EXHIBIT 10.4
RESTATEMENT AND AMENDMENT OF
LOAN AGREEMENT
BETWEEN
CAMDEN PROPERTY TRUST
BORROWER
AND
NATIONSBANK OF TEXAS, N.A.
AGENT
AND
THE LENDERS NAMED HEREIN
LENDERS
dated effective as of
April 14, 1997
PAGE
TABLE OF CONTENTS
Page
ARTICLE 1 - GENERAL INFORMATION. . . . . . . . . . . . . . . . . 1
1.1. Loan . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Purpose. . . . . . . . . . . . . . . . . . . . . . . 1
1.3. Loan Documents . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 - DEFINITIONS. . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 3 - THE LOAN . . . . . . . . . . . . . . . . . . . . . . 6
3.1. Commitment and Advances. . . . . . . . . . . . . . . 6
3.2. Direct Advances to Lenders . . . . . . . . . . . . . 6
3.3. Disbursement and Performance by Lenders. . . . . . . 6
3.4. Fees . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5. Advance Request. . . . . . . . . . . . . . . . . . . 7
3.6. Conditions to All Advances . . . . . . . . . . . . . 8
3.7. Bid Rate Loans . . . . . . . . . . . . . . . . . . . 8
ARTICLE 4 - PAYMENT. . . . . . . . . . . . . . . . . . . . . . . 9
4.1 Repayment at Maturity; Mandatory Principal Reductions 9
4.2. Interest . . . . . . . . . . . . . . . . . . . . . . 9
4.3. Payment of Principal and Interest. . . . . . . . . . 11
4.4. Prepayment Premium . . . . . . . . . . . . . . . . . 11
4.5. Past-Due Obligations . . . . . . . . . . . . . . . . 11
4.6. Application of Payments. . . . . . . . . . . . . . . 12
4.7. General Provisions . . . . . . . . . . . . . . . . . 12
4.8. Extension of Maturity Date . . . . . . . . . . . . . 12
ARTICLE 5 - ASSET POOL . . . . . . . . . . . . . . . . . . . . . 13
5.1. Property Pool. . . . . . . . . . . . . . . . . . . . 13
5.2. Negative Pledge Agreements . . . . . . . . . . . . . 13
ARTICLE 6 - INTERCREDITOR MATTERS. . . . . . . . . . . . . . . . 13
6.1. Intercreditor Agreement. . . . . . . . . . . . . . . 13
6.2. Successors and Assigns; Participations . . . . . . . 14
ARTICLE 7 - ADDITIONAL REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS. . . . . . . . . . . . . . . . . . 14
7.1. Financial Statements . . . . . . . . . . . . . . . . 14
7.2. Litigation . . . . . . . . . . . . . . . . . . . . . 15
7.3. Existence and Rights . . . . . . . . . . . . . . . . 15
7.4. Authorization, Conflicts, Enforceability . . . . . . 15
7.5. Title to the Property. . . . . . . . . . . . . . . . 16
7.6. Legal Requirements . . . . . . . . . . . . . . . . . 16
7.7. Utilities and Access . . . . . . . . . . . . . . . . 16
7.8. Full Disclosure. . . . . . . . . . . . . . . . . . . 16
7.9. Certain Regulatory Matters . . . . . . . . . . . . . 16
7.10. Principal Office, Etc. . . . . . . . . . . . . . . . 16
7.11. Payment and Performance. . . . . . . . . . . . . . . 16
7.12. Inspection of the Property . . . . . . . . . . . . . 16
7.13. Estoppel Certificate . . . . . . . . . . . . . . . . 17
7.14. Maintenance and Use . . . . . . . . . . . . . . . . 17
7.15. Notice to Agent . . . . . . . . . . . . . . . . . . 17
7.16. Costs and Expenses . . . . . . . . . . . . . . . . . 17
7.17. Further Assurances . . . . . . . . . . . . . . . . . 17
7.18. No Assignment. . . . . . . . . . . . . . . . . . . . 18
7.19. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . 18
7.20. REIT Status. . . . . . . . . . . . . . . . . . . . . 18
7.21. Management of Property . . . . . . . . . . . . . . . 18
7.22. Minimum Net Worth. . . . . . . . . . . . . . . . . . 19
7.23. Liabilities/Assets Ratios. . . . . . . . . . . . . . 19
7.24. Notice of Rating Change/Definition Change. . . . . . 19
7.25. Earnings Ratios. . . . . . . . . . . . . . . . . . . 19
7.26. Unencumbered NOI . . . . . . . . . . . . . . . . . . 19
7.27. Limitation on Distributions. . . . . . . . . . . . . 19
7.28. Cost of Unimproved Real Estate . . . . . . . . . . . 19
7.29. Borrower's Equity Interests. . . . . . . . . . . . . 19
7.30. Non-Apartment Project Assets . . . . . . . . . . . . 20
7.31. Cost of Development Projects . . . . . . . . . . . . 20
7.32. Notes Receivable . . . . . . . . . . . . . . . . . . 20
7.33. Market Capitalization. . . . . . . . . . . . . . . . 20
7.34. Additional Covenants Regarding Consolidated
Subsidiaries. . . . . . . . . . . . . . . . . . . . 20
ARTICLE 8 - DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . 21
8.1. Default. . . . . . . . . . . . . . . . . . . . . . . 21
8.2. Notice and Cure. . . . . . . . . . . . . . . . . . . 22
8.3. Certain Remedies . . . . . . . . . . . . . . . . . . 22
8.4. Rights and Remedies Cumulative . . . . . . . . . . . 23
ARTICLE 9 - GENERAL TERMS AND CONDITIONS . . . . . . . . . . . . 23
9.1. Loan Documents . . . . . . . . . . . . . . . . . . . 23
9.2. Waiver . . . . . . . . . . . . . . . . . . . . . . . 23
9.3. Lenders' Consent or Approval . . . . . . . . . . . . 23
9.4. Modification or Termination. . . . . . . . . . . . . 23
9.5. Forum. . . . . . . . . . . . . . . . . . . . . . . . 23
9.6. Compliance with Usury Laws . . . . . . . . . . . . . 23
9.7. Notices. . . . . . . . . . . . . . . . . . . . . . . 24
9.8. No Brokers . . . . . . . . . . . . . . . . . . . . . 24
9.9. Partial Invalidity . . . . . . . . . . . . . . . . . 24
9.10. Interpretation . . . . . . . . . . . . . . . . . . . 24
9.11. Disclosure of Information. . . . . . . . . . . . . . 24
9.12. Binding Effect . . . . . . . . . . . . . . . . . . . 25
9.13. Conditions for the Benefit of Lenders. . . . . . . . 25
9.14. Counterparts . . . . . . . . . . . . . . . . . . . . 25
9.15. No Partnership, etc. . . . . . . . . . . . . . . . . 25
9.16. Loan Agreement Governs . . . . . . . . . . . . . . . 25
9.17. Time of Essence. . . . . . . . . . . . . . . . . . . 25
9.18. Applicable Law . . . . . . . . . . . . . . . . . . . 25
9.19. Participation or Sale of Loan. . . . . . . . . . . . 25
9.20. Survival of Representations, Warranties
and Covenants. . . . . . . . . . . . . . . . . . . . 26
9.21. Payments Set Aside . . . . . . . . . . . . . . . . . 26
9.22. Disclaimer of Financing. . . . . . . . . . . . . . . 26
9.23. Evidence of Satisfaction . . . . . . . . . . . . . . 26
ARTICLE 10 - EXHIBITS. . . . . . . . . . . . . . . . . . . . . . 26
10.1. Exhibits . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 11 - MANDATORY ARBITRATION . . . . . . . . . . . . . . . 26
11.1. Mandatory Arbitration . . . . . . . . . . . . . . . 26
ARTICLE 12 - ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . 27
12.1. Entire Agreement . . . . . . . . . . . . . . . . . . 27
EXHIBITS
Exhibit "A" - Closing Conditions
Exhibit "B" - Affidavit and Advance Request
Exhibit "C" - Compliance Certificate
Exhibit "D" - Eurodollar Rate Notice
Exhibit "E" - Schedule of Parties, Addresses, Commitments and Wiring
Instructions
Exhibit "F" - Form of Assignment and Acceptance
Exhibit "G" - Bid Rate Note Form
Exhibit "H" - Bid Loan Request Confirmation
Exhibit "I" - Invitation to Bid
Exhibit "J" - Confirmation of Bid
Exhibit "K" - Notice of Acceptance of Bid
PAGE
RESTATEMENT AND AMENDMENT
OF LOAN AGREEMENT
THIS RESTATEMENT AND AMENDMENT OF LOAN AGREEMENT (this
"Agreement"), dated effective as of April 14, 1997, is made as a
restatement and amendment of the Prior Loan Agreement (defined below) by
Lenders (defined below), NATIONSBANK OF TEXAS, N.A., a national banking
association, for itself and as Agent for Lenders, and CAMDEN PROPERTY
TRUST, a Texas real estate investment trust ("Borrower"), who agree as
follows:
ARTICLE 1 - GENERAL INFORMATION
1.1. Loan. Pursuant to this Agreement, Lenders have agreed to provide
a revolving line of credit to Borrower and Bid Rate Loans (defined below;
collectively, the "Loan") in an amount not to exceed an aggregate of ONE
HUNDRED FIFTY MILLION AND NO/100 DOLLARS ($150,000,000.00) (the "Committed
Sum"); provided that the Loan may, at Lenders' option as hereinafter
described, exceed the Committed Sum.
1.2. Purpose. The proceeds of the Loan shall be used by Borrower for
any legal purpose, including, without limitation, for Borrower's working
capital needs.
1.3. Loan Documents. The Loan Documents evidence the agreements of
Borrower and Lenders with respect to the Loan. The Loan Documents include
the following (the "Notes"): (a) Promissory Notes in the aggregate
principal amount of the Committed Sum, executed by Borrower, each payable
to the order of a Lender, evidencing Advances (defined below) other than
Bid Rate Loans, and (b) Promissory Notes, each in the amount of
$75,000,000.00, executed by Borrower, each payable to the order of a
Lender. Borrower shall comply with all Loan Documents. The exhibits
attached to this Agreement, which are made a part of herein and are
incorporated herein, contain terms, provisions, and conditions applicable
to the Loan.
ARTICLE 2 - DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the respective meanings set forth below:
"Additional Commitment Fee" is defined in Section 4.8.
"Advance" means a disbursement of any of the proceeds of the Loan by
Lenders pursuant to this Agreement.
"Advance Request" is defined in Section 3.5.
"Advance Termination Date" means July 28, 1999.
"Agent" means NationsBank of Texas, N.A., and its successor or
successors as agent for Lenders under this Agreement.
"Applicable Rate" means the rate of interest applicable to the Loan or
portions thereof pursuant to the provisions of Section 4.2.
"Base Bid Rate" means a rate per annum equal to the Base Rate plus or
minus a margin specified by a Lender.
"Base Bid Rate Loan" means a Bid Rate Loan which bears interest at a
Base Bid Rate.
"Base Rate" means, on any day, a rate per annum equal to the Prime
Rate for that day.
"Bid Rate Loan" means an Advance the interest rate on which is
determined by agreement between Borrower and Lender making such Advance
pursuant to Section 3.7.
"Bid Rate Note" means each promissory note of Borrower evidencing Bid
Rate Loans, in substantially the form of Exhibit "G" hereto, as each such
note may be amended, extended, restated, renewed, substituted or replaced
from time to time.
"Business Day" means a day of the year other than a Saturday or Sunday
on which (i) Lenders and any participant in the Loan are open for business
and (ii) all major departments of banks in both London, England and
Houston, Texas, U.S.A. are open for business.
"Closing Date" means the date of this Agreement.
"Commitment" means, for a Lender, the amount (which is subject to
reduction and cancellation as provided in this Agreement) stated beside
such Lender's name on Exhibit "E" attached hereto and made a part hereof
for all purposes, as such Exhibit is most recently amended under this
Agreement.
"Commitment Fee" means the sum of (i) the Initial Commitment Fee, as
such term is defined in Section 3.4(a), and (ii) the Additional Commitment
Fee, as such term is defined in Section 4.8.
"Commitment Percentage" means, for any Lender, the proportion (stated
as a percentage) that the Commitment bears to the Total Commitment.
"Compliance Certificate" is defined in Section 7.1(b).
"Consolidated Subsidiary" means any Person in whom Borrower holds an
equity or ownership interest and whose financial results would be
consolidated under GAAP with the financial results of Borrower on the
consolidated financial statements of Borrower.
"Current Date" means a date within 30 days prior to the Closing Date.
"Debentures" is defined in Section 7.23.
"Debtor Relief Laws" means any applicable Laws pertaining to
liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
insolvency, reorganization, receivership, composition, extension or
adjustment of debt, or similar Laws, domestic or foreign, affecting the
rights or remedies of creditors generally, in effect from time to time.
"Default" is defined in Article 8.
"Development Projects" is defined in Article 5.
"Distribution" means (i) any dividend or other distribution, direct or
indirect, on account of any shares of any class of stock of Borrower now or
hereafter outstanding and (ii) any redemption, retirement, purchase or
other acquisition for value, direct or indirect, of any shares of any class
of stock of Borrower now or hereafter outstanding, or of any warrants,
options or other rights to acquire any such shares or stock.
"Eurodollar Bid Rate" means a rate per annum equal to the Eurodollar
Rate for the term in question plus a margin specified by a Lender.
"Eurodollar Bid Rate Loan" means a Bid Rate Loan which bears interest
at the Eurodollar Bid Rate.
"Eurodollar Rate" means for any applicable Interest Period for any
Eurodollar Rate Principal, a simple rate per annum equal to the quotient
obtained (rounded upward, if necessary, to the next higher 1/100 of 1%) by
dividing (i) the applicable Interbank Offered Rate by (ii) 1.00 minus the
Eurodollar Reserve Percentage, where
"Interbank Offered Rate" means, for any Eurodollar Rate Principal
for any Interest Period therefor, the rate per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page
3750 (or any successor page) as the London interbank offered rate for
deposits in dollars at approximately 11:00 a.m. (London time) two (2)
Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period. If for any reason such rate
is not available, the term "Interbank Offered Rate" shall mean, for
any Eurodollar Rate Principal for any Interest Period therefor, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in dollars at approximately 11:00 a.m.
(London time) two (2) Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters
Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such rates.
"Eurodollar Reserve Percentage" means, with respect to any
applicable Interest Period, for any day that percentage (expressed as
a decimal) which is in effect on such day, as prescribed by the Board
of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including basic,
supplemental, emergency, special and marginal reserves) generally
applicable to financial institutions regulated by the Federal Reserve
Board comparable in size and type to Agent, in respect of
"Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest
rate on Eurodollar Rate Principal is determined), whether or not Agent
has any Eurocurrency liabilities or such requirement otherwise in fact
applies to Agent. The Interbank Offered Rate shall be adjusted
automatically as of the effective date of each change in the
Eurodollar Reserve Percentage.
"Eurodollar Rate Principal" means any portion or portions of the
outstanding principal balance of the Notes which bears interest at an
applicable Eurodollar Rate at the time in question.
"Excess Debt" means the amount by which the then outstanding principal
balance of the Loan exceeds the Maximum Available Amount as determined on
any date during the term of the Notes.
"Fixed Charges" means the sum of all interest and scheduled principal
payments made by Borrower and its Consolidated Subsidiaries in the
immediately preceding 12-month period plus annual capital expenditures,
including reserves, with capital expenditures being calculated at the
greater of (i) actual capital expenditures and reserves or (ii) $175.00 per
apartment unit on the Property per year.
"Funds from Operations" means the term "Funds from Operations" as such
term is defined by the National Association of Real Estate Investment
Trusts, or if said association no longer exists or no longer promulgates a
definition for such term, then such other meaning as is selected by Agent
acting reasonably.
"GAAP" is defined in Section 7.1(a).
"Ground-Leased Property" means those two (2) certain properties in
Nueces County, Texas, subject to ground leases from Texas A&M University,
containing 7.494 and 4.841 acres, respectively, and commonly known as
Miramar Phase I Apartments and Miramar Phase II Apartments, respectively.
"Improvements" means all improvements now or later to be located on
the Lands.
"Initial Commitment Fee" is defined in Section 3.4(a).
"Intercreditor Agreement" means that certain Intercreditor Agreement,
dated of even date herewith, among Agent and Lenders, as modified, amended
or supplemented from time to time.
"Interest Adjustment Date" means the earlier of either the last day of
an Interest Period or the Termination Date.
"Interest Period" means, with respect to Eurodollar Rate Principal, a
period selected by Borrower of 7 days or 30, 60, 90, 120, 180 or 360 days,
commencing on the Effective Date of any Eurodollar Rate Principal.
"Lands" means the real estate portion of the Property.
"Laws" means all constitutions, treaties, statutes, laws, ordinances,
codes, regulations, rules, orders, decisions, writs, injunctions, or
decrees of the United States of America or any other Tribunal, now in
effect and as hereafter amended, issued, promulgated, or otherwise coming
into effect.
"Legal Requirements" means all Laws, and all recorded or unrecorded
agreements, covenants, restrictions, easements or conditions (including any
requirement of any insurance or surety company or any board of fire
underwriters), as now in effect and as hereafter amended, issued,
promulgated, or otherwise coming into effect.
"Lenders" means the financial institutions named on Exhibit "E" or on
the most recently amended Exhibit "E", if any, delivered by Agent under
this Agreement, and, subject to this Agreement, their respective successors
and assigns (but not any participant who is not otherwise a party to this
Agreement).
"Lenders Payment Address": 700 Louisiana, 5th Floor
Houston, Texas 77002
Attn: Real Estate Administration
"Lien" means any lien, mortgage, security interest, pledge,
assignment, charge, title retention agreement or encumbrance of any kind
and any other substantially similar arrangement for a creditor's claim to
be satisfied from assets or proceeds prior to the claims of other creditors
or the owners.
"Litigation" means any proceeding, claim, suit, action, case or
investigation by, before or involving any Tribunal.
"Loan Documents" means this Agreement, the Notes, the Bid Rate Notes,
each Advance Request, and all other documents now or hereafter pertaining
to the Loan, as renewed, extended, amended, supplemented, increased,
modified, or replaced.
"Market Capitalization" means the sum of (i) the market value of all
issued and outstanding common stock of Borrower based on the average
closing price of such stock for the preceding twenty (20) days trading
days, (ii) the market value of the Debentures if the Debentures were
converted to common stock, (iii) the total liabilities of Borrower and its
Consolidated Subsidiaries (as calculated in accordance with GAAP) and (iv)
all contingent liabilities and unfunded indebtedness of Borrower and its
Consolidated Subsidiaries (other than unfunded indebtedness under this
Agreement).
"Material Adverse Effect" means an effect resulting from any
circumstance or event of whatever nature (including the filing of, or any
adverse determination or development in, any Litigation) which does, or
could reasonably be expected to, (i) impair the validity or enforceability
of any Loan Document, (ii) materially and adversely affect the condition
(financial or otherwise), operations, business, management or assets of
Borrower or its Consolidated Subsidiaries, (iii) materially impair the
ability of Borrower to fulfill any material Obligation, or (iv) cause a
Default or Potential Default.
"Maturity Date" means the earlier to occur of (i) July 28, 1999 (or
July 28, 2000, if the Option is exercised), or (ii) any earlier maturity
resulting from acceleration of the Loan.
"Maximum Available Amount" means the maximum aggregate principal
balance of the Notes which may be outstanding without resulting in a breach
of the requirements set forth in either subsection (a) or (d) of Section
5.1.
"Maximum Rate" means the maximum nonusurious interest rate per annum,
if any, permitted from time to time under applicable Laws to be contracted
for, taken, reserved, charged, or received by Lenders with respect to the
Loan. If such maximum nonusurious interest rate shall change after the date
hereof, the Maximum Rate shall be automatically increased or decreased, as
the case may be, from time to time as of the effective time of each change
in such maximum nonusurious interest rate, without notice to Borrower or
any other Person; provided, that the Maximum Rate shall decrease only to
any extent required by applicable Laws and shall increase only to the
extent permitted by applicable Laws. For purposes of determining the
Maximum Rate under the applicable Laws of the State of Texas, the
applicable rate ceiling shall be the indicated rate ceiling computed in
accordance with Article 5069-1.04 of the Texas Revised Civil Statutes, as
hereafter amended or supplemented; provided that, to the extent permitted
by applicable Laws and subject to any notice or other requirements under
applicable Laws, Lenders may from time to time change the rate ceiling.
"Moody's" means Moody's Investors Service, Inc., or, if Moody's no
longer publishes ratings, such other ratings agency acceptable to Agent.
"Moody's Rating" means the most recently announced rating from time to
time of Moody's assigned to any class of long-term senior, unsecured
liability securities issued by Borrower, as to which no letter of credit,
guaranty, or third party credit support is in place, regardless of whether
all or any part of such liability has been issued at the time such rating
was issued.
"Note" means any one of the Notes.
"Obligations" means (i) the unpaid principal balance of the Loan,
together with all accrued unpaid interest thereon, (ii) all other
outstanding indebtedness, fees, costs, expenses, charges, covenants, and
obligations payable or performable under any Loan Document, and (iii) all
renewals, extensions, amendments, modifications, increases and supplements
thereof. Borrower acknowledges and agrees that the Obligations may, under
the circumstances described in the Loan Documents, exceed the Committed
Sum.
"Option" is defined in Section 4.8.
"Participant" is defined in Section 6.2(b).
"Past Due Rate" means, on any day, a rate per annum equal to the sum
of the Prime Rate for that day plus four percent (4%).
"Permitted Liens" means (i) Liens granted to Agent to secure the
Obligations, (ii) pledges or deposits made to secure payment of worker's
compensation (or to participate in any fund in connection with worker's
compensation insurance), unemployment insurance, pensions or social
security programs, (iii) encumbrances consisting of zoning restrictions,
easements, or other restrictions on the use of real property, provided that
such items do not materially impair the use of such property for the
purposes intended and none of which is violated in any material respect by
existing or proposed structures or land use, (iv) the following: (A) Liens
for taxes not yet due and payable or that are being contested in good faith
by appropriate proceedings diligently conducted, and for which reserves in
accordance with GAAP or otherwise reasonably acceptable to Agent have been
provided; or (B) Liens imposed by mandatory provisions of law such as for
materialmen's, mechanic's, warehousemen's and other like Liens arising in
the ordinary course of business, securing payment of any Liability whose
payment is not yet due, (v) Liens for taxes, assessments and governmental
charges or assessments that are being contested in good faith by
appropriate proceedings diligently conducted, and for which reserves in
accordance with GAAP or otherwise reasonably acceptable to Agent have been
provided, (vi) Liens on Property where Borrower is insured against such
Liens by title insurance, (vii) Liens securing assessments or charges
payable to a property owner association or similar entity, which
assessments are not yet due and payable or that are being contested in good
faith by appropriate proceedings diligently conducted, and for which
reserves in accordance with GAAP or otherwise reasonably acceptable to
Agent have been provided, (viii) Liens securing assessment bonds, so long
as Borrower is not in default under the terms thereof, or (ix) Liens filed
by mechanics and materialmen which are being diligently contested in good
faith and which do not exceed the sum of $10,000.00 for any one such Lien
or the aggregate sum of $30,000.00 for all such Liens filed for any one
apartment project.
"Person" means firms, associations, partnerships (including limited
partnerships), joint ventures, trusts, corporations and other legal
entities, including public or governmental bodies, agencies or
instrumentalities, as well as natural persons.
"Pool" means Property that (i) is owned in fee simple or is
Ground-Leased Property and (ii) is not subject to any Liens other than
Permitted Liens.
"Pool NOI" is defined in Section 5.1.
"Potential Default" means any condition or event which after notice
and/or lapse of time would constitute a Default.
"Prime Rate" means for each Prime Rate Portion, on any day, the rate
of interest per annum then most recently established by Agent as its "prime
rate," which rate (i) is set by Agent as a general reference rate of
interest, taking into account such factors as Agent may deem appropriate,
(ii) is not necessarily the lowest or best rate actually charged to any
customer or a favored rate, and (iii) may not correspond with future
increases or decreases in interest rates charged by other lenders or market
rates in general. Agent may make various business or other loans at rates
of interest having no relationship to such rate. Without notice to Borrower
or any other Person, the Prime Rate shall change automatically from time to
time, as and in the amount by which Agent's prime rate changes.
Notwithstanding the foregoing, if a Lender then acting as Agent under this
Agreement is not a bank organized under the Laws of the United States or
any State, then all references in the preceding sentences in this
definition to Agent shall be deemed to refer to NationsBank of Texas, N.A.
"Prime Rate Portion" means that portion of the Loan which will bear
interest computed with reference to the Prime Rate.
"Prior Loan Agreement" means that certain Loan Agreement dated
effective as of September 27, 1995, between NationsBank of Texas, N.A., as
Agent and a Lender, Fleet National Bank, Bank One, Texas, National
Association, First Interstate Bank of Texas, N.A., Natwest Bank N.A. and
Dresdner Bank AG, New York Branch and Grand Cayman Branch, as restated and
amended pursuant to Restatement and Amendment of Loan Agreement dated
effective as of March 31, 1996.
"Property" means, collectively, the Lands, the Improvements and all
other real or personal property owned by Borrower or one of its
Consolidated Subsidiaries.
"Pro Rata" and "Pro Rata Part" means, when determined for any Lender,
the proportion (stated as a percentage) that such Lender's Commitment bears
to the Total Commitment, or, if the Total Commitments shall have been
terminated, then the proportion (stated as a percentage) that the sum of
the principal outstanding on such Lender's Notes bears to the outstanding
principal balance on all Notes.
"Purchaser" is defined in Section 6.2(c).
"Required Lenders" means those Lenders required under the
Intercreditor Agreement to modify, amend, or waive any term or condition
herein, or to require Agent to take any action hereunder.
"S & P" means Standard & Poor's Rating Group, a division of McGraw
Hill, Inc., a New York corporation, or if S & P no longer publishes
ratings, then such other ratings agency acceptable to Agent.
"S & P Rating" means the most recently announced rating from time to
time of S & P assigned to any class of long-term senior, unsecured
liability securities issued by Borrower, as to which no letter of credit,
guaranty, or third party credit support is in place, regardless of whether
all or any part of such liability has been issued at the time such rating
was issued.
"Target Monthly Amortization" is defined in Section 5.1.
"Termination Date" means the Maturity Date of the Notes (other than
the Bid Rate Notes), as such maturity date may be accelerated under the
terms of the Notes or otherwise.
"Total Assets" means the sum of (i) the undepreciated book value of
real estate assets of Borrower and its Consolidated Subsidiaries and (ii)
the aggregate book value of all other assets of Borrower and its
Consolidated Subsidiaries, after deducting assets classified as intangible
assets, all as determined in accordance with GAAP.
"Total Commitment" means, at any time, the sum of the Commitments of
all of Lenders.
"Total Unsecured Debt" means the outstanding principal balance of all
indebtedness of Borrower and its Consolidated Subsidiaries that is not
secured by Liens, including, without limitation, the aggregate outstanding
principal balance of the Notes.
"Tribunal" means any state, commonwealth, county, municipal, federal,
foreign, territorial or other governmental body, court, administrative
department, commission, board, bureau, district, authority, agency, or
instrumentality, or any arbitration authority.
"Work" means the furnishing of labor, materials, components,
furniture, furnishings, fixtures, appliances, machinery, equipment, tools,
power, water, fuel, lubricants, supplies, goods and/or services with
respect to the Property.
ARTICLE 3 - THE LOAN
3.1. Commitment and Advances. As a condition precedent to the Loan,
Borrower shall have satisfied all of the conditions set forth in Exhibit
"A" on or before the Closing Date or such other date specified therein.
Thereafter, each Lender agrees severally and not jointly to make Advances
of the Loan to Borrower in accordance with this Agreement from the Closing
Date to the earliest to occur of (a) the Maturity Date; (b) if Agent
elects, the date thirty (30) days after the Closing Date if all conditions
to the first Advance have not been satisfied on or before such date; (c)
the Advance Termination Date; or (d) termination under Article 8.
Notwithstanding the foregoing, Lenders shall have no obligation to make any
Advance (x) which would cause the unpaid principal amount of the Loan to
exceed the lesser of the Committed Sum or the Maximum Available Amount,
except to the extent contemplated in Section 3.7(b)(v) with respect to Bid
Rate Loans, or (y) to the extent Lenders are relieved from such obligation
under provisions of the Loan Documents. Furthermore, except to the extent
contemplated in Section 3.7(b)(v) with respect to Bid Rate Loans, no Lender
shall have any obligation to make any Advance which would cause the unpaid
principal balance of such Lender's Notes to exceed such Lender's
Commitment. The Loan is revolving until the Advance Termination Date; prior
to the Advance Termination Date any amount repaid may be reborrowed. The
Loan is non-revolving on and after the Advance Termination Date. The amount
of the Loan set forth on the books and records of Agent maintained in the
ordinary course of business shall be presumptive evidence of the principal
amount thereof owing and unpaid from time to time, but the failure to
record any such amount shall not limit or affect the Obligations.
The obligations of Borrower with respect to all Advances other than
Bid Rate Loans shall be evidenced by the Notes other than the Bid Rate
Notes. The obligations of Borrower with respect to the Bid Rate Loans shall
be evidenced by the Bid Rate Notes.
Borrower hereby authorizes Lenders to make Advances of the Loan on the
Closing Date to pay all amounts outstanding, principal, interest and other
sums, under those certain Promissory Notes dated effective as of September
27, 1995, made payable by Borrower to the order of the lenders under the
Prior Loan Agreement in the aggregate original principal sum of
$150,000,000.00. Borrower further acknowledges that this Agreement restates
and amends the Prior Loan Agreement in its entirety.
3.2. Direct Advances to Lenders. Lenders may (but shall have no
obligation to) advance, by journal entry or otherwise, Loan funds directly
to themselves to pay interest due on the Loan and the Commitment Fee,
whether there is any Default or Potential Default. Each such direct Advance
shall be added to the principal amount of the Loan, even if in excess of
the Committed Sum, and shall be secured by the Loan Documents. Nothing
contained in this Agreement shall be construed to permit the deferral of
the payment of interest on the Loan beyond the dates due, require Borrower
to use Loan funds to pay interest or any such fees, or affect Borrower's
absolute obligation to pay the same in accordance with the Loan Documents.
3.3. Disbursement and Performance by Lenders. (a) If Borrower fails
to pay or perform any Obligation when due and there exists any Default or
Potential Default which is continuing, or Borrower has requested Agent to
make an Advance, refrain from making an Advance or take any action, Agent,
in Borrower's name or in its own name, shall have the right, but not the
obligation, to perform such Obligation including (i) payment to Tribunals
of taxes, assessments and other charges with respect to the Property; (ii)
payment to insurers to maintain insurance; (iii) payment to the holder of
any unpermitted lien or encumbrance against the Property to remove same;
(iv) performing any other Obligation including payment to any third party
Agent deems necessary or advisable in connection with any Work or expenses
incident to the Property or the Loan; and (v) taking any action and paying
any amounts Agent deems necessary or advisable to protect and preserve the
Property, the title thereto, or any other security for the Obligations.
Borrower hereby assigns and pledges the proceeds of the Loan to Agent and
Lenders for such purpose. Agent and its representatives shall have the
right, but not the obligation, to enter upon the Property at any time for
the purposes referred to in this Section. No such action, payment or
disbursement, or failure to act, pay or disburse, shall cure or waive any
Default or Potential Default, or waive any right or remedy of Agent or
Lenders.
(b) Any funds of Lenders paid or used for any of the purposes
referred to above in this Section shall constitute an Advance of Loan funds
and be a part of the Obligations secured by the Loan Documents, even if in
excess of the Committed Sum, and Lenders' obligation to make future
Advances shall be correspondingly reduced. Agent and Lenders may rely on
any statement, invoice, claim or notice without inquiry into the validity
or accuracy thereof, and without liability for the sufficiency or adequacy
of any such action or payment. Upon making any such payment Lenders shall
be subrogated to all rights of the Person receiving such payment. The
amount and nature of any such expense or expenditure and the time when paid
shall be fully established by the statement of Agent of the amount and
nature thereof.
(c) All costs, expenses and disbursements incurred by Lenders under
this Section, in connection with any Default or Potential Default, to
protect or preserve the Property, or which are reimbursable by Borrower
under any provision of this Agreement or any Loan Document shall be a part
of the Obligations, even if in excess of the Committed Sum, and secured by
the Loan Documents. Except as provided otherwise in the Loan Documents, if
incurred before the Maturity Date, such costs, expenses and disbursements
shall be paid or reimbursed to Lenders upon demand and shall bear interest
until paid (i) from the date incurred or paid until the date ten (10) days
after demand, at the per annum rate equal to the lesser of the Maximum Rate
or the Base Rate, provided that if at any time the Base Rate would exceed
the Maximum Rate then the Base Rate shall be limited to the Maximum Rate,
but, to the extent permitted by applicable Laws, any subsequent reductions
in the Base Rate shall not reduce the Base Rate below the Maximum Rate
until the total amount of interest accrued at the Maximum Rate equals the
amount of interest which would have accrued if the Base Rate had not been
limited by the Maximum Rate, and (ii) from and after the date ten (10) days
after demand, at the per annum rate equal to the lesser of the Maximum Rate
or the Past Due Rate. Except as provided otherwise in the Loan Documents,
if incurred after the Maturity Date, all such costs and expenses shall be
reimbursed to Lenders upon demand by Agent and shall bear interest until
paid at the per annum rate equal to the lesser of the Maximum Rate or the
Past Due Rate.
3.4. Fees. (a) In consideration of the commitment of Lenders to make
the proceeds of the Loan available to Borrower on a revolving basis prior
to the Advance Termination Date, prior to the execution hereof, Borrower
has paid to Agent, for the benefit of Lenders, the nonrefundable commitment
fee in the amount of $187,500.00 (the "Initial Commitment Fee"), being the
sum equal to .125% of $150,000,000.00. The Initial Commitment Fee has been
earned in full and is a bona fide commitment fee intended as reasonable
compensation to Lenders for committing to make the Loan available to
Borrower on a revolving basis prior to the Advance Termination Date.
(b) Within ten (10) days after the last day of each calendar quarter
(or portion thereof in the event the Maturity Date is not the last day of a
calendar quarter) during the term of the Loan commencing with the quarter
ending June 30, 1997, Borrower shall pay to Agent, for the benefit of each
Lender, in arrears a facility fee equal to .15% per annum on the daily
average of each Lender's unused commitment. As used in the preceding
sentence, the term "unused commitment" means, with respect to each Lender,
an amount equal to the product of such Lender's Commitment Percentage
multiplied by the Total Commitment in effect on such date, minus an amount
equal to the sum of all Advances (both for Bid Rate Loans and otherwise)
made by such Lender which are outstanding on such date.
(c) Borrower shall pay to Agent, solely for its own account, the
fees described in that certain letter agreement between Borrower and Agent
dated of even date herewith.
3.5. Advance Request.
(a) At least four (4) Business Days before the requested date of
each Advance, Borrower shall deliver to Agent an Affidavit and Advance
Request in the form of Exhibit "B" ("Advance Request"), duly executed on
Borrower's behalf, specifying the amount of the Advance, and all supporting
documentation required by this Agreement. Lenders shall not be required to
make Advances more frequently than twice each week and shall, only upon
satisfaction of all conditions of this Agreement, make the requested
Advance to Borrower on a Business Day within four (4) Business Days after
submission of the Advance Request. Each Advance Request and Borrower's
acceptance of any Advance shall be deemed to ratify and confirm that all
representations and warranties in the Loan Documents remain true and
correct as of the date of the Advance Request and such Advance.
(b) Agent shall promptly notify each Lender of its receipt of any
Advance Request and its contents.
(c) By 11:00 a.m. on the applicable Advance date, each Lender shall
remit its Pro Rata Part of each requested Advance by wire transfer to Agent
pursuant to Agent's wire transfer instructions on Exhibit "E" (or as
otherwise directed by Agent) in funds that are available for immediate use
by Agent.
(d) Absent contrary written notice from a Lender, Agent may assume
that each Lender has made its Pro Rata Part of the requested Advance
available to Agent on the applicable Advance date, and Agent may, in
reliance upon such assumption (but is not required to), make available to
Borrower a corresponding amount. If a Lender fails to make its Pro Rata
Part of any requested Advance available to Agent on the applicable Advance
date, Agent shall seek to recover the applicable amount on demand (i) from
that Lender, together with interest at the overnight rate for federal funds
transactions between member banks of the Federal Reserve System, as
published by the Federal Reserve Bank of New York, for the period
commencing on the date the amount was made available to Borrower by Agent
and ending on (but excluding) the date Agent recovers the amount from that
Lender, or (ii) if that Lender fails to pay its amount upon demand, then
from Borrower, together with interest at an annual interest rate equal to
the rate applicable to the requested Advance for the period commencing on
the Advance date and ending on (but excluding) the date Agent recovers the
amount from Borrower. No Lender is responsible for the failure of any other
Lender to make its Pro Rata Part of any Advance.
3.6. Conditions to All Advances. In addition to all other terms of
the Loan Documents, as conditions precedent to each Advance:
(a) all conditions of the Loan Documents and the Closing Conditions
listed in Exhibit "A" must be satisfied;
(b) no Default or Potential Default shall exist;
(c) all representations and warranties made in the Loan Documents
shall be true and correct as of the date of each Advance;
(d) as of the date of making such Advance, no event, circumstance or
condition shall exist or shall have occurred and be continuing which has or
could have a Material Adverse Effect.
3.7. Bid Rate Loans.
(a) Each Lender may, in its sole discretion and on the terms and
conditions set forth in this Agreement, make Bid Rate Loans to Borrower
from time to time until the Termination Date in an aggregate amount not in
excess of the difference between the Total Commitment minus the aggregate
outstanding principal amount of all Advances under the Loan; provided,
however, at no time shall the sum of (i) the aggregate outstanding
principal amount of all Bid Rate Loans made by all Lenders plus (ii) the
aggregate principal amount of all outstanding Advances other than Bid Rate
Loans exceed the Total Commitment. Bid Rate Loans must have a term not in
excess of six (6) months and a maturity date on or prior to the Maturity
Date and may not be prepaid without the prior written consent of the Lender
making such Bid Rate Loan. Each Bid Rate Loan shall be in an aggregate
principal amount which is at least $10,000,000 and which is an integral
multiple of $1,000,000 in excess thereof; each Bid Rate Loan by a Lender
shall be in a principal amount which is at least $1,000,000 and which is an
integral multiple of $1,000,000 in excess thereof. Notwithstanding anything
herein to the contrary, the aggregate principal amount of Bid Rate Loans
outstanding at any time may not exceed $75,000,000. No Lender shall have
any obligation to make Bid Rate Loans, and Borrower shall have no
obligation to accept any offers for Bid Rate Loans. No Lender shall be
relieved of its obligation to fund its Commitment Percentage of any Advance
notwithstanding the fact that at any time the aggregate outstanding
principal amount of all Bid Rate Loans and Advances other than Bid Rate
Loans made by such Lender exceeds its Commitment Percentage.
(b) With respect to Bid Rate Loans, Borrower shall give Agent prior
to 10:00 a.m., utilizing the form attached hereto as Exhibit "H", (i) in
the case of Eurodollar Bid Rate Loans, at least four (4) Business Days
prior to the proposed borrowing and (ii) in the case of Base Bid Rate
Loans, at least two (2) Business Days prior to the proposed borrowing,
irrevocable written notice of its intention to borrow Bid Rate Loans. Such
notice of borrowing shall specify (i) the requested funding date, which
shall be a Business Day, (ii) the aggregate amount of the proposed
borrowing of Bid Rate Loans (which shall be at least $10,000,000 and which
is an integral multiple of $1,000,000 in excess thereof), (iii) the term of
the Bid Rate Loans selected by Borrower, provided that such term shall not
exceed six (6) months and shall not extend past the Termination Date, (iv)
whether the Bid Rate Loans requested are Base Bid Rate Loans or Eurodollar
Bid Rate Loans, and (v) any other terms applicable thereto. Borrower shall
pay a $1,000 non-refundable, administrative fee for the account of Agent
for each month during which Borrower submits more than two (2) notices of a
proposed borrowing consisting of Bid Rate Loans. Such fee shall be paid to
Agent on the date of delivery of Borrower's third notice of intention to
borrow Bid Rate Loans within a particular month, and shall not be refunded
notwithstanding that the proposed borrowing is canceled by Borrower or no
Lender offers to make a Bid Rate Loan.
(i) Upon receipt of Agent's notice in the form attached
hereto as Exhibit "I", each Lender shall, if, in its sole
discretion, it elects to do so, irrevocably offer to make one or
more Bid Rate Loans to Borrower as part of such proposed
borrowing at a rate or rates of interest specified by such
Lender in its sole discretion, by delivering a written quote to
Agent in the form attached hereto as Exhibit "J", before 10:00
a.m., (A) three (3) Business Days prior to the proposed date of
borrowing, in the case of a request for Eurodollar Bid Rate
Loans, and (B) one (1) Business Day prior to the proposed date
of borrowing, in the case of a request for Base Bid Rate Loans,
setting forth (A) the minimum amount (which shall be $1,000,000
or an integral multiple in excess thereof) and maximum amount of
each Bid Rate Loan which such Lender would be willing to make as
part of the proposed borrowing (which amounts may exceed such
Lender's Commitment Percentage of the Total Commitment) and (B)
the rate or rates of interest therefor. If any Lender shall fail
to respond to Agent by such time, such Lender shall be deemed to
have elected not to make an offer.
(ii) Not later than 11:00 a.m. (A) three (3) Business Days
prior to the proposed date of borrowing in the case of
Eurodollar Bid Rate Loans and (B) on the date of the proposed
borrowing in the case of Base Bid Rate Loans, Borrower shall, in
turn, either
(x) cancel such proposed borrowing by giving Agent
notice to that effect, or
(y) by delivering to Agent the form attached hereto
as Exhibit "K", accept one or more of the offers made by any
Lender or Lenders pursuant to clause (i) above, in its sole
discretion, by giving notice to Agent of the amount of each
Bid Rate Loan (which amount shall be equal to or greater
than the minimum amount, and equal to or less than the
maximum amount, for which notification was given to Borrower
by any Lender for such Bid Rate Loan pursuant to clause (i)
above) to be made by each Lender as part of such borrowing,
and reject any remaining offers made by Lenders pursuant to
clause (i) above by giving Agent notice to that effect;
provided, however, that acceptance by Borrower of offers may
only be made on the basis of ascending Eurodollar Bid Rates
and Base Bid Rates within each term with respect to Lenders
whose outstanding Advances do not exceed or would not exceed
as a result of such Bid Rate Loans its Commitment Percentage
of the Total Commitment; and, provided, further, that if
offers are made by two or more such Lenders with same
Eurodollar Bid Rates or Base Bid Rates for a greater
aggregate principal amount than the amount for which such
offers are accepted for the related term, the principal
amount of Bid Rate Loans accepted shall be allocated by
Borrower among such Lenders as nearly as possible (in
multiples not less than $1,000,000) in proportion to the
aggregate principal amount of such offers.
(iii) Agent shall promptly notify each bidding Lender,
utilizing the form attached hereto as Exhibit "K", whether or
not its Bid Rate Loan has been accepted (which notice to those
Lenders whose Bid Rate Loans have been accepted will be given
within one hour from the time such bid was accepted by
Borrower). After completing the notifications referred to in the
immediately preceding sentence, Agent shall notify each bidding
Lender (A) the aggregate amount of Bid Rate Loans made in
connection with such proposed borrowing, (B) each date on which
any Bid Rate Loan shall mature, (C) the principal amount of Bid
Rate Loans which shall mature on such date, (D) the interest
rate for each such Bid Rate Loan, (E) the highest and lowest bid
submitted by Lenders in connection with each Bid Rate Loan
request and (F) Lender making each such Bid Rate Loan.
(iv) If Agent shall at any time elect to submit a bid for
a Bid Rate Loan in its capacity as a Lender, it shall submit
such bid directly to Borrower one-half hour earlier than the
latest time at which other Lenders are required to submit their
bid to Agent pursuant to Section 3.7(b)(i) hereof.
(v) If Borrower accepts one or more offers made by any
Lender or Lenders pursuant to Section 3.7(b)(ii)(y) above, each
such Lender shall, unless any applicable condition set forth
herein has not been satisfied, make the funds under the Bid Rate
Loans promptly available to Borrower by wire transfer to Agent
pursuant to Agent's wire transfer instructions on "Exhibit E"
(or as otherwise directed by Agent) in funds that are available
for immediate use by Agent.
(vi) Interest on any Eurodollar Bid Rate Loan shall be
calculated at a daily rate equal to 1/360 of the annual
percentage rate applicable to such Eurodollar Bid Rate Loan;
interest on any Base Bid Rate Loan shall be calculated on the
basis of the actual days elapsed in a year consisting of 365 or
366 days, as the case may be.
ARTICLE 4 - PAYMENT
4.1 Repayment at Maturity; Mandatory Principal Reductions.
(a) Subject to any provisions of the Loan Documents requiring
repayment on any earlier date, the principal amount of the Loan and all
accrued and unpaid interest thereon shall be due and payable on the
Maturity Date.
(b) Borrower shall, immediately upon a determination of the
existence of Excess Debt, reduce the outstanding principal balance of the
Loan by an amount equal to the Excess Debt.
4.2. Interest. Subject to Section 3.7 regarding Bid Rate Loans and
Section 9.6, interest shall be calculated in accordance with the following:
(a) (i) Interest on the Loan or any portion thereof shall accrue at
a rate per annum equal to the lesser of (A) at Borrower's option, (x) the
Base Rate or (y) the Eurodollar Rate plus one and five hundredths percent
(1.05%), subject, however, to the provisions of this Section 4.2, or (B)
the Maximum Rate, provided, however, that:
(1) the definition of Base Rate shall be deemed to be one-quarter
percent (.25%) in excess of the Prime Rate and the reference to
"one and five hundredths percent (1.05%)" in subsection (y)
above shall be deemed to refer to "one and one-half percent
(1.5%)" during any period for which both the S&P Rating and the
Moody's Rating are less than BBB- and Baa3, respectively; and
(2) the reference to "one and five hundredths percent (1.05%)" in
subsection (y) above shall be deemed to refer to the percentage
set forth below during any period in which the lower of the S&P
Rating or the Moody's Rating is at the corresponding level set
forth below:
Debt Rating Rate Spread
BBB\Baa2 ninety-five hundredths percent (.95%)
BBB+\Baa1 eighty-five hundredths percent (.85%)
A-\A3 or higher three-quarters percent (.75%)
Interest on any Eurodollar Rate Principal of the Notes shall be calculated
at a daily rate equal to 1/360 of the annual percentage rate applicable to
such Eurodollar Rate Principal; interest on any Prime Rate Portion of the
Notes shall be calculated on the basis of the actual days elapsed in a year
consisting of 365 or 366 days, as the case may be.
(ii) Subject to the conditions provided herein, Borrower
may, on any Interest Adjustment Date (other than the Termination Date)
convert any Eurodollar Rate Principal into a Prime Rate Portion with
interest accruing thereon with reference to the Prime Rate as provided in
paragraph (i) above.
(iii) Subject to the conditions provided herein, Borrower
may, on any Business Day (other than the Termination Date) convert any
Prime Rate Portion into a Eurodollar Rate Principal with interest accruing
thereon with reference to the Eurodollar Rate as provided in paragraph (i)
above, for the Interest Period selected in such notice.
(iv) Subject to the conditions provided herein, Borrower
may elect for interest to accrue with respect to an Advance with reference
to the Eurodollar Rate as provided in paragraph (i) above.
(v) To the extent Borrower has not made an effective
election under and in accordance with subparagraph (iii) or (iv) above, the
Applicable Rate shall be the rate specified pursuant to the provisions
contained herein for a Prime Rate Portion.
(b) Each notice of Eurodollar Rate Principal election by Borrower,
other than in connection with a Bid Rate Loan, must be in the form attached
hereto as Exhibit "D", received by Agent by 2:00 p.m. Houston time two (2)
Business Days prior to any Advance, conversion or continuation (the
"Minimum Notice Period") and shall include the following: (i) Borrower's
election of the Eurodollar Rate; (ii) Borrower's choice of an Interest
Period during which the Eurodollar Rate will apply; (iii) Borrower's
election of the "Effective Date" (herein so called) on which the Interest
Period shall begin; (iv) the amount of the Eurodollar Rate Principal; and
(v) Borrower's representation that there then exists no Default or
Potential Default.
(c) Borrower's election to accrue interest at the Eurodollar Rate is
subject to the following conditions: (i) no Eurodollar Rate Principal shall
be less than $100,000.00; (ii) the Interest Period shall be limited to a
period commencing on the Effective Date and ending on a date 7 days or 30,
60, 90, 120, 180 or 360 days later elected by Borrower in its notice to
Agent; (iii) Borrower's written notice of an election shall be received by
Agent in time to satisfy the Minimum Notice Period; (iv) the last day of
the Interest Period will not be subsequent in time to the Termination Date;
(v) in the case of a continuation of an Interest Period, the Interest
Period applicable after such continuation shall commence on the last day of
the preceding Interest Period; (vi) no Eurodollar Rate Principal election
shall be made if Agent determines by reason of circumstances affecting the
interbank Eurodollar market either adequate or reasonable means do not
exist for ascertaining the Eurodollar Rate for any Interest Period, or it
becomes impracticable or illegal for Agent, any Lender or any participant
in the Loan to obtain funds (by purchasing U.S. dollars in the interbank
Eurodollar market) or if Agent or any Lender determines that the Eurodollar
Rate will not adequately or fairly reflect the costs to any Lender of
maintaining the applicable Eurodollar Rate Principal at such rate; or if as
a result of any change in applicable law or regulation, or in the
interpretation thereof by any governmental authority charged with the
administration thereof (a "Regulatory Change"), it shall become unlawful or
impossible for any Lender to maintain any such Eurodollar Rate Principal;
(vii) there shall never be more than seven (7) portions of the Loan
representing Eurodollar Rate Principal in effect at any one time hereunder
(with no more than two (2) of these being for an Interest Period of 7
days); and (viii) there shall then exist no default under any Loan Document
nor any event or circumstance which, with the giving of notice or time or
both, would constitute a default under any Loan Document.
(d) Borrower shall indemnify Agent and Lenders against any loss or
expense which Agent or Lenders may, as a consequence of Borrower's failure
to make a payment on the date such payment is due hereunder or the payment,
prepayment or conversion of any Eurodollar Rate Principal hereunder on a
day other than an Interest Adjustment Date, sustain or incur in liquidating
or employing deposits from third parties acquired to effect, fund or
maintain any such Eurodollar Rate Principal or any part thereof; provided,
however, that in no event will Borrower be obligated to pay in connection
with the Loan any amount constituting interest under applicable law in
excess of the maximum amount permissible under applicable law. Such loss or
expense shall include, without limitation, (i) the interest which, but for
such failure, payment, prepayment or conversion, Lenders would have earned
in respect of such Eurodollar Rate Principal so paid, for the remainder of
the Interest Period applicable to such Eurodollar Rate Principal, reduced,
if Agent or any Lender is able to redeposit such principal amount so paid
for the balance of such Interest Period, by the interest earned by Agent or
such Lender as a result of so redepositing such principal amount, plus (ii)
any expenses or penalty incurred by Agent or such Lender on redepositing
such principal amount. In the event any such loss or expense is incurred by
Agent or any Lender, if requested by Borrower, Agent or such Lender shall
furnish Borrower with a certificate detailing the basis upon which such
loss or expense is computed. Any such certificate shall establish the
amount of such expense or loss for purposes of this paragraph, in the
absence of manifest error in calculation, provided, however, that upon the
discovery of any error, appropriate adjustments shall be made between such
Lender and Borrower.
(e) Upon receipt of written notice from Agent on behalf of any such
Lender, Borrower shall also indemnify such Lender against and reimburse
such Lender for increased costs to such Lender incurred after delivery of
such notice, as a result of any Regulatory Change, in the maintaining of
any Eurodollar Rate Principal; provided, however, that in no event will
Borrower be obligated to pay in connection with the Loan any amount
constituting interest under applicable law in excess of the maximum amount
permissible under applicable law. All payments made pursuant to this
paragraph shall be made free and clear, without reduction for, or account
of, any present or future taxes or other levies of any nature, excluding
net income and franchise taxes.
4.3. Payment of Principal and Interest. (a) The principal amount of
the Loan from time to time outstanding that is not past-due shall bear
interest at a varying rate per annum equal to the lesser of the Maximum
Rate or the Applicable Rate; provided that if at any time the Applicable
Rate would exceed the Maximum Rate then the Applicable Rate shall be
limited to the Maximum Rate, but, to the extent permitted by applicable
Laws, any subsequent reductions in the Applicable Rate shall not reduce the
Applicable Rate below the Maximum Rate until the total amount of interest
accrued at the Maximum Rate equals the amount of interest which would have
accrued if the Applicable Rate had not been limited by the Maximum Rate.
Interest accrued for each calendar month shall be due and payable on the
tenth (10th) day of the following calendar month, commencing on the tenth
(10th) day of the first calendar month following the Closing Date, and
continuing through the Maturity Date.
(b) The principal of the Notes (other than Bid Rate Notes) shall be
due and payable on the Maturity Date (except as set forth in Section 4.8 in
the event the Option is exercised). The maturity date of each Bid Rate Note
shall be subject to the terms of Section 3.7.
4.4. Prepayment Premium. Borrower may prepay the Prime Rate Portion
in full or in part at any time, on any Business Day, without premium or
penalty. Borrower may prepay any Eurodollar Rate Principal prior to the
expiration of the Applicable Interest Period in full or in part at any
time, on any Business Day, provided (a) Borrower gives Agent at least five
(5) Business Days prior written notice of Borrower's intent to prepay, of
the amount of principal which will be prepaid (the "Prepaid Principal") and
of the date (the "Prepayment Date") on which the prepayment will be made
and the specific amount of Prepaid Principal to be applied to sums bearing
interest at the Eurodollar Rate, (b) the prepayment is in the amount of
100% of the Prepaid Principal plus interest accrued thereon to the
Prepayment Date plus any other unpaid sums (other than principal and
interest) which are due and owing to Agent and Lenders under the Loan
Documents as of the Prepayment Date, and (c) Borrower shall pay the
following prepayment privilege fee, which shall in no event be less than
zero, with respect to any Eurodollar Rate Principal that is being prepaid
prior to the last day of the applicable Interest Period:
(i) the applicable Eurodollar Rate minus a rate derived
by Agent using the rate of interest per annum equal to the
interest settlement rate for U.S. Dollars as published by the
British Bankers Association, or to the rate or rates published
by Reuters, Ltd. through its Reuter monitor service, or to
quotations published by any other recognized market rate source,
or to direct market quotations) to be the prevailing rate at
which deposits in dollars are (or would be at Agent's request)
offered to Agent by major banks in the interbank market for
Eurodollar deposits at any time during the Prepayment Date for
the approximate principal amount of the Prepaid Principal and
for a period comparable to the unexpired portion of the
applicable Interest Period, multiplied by
(ii) the Prepaid Principal, and then multiplied by
(iii) a fraction, the numerator of which is the number of days from
the Prepayment Date to the end of the Interest Period and the
denominator of which is 360.
No Lender shall be obligated actually to reinvest the Prepaid Principal in
any manner as a condition to receiving the prepayment privilege fee or
otherwise.
4.5. Past-Due Obligations. Any Obligation (including, to the extent
permitted by applicable law, all accrued unpaid interest on the principal
amount of the Loan) that is not paid when due (whether scheduled,
accelerated, or otherwise) shall bear interest, payable on demand, from the
date due until paid, at a rate per annum equal to the lesser of the Maximum
Rate or the Past Due Rate.
4.6. Application of Payments. (a) So long as no Default or Potential
Default has occurred and is continuing, all payments (including
prepayments) received by Agent or Lenders hereunder from or on behalf of
Borrower shall be applied first to pay accrued interest then due and
payable, second to repay the principal amount of the Loan (in inverse order
of maturity, in the case of partial prepayments), and third to pay any
other Obligations in the manner and order determined by Agent in its sole
discretion. Notwithstanding the foregoing, so long as no Default or
Potential Default has occurred and is continuing and after application of
any payment to accrued interest, Agent shall apply the payment to that
portion of the principal amount of the Loan as is designated by Borrower in
a written notice delivered to Agent simultaneously with the payment;
provided, however, that Agent shall not assist Borrower with any
determination of the portion of the principal amount of the Loan to which
the payment will be applied.
(b) After the occurrence and during the continuance of a Default or
Potential Default, all payments (including prepayments) received by Agent
or any Lender hereunder from or on behalf of Borrower shall be applied to
the Obligations in the manner and order determined by Agent in its sole
discretion (subject to the terms and provisions of Article 6 hereof and the
Intercreditor Agreement).
4.7. General Provisions. Each payment of principal, interest, and/or
other sums due to Lenders under any other Loan Document shall be made by
Borrower to Agent before 2:00 p.m. Houston, Texas time on the due date
therefor, without setoff or counterclaim, in lawful money of the United
States of America in immediately available funds at Lenders' Payment
Address, or at such other place as may be from time to time designated by
Agent by notice to Borrower. Any payment received after 2:00 p.m. Houston,
Texas time shall not be deemed received and therefore shall not be applied
until the next Business Day. Should any payment due under the Loan
Documents become due and payable on a day other than a Business Day, the
date for payment thereof shall be extended to the next succeeding Business
Day. If the date for any payment of principal is extended by operation of
Law or otherwise, interest thereon shall be payable for the extended time
at the Base Rate or at the Maximum Rate as applicable.
4.8. Extension of Maturity Date. Borrower shall have the option (the
"Option") to extend the original maturity date of the Notes from July 28,
1999, to July 28, 2000, such Option being exercisable only as provided
below, and subject to satisfaction of the following conditions:
(a) Agent shall have received written notice of the exercise thereof
at least thirty (30) but no more than sixty (60) days before the
Advance Termination Date;
(b) There shall exist no Default or Potential Default;
(c) No event, circumstance or condition shall exist or shall have
occurred which constitutes a Material Adverse Effect;
(d) Borrower shall have executed and delivered to Agent a
modification and extension agreement, and) such other
agreements, documents or amendments to the Loan Documents as are
reasonably requested by Agent to properly document the
extension, all in form and content satisfactory to Agent;
(e) Borrower shall pay to Agent, for the benefit of Lenders, an
additional nonrefundable commitment fee in the amount of
$375,000.00 (the "Additional Commitment Fee"; together with the
Initial Commitment Fee, the "Commitment Fee"), being .25% of
$150,000,000.00, in consideration of the commitment of Lenders
to make the proceeds of the Loan available to Borrower on a
non-revolving basis after the Advance Termination Date. As of
the date of Borrower's delivery of written notice regarding the
Option, the Additional Commitment Fee will have been earned in
full and be a bona fide commitment fee intended as reasonable
compensation to Lenders for commitment to make by the Loan
available to Borrower on a non-revolving basis after the Advance
Termination Date; and
(f) During the extended term, all terms and conditions of the Loan
Documents (including but not limited to interest rates and
payments) pertaining to the Loan shall continue to apply,
provided, however, that the principal shall be due and payable in
monthly installments, each equal to the principal portion only of
the level payment of principal and interest which would be
required if an amount equal to the sum of the outstanding
aggregate principal balance of the Notes as of July 28, 1999 were
amortized over fifteen (15) years at a per annum interest rate
equal to the greater of (i) nine percent (9%), or (ii) two and
one-half percent (2.5%) plus the rate of interest per annum on
U.S. Treasury Notes having a maturity of seven (7) years in the
"this week" column under the heading "Treasury Constant
Maturities" of the FEDERAL RESERVE statistical release Form H.15
which has been most recently published, all calculated as of the
first (1st) day of the calendar month following the Advance
Termination Date. The first of such principal installments shall
be due and payable beginning on the tenth (10th) day of the
calendar month following the Advance Termination Date and a like
principal installment shall be due and payable on the 10th day of
each succeeding calendar month thereafter.
All references in this Agreement to the exercise of the Option shall
be deemed to refer to satisfaction of all conditions set forth above.
ARTICLE 5 - ASSET POOL
5.1. Property Pool. As of any date during the term hereof:
(a) The Pool must have an aggregate undepreciated book value, as
determined in accordance with GAAP, equal to at least one hundred
seventy-five percent (175%) of the Total Unsecured Debt;
(b) (i) The Pool must consist of multi-family real estate
projects for which Borrower must have received from third party
independent environmental consultants, and delivered to Agent upon
Agent's request, written assessments that do not disclose any material
environmental conditions or risks related to such properties provided,
however, that Agent shall have given Borrower thirty (30) days' prior
written notice identifying any project Agent determines must be
excluded from the Pool due to a material environmental condition
before such exclusion shall become effective;
(ii) No more than seven and one-half percent (7.5%) of the
aggregate undepreciated book value of the Pool(as determined in
accordance with GAAP) may consist of multi-family projects
under)construction ("Development Projects); and
(iii) The Pool must have no more than an aggregate of
$200,000.00 in Liens described in subsection (ix) of the definition of
the term "Permitted Liens" set forth in Article 2, provided, however,
that in the event the Pool has more than an aggregate of $200,000.00
in said Liens, Borrower shall designate in writing to Agent which
project or projects with said Liens shall be excluded from the Pool so
that this requirement is once again satisfied, and further provided,
that such exclusion shall terminate automatically upon reduction of
said Liens below an aggregate of $200,000.00;
(c) The Property in the Pool other than the Development Projects
must have an aggregate occupancy level based on bona fide tenant leases
requiring current rent payments of at least eighty-five percent (85%),
where the occupancy level is the average of the occupancy level for each of
the immediately preceding three (3) months; and
(d) The Total Unsecured Debt must not exceed the maximum
hypothetical loan amount on which the Target Monthly Amortization (as such
term is hereinafter defined) can be calculated with the result that Pool
NOI (as such term is hereinafter defined) for the preceding 90-day period
would not be less than one hundred fifty percent (150%) of the aggregate
Target Monthly Amortization for such period. As used herein:
"Pool NOI" means the net operating income for the Pool,
calculated by including in expenses the greater of (i) actual capital
expenditures expensed by Borrower and reserves or (ii) $175.00 per
apartment unit per year.
"Target Monthly Amortization" means the hypothetical monthly
payment of principal and interest which would be required for each
month if the Total Unsecured Debt, as of the date of determination of
the) Target Monthly Amortization, were amortized in level payments of
principal and interest over twenty-five (25) years at an interest rate
per annum equal to the greater of (i) eight and one-quarter (8.25%);
or (ii) one) and three quarters percent (1.75%) plus the rate of
interest per annum on U.S. Treasury Notes having a) maturity of seven
(7) years in the "this week" column under the heading "Treasury
Constant Maturities," of the FEDERAL RESERVE statistical release FORM
H.15 which has been most recently published (or, if for any reason
that published rate as of a date not more than ten (10) days prior to
such date is not available, another rate determined by Agent to be
comparable, in its discretion reasonably exercised, shall be used for
this purpose).
5.2. Negative Pledge Agreements. Borrower shall not, and shall not
permit any of its Consolidated Subsidiaries to, enter into any negative
pledge agreements with any other Person such that Borrower shall be
prohibited from granting, or causing any Consolidated Subsidiaries to
grant, to Agent, for the benefit to Lenders, a first priority lien and
security interest in the Pool as security for the Obligations.
ARTICLE 6 - INTERCREDITOR MATTERS
6.1. Intercreditor Agreement. Borrower is aware of, and has been
furnished a copy of, the Intercreditor Agreement.
6.2. Successors and Assigns; Participations.
(a) No Lender may transfer, pledge, assign, sell any participation
in, or otherwise encumber its portion of the Obligation, except as
specifically permitted under the terms and provisions of the Intercreditor
Agreement and in accordance with this Section.
(b) In the event that a Lender, as permitted under the Intercreditor
Agreement, at any time sells to one or more Persons (each a "Participant")
participating interests in its portion of the Obligation, the selling
Lender shall remain a "Lender" under this Agreement (and the Participant
shall not constitute a "Lender" under this Agreement) and its obligations
under this Agreement shall remain unchanged. The selling Lender shall
remain solely responsible for the performance of its obligations under the
Loan Documents and shall remain the holder of its share of the Loan for all
purposes under this Agreement. Borrower and Agent shall continue to deal
solely and directly with the selling Lender in connection with that
Lender's rights and obligations under the Loan Documents. Participants have
no rights under the Loan Documents. Subject to the following, each Lender
may obtain (on behalf of its Participants) the benefits of Article 4 with
respect to all participations in its part of the Obligation outstanding
from time to time so long as Borrower is not obligated to pay any amount in
excess of the amount that would be due to that Lender under Article 4
calculated as though no participations have been made. No Lender may sell
any participating interest under which the Participant has any rights to
approve any amendment, modification or waiver of any Loan Document, except
to the extent the amendment, modification or waiver extends the due date
for payment of any principal, interest or fees due under the Loan
Documents, reduces the interest rate or the amount of principal or fees
applicable to the Obligation (except reductions contemplated by this
Agreement), or releases any guaranty or collateral, if any, for the
Obligation. However, if a Participant is entitled to the benefits of
Article 4 or a Lender grants rights to its Participants to approve
amendments to or waivers of the Loan Documents respecting the matters
described in the previous sentence, then that Lender must include a voting
mechanism in the relevant participation agreement whereby a majority of its
portion of the Obligation (whether held by it or participated) shall
control the vote for all of that Lender's portion of the Obligation. Except
in the case of the sale of a participating interest to another Lender, the
relevant participation agreement shall prohibit the Participant from
transferring, pledging, assigning, selling participations in, or otherwise
encumbering its portion of the Obligation.
(c) In each case in which a Lender, as permitted under the
Intercreditor Agreement, assigns to any other Person (each a "Purchaser")
all or any part of its rights and obligations under the Loan Documents, the
Purchaser shall assume those rights and obligations under an assignment
agreement substantially in the form of the attached Exhibit "F". Upon (i)
delivery of an executed copy of the assignment agreement to Agent and (ii)
payment of any fee required under the Intercreditor Agreement from the
transferor to Agent, from and after the assignment's effective date (which
shall be after the date of delivery), the Purchaser shall for all purposes
be a Lender party to this Agreement and shall have all the rights and
obligations of a Lender under this Agreement to the same extent as if it
were an original party to this Agreement with commitments as set forth in
the assignment agreement, and the transferor Lender shall be released from
its obligations under this Agreement to a corresponding extent, and, except
as provided in the following sentence, no further consent or action by
Lenders or Agent shall be required. Upon the consummation of any transfer
to a Purchaser under this subsection (c), the then-existing Exhibit "E"
shall automatically be deemed to reflect the name, address, and Commitment
of such Purchaser, Agent shall deliver to Borrower and Lenders an amended
Exhibit "E" reflecting those changes, Borrower shall execute and deliver to
each of the transferor Lender and the Purchaser a Note in the face amount
of its respective Commitment following transfer, and, upon receipt of its
new Note, the transferor Lender shall return to Borrower the Notes
previously delivered to it under this Agreement. A Purchaser is subject to
all the provisions in this Article as if it were a Lender signatory to this
Agreement as of the date of this Agreement.
(d) Notwithstanding any contrary provision in this Agreement or the
Intercreditor Agreement, a Lender may not sell or participate any of its
interests for a purchase price that, directly or indirectly, reflects a
discount from face value, without first offering the sale or participation
to the other Lenders on a Pro Rata basis (which must be accepted or
rejected within five (5) Business Days after the offer).
ARTICLE 7 - ADDITIONAL REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS
Borrower represents, warrants, covenants and agrees as follows:
7.1. Financial Statements.
(a) All financial statements and other financial information
regarding Borrower and its Consolidated Subsidiaries furnished by or on
behalf of Borrower to Agent or Lenders are true, correct, and complete as
of the dates specified therein and fully and accurately present the
financial condition of Borrower and its Consolidated Subsidiaries as of the
dates specified, all financial statements have been prepared in accordance
with generally accepted accounting principles and practices recognized from
time to time by the Financial Accounting Standards Board (or any generally
recognized successor) consistently applied for all periods to properly
reflect the financial condition, and the results of operations and changes
in financial position, of Borrower (and, on a consolidated basis, of
Borrower and its Consolidated Subsidiaries) ("GAAP"). No change has
occurred in Borrower's financial condition or the condition of its
Consolidated Subsidiaries reflected therein since the date of the financial
statement delivered to Agent which constitutes a Material Adverse Effect.
Borrower is solvent after giving effect to all borrowings and guaranties
contemplated in the Loan Documents. Borrower shall, and shall cause each of
its Consolidated Subsidiaries to, keep accurate books and records in
accordance with GAAP in which full, true and correct entries shall be
promptly made. Borrower shall, and shall cause each of its Consolidated
Subsidiaries to, permit Agent, at all reasonable times, to examine and copy
the books and records of Borrower and its Consolidated Subsidiaries
pertaining to the Loan, Property, and all contracts, statements, invoices,
bills, and claims for any Work.
(b) Borrower shall furnish or cause to be furnished to Agent the
following:
(i) within ninety (90) days after the close of each fiscal
year of Borrower: (A) a balance sheet of Borrower and its Consolidated
Subsidiaries dated as of the close of such fiscal year; (B) an
operating statement for such fiscal year; and (C) a fully executed
certificate in the form of Exhibit "C" ("Compliance Certificate")
dated as of the delivery of such statements;
(ii) within forty-five (45) days after the close of each
quarter of each fiscal year of Borrower: (A) a balance sheet of
Borrower and its Consolidated Subsidiaries dated as of the close of
such fiscal quarter;(B) an operating statement for such fiscal
quarter; and (C) a fully executed Compliance Certificate dated as of
the delivery of such statements;
(iii) within forty-five (45) days after the end of each calendar
quarter, with respect to the Pool, a consolidating operating statement
for such quarter (unless requested more frequently by Agent); and
(iv) from time to time, additional financial statements and
financial information as Agent shall reasonably request.
Borrower shall simultaneously deliver to each Lender copies of
the items referenced in subsections (i)(A) and (B) and (ii)(A) and
(B).
(c) All financial statements of Borrower and its Consolidated
Subsidiaries shall include balance sheets (including disclosure of all
contingent liabilities), an income statement, a statement of shareholders'
equity and a statement of cash flows for the applicable period, together
with such supporting schedules and documentation as Agent requires. The
consolidating quarterly operating statements shall include: the project
name and location; percentage of ownership interest; leasing status; and
net operating income. All balance sheets and operating statements shall be
certified by Borrower and the balance sheet and operating statement
described in Section 7.1(b)(i) shall be audited by independent certified
public accountants of recognized standing, selected by Borrower and
acceptable to Agent without any qualification or exception other than those
acceptable to Agent.
7.2. Litigation. There is no threatened or pending Litigation
involving or affecting the Property or Borrower, its Consolidated
Subsidiaries, the validity, enforceability, or priority of any of the Loan
Documents, or which constitutes a Material Adverse Effect. If any
Litigation is threatened or commenced (a) that seeks to enjoin, prevent, or
declare invalid or unlawful Borrower's renovation, occupancy, use or
operation of the Improvements; (b) that endangers, questions or attacks the
title to any part of the Property or the validity, enforceability, or
priority of any Loan Document; (c) that seeks to levy upon or seize any
part of the Property; (d) for any condemnation or taking of any part of or
interest in the Property; (e) regarding any claimed damage, default, or
diminution or offset against Rent; (f) with respect to any claimed personal
injury, death or property damage on or about the Property; (g) otherwise
purporting to affect the Property; or (h) which constitutes a Material
Adverse Effect; then Borrower shall promptly and vigorously contest such
Litigation in good faith, resist the entry of any temporary or permanent
injunction, and seek the stay of any such injunction that may be entered.
After the occurrence and during the continuance of a Default or Potential
Default, Agent may (but shall not be obligated to) commence, appear in, or
defend any such Litigation, compromise or discharge adverse claims made
with respect to the Property, purchase tax titles, remove prior liens or
security interests, and pay all necessary expenses, including attorneys'
fees, incurred in connection with such Litigation, which Borrower shall
reimburse to Agent on demand and which shall be part of the Obligations,
even if in excess of the Committed Sum, secured by the Loan Documents.
7.3. Existence and Rights. True, correct and complete copies of the
documents governing Borrower's existence and authority have been delivered
to Agent. Borrower and each of its Consolidated Subsidiaries is duly
organized, validly existing, and in good standing under the Laws of the
state of its organization and under Texas Laws; is lawfully doing business
in Texas and any other state in which any portion of the Property is
located; has full power and authority to own the Property, renovate, lease
and operate the Improvements, and enter into and perform the Loan
Documents; and has not conveyed, assigned or otherwise transferred (or
agreed to do so) any development rights, air rights, utility rights,
tap-in, availability, or capacity rights, easement or license rights, or
other rights, privileges or attributes with respect to the Property, except
for the Permitted Encumbrances. Borrower and each of its Consolidated
Subsidiaries shall maintain and preserve its existence under the Laws of
its jurisdiction of organization and under Texas Laws; preserve, protect,
renew and extend all franchises, permits, licenses, privileges, concessions
and other material rights applicable to Borrower, its Consolidated
Subsidiaries or the Property; and shall not make any change in its name,
identity, or structure without Agent's prior written consent.
7.4. Authorization, Conflicts, Enforceability. The execution,
delivery, and performance of the Loan Documents by Borrower and its
Consolidated Subsidiaries have been duly authorized by Borrower and its
Consolidated Subsidiaries and shall not cause or result in a violation or
breach of, or a default (or provide cause for acceleration of indebtedness)
under, any organizational document, agreement or other Legal Requirement by
which Borrower, its Consolidated Subsidiaries or any of Borrower's property
are bound or affected. Neither Borrower nor any of its Consolidated
Subsidiaries is in default under any obligation of Borrower, any Legal
Requirement applicable to the Property, or any other Legal Requirement
which constitutes a Material Adverse Effect. The Loan Documents executed by
Borrower constitute the valid and legally binding obligations of Borrower
enforceable in accordance with their terms, except as limited by Debtor
Relief Laws and except as the availability of certain remedies may be
limited by general principles of equity.
7.5. Title to the Property. Except with respect to the Ground-Leased
Property, Borrower or one of its Consolidated Subsidiaries owns and holds
full legal and equitable title to the Property, in fee simple absolute as
to all real property. The execution, delivery, performance and observance
of the Loan Documents will not require or result in the creation of any
Lien on any of Borrower's Property in the Pool.
7.6. Legal Requirements. Borrower and each of its Consolidated
Subsidiaries (a) has complied and will comply, in all material respects as
determined by Agent, with all Legal Requirements relating to or affecting
the Property, Loan (including all reporting requirements applicable to
Lenders) or Borrower or its Consolidated Subsidiaries; (b) has obtained,
and delivered true and correct copies to Agent of, all required permits,
licenses, approvals and consents from, and has made all filings with, any
Tribunal (and the same have not lapsed nor been rescinded or revoked)
necessary in connection with the renovation of the Improvements, the
execution, delivery or enforcement of any Loan Document, and the
performance of the Obligations; and (c) has no knowledge of, and has
received no notice of, any violation of any Legal Requirement relating to
or affecting the Property, Borrower or any of its Consolidated
Subsidiaries. The Property, and the intended use, occupancy, or operation
thereof, complies and will comply with all applicable Legal Requirements.
No part of the Property constitutes (or will constitute) a nonconforming
use under any zoning Law or similar Legal Requirement.
7.7. Utilities and Access. With respect to the Pool: (a) all utility
and municipal services required for the renovation, occupancy, use and
operation of the Improvements are available for use and tap-in at the
boundaries of the Land and will be available in sufficient amounts for the
intended use of the Improvements; (b) all binding agreements, allocations
or commitment letters required to ensure the provision of such services
have been obtained or will be available from the applicable utility
companies and/or Tribunals providing such services; (c) all public and
private roads necessary for the intended occupancy, use and operation of
the Improvements are completed and available for vehicular ingress to and
egress from the Land and have been publicly dedicated and accepted for
maintenance by all applicable Tribunals; (d) all necessary or required
utility, private roadway, parking, access (including curb cuts), easements,
covenants and permits have been granted or issued; and (e) all impact,
connection or other requisite fees therefor have been paid.
7.8. Full Disclosure. All plans, budgets, schedules, certificates,
confirmations, statements, applications, rent rolls, affidavits,
agreements, contracts, reports, studies, tests, opinions, and other
materials and factual information furnished to Agent and Lenders by or on
behalf of Borrower and its Consolidated Subsidiaries in connection with the
Loan are true, accurate and complete in every material respect on the date
as of which the information is dated or certified and none is incomplete by
omitting to state any material fact necessary to make such information not
misleading. There is no material fact or information that Borrower has not
disclosed to Agent that could materially adversely affect the Property or
the condition (financial, business, or otherwise) of Borrower and its
Consolidated Subsidiaries. There has been no material change in any of the
foregoing matters from the matters submitted or disclosed to Agent. There
has been no circumstance or event that constitutes a Material Adverse
Effect.
7.9. Certain Regulatory Matters. The proceeds of the Loan are not
being used and shall not be used to purchase or carry any "margin stock"
within the meaning of Regulation "U" of the Board of Governors of the
Federal Reserve System, nor to extend credit to others for that purpose.
Borrower and each of its Consolidated Subsidiaries is in compliance (and
will comply) in all material respects with the Employee Retirement Income
Security Act of 1974, as amended, and neither Borrower nor any of its
Consolidated Subsidiaries has incurred (or will incur) any liability to the
Pension Benefit Guaranty Corporation or any Tribunal succeeding to any or
all of its functions thereunder. Neither Borrower nor any of its
Consolidated Subsidiaries is a "foreign person" within the meaning of the
Internal Revenue Code of 1986, Sections 1445 and 7701.
7.10. Principal Office, Etc. The principal office, chief executive
office and principal place of business of Borrower, and the place where
Borrower maintains its principal records and books, is at Borrower's
address for notices as specified in this Agreement. The Loan is solely for
business purposes, and is not for personal family, household or
agricultural purposes.
7.11. Payment and Performance. No Default or Potential Default exists.
Borrower is in compliance with the Loan Documents. Borrower shall perform
all the Obligations in accordance with the Loan Documents.
7.12. Inspection of the Property. Agent may enter upon the Property to
inspect the Property at all reasonable times. Borrower will cooperate and
assist, and will cause its Consolidated Subsidiaries to cooperate and
assist, in such inspections, including furnishing all plans, shop drawings
and specifications in Borrower's possession or the possession of its
Consolidated Subsidiaries relating to the Improvements.
7.13. Estoppel Certificate. Borrower shall at any time furnish within
ten (10) days of request by Agent a written statement in such form as may
be required by Agent, stating (a) that the Loan Documents are valid,
binding and enforceable obligations of Borrower; (b) the outstanding
principal balance of the Loan; (c) the date to which interest is paid; (d)
that the Loan Documents have not been released, subordinated or modified;
(e) that there are no offsets or defenses against the enforcement of the
Loan Documents, and (f) any such other matters reasonably requested by
Agent. If any of the foregoing statements are untrue, Borrower shall,
alternatively, specify the reasons therefor.
7.14. Maintenance and Use. Borrower will keep, and will cause its
Consolidated Subsidiaries to keep, the Property in first class order,
repair, operating condition and appearance, causing all necessary repairs,
renewals, replacements, additions and improvements to be promptly made, and
will not allow any of the Property to be misused, abused or wasted or to
deteriorate. Borrower will not, and will not allow its Consolidated
Subsidiaries to, without the prior written consent of Agent, (a) remove
from the Pool any fixtures or personal property covered by the Loan
Documents except such as is replaced by Borrower or one of its Consolidated
Subsidiaries by an article of equal suitability and value, owned by
Borrower or one of its Consolidated Subsidiaries, free and clear of any
lien or security interest, except those created by the Loan Documents; (b)
make any structural alteration to the Pool after completion of renovation
of the Improvements or any other alteration thereto which impairs the value
thereof; (c) initiate or permit any zoning reclassification of the Pool,
seek any variance under existing zoning ordinances, or use or permit the
use of the Pool in a manner that is a nonconforming use under applicable
zoning ordinances or other Legal Requirements; (d) impose any easement,
restrictive covenant or encumbrance upon the Pool, execute or file any
subdivision plat or condominium declaration affecting the Pool, or consent
to the annexation of the Pool to any municipality; (e) perform, or consent
to, any drilling or exploration for or extraction, removal or production of
any mineral, hydrocarbon, gas, natural element, compound or substance
(including sand and gravel) from the surface or subsurface of the Land in
the Pool, or (f) use or occupy or allow the use or occupancy of the Pool in
any manner which violates any Legal Requirement, constitutes a public or
private nuisance, or makes void, voidable or cancelable, or increases the
premium of, any insurance.
7.15. Notice to Agent. Borrower shall promptly notify Agent in writing
of any of the following events, specifying in each case the action Borrower
has taken or proposes to take with respect thereto: (a) the existence of
any Default or Potential Default; (b) any material default by Borrower or
any of its Consolidated Subsidiaries under any Legal Requirement, or any
default by Borrower or any of its Consolidated Subsidiaries in the
performance of any obligation which constitutes a Material Adverse Effect;
(c) any decline of ten percent (10%) or more in the tangible net worth of
Borrower from that shown on the most recent financial statements of
Borrower delivered to Agent; (d) any Litigation instituted or threatened
against Borrower, any of its Consolidated Subsidiaries or the Property or
any material development in any such Litigation; (e) any actual or
threatened (but only if such threat is communicated to Borrower in writing)
condemnation or other taking of any portion of the Property, any
negotiations with respect thereto, or any loss of or substantial damage to
any portion of the Property; and (f) any cancellation, adverse alteration
or non-renewal of any insurance coverage with respect to the Property.
7.16. Costs and Expenses. Without limitation of any Loan Document and
to the extent not prohibited by applicable Laws, (a) Borrower shall pay
when due, and reimburse to Agent to the extent paid by Agent on demand, and
indemnify Agent from, all out-of-pocket fees, costs and expenses paid or
incurred by Agent in connection with the negotiation, preparation and
execution of this Agreement and the other Loan Documents (and any
amendments, approvals, consents, waivers and releases requested, required,
proposed or done from time to time), or in connection with the
disbursement, administration or collection of the Loan or the enforcement
of the Obligations or the exercise of any right or remedy of Agent,
including reasonable fees and expenses of Agent's counsel, and (b) Borrower
shall reimburse to Lenders to the extent paid by Lenders on demand, and
indemnify Lenders from, all out-of-pocket fees, costs and expenses paid or
incurred by Lenders in connection with the collection of the Loan after
Default or the enforcement of the Obligations or the exercise of any right
or remedy of Lenders, including reasonable fees and expenses of Lenders'
counsel. Borrower shall pay all costs and expenses incurred by Agent or
Lenders, including attorneys' fees, if the Obligations or any part thereof
are sought to be collected by or through an attorney at law, whether or not
involving probate, appellate, administrative or bankruptcy proceedings.
Borrower shall pay all costs and expenses of complying with the Loan
Documents. Borrower's obligations under this Section shall survive the
delivery of the Loan Documents, the making of Advances, the payment in full
of the Obligations, the release or termination of the Loan Documents, any
bankruptcy or other debtor relief proceeding, and any other event
whatsoever. Borrower acknowledges that none of the foregoing costs and
expenses are included in the Commitment Fee.
7.17. Further Assurances. Borrower will, on request of Agent, (a)
promptly correct any defect, error or omission in any Loan Document; (b)
execute, acknowledge, deliver, procure, record or file such further
instruments and do such further acts deemed necessary, desirable or proper
by Agent to carry out the purposes of the Loan Documents; and (c) provide
such certificates, documents, reports, information, affidavits and other
instruments and do such further acts deemed necessary, desirable or proper
by Agent or any Lender to comply with the requirements of any agency having
jurisdiction over Agent or any Lender.
7.18. No Assignment. Borrower shall not assign, transfer or encumber
its rights or Obligations under any Loan Document or any proceeds of the
Loan without the prior written consent of Agent.
7.19. INDEMNIFICATION. BORROWER SHALL, AND SHALL CAUSE
EACH OF ITS CONSOLIDATED SUBSIDIARIES TO, JOINTLY AND SEVERALLY,
INDEMNIFY AND HOLD HARMLESS AGENT, LENDERS, NATIONSBANK CAPITAL
MARKETS, INC. AND THE DIRECTORS, OFFICERS, PARTNERS, EMPLOYEES,
AGENTS, HEIRS, REPRESENTATIVES, SUCCESSORS AND ASSIGNS OF AGENT,
LENDERS, NATIONSBANK CAPITAL MARKETS, INC., RESPECTIVELY, FROM
AND AGAINST, AND REIMBURSE THEM ON DEMAND FOR, ANY AND ALL
INDEMNIFIED MATTERS (DEFINED BELOW) BUT ONLY IN THOSE CASES IN
WHICH THE FOREGOING INDEMNITEES ARE SEEKING INDEMNIFICATION IN
THE CAPACITIES IDENTIFIED AND NOT AS TENANTS OR INVITEES ON THE
PROPERTY. WITHOUT LIMITATION, THE FOREGOING INDEMNITIES SHALL
APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO MATTERS WHICH IN
WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF
SUCH (AND/OR ANY OTHER) INDEMNIFIED PERSON. HOWEVER, SUCH
INDEMNITIES SHALL NOT APPLY TO A PARTICULAR INDEMNIFIED PERSON
TO THE EXTENT THAT THE SUBJECT OF THE INDEMNIFICATION IS CAUSED
BY OR ARISES OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF THAT INDEMNIFIED PERSON. ANY AMOUNT TO BE PAID UNDER THIS
SECTION BY BORROWER TO AN INDEMNIFIED PERSON SHALL BE A DEMAND
OBLIGATION OWING BY BORROWER (WHICH BORROWER HEREBY PROMISES
TO PAY) TO AGENT, PART OF THE OBLIGATIONS, EVEN IF IN EXCESS OF
THE COMMITTED SUM, AND SECURED BY THE LOAN DOCUMENTS. NOTHING
IN THIS SECTION, ELSEWHERE IN THIS AGREEMENT OR IN ANY OTHER
LOAN DOCUMENT SHALL LIMIT OR IMPAIR ANY RIGHTS OR REMEDIES OF
AGENT, LENDERS, OR ANY OTHER INDEMNIFIED PERSON (INCLUDING
WITHOUT LIMITATION ANY RIGHTS OF CONTRIBUTION OR INDEMNIFICATION)
AGAINST BORROWER OR ANY OTHER PERSON UNDER ANY OTHER PROVISION
OF THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, ANY OTHER AGREEMENT
OR ANY APPLICABLE LEGAL REQUIREMENT. AS USED HEREIN, THE TERM
"INDEMNIFIED MATTERS" MEANS ANY AND ALL CLAIMS, DEMANDS,
LIABILITIES (INCLUDING STRICT LIABILITY), LOSSES, DAMAGES
(INCLUDING CONSEQUENTIAL DAMAGES), CAUSES OF ACTION, JUDGMENTS,
PENALTIES, FINES, COSTS AND EXPENSES (INCLUDING WITHOUT LIMITATION,
REASONABLE FEES AND EXPENSES OF ATTORNEYS AND OTHER PROFESSIONAL
CONSULTANTS AND EXPERTS, AND OF THE INVESTIGATION AND DEFENSE OF
ANY CLAIM, WHETHER OR NOT SUCH CLAIM IS ULTIMATELY DEFEATED, AND
THE SETTLEMENT OF ANY CLAIM OR JUDGMENT INCLUDING ALL VALUE PAID
OR GIVEN IN SETTLEMENT) OF EVERY KIND, KNOWN OR UNKNOWN,
FORESEEABLE OR UNFORESEEABLE, WHICH MAY BE IMPOSED UPON,
ASSERTED AGAINST OR INCURRED OR PAID BY AGENT, LENDERS, OR
ANY INDEMNIFIED PERSON AT ANY TIME AND FROM TIME TO TIME,
WHENEVER IMPOSED, ASSERTED OR INCURRED, BECAUSE OF, RESULTING
FROM, IN CONNECTION WITH, OR ARISING OUT OF ANY TRANSACTION,
ACT, OMISSION, EVENT OR CIRCUMSTANCE IN ANY WAY CONNECTED WITH
THE PROPERTY OR WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT,
INCLUDING DISBURSEMENT OF THE LOAN PROCEEDS, THE CONDITION OF
THE PROPERTY (INCLUDING THE PRESENCE OF HAZARDOUS SUBSTANCES),
ANY BODILY INJURY OR DEATH OR PROPERTY DAMAGE OCCURRING IN OR
UPON OR IN THE VICINITY OF THE PROPERTY THROUGH ANY CAUSE
WHATSOEVER AT ANY TIME ON OR BEFORE THE RELEASE DATE, ANY ACT
PERFORMED OR OMITTED TO BE PERFORMED HEREUNDER OR UNDER ANY
OTHER LOAN DOCUMENT, ANY FAILURE BY BORROWER TO PERFORM ITS
OBLIGATIONS UNDER ANY CONSTRUCTION CONTRACT, ANY DEFAULT OR
POTENTIAL DEFAULT, AND ANY CLAIM UNDER OR WITH RESPECT TO ANY
LEASE. THE TERM "RELEASE DATE" AS USED HEREIN MEANS THE DATE
ON WHICH THE OBLIGATIONS HAVE BEEN PAID AND PERFORMED IN FULL
AND THE LOAN DOCUMENTS HAVE BEEN RELEASED; PROVIDED, THAT IF
SUCH PAYMENT, PERFORMANCE OR RELEASE IS CHALLENGED, IN BANKRUPTCY
PROCEEDINGS OR OTHERWISE, THE RELEASE DATE SHALL BE DEEMED NOT
TO HAVE OCCURRED UNTIL SUCH CHALLENGE IS REJECTED, DISMISSED
OR WITHDRAWN WITH PREJUDICE. THE INDEMNITIES IN THIS SECTION
SHALL NOT TERMINATE UPON THE RELEASE DATE BUT WILL SURVIVE THE
RELEASE DATE, THE PAYMENT OF THE OBLIGATIONS, THE DISCHARGE AND
RELEASE OF THE LOAN DOCUMENTS, ANY BANKRUPTCY OR OTHER DEBTOR
RELIEF PROCEEDING, AND ANY OTHER EVENT WHATSOEVER.
7.20. REIT Status. Borrower shall maintain its qualification as a real
estate investment trust as that term is defined in Section 856 of the
Internal Revenue Code of 1986, as amended from time to time, and the
regulations of the United States Treasury Department promulgated
thereunder.
7.21. Management of Property. Any material change in the day-to-day
leasing, management and operation of the Property shall be subject to the
prior written consent of Agent. Furthermore, at least two (2) of the three
(3) current holders of the positions of (a) Chairman and Chief Executive
Officer, (b) President and Chief Operating Officer and (c) Chief Financial
Officer of Borrower shall remain actively involved in the management of
Borrower; provided, however, that upon the withdrawal of any two (2) of
these individuals from active involvement in the management of Borrower
(due to death, disability, termination of employment or otherwise and
regardless of whether or not such withdrawal is simultaneous), Borrower
shall have a period of six (6) months within which to submit replacement
personnel for Agent's approval in Agent's sole discretion.
7.22. Minimum Net Worth. The net worth of Borrower and its
Consolidated Subsidiaries, as calculated in accordance with GAAP, shall
never be less than ninety percent (90%) of Borrower's net worth as reported
on Borrower's financial statements dated December 31, 1996, prepared in
accordance with GAAP except that net worth shall be grossed up to include
the Debentures (as such term is defined in Section 7.23), as (a) adjusted
for Borrower's accumulated depreciation after December 31, 1996, (b)
adjusted for any completed mergers or acquisitions, and (c) increased by an
amount equal to ninety percent (90%) of Borrower's net proceeds from
securities issued by Borrower after December 31, 1996, at any fiscal
quarter end or fiscal year end of Borrower.
7.23. Liabilities/Assets Ratios. (a) The ratio of total liabilities of
Borrower and its Consolidated Subsidiaries, as calculated in accordance
with GAAP except that total liabilities shall include contingent
liabilities and exclude those certain 7.33% Convertible Subordinated
Debentures issued prior to the date of this Agreement to the extent such
debentures are fully subordinated to all other debt of Borrower (the
"Debentures"), to Total Assets shall never exceed .60 to 1.0.
(b) The ratio of liabilities of Borrower and its Consolidated
Subsidiaries secured by Liens, calculated in accordance with GAAP, to Total
Assets shall never exceed .35 to 1.0.
7.24. Notice of Rating Change/Definition Change. Borrower shall
promptly upon the receipt of notice thereof, and in any event within five
(5) Business Days after any change in the Moody's Rating or the S & P
Rating, notify Agent in writing of such change. Borrower shall promptly
upon the receipt of notice thereof, notify Agent of any change in the
definition of the term "Funds from Operations" as promulgated by the
National Association of Real Estate Investment Trusts.
7.25. Earnings Ratios. (a) The ratio, calculated for the preceding
twelve (12) month period, of (i) earnings before interest, taxes,
depreciation and amortization expense of Borrower and its Consolidated
Subsidiaries to (ii) all interest on debt owed by Borrower and its
Consolidated Subsidiaries, shall exceed 1.75 to 1.0.
(b) The ratio, calculated for the preceding twelve (12) month period,
of (i) earnings before interest, taxes, depreciation and amortization
expense of Borrower and its Consolidated Subsidiaries to (ii) Fixed Charges
shall exceed 1.75 to 1.0.
7.26. Unencumbered NOI. The ratio of net operating income from
Property not subject to Liens to all interest on debt owed by Borrower and
its Consolidated Subsidiaries that is not secured by Liens shall exceed
1.75 to 1.0. For purposes of calculating net operating income under this
Section 7.26, expenses shall include the greater of (a) actual annual
capital expenditures and reserves or (b) $175.00 per apartment unit per
year.
7.27. Limitation on Distributions. Unless necessary to comply with
Section 7.20 hereof or solely as a result of a conversion of convertible
debentures, Borrower shall not, directly or indirectly, declare or pay any
Distribution with respect to any class of stock of Borrower unless,
immediately after giving effect to such proposed Distribution, the
aggregate of all Distributions made during any fiscal year of Borrower
would not exceed ninety-five percent (95%) of Borrower's Funds from
Operations attributable to such period.
7.28. Cost of Unimproved Real Estate. Borrower shall not, and shall
not permit any of its Consolidated Subsidiaries to, purchase or otherwise
acquire title to any unimproved real estate (excluding Development
Projects) if the cost thereof, when added to the aggregate cost of all
unimproved real estate (excluding Development Projects) then owned by
Borrower and its Consolidated Subsidiaries, would exceed five percent
(5.0%) of Total Assets. For purposes of the foregoing percentage
calculation, Borrower may exclude unimproved real estate that Agent
determines is in the process of being continuously and diligently developed
by Borrower. As used in this Section 7.28, the term "cost" means the
aggregate amount of all payments made and obligations incurred by Borrower
or its Consolidated Subsidiaries in connection with the acquisition of such
unimproved real estate, including, without limitation, purchase price,
closing costs, attorneys' fees and other costs and expenses customarily
classified as real estate costs.
7.29. Borrower's Equity Interests. Borrower shall not, and shall not
permit any of its Consolidated Subsidiaries to, make any investments with
the result that:
(a) Borrower's ownership interests in partnerships, joint ventures
or similar entities accounted for on an equity basis (determined in
accordance with GAAP), which are not controlling interests, exceed ten
percent (10%) of Total Assets;
(b) The cash portion of the purchase price of the stock of any
Persons owned by Borrower, which stock holdings are controlling interests
in the respective Persons, exceeds ten percent (10%) of Total Assets; or
(c) Without the prior written consent of Agent, the aggregate cost
of the stock of any Person owned by Borrower, which stock holdings are
controlling interests in the respective Persons and which stock is received
in exchange for stock or assets of Borrower, exceeds thirty-three and a
third percent (33 1/3%) of Total Assets.
As used in this Section 7.29, the term "controlling interest" means an
ownership interest, direct or indirect, in excess of fifty percent (50%) of
the outstanding stock of the subject Person or an interest which provides
Borrower the right or power to control the composition of a majority of the
board of directors or equivalent governing body of the Person.
7.30. Non-Apartment Project Assets. Borrower shall not, and shall not
permit its Consolidated Subsidiaries to, purchase or otherwise acquire
title to Properties, which Properties are not multi-family projects, or
other assets for which the aggregate undepreciated book value (as
determined in accordance with GAAP) exceeds seven and one-half percent
(7.5%) of Total Assets, as determined in accordance with GAAP.
7.31. Cost of Development Projects. The ratio of the aggregate cost of
the Development Projects to the aggregate undepreciated book value of the
Property as determined in accordance with GAAP shall never exceed .15 to
1.0. As used in this Section 7.31, the term "cost" means the sum of (a) the
cost (as such term is defined in Section 7.28 above) of a Development
Project in its former state as unimproved real estate and (b) all payments
made by Borrower or any of its Consolidated Subsidiaries with respect to
predevelopment costs, to-date-development costs and construction costs in
connection with such Development Project.
7.32. Notes Receivable. Notes receivable of Borrower and its
Consolidated Subsidiaries shall not exceed ten percent (10%) of Borrower's
net worth, as determined in accordance with GAAP.
7.33. Market Capitalization. The ratio of total liabilities of
Borrower and its Consolidated Subsidiaries, as calculated in accordance
with GAAP except that total liabilities shall include contingent
liabilities and exclude the Debentures, to Market Capitalization shall
never exceed .50 to 1.0.
7.34. Additional Covenants Regarding Consolidated Subsidiaries.
(a) Borrower shall not (i) enter into any negative pledge agreements
with any other Person such that Borrower shall be prohibited from granting
to Agent, for the benefit of Lenders, a first priority security interest in
the stock or other equity interest of Borrower in any of its Consolidated
Subsidiaries or future Consolidated Subsidiaries (the "Equity") as security
for the Obligations, or (ii) grant any Liens, other than Permitted Liens,
in the Equity.
(b) Without the prior written approval of Agent, Borrower shall not
transfer any assets of Borrower, real or personal, to any Consolidated
Subsidiary or future Consolidated Subsidiary.
(c) At all times, Borrower must have the necessary control of its
Consolidated Subsidiaries and its future Consolidated Subsidiaries so that
Borrower, without the consent of any other Person, may (i) transfer, by
dividend or otherwise, cash and capital from each Consolidated Subsidiary
(existing or future) to Borrower and (ii) transfer, sell or convey, or
grant a lien or security interest in, the assets, real or personal, of its
Consolidated Subsidiaries (existing or future).
(d) Borrower shall not cause or permit its Consolidated Subsidiaries
(existing or future) to, and the Consolidated Subsidiaries (existing or
future) shall not, incur additional debt other than:
(i) debt owing to a Person other than Borrower, provided that
such debt:
(A) is nonrecourse to any of Borrower and its Consolidated
Subsidiaries (existing or future),
(B) consists of trade payables, or
(C) constitutes a refinancing, on substantially equivalent
terms and amounts, of any existing debt of existing
Consolidated Subsidiaries which is secured by a first
priority lien covering real property, and related
personal property, owned by an existing Consolidated
Subsidiary, or
(ii) debt incurred by Consolidated Subsidiaries to Borrower,
whether such debt was originally payable to Borrower or
refinanced by Borrower ("Intercompany Debt"), but only if:
(A) such debt is secured by a first priority lien covering
real property, and related personal property, owned by
a Consolidated Subsidiary (existing or future); and
(B) the instrument evidencing such debt is endorsed and
delivered to Borrower and such instrument is, as to
terms, including without limitation, amount, interest
rate, amortization, security, maturity, and compliance
with subparagraph (f) below regarding cross-default,
satisfactory to Agent in its reasonable discretion.
(e) In the case of any Intercompany Debt that was originally payable
to a party other than Borrower, Borrower:
(i) shall have obtained an assignment from the prior holder
thereof of all liens and security interests securing said
debt,
(ii) shall thereafter maintain, and specifically not release or
allow to lapse, all liens and security interests assigned
to Borrower by said prior holder, and
(iii) shall not:
(A) enter into any negative pledge agreements with any
other Person such that Borrower shall be prohibited
from granting to Agent, for the benefit of Lenders, a
first security interest in, or a collateral assignment
of, the instruments evidencing and securing said
Intercompany Debt, or
(B) grant any Liens, other than Permitted Liens, in the
instruments evidencing and securing said Intercompany
Debt.
(f) A Default shall constitute a default under the documents
evidencing and securing the Intercompany Debt; a default under the
documents evidencing and securing the Intercompany Debt shall constitute a
Default.
Notwithstanding anything to the contrary contained herein, (x) no
subordinated debentures (other than the Debentures) shall be treated as
equity for any purpose, including calculations made under Section
7.23hereof and (y) Lenders hereby approve the merger contemplated by that
certain letter agreement dated December 16, 1996, from the lenders under
the Prior Loan Agreement to Borrower.
ARTICLE 8 - DEFAULT AND REMEDIES
8.1. Default. Subject to the last grammatical paragraph of this
Section 8.1, the occurrence of any of the following shall be a default
("Default"):
(a) Failure to Pay Obligations. Borrower fails to pay, within five
(5) days after the date such sum is due, the principal amount of the Loan,
any installment thereof, any interest thereon, or any other amount required
to be paid to Agent or Lenders under the Loan Documents when due and
payable, whether scheduled, accelerated, or otherwise.
(b) Nonperformance of Covenants. Borrower (and, if applicable, any
of its Consolidated Subsidiaries) fails timely and properly to observe,
keep or perform any covenant, agreement or condition required in any Loan
Document, other than those covenants, agreements, or conditions addressed
as a Default in this Section 8.1.
(c) Representations and Warranties. Any statement, representation or
warranty by or on behalf of Borrower or any of its Consolidated
Subsidiaries in any Loan Documents, or in any financial statement or any
other writing heretofore or hereafter delivered to Agent or any Lender in
connection with the Obligations is false, fraudulent, misleading or
erroneous in any material respect.
(d) Bankruptcy or Insolvency. Borrower or any of its Consolidated
Subsidiaries:
(i) (A) executes an assignment for the benefit of creditors, or
takes any action in furtherance thereof; (B) admits in writing its
inability to pay, or fails to pay, its debts generally as they become
due; (C) as a debtor, files a petition, case, proceeding or other
action pursuant to, or voluntarily seeks the benefit of any Debtor
Relief Law, or takes any action in furtherance thereof; or (D) seeks
the appointment of a receiver, trustee, custodian or liquidator of any
part of the Property or of any significant portion of its other
property; or
(ii) suffers the filing of a petition, case, proceeding or
other action against it as a debtor under any Debtor Relief Law or
seeking appointment of a receiver, trustee, custodian or liquidator of
any part of the Property or of any significant portion of its other
property, and (A) admits, acquiesces in or fails to contest diligently
the material allegations thereof; (B) the petition, case, proceeding
or other action results in entry of any order for relief or order
granting relief sought against it; (C) in a proceeding under the Title
11 of the United States Code, the case is converted from one chapter
to another; or (D) fails to have the petition, case, proceeding or
other action permanently dismissed or discharged on or before the
earlier of trial thereon or ninety (90) days next following the date
of its filing; or
(iii) conceals, removes, or permits to be concealed or removed,
any part of its property, with intent to hinder, delay or defraud its
creditors or any of them, or makes or suffers a transfer of any of its
property which may be fraudulent under any bankruptcy, fraudulent
conveyance or similar Law; or suffers or permits, while insolvent, any
creditor to obtain a lien (other than as described in subparagraph
(iv) below) upon any of its property through legal proceedings which
are not vacated and such lien discharged prior to enforcement of such
lien and in any event within ninety (90) days from the date thereof;
or
(iv) fails to have discharged within a period of twenty (20)
days any attachment, sequestration, or similar writ levied upon any of
its property; or
(v) fails to pay any final money judgment against it within
twenty (20) days after the entry of such judgment.
(e) Liquidation. The liquidation, termination, dissolution, merger,
consolidation or failure to maintain good standing in the State of Texas,
or any other state in which any portion of the Property is located, of
Borrower or its Consolidated Subsidiaries, other than a merger or
consolidation which does not result in the occurrence of any other
Potential Default or Default and after which the surviving entity is
Borrower.
(f) Material Adverse Change. Any circumstance or event of whatever
nature (including the filing of, or any adverse determination or
development in, any Litigation) occurs which (a) impairs the validity or
enforceability of any Loan Document with respect to a material term, (b)
materially and adversely affects or changes the condition (financial or
otherwise), operations, business, management or assets of Borrower or any
of its Consolidated Subsidiaries, or (c) impairs the ability of Borrower to
fulfill any material Obligation.
(g) Enforceability; Priority. Any Loan Document shall for any reason
cease to be in full force and effect, be declared null and void or
unenforceable in whole or in part, cease to have the priority required
herein, or the validity or enforceability thereof, in whole or in part
shall be challenged or denied but, in the case of a challenge by a party
other than Borrower or any of its Consolidated Subsidiaries, only if Agent
acting reasonably determines such challenge is serious.
(h) Certain Investors. The characterization of the assets of
Borrower or any of its Consolidated Subsidiaries as assets of an employee
benefit plan subject to the Employee Retirement Income Security Act of 1974
if such plan owns stock in Borrower or any of its Consolidated
Subsidiaries.
(i) Other Loan Documents. A default or event of default occurs
under any Loan Document, other than this Agreement, and the same is not
remedied within the applicable period of grace (if any) provided in such
Loan Document.
Notwithstanding anything to the contrary contained herein or in any
other Loan Document, the occurrence of any of the events described in
Section 8.1 (other than the failure to pay any sum required under the Loan
Documents, those events which are not curable and those events which are
described in subsections (a) and (d) of Section 8.1) shall constitute a
Default fifteen (15) days after delivery of written notice thereof by Agent
to Borrower unless the event is cured within said fifteen (15) days.
8.2. Notice and Cure. If any Loan Document provides for Agent to give
to Borrower any notice regarding a Default or Potential Default, and if
Agent fails to give such notice to Borrower as provided, the sole and
exclusive remedy of Borrower for such failure shall be to seek appropriate
equitable relief to enforce the agreement to give such notice and to have
any acceleration of the maturity of the Obligations postponed or revoked
and foreclosure proceedings in connection therewith delayed or terminated
pending or upon the curing of such Potential Default to Agent's
satisfaction in the manner and during the period of time permitted by such
agreement, if any, and Borrower waives any and all right to damages and any
other relief.
8.3. Certain Remedies. Any Default under this Agreement shall also
constitute a Default under the other Loan Documents. Should a Default
occur, Agent may but without any obligation to do so, at its option and at
any time, and without presentment, demand, or protest, notice of default,
dishonor, demand, non-payment, or protest, notice of intent to accelerate
all or any part of the Obligations, notice of acceleration of all or any
part of the Obligations, or notice of any other kind, all of which Borrower
hereby expressly waives, except for any notice required by applicable
statute which cannot be waived (a) declare the Obligations, or any part
thereof, immediately due and payable, whereupon the same shall be due and
payable; (b) terminate the Total Commitment and any obligation to disburse
any other funds hereunder; (c) reduce any claim to judgment; (d) to the
maximum extent permitted under applicable Laws, set-off (or request each
Lender to, and each Lender is entitled to, set off) and apply any and all
deposits (general or special, time or demand, provisional or final), funds,
or assets at any time held and any and all other indebtedness at any time
owing by Agent (or any Lender) to or for the credit or the account of
Borrower against any and all Obligations (and, to the extent permitted by
Law, Borrower is deemed directly obligated to each Lender in the full
amount of the Obligations for this purpose), whether or not Agent exercises
any other right or remedy hereunder and whether or not such Obligations are
then matured; and/or (e) exercise any and all rights and remedies afforded
by any of the Loan Documents, or by Law or equity or otherwise, as Agent
deems appropriate. The aggregate sum of the deposits and funds offset under
subsection (d) above shall (i) not exceed the Obligations and (ii) be
distributed on a Pro Rata basis among the Lenders.
8.4. Rights and Remedies Cumulative. All rights and remedies provided
for in the Loan Documents are cumulative of each other and of any and all
other rights and remedies existing at Law or in equity, and Agent and
Lenders shall, in addition to the rights and remedies provided in any Loan
Document, be entitled to avail themselves of all such other rights and
remedies now or hereafter existing at Law or in equity for the collection
and enforcement of the Obligations and the foreclosure of the liens and
security interests evidenced by the Loan Documents. The resort to any right
or remedy provided for under any Loan Documents or provided for by Law or
in equity shall not prevent the concurrent or subsequent employment of any
other appropriate right or rights or remedy or remedies.
ARTICLE 9 - GENERAL TERMS AND CONDITIONS
Borrower and Lenders further covenant and agree as follows:
9.1. Loan Documents. All documents, certificates, insurance policies,
and other items required under this Agreement to be executed and/or
delivered to Agent or any Lender shall be in form and content satisfactory
to Agent.
9.2. Waiver. Agent or Lenders may at any time by a specific writing,
waive compliance by Borrower with any covenant in any Loan Document,
consent to Borrower's doing any act which in any Loan Document Borrower is
prohibited from doing, or to Borrower's failing to do any act which in any
Loan Document Borrower is required to do, or release any Person liable for
any part of the Obligations without impairing or releasing the liability of
any other Person. Agent or Lenders may waive any Default or Potential
Default without waiving any other prior or subsequent Default or Potential
Default. Agent or Lenders may remedy any Default or Potential Default
without waiving the Default or Potential Default remedied. Neither failure
by Agent or Lenders to exercise, nor delay by Agent or Lenders in
exercising, nor discontinuance of the exercise of any right, power or
remedy upon any Default or Potential Default shall be construed as a waiver
of such Default or Potential Default or as a waiver of the right to
exercise any such right, power or remedy (including the right to accelerate
the maturity of the Obligations or any part thereof) at a later date. No
single or partial exercise by Agent or Lenders of any right, power or
remedy under any Loan Document shall exhaust the same or shall preclude any
other or further exercise thereof, and every such right, power or remedy
under any Loan Document may be exercised at any time and from time to time.
No modification or waiver of any provision of any Loan Document nor consent
to any departure by Borrower therefrom shall in any event be effective
unless in writing signed by Agent or Lenders and then such waiver or
consent shall be effective only in the specific instance, for the purpose
for which given and to the extent therein specified. No notice to nor
demand on Borrower in any case shall of itself entitle Borrower to any
other or further notice or demand in similar or other circumstances.
Remittances in payment of any part of the Obligations other than in the
required amount in immediately available U.S. funds shall not, regardless
of any receipt or credit issued therefor, constitute payment until the
required amount is actually received by Agent or Lenders in immediately
available U.S. funds and shall be made and accepted subject to the
condition that any check or draft may be handled for collection in
accordance with the practice of the collecting bank or banks. Acceptance by
Agent or Lenders of any payment which is past due or which is in an amount
less than the amount then due on any Obligation shall be deemed an
acceptance on account only and shall not in any way excuse the existence of
a Default or Potential Default, waive, extinguish or impair any of Agent's
or Lenders' rights, including the rights to accelerate the maturity of the
Obligations or any part thereof, or nullify any prior exercise of any of
such rights, constitute a waiver of the requirement of punctual payment and
performance, or constitute a novation in any respect.
9.3. Lenders' Consent or Approval. Except where otherwise expressly
provided in the Loan Documents, in any instance where the approval, consent
or the exercise of judgment of Agent or Lenders is required, the granting
or denial of such approval or consent and the exercise of such judgment
shall be (a) within the sole discretion of Agent or Lenders, as the case
may be; and (b) deemed to have been given only by a specific writing
intended for the purpose and executed by Agent or Lenders. Each provision
for consent, approval, inspection, review, or verification by Agent or
Lenders is for Agent's or Lenders' own purposes and benefit only.
9.4. Modification or Termination. The Loan Documents may only be
modified, supplemented, or terminated by a written instrument or
instruments intended for that purpose and executed by the party against
which enforcement of the modification, supplement, or termination is
asserted. Any alleged modification, supplement, or termination which is not
so documented shall not be effective as to any party.
9.5. Forum. Borrower hereby irrevocably submits generally and
unconditionally for itself and in respect of its property and its
Consolidated Subsidiaries to the non-exclusive jurisdiction of any Texas
state court, or any United States federal court, sitting in the City of
Houston, Texas, and to the non-exclusive jurisdiction of any state or
United States federal court sitting in the state in which any of the
Property is located, over any suit, action or proceeding arising out of or
relating to the Loan Documents or the Obligations.
9.6. Compliance with Usury Laws. It is the intent of Borrower and
Lenders to conform to and contract in strict compliance with applicable
usury Laws from time to time in effect. All agreements between Borrower and
Lenders are hereby limited by the provisions of this Section which shall
override and control all such agreements, whether now existing or hereafter
arising. In no way, nor in any event or contingency (including, but not
limited to, prepayment, default, demand for payment, or acceleration of the
maturity of any obligation), shall the interest taken, reserved, contacted
for, charged or received under any Loan Document, or otherwise, exceed the
maximum amount permissible under applicable Laws. If, from any possible
construction of any document, interest would otherwise be payable in excess
of the maximum lawful amount, any such construction shall be subject to the
provisions of this Section and such document shall be automatically
reformed and the interest payable shall be automatically reduced to the
maximum amount permitted under applicable Laws, without the necessity of
execution of any amendment or new document. If Lenders shall ever receive
anything of value which is characterized as interest under applicable Laws
and which would apart from this provision be in excess of the maximum
lawful amount, an amount equal to the amount which would have been
excessive interest shall, without penalty, be applied to the reduction of
the principal amount of the Loan in the inverse order of its maturity and
not to the payment of interest, or refunded to Borrower or the other payor
thereof if and to the extent such amount which would have been excessive
exceeds the principal amount of the Loan. The right to accelerate maturity
of the Obligations does not include the right to accelerate any interest
which has not otherwise accrued on the date of the acceleration, and
Lenders do not intend to charge or receive any unearned interest in the
event of acceleration. All interest taken, reserved, contracted for,
charged or received shall, to the extent permitted by applicable Law, be
amortized, prorated, allocated and spread throughout the full stated term
(including any renewal or extension) of such indebtedness so that the
amount of interest on account of such indebtedness does not exceed the
maximum permitted by applicable Laws. As used in this Section, the term
"applicable Laws" means the Laws of the State of Texas or the federal Laws
of the United States, whichever Laws allow the greater interest, as such
Laws now exist or may be changed or amended or come into effect in the
future.
9.7. Notices. Unless specifically provided otherwise, any notice for
purposes of this Agreement or any other Loan Document shall be given in
writing or by telex or by facsimile (fax) transmission and shall be
addressed or delivered to the respective addresses set forth on Exhibit
"E", or to such other address as may have been previously designated by the
intended recipient by notice given in accordance with this Section. If sent
by prepaid, registered or certified mail (return receipt requested), the
notice shall be deemed effective when the receipt is signed or when the
attempted initial delivery is refused or cannot be made because of a change
of address of which the sending party has not been notified; if transmitted
by telex, the notice shall be effective when transmitted (answerback
confirmed); and if transmitted by facsimile or personal delivery, the
notice shall be effective when received. No notice of change of address
shall be effective except upon actual receipt, and service of a notice
required by Texas Property Code S 51.002, as amended from time to time,
shall be considered complete when the requirements of that statute are met.
This Section shall not be construed in any way to affect or impair any
waiver of notice or demand provided in any Loan Document or to require
giving of notice or demand to or upon any Person in any situation or for
any reason.
9.8. No Brokers. Borrower indemnifies Agent and Lenders from any
liability, claims or losses arising by reason of claims for any such
brokerage commission made by any Person claiming to have dealt with
Borrower or any affiliate of Borrower. The provisions of this Section shall
survive the repayment of the Loan and shall continue in full force and
effect so long as the possibility of such liability (including attorneys'
fees), claims or losses exists.
9.9. Partial Invalidity. A determination that any provision of any
Loan Document is unenforceable or invalid shall not affect the
enforceability or validity of any other provision and the determination
that the application of any provision of any Loan Document to any Person or
circumstance is illegal or unenforceable shall not affect the
enforceability or validity of such provision as it may apply to other
Persons or circumstances.
9.10. Interpretation. If this Agreement is signed by more than one
Person as "Borrower," then the term "Borrower" as used in this Agreement
shall refer to all such Persons jointly and severally, and all promises,
agreements, covenants, waivers, consents, representations, warranties and
other provisions in this Agreement are made by and shall be binding upon
each and every such undersigned Person, jointly and severally. The term
"Lenders" shall be deemed, subject to this Agreement, to include any
subsequent holder(s) of the Notes. Whenever the context of any provisions
hereof shall require it, words in the singular shall include the plural,
words in the plural shall include the singular, and pronouns of any gender
shall include the other genders. Captions and headings in the Loan
Documents are for convenience only and shall not affect the construction of
the Loan Documents. All references in this Agreement to Schedules,
Exhibits, Articles, Sections, Subsections, paragraphs and subparagraphs
refer to the respective subdivisions of this Agreement, unless such
reference specifically identifies another document. The terms "herein,"
"hereof," "hereto," "hereunder" and similar terms refer to this Agreement
and not to any particular Section or other subdivision of this Agreement.
The terms "includes" and "including" shall be interpreted as if followed by
the words "without limitation." All references in this Agreement to sums
denominated in dollars or with the symbol "$" refer to the lawful currency
of the United States of America, unless such reference specifically
identifies another currency.
9.11. Disclosure of Information. Agent and any Lender may disclose any
information Agent or any Lender may from time to time have regarding the
Loan, Borrower, its Consolidated Subsidiaries or the Property to any
assignee or participant or prospective assignee or prospective participant,
to Agent's affiliates including NationsBanc Capital Markets, Inc., to any
regulatory body having jurisdiction over Agent or such Lender and to any
agent or attorney of Agent or any Lender and in such other circumstances
and to such other parties as necessary or appropriate in Agent's or any
Lender's reasonable judgment.
9.12. Binding Effect. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns and shall inure only to
the benefit of Agent and Lenders and each of their respective successors
and permitted assigns and Borrower and Borrower's successors and assigns
(and no other Person shall be deemed a benefitted party hereunder under any
circumstances), subject to Sections 7.19 and 9.19.
9.13. Conditions for the Benefit of Lenders. All conditions of the
obligations of Agent and Lenders hereunder, including the obligation to
make Advances, are imposed solely and exclusively for the benefit of Agent
and Lenders, and may be freely waived in whole or in part by Agent and
Lenders at any time. No other Person is a beneficiary of such conditions,
has standing to require satisfaction of such conditions, or is entitled to
assume that Agent and Lenders will make Advances or refuse to make Advances
in the absence of strict compliance therewith. Notwithstanding any
approval, consent, inspection, verification, or receipt and review of
information or documents by Agent and Lenders, neither Agent nor Lenders
have any obligation or responsibility whatsoever, and assume no duty or
obligation, for the Property or its condition, the performance or quality
of any Work or workmanship regarding the Property or the absence therefrom
of defects, the financial condition, or the reporting thereof, of Borrower,
or the compliance of any of the foregoing with any Legal Requirement. Any
inspection or audit of the books and records of Borrower, or the procuring
of documents and financial and other information, by or on behalf of Agent
or Lenders shall be for Agent and Lenders' protection only, and shall not
constitute any assumption of responsibility to Borrower or anyone else with
regard to the condition, construction, maintenance or operation of the
Property, or relieve Borrower of any of the Obligations. Neither Agent nor
Lenders have any duty to supervise or inspect any of the Work, the books
and records pertaining to the Property or the financial records of
Borrower, or to inform Borrower or any other Person of the existence of any
defect, nor shall Agent or Lenders have any liability for the performance
or default of Borrower or any other Person, or for any failure to renovate,
complete, protect or insure the Improvements, or to pay any costs of the
Work, or for the performance of any obligation of Borrower whatsoever.
9.14. Counterparts. This Agreement has been executed in several
counterparts, all of which are identical, each of which shall be deemed an
original, and all of which counterparts together shall constitute one and
the same instrument.
9.15. No Partnership, etc. The relationship between Lenders and
Borrower is solely that of lender and borrower. Neither Agent nor Lenders
have any fiduciary or other special relationship with or duty to Borrower
and none is created hereby. Nothing contained in the Loan Documents, and no
action taken pursuant to the Loan Documents, is intended or shall be
construed to create any partnership, joint venture, association, or special
relationship between Borrower and Agent or Lenders or in any way make Agent
or any Lender a co-principal with Borrower with reference to the Property
or otherwise. In no event shall Agent's or Lenders' rights and interests
under the Loan Documents be construed to give Agent or any Lender the right
to control, or be deemed to indicate that Agent or any Lender is in control
of, the business, properties, management or operations of Borrower.
9.16. Loan Agreement Governs. In the event of any conflict between the
terms of this Agreement and any terms of any other Loan Document, the terms
of this Agreement shall govern. All of the Loan Documents are by this
reference incorporated into this Agreement.
9.17. Time of Essence. Time shall be of the essence in this Agreement.
9.18. Applicable Law. This Agreement and the other Loan Documents are
contracts made in, and under the Laws of, the State of Texas, and the Loan
Documents and their validity, enforcement and interpretation, shall for all
purposes be governed by Texas law (without regard to any conflict of laws
principles), unless a portion of the Property is located in a state other
than Texas, in which case the laws of such state shall apply only to the
extent necessary for the enforcement of Agent's remedies under the Loan
Documents, and applicable United States federal law. Chapter 15 of Subtitle
3, Title 79, of the Revised Civil Statutes of the State of Texas, as in
effect on the date hereof and as the same may hereafter be amended or
supplemented from time to time, shall not apply to the Loan, any Advance or
any Loan Document.
9.19. Participation or Sale of Loan. Subject to the terms and
provisions of Article 6 hereof and the Intercreditor Agreement, Agent may,
from time to time, sell or offer to sell interests in the Loan to one or
more assignees or participants and any Lender shall have the right to sell
its interest in the Loan or an undivided ownership or participation
interest in the Loan provided NationsBank of Texas, N.A. remains the agent
lender (subject to removal for cause under the terms and provisions of any
Intercreditor Agreement related to the Loan). Agent and each Lender are
hereby authorized to disseminate any information it now has or hereafter
obtains pertaining to the Loan including, without limitation, any security
for the Loan and any credit or other information on Borrower, its
Consolidated Subsidiaries and any of its principals which may be necessary
to effectuate any sale or attempted sale of its interest in the Loan or
participation therein or attempted participation therein. Borrower shall,
and shall cause its Consolidated Subsidiaries to, execute, acknowledge and
deliver any and all instruments reasonably requested by Agent and any
Lender in connection with the foregoing, including, without limitation, to
satisfy such purchaser or participants that the Loan is outstanding in
accordance with the terms and provisions contained herein and in the other
Loan Documents. To the extent, if any, specified in any assignment or
participation, such companies, assignee(s), and participant(s) shall have
the rights and benefits with respect to the Loan Documents as such
person(s) would have had if such person(s) had been a Lender hereunder.
9.20. Survival of Representations, Warranties and Covenants. The
obligations of Borrower and the rights of Agent and Lenders under the Loan
Documents shall continue until all Obligations have been paid in full and
as provided in Section 9.21. All representations, warranties and covenants
(including, without limitation, indemnities) made by Borrower in any Loan
Document shall survive the delivery of the Loan Documents to Agent and the
Notes to Lenders, the making of Advances, and the termination of the Total
Commitment, and, with respect to such indemnities (and any other provisions
in any Loan Document specified to survive), shall survive the payment in
full of the Obligations and the release or termination of the Loan
Documents, any bankruptcy or other debtor relief proceeding, and any other
event whatsoever. No investigation at any time made by or on behalf of
Agent or Lenders shall diminish Agent's and Lenders' right to rely on all
representations and warranties made by Borrower under any Loan Document.
9.21. Payments Set Aside. To the extent that Borrower or any other
Person pays the Obligations or any part thereof to Agent or Lenders, or
Agent or Lenders enforce any of their rights under any Loan Document, and
such payment or enforcement or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside, and/or
required to be repaid to Borrower or such other Person, its estate, a
trustee, receiver, or any other Person under any Law, then to the extent of
such repayment, the Obligations or part thereof originally intended to be
satisfied, together with all Loan Documents (including all the terms
thereof and all of Agent's and Lenders' rights thereunder), notwithstanding
any prior termination and/or delivery of the Loan Documents to Borrower (it
being agreed that the provisions of this Section shall survive any such
termination and/or delivery), shall be revived and continued in effect as
if such payment had not been made or such enforcement had not occurred.
Agent shall be entitled to retain the Loan Documents in its possession for
one (1) year after the date on which all Obligations have been paid in
full; provided, that such retention or non-retention of such documents
after payment in full of all Obligations shall not impair the revival
provisions in this Section or the survival provisions in Section 9.20.
9.22. Disclaimer of Financing. Lenders have not made any commitment or
agreement, express or implied, to extend the term of the Loan past the
Maturity Date or to provide Borrower with any financing except as expressly
described in this Agreement.
9.23. Evidence of Satisfaction. As part of satisfying or performing
any condition or obligation under the Loan Documents, Borrower shall
deliver to Agent evidence of such satisfaction or performance satisfactory
to Agent.
ARTICLE 10 - EXHIBITS
10.1. Exhibits. This Agreement includes the Exhibits listed below
which are marked by "X", all of which Exhibits are attached hereto and made
a part hereof for all purposes, it being agreed that if any Exhibit
contains blanks, the same shall be completed correctly and in accordance
with this Agreement prior to or at the time of the execution and deliver
hereof.
X Exhibit "A" - Closing Conditions
X Exhibit "B" - Affidavit and Advance Request
X Exhibit "C" - Compliance Certificate
X Exhibit "D" - Eurodollar Rate Notice
X Exhibit "E" - Schedule of Parties, Addresses, Commitments and
Wiring Information
X Exhibit "F" - Form of Assignment and Acceptance
X Exhibit "G" - Bid Rate Note Form
X Exhibit "H" - Bid Loan Request Confirmation
X Exhibit "I" - Invitation to Bid
X Exhibit "J" - Confirmation of Bid
X Exhibit "K" - Notice of Acceptance of Bid
ARTICLE 11 - MANDATORY ARBITRATION
11.1. Mandatory Arbitration. Any controversy or claim between or among
the parties hereto including, but not limited to, those arising out of or
relating to this Agreement or any related agreements or instruments,
including any claim based on or arising from an alleged tort, shall be
determined by binding arbitration in accordance with the Federal
Arbitration Act (or if not applicable, the applicable state law), the Rules
of Practice and Procedure for the Arbitration of Commercial Disputes of
Endispute, Inc. (doing business as J.A.M.S./Endispute), and the "Special
Rules" set forth below. In the event of any inconsistency, the Special
Rules shall control. Judgment upon any arbitration award may be entered in
any court having jurisdiction. Any party to this Agreement may bring an
action, including a summary or expedited proceeding, to compel arbitration
of any controversy or claim to which this agreement applies in any court
having jurisdiction over such action.
a. Special Rules. The arbitration shall be conducted in the city of
the Borrower's domicile at time of this Agreement's execution and
administered by J.A.M.S./Endispute who will appoint an arbitrator; if
J.A.M.S./Endispute is unable or legally precluded from administering
the arbitration, then the American Arbitration Association will serve.
All arbitration hearings will be commenced within 90 days of the
demand for arbitration; further, the arbitrator shall only, upon a
showing of cause, be permitted to extend the commencement of such
hearing for up to an additional 60 days.
b. Reservations of Rights. Nothing in this Agreement shall be deemed
to (i) limit the applicability of any otherwise applicable statutes of
limitation or repose and any waivers contained in this Agreement; or
(ii) be a waiver by Agent or Lenders of the protection afforded to it
by 12 U.S.C. Sec. 91 or any substantially equivalent state law; or
(iii) limit the right of Agent or Lenders (A) to exercise self help
remedies such as (but not limited to) setoff, or (B) to foreclose
against any real or personal property collateral, or (C) to obtain
from a court provisional or ancillary remedies such as (but not
limited to) injunctive relief or the appointment of a receiver. Agent
and Lenders may exercise such self help rights, foreclose upon such
property, or obtain such provisional or ancillary remedies before,
during or after the pendency of any arbitration proceeding brought
pursuant to this Agreement. At Lenders' option, foreclosure under a
deed of trust or mortgage may be accomplished by any of the following:
the exercise of a power of sale under the deed of trust or mortgage,
or by judicial sale under the deed of trust or mortgage, or by
judicial foreclosure. Neither the exercise of self help remedies nor
the institution or maintenance of an action for foreclosure or
provisional or ancillary remedies shall constitute a waiver of the
right of any party, including the claimant in any such action, to
arbitrate the merits of the controversy or claim occasioning resort to
such remedies.
No provision in the Loan Documents regarding submission to jurisdiction
and/or venue in any court is intended or shall be construed to be in
derogation of the provisions in any Loan Document for arbitration of any
controversy or claim.
ARTICLE 12 - ENTIRE AGREEMENT
12.1. Entire Agreement. The Loan Documents constitute the entire
understanding and agreement between the parties hereto with respect to the
transactions arising in connection with the Loan and supersede all prior
understandings and agreements between the parties hereto with respect to
the matters addressed in the Loan Documents. Except as incorporated in
writing in the Loan Documents, there are not, and were not, and no Persons
are or were authorized to make, on behalf of Lenders any representations,
understandings, stipulations, agreements or promises with respect to the
matters addressed in the Loan Documents.
THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF
THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTED and DELIVERED as of the date first recited above.
BORROWER:
BORROWER'S TAX IDENTIFICATION CAMDEN PROPERTY TRUST
NO.: 76-6088377
By: /S/ G. Steven Dawson
-------------------------
G. Steven Dawson,
Senior Vice President of Finance
and Chief Financial Officer
NATIONSBANK OF TEXAS, N.A.,
as Agent and a Lender
By: /S/ Cynthia C. Sanford
-------------------------
Cynthia C. Sanford,
Senior Vice President
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