVATION OF EXISTENCE.
Preserve and maintain in full force and effect (i) its partnership,
corporate or other organizational existence and good standing under the laws of
its state or jurisdiction of organization, and (ii) its licenses, permits,
rights, franchises and privileges necessary or desirable in the normal conduct
of its business, except where failure to do so does not have a Material Adverse
Effect; provided, however, that with respect to any Person that is not a
Management Entity, then only to the extent that the failure to do any of the
foregoing would reasonably be expected to have a Material Adverse Effect.
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6.05 MAINTENANCE OF PROPERTIES.
Maintain, preserve and protect all of its material Properties and
equipment necessary in the operation of its business in good order and condition
in accordance with Borrower's past practices, subject to wear and tear in the
ordinary course of business, and not permit any waste of its Properties.
6.06 MAINTENANCE OF INSURANCE.
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 liability insurance
specifically insuring Borrower and its Wholly Owned Subsidiaries from any tort,
legal or other liability resulting from their participation as general partners
in partnerships which own Property, 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 Administrative Agent), and upon the
request of Administrative Agent, furnish Administrative Agent, with sufficient
copies for each Lender, at reasonable intervals (but not more than twice per
calendar year) a certificate signed by at least two (2) Responsible Officers of
Borrower (and, if requested by Administrative Agent, any insurance broker of
Borrower or the REIT) setting forth the nature and extent of all insurance
maintained by Borrower, the REIT, the Management Entities and each of their
Subsidiaries in accordance with this Section 6.06 (and which, in the case of a
certificate of a broker, was placed through such broker).
6.07 COMPLIANCE WITH LAWS.
(a) Comply, in all material respects, with the requirements of
all applicable Laws and orders of any Governmental Authority,
noncompliance with which has a Material Adverse Effect.
(b) Conduct its operations and keep and maintain its
Properties in compliance in all material respects with all
Environmental Laws, and upon the written request of Administrative
Agent or any Lender, submit to Administrative Agent and the Lenders,
at Borrower'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 6.02(j) that could, individually
or in the aggregate, result in liability in excess of $10,000,000.
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6.08 INSPECTION RIGHTS.
At any time during regular business hours and as often as reasonably
requested, upon no less than forty-eight (48) hours advance notice to Borrower,
permit Administrative Agent or any Lender, or any employee, agent or
representative thereof, to examine, audit and make copies and abstracts from the
Borrower Parties' records and books of account and to visit and inspect their
properties and to discuss their affairs, finances and accounts with any of their
officers and key employees, and, upon request, furnish promptly to
Administrative Agent or any Lender true copies of all financial information and
internal management reports made available to their senior management, all at
the expense of Borrower; provided, however, that when an Event of Default
exists, Administrative Agent may visit and inspect at the expense of Borrower
such Properties at any time during business hours and without advance notice.
6.09 KEEPING OF RECORDS AND BOOKS OF ACCOUNT.
Keep adequate records and books of account reflecting all financial
transactions in conformity with GAAP, and in material conformity with all
applicable requirements of any Governmental Authority having regulatory
jurisdiction over Borrower or any of its Subsidiaries.
6.10 COMPLIANCE WITH ERISA.
Cause, and cause each of its ERISA Affiliates to: (a) maintain each
Plan in compliance in all material respects with the applicable provisions of
ERISA, the Code and other federal or state law; and (b) make all required
contributions to any Plan subject to Section 412 of the Code.
6.11 COMPLIANCE WITH AGREEMENTS.
Comply and cause each Guarantor to comply with their respective
Organizational Documents. Promptly and fully comply with all Contractual
Obligations under all material agreements, indentures, leases and/or instruments
to which any one or more of them is a party, except for any such Contractual
Obligations (a) the performance of which would cause a Default, (b) then being
contested by any of them in good faith by appropriate proceedings, or (c) if the
failure to comply therewith does not have a Material Adverse Effect.
6.12 USE OF PROCEEDS.
Use the proceeds of Extensions of Credit for (i) funding general
working capital and corporate needs, (ii) financing acquisitions permitted under
this Agreement,
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and (iii) funding costs associated with Construction/Renovation; provided,
however, that the aggregate principal amount of Loans the proceeds of which were
used to fund costs associated with Construction/Renovation shall not at any one
time exceed $100,000,000.
6.13 COMMUNICATION WITH ACCOUNTANTS.
While any Event of Default is continuing, authorize Administrative
Agent and any Lender to communicate directly with Borrower'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 Borrower.
6.14 MAINTENANCE OF REIT STATUS; STOCK EXCHANGE LISTING.
With respect to the REIT, maintain its REIT Status and maintain its
common Stock listing on the NYSE, American Stock Exchange or Nasdaq Stock
Exchange.
6.15 SOLVENCY.
Remain Solvent.
6.16 FURTHER ASSURANCES.
(a) Full Disclosure. Ensure that all other written
information, exhibits and reports furnished to Administrative Agent or
any Lender by Borrower, 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
Administrative 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 Administrative
Agent or the Requisite Lenders, 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 Administrative Agent or such Lenders, as the case may
be, may reasonably require from time to time in order (i) to
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carry out more effectively the purposes of this Agreement or any other
Loan Document, and (ii) to better assure, convey, grant, assign,
transfer, preserve, protect and confirm to Administrative 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 Guarantors. Promptly upon (i) the formation by
the REIT and/or Borrower of any Person which is a Material Entity, (ii)
any Person in which the REIT and/or Borrower owns any equity interest
becoming a Material Entity or (iii) the acquisition by the REIT and/or
Borrower of any Person which constitutes a Material Entity after giving
effect to such acquisition, in each case after the Closing Date,
Borrower shall cause such Person (so long as such Person is not
prohibited from doing so by law or contractual obligations) to deliver
to Administrative Agent for the ratable benefit of the Lenders a
guaranty of the Obligations in the form attached hereto as Exhibit H-2.
Concurrently with the delivery of such guaranty, Borrower shall deliver
to Administrative Agent with respect to such Person the same documents
and other instruments required to be delivered pursuant to clauses
(iii) and (iv) of Section 4.01(a) and an opinion of counsel, in form
and substance satisfactory to Administrative Agent. All such
agreements, documents and other instruments required to be delivered to
Administrative Agent pursuant to this Section 6.16(c) shall delivered
collectively at the same time a Compliance Certificate is delivered to
Administrative Agent pursuant to Section 6.02(b). Additionally,
Borrower shall cause such additional Subsidiaries of the REIT and/or
Borrower and/or such other Persons in which the REIT and/or Borrower
owns any equity interest to become a Guarantor pursuant to this Section
6.16(c) so that at all times the Guarantors, collectively, represent
not less than 75% of Total Corporate EBITDA for the immediately
preceding fiscal quarter.
6.17 UNCONSOLIDATED PARTNERSHIP DISTRIBUTIONS.
Cause the REIT, each Guarantor or their respective Subsidiaries with an
equity interest in any Person to use its best efforts to cause such Person to
make regular distributions of Net Operating Income of such Person in accordance
with such Person's partnership, operating or incorporation agreements and sound
business practices.
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SECTION 7.
NEGATIVE COVENANTS
So long as any Extension of Credit remains unpaid, or any other
Obligations remain unpaid or unperformed, or any portion of the Commitments
remains out standing, Borrower shall not, and shall not permit the REIT nor any
of their respective Subsidiaries to, directly or indirectly:
7.01 INDEBTEDNESS.
Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Ordinary Course Indebtedness;
(b) 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) Intra-Company Debt;
(d) Indebtedness of Borrower, the Guarantors and their
Subsidiaries (whether secured or unsecured) which is Recourse to
Borrower, the Guarantors or any of their Subsidiaries (but excluding
Indebtedness under the Loan Documents) in an aggregate principal amount
not to exceed $120,000,000 at any time and any such Recourse
Indebtedness existing on the date hereof shall be listed on Schedule
7.01(d);
(e) Secured Indebtedness of Borrower, the Guarantors and their
Subsidiaries which is not Recourse to Borrower, the Guarantors or any
of their Subsidiaries;
(f) dorsements for collection or deposit in the Ordinary
Course of Business;
(g) Unsecured Swap Agreements entered into by Borrower with
respect to variable rate Indebtedness permitted hereunder;
(h) Indebtedness of the REIT, Borrower and their Subsidiaries
consisting of "exceptions to nonrecourse" guaranties of non-Recourse
Indebtedness otherwise permitted under this Section 7.01 or of other
Indebtedness permitted under this Section 7.01; provided that
"exceptions to
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non-recourse" shall include the types of additional exceptions
customarily required by Federal National Mortgage Association or
Federal Home Loan Mortgage Corporation from time to time in its
standard form loan documentation;
(i) Indebtedness (other than any Indebtedness otherwise
permitted under clauses (a) through (h) of this Section 7.01)
outstanding on the date hereof and listed on Schedule 7.01(i);
(j) Any refinancings, refundings, renewals or extensions of
any Indebtedness permitted under Sections 7.01(d), (e) or (i);
provided, however, that any such refinancing, refunding, renewal or
extension shall not cause the financial or other material covenants,
when taken as a whole, to be significantly more restrictive than (A)
those existing in the applicable credit documentation prior to such
renewal, refinancing or extension or (B) the comparable covenants in
this Agreement;
(k) Indebtedness in respect of performance bonds, bid bonds,
appeal bonds, surety bonds and similar obligations and trade-related
letters of credit, in each case provided in the Ordinary Course of
Business, and any extension, renewal or refinancing thereof to the
extent not provided to secure the repayment of other Indebtedness which
Indebtedness existing on the date hereof is listed on Schedule 7.01(k);
(l) Variable rate Indebtedness (but excluding such variable
rate Indebtedness that is covered by unsecured Swap Agreements
permitted under Section 7.01(g) and Indebtedness under the Loan
Documents) in an aggregate principal amount not to exceed 30% of Total
Combined Debt at any time; provided, however, that such variable rate
Indebtedness shall otherwise be Indebtedness permitted under Sections
7.01(d) and (e); and
(m) Indebtedness which is cross-collateralized with or
cross-defaulted to any other Indebtedness in an aggregate principal
amount not to exceed 15% of Total Combined Debt at any time; provided,
however, that such cross-collateralized or cross-defaulted Indebtedness
shall otherwise be Indebtedness permitted under Sections 7.01(d) and
(e); provided further that all cross-collateralized and cross-defaulted
Indebtedness existing on the date hereof shall be listed on Schedule
7.01(m) and such cross-collateralized and cross-defaulted Indebtedness
shall be satisfactory to Co-Lead Arrangers.
Nothing contained in this Section 7.01 shall be deemed to excuse any
lack of compliance by Borrower, the REIT, or any Subsidiary with the terms of
Section 7.14.
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7.02 LIENS AND NEGATIVE PLEDGES.
Incur, assume or suffer to exist, any Lien or Negative Pledge upon any
of its Property, assets or revenues, whether now owned or hereafter acquired,
except:
(a) Liens and Negative Pledges existing on the date hereof and
any renewals or extensions thereof;
(b) Ordinary Course Liens;
(c) 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;
(d) Liens securing Indebtedness permitted under Section
7.01(d), (e) or (i) on real and personal Properties and not
constituting ownership interests in Borrower or any of the Subsidiaries
of Borrower or the REIT;
(e) Liens supporting purchase options and Guaranty Obligations
permitted by this Agreement;
(f) Liens on Property of a Person which becomes a Subsidiary
of the REIT, Borrower or any of their respective Subsidiaries after the
date hereof securing Indebtedness permitted by Section 7.01(d) or (e);
provided that (i) such Liens existed at the time such Person become a
Subsidiary of the REIT, Borrower or any of their respective
Subsidiaries and were not incurred or otherwise created in
anticipation thereof, and (ii) any such Lien is not expanded to cover
any other Property of such Person after the time such Person becomes a
Subsidiary of the REIT, Borrower or any of their respective
Subsidiaries;
(g) Licenses, leases or subleases granted to other Persons in
the Ordinary Course of Business not materially interfering with the
conduct of the business of the Borrower Parties taken as a whole; and
(h) Liens arising from Capital Leases entered into by the
Borrower Parties.
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Except with respect to specific property encumbered to secure payment
of particular Indebtedness, neither Borrower nor any of its Subsidiaries shall
enter into any agreement prohibiting the creation or assumption of any Lien upon
any of its Properties or any stock or assets, whether now owned or hereafter
acquired. Except as provided (i) in this Agreement, (ii) with respect to
particular Indebtedness permitted under Section 7.01, (iii) in acquisition
agreements, and (iv) with respect to non-assignment provisions of leases,
subleases, licenses and sublicenses, Borrower will not, and will not permit any
of its Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any such Subsidiary to (A) pay dividends or make any other distributions on
any of such Subsidiary's capital stock owned by Borrower or any other Subsidiary
of Borrower, (B) repay or prepay any Indebtedness owed by such Subsidiary to
Borrower or any other Subsidiary of Borrower, (C) make loans or advances to
Borrower or any other Subsidiary of Borrower, or (D) transfer any of its
property or assets to Borrower or any other Subsidiary of Borrower.
7.03 FUNDAMENTAL CHANGES.
(a) Merge or consolidate with or into any Person or liquidate,
wind-up or dissolve itself, or permit or suffer any liquidation or
dissolution, except, that so long as no Default or Event of Default
exists or would result therefrom:
(i) Subsidiaries of Borrower or of the REIT may merge
or consolidate with or into, or convey, transfer, lease or
otherwise dispose (whether in one transaction or in a series
of transactions) of all or substantially all of any of their
Properties (whether now owned or hereafter acquired) to, or in
favor of, Borrower, the REIT or another Subsidiary of Borrower
or of the REIT;
(ii) Subsidiaries of Borrower or of the REIT may be
liquidated, wound up or dissolved following any conveyance,
transfer, lease or other disposition (whether in one
transaction or a series of transactions) of all or
substantially all of their Properties permitted under Section
7.03(a)(i);
(iii) Subsidiaries of Borrower or of the REIT may
engage in reverse mergers or internal reorganizations whereby
a Subsidiary or Subsidiaries merge into or with one or more
Subsidiaries of the Borrower or any Guarantor or any
combination thereof; and
(iv) Borrower, the REIT or any Subsidiary may merge,
or consolidate with another Person; provided that each of the
following
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conditions are satisfied: (1) at the inception of the
transaction, Borrower, the REIT or Subsidiary are intended to
be and will be the surviving Person after the consummation of
the contemplated transaction; (2) to the best Knowledge of
Borrower, prior to the consummation of the transaction, the
transaction will not cause Borrower to be in breach of the
representations and warranties of this Agreement and the other
Loan Documents; (3) the transaction will not cause Borrower
to be in breach of the covenants of this Agreement and the
other Loan Documents, including financial covenants after the
consummation thereof; and (4) Borrower provides
Administrative Agent with a pro-forma Compliance Certificate
that demonstrates that after the consummation of the proposed
transaction the Borrower will be in compliance with the
financial covenants of this Agreement.
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.
(b) Amend its Organizational Documents in any respect which
is, in the opinion of the Requisite Lenders, materially adverse to the
interests of the Lenders. Without limiting the foregoing, under no
circumstances (i) shall the Organizational Documents of the REIT and
Borrower be changed so as to eliminate the transferability of
Partnership Units of Borrower for common Stock in the REIT on a
one-to-one basis (subject to adjustment as provided in the
Organizational Documents of the Borrower) or (ii) shall the
Organizational Documents of a Management Entity be changed so as to
eliminate or reduce any obligation to pay preferred Stock dividends,
without the prior consent of the Requisite Lenders; provided, however,
that consent shall not be required for the foregoing solely to the
extent any such changes or amendments are required in connection with
the consolidation or merger of any Management Entity into a
Wholly-Owned Subsidiary of the Borrower or the REIT and such new or
surviving Person provides a Guaranty to the Lenders in accordance with
the requirements of Section 6.16(c).
(c) Issue any preferred Stock or preferred Partnership Units;
provided, however, the REIT or any of its Subsidiaries may issue
preferred Stock so long as (i) if such Stock has any mandatory
redemption feature or has a redemption feature which is exercisable at
the option of the holder thereof (other than a change of control put
feature), then the face amount of such Stock shall be deemed Unsecured
Debt for all purposes of this Agreement;
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and (ii) any distributions with respect thereto shall comply with the
provisions of this Agreement (including, without limitation, Section
7.07).
(d) Change the organizational structure of Borrower, the REIT
or any of their respective Subsidiaries from that which is reflected in
the Organizational Chart which is, in the reasonable opinion of the
Requisite Lenders, materially adverse to any Management Entity, without
the prior written consent of the Requisite Lenders, except for mergers
and changes in the equity structure of Subsidiaries and the formation
or acquisition of Subsidiaries in accordance with this Section 7.03;
provided, however, that consent shall not be required for the foregoing
solely to the extent any such changes are required in connection with
the consolidation or merger of any Management Entity into a
Wholly-Owned Subsidiary of the Borrower or the REIT and such new or
surviving Person provides a Guaranty to the Lenders in accordance with
the requirements of Section 6.16(c).
(e) Terminate the employment of Terry S. Considine and/or
Peter K. Kompaniez as Chief Executive Officer and President of the
REIT, respectively, or remove either or both of them from such
positions without the prior written consent of Requisite Lenders (other
than in the event of death or permanent disability).
(f) Acquire by purchase or otherwise all or substantially all
of the business or Property of, or Stock or other evidence of
beneficial ownership of, any Person or any division or line of business
of any Person, where such business, Property, Stock or other evidence
of beneficial ownership and/or division or line of business to be
acquired has a fair market value in excess of 20% of the Gross Asset
Value in effect immediately prior to such acquisition, without the
prior written consent of Requisite Lenders.
7.04 DISPOSITIONS. Make any Dispositions, except:
(a) Ordinary Course Dispositions;
(b) Dispositions permitted by Section 7.03; and
(c) Dispositions of Property or Properties which generate Net
Disposition Proceeds of $1,000,000 or more; provided that (i) the
consideration received for such Property or Properties shall be in an
amount at least equal to the fair market value thereof; (ii) any
consideration received for such Property or Properties in the form of
promissory notes shall be pledged to Administrative Agent pursuant to
the Borrower Pledge Agreement; and
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(iii) the Net Disposition Proceeds of such Dispositions shall be
applied as required by Section 2.06(b)(iv).
7.05 INVESTMENTS. Make or maintain any Investments, except:
(a) Investments existing on the date hereof;
(b) Ordinary Course Investments;
(c) Investments permitted by Section 7.03;
(d) Investments in Intra-Company Debt permitted under Section
7.01(c);
(e) Investments in unsecured Swap Agreements permitted under
Section 7.01(g);
(f) Investments in multi-family apartment projects (including
those with de minimus commercial aspects) in fee simple or leasehold
interests therein or partnership, joint venture interests or other
Investments (including capital contributions or partner loans) in
Persons that own multi-family apartment projects (including those with
de minimus commercial aspects);
(g) Investments in Management Entities;
(h) Investments in unimproved land with an aggregate book
value not to exceed 5% of the Gross Asset Value then in effect;
(i) Investments in Stock and Partnership Units with an
aggregate book value not to exceed 5% of the Gross Asset Value then in
effect;
(j) Investments in GP Loans and other mortgage loans with an
aggregate book value not to exceed 10% of the Gross Asset Value then in
effect;
(k) Investments in New Construction with an aggregate
undepreciated book value not to exceed 5% of the Gross Asset Value
then in effect; and
(l) Investments in real property not constituting multi-family
apartment projects (each a "Temporary Investment") acquired as part of
any Investment in any multi-family apartment project permitted under
Section
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7.05(f); provided that any such Temporary Investment shall be sold or
otherwise disposed of as soon as commercially reasonable after its
acquisition.
7.06 LEASE OBLIGATIONS.
Create or suffer to exist any obligations for the payment of rent for
any Property under lease or agreement to lease, except:
(a) leases in existence on the date hereof and any renewal,
extension or refinancing thereof; and
(b) leases (other than Capital Leases) entered into or assumed
by Borrower or any of its Subsidiaries after the date hereof in the
Ordinary Course of Business.
7.07 RESTRICTED PAYMENTS.
(a) (i) Declare or make any Restricted Payment or any
distribution of any Properties (including cash, rights, obligations,
partnership interests or Partnership Units, on account of any
partnership interests, Partnership Units or Stock) to any Person (other
than Borrower, the REIT or a Wholly-Owned Subsidiary), or (ii)
purchase, redeem or otherwise acquire for value any of its partnership
interests, Partnership Units or Stock, now or hereafter outstanding,
from any Person (other than Borrower, the REIT or a Wholly-Owned
Subsidiary) (all of the foregoing set forth in clauses (i) and (ii),
collectively, being "distributions"), except (i) for the exchange of
common Stock of the REIT for Partnership Units; and (ii) that if no
Default or Event of Default exists under Section 8.01(a), (b) or (c) as
a result of a breach of Section 7.14, the REIT, Borrower and all such
Subsidiaries may make distributions during any four consecutive fiscal
quarter 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) (i) Permit any Subsidiary to make a demand under any
Intra-Company Debt which is payable upon demand at any time after the
Revolving Commitment Termination Date, or (ii) permit any payment with
respect to Intra-Company Debt while any Event of Default is continuing.
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7.08 ERISA.
At any time (a) engage in a transaction which could be subject to
Sections 4069 or 4212(c) of ERISA, or (b) permit any Pension Plan to (i) engage
in any non-exempt "prohibited transaction" (as defined in Section 4975 of the
Code); (ii) fail to comply with ERISA or any other applicable Laws; or (iii)
incur any material "accumulated funding deficiency" (as defined in Section 302
of ERISA), which, with respect to each event listed above, has a Material
Adverse Effect, (c) terminate any Plan subject to Title IV of ERISA so as to
result in any material (in the opinion of Administrative Agent) liability to
Borrower or any ERISA Affiliate (i.e., $1,000,000 or more), (d) permit to exist
any ERISA Event or any other event or condition, which presents the risk of a
material (in the opinion of Administrative Agent) liability to any member of the
Controlled Group, (e) 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 Administrative Agent) liability to Borrower or any
ERISA Affiliate, (f) 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 Administrative Agent) liability to any member of the Controlled
Group, or (g) 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 Administrative 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.
7.09 CHANGE IN NATURE OF BUSINESS.
Make any change in the nature of the business of any Borrower Party as
conducted and as proposed to be conducted as of the date hereof; provided, how
ever, that the foregoing shall not restrict the Borrower's development of
related lines of business which are complimentary to its existing core
multifamily rental operations.
7.10 TRANSACTIONS WITH AFFILIATES.
Enter into any transaction with any Affiliate of Borrower (other than a
Wholly-Owned Subsidiary or a Management Entity), except (a) as permitted by this
Agreement, (b) in the Ordinary Course of Business and pursuant to the reasonable
requirements of the business of Borrower, and in each case of (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, (c)
transactions between or among Borrower, the REIT and their respective
Subsidiaries, (d) employment, compensation and indemnification arrangements with
officers and directors of Borrower, the REIT and their respective Subsidiaries,
(e) fees payable in connection with directors' fees and services rendered to the
Board of Directors of
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Borrower, the REIT or their respective Subsidiaries, or (f) loans and advances
to officers and directors of Borrower, the REIT and their respective
Subsidiaries.
7.11 USE OF PROCEEDS.
Use any proceeds of any Extensions of Credit, directly or indirectly,
(a) to purchase or carry Margin Stock, (b) to repay or otherwise refinance
indebtedness of Borrower or others incurred to purchase or carry Margin Stock,
(c) to extend credit for the purpose of purchasing or carrying any Margin Stock,
(d) for any purpose other than those permitted by Section 6.12, or (e) in
connection with the acquisition of a voting interest of five percent (5%) or
more in any Person if such acquisition is opposed by the board of directors or
management of such Person unless (i) Borrower has given Administrative Agent
(who shall promptly notify each Lender) five Business Days' prior notice thereof
and (ii) no Lender shall have, within that period, notified Administrative Agent
(who shall promptly notify Borrower) not consented to the use of the proceeds of
such Extension of Credit for that purpose.
7.12 TRANSFERS OF NON-OWNED INTERESTS IN THE MANAGEMENT ENTITIES.
Sell, transfer, encumber or hypothecate, voluntarily or involuntarily,
all or any portion of the interests in the Management Entities or any rights
therein that are not held directly or indirectly by Borrower 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 Borrower, the
REIT, or any of their Subsidiaries; provided, however, that consent shall not
be required for the transfers of interests in a Management Entity solely to the
extent any such transfer is required in connection with the consolidation or
merger of any Management Entity into a Wholly-Owned Subsidiary of the Borrower
or the REIT and such new or surviving Person provides a Guaranty to the Lenders
in accordance with the requirements of Section 6.16(c).
7.13 LIMITATIONS ON UPSTREAMING.
Agree to any restriction or limitation on the making of Restricted
Payments or transferring of assets from any Subsidiary of Borrower to Borrower,
except for such restrictions existing or by reason of (a) any restrictions
existing under the Loan Documents, (b) customary provisions in leases,
subleases, licenses and other contracts restricting the assignment thereof, (c)
applicable law, (d) Intra-Company Debt, (e) ordinary course restrictions in
joint venture agreements limiting the payment of distributions to the joint
venturers (subject to Section 6.17) and (f) restrictions in contracts for sales
or Dispositions of Property permitted hereby; provided that such restrictions
relate only to the Property being disposed of.
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7.14 FINANCIAL COVENANTS.
(a) Permit the Fixed Charge Coverage Ratio as of the end of
any fiscal quarter ending during any period set forth below to be less
than the following ratios during the applicable periods:
<TABLE>
<CAPTION>
APPLICABLE PERIOD RATIO
----------------- -----
<S> <C>
Closing Date to and including
September 10, 1999 1.70:1:00
October 1, 1999 and thereafter 1.75.1.00
</TABLE>
(b) Permit the Interest Coverage Ratio as of the end of any
fiscal quarter to be less than 2.25:1.00.
(c) Permit the Unsecured Debt Service Coverage Ratio as of the
end of any fiscal quarter to be less than 3.00:1.00.
(d) Permit the ratio of Total Combined Debt to Gross Asset
Value to exceed 0.55:1.00 at any time; provided, however, that for
purposes of this Section 7.14(d), Gross Asset Value shall be reduced by
an amount equal to the excess, if any, of (x) the sum of the amounts,
as on the date of determination, from clauses (ii), (vi) and (vii) set
forth in the definition of "Gross Asset Value" over (y) 15% of the sum
of the amounts, as on such date of determination, from clauses (i),
(iii), (iv) and (v) set forth in the definition of "Gross Asset Value".
(e) Permit the ratio of Total Obligations to Gross Asset Value
to exceed 0.65:1.00 at any time; provided, however, that for purposes
of this Section 7.14(e), Gross Asset Value shall be reduced by an
amount equal to the excess, if any, of (x) the sum of the amounts, as
on the date of determination, from clauses (ii), (vi) and (vii) set
forth in the definition of "Gross Asset Value" over (y) 15% of the sum
of the amounts, as on such date of determination, from clauses (i),
(iii), (iv) and (v) set forth in the definition of "Gross Asset Value".
(f) Permit the Encumbered Property Debt Coverage Ratio as of
the end of any fiscal quarter to be less than 1.60:1.00.
(g) Subsidiaries on a consolidated basis to be less at any
time than the sum of (x) $1,932,411,000 plus (y) 85% of the Net
Issuance Proceeds of all issuances of Stock or Partnership Units after
the Closing Date.
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7.15 CHANGE IN AUDITORS.
Change the certified public accountants auditing the books of Borrower
without the consent of Requisite Lenders, other than changes to Ernst & Young
LLP, PricewaterhouseCoopers LLP, Arthur Andersen LLP and Deloitte & Touche LLP.
7.16 SPECIAL COVENANTS RELATING TO THE REIT.
In the case of the REIT:
(a) Make any disposition of or encumber, pledge or
hypothecate, whether directly or indirectly, all or any portion of its
interest in Borrower or any Subsidiary at any time or any rights to
distributions or dividends therefrom other than to Borrower 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 aggregate outstanding partnership interests in
Borrower;
(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 Borrower
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 REIT for immediate contribution thereof to
Borrower;
(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 and applicable law.
7.17 TAXATION OF BORROWER.
In the case of Borrower, become an association taxable as a corporation
and not be taxed as a partnership under the Code.
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SECTION 8.
EVENTS OF DEFAULT AND REMEDIES
8.01 EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an Event of
Default:
(a) Borrower fails to pay any principal on any Extension of
Credit as and on the date when due; or
(b) Borrower fails to pay any interest on any Extension of
Credit, or any fees due hereunder or amount payable to Administrative
Agent or any Lender under any Loan Document within five days after the
date due; or
(c) Any default occurs in the observance or performance of any
agreement contained in Sections 6.12, 6.14 or 7; or
(d) The occurrence of an Event of Default (as such term is or
may hereafter be specifically defined in any other Loan Document) under
any other Loan Document; or any Borrower Party fails to perform or
observe any other covenant or agreement (not specified above) contained
in any Loan Document on its part to be performed or observed and such
failure continues for 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
Borrower by Administrative Agent or any Lender; or
(e) Any representation or warranty in any Loan Document or in
any certificate, agreement, instrument or other document made or
delivered by any Borrower Party or any Responsible Officer pursuant to
or in connection with any Loan Document proves to have been incorrect
in any material respect when made or deemed made; or
(f) Borrower, the Guarantors, any of their respective
Subsidiaries or any Person in which they have an equity interest shall
fail, after any applicable cure period:
(A) to make any payment when due, whether by
scheduled maturity, required prepayment, acceleration, demand,
or otherwise, (and which failure is continuing) in respect of
any Indebtedness of Borrower, any Guarantor or any of their
respective Subsidiaries which is Recourse to the assets of any
such Person or Persons and
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that, together with all other such Recourse Indebtedness for
which the applicable Person has failed to make any such
payment when due during the prior twelve (12) month period,
equals or exceeds $5,000,000 in the aggregate (other than any
payments with respect to Intra-Company Debt where the obligee
has not commenced pursuing its remedies);
(B) to make any payment when due, whether by
scheduled maturity, required prepayment, acceleration, demand,
or otherwise, (and which failure is continuing) in respect of
any Indebtedness (other than the Indebtedness described in
Section 8.01(f)(A) above) of Borrower, any Guarantor, any of
their respective Subsidiaries or any other Person in which
Borrower, any Guarantor or any such Subsidiary has an equity
interest (each such Person being a "Nonrecourse Debt Obligor")
and that equals or exceeds (x) $25,000,000 individually or (y)
together with all other such Indebtedness for which Borrower,
any Guarantor or their respective Subsidiaries or any
Nonrecourse Debt Obligor has failed to make any payment when
due during the prior twelve (12) month period, $50,000,000 in
the aggregate (in either case, other than any payments with
respect to Intra-Company Debt where the obligee has not
commenced pursuing its remedies); provided, however, that in
determining the amount of such Indebtedness subject to this
Section 8.01(f)(B), the amount of such Indebtedness shall
include (I) 100% of such Indebtedness (provided that Borrower,
any Guarantor or any of their respective Subsidiaries shall
own a 50% or greater equity interest in the Nonrecourse Debt
Obligor), and (II) the Borrower's, any Guarantor's or any of
their Subsidiaries' pro rata share of such Indebtedness of a
Nonrecourse Debt Obligor. For purposes of this clause (B)(II),
"pro rata share" of Indebtedness of a Person means the greater
of (1) the amount of such Indebtedness allocated by the
Nonrecourse Debt Obligor to the Person on the books or records
of the Nonrecourse Debt Obligor or (2) the Borrower's, any
Guarantors' or any Subsidiaries' ownership percentage of the
Nonrecourse Debt Obligor, multiplied by the outstanding amount
of such Indebtedness, as of any date of determination.
(C) 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 described in Section
8.01(f)(A) or (B), 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
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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
(D) to perform or observe any condition or covenant
of the Intra-Company Loan Subordination Agreement; or
(E) to perform or observe any condition or covenant
under any Indebtedness which is Recourse to the assets of any
Management Entity within any applicable cure or grace periods;
or
(It is being understood that, for purposes of clauses (A), (B) and (C)
above, nofailure by the REIT, Borrower or any Subsidiary to pay or perform any
obligation with respect to an item of Intra-Company Debt 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.)
(g) Any Loan Document, at any time after its execution and
delivery and for any reason other than the agreement of all Lenders or
satisfaction in full of all the Obligations, ceases to be in full force
and effect (other than in accordance with its terms) or is declared by
a court of competent jurisdiction to be null and void, invalid or
unenforceable in any respect; or any Borrower Party denies that it has
any or further liability or obligation under any Loan Document, or
purports to revoke, terminate or rescind any Loan Document to which it
is a party; or
(h) A final judgment against any Borrower Party is entered for
the payment of money (for a liability not covered by insurance) in
excess of the Threshold Amount, or any non-monetary final judgment is
entered against any Borrower Party which has a Material Adverse Effect
and, in each case if such judgment remains unsatisfied without
procurement of a stay of execution within 30 calendar days after the
date of entry of judgment or, if earlier, five days prior to the date
of any proposed sale, or any writ or warrant of attachment or execution
or similar process is issued or levied against all or any material part
of the Property of any such Person and is not released, vacated or
fully bonded within 30 calendar days after its issue or levy; or
(i) Any Borrower Party or any of its Material Entities
institutes or consents to the institution of any proceeding under
Debtor Relief Laws with respect to itself or its assets, or makes an
assignment for the benefit of creditors; or applies for or consents to
the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for
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it or for all or any material part of its property; or any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar
officer is appointed without the application or consent of that Person
and the appointment continues undischarged or unstayed for 60 calendar
days; or any proceeding under Debtor Relief Laws relating to any such
Person or to all or any part of its property is instituted without the
consent of that Person and continues undismissed or unstayed for 60
calendar days, or an order for relief is entered in any such
proceeding; or
(j) (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) Borrower 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 Borrower 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 $5,000,000; (iv) in the case
of an ERISA Event involving the complete or partial withdrawal of
Borrower or an ERISA Affiliate from a Multiemployer Plan, the
withdrawing employer has incurred a withdrawal liability in an
aggregate amount exceeding $5,000,000; (v) in the case of an ERISA
Event not described in clause (iii) or (iv), the Unfunded Pension
Liabilities of the relevant Plan or Plans exceed $5,000,000; (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
$5,000,000 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 $5,000,000; (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 $5,000,000; (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
$5,000,000; (x) any member of the Controlled Group is assessed a tax
under section 4980B of the Code in excess of $5,000,000; or (xi) the
occurrence of any combination of events listed in clauses (iii) through
(x) that involves a potential liability, net
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increase in aggregate Unfunded Pension Liabilities, unfunded
liabilities, or any combination thereof, in excess of $5,000,000; or
(k) [Intentionally Omitted]
(l) [Intentionally Omitted]
(m) (i) Any provision of any Guaranty shall for any reason
(other than pursuant to the terms thereof) cease to be valid and
binding on or enforceable against Borrower or other Person party
thereto (except to the extent that the same results solely from an act
or omission of Administrative Agent or the Lenders), or Borrower or
such Person shall so state in writing or bring an action to limit its
obligations or liabilities thereunder; or (ii) any party to any
Guaranty (other than the Administrative Agent or Lenders) shall fail to
perform or observe any term or covenant contained in such Guaranty, and
such failure shall continue uncured for a period of 20 days after the
earlier of (A) the date upon which a Responsible Officer of Borrower
knew or received written notice of such failure or (B) the date upon
which written notice thereof is given to Borrower by Administrative
Agent, or any other event or condition shall occur or exist under a
Guaranty that constitutes an "Event of Default" as defined therein; or
(iii) 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 or
incorporated from Sections 6.12 and 6.14 and Article 7 of this
Agreement into Section 12(h) of such guaranty, or (B) any other term,
covenant or agreement in the REIT Guaranty, 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 Borrower or the REIT (or any Subsidiary party
thereto) by Administrative Agent; or the REIT Guaranty 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; or
(n) (i) Any "Person", or a "group" of related "Persons" (as
such terms are used for purposes of Sections 13(d) and 14(d) of the
Exchange Act whether or not applicable), 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
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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 Borrower 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
(o) Borrower, any Guarantor, or any of their respective
Subsidiaries shall lose, through suspension, termination, impoundment,
revocation, failure to renew or otherwise, any license or permit
material to Borrower, Guarantors and their respective Subsidiaries,
taken as a whole; or
(p) Borrower, any Guarantor, or any of their respective
Subsidiaries or any of their respective Properties shall become
subject to one or more Liens for costs or damages in excess of
$5,000,000, individually or in the aggregate, and in each case under
any Environmental Law and such Liens shall remain in place for thirty
(30) days after the creation thereof; or
(q) If at any time after the incurrence of any Intra-Company
Debt, Borrower, the REIT, or any 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 Revolving Commitment Termination Date, the holder of any
Intra-Company Debt demands any payment whatsoever thereon; or
(r) Any event not otherwise described in this Section 8.01
occurs which has a Material Adverse Effect; or
(s) If at any time Terry S. Considine and Peter K. Kompaniez
and their respective immediate family members and/or affiliated trusts
fail to directly or indirectly own in the aggregate the lesser of (i)
at least 2% of the aggregate ordinary voting power represented by the
issued and outstanding equity of the REIT as diluted from time to time
or (ii) 600,000 shares of common voting Stock thereof or Partnership
Units.
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8.02 REMEDIES UPON EVENT OF DEFAULT.
Without limiting any other rights or remedies of Administrative Agent
or Lenders provided for elsewhere in this Agreement, or the other Loan
Documents, or by applicable Law, or in equity, or otherwise:
(a) upon the occurrence, and during the continuance, of any
Event of Default other than an Event of Default described in Section
8.01(i):
(i) Supermajority Lenders may request Administrative
Agent to, and Administrative Agent thereupon shall, terminate
the Commitments and/or declare all or any part of the unpaid
principal of all Loans, all interest accrued and unpaid
thereon and all other amounts payable under the Loan Documents
to be forthwith due and payable, whereupon the same shall
become and be forthwith due and payable, without protest,
presentment, notice of dishonor, demand or further notice of
any kind, all of which are expressly waived by Borrower; and
(ii) Issuing Lender may, with the approval of
Administrative Agent on behalf of Supermajority Lenders,
demand immediate payment by Borrower of an amount equal to the
aggregate amount of all outstanding Letters of Credit Usage to
be held in a Letter of Credit Cash Collateral Account.
(b) Upon the occurrence of any Event of Default described in
Section 8.01(i):
(i) the Commitments and all other obligations of
Administrative Agent or Lenders shall automatically terminate
without notice to or demand upon Borrower, which are expressly
waived by Borrower;
(ii) the unpaid principal of all Loans, all interest
accrued and unpaid thereon and all other amounts payable under
the Loan Documents shall be forthwith due and payable, without
protest, presentment, notice of dishonor, demand or further
notice of any kind, all of which are expressly waived by
Borrower; and
(iii) an amount equal to the aggregate amount of all
outstanding Letters of Credit Usage shall be immediately due
and payable to Issuing Lender without notice to or demand upon
Borrower,
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which are expressly waived by Borrower, to be held in a Letter
of Credit Cash Collateral Account.
(c) Upon the occurrence of any Event of Default, Lenders and
Administrative Agent, or any of them, without notice to (except as
expressly provided for in any Loan Document) or demand upon Borrower,
which are expressly waived by Borrower (except as to notices expressly
provided for in any Loan Document), may proceed to (but only with the
consent of Supermajority Lenders) protect, exercise and enforce their
rights and remedies under the Loan Documents against any Borrower
Party and such other rights and remedies as are provided by Law or
equity.
(d) Except as permitted by Section 10.05, no Lender may
exercise any rights or remedies with respect to the Obligations without
the consent of Supermajority Lenders in their sole discretion. The
order and manner in which Administrative Agent's and Lenders' rights
and remedies are to be exercised shall be determined by Supermajority
Lenders in their sole discretion. Regardless of how a Lender may treat
payments for the purpose of its own accounting, for the purpose of
computing the Obligations hereunder, payments shall be applied first,
to costs and expenses (including Attorney Costs) incurred by
Administrative Agent and each Lender, second, to the payment of accrued
and unpaid interest on the Loans to and including the date of such
application, third, to the payment of the unpaid principal of the
Loans, and fourth, to the payment of all other amounts (including fees)
then owing to Administrative Agent and Lenders under the Loan
Documents, in each case paid pro rata to Administrative Agent and each
Lender in the same proportions that the aggregate Obligations owed to
Administrative Agent and each Lender under the Loan Documents bear to
the aggregate Obligations owed under the Loan Documents to
Administrative Agent and all Lenders, without priority or preference
among Administrative Agent and Lenders. No application of payments will
cure any Event of Default, or prevent acceleration, or continued
acceleration, of amounts payable under the Loan Documents, or prevent
the exercise, or continued exercise, of rights or remedies of
Administrative Agent and Lenders hereunder or thereunder or at Law or
in equity.
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SECTION 9.
ADMINISTRATIVE AGENT
9.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.
(a) Each Lender hereby irrevocably (subject to Section 9.09)
appoints, designates and authorizes Administrative 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,
Administrative Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall Administrative 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 against Administrative Agent.
Without limiting the generality of the foregoing sentence, the use of
the term "agent" in this Agreement with reference to Administrative
Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable
law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative
relationship between independent contracting parties.
(b) Issuing Lender shall act on behalf of Lenders with respect
to any Letters of Credit issued by it and the documents associated
therewith until such time and except for so long as Administrative
Agent may agree at the request of the Requisite Lenders to act for such
Issuing Lender with respect thereto; provided, however, that Issuing
Lender shall have all of the benefits and immunities (i) provided to
Administrative Agent in this Section 9 with respect to any acts taken
or omissions suffered by Issuing Lender in connection with Letters of
Credit issued by it or proposed to be issued by it and the application
and agreements for letters of credit pertaining to the Letters of
Credit as fully as if the term "Administrative Agent" as used in this
Section 9 included Issuing Lender with respect to such acts or
omissions, and (ii) as additionally provided in this Agreement with
respect to Issuing Lender.
9.02 DELEGATION OF DUTIES.
Administrative 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
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shall be entitled to advice of counsel concerning all matters pertaining to such
duties. Administrative 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 ADMINISTRATIVE AGENT.
None of Administrative Agent-Related Persons shall (i) 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 or the transactions contemplated
hereby (except for its own gross negligence or willful misconduct), or (ii) be
responsible in any manner to any of Lenders for any recital, statement,
representation or warranty made by Borrower or any Subsidiary or Affiliate of
Borrower, 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 Administrative Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of Borrower or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No
Administrative 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 Borrower or any of
Borrower's Subsidiaries or Affiliates.
9.04 RELIANCE BY ADMINISTRATIVE AGENT.
(a) Administrative Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, 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 Borrower), independent accountants
and other experts selected by Administrative Agent. Administrative
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 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. Administrative 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
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or all Lenders, if required hereunder, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of
Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, 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 either sent by
Administrative Agent to such Lender for consent, approval, acceptance
or satisfaction, or required thereunder to be consented to or approved
by or acceptable or satisfactory to such Lender.
9.05 NOTICE OF DEFAULT.
Administrative 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
Administrative Agent for the account of Lenders, unless Administrative Agent
shall have received written notice from a Lender or Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". Administrative Agent will notify Lenders of its
receipt of any such notice. Administrative Agent shall take such action with
respect to such Default or Event of Default as may be requested by the Requisite
Lenders in accordance with Section 8; provided, however, that unless and until
Administrative Agent has received any such request, Administrative Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable or in the best interest of Lenders.
9.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE
AGENT.
Each Lender acknowledges that none of Administrative Agent-Related
Persons or Co-Lead Arrangers has made any representation or warranty to it, and
that no act by Administrative Agent hereinafter taken, including any consent to
and acceptance of any assignment or review of the affairs of Borrower and its
Subsidiaries, shall be deemed to constitute any representation or warranty by
any Administrative Agent-Related Person or any Co-Lead Arranger to any Lender
as to any matter, including without limitation, whether Administrative
Agent-Related Persons or Co-Lead Arrangers, as the case may be, have disclosed
material information in their possession. Each Lender, including any Lender by
assignment, represents to Administrative Agent that it has, independently and
without reliance upon any Administrative Agent-Related Person or any Co-Lead
Arranger and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
prospects, operations, property, financial and
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other condition and creditworthiness of Borrower and its Subsidiaries, and all
applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to Borrower hereunder. Each Lender also represents that it will,
independently and without reliance upon any Administrative Agent-Related Person
or any Co-Lead Arranger 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, property, financial
and other condition and credit worthiness of Borrower. Except for notices,
reports and other documents expressly herein required to be furnished to Lenders
by Administrative Agent herein, Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of Borrower or any of its Subsidiaries which may
come into the possession of any of Administrative Agent-Related Persons or
Co-Lead Arranger.
9.07 INDEMNIFICATION OF ADMINISTRATIVE AGENT.
Whether or not the transactions contemplated hereby are consummated,
Lenders shall indemnify upon demand each Administrative Agent-Related Person (to
the extent not reimbursed by or on behalf of Borrower and without limiting the
obligation of Borrower to do so), pro rata, and hold harmless each
Administrative Agent-Related Person from and against any and all Indemnified
Liabilities incurred by it; provided, however, that no Lender shall be liable
for the payment to any Administrative Agent-Related Person of any portion of
such Indemnified Liabilities resulting from such Person's gross negligence or
willful misconduct; provided, however, that no action taken in accordance with
the directions of the Requisite Lenders shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section. Without
limitation of the foregoing, each Lender shall reimburse Administrative Agent
upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by Administrative Agent after the Closing
Date 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 Administrative Agent
is not reimbursed for such expenses by or on behalf of Borrower. The undertaking
in this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of Administrative Agent.
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9.08 ADMINISTRATIVE AGENT IN INDIVIDUAL CAPACITY.
Administrative Agent and its 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, underwriting or other business with Borrower and its Subsidiaries and
Affiliates as though it were not Administrative Agent or Issuing Lender
hereunder and without notice to or consent of Lenders. Lenders acknowledge that,
pursuant to such activities, Administrative Agent or its Affiliates may receive
information regarding Borrower or its Affiliates (including information that may
be subject to confidentiality obligations in favor of Borrower or such
Affiliate) and acknowledge that Administrative Agent shall be under no
obligation to provide such information to them. With respect to its Loans,
Administrative Agent shall have the same rights and powers under this Agreement
as any other Lender and may exercise the same as though it were not
Administrative Agent or Issuing Lender.
9.09 SUCCESSOR ADMINISTRATIVE AGENT.
Administrative Agent may, and at the request of the Supermajority
Lenders shall, resign as Administrative Agent upon thirty (30) days' notice to
Lenders. If Administrative Agent resigns under this Agreement, the Requisite
Lenders shall appoint from among Lenders a successor administrative agent for
Lenders, and, so long as no Default or Event of Default has occurred and is
continuing, such successor administrative agent shall be approved by Borrower
(which approval shall not be unreasonably withheld, conditioned or delayed). If
no successor administrative agent is appointed prior to the effective date of
the resignation of Administrative Agent, Administrative Agent may appoint, after
consulting with Lenders and Borrower, a successor administrative agent from
among Lenders. Upon the acceptance of its appointment as successor
administrative agent hereunder, such successor administrative agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent and the term "Administrative Agent" shall mean such successor
administrative agent and the retiring Administrative Agent's appointment,
powers and duties as Administrative Agent shall be terminated. After any
retiring Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this Section 9 and Sections 10.03 and 10.13 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. If no successor administrative agent
has accepted appointment as Administrative Agent by the date which is thirty
(30) days following a retiring Administrative Agent's notice of resignation, the
retiring Administrative Agent's resignation shall nevertheless thereupon become
effective and Lenders shall perform all of the duties of Administrative Agent
hereunder until such time, if any, as the Requisite Lenders appoint a successor
agent as provided for above. Notwithstanding the foregoing, however, Bank of
America may not be removed as Administrative Agent at the request of
Supermajority Lenders unless Bank of America shall
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also simultaneously be replaced as "Issuing Lender" hereunder pursuant to
documentation in form and substance reasonably satisfactory to Bank of America.
9.10 CO-LEAD AGENTS.
None of Lenders identified on the facing page or signature pages of
this Agreement as a "lead agent" or "co-lead agent" shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, none of
Lenders so identified as a "lead agent" or "co-lead agent" shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of Lenders so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
SECTION 10.
MISCELLANEOUS
10.01 AMENDMENTS; CONSENTS.
No amendment, modification, supplement, extension, termination or
waiver of any provision of this Agreement or any other Loan Document, no
approval or consent thereunder, and no consent to any departure by any Borrower
Party there from shall be effective unless in writing signed by Administrative
Agent and Requisite Lenders, and each such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that, except as otherwise expressly provided herein, (i)
without the approval in writing of Administrative Agent and Supermajority
Lenders, no amendment, modification, supplement, termination, waiver or consent
may be effective to amend the provisions of Sections 7.14(a), (b), (d) or (e) or
of Section 8 or to amend any provision of this Agreement that expressly requires
the consent or approval of Supermajority Lenders, and (ii) without the approval
in writing of Administrative Agent and all Lenders, no amendment, modification,
supplement, termination, waiver or consent may be effective:
(a) To reduce the amount of principal, principal prepayments
or the rate of interest payable on, any Loan, or the amount of any fee
or other amount payable to any Lender under the Loan Documents (unless
such modification is consented to by each Lender entitled to receive
such fee) or to waive an Event of Default consisting of the failure of
Borrower to pay when due principal, interest or any commitment fee; or
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(b) To postpone any date fixed for any payment of principal
of, prepayment of principal of, or any installment of interest on, any
Loan or any installment of any commitment fee, to extend the term of,
or increase the amount of, any Lender's Commitment (it being understood
that a waiver of an Event of Default shall not constitute an extension
or increase in the Commitment of any Lender) or modify the Pro Rata
Share of any Lender; or
(c) To amend the provisions of the definition of "Requisite
Lenders", "Supermajority Lenders", Sections 9 or this Section 10.01; or
(d) To amend any provision of this Agreement that expressly
requires the consent or approval of all Lenders; or
(e) To release (i) any Lien granted in favor of Administrative
Agent with respect to all or substantially all of the Collateral, or
(ii) all or substantially all of the Guarantors from their obligations
under the REIT Guaranty Documents, in each case other than in
accordance with the terms of the Loan Documents;
provided, however, that (i) no amendment, waiver or consent shall, unless in
writing and signed by Issuing Lender in addition to the Requisite Lenders or all
Lenders, as the case may be, affect the rights or duties of Issuing Lender under
any Loan Document relating to Letters of Credit and (ii) the Fee Letters may be
amended, or rights or privileges thereunder waived, in a writing executed by the
parties thereto. Any amendment, modification, supplement, termination, waiver or
consent pursuant to this Section shall apply equally to, and shall be binding
upon, all Lenders and Administrative Agent.
Notwithstanding any other provision contained herein to the contrary,
Administrative Agent may charge, for distribution to Lenders, a reasonable
amendment fee for any amendments to this Agreement made pursuant to this Section
10.01 if such fee is necessary or, in the reasonable opinion of Administrative
Agent, desirable to effectuate any such amendment.
10.02 TRANSMISSION AND EFFECTIVENESS OF NOTICES AND SIGNATURES.
(a) MODES OF DELIVERY. Except as otherwise provided in any
Loan Document, notices, requests, demands, directions, agreements and
documents delivered in connection with the Loan Documents
(collectively, "communications") shall be transmitted by Requisite
Notice to the number and address set forth on Schedule 10.02, may be
delivered by the following modes of delivery, and shall be effective as
follows:
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<TABLE>
<CAPTION>
MODE OF DELIVERY EFFECTIVE ON EARLIER OF ACTUAL RECEIPT AND:
---------------- -------------------------------------------
<S> <C>
Courier Scheduled delivery date
Facsimile When transmission in legible form complete
Mail Fourth Business Day after deposit in U.S. mail
first class postage-pre-paid
Personal Delivery When received
Telephone When conversation completed
</TABLE>
; provided, however, that communications delivered to Administrative Agent
pursuant to Section 2 shall not be effective until actually received by
Administrative Agent.
(b) RELIANCE BY ADMINISTRATIVE AGENT AND LENDERS.
Administrative Agent and Lenders shall be entitled to rely and act on
any communications purportedly given by or on behalf of any Borrower
Party even if such communications (i) were not made in a manner
specified herein, (ii) were incomplete, (iii) were not preceded or
followed by any other notice specified herein, or (d) the terms
thereof, as understood by the recipient, varied from any subsequent
related communications provided for herein. Borrower shall indemnify
Administrative Agent and Lenders from any loss, cost, expense or
liability as a result of relying on any communications permitted
herein.
(c) EFFECTIVENESS OF ELECTRONIC AND FACSIMILE SIGNATURES.
Signatures on communications may be transmitted by facsimile,
electronic mail or other digital transmission only with the consent of
Administrative Agent in its sole discretion in each instance. The
effectiveness of any such signatures accepted by Administrative Agent
shall, subject to applicable Law, have the same force and effect as
manual signatures and shall be binding on all Borrower Parties and
Administrative Agent and Lenders. Administrative Agent may also require
that any such signature be confirmed by a manually-signed hardcopy
thereof.
10.03 ATTORNEY COSTS, EXPENSES AND TAXES.
Borrower agrees (a) to pay or reimburse Administrative Agent for all
reasonable costs and expenses incurred in connection with the development,
preparation, negotiation and execution of the Loan Documents, and the
development, preparation, negotiation and execution of any amendment, waiver,
consent, supplement or modification to, any Loan Documents, and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, all Attorney Costs; provided, however, that Administrative
Agent and BankBoston shall
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not seek more than $50,000 from Borrower for reimbursement of travel and
travel-related expenses through and including the Closing Date; and (b) to pay
or reimburse Administrative Agent and each Lender for all costs and expenses
incurred in connection with any refinancing, restructuring, reorganization
(including a bankruptcy reorganization) and enforcement or attempted
enforcement, or preservation of any rights under any Loan Documents, and any
other documents prepared in connection herewith or therewith, or in connection
with any refinancing, or restructuring of any such documents in the nature of a
"workout" or of any insolvency or bankruptcy proceeding, including, without
limitation, Attorney Costs. The foregoing costs and expenses shall include all
search, filing, recording, title insurance and appraisal charges and fees and
taxes related thereto, and other out-of-pocket expenses incurred by
Administrative Agent and the cost of independent public accountants and other
outside experts retained by Administrative Agent or any Lender. Such costs and
expenses shall also include administrative costs of Administrative Agent
reasonably attributable to the administration of the Loan Documents, among other
things, in connection with the matters described in clause (b) above. Any amount
payable by Borrower under this Section shall bear interest from the second
Business Day following the date of demand for payment at the Default Rate,
unless waived by Administrative Agent. The agreements in this Section shall
survive repayment of all Obligations.
10.04 BINDING EFFECT; ASSIGNMENT.
(a) This Agreement and the other Loan Documents to which
Borrower is a party will be binding upon and inure to the benefit of
Borrower, Administrative Agent, Lenders and their respective
successors and assigns, except that, Borrower may not assign its rights
hereunder or there under or any interest herein or therein without the
prior written consent of all Lenders and any such attempted assignment
shall be void. Any Lender may at any time pledge its Note or any other
instrument evidencing its rights as a Lender under this Agreement to a
Federal Reserve Bank, but no such pledge shall release that Lender from
its obligations hereunder or grant to such Federal Reserve Bank the
rights of a Lender hereunder absent foreclosure of such pledge.
(b) From time to time following the Closing Date, each Lender
may assign to one or more Eligible Assignees all or any portion of its
Pro Rata Share of its Commitment and/or Extensions of Credit; provided
that (i) such assignment, if not to a Lender or an Affiliate of the
assigning Lender, shall require the approval of Borrower at all times
other than during the existence of a Default or Event of Default and
Administrative Agent and Issuing Lender (which approval of Borrower or
Administrative Agent or Issuing Lender, as the case may be, shall not
be unreasonably withheld,
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conditioned or delayed and if Borrower does not respond during such ten
(10) Business Days after receipt of a Notice of Assignment and
Acceptance, such assignment shall be deemed approved), (ii) a copy of a
duly signed and completed Notice of Assignment and Acceptance shall be
delivered to Administrative Agent, (iii) except in the case of an
assignment to an Affiliate of the assigning Lender, to another Lender
or of the entire remaining Commitment of the assigning Lender, the
assignment shall not assign a Pro Rata Share equivalent to less than
the Minimum Amount therefor, and (iv) the effective date of any such
assignment shall be as specified in the Notice of Assignment and
Acceptance, but not earlier than the date which is five Business Days
after the date Administrative Agent has received the Notice of
Assignment and Acceptance. Upon acceptance by Administrative Agent of
such Notice of Assignment and Acceptance and approval thereto by
Administrative Agent and Issuing Lender and payment of the requisite
fee described below, the Eligible Assignee named therein shall be a
Lender for all purposes of this Agreement, with the Pro Rata Share
therein set forth and, to the extent of such Pro Rata Share, the
assigning Lender shall be released from its further obligations under
this Agreement. Borrower agrees that it shall execute and deliver upon
request (against delivery by the assigning Lender to Borrower of any
Note) to such assignee Lender, one or more Notes evidencing that
assignee Lender's Pro Rata Share, and to the assigning Lender if
requested, one or more Notes evidencing the remaining balance Pro Rata
Share retained by the assigning Lender. Administrative Agent's consent
to and acceptance of any assignment shall not be deemed to constitute
any representation or warranty by any Administrative Agent-Related
Person as to any matter.
(c) After receipt of a completed Notice of Assignment and
Acceptance, and receipt of an assignment fee of $2,500 from such
Eligible Assignee, Administrative Agent shall, promptly following the
effective date thereof, provide to Borrower and Lenders a revised
Schedule 10.02 giving effect thereto.
(d) Each Lender may from time to time grant participations to
one or more banks or other financial institutions (including another
Lender) all or any portion of its Pro Rata Share of its Commitment and
Extensions of Credit; provided, however, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) the participating banks or
other financial institutions shall not be a Lender hereunder for any
purpose except, if the participation agreement so provides, for the
purposes of Section 3 (but only to the extent that the cost of such
benefits to Borrower does not exceed the cost which Borrower would
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have incurred in respect of such Lender absent the participation) and
subject to Sections 10.05 and 10.06, (iv) Borrower, Administrative
Agent and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and
obligations under this Agreement, (v) the participation shall not
restrict an increase in the Commitment or in granting Lender's Pro Rata
Share, so long as the amount of the participation interest is not
affected thereby, and (vi) the consent of the holder of such
participation interest shall not be required for amendments or waivers
of provisions of the Loan Documents; provided, however, that the
assigning Lender may, in any agreement with a participant, give such
participant the right to consent to any matter which (A) extends the
Maturity Date as to such participant or any other date upon which any
payment of money is due to such participant, (B) reduces the rate of
interest owing to such participant, any fee or any other monetary
amount owing to such participant, or (C) reduces the amount of any
installment of principal owing to such participant.
10.05 SET-OFF.
In addition to any rights and remedies of Administrative Agent and
Lenders or any assignee or participant of Lenders or any Affiliates thereof
(each, a "Proceeding Party") provided by law, upon the occurrence and during
the continuance of any Event of Default, each Proceeding Party is authorized at
any time and from time to time, without prior notice to Borrower, any such
notice being waived by Borrower to the fullest extent permitted by law, to
proceed directly, by right of set-off, banker's lien, or otherwise, against any
assets of the Borrower Parties which may be in the hands of such Proceeding
Party (including all general or special, time or demand, provisional or other
deposits and other indebtedness owing by such Proceeding Party to or for the
credit or the account of Borrower) and apply such assets against the
Obligations, irrespective of whether such Proceeding Party shall have made any
demand therefor and although such Obligations may be unmatured. Each Lender
agrees promptly to notify Borrower and Administrative Agent after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application
10.06 SHARING OF PAYMENT.
Each Lender severally agrees that if it, through the exercise of any
right of setoff, banker's lien or counterclaim against Borrower, or otherwise,
receives payment of the Obligations held by it that is ratably more than any
other Lender, through any means, receives in payment of the Obligations held by
that Lender, then, subject to applicable Laws: (a) Lender exercising the right
of setoff, banker's lien or counterclaim or otherwise receiving such payment
shall purchase, and shall be deemed to have simultaneously purchased, from the
other Lenders a participation
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<PAGE> 123
in the Obligations held by the other Lenders and shall pay to the other Lenders
a purchase price in an amount so that the share of the Obligations held by each
Lender after the exercise of the right of setoff, banker's lien or counterclaim
or receipt of payment shall be in the same proportion that existed prior to the
exercise of the right of setoff, banker's lien or counterclaim or receipt of
payment; and (b) such other adjustments and purchases of participations shall be
made from time to time as shall be equitable to ensure that all Lenders share
any payment obtained in respect of the Obligations ratably in accordance with
each Lender's share of the Obligations immediately prior to, and without taking
into account, the payment; provided that, if all or any portion of a
disproportionate payment obtained as a result of the exercise of the right of
setoff, banker's lien, counterclaim or otherwise is thereafter recovered from
the purchasing Lender by Borrower or any Person claiming through or succeeding
to the rights of Borrower, the purchase of a participation shall be rescinded
and the purchase price thereof shall be restored to the extent of the recovery,
but without interest. Each Lender that purchases a participation in the
Obligations pursuant to this Section shall from and after the purchase have the
right to give all notices, requests, demands, directions and other
communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased. Borrower expressly consents to
the foregoing arrangements and agrees that any Lender holding a participation in
an Obligation so purchased may exercise any and all rights of setoff, banker's
lien or counterclaim with respect to the participation as fully as if Lender
were the original owner of the Obligation purchased.
10.07 NO WAIVER; CUMULATIVE REMEDIES.
(a) No failure by any Lender or Administrative Agent to
exercise, and no delay by any Lender or Administrative Agent in
exercising, 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 under any Loan Document
preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.
(b) The rights, remedies, powers and privileges herein or
therein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by Law. Any decision by
Administrative Agent or any Lender not to require payment of any
interest (including Default Interest), fee, cost or other amount
payable under any Loan Document or to calculate any amount payable by a
particular method on any occasion shall in no way limit or be deemed a
waiver of Administrative Agent's or such Lender's right to require full
payment thereof, or to calculate an amount
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<PAGE> 124
payable by another method that is not inconsistent with this Agreement,
on any other or subsequent occasion.
(c) The terms and conditions of Section 9 are inserted for the
sole benefit of Administrative Agent and Lenders; the same may be
waived in whole or in part, with or without terms or conditions, in
respect of any Extension of Credit without prejudicing Administrative
Agent's or Lenders' rights to assert them in whole or in part in
respect of any other Loan.
10.08 USURY.
Notwithstanding anything to the contrary contained in any Loan
Document, the interest and fees paid or agreed to be paid under the Loan
Documents shall not exceed the maximum rate of non-usurious interest permitted
by applicable Law (the "Maximum Rate"). If Administrative Agent or any Lender
shall receive interest or a fee in an amount that exceeds the Maximum Rate, the
excessive interest or fee shall be applied to the principal of the Outstanding
Obligations or, if it exceeds the unpaid principal, refunded to Borrower. In
determining whether the interest or a fee contracted for, charged, or received
by Administrative Agent or a Lender exceeds the Maximum Rate, such Person may,
to the extent permitted by applicable Law, (a) characterize any payment that is
not principal as an expense, fee, or premium rather than interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the contemplated term of the Obligations.
10.09 COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
10.10 INTEGRATION.
This Agreement, together with the other Loan Documents and any letter
agreements referred to herein, comprises the complete and integrated agreement
of the parties on the subject matter hereof and supersedes all prior agreements,
written or oral, on the subject matter hereof. There are no unwritten oral
agreements between the parties hereto. In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control and govern; provided that the
inclusion of supplemental rights or remedies in favor of Administrative Agent or
Lenders in any other Loan Document shall not be deemed a conflict with this
Agreement. Each Loan Document was drafted with the joint participation of the
respective parties thereto and
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shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.
10.11 NATURE OF LENDERS' OBLIGATIONS.
The obligations of Lenders hereunder are several and not joint or joint
and several. Nothing contained in this Agreement or any other Loan Document and
no action taken by Administrative Agent or Lenders or any of them pursuant
hereto or thereto may, or may be deemed to, make Lenders a partnership, an
association, a joint venture or other entity, either among themselves or with
Borrower or any Affiliate of Borrower. Each Lender's obligation to make the
initial Loan is conditioned upon the performance by all other Lenders of their
obligations to make initial Loans. A default by any Lender will not increase the
Pro Rata Share attributable to any other Lender.
10.12 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made hereunder and in any Loan
Document, certificate or statement delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and delivery
thereof but shall terminate the later of (a) when the Commitments are terminated
and (b) when no Obligations remain outstanding under any Loan Document. Such
representations and warranties have been or will be relied upon by
Administrative Agent and each Lender, notwithstanding any investigation made by
Administrative Agent or any Lender or on their behalf.
10.13 INDEMNITY BY BORROWER.
Borrower agrees to indemnify, save and hold harmless Administrative
Agent-Related Persons and each Lender and their respective Affiliates,
directors, officers, agents, attorneys and employees (collectively the
"Indemnitees") from and against: (a) any and all claims, demands, actions or
causes of action (except a claim, demand, action, or cause of action for Taxes
of Lenders) if the claim, demand, action or cause of action arises out of or
relates to any act or omission (or alleged act or omission) of any Borrower
Party, its Affiliates or any of their officers, directors or stockholders
relating to the Commitments, the use or contemplated use of proceeds of any
Loan, or the relationship of any Borrower Party and Lenders under this
Agreement; (b) any administrative or investigative proceeding by any
Governmental Authority arising out of or related to a claim, demand, action or
cause of action described in subsection (a) above; and (c) any and all
liabilities, losses, costs or expenses (including Attorney Costs) that any
Indemnitee suffers or incurs as a result of the assertion of any foregoing
claim, demand, action or cause of action thereto, including those liabilities
caused by an Indemnitee's own negligence
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(all the foregoing, collectively, the "Indemnified Liabilities"); provided that
no Indemnitee shall be entitled to indemnification for any loss caused by its
own gross negligence or willful misconduct or for any loss asserted against it
by another Indemnitee.
10.14 NONLIABILITY OF LENDERS.
Borrower acknowledges and agrees that:
(a) Any inspections of any Property of Borrower made by or
through Administrative Agent or Lenders are for purposes of
administration of the Loan Documents only, and Borrower is not entitled
to rely upon the same (whether or not such inspections are at the
expense of Borrower);
(b) By accepting or approving anything required to be
observed, performed, fulfilled or given to Administrative Agent or
Lenders pursuant to the Loan Documents, neither Administrative Agent
nor Lenders shall be deemed to have warranted or represented the
sufficiency, legality, effectiveness or legal effect of the same, or
of any term, provision or condition thereof, and such acceptance or
approval thereof shall not constitute a warranty or representation to
anyone with respect thereto by Administrative Agent or Lenders;
(c) The relationship between Borrower and Administrative Agent
and Lenders is, and shall at all times remain, solely that of borrowers
and lenders; neither Administrative Agent nor Lenders shall under any
circumstance be construed to be partners or joint venturers of
Borrower or their Affiliates; neither Administrative Agent nor Lenders
shall under any circumstance be deemed to be in a relationship of
confidence or trust or a fiduciary relationship with Borrower or its
Affiliates, or to owe any fiduciary duty to Borrower or its Affiliates;
neither Administrative Agent nor Lenders under take or assume any
responsibility or duty to Borrower or its Affiliates to select, review,
inspect, supervise, pass judgment upon or inform Borrower or its
Affiliates of any matter in connection with their Property or the
operations of Borrower or its Affiliates; Borrower and its Affiliates
shall rely entirely upon their own judgment with respect to such
matters; and any review, inspection, supervision, exercise of judgment
or supply of information undertaken or assumed by Administrative Agent
or Lenders in connection with such matters is solely for the
protection of Administrative Agent and Lenders and neither Borrower nor
any other Person is entitled to rely thereon; and
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(d) Administrative Agent and Lenders shall not be responsible
or liable to any Person for any loss, damage, liability or claim of any
kind relating to injury or death to Persons or damage to Property
caused by the actions, inaction or negligence of Borrower and/or its
Affiliates and Borrower hereby indemnifies and holds Administrative
Agent and Lenders harmless from any such loss, damage, liability or
claim.
10.15 NO THIRD PARTIES BENEFITED.
This Agreement is made for the purpose of defining and setting forth
certain obligations, rights and duties of Borrower, Administrative Agent and
Lenders in connection with the Loans, and is made for the sole benefit of
Borrower, Administrative Agent and Lenders, and Administrative Agent's and
Lenders' successors and assigns. Except as provided in Sections 10.04 and 10.13,
no other Person shall have any rights of any nature hereunder or by reason
hereof.
10.16 SEVERABILITY.
Any provision of the Loan Documents that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.17 [INTENTIONALLY OMITTED]
10.18 HEADINGS. Section headings in this Agreement and the other Loan
Documents are included for convenience of reference only and are not part of
this Agreement or the other Loan Documents for any other purpose.
10.19 TIME OF THE ESSENCE. Time is of the essence of the Loan
Documents.
10.20 [INTENTIONALLY OMITTED]
10.21 GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
the LAW OF THE GOVERNING STATE applicable to agreements made and to be performed
entirely within such State; PROVIDED THAT ADMINISTRATIVE Agent AND EACH LENDER
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
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10.22 WAIVER OF RIGHT TO TRIAL BY JURY.
EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL
BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN
DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTY HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.23 EXCLUSIVE JURISDICTION.
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF THE GOVERNING
STATE OR OF THE UNITED STATES FOR THE CENTRAL DISTRICT OF THE GOVERNING STATE,
AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH BORROWER PARTY,
ADMINISTRATIVE Agent AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH BORROWER
PARTY, ADMINISTRATIVE Agent AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NONCONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED HERETO. EACH BORROWER PARTY, ADMINISTRATIVE Agent AND EACH
LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH
MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF THE GOVERNING STATE.
10.24 NOTICE OF CLAIMS; CLAIMS BAR.
BORROWER HEREBY AGREES THAT IT SHALL GIVE PROMPT WRITTEN NOTICE TO
ADMINISTRATIVE AGENT OF ANY CLAIM OR
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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 ANY ACT OR OMISSION TO ACT BY ADMINISTRATIVE AGENT OR ANY LENDER WITH
RESPECT HERETO OR THERETO, AND THAT IF BORROWER SHALL FAIL TO GIVE SUCH PROMPT
NOTICE TO ADMINISTRATIVE AGENT WITH REGARD TO ANY SUCH CLAIM OR CAUSE OF ACTION,
BORROWER 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.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
AIMCO PROPERTIES, L.P.
By: AIMCO-GP, INC.
Its: General Partner
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
BANK OF AMERICA, N.A., as
Administrative Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
BANK OF AMERICA, N.A., as
Issuing Lender and a Lender
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
BANKBOSTON, N.A., as Syndication Agent
and a Lender
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[ADD LENDERS]
<PAGE> 1
EXHIBIT 10.2
BORROWER PLEDGE AGREEMENT
This PLEDGE AGREEMENT (this "Agreement") is dated as of August
16, 1999 and entered into by and between AIMCO PROPERTIES, L.P., a Delaware
limited partnership ("PLEDGOR") and BANK OF AMERICA, N.A., as Co-Lead Agent and
Administrative Agent for and representative of (in such capacity herein called
"SECURED PARTY") the financial institutions ("LENDERS") party to the Credit
Agreement (as hereinafter defined; the terms defined therein and not otherwise
defined herein being used herein as therein defined).
PRELIMINARY STATEMENTS
A. Pledgor is the legal and beneficial owner of (i) the shares
of stock in one or more Persons described in Part A of Schedule I annexed
hereto, and (ii) the indebtedness described in Part B of said Schedule I and
issued by the obligors named therein.
B. Secured Party and Lenders have entered into a Credit
Agreement dated as of August __, 1999 (said Credit Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "Credit Agreement") with Pledgor pursuant to which Lenders have made
certain commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Pledgor.
C. It is a condition precedent to the initial extensions of
credit by Lenders under the Credit Agreement that Pledgor shall have granted the
security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce Lenders to make Loans and other extensions of credit under the Credit
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Pledgor hereby agrees with Secured
Party as follows:
SECTION 1. PLEDGE OF SECURITY. Pledgor hereby pledges and
assigns to Secured Party, and hereby grants to Secured Party a security interest
in, all of Pledgor's right, title and interest in and to the following, whether
now owned and existing or hereafter acquired and arising (the "PLEDGED
COLLATERAL"):
<PAGE> 2
(a) the shares of stock represented by the certificates or
other instruments described in Part A of Schedule I annexed hereto (the "PLEDGED
SHARES"), and all dividends, distributions, returns of capital, cash, warrants,
option, rights, instruments, right to vote or manage the business of such Person
pursuant to organiza tional documents governing the rights and obligations of
the stockholders, 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 Pledged Shares; provided, that if the issuer of any of such Pledged
Shares is a controlled foreign corporation (used hereinafter as such term is
defined in Section 975(a) or a successor provision of the Internal Revenue
Code), the Pledged Shares shall not include any shares of stock of such issuer
in excess of the number of shares of such issuer possessing up to but not
exceeding 66% of the voting power of all classes of capital stock entitled to
vote of such issuer, 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 Pledged Shares;
(b) the indebtedness from time to time owed to Pledgor
evidenced by the instruments described in Part B of Schedule I annexed hereto
and issued by the obligors named therein (the "PLEDGED DEBT"), and all interest,
cash, 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 the Pledged Debt; and
(c) to the extent not covered by clauses (a) and (b) above,
all proceeds of any or all of the foregoing Pledged Collateral. For purposes of
this Agreement, the term "proceeds" includes whatever is receivable or received
when Pledged Collateral or proceeds are sold, exchanged, collected or otherwise
disposed of, whether such disposition is voluntary or involuntary, and includes,
without limitation, proceeds of any indemnity or guaranty payable to Pledgor or
Secured Party from time to time with respect to any of the Pledged Collateral.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures,
and the Pledged Collateral is collateral security for, the prompt payment or
performance in full when due, 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)), of
all obligations and liabilities of every nature of Pledgor now or hereafter
existing under or arising out of or in connection with the Credit Agreement and
the other Loan Documents, together with all extensions or renewals thereof,
whether for principal, interest (including without limitation interest
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<PAGE> 3
that, but for the filing of a petition in bankruptcy with respect to Pledgor,
would accrue on such obligations, whether or not a claim is allowed against
Pledgor for such interest in the related bankruptcy proceeding), reimbursement
of amounts drawn under Letters of Credit, fees, expenses, indemnities or
otherwise, whether voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly owed 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, and all obligations of every
nature of Pledgor now or hereafter existing under this Agreement (all such
obligations of Pledgor being the "SECURED OBLIGATIONS").
SECTION 3. DELIVERY OF PLEDGED COLLATERAL. All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of Secured Party pursuant hereto and shall be in
suitable form for transfer by delivery or, as applicable, shall be accompanied
by Pledgor's endorsement, where necessary, or duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to
Secured Party. Upon the occurrence and during the continuation of an Event of
Default (as defined in Section 11), Secured Party shall have the right, without
notice to Pledgor, to transfer to or to register in the name of Secured Party or
any of its nominees any or all of the Pledged Collateral. In addition, Secured
Party shall have the right at any time to exchange certificates or instruments
representing or evidencing Pledged Collateral for certificates or instruments of
smaller or larger denominations.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Pledgor represents
and warrants as follows:
(a) Due Authorization, etc. of Pledged Collateral. All of the
Pledged Shares described on Part A of Schedule I have been duly authorized and
validly issued and are fully paid and non-assessable. All of the Pledged Debt
described on Part B of said Schedule I has been duly authorized, authenticated
or issued, and delivered and is the legal, valid and binding obligation of the
issuers thereof and is not in default.
(b) Description of Pledged Collateral. Except as set forth in
said Schedule I, the Pledged Shares constitute all of the issued and outstanding
shares of stock of each issuer thereof (subject to the proviso to Section 1(a)
with respect to shares of a foreign controlled corporation), and there are no
outstanding warrants, options or
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<PAGE> 4
other rights to purchase, or other agreements outstanding with respect to, or
property that is now or hereafter convertible into, or that requires the
issuance or sale of, any Pledged Shares. The Pledged Debt constitutes all of the
issued and outstanding intercompany indebtedness evidenced by a promissory note
of the respective issuers thereof owing to Pledgor. Part A of Schedule I sets
forth all of the Pledged Shares; and Part B of said Schedule I sets forth all of
the Pledged Debt.
(c) Ownership of Pledged Collateral. Pledgor is the legal,
record and beneficial owner of the Pledged Collateral free and clear of any Lien
except for Ordinary Course Liens and liens permitted under the Credit Agreement.
(d) Governmental Authorizations. No authorization, approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge by Pledgor of the Pledged
Collateral pursuant to this Agreement and the grant by Pledgor of the security
interest granted hereby, (ii) the execution, delivery or performance of this
Agreement by Pledgor, or (iii) the exercise by Secured Party of the voting or
other rights, or the remedies in respect of the Pledged Collateral, provided for
in this Agreement (except as may be required in connection with a disposition of
Pledged Collateral by laws affecting the offering and sale of securities
generally).
(e) Perfection. The pledge and delivery to Secured Party of
the Pledged Collateral pursuant to this Agreement creates a valid and perfected
first priority security interest in the Pledged Collateral, securing the payment
of the Secured Obligations.
(f) Margin Regulations. The pledge of the Pledged Collateral
pursuant to this Agreement does not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
(g) Other Information. All information heretofore, herein or
hereafter supplied to Secured Party by or on behalf of Pledgor with respect to
the Pledged Collateral is accurate and complete in all respects.
SECTION 5. TRANSFERS AND OTHER LIENS; ADDITIONAL PLEDGED
COLLATERAL; ETC. Pledgor shall:
(a) not, except as expressly permitted by the Credit
Agreement, (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any
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<PAGE> 5
option with respect to, any of the Pledged Collateral, (ii) create or suffer to
exist any Lien upon or with respect to any of the Pledged Collateral, except for
Liens permitted under the Credit Agreement, or (iii) permit any issuer of
Pledged Shares to merge or consolidate unless all the outstanding capital stock
of the surviving or resulting corporation is, upon such merger or consolidation,
pledged hereunder and no cash, securities or other property is distributed in
respect of the outstanding shares of any other constituent corporation;
provided, if the surviving or resulting corporation upon any such merger or
consolidation involving an issuer of Pledged Shares which is a controlled
foreign corporation is a controlled foreign corporation, then Pledgor shall only
be required to pledge outstanding capital stock of such surviving or resulting
corporation possessing up to but not exceeding 66% of the voting power of all
classes of capital stock of such issuer entitled to vote;
(b) (i) cause each issuer of Pledged Shares not to issue any
stock or other securities in addition to or in substitution for the Pledged
Shares issued by such issuer, except to Pledgor and (ii) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and all
additional shares of stock or other securities of each issuer of Pledged Shares;
(c) pledge hereunder, immediately upon their issuance, any and
all instruments or other evidences of additional indebtedness from time to time
owed to Pledgor by any obligor on the Pledged Debt;
(d) promptly deliver to Secured Party all written notices
received by it with respect to the Pledged Collateral; and
(e) pay promptly when due all taxes, assessments and
governmental charges or levies imposed upon, and all claims against, the Pledged
Collateral, except to the extent the validity thereof is being contested in good
faith; provided that Pledgor shall in any event pay such taxes, assessments,
charges, levies or claims not later than five days prior to the date of any
proposed sale under any judgement, writ or warrant of attachment entered or
filed against Pledgor or any of the Pledged Collateral as a result of the
failure to make such payment.
SECTION 6. FURTHER ASSURANCES; PLEDGE AMENDMENTS.
(a) Pledgor agrees that from time to time, at the expense of
Pledgor, Pledgor will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable, or
that Secured Party may
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<PAGE> 6
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any Pledged
Collateral. Without limiting the generality of the foregoing, Pledgor will: (i)
execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as Secured Party may request, in order to perfect and preserve the
security interests granted or purported to be granted hereby and (ii) at Secured
Party's request, appear in and defend any action or proceeding that may affect
Pledgor's title to or Secured Party's security interest in all or any part of
the Pledged Collateral. Upon an Event of Default, Pledgor authorizes Secured
Party to file one or more financing or continuation statements, and amendments
thereto, relative to all or any part of the Pledged Collateral without the
signature of Pledgor. Pledgor agrees that a carbon, photographic or other
reproduction of this Agreement or of a financing statement signed by Pledgor
shall be sufficient as a financing statement and may be filed as a financing
statement in any and all jurisdictions.
(b) Pledgor further agrees that it will, upon obtaining any
additional shares of stock or other securities required to be pledged hereunder
as provided in Section 5(b) or (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 Schedule II annexed hereto (a "PLEDGE
AMENDMENT"), in respect of the additional Pledged Shares or Pledged Debt to be
pledged pursuant to this Agreement. Upon each delivery of a Pledge Amendment to
Secured Party, the representations and warranties contained in Section 4 hereof
shall be deemed to have been made by Pledgor as to the Pledged Collateral
described in such Pledge Amendment. Pledgor hereby authorizes Secured Party to
attach each Pledge Amendment to this Agreement and agrees that all Pledged
Shares or Pledged Debt listed on any Pledge Amendment delivered to Secured Party
shall for all purposes hereunder be considered Pledged Collateral; provided that
the failure of Pledgor to execute a Pledge Amendment with respect to any
additional Pledged Shares or Pledged Debt pledged pursuant to this 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.
SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC.
(a) So long as no Event of Default shall have occurred and be
continuing:
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<PAGE> 7
(i) Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged Collateral
or any part thereof for any purpose not inconsistent with the terms of
this Agreement or the Credit Agreement; provided, however, that Pledgor
shall give Secured Party at least five Business Days' prior written
notice of the manner in which it intends to exercise, or the reasons
for refraining from exercising, any such right (it being understood,
however, that neither (A) the voting by Pledgor of any Pledged Shares
for or Pledgor's consent to the election of directors at a regularly
scheduled annual or other meeting of stockholders or with respect to
incidental matters at any such meeting, nor (B) Pledgor's consent to or
approval of any action otherwise permitted under this Agreement and the
Credit Agreement shall be deemed inconsistent with the terms of this
Agreement or the Credit Agreement within the meaning of this Section
7(a)(i), and no notice of any such voting or consent need be given to
Secured Party);
(ii) Pledgor shall be entitled to receive and retain,
and to utilize free and clear of the lien of this Agreement, any and
all dividends, other distributions and interest paid in respect of the
Pledged Collateral; provided, however, that any and all
(A) dividends, other distributions and
interest paid or payable other than in cash in respect of, and
instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any
Pledged Collateral,
(B) dividends and other distributions paid
or payable in cash in respect of any Pledged Collateral in
connection with a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus
or paid-in-surplus, and
(C) cash paid, payable or otherwise
distributed in respect of principal or in redemption of or in
exchange for any Pledged Collateral,
shall be, and shall forthwith be delivered to Secured Party to hold as,
Pledged Collateral and shall, if received by Pledgor, be received in
trust for the benefit of Secured Party, be segregated from the other
property or funds of Pledgor and be forthwith delivered to Secured
Party as Pledged Collateral in the same form as so received (with all
necessary endorsements); and
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<PAGE> 8
(iii) Secured Party shall promptly execute and
deliver (or cause to be executed and delivered) to Pledgor all such
proxies, dividend payment orders 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 and to receive the
dividends, other distributions, principal or interest payments which it
is authorized to receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuation of an
Event of Default:
(i) 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 7(a)(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;
(ii) all rights of Pledgor to receive the dividends,
other distributions and interest payments which it would otherwise be
authorized to receive and retain pursuant to Section 7(a)(ii) shall
cease, and all such rights shall thereupon become vested in Secured
Party who shall thereupon have the sole right to receive and hold as
Pledged Collateral such dividends, other distributions and interest
payments; and
(iii) all dividends, principal, interest payments and
other distributions which are received by Pledgor contrary to the
provisions of paragraph (ii) of this Section 7(b) shall be received in
trust for the benefit of Secured Party, shall be segregated from other
funds of Pledgor and shall forthwith be paid over to Secured Party as
Pledged Collateral in the same form as so received (with any necessary
endorsements).
(c) In order to permit Secured Party to exercise the voting
and other consensual rights which it may be entitled to exercise pursuant to
Section 7(b)(i) and to receive all dividends and other distributions which it
may be entitled to receive under Section 7(a)(ii) or Section 7(b)(ii), (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
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<PAGE> 9
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
Shares and to exercise all other rights, powers, privileges and remedies to
which a holder of the Pledged Shares 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 Shares on the record books of the issuer thereof) by
any other Person (including the issuer of the Pledged Shares or any officer or
agent thereof), upon the occurrence of an Event of Default and which proxy shall
only terminate upon the payment in full of the Secured Obligations.
SECTION 8. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Pledgor
hereby irrevocably appoints Secured Party as Pledgor's attorney-in-fact, with
full authority in the place and stead of Pledgor and in the name of Pledgor,
Secured Party or otherwise, from time to time in Secured Party's discretion to
take any action and to execute any instrument that Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement, including
without limitation:
(a) to file one or more financing or continuation statements,
or amendments thereto, relative to all or any part of the Pledged Collateral
without the signature of Pledgor;
(b) upon the occurrence and during the continuance of an Event
of Default, to ask, demand, collect, sue for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Pledged Collateral;
(c) upon the occurrence and during the continuance of an Event
of Default, to receive, endorse and collect any instruments made payable to
Pledgor representing any dividend, principal or interest payment or other
distribution in respect of the Pledged Collateral or any part thereof and to
give full discharge for the same;
(d) upon the occurrence and during the continuance of an Event
of Default, to file any claims or take any action or institute any proceedings
that Secured Party may deem necessary or desirable for the collection of any of
the Pledged Collateral or otherwise to enforce the rights of Secured Party with
respect to any of the Pledged Collateral;
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<PAGE> 10
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or placed upon or
threatened against the Pledged Collateral, the legality or validity thereof and
the amounts necessary to discharge the same to be determined by Secured Party in
its sole discretion, any such payments made by Secured Party to become
obligations of Pledgor to Secured Party, due and payable immediately without
demand; and
(f) upon the occurrence and during the continuance of an Event
of Default, generally to sell, transfer, pledge, make any agreement with respect
to or otherwise deal with any of the Pledged Collateral as fully and completely
as though Secured Party were the absolute owner thereof for all purposes, and to
do, at Secured Party's option and Pledgor's expense, at any time or from time to
time, all acts and things that Secured Party deems necessary to protect,
preserve or realize upon the Pledged Collateral and Secured Party's security
interest therein in order to effect the intent of this Agreement, all as fully
and effectively as Pledgor might do.
SECTION 9. SECURED PARTY MAY PERFORM. If Pledgor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party incurred
in connection therewith shall be payable by Pledgor under Section 14(b).
SECTION 10. STANDARD OF CARE. The powers conferred on Secured
Party hereunder are solely to protect its interest in the Pledged 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 Pledged Collateral in its
possession and the accounting for moneys actually received by it hereunder,
Secured Party shall have no duty as to any Pledged 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 Pledged 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 Pledged Collateral) to preserve
rights against any prior parties or any other rights pertaining to any Pledged
Collateral, (c) taking any necessary steps to collect or realize upon the
Secured Obligations or any guarantee therefor, or any part thereof, or any of
the Pledged Collateral, or (d) initiating any action to protect the Pledged
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 Pledged Collateral in its possession if such Pledged Collateral
is
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accorded treatment substantially equal to that which Secured Party accords its
own property consisting of negotiable securities.
SECTION 11. REMEDIES.
(a) If any Event of Default (as defined in the Credit
Agreement) shall have occurred and be continuing, Secured Party may exercise in
respect of the Pledged Collateral, in addition to all other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies of
a secured party on default under the Uniform Commercial Code as in effect on the
date hereof in the State of California (the "UCC") (whether or not the UCC
applies to the affected Pledged Collateral), and Secured Party may also in its
sole discretion, without notice except as specified below, sell the Pledged
Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange or broker's board or at any of Secured Party's offices or
elsewhere, for cash, on credit or for future delivery, at such time or times and
at such price or prices and upon such other terms as Secured Party may deem
commercially reasonable, irrespective of the impact of any such sales on the
market price of the Pledged Collateral. Secured Party or any Lender may be the
purchaser of any or all of the Pledged Collateral at any such sale, and Secured
Party, as agent for and representative of Lenders (but not any Lender or Lenders
in its or their respective individual capacities unless Requisite Obligees (as
defined in Section 16(a)) shall otherwise agree in writing), shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Pledged Collateral sold at any such public
sale, to use and apply any of the Secured Obligations as a credit on account of
the purchase price for any Pledged Collateral payable by Secured Party at such
sale. Each purchaser at any such sale shall hold the property sold absolutely
free from any claim or right on the part of Pledgor, and Pledgor hereby waives
(to the extent permitted by applicable law) all rights of redemption, stay
and/or appraisal which it now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted. Pledgor agrees
that, to the extent notice of sale shall be required by law, at least ten days'
notice to Pledgor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification.
Secured Party shall not be obligated to make any sale of Pledged Collateral
regardless of notice of sale having been given. Secured Party may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. Pledgor hereby waives any claims against
Secured Party arising by reason of the fact that the price at which any Pledged
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Secured
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Party accepts the first offer received and does not offer such Pledged
Collateral to more than one offeree. If the proceeds of any sale or other
disposition of the Pledged Collateral are insufficient to pay all the Secured
Obligations, Pledgor shall be liable for the deficiency and the reasonable fees
of any attorneys employed by Secured Party to collect such deficiency.
(b) Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as from time to time amended (the
"Securities Act"), and applicable state securities laws, Secured Party may be
compelled, with respect to any sale of all or any part of the Pledged Collateral
conducted without prior registration or qualification of such Pledged Collateral
under the Securities Act and/or such state securities laws, to limit purchasers
to those who will agree, among other things, to acquire the Pledged Collateral
for their own account, for investment and not with a view to the distribution or
resale thereof. Pledgor acknowledges that any such private sales may be at
prices and on terms less favorable than those obtainable through a public sale
without such restrictions (including, without limitation, a public offering made
pursuant to a registration statement under the Securities Act) and,
notwithstanding such circumstances and the registration rights granted to
Secured Party by Pledgor pursuant to Section 12, Pledgor agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner and that Secured Party shall have no obligation to engage in public sales
and no obligation to delay the sale of any Pledged Collateral for the period of
time necessary to permit the issuer thereof to register it for a form of public
sale requiring registration under the Securities Act or under applicable state
securities laws, even if such issuer would, or should, agree to so register it.
(c) If Secured Party determines to exercise its right to sell
any or all of the Pledged Collateral, upon written request, Pledgor shall and
shall cause each issuer of any Pledged Shares to be sold hereunder from time to
time to furnish to Secured Party all such information as Secured Party may
request in order to determine the number of shares and other instruments
included in the Pledged Collateral which may be sold by Secured Party in exempt
transactions under the Securities Act and the rules and regulations of the
Securities and Exchange Commission thereunder, as the same are from time to time
in effect.
SECTION 12. REGISTRATION RIGHTS. If Secured Party shall
determine to exercise its right to sell all or any of the Pledged Collateral
pursuant to Section 11, Pledgor agrees that, upon request of Secured Party
(which request may be made by Secured Party in its sole discretion), Pledgor
will, at its own expense:
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(a) execute and deliver, and cause each issuer of the Pledged
Collateral contemplated to be sold and the directors and officers thereof to
execute and deliver, all such instruments and documents, and do or cause to be
done all such other acts and things, as may be necessary or, in the opinion of
Secured Party, advisable to register such Pledged Collateral under the
provisions of the Securities Act and to cause the registration statement
relating thereto to become effective and to remain effective for such period as
prospectuses are required by law to be furnished, and to make all amendments and
supplements thereto and to the related prospectus which, in the reasonable
opinion of Secured Party, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto;
(b) use its best efforts to qualify the Pledged Collateral
under all applicable state securities or "Blue Sky" laws and to obtain all
necessary governmental approvals for the sale of the Pledged Collateral, as
requested by Secured Party;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement which will satisfy the
provisions of Section 11(a) of the Securities Act;
(d) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Pledged Collateral or any part thereof
valid and binding and in compliance with applicable law; and
(e) bear all costs and expenses, including reasonable
attorneys' fees, of carrying out its obligations under this Section 12.
Pledgor further agrees that a breach of any of the covenants
contained in Sections 11 and 12 will cause irreparable injury to Secured Party,
that Secured Party has no adequate remedy at law in respect of such breach and,
as a consequence, that each and every covenant contained in Sections 11 and 12
shall be specifically enforceable against Pledgor, and Pledgor hereby waives and
agrees not to assert any defenses against an action for specific performance of
such covenants except for a defense that no default has occurred giving rise to
the Secured Obligations becoming due and payable prior to their stated
maturities. Nothing in this Section 12 shall in any way alter the rights of
Secured Party hereunder.
SECTION 13. APPLICATION OF PROCEEDS. Except as expressly
provided elsewhere in this Agreement, all proceeds received by Secured Party in
respect of any
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sale of, collection from, or other realization upon all or any part of the
Pledged Collateral shall be applied in the following order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Secured Party and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Secured Party in
connection therewith, and all amounts for which Secured Party is
entitled to indemnification hereunder and all advances made by Secured
Party hereunder for the account of Pledgor, and to the payment of all
costs and expenses paid or incurred by Secured Party in connection with
the exercise of any right or remedy hereunder;
SECOND: To the payment of all other Secured Obligations (for
the ratable benefit of the holders thereof) and, as to obligations
arising under the Credit Agreement, as provided in the Credit
Agreement, and
THIRD: To the payment to or upon the order of Company, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
SECTION 14. INDEMNITY AND EXPENSES.
(a) Pledgor agrees to indemnify Secured Party and each Lender
from and against any and all claims, losses and liabilities in any way relating
to, growing out of or resulting from this Agreement and the transactions
contemplated hereby (including, without limitation, enforcement of this
Agreement), except to the extent such claims, losses or liabilities result
solely from Secured Party's or such Lender's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.
(b) Pledgor agrees to pay to Secured Party upon demand the
amount of all reasonable costs and expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that Secured Party may
incur in connection with (i) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Pledged Collateral, (ii)
the exercise or enforcement of any of the rights of Secured Party hereunder, or
(iii) the failure by Pledgor to perform or observe any of the provisions hereof.
14
<PAGE> 15
(c) In the event of any public sale described in Section 12,
Pledgor agrees to indemnify and hold harmless Secured Party and each of Secured
Party's directors, officers, employees and agents from and against any loss,
fee, cost, expense, damage, liability or claim, joint or several, to which
Secured Party or such other persons may become subject or for which any of them
may be liable, under the Securities Act or otherwise, insofar as such losses,
fees, costs, expenses, damages, liabilities or claims (or any litigation
commenced or threatened in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, registration statement, prospectus or other such
document published or filed in connection with such public sale, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
promptly reimburse Secured Party and such other persons for any legal or other
expenses reasonably incurred by Secured Party and such other persons in
connection with any litigation, of any nature whatsoever, commenced or
threatened in respect thereof (including without limitation any and all fees,
costs and expenses whatsoever reasonably incurred by Secured Party and such
other persons and counsel for Secured Party and such other persons in
investigating, preparing for, defending against or providing evidence, producing
documents or taking any other action in respect of, any such commenced or
threatened litigation or any claims asserted). This indemnity shall be in
addition to any liability which Pledgor may otherwise have and shall extend upon
the same terms and conditions to each person, if any, that controls Secured
Party or such persons within the meaning of the Securities Act.
(d) The obligations of Pledgor in this Section 14 shall
survive the termination of this Agreement and the discharge of Pledgor' other
obligations under this Agreement, the Credit Agreement and the other Loan
Documents.
SECTION 15. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the Pledged
Collateral and shall (a) remain in full force and effect until the payment in
full of all Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters of
Credit, (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
subsection 10.04 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
15
<PAGE> 16
thereupon become vested with all the benefits in respect thereof granted to
Lenders herein or otherwise. Upon the payment in full of all Secured
Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Pledged 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. In addition, upon the
proposed sale, transfer or other disposition of any Pledged Collateral by a
Pledgor in accordance with the Credit Agreement for which Pledgor desires to
obtain a security interest release from Secured Party, Pledgor shall deliver an
Officers' Certificate, which shall be true and correct, (x) stating that the
Pledged Collateral subject to such disposition is being sold, transferred or
otherwise disposed of in compliance with the terms of the Credit Agreement and
(y) specifying the Pledged Collateral being sold, transferred or otherwise
disposed of in the proposed transaction. Upon the receipt of such Officers'
Certificate, Secured Party shall, at Pledgor's expense, so long as Secured Party
has no reason to believe that the Officers' Certificate delivered by Pledgor
with respect to such sale is not true and correct, execute and deliver such
releases of its security interest in such Pledged Collateral which is to be so
sold, transferred or disposed of, as may be reasonably requested by Pledgor.
SECTION 16. SECURED PARTY AS ADMINISTRATIVE 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 Pledged Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided that Secured
Party shall exercise, or refrain from exercising, any remedies provided for in
Section 11 in accordance with the instructions of Requisite Lenders (Requisite
Lenders being referred to herein as "REQUISITE OBLIGEES").
(b) Secured Party shall at all times be the same Person that
is Administrative Agent under the Credit Agreement. Notice of resignation by
Administrative Agent pursuant to subsection 9.09 of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement;
removal of Administrative Agent pursuant to subsection 9.09 of the Credit
Agreement shall also constitute removal as Secured Party under this Agreement;
and appointment of a successor Administrative Agent pursuant to subsection 9.09
of the Credit Agreement shall also constitute
16
<PAGE> 17
appointment of a successor Secured Party under this Agreement. Upon the
acceptance of any appointment as Administrative Agent under subsection 9.09 of
the Credit Agreement by a successor Administrative Agent, that successor
Administrative 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 Agreement, and the retiring or removed Secured Party under this
Agreement shall promptly (i) transfer to such successor Secured Party all sums,
securities and other items of Pledged 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 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 or
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
Agreement. After any retiring or removed Administrative Agent's resignation or
removal hereunder as Secured Party, the provisions of this Agreement shall inure
to its benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Secured Party hereunder.
SECTION 17. [INTENTIONALLY OMITTED].
SECTION 18. AMENDMENTS; ETC. No amendment, modification,
termination or waiver of any provision of this Agreement, and no consent to any
departure by Pledgor therefrom, shall in any event be effective unless the same
shall be in writing and signed by Secured Party and, in the case of any such
amendment or modification, by Pledgors. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.
SECTION 19. NOTICES. Any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telexed or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile or telex, or three Business Days
after depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Secured Party shall not be effective until
received. For the purposes hereof, the address of each party hereto shall be as
provided in subsection 10.02 of the Credit Agreement or as set forth under such
party's name on the signature pages hereof or as such other address as shall be
designated by such party in a written notice delivered to the other party
hereto.
17
<PAGE> 18
SECTION 20. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Secured Party in the exercise of
any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
SECTION 21. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 22. HEADINGS. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 23. GOVERNING LAW; TERMS. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCOR DANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA (INCLUDING WITHOUT LIMITATION SECTION 1646.5 OF THE CIVIL CODE OF THE
STATE OF CALIFORNIA), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO
THE EXTENT THAT THE UCC PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR PLEDGED
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
CALIFORNIA. Unless otherwise defined herein or in the Credit Agreement, terms
used in Divisions 8 and 9 of the Uniform Commercial Code in the State of
California are used herein as therein defined. The rules of construction set
forth in subsection 1.02 of the Credit Agreement shall be applicable to this
Agreement mutatis mutandis.
SECTION 24. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE COURT
OF COMPETENT JURISDICTION
18
<PAGE> 19
IN THE STATE OF CALIFORNIA OR IN THE UNITED STATES DISTRICT COURT FOR THE
CENTRAL DISTRICT OF CALIFORNIA. BY EXECUTING AND DELIVERING THIS AGREEMENT,
PLEDGOR, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I)
ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF
SUCH COURTS; (II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) 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 ACCORDANCE WITH SECTION 19; (IV) AGREES THAT SERVICE AS
PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION
OVER PLEDGOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT SECURED PARTY
RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
BRING PROCEEDINGS AGAINST PLEDGOR IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SECTION 24 RELATING TO JURISDICTION AND
VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 410.40 OR OTHERWISE.
SECTION 25. WAIVER OF JURY TRIAL. PLEDGOR AND SECURED PARTY
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Pledgor and Secured Party
acknowledge that this waiver is a material inducement for Pledgor and Secured
Party to enter into a business relationship, that Pledgor and Secured Party have
already relied on this waiver in entering into this Agreement and that each will
continue to rely on this waiver in their related future dealings. Pledgor and
Secured Party further warrant and represent that each has reviewed this waiver
with its legal counsel, and that each knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 25
AND EXECUTED BY EACH OF THE PARTIES HERETO),
19
<PAGE> 20
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.
SECTION 26. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
[Rest of Page Intentionally Left Blank]
20
<PAGE> 21
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
AIMCO PROPERTIES, L.P.,
as Pledgor
By: AIMCO-GP, INC.,
a Delaware corporation
Its: General Partner
By:
---------------------------
Peter K. Kompaniez
President
BANK OF AMERICA, N.A.
as Secured Party
By:
------------------------------------
Title:
---------------------------------
<PAGE> 22
SCHEDULE I
Attached to and forming a part of the Pledge Agreement dated
as of August 16, 1999 between AIMCO Properties, L.P., as Pledgor, and Bank of
America, N.A., as Secured Party.
Part A
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Class of Stock or Stock Certif- Par Number of
Stock Issuer other equity interests icate Nos. Value Shares
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
</TABLE>
Part B
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Debt Issuer Amount of Indebtedness
- ------------------------------------------------------------------------------------------------------------
<S> <C>
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE I-1
<PAGE> 23
SCHEDULE II
PLEDGE AMENDMENT
This Pledge Amendment, dated as of _____________, ____ is
being delivered pursuant to that certain Pledge Agreement by and between AIMCO
Properties, L.P., as Pledgor, and Bank of America, N.A., as Secured Party (the
"PLEDGE AGREEMENT," capitalized terms defined therein being used herein as
therein defined). The [Pledged Shares] [Pledged Debt] listed on this Pledge
Amendment shall be deemed to be part of the [Pledged Shares] [Pledged Debt] and
shall become part of the Pledged Collateral and shall secure all Secured
Obligations.
AIMCO PROPERTIES, L.P.,
as Pledgor
By: AIMCO-GP, INC.,
a Delaware corporation
Its: General Partner
By:
-----------------------------
Peter K. Kompaniez
President
Part A
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Class of Stock or Stock Certif- Par Number of
Stock Issuer other equity interests icate Nos. Value Shares
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
</TABLE>
Part B
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Debt Issuer Amount of Indebtedness
- ------------------------------------------------------------------------------------------------------------
<S> <C>
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE II-1
<PAGE> 1
EXHIBIT 10.3
EXHIBIT C-1
FORM OF COMMITTED LOAN NOTE
$
----------------------------- ----------------------------
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby
promises to pay to the order of ____________________ (the "Lender"), on the
Maturity Date (as defined in the Credit Agreement referred to below) the
principal amount of $____________________, or such lesser principal amount of
Committed Loans (as defined in the Credit Agreement referred to below) payable
by Borrower to Lender on such Maturity Date under that certain Credit Agreement
dated as of August __, 1999 among AIMCO PROPERTIES, L.P., a Delaware limited
partnership ("Borrower"), Lenders from time to time party thereto, BANK OF
AMERICA, N.A., as Administrative Agent, Issuing Lender and a Co-Lead Agent,
BANKBOSTON, N.A., as a Lender, Co-Lead Agent and Syndication Agent, and FIRST
UNION NATIONAL BANK, as a Lender and Documentation Agent (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the
"Agreement;" the terms defined therein being used herein as therein defined).
Borrower promises to pay interest on the unpaid principal
amount of each Committed Loan from the date of such Committed Loan until such
principal amount is paid in full, at such interest rates, and payable at such
times as are specified in the Credit Agreement.
All payments of principal and interest shall be made to
Administrative Agent for the account of Lender in United States dollars in
immediately available funds at Administrative Agent's Payment Office.
If any amount is not paid in full when due hereunder, such
unpaid amount shall bear interest, to be paid upon demand, from the due date
thereof until the date of actual payment (and before as well as after judgment)
computed at the per annum rate set forth in the Credit Agreement.
This Note is one of the "Committed Loan Notes" referred to in
the Credit Agreement. Reference is hereby made to the Credit Agreement for
rights and obligations of payment and prepayment, events of default and the
right of Lender to accelerate the maturity hereof upon the occurrence of such
events.
Borrower, for itself, its successors and assigns, hereby
waives diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
C-1-1
<PAGE> 2
Borrower agrees to pay all collection expenses, court costs
and Attorney Costs (whether or not litigation is commenced) which may be
incurred by Lender in connection with the collection or enforcement of this
Note.
C-1-2
<PAGE> 3
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA.
AIMCO PROPERTIES, L.P.,
a Delaware limited partnership
By: AIMCO-GP, INC.,
a Delaware corporation
Its: General Partner
By:
------------------------------
Peter K. Kompaniez
President
C-1-3
<PAGE> 4
LOANS AND PRINCIPAL PAYMENTS
<TABLE>
<CAPTION>
AMOUNT OF OUTSTANDING
END OF PRINCIPAL OR PRINCIPAL
TYPE OF AMOUNT OF INTEREST INT. PAID BALANCE THIS NOTATION
DATE LOAN MADE LOAN MADE PERIOD THIS DATE DATE MADE BY
-------------- -------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
-------------- -------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------- --------------
</TABLE>
C-1-4
<PAGE> 1
EXHIBIT 10.4
EXHIBIT C-2
FORM OF SWING LINE NOTE
$
------------------------- -------------------------
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby
promises to pay to the order of Bank of America, N.A. (the "Swing Line Lender"),
on the Maturity Date (as defined in the Credit Agreement referred to below) the
principal amount of $___________________, or such lesser principal amount of
Swing Line Loans (as defined in the Credit Agreement referred to below) payable
by Borrower to Swing Line Lender on such Maturity Date under that certain Credit
Agreement dated as of August __, 1999 among AIMCO PROPERTIES, L.P., a Delaware
limited partnership ("Borrower"), Lenders from time to time party thereto, BANK
OF AMERICA, N.A., as Administrative Agent, Issuing Lender and a Co-Lead Agent,
BANKBOSTON, N.A., as a Lender, a Co-Lead Agent and Syndication Agent, and FIRST
UNION NATIONAL BANK, as a Lender and Documentation Agent (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the
"Agreement;" the terms defined therein being used herein as therein defined).
Borrower promises to pay interest on the unpaid principal
amount of each Swing Line Loan from the date of such Swing Line Loan until such
principal amount is paid in full, at such interest rates, and payable at such
times as are specified in the Credit Agreement.
All payments of principal and interest shall be made to
Administrative Agent for the account of Swing Line Lender in United States
dollars in immediately available funds at Administrative Agent's Payment Office.
If any amount is not paid in full when due hereunder, such
unpaid amount shall bear interest, to be paid upon demand, from the due date
thereof until the date of actual payment (and before as well as after judgment)
computed at the per annum rate set forth in the Credit Agreement.
This Note is one of the "Swing Line Loan Notes" referred to in
the Credit Agreement. Reference is hereby made to the Credit Agreement for
rights and obligations of payment and prepayment, events of default and the
right of Lender to accelerate the maturity hereof upon the occurrence of such
events.
Borrower, for itself, its successors and assigns, hereby
waives diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
Borrower agrees to pay all collection expenses, court costs
and Attorney Costs (whether or not litigation is commenced) which may be
incurred by Lender in connection with the collection or enforcement of this
Note.
C-2-1
<PAGE> 2
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA.
AIMCO PROPERTIES, L.P.,
a Delaware limited partnership
By: AIMCO-GP, INC.,
a Delaware corporation
Its: General Partner
By:
------------------------
Peter K. Kompaniez
President
C-2-2
<PAGE> 3
LOANS AND PRINCIPAL PAYMENTS
<TABLE>
<CAPTION>
AMOUNT OF OUTSTANDING
END OF PRINCIPAL OR PRINCIPAL
TYPE OF AMOUNT OF INTEREST INT. PAID BALANCE THIS NOTATION
DATE LOAN MADE LOAN MADE PERIOD THIS DATE DATE MADE BY
---- --------- --------- -------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C>
---- --------- --------- -------- ------------ ------------ --------
---- --------- --------- -------- ------------ ------------ --------
---- --------- --------- -------- ------------ ------------ --------
---- --------- --------- -------- ------------ ------------ --------
---- --------- --------- -------- ------------ ------------ --------
---- --------- --------- -------- ------------ ------------ --------
---- --------- --------- -------- ------------ ------------ --------
---- --------- --------- -------- ------------ ------------ --------
---- --------- --------- -------- ------------ ------------ --------
---- --------- --------- -------- ------------ ------------ --------
---- --------- --------- -------- ------------ ------------ --------
---- --------- --------- -------- ------------ ------------ --------
</TABLE>
C-2-3
<PAGE> 1
EXHIBIT 10.5
EXHIBIT H-1
FORM OF PAYMENT GUARANTY
OF REIT AND OF PREFERRED STOCK SUBSIDIARIES
This PAYMENT GUARANTY ("GUARANTY") is made as of August __, 1999, by the
undersigned entities (each a "GUARANTOR") in favor of BANK OF AMERICA, N.A.
("BANK OF AMERICA"), as a Co-Lead Agent and Administrative Agent for itself and
the lenders ("LENDERS") from time to time party to the Credit Agreement (as
hereinafter defined) (in such capacities, "ADMINISTRATIVE AGENT").
Factual Background
The Lenders intend to make a $300,000,000 credit facility available to
AIMCO Properties L.P., a Delaware limited partnership ("BORROWER") in accordance
with the Credit Agreement (the "CREDIT AGREEMENT"), dated as of the date hereof,
by and among Borrower, Bank of America (as Administrative Agent and as Issuing
Lender), BankBoston, N.A. (as a Co-Lead Agent, the Syndication Agent and as a
Lender), First Union National Bank (as Documentation Agent and as a Lender) and
the other Lenders from time to time party thereto. In connection with the Credit
Agreement, the Borrower has obtained this Guaranty from the Guarantor, and the
Guarantor (other than the REIT) has provided this Guaranty in return for
Borrower's payment of a guarantee fee. In addition, certain Subsidiaries of
Guarantor (other than the REIT) will be providing a guaranty for which Guarantor
(other than the REIT) has been paid a guarantee fee. Capitalized terms used but
not defined herein will have the meanings set forth in the Credit Agreement. As
used herein, the term "Facility" shall refer individually to each of the credit
facilities available to the Borrower under the Credit Agreement.
Guaranty
1. Guaranty of Loan.
(a) Absolute Guaranty. Guarantor absolutely, unconditionally and
irrevocably guaranties to Administrative Agent and the Lenders the full payment
of the Indebtedness (as hereinafter defined), and unconditionally agrees to pay
to Administrative Agent and the Lenders the full amount of the Indebtedness.
This is a guaranty of payment, not of collection. If Borrower defaults in the
payment when due of the Indebtedness or any part of it, Guarantor will in lawful
money of the United States pay to Administrative 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.
(b) Guaranty Prohibition. If, in accordance with Section 6.16(c) of the
Credit Agreement, any Guarantor is prohibited from providing this Guaranty under
its existing financing arrangements, current as of even date herewith, such
Guarantor shall have no obligation under this Guaranty.
H1-1
<PAGE> 2
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 Borrower to pay principal, interest, prepayment charges, breakage
costs, late charges, loan fees and any other fees, charges, sums, costs and
expenses that may be owing at any time under the Loan Documents, and shall
include, without limitation, all liabilities and obligations of the Borrower
with respect to Letters of Credit issued under the 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, 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 Administrative Agent and the Lenders. Guarantor authorizes
Administrative 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) Administrative 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) Administrative 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) Administrative 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 Administrative Agent or any Lender may also
bid at any such sale.
(d) Administrative Agent or any Lender may apply any payments or recoveries
from Borrower, Guarantor or any other source, and any proceeds of any security,
to Borrower's obligations under the Loan Documents in such manner, order and
priority as Administrative 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) Administrative Agent or any Lender may release Borrower of its
liability for the Indebtedness or any part of it.
(f) Administrative Agent or any Lender may substitute, add or release any
one or more Guarantors, other guarantors or endorsers.
(g) In addition to the Indebtedness, Administrative Agent or any Lender may
extend other credit to Borrower, 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 (other than payment and performance in full of the
Indebtedness) 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 Administrative Agent or any Lender, or its failure to proceed
promptly or otherwise as against Borrower, Guarantor or any security;
(c) Any action, omission or circumstance that might increase the likelihood
that Guarantor may be called upon to perform under this Guaranty or that might
affect the rights or remedies of Guarantor as against Borrower;
(d) Any dealings occurring at any time between Borrower and Administrative
Agent or any Lender, whether relating to the Indebtedness or otherwise; or
(e) Any action of Administrative 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 Administrative Agent or any Lender, to the fullest
extent permitted by law;
(b) Any right it may have to require Administrative Agent or any Lender to
proceed against Borrower, proceed against or exhaust any security held from
Borrower, or pursue any other remedy in Administrative 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 Borrower;
(d) Any defense based on: (i) any legal disability of Borrower, (ii) any
release, discharge, modification, impairment or limitation of the liability of
Borrower to Administrative Agent or any Lender from any cause, whether consented
to by Administrative Agent or any Lender or arising by operation of law or from
any bankruptcy or other voluntary or involuntary
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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 Administrative
Agent or any Lender in any Insolvency Proceeding involving Borrower, including
any election to have Administrative Agent's or that Lender's claim allowed as
being secured, partially secured or unsecured, any extension of credit by Lender
to Borrower in any Insolvency Proceeding, and the taking and holding by
Administrative 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 Administrative Agent or any Lender to Guarantor expressly provided for
in Section 1;
(g) Any defense based on or arising out of any defense that Borrower 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 Administrative
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 Borrower, Administrative
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 Borrower
or Guarantor, or (iv) exercise any other remedy against Borrower or any
security. No such action by Administrative 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 Borrower for any sums paid to Administrative 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 Administrative 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 Borrower for any sums paid to
Administrative 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
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that Lender may have against Borrower, and (iii) all rights to participate in
any security now or later to be held by Administrative 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 Administrative Agent or any Lender, even though that election of
remedies may affect Guarantor's rights of subrogation and reimbursement against
the Borrower by the operation of law or otherwise. In addition, Guarantor waives
all rights and defenses that Guarantor may have because the Borrower's
indebtedness is secured by real property. This means, among other things, that
Administrative Agent and the Lenders may collect from Guarantor without first
foreclosing on any real or personal property collateral pledged by the Borrower.
7. Revival and Reinstatement. If Administrative Agent or any Lender is
required to pay, return or restore to Borrower or any other person any amounts
previously paid on the Indebtedness because of any Insolvency Proceeding of
Borrower, any stop notice or any other reason, the obligations of Guarantor
shall be reinstated and revived and the rights of Administrative Agent and such
Lender shall continue with regard to such amounts, all as though they had never
been paid.
8. Information Regarding Owner. Before signing this Guaranty, Guarantor
investigated the financial condition and business operations of Borrower and
such other matters as Guarantor deemed appropriate to assure itself of
Borrower'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 that may affect Borrower's ability to pay and
perform its obligations to the Administrative Agent and the Lenders. Neither
Administrative Agent nor any Lender has any duty to disclose to Guarantor any
information which such party may have or receive about Borrower'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 Borrower or any Subsidiary thereof or to receive any payment from
Borrower or any such Subsidiary other than those payments or distributions
permitted under Sections 7.07 and 7.10 of the 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
Administrative 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 Administrative Agent and the Lenders that all
financial information with respect to the Guarantor delivered or to
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be delivered to Administrative Agent and the Lenders by the Borrower with
respect to Guarantor 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 Guarantor for the applicable period. Guarantor shall promptly
provide Administrative Agent and the Lenders with any additional audited
financial information that Guarantor may obtain, and such other information
concerning its affairs and properties as Administrative Agent or any Lender may
reasonably request, including, without limitation, signed copies of any tax
returns if requested by Administrative Agent or the Lenders.
11. Guarantor's Representations and Warranties. Guarantor represents and
warrants that:
(a) All financial statements delivered to Administrative 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
Administrative 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 Credit Agreement and in any other
Loan Document or certification made in connection with the Credit 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 Sections 6 and 7
of the Credit Agreement and in all other Loan Documents.
13. Intentionally Omitted.
14. Intentionally Omitted.
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.
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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 Administrative Agent and consented
to by the Lenders. Guarantor's obligations under this Guaranty are independent
of those of Borrower on the Indebtedness. Administrative Agent or the Lenders
may bring a separate action, or commence a separate arbitration proceeding
against Guarantor without first proceeding against Borrower, any other person or
any security that Administrative Agent or any Lender may hold, and without
pursuing any other remedy. None of Administrative Agent's or any Lender's rights
under this Guaranty shall be exhausted by any action by Administrative 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 Administrative
Agent or the Lenders must be in writing, and no waiver shall be construed as a
continuing waiver. No waiver shall be implied from Administrative Agent's or any
Lender's delay in exercising or failure to exercise any right or remedy against
Borrower, Guarantor or any security. Consent by Administrative Agent or the
Lenders to any act or omission by Borrower 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 Administrative Agent's or the Lenders' consent to be obtained in
any future or other instance. All remedies of Administrative Agent and each
Lender against Borrower 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 Administrative 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 Administrative 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
Administrative Agent in each instance. Without notice to or the consent of
Guarantor, Administrative 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 Administrative 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 the recipient's 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.
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(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. Administrative 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 Administrative Agent nor any Lender
shall have any liability to Guarantor or any other person on account of any
action taken or not taken by Administrative 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 Administrative Agent or a Lender of a confirmation which is at
variance with the terms understood by Administrative Agent or such Lender to be
contained in the telephonic or facsimile notice.
21. Rules of Construction. In this Guaranty, the word "Borrower" includes
both the named Borrower 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 Borrower 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 California, 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 Administrative Agent's and each Lender's costs and
expenses, including attorneys' fees (including allocated costs for services of
the Administrative 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 Administrative
Agent or Lenders under the Credit 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 Administrative Agent or the Lenders make demand
therefor
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hereunder until paid in full in cash to such Administrative Agent or the Lenders
at the Base Rate, as defined in the 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. Covenant. Each Guarantor hereby agrees that it will make dividend
payments on its outstanding preferred stock with its excess cash to the extent
such cash is not required by the Guarantor for its business, consistent with
prudent business practices and its cash requirements.
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, Administrative Agent and the 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, Administrative 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 Administrative 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 Administrative
Agent and the Lenders only, nothing contained in this Guaranty shall alter the
rights and obligations among Administrative 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.
27. Consent to Jurisdiction and Service of Process. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST GUARANTOR ARISING OUT OF OR RELATING TO THIS
GUARANTY, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE COURT OF
COMPETENT JURISDICTION IN THE STATE OF CALIFORNIA OR IN THE UNITED STATES
DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA. BY EXECUTING AND
DELIVERING THIS GUARANTY, GUARANTOR, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (III) 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 ACCORDANCE WITH
SECTION 20; (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER GUARANTOR IN ANY SUCH PROCEEDING
IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE
IN EVERY RESPECT; (V) AGREES THAT
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ADMINISTRATIVE AGENT RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST GUARANTOR IN THE COURTS OF ANY
OTHER JURISDICTION; AND (VI) AGREES THAT THE PROVISIONS OF THIS SECTION 27
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION
410.40 OR OTHERWISE.
28. Waiver of Jury Trial. GUARANTOR AND ADMINISTRATIVE AGENT HEREBY AGREE
TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS GUARANTY. The scope of this waiver is intended
to be all-encompassing of any and all disputes that may be filed in any court
and that relate to the subject matter of this transaction, including without
limitation contract claims, tort claims, breach of duty claims, and all other
common law and statutory claims. Guarantor and Administrative Agent acknowledge
that this waiver is a material inducement for Guarantor and Administrative Agent
to enter into a business relationship, that Guarantor and Administrative Agent
have already relied on this waiver in entering into this Guaranty and that each
will continue to rely on this waiver in their related future dealings. Guarantor
and Administrative Agent further warrant and represent that each has reviewed
this waiver with its legal counsel, and that each knowingly and voluntarily
waives its jury trial rights following consultation with legal counsel. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS
SECTION 28 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT. In the event of litigation, this Guaranty may be filed as a
written consent to a trial by the court.
29. Provisional Remedies, Self-Help and Foreclosure. No provision of this
Guaranty 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.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the undersigned has executed and delivered
this Guaranty as of the date on the first page.
GUARANTOR:
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By:
-----------------------
Peter K. Kompaniez
President
AIMCO/NHP HOLDINGS, INC.
By:
-----------------------
Peter K. Kompaniez
President
NHP A&R SERVICES, INC.
By:
-----------------------
Peter K. Kompaniez
President
NHP MANAGEMENT COMPANY
By:
-----------------------
Name:
Title:
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<PAGE> 12
Address Where Notices are to be Sent:
To Guarantor: 1873 South Bellaire Street
17th Floor
Denver, Colorado 90071
To Administrative Agent: BANK OF AMERICA, N.A.
555 South Flower Street, 6th Floor
Los Angeles, California 90071
Attention: Manager - Unit #1357
To Lenders: Per the Credit Agreement
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<PAGE> 1
EXHIBIT 10.6
EXHIBIT H-2
FORM OF PAYMENT GUARANTY
OF NON-PREFERRED STOCK SUBSIDIARIES
This PAYMENT GUARANTY ("GUARANTY") is made as of August ___,
1999, by the undersigned entities (each a "GUARANTOR") in favor of BANK OF
AMERICA, N.A. ("BANK OF AMERICA"), as a Co-Lead Agent and the Administrative
Agent for itself and the lenders ("LENDERS") from time to time party to the
Credit Agreement (as hereinafter defined) (in such capacities, the
"ADMINISTRATIVE AGENT").
Factual Background
The Lenders intend to make a $300,000,000 credit facility
available to AIMCO Properties L.P., a Delaware limited partnership (the
"BORROWER") in accordance with the Credit Agreement (the "CREDIT AGREEMENT"),
dated as of the date hereof, by and among Borrower, Bank of America (as
Administrative Agent and as Issuing Lender), BankBoston, N.A. (as a Co-Lead
Agent, the Syndication Agent and as a Lender), First Union National Bank (as
Documentation Agent and as a Lender) and the other Lenders from time to time
party thereto. In connection with the Credit Agreement, the Borrower has
obtained this Guaranty from the Guarantor. Capitalized terms used but not
defined herein will have the meanings set forth in the Credit Agreement. As
used herein, the term "Facility" shall refer individually to each of the credit
facilities available to the Borrower under the Credit Agreement.
Guaranty
1. Guaranty of Loan.
(a) Absolute Guaranty. Guarantor absolutely, unconditionally
and irrevocably guaranties to Administrative Agent and the Lenders the full
payment of the Indebtedness (as hereinafter defined), and unconditionally
agrees to pay to Administrative Agent and the Lenders the full amount of the
Indebtedness. This is a guaranty of payment, not of collection. If Borrower
defaults in the payment when due of the Indebtedness or any part of it,
Guarantor will in lawful money of the United States pay to Administrative 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.
(b) Guaranty Prohibition. If, in accordance with Section
6.16(c) of the Credit Agreement, any Guarantor is prohibited from providing
this Guaranty under its existing financing arrangements, current as of even
date herewith, such Guarantor shall have no obligation under this Guaranty.
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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 Borrower to pay principal, interest, prepayment
charges, breakage costs, late charges, loan fees and any other fees, charges,
sums, costs and expenses that may be owing at any time under the Loan
Documents, and shall include, without limitation, all liabilities and
obligations of the Borrower with respect to Letters of Credit issued under the
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, 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 Administrative Agent and the Lenders. Guarantor
authorizes Administrative 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) Administrative 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) Administrative 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) Administrative 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 Administrative Agent or any
Lender may also bid at any such sale.
(d) Administrative Agent or any Lender may apply any payments
or recoveries from Borrower, Guarantor or any other source, and any proceeds of
any security, to Borrower's obligations under the Loan Documents in such
manner, order and priority as Administrative 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) Administrative Agent or any Lender may release Borrower
of its liability for the Indebtedness or any part of it.
(f) Administrative Agent or any Lender may substitute, add or
release any one or more Guarantors, other guarantors or endorsers.
(g) In addition to the Indebtedness, Administrative Agent or
any Lender may extend other credit to Borrower, 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 (other than payment and performance in
full of the Indebtedness) 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 Administrative Agent or any Lender, or its failure
to proceed promptly or otherwise as against Borrower, Guarantor or any
security;
(c) Any action, omission or circumstance that might increase
the likelihood that Guarantor may be called upon to perform under this Guaranty
or that might affect the rights or remedies of Guarantor as against Borrower;
(d) Any dealings occurring at any time between Borrower and
Administrative Agent or any Lender, whether relating to the Indebtedness or
otherwise; or
(e) Any action of Administrative 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 Administrative Agent or any Lender, to
the fullest extent permitted by law;
(b) Any right it may have to require Administrative Agent or
any Lender to proceed against Borrower, proceed against or exhaust any security
held from Borrower, or pursue any other remedy in Administrative 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 Borrower;
(d) Any defense based on: (i) any legal disability of
Borrower, (ii) any release, discharge, modification, impairment or limitation
of the liability of Borrower to Administrative Agent or any Lender from any
cause, whether consented to by Administrative Agent or any Lender or arising by
operation of law or from any bankruptcy or other voluntary or involuntary
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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
Administrative Agent or any Lender in any Insolvency Proceeding involving
Borrower, including any election to have Administrative Agent's or that
Lender's claim allowed as being secured, partially secured or unsecured, any
extension of credit by Lender to Borrower in any Insolvency Proceeding, and the
taking and holding by Administrative 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 Administrative Agent or any Lender to Guarantor
expressly provided for in Section 1;
(g) Any defense based on or arising out of any defense that
Borrower 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
Administrative 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 Borrower,
Administrative 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 Borrower or Guarantor, or (iv) exercise any
other remedy against Borrower or any security. No such action by Administrative
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 Borrower for any sums
paid to Administrative 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 Administrative 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
Borrower for any sums paid to Administrative 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
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that Lender may have against Borrower, and (iii) all rights to participate in
any security now or later to be held by Administrative 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 Administrative Agent or any Lender, even though
that election of remedies may affect Guarantor's rights of subrogation and
reimbursement against the Borrower by the operation of law or otherwise. In
addition, Guarantor waives all rights and defenses that Guarantor may have
because the Borrower's indebtedness is secured by real property. This means,
among other things, that Administrative Agent and the Lenders may collect from
Guarantor without first foreclosing on any real or personal property collateral
pledged by the Borrower.
7. Revival and Reinstatement. If Administrative Agent or any
Lender is required to pay, return or restore to Borrower or any other person
any amounts previously paid on the Indebtedness because of any Insolvency
Proceeding of Borrower, any stop notice or any other reason, the obligations of
Guarantor shall be reinstated and revived and the rights of Administrative
Agent and such Lender shall continue with regard to such amounts, all as though
they had never been paid.
8. Information Regarding Owner. Before signing this Guaranty,
Guarantor investigated the financial condition and business operations of
Borrower and such other matters as Guarantor deemed appropriate to assure
itself of Borrower'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 that may affect Borrower's ability
to pay and perform its obligations to the Administrative Agent and the Lenders.
Neither Administrative Agent nor any Lender has any duty to disclose to
Guarantor any information which such party may have or receive about Borrower'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 Borrower or any Subsidiary thereof or to
receive any payment from Borrower or any such Subsidiary other than those
payments or distributions permitted under Sections 7.07 and 7.10 of the 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 Administrative 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 Administrative Agent and
the Lenders that all financial information with respect to the Guarantor
delivered or to
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be delivered to Administrative Agent and the Lenders by the Borrower with
respect to Guarantor 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 Guarantor for the applicable period. Guarantor shall promptly
provide Administrative Agent and the Lenders with any additional audited
financial information that Guarantor may obtain, and such other information
concerning its affairs and properties as Administrative Agent or any Lender may
reasonably request, including, without limitation, signed copies of any tax
returns if requested by Administrative Agent or the Lenders.
11. Guarantor's Representations and Warranties. Guarantor
represents and warrants that:
(a) All financial statements delivered to Administrative
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 Administrative 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 Credit Agreement and in
any other Loan Document or certification made in connection with the Credit
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
Sections 6 and 7 of the Credit Agreement and in all other Loan Documents.
13. Intentionally Omitted.
14. Intentionally Omitted.
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.
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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 Administrative Agent
and consented to by the Lenders. Guarantor's obligations under this Guaranty
are independent of those of Borrower on the Indebtedness. Administrative Agent
or the Lenders may bring a separate action, or commence a separate arbitration
proceeding against Guarantor without first proceeding against Borrower, any
other person or any security that Administrative Agent or any Lender may hold,
and without pursuing any other remedy. None of Administrative Agent's or any
Lender's rights under this Guaranty shall be exhausted by any action by
Administrative 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
Administrative Agent or the Lenders must be in writing, and no waiver shall be
construed as a continuing waiver. No waiver shall be implied from
Administrative Agent's or any Lender's delay in exercising or failure to
exercise any right or remedy against Borrower, Guarantor or any security.
Consent by Administrative Agent or the Lenders to any act or omission by
Borrower 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
Administrative Agent's or the Lenders' consent to be obtained in any future or
other instance. All remedies of Administrative Agent and each Lender against
Borrower 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 Administrative 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 Administrative 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 Administrative Agent in each instance. Without notice
to or the consent of Guarantor, Administrative 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 Administrative 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
recipient's 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.
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(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. Administrative 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 Administrative Agent
nor any Lender shall have any liability to Guarantor or any other person on
account of any action taken or not taken by Administrative 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 Administrative Agent or a Lender of a
confirmation which is at variance with the terms understood by Administrative
Agent or such Lender to be contained in the telephonic or facsimile notice.
21. Rules of Construction. In this Guaranty, the word
"Borrower" includes both the named Borrower 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 Borrower 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 California, 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 Administrative
Agent's and each Lender's costs and expenses, including attorneys' fees
(including allocated costs for services of the Administrative 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 Administrative Agent or Lenders under the
Credit 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 Administrative
Agent or the Lenders make demand therefor
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<PAGE> 9
hereunder until paid in full in cash to such Administrative Agent or the
Lenders at the Base Rate, as defined in the 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. Covenant. Each Guarantor hereby agrees that it will make
dividend payments on its outstanding preferred stock with its excess cash to
the extent such cash is not required by the Guarantor for its business,
consistent with prudent business practices and its cash requirements.
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, Administrative Agent and the 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, Administrative 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
Administrative 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 Administrative Agent and the Lenders only, nothing contained in this
Guaranty shall alter the rights and obligations among Administrative 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.
27. Consent to Jurisdiction and Service of Process. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST GUARANTOR ARISING OUT OF OR RELATING TO
THIS GUARANTY, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE COURT
OF COMPETENT JURISDICTION IN THE STATE OF CALIFORNIA OR IN THE UNITED STATES
DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA. BY EXECUTING AND
DELIVERING THIS GUARANTY, GUARANTOR, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (III) 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 ACCORDANCE
WITH SECTION 20; (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER GUARANTOR IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT; (V) AGREES THAT
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ADMINISTRATIVE AGENT RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST GUARANTOR IN THE COURTS OF ANY
OTHER JURISDICTION; AND (VI) AGREES THAT THE PROVISIONS OF THIS SECTION 27
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION
410.40 OR OTHERWISE.
28. Waiver of Jury Trial. GUARANTOR AND ADMINISTRATIVE AGENT
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Guarantor and
Administrative Agent acknowledge that this waiver is a material inducement for
Guarantor and Administrative Agent to enter into a business relationship, that
Guarantor and Administrative Agent have already relied on this waiver in
entering into this Guaranty and that each will continue to rely on this waiver
in their related future dealings. Guarantor and Administrative Agent further
warrant and represent that each has reviewed this waiver with its legal
counsel, and that each knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL
WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 28 AND EXECUTED BY EACH
OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the
event of litigation, this Guaranty may be filed as a written consent to a trial
by the court.
29. Provisional Remedies, Self-Help and Foreclosure. No
provision of this Guaranty 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.
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IN WITNESS WHEREOF, the undersigned has executed and
delivered this Guaranty as of the date on the first page.
GUARANTOR
[Need List of Non-Preferred Subs]
<PAGE> 12
Address Where Notices are to be Sent:
To Guarantor: 1873 South Bellaire Street
17th Floor
Denver, Colorado 90071
To Administrative Agent: BANK OF AMERICA, N.A.
555 South Flower Street, 6th Floor
Los Angeles, California 90071
Attention: Manager - Unit #1357
To Lenders: Per the Credit Agreement
<PAGE> 1
EXHIBIT 10.7
EXHIBIT I
FORM OF INTRA-COMPANY SUBORDINATION AGREEMENT
This INTRA-COMPANY SUBORDINATION AGREEMENT (together with all
amendments and supplements hereto, this "AGREEMENT"), is dated as of August ___,
1999 by and among AIMCO PROPERTIES, L.P., a Delaware limited partnership (the
"COMPANY"), each of the parties designated as a "LENDER" on Annex 1 attached
hereto (each, an "INTRA-COMPANY LENDER", and collectively, the "INTRA-COMPANY
LENDERS"), BANK OF AMERICA, N.A. ("BANK OF AMERICA"), as Issuing Lender, BANK OF
AMERICA, N.A., as one of the Lenders, a Co-Lead Agent and Administrative Agent
(the "AGENT") for the Lenders, BANKBOSTON, N.A., as one of the Lenders, a
Co-Lead Agent and Syndication Agent, and FIRST UNION NATIONAL BANK, as one of
the Lenders and Documentation Agent. Capitalized terms used in this Agreement
without definition have the meanings specified in the Agreement (as defined
herein.)
RECITALS
A. In accordance with that certain Credit Agreement (the
"Credit Agreement"), dated of even date herewith, by and among the Company, Bank
of America (as Issuing Lender, Co-Lead Agent and Administrative Agent, and as a
Lender), BankBoston, N.A. (as a Co-Lead Agent, Syndication Agent and as a
Lender), First Union National Bank (as Documentation Agent and as a Lender) and
the other Lenders from time to time party thereto, such Lenders have agreed to
provide up to a $300,000,000 credit facility to the Company. As used herein, the
term "Credit Facility" shall refer individually to each of the credit facilities
available to the Company under the Credit Agreement and shall refer collectively
to all such credit facilities, including, without limitation, all obligations
with respect to principal, premium, if any, interest, and default interest, if
any, and all other obligations secured by the Loan Documents.
B. Each of the Intra-Company Lenders has made a loan or loans
(each, an "Intra-Company Loan", and collectively the "Intra-Company Loans") to
certain Subsidiaries of the REIT, Borrower or any of their Subsidiaries and
other Persons in which the REIT, Borrower or any of their Subsidiaries has any
equity interest (collectively, the "Intra-Company Borrowers"). Each
Intra-Company Loan is in the principal amount described on Annex 1, and is
evidenced by a promissory note or notes dated as of the date set forth on Annex
1.
C. To induce the Lenders to make the Loans under the Credit
Agreement, each of the Intra-Company Lenders desires to subordinate the
Intra-Company Loan or Intra-Company Loans made by such Intra-Company Lender to
the Credit Facility and to the obligations of each of the guarantors (the "REIT
Guarantors") under the REIT Guaranty Documents and to make certain agreements in
favor of the Agent and the Lenders. (As used herein, "Applicable Intra-Company
Loan" means, with respect to any Intra-Company lender, an Intra-Company Loan
made by such Intra-Company Lender to an Intra-Company Borrower.)
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AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:
1. Approval of Credit Facility. Each of the Intra-Company
Lenders acknowledges that it has received, and each Intra-Company Lender hereby
consents to, the Loan Documents.
2. Payment Subordination.
(a) Each Intra-Company Lender agrees that any Applicable
Intra-Company Loan is and shall be subject, subordinate and rendered junior, in
right of payment, to the prior indefeasible payment and performance in full, for
a period of time in excess of all applicable preference or other similar periods
under applicable bankruptcy, insolvency or creditors' rights laws, of the Credit
Facility and all obligations under the Loan Documents, including, without
limitation, all obligations of the REIT Guarantors under the REIT Guaranty
Documents.
(b) Each Intra-Company Lender agrees not to ask, demand, sue
for, take or receive from an Intra-Company Borrower or any other Person,
directly or indirectly, in cash, securities or other property or by set-off or
in any other manner (including without limitation from or by way of collateral),
payment of all or any amounts owing with respect to any Applicable Intra-Company
Loan; nor to accept any such payment; and each of the Intra-Company Borrowers,
and the Company agrees not to make any such payment; unless and until, in each
such case, the Credit Facility and all other obligations under the Loan
Documents, including, without limitation, all obligations of the REIT Guarantors
under the REIT Guaranty Documents, shall have been indefeasibly paid and
performed in full, for a period of time in excess of all applicable preference
or other similar periods under applicable bankruptcy, insolvency or creditors'
rights laws; provided, however, payments may be made under Intra-Company Loans,
other than the Finance Subsidiary Loan, in accordance with Section 7.07 of the
Credit Agreement.
3. In Furtherance of Subordination.
(a) Upon any distribution of all or any of the assets of any of
the Intra-Company Borrowers (a) in the event of any insolvency or bankruptcy
case or proceeding, or any receivership, liquidation, reorganization or other
similar case or proceeding in connection therewith, relative to any of the
Intra-Company Borrowers or to any of their creditors, as such, or to its assets,
(b) in the event of any liquidation, dissolution or other winding up of any of
the Intra-Company Borrowers, whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy, (c) in the event of any assignment for the
benefit of creditors or any other marshaling of assets and liabilities of any of
the Intra-Company Borrowers, or (d) in any manner inconsistent with the
provisions of this Agreement, then and in any such event the holder of the
Credit Facility shall receive indefeasible payment in full of all amounts due or
to become
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due (whether or not an Event of Default has occurred or the maturity of the
Credit Facility has been declared due and payable prior to the date on which it
would otherwise have become due and payable) on or in respect to the Credit
Facility, including any post-petition interest thereon, before any of the
Intra-Company Lenders is entitled to receive any payment on account of principal
of (or premium, if any) or interest on any Applicable Intra-Company Loan.
(b) Each Intra-Company Lender agrees that, so long as the
Credit Facility shall remain unpaid, such Intra-Company Lender shall not loan or
advance any additional funds to the Company, the REIT, or any of their
respective Subsidiaries, other than the Applicable Intra-Company Loan.
(c) Subject to the proviso in Section 2(b) hereof, all payments
with respect to an Intra-Company Loan or distributions received by an
Intra-Company Lender contrary to the provisions of this Agreement shall be
received in trust for the benefit of the Lenders, shall be segregated from other
funds and property held by such Intra-Company Lender, and shall be forthwith
paid over to the Agent for the ratable benefit of the Lenders in the same form
as so received (with any necessary endorsement) to be applied (in the case of
cash) to, or held as collateral (in the case of non-cash property or securities)
for, the payment or prepayment of the Credit Facility.
4. No Commencement of Any Proceedings. Each Intra-Company
Lender agrees that, so long as the Credit Facility shall remain unpaid, such
Intra-Company Lender will not commence, or join with any creditor other than
Lenders in commencing, or cause the Intra-Company Borrower to commence, any
proceeding referred to in Section 3(a).
5. No Disposition or Amendment of or Exercise of Remedies With
Respect to an Intra-Company Loan. So long as the Credit Facility remains unpaid,
each Intra-Company Lender agrees that it will not:
(a) Sell, assign, transfer, endorse, pledge, encumber or
otherwise enter into any Disposition of the Applicable Intra-Company Loan or any
interest therein; or
(b) Enter into any amendment, modification, extension, renewal
or replacement of or accept any collateral or guaranty for any Applicable
Intra-Company Loan; or
(c) Take, or permit to be taken, any action to assert, collect
or enforce any Applicable Intra-Company Loan or any part thereof, or to exercise
any of such Intra-Company Lender's remedies with respect to any Applicable
Intra-Company Loan.
6. Rights and Obligations hereunder Not Affected. All rights
and interests of the Agent and the Lenders hereunder, and all agreements and
obligations of each Intra-Company Lender, the Company, and each Intra-Company
Borrower under this Agreement, shall remain in full force and effect
irrespective of:
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(a) any lack of validity or enforceability of the Loan
Documents or any other documents evidencing or securing the Credit Facility;
(b) any change in the time, manner or place of payment of, or
in any other term of, the Credit Facility, or any other amendment or waiver of
or any consent to departure from the Loan Documents;
(c) any exchange, release or non-perfection of any collateral
for or of any Person liable for all or any of the Credit Facility; or
(d) the rescission or return of any payment on account of the
Credit Facility by any Lender upon the insolvency, bankruptcy or reorganization
of the Company, the REIT, any of the Intra-Company Borrowers, or any of the REIT
Guarantors, or otherwise, all as though such payment had not been made.
7. Representations and Warranties. The Company and each
Intra-Company Lender represents and warrants to the Agent and the Lenders that:
(a) Each Intra-Company Lender that is a corporation,
partnership, or limited liability company:
i. Is duly organized (or formed, in the case of a
partnership or limited liability company), validly existing and in good
standing under the laws of the jurisdiction of its organization; and
ii. Has the power and authority and all governmental
licenses, authorizations, consents and approvals to perform its
obligations under this Agreement.
(b) The execution, delivery and performance by each
Intra-Company Lender of this Agreement has been duly authorized by all necessary
partnership or other organizational action, and do not and will not:
i. Contravene the terms of any Intra-Company Lender's
Organizational Documents;
ii. Conflict with, or result in any breach or
contravention of, or the creation of any Lien under, any document
evidencing any Contractual Obligation, to which each Intra-Company
Lender is a party or any order, injunction, writ or decree of any
Governmental Authority to which each Intra-Company Lender or its
Properties are subject; or
iii. Violate any Requirement of Law.
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(c) No approval, consent, exemption, authorization, or other
action by, or notice to, or filing with, any Governmental Authority is necessary
or required in connection with the execution, delivery or performance by, or
enforcement against, each Intra-Company Lender of this Agreement.
(d) This Agreement constitutes the legal, valid and binding
obligation of each Intra-Company Lender, enforceable against each such
Intra-Company Lender in accordance with its 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.
(e) All representations and warranties of the Company with
respect to each Intra-Company Lender and each Intra-Company Borrower (whether
expressly or as a Subsidiary) set forth in the Credit Agreement and the other
Loan Documents are true and correct as if made on the date hereof.
8. Waivers. No waiver of any provision of this Agreement shall
in any event be effective unless the same shall be in writing and signed by the
Agent with any required consent from the Lenders, and then only in the specific
instance and for the specific purpose for which given. Any waiver, forbearance,
failure or delay by the Agent or any Lender in exercising any right, power or
remedy, shall not preclude the further, simultaneous or later exercise thereof,
and every right, power or remedy of the Agent or any Lender shall continue in
full force and effect until such right, power or remedy is specifically waived
in a writing executed by the Agent with any required consent from the Lenders.
9. Cumulative Rights. The rights, powers and remedies of the
Agent and the Lenders under this Agreement shall be in addition to all rights,
powers and remedies given to the Agent and the Lenders by virtue of any statute
or rule of law, the Credit Agreement, or any other agreement, all of which
rights, powers and remedies shall be cumulative and may be exercised
successively or concurrently.
10. Assignment; Successors and Assigns. Each Intra-Company
Lender hereby represents to the Agent and the Lenders that it has not assigned
or sold any interest in any Applicable Intra-Company Loan. This Agreement shall
bind the Agents, the Lenders, each Intra-Company Lender, the Company, and each
Intra-Company Borrower, and their successors and assigns and shall inure to the
benefit of their respective successors and assigns.
11. Counterpart Originals. This Agreement may be executed in
counterpart originals, each of which shall constitute the same agreement.
12. Choice of Law. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State of California,
without respect to conflicts or choice of law rules.
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13. Intentionally Omitted.
14. 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.
15. Integration; Modifications. This Agreement and the Loan
Documents (a) integrate all the terms and conditions mentioned in or incidental
to this Agreement and the Loan Documents, (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 this Agreement and the Loan Documents. 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 the Agent with any required consent of
the Lenders, the Company, with respect to any Intra-Company Loan affected
thereby, the applicable Intra-Company Borrower and Intra-Company Lender.
16. Attorney Costs. If any lawsuit, reference or arbitration
is commenced which arises out of, or which relates to this Agreement, including
any alleged tort action, regardless of which party commences the action, the
prevailing party shall be entitled to recover from each other party to such
action such sums as the court, referee or arbitrator may adjudge to be
reasonable Attorney Costs in the action or proceeding, in addition to costs and
expenses otherwise allowed by law. Any such Attorney Costs incurred by either
party in enforcing a judgment in its favor under this Agreement shall be
recoverable separately from and in addition to any other amount included in such
judgment, and such attorneys' fees obligation is intended to be severable from
the other provisions of this Agreement and to survive and not be merged into any
such judgment.
17. Other Intra-Company Indebtedness. If the Company, any of
the Intra-Company Lenders, or any of the Intra-Company Borrowers are either an
obligor or an obligee with respect to "Intra-Company Debt" (and whether any such
parties originated the applicable loan or accepted such loan by assignment, or
originally incurred such debt or assumed such debt), and such Intra-Company Debt
is not scheduled on Annex 1 hereto, each of the Company, the Intra-Company
Lenders, and the Intra-Company Borrowers agrees that such Intra-Company Debt
shall be considered an "Intra-Company Loan" for all purposes hereunder, the
applicable obligor and obligee with respect to such Intra-Company Loan shall be
deemed an Intra-Company Borrower or Intra-Company Lender, respectively,
hereunder, and all representations, warranties, covenants, and other provisions
herein shall apply with respect thereto.
18. Further Assurances. Each of the Company, the Intra-Company
Lenders, and the Intra-Company Borrowers agrees to execute and deliver such
additional instruments and agreements and to undertake such further acts as may
be deemed necessary or appropriate by the Agent or the Lenders in order to
effectuate the provisions of this Agreement.
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19. Consent to Jurisdiction and Service of Process. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST INTRA-COMPANY LENDERS ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY
STATE COURT OF COMPETENT JURISDICTION IN THE STATE OF CALIFORNIA OR IN THE
UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA. BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH INTRA-COMPANY LENDER, FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) 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 EACH SUCH INTRA-COMPANY LENDER AT
ITS ADDRESS SET FORTH IN ANNEX 1 ATTACHED HERETO; (IV) AGREES THAT SERVICE AS
PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION
OVER EACH SUCH INTRA-COMPANY LENDER IN ANY SUCH PROCEEDING IN ANY SUCH COURT,
AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V)
AGREES THAT BANK OF AMERICA RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY INTRA-COMPANY LENDER
IN THE COURTS OF ANY OTHER JURISDICTION; AND (VI) AGREES THAT THE PROVISIONS OF
THIS SECTION 19 RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND
ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER CALIFORNIA CODE OF CIVIL
PROCEDURE SECTION 410.40 OR OTHERWISE.
20. Waiver of Jury Trial. EACH INTRA-COMPANY LENDER AND EACH
OTHER PARTY PARTY TO THIS AGREEMENT HEREBY AGREE TO WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing
of any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement for the parties hereto to enter into a business relationship, that
each party hereto has already relied on this waiver in entering into this
Agreement and that each will continue to rely on this waiver in their related
future dealings. Each party hereto further warrants and represents that each has
reviewed this waiver with its legal counsel, and that each knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 20 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may
be filed as a written consent to a trial by the court.
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21. Provisional Remedies, Self-Help and Foreclosure. No
provision of this Agreement 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.
[Remainder of Page Intentionally Left Blank]
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<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first set forth above.
COMPANY
AIMCO PROPERTIES, L.P., a Delaware limited
partnership
By: AIMCO-GP, INC.,
a Delaware corporation,
its general partner
By:
-----------------------------------------
Printed Name: Peter K. Kompaniez
Title: President
EACH OF THE INTRA-COMPANY LENDERS
AIMCO HOLDINGS QRS, INC.,
a Delaware corporation
By:
-----------------------------------------
Printed Name: Peter K. Kompaniez
Title: President
AIMCO PROPERTIES FINANCE CORP.,
a Delaware corporation
By:
-----------------------------------------
Printed Name: Peter K. Kompaniez
Title: President
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<PAGE> 10
AIMCO PROPERTIES FINANCE
PARTNERSHIP, L.P.,
a Delaware limited partnership
By: AIMCO PROPERTIES FINANCE CORP.,
a Delaware corporation
By:
-----------------------------------------
Printed Name: Peter K. Kompaniez
Title: President
AIMCO/OTC QRS, INC.,
a Delaware corporation
By:
-----------------------------------------
Printed Name: Peter K. Kompaniez
Title: President
CONSOLIDATED CAPITAL INSTITUTIONAL
PROPERTIES, a California limited partnership
By: CONCAP EQUITIES, INC.
a Delaware corporation,
General Partner
By:
-----------------------------------------
Printed Name: Peter K. Kompaniez
Title: President
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CONSOLIDATED CAPITAL INSTITUTIONAL
PROPERTIES/II, a California limited partnership
By: CONCAP EQUITIES, INC.
a Delaware corporation,
General Partner
By:
--------------------------------------------
Printed Name: Peter K. Kompaniez
Title: President
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LENDERS
BANK OF AMERICA, N.A.
as Co-Lead Agent and Administrative Agent
By:
------------------------------------------
Printed Name:
Title:
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<PAGE> 13
BANKBOSTON, N.A.
as Co-Lead Agent and Syndication Agent
By:
------------------------------------------
Printed Name:
Title:
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