CREDIT AGREEMENT
(Bridge Loan)
This CREDIT AGREEMENT (BRIDGE LOAN) is entered into as of August 12, 1996,
among AIMCO PROPERTIES, L.P., a Delaware limited partnership (the "Company"),
the banks from time to time party to this Agreement (the "Banks"), BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as one of the Banks ("BofA"),
and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent (the
"Agent").
A. Concurrently herewith, the Banks, the Company, and the Agent are
entering into that certain Credit Agreement, which makes available to the
Company a revolver-to-term credit facility in an amount not to exceed Fifty
Million Dollars ($50,000,000) (the "Credit Agreement").
B. The Banks and the Agent have agreed to provide to the Company an
additional revolving credit facility upon the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties hereby agree as follows:
ARTICLE I DEFINITIONS
1.01 DEFINED TERMS. Capitalized terms used but not defined herein have
the meanings set forth in the Credit Agreement. In addition to the terms defined
elsewhere in this Agreement, the following terms have the following meanings:
"AFFILIATE" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Without
limitation, any director, executive officer or beneficial owner of five percent
(5%) or more of the equity of a Person shall, for the purposes of this
Agreement, be deemed to control the other Person. In no event shall any Bank be
deemed an "Affiliate" of the Company.
"AGENT" means Bank of America National Trust and Savings Association, in
its capacity as Agent, and any successor Agent appointed hereunder.
"AGENT-RELATED PERSONS" has the meaning specified in Section 9.03.
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"AGGREGATE BRIDGE COMMITMENT" means the combined Bridge Commitments of the
Banks, in the amount of up to $25,000,000.
"AGREEMENT" means this Credit Agreement (Bridge Loan), as amended,
supplemented or modified from time to time.
"APPLICABLE MARGIN" means
(a) with respect to Base Rate Loans, .20%; and
(b) with respect to LIBOR Loans, 1.95%.
"ASSIGNEE" has the meaning specified in Section 10.08.
"ASSIGNMENT AND ACCEPTANCE" has the meaning specified in Section 10.08(a).
"ATTORNEY COSTS" means and includes all fees and disbursements of any law
firm or other external counsel, the allocated cost of internal legal services
and all disbursements of internal counsel.
"BANK" means each of the lenders party to this Agreement, and includes BofA
in its individual capacity.
"INK AFFILIATE" means a Person that is engaged primarily in the business of
commercial lending and is a Subsidiary of a Bank or of a Person of which a Bank
is a Subsidiary.
"BANKRUPTCY CODE" means the Federal Bankruptcy Reform Act of 1978
(12 U.S.C. $101, et. SEQ.), as amended from time to time.
"BASE RATE" means the higher of:
(a) the annual rate of interest publicly announced from time to
time by the Reference Bank as its "reference" rate. The "reference" rate is a
rate set based upon various factors including the Reference Bank's costs and
desired return, general economic conditions, and other factors, and is used
as reference points for pricing some loans. Any change in the Base Rate shall
take effect on the day specified in the public announcement of such change; or
(b) one-half of one percent (0.5%) per annum above the latest
Federal Funds Rate.
"BASE RATE LOAN" means a Loan that bears interest based on the Base Rate.
"BOFA" means Bank of America National Trust and Savings Association, in
its capacity as a Bank.
"BORROWING NOTICE" means a notice given by the Company to the Agent
pursuant to Section 2.03, in substantially the form of EXHIBIT A.
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"BRIDGE AVAILABILITY" shall mean at any time the Bridge Commitment,
minus the outstanding balance of all Loans at such time.
"BRIDGE COMMITMENT" means the amount set forth opposite each Bank's name
in SCHEDULE 2.01 (such amount as the same may be reduced or increased as a
result of one or more assignments pursuant to Section 10.08).
"BRIDGE COMMITMENT PERCENTAGE" means, as to any Bank, the percentage
equivalent of such Bank's Bridge Commitment divided by the Aggregate Bridge
Commitment.
"BRIDGE FACILITY" has the meaning specified in Section 2.01(a).
"BRIDGE FACILITY MATURITY DATE" means the earlier of (i) the Conversion
Date, (ii) the date on which the Aggregate Commitment under (and as such term
is defined in) the Credit Agreement is reduced to zero, and (iii) the date
which is two (2) years after the Closing Date; subject, however, to earlier
acceleration pursuant to the provisions of the Loan Documents.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day
on which commercial lenders are authorized or required by law to close in New
York City or the city in which the Agent's office charged with administration
of the Loans is located; except in cases in which it relates to any LIBOR
Loan, in which cases "Business Day" means such a day on which dealings are
carried on in the London dollar interbank market.
"CAPITAL ADEQUACY REGULATION" means any guideline, request or directive
of any central bank or other Governmental Authority having jurisdiction, or
any other law, rule or regulation, whether or not having the force of law,
regarding capital adequacy of any Bank or of any corporation controlling a
Bank.
"CLOSING DATE" means the date on which all conditions precedent set
forth in Section 4.01 are satisfied or waived by all Banks; said date shall
occur no later than August 31, 1996.
"COLLATERAL" means all property interests, now owned or hereafter
acquired, of the Company or any Wholly-Owned Subsidiary in or upon which a
Lien now or hereafter exists in favor of the Agent on behalf of the Banks
hereunder or under the Equity Interests Pledge Documents.
"DEFAULT" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise
remedied) constitute an Event of Default.
"DISPOSITION" means the sale, lease, conveyance, transfer, encumbrance,
mortgage, hypothecation or other disposition of (whether in one or a series
of transactions) any Funded Project or portion thereof or interest therein.
"DOLLARS", "DOLLARS" and "3" each mean lawful money of the United States.
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"DOMESTIC LENDING OFFICE" means, with respect to each Bank, the office
of that Bank designated as such on the signature pages hereto or such other
office of a Bank as it may from time to time specify in writing to the
Company and the Agent.
"EFFECTIVE DATE" means, 1996.
"ELIGIBLE ASSIGNEE" means (a) a commercial lender organized under the
laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000, (b) a commercial lender
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having a combined capital and
surplus of at least $100,000,000, provided that such commercial lender is
acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD, and (c) any
Bank Affiliate.
"EQUITY INTERESTS PLEDGE AGREEMENTS" shall mean the pledge agreements
delivered from time to time pursuant to Section 2.13.
"EQUITY INTERESTS PLEDGE DOCUMENTS" means, collectively, (a) the Equity
Interests Pledge Agreements delivered by the Company or any Wholly-Owned
Subsidiary to the Agent for the benefit of the Banks pursuant hereto, (b) all
financing statements (or comparable documents) now or hereafter filed in
accordance with the UCC (or comparable law) against the Company or any
Wholly-Owned Subsidiary as debtor in favor of the Banks or the Agent for the
benefit of the Banks as secured party pursuant to the Equity Interests Pledge
Agreements, and (c) any amendments, supplements, modifications, renewals,
replacements, consolidations, substitutions and extensions of any of the
foregoing.
"EVENT OF DEFAULt" means any of the events or circumstances specified in
Section 8.01.
"EVENT OF LOSS" means, with respect to any Funded Project, any of the
following: (a) any loss, destruction or damage of such Funded Project, (b)
any pending or threatened institution of any proceedings for the condemnation
or seizure of such Funded Project or for the exercise of any right of eminent
domain, or (c) any actual condemnation, seizure or taking, by exercise of the
power of eminent domain or otherwise, of such Funded Project, or confiscation
of such property or requisition of the use of such Funded Project.
"FEDERAL FUNDS RATE" means, for any period, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)". If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30
p.m. Quotation") for such day under the caption "Federal Funds Effective
Rate". If on any relevant day the appropriate rate for such previous day is
not yet published in
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either H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day
will be the arithmetic mean of the rates for the last transaction in overnight
Federal funds arranged prior to 9:00 a.m. (New York time) on that day by each of
three (3) leading brokers of Federal funds transactions in New York City
selected by the Agent.
"FUNDED PROJECT" means any one of the Initial Funded Projects or any
other multi-family apartment project with respect to which the Company or a
Wholly-Owned Subsidiary will, prior to or simultaneously upon the release of
any Loan funds hereunder on account thereof, acquire a fee simple estate,
subject only to normal and customary title exceptions, and which has been
approved by the Banks in accordance with Section 2.14 below. A project shall
cease being a "Funded Project" hereunder in accordance with Section 7.02
hereof.
"INDEMNIFIED COST" has the meaning specified in Section 6.10.
"INDEMNIFIED LIABILITIES" has the meaning specified in Section 10.05.
"INDEMNIFIED PARTY" has the meaning specified in Section 6.10.
"INDEMNIFIED PERSON" has the meaning specified in Section 10.05.
"INDIVIDUAL BRIDGE LOAN LIMITATION" has the meaning set forth in Section
2.14(b).
"INDIVIDUAL BRIDGE LOAN MATURITY DATE" means, with respect to each Loan,
the date which is the earlier of (i) sixty (60) days after the disbursement
of such Loan or (ii) the Bridge Facility Maturity Date, subject, however, to
earlier acceleration pursuant to the provisions of the Loan Documents.
"INITIAL FUNDED PROJECTS" means the multi-family apartment projects so
designated on SCHEDULE 1.01 attached hereto.
"INTEREST PAYMENT DATE" means, with respect to any Base Rate Loan and
any LIBOR Loan, the thirtieth day and the sixtieth day after each Loan has
been funded, unless such Loan is sooner repaid in full.
"INTEREST PERIOD" means, with respect to any LIBOR Loan, the period
commencing on the Business Day on which the Loan is disbursed or on the
Pricing Conversion Date on which the Loan is continued as or converted to the
LIBO Rate and ending on the date one (1) or two (2) months thereafter, as
selected by the Company in its Borrowing Notice or Notice of
Conversion/Continuation; PROVIDED that:
(a) if any Interest Period would otherwise end on a day that is not
a Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Business Day;
(b) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar
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month at the end of such Interest Period) shall end on the last Business Day of
the calendar month at the end of such Interest Period; and
(c) no Interest Period for any Loan shall extend beyond the
Individual Bridge Loan Maturity Date for that Loan.
"KNOWLEDGE OF THE COMPANY" means the actual knowledge (after reasonable
inquiry) of any of the officers of the Company or the REIT and each other
Person with executive responsibility for any aspect of the Company's or the
REIT's business.
"LENDING OFFICE" means, with respect to any Bank, the office or offices
of the Bank specified as its "Lending Office" opposite its name on the
signature pages hereto, or such other office or offices of the Bank as it may
from time to time specify in writing to the Company and the Agent.
"LIBO RATE" means, for each Interest Period for any LIBOR Loan, an
interest rate per annum (rounded upward to the nearest 1/100th of 1%)
determined pursuant to the following formula:
LIBOR
LIBO Rate = -------------------------
1.00 - Reserve Percentage
Where,
(i) "LIBOR" means the per annum rate of interest, rounded
upward, if necessary, to the nearest 1/16th of one percent (0.0625%), at
which the Reference Bank's London branch, London, England, would offer U.S.
dollar deposits in amounts and for periods comparable to those of the
applicable LIBOR Loan and Interest Period to major banks in the London U.S.
dollar inter-bank market at approximately 11:00 a.m., London time, on the
first Business Day after the Borrowing Notice or Notice of
Conversion/Continuation for such LIBOR Loan is delivered to the Agent; and
(ii) "RESERVE PERCENTAGE" means the total of the maximum
reserve percentages from time to time for determining the reserves to be
maintained by member banks of the Federal Reserve System for Eurocurrency
Liabilities, as defined in Federal Reserve Board Regulation D, whether or not
applicable to any Bank. The Reserve Percentage shall be expressed in decimal
form and rounded upward, if necessary, to the nearest 1/100th of one percent,
and shall include marginal, emergency, supplemental, special and other
reserve percentages.
"LIBOR LOAN" means a Loan that bears interest based on the LIBO Rate.
"LOAN" has the meaning specified in Section 2.01(a).
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"LOAN DOCUMENTS" means this Agreement, the Equity Interests Pledge
Documents and the REIT Guaranty Documents.
"MATERIAL ADVERSE EFFECT" means a material adverse change in, or a
material adverse effect upon, any of (a) the assets, operations, business,
condition (financial or otherwise), or prospects of the Company, the REIT and
their respective Subsidiaries, taken as a whole, (b) the ability of the
Company, the REIT and their respective Subsidiaries to perform under any Loan
Document and avoid any Event of Default, (c) the ability of the REIT and the
Subsidiaries party thereto to perform under the REIT Guaranty Documents.
"NOTE" means a promissory note of the Company payable to the order of a
Bank in substantially the form of EXHIBIT B, evidencing the aggregate
indebtedness of the Company to such Bank resulting from Loans made by such
Bank.
"NOTICE OF CONVERSION/CONTINUATION" means a notice given by the Company
to the Agent pursuant to Section 2.04, in substantially the form of EXHIBIT C.
"OBLIGATIONS" means all Loans, and other Indebtedness, advances, debts,
liabilities, obligations, covenants and duties owed by the Company, the REIT
or any of their respective Subsidiaries to the Agent, any Bank, or any other
Person required to be indemnified under any Loan Document, of any kind or
nature, present or future, whether or not evidenced by any note, guaranty or
other instrument, arising under this Agreement or under any other Loan
Document, whether or not for the payment of money, whether arising by reason
of an extension of credit, loan, guaranty, indemnification or in any other
manner, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter
arising and however acquired.
"OTHER TAXES" has the meaning specified in Section 3.01(b).
"OUTSTANDING AMOUNT" means the aggregate principal amount of all
outstanding Loans.
"PARTICIPANT" has the meaning specified in Section 10.08(d).
"PAYMENT OFFICE" means the address for payments set forth on the
signature page hereto in relation to the Agent or such other address as the
Agent may from time to time specify in accordance with Section 10.02.
"PRICING CONVERSION DATE" means any date on which the Company elects to
(a) convert a Base Rate Loan to a LIBOR Loan or a LIBOR Loan to a Base Rate
Loan or (b) continue an existing LIBOR Loan for an additional Interest Period.
"REFERENCE" means BofA.
"REIT" means Apartment Investment and Management Company, a Maryland
corporation.
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"REIT GUARANTY DOCUMENTS" shall mean a guaranty of the Obligations, in
the form of EXHIBIT D attached hereto, and such other documents relating to
such guaranty as the Agent may require, duly executed by the REIT, AIMCO-GP,
Inc., AIMCO-LP, Inc., AIMCO Holdings, L.P., AIMCO Holdings Qrs, Inc., AIMCO
Somerset, Inc., and AIMCO/OTC Qrs, Inc., together with the guaranties
delivered pursuant to Section 6.08.
"REQUISITE BANKS" means, as of any date of determination, (a) if there
is one Bank hereunder, that Bank, and (b) if there are two (2) or more Banks
hereunder, then two (2) or more Banks (for purposes of counting Banks, BofA
and all affiliates of BofA collectively count as one Bank, and in order to
qualify as one of the two (2) necessary Banks, a Bank must hold a minimum
Bridge Commitment of $5,000,000), holding at least sixty-six and two-thirds
percent (66-2/3%) of the outstanding balance of the Loans, or, if there are
no Loans outstanding, having at least sixty-six and two thirds percent
(66-2/3%) of the Aggregate Bridge Commitment.
"TAXES" has the meaning specified in Section 3.01(a).
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary of the Company or the REIT
one hundred percent (100%) of the Stock or other equity or other beneficial
interests (in the case of Persons other than corporations) is owned directly
or indirectly by (i) the Company and/or (ii) the REIT, and which in each such
case has been formed in accordance with Section 7.07 of the Credit Agreement;
provided, however, that where such term is qualified with respect to a
specific Person (e.g., "Wholly-Owned Subsidiary of the REIT"') such term
means a Subsidiary (i) one hundred percent (100%) of the Stock or other
equity or other beneficial interests (in the case of Persons other than
corporations) is owned directly or indirectly by such Person, and (ii) which
is formed in compliance with Sections 7.07 of the Credit Agreement.
1.02 Other Definitional Provisions.
(a) DEFINED TERMS. Unless otherwise specified herein or therein,
all terms defined in this Agreement shall have the defined meanings when used
in any certificate or other document made or delivered pursuant hereto. The
meaning of defined terms shall be equally applicable to the singular and
plural forms of the defined terms. Terms (including uncapitalized terms) not
otherwise defined herein but defined in the UCC shall have the meanings set
forth therein.
(b) THE AGREEMENt. The words "hereof', "herein", "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement;
and section, schedule and exhibit references are to this Agreement unless
otherwise specified.
(c) Certain Common Terms.
(i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
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(ii) The term "including" is not limiting and means "including
without limitation."
(iii) The term "ratably" means, at any time that Loans may be
outstanding, in accordance with the amount of the outstanding Loans of the
respective Banks; and, at any time that no Loans are outstanding, in
accordance with the outstanding Bridge Commitments of the respective Banks.
(d) PERFORMANCE; TIME. Whenever any performance obligation
hereunder (other than a payment obligation) is stated to be due or required
to be satisfied on a day other than a Business Day, such performance shall be
made or satisfied on the next succeeding Business Day. In the computation of
periods of time from a specified date to a later specified date, the word
"from" means "from and including"; the words "to" and "until" each mean "to
but excluding," and the word "through" means "to and including". If any
provision of this Agreement refers to any action taken or to be taken by any
Person, or which such Person is prohibited from taking, such provision shall
be interpreted to encompass any and all means, direct or indirect, of taking,
or not taking, such action.
(e) CONTRACTS. Unless otherwise expressly provided herein,
references to agreements and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications thereto, but only
to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document.
(f) LAWS. References to any statute or regulation are to be
construed as including all statutory and regulatory provisions consolidating,
amending or replacing the statute or regulation.
(g) CAPTIONS. The captions and headings of this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.
(h) INDEPENDENCE OF PROVISIONS. The parties acknowledge that this
Agreement and other Loan Documents may use several different limitations,
tests or measurements to regulate the same or similar matters, and that such
limitations, tests and measurements are cumulative and must each be
performed, except as expressly stated to the contrary in this Agreement.
1.03 ACCOUNTING PRINCIPLES.
(a) GAAP. Unless the context otherwise clearly requires, all
accounting terms not expressly defined herein shall be construed, and all
financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
(b) FISCAL YEAR QUARTER. References herein to "fiscal year" and
"fiscal quarter" refer to such fiscal periods of the Company.
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ARTICLE II
THE FACILITY
2.01 Amounts and Terms of Bridge Commitments.
(a) BRIDGE LOANS. Subject to the terms and conditions of
this Agreement and the Note, each Bank severally agrees, on the terms and
conditions hereinafter set forth, to make loans to the Company (each such
loan, a "Loan" and all such loans collectively, the "Bridge Facility") from
time to time on any Business Day during the period from the Closing Date
until the Bridge Facility Maturity Date, in such amounts as the Company may
request that do not exceed (i) in the aggregate, the lesser of (a) such
Bank's Bridge Commitment, or (b) such Bank's Bridge Commitment Percentage of
the Bridge Availability, or (ii) with respect to any single Funded Project,
such Bank's Bridge Commitment Percentage of the Individual Bridge Loan
Limitation for such Funded Project as determined in accordance with Section
2.13 hereof. Each Loan shall be in a principal amount at least equal to One
Million Dollars ($1,000,000) and integral multiples of $100,000 in excess
thereof. No Loans shall be made after the Bridge Facility Maturity Date.
Within the foregoing limitations, and subject to the other terms and
conditions hereof, the Company may borrow under this Section 2.01(a), repay
or prepay pursuant to Section 2.05 and reborrow pursuant to this Section
2.01(a).
(b) Bridge Credit Usage. The Company shall use the
proceeds of all Loans for the purposes described in Section 2.14(a) hereof.
2.02 NOTE. The Loans made by each Bank shall be evidenced by a
Note dated the Closing Date payable to the order of that Bank in an amount
equal to its Bridge Commitment. Each Bank shall endorse on the schedules
annexed to the Note, the date, amount and maturity of each Loan made by it
and the amount of each payment of principal made by the Company with respect
thereto. Each Bank is irrevocably authorized by the Company to endorse its
Note, and each Bank's record shall be conclusive absent manifest error;
PROVIDED, HOWEVER, that the failure of a Bank to make, or an error in making,
a notation thereon with respect to any Loan shall not limit or otherwise
affect the obligations of the Company hereunder or under any such Note to
such Bank.
2.03 PROCEDURE FOR BORROWING.
(a) BORROWING NOTICE. Each Loan shall be made upon the
irrevocable written notice (including notice via facsimile confirmed
immediately by a telephone call) of the Company in the form of a Borrowing
Notice, as follows:
(i) Designation of Interest Rate. The Company shall
have the right to elect that a Loan be made as a LIBOR Loan or a Base Rate
Loan; PROVIDED that, unless the Agent shall otherwise agree in writing, the
Company may not elect that a Loan be made as a LIBOR Loan if after giving
effect to such Loan there shall be more than five (5) different LIBOR Loans
outstanding.
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(ii) APPROVAL OF FUNDED PROJECT. The Company shall have
delivered to the Banks the notice and other information required under, and the
Banks shall have approved the Funded Project to which such Loan relates in
accordance with, Section 2.14 below.
(iii) TIMING OF NOTICE. Each Borrowing Notice shall be
submitted to and received by the Agent prior to 9:00 a.m. (California time) (a)
at least three (3) Business Days prior to the specified borrowing date, in the
case of LIBOR Loans; and (b) at least two (2) Business Days prior to the
specified borrowing date, in the case of Base Rate Loans.
(iv) CONTENTS OF NOTICE. Each Borrowing Notice shall
set forth the following information with respect to the Loan subject thereto:
(a) a single, specific borrowing date, which shall be a
Business Day;
(b) a single, exact amount for the Loan, which for any
LIBOR Loan, shall be in an aggregate minimum principal amount of $1,000,000
or any multiple of $100,000 in excess thereof;
(c) whether the Loan is to be made as a LIBOR Loan or a
Base Rate Loan;
(d) if the Loan is to be made as a LIBOR Loan, the
applicable Interest Period. If a Borrowing Notice shall fail to specify the
applicable Interest Period for any LIBOR Loan requested, such Loan will
instead be made as a Base Rate Loan;
(e) subject to 2.03(c) with respect to Loans for Initial
Funded Projects, the address and wiring instructions for the escrow closing
the acquisition of the Funded Project to which the Loan will be applied.
(b) NOTICE TO BANKS. Upon receipt of a Borrowing Notice
conforming with the terms of Section 2.03(a), the Agent shall promptly notify
each Bank thereof and of the amount of such Bank's Bridge Commitment
Percentage of the Loan described therein.
(c) FUNDING OF BRIDGE COMMITMENT. Each Bank shall make the
amount of its Bridge Commitment Percentage of the Loan described in any
Borrowing Notice available to the Agent for the account of the Company at the
Payment Office by 9:00 a.m. (California time) on the borrowing date specified
therein in funds immediately available to the Agent. Unless any applicable
condition specified in Article IV has not been satisfied, such funds shall
then be made available to the Company by the Agent in the aggregate of the
amounts made available to the Agent by the Banks (in like funds as received
by the Agent), at the escrow closing the acquisition of the Funded Project to
which the Loan will be applied, or in the case of any Loan for an Initial
Funded Project not encumbered by any Liens securing Indebtedness, by
crediting the account of the Company. With respect to any Initial Funded
Project encumbered by any Liens securing Indebtedness, the Agent may, in its
sole discretion, either fund the applicable Loan proceeds into an escrow, if
applicable, or disburse such Loan proceeds directly to the account of the
creditor
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whose Lien is being concurrently repaid upon satisfactory evidence that on or
before such repayment the Lien will be released or reconveyed.
(d) FREQUENCY OF BORROWINGS. No more than four (4)
Borrowing Notices may be given in any calendar month.
2.04 CONVERSION AND CONTINUATION ELECTIONS.
(a) NOTICE OF CONVERSION/ CONTINUATION. Each conversion
or continuation of an outstanding Base Rate Loan or LIBOR Loan shall be made
upon the irrevocable written notice (including notice via facsimile confirmed
immediately by a telephone call) of the Company in the form of a Notice of
Conversion/Continuation, as follows:
(i) DESIGNATION OF INTEREST RATE. The Company shall
have the right to make the following elections with respect to the conversion
or continuation of any outstanding Base Rate Loan or LIBOR Loan:
(A) to convert, on any Business Day, any Base
Rate Loan, in a minimum principal amount of $1,000,000 or an integral
multiple of $100,000 in excess thereof, into a LIBOR Loan; or
(B) to convert, on the last day of any Interest
Period with respect to a LIBOR Loan (or, on any other day of any Interest
Period, upon payment of any loss or expense incurred or sustained by any Bank
with respect to the early termination of such LIBOR Loan prior to the last
day of the Interest Period as provided in Section 3.04), such LIBOR Loan into
a Base Rate Loan; or
(C) to continue, on the last day of any Interest
Period with respect to a LIBOR Loan (or, on any other day of any Interest
Period, upon payment any loss or expense incurred or sustained by any Bank
with respect to the early termination of such LIBOR Loan prior to the last
day of the Interest Period as provided in Section 3.04), such LIBOR Loan (or
any part thereof in a minimum principal amount of $1,000,000 or an integral
multiple of $100,000 in excess thereof) for a subsequent Interest Period;
PROVIDED, that unless the Agent shall otherwise agree in writing, the Company
may not elect to have any outstanding LIBOR Loan or Base Rate Loan (or any
portion thereof) continued as or converted into a LIBOR Loan if (a) a Default or
Event of Default shall exist, (b) after giving effect to the such continuation
or conversion there shall be more (i) than five different LIBOR Loans
outstanding or (ii) the aggregate outstanding principal amount of all LIBOR
Loans shall have been reduced, by payment, prepayment, or partial conversion to
less than $1,000,000.
(ii) TIMING OF NOTICE. Each Notice of
Conversion/Continuation shall be submitted to and received by the Agent prior
to 9:00 a.m. (California time): (a) at least three (3) Business Days prior
to the Pricing Conversion Date of any outstanding Loan to be converted into
or continued as a LIBOR Loan; and (b) at least two
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(2) Business Days prior to the Pricing Conversion Date of any outstanding Loan
to be converted into or continued as a Base Rate Loan.
(iii) CONTENTS OF NOTICE. The Notice of
Conversion/Continuation shall set forth the following information with
respect to the Loan subject thereto:
(A) the Pricing Conversion Date, which shall
be a Business Day;
(B) the amount of the LIBOR Loan or Base Rate
Loan to be converted or continued;
(C) whether such Loan is to be converted
into/continued as a LIBOR Loan or a Base Rate Loan; and
(D) if such Loan (or any portion thereof) is
to be converted into/continued as a LIBOR Loan, the applicable Interest
Period.
(b) AUTOMATIC CONVERSIONS. Any outstanding LIBOR Loan
shall automatically convert to a Base Rate Loan, effective on the last day of
the applicable Interest Period, if as of such date:
(i) DEFAULT: EVENT OF DEFAULT. A Default or Event of
Default shall exist;
(ii) FAILURE TO PROVIDE NOTICE. The Company shall have
failed to submit a Notice of Conversion/Continuation for such Loan in compliance
with the terms of Section 2.04(a); or
(iii) Failure to Maintain Minimum Loans. If the
aggregate outstanding principal amount of LIBOR Loans having the same
Interest Period shall have been reduced, by payment, prepayment, or partial
conversion to be less than $1,000,000.
(c) NOTICE TO BANKS. Upon receipt of a Notice of
Conversion/Continuation conforming with the terms of Section 2.04(a), or an
automatic conversion pursuant to Section 2.04(b), the Agent shall promptly
notify each Bank thereof. All conversions and continuations shall be made pro
rata according to the respective outstanding principal amounts of the Loans
converted or continued.
2.05 OPTIONAL PREPAYMENTS. Subject to Section 3.04, the
Company may, at any time and from time to time, ratably prepay Loans in whole
or in part, in an aggregate minimum amount of $1,000,000 or an integral
multiple of $100,000 in excess thereof, upon (a) at least three (3) Business
Days' prior notice, if the Loans to be prepaid are LIBOR Loans, and (b) at
least one Business Day's prior notice, if the Loans to be prepaid are Base
Rate Loans. Such notice of prepayment shall specify (i) the amount of such
prepayment, (ii) the date of such
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prepayment, which shall be a Business Day, and (iii) whether such prepayment is
of LIBOR Loans, Base Rate Loans, or any combination thereof. Such notice shall
not thereafter be revocable by the Company and the Agent shall promptly notify
each Bank thereof and of such Bank's Bridge Commitment Percentage of such
prepayment. If a prepayment notice is given, the payment amount specified
therein shall be due and payable on the date specified therein, together with
accrued interest to such date on the amount prepaid and any amounts required to
be paid pursuant to Section 3.04.
2.06 MANDATORY PREPAYMENTS OF LOANS. If at any time the
Outstanding Amount exceeds the then applicable Bridge Availability, the
Company shall, within three (3) days thereafter, prepay Loans in an amount
sufficient to reduce the Outstanding Amount to the then applicable Bridge
Availability.
2.07 APPLICATION OF PROCEEDS. Unless otherwise instructed by
the Company, any prepayments pursuant to Section 2.05 or Section 2.06 made
(i) on a day other than the last day of an Interest Period for any Loan shall
be applied first to any Base Rate Loans then outstanding and then to any
LIBOR Loans then outstanding, in the inverse order of such LIBOR Loans'
stated maturities and (ii) on the last day of an Interest Period for any
LIBOR Loan shall be applied first to such maturing LIBOR Loan, then to any
Base Rate Loans outstanding, and then to any other LIBOR Loans then
outstanding, in the inverse order of such LIBOR Loans' stated maturities.
2.08 REPAYMENT. Subject to Section 2.06, the Company shall
repay each Loan on the applicable Individual Bridge Loan Maturity Date.
2.09 INTEREST.
(a) RATES. Subject to Section 2.09(c), each Loan shall
bear interest on the outstanding principal amount thereof from the date such
Loan is made until the date such Loan becomes due, at a rate per annum equal
to the LIBO Rate or the Base Rate, as the case may be, PLUS the Applicable
Margin.
(b) PAYMENT DATES. Interest on each Loan shall be payable
in arrears on each Interest Payment Date and the Individual Bridge Loan
Maturity Date. Interest shall also be payable on the date of any prepayment
of Loans pursuant to Section 2.05 or Section 2.06 for the portion of the
Loans so prepaid. During the existence of any Event of Default, interest
shall be payable on demand.
(a) Default Rates. While any Event of Default exists or
after acceleration and during the continuation thereof, and after as well as
before any entry of judgment thereon, the Company shall pay interest (after
as well as before judgment to the extent permitted by law) on all outstanding
Obligations at a rate per annum which is determined by increasing the
Applicable Margin then in effect by three percent (3%) per annum; PROVIDED,
HOWEVER, that, on and after the expiration of the Interest Period applicable
to any LIBOR Loan outstanding on the date of occurrence of such Event of
Default or acceleration, the outstanding Obligations shall, during the
continuation of such Event of Default or after acceleration and 14
14
during the continuation thereof, bear interest at a fluctuating rate per annum
equal to the Base Rate plus three percent (3%).
(d) LIMITATIONS FOR APPLICABLE LAW. Anything herein to the
contrary notwithstanding, payments of interest shall not be required, for any
period for which interest is computed hereunder, to the extent (but only to
the extent) that contracting for or receiving such payments by the respective
Bank would be contrary to the provisions of any law applicable to such Bank
limiting the highest rate of interest which may be lawfully contracted for,
charged or received by such Bank, and in such event the Company shall pay
such Bank interest at the highest rate permitted by applicable law.
2.10 FEES. The Company shall pay to the Agent for the account
of each Bank ratably a fee equal to .25% of the amount of each Loan not
prepaid or repaid on or prior to the Individual Bridge Loan Maturity Date
thereof using the proceeds of a Revolving Loan under the Credit Agreement.
Such fee shall be due and payable on the date of such payment or prepayment
or, if such Loan has not been paid in full on the Individual Bridge Loan
Maturity Date therefor, on such Individual Bridge Loan Maturity Date.
2.11 COMPUTATION OF FEES AND INTEREST.
(a) COMPUTATION PERIOD. All computations of fees and
interest under this Agreement shall be made on the basis of a 360-day year
and actual days elapsed. Interest and fees shall accrue during each period
for which interest or fees are computed from the first day thereof to the
last day thereof.
(b) NOTICE. The Agent shall, with reasonable promptness,
notify the Company and the Banks of each determination of a LIBO Rate,
PROVIDED that no failure to do so shall relieve the Company of any obligation
hereunder. Any change in the interest rate on a Loan resulting from a change
in the Reserve Percentage (as defined in the definition of "LIBO Rate") shall
become effective as of the opening of business on the day on which such
change becomes effective. The Agent shall with reasonable promptness notify
the Company and the Banks of the effective date and the amount of each such
change, PROVIDED that no failure to do so shall relieve the Company of any
obligation hereunder. Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be conclusive and binding
on the Company and the Banks in the absence of manifest error.
(c) DETAIL OF CALCULATION. The Agent shall, at the
request of the Company or any Bank, deliver to the Company or such Bank, as
the case may be, a statement showing the quotations used by the Agent in
determining any interest rate.
2.12 PAYMENTS BY THE COMPANY.
(a) TERMS OF PAYMENTS. All payments (including
prepayments) to be made by the Company on account of principal, interest,
fees and other amounts required hereunder shall be made without setoff or
counterclaim and shall, except as otherwise expressly provided herein, be
made to the Agent for the ratable account of the Banks at the Payment 15
15
Office, in dollars and in immediately available funds, no later than 9:00 a.m.
(California time) on the date specified herein. The Agent shall promptly
distribute to each Bank such Bank's Bridge Commitment Percentage (or other
applicable share as expressly provided herein) of such principal, interest, fees
or other amounts (in like funds as received). Any payment which is received by
the Agent later than 9:00 a.m. (California time) shall be deemed to have been
received on the immediately succeeding Business Day, and any applicable interest
or fee shall continue to accrue.
(b) BUSINESS DAYS. Whenever any payment hereunder shall
be stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall be
included in the computation of interest or fees, as the case may be; subject
to the provisions set forth in the definition of "Interest Period".
(c) RELIANCE OF AGENT ON PAYMENTS BY THE COMPANY. Unless
the Agent shall have received notice from the Company prior to the date on
which any payment is due to the Banks hereunder that the Company will not
make such payment in full, the Agent may assume that the Company has made
such payment in full to the Agent on such date, and the Agent may (but shall
not be required to), in reliance upon such assumption, cause to be
distributed to each Bank on such due date the amount then due such Bank. If
and to the extent the Company shall not have made such payment in full to the
Agent, each Bank shall repay to the Agent on demand such amount distributed
to such Bank, together with interest thereon for each day from the date such
amount is distributed to such Bank until the date such Bank repays such
amount to the Agent, at the Federal Funds Rate as in effect for each such day.
2.13 SECURITY. In connection with the acquisition of a Funded
Project by or for a Wholly-Owned Subsidiary using Loan proceeds, the Company
shall deliver to the Agent a Equity Interests Pledge Agreement pledging to
the Agent for the ratable benefit of the Banks all of the Stock (or other
equity or beneficial interest if such Person is not a corporation) in such
Wholly-Owned Subsidiary owned by the Company, the REIT and any other
Wholly-Owned Subsidiary, substantially in the form of EXHIBIT E hereto,
together with financing statements or stock certificates, as applicable, and
such legal opinions or other evidence as the Agent may require to assure or
confirm that the Agent holds for the benefit of the Banks a duly perfected,
first-priority Lien on such Stock (or other interests).
2.14 Loan Funded Project Conditions.
(a) PURPOSE OF LOANS. Any Loan funds advanced with
respect to an Initial Funded Project shall be applied by the Company first to
repay Indebtedness secured by Liens on the applicable Initial Funded Project,
and then for general working capital purposes. The proceeds of all Loans
advanced for Funded Projects other than the Initial Funded Projects shall be
used by the Company solely as a source of short term bridge financing for
Funded Projects to be acquired by the Company or any Wholly-Owned Subsidiary.
The Company shall not use any Loan for any purpose other than as described in
this Section 2.14(a). Subject to Section 2.03(c) with respect to Loans for
Initial Funded Projects, each Loan shall be funded 16
16
directly into the escrow at a title company approved by Agent for the Company's
acquisition of the Funded Project to be acquired with the proceeds of such Loan
and shall be released therefrom only in accordance with instructions approved by
the Agent.
(b) LIMITATION ON AMOUNT: ACCEPTANCE BY THE BANKS. No
Loan shall exceed fifty percent (50%) of the acquisition cost (exclusive of
prorations and closing costs), as certified to the Banks by the Company in
the applicable Borrowing Notice or Conversion/Continuation, for the Funded
Project proposed to be acquired, in part, with the proceeds of such Loan
(such limitation, the "INDIVIDUAL BRIDGE LOAN LIMITATION"). The Company shall
deliver to the Agent at least thirty (30) days prior written notice of its
intention to request a Loan hereunder for acquisition of a proposed Funded
Project. Prior to the making of any Loan, the Banks shall have the right, in
their sole discretion, after performing such due diligence as the Banks
desire in their sole discretion, to approve or disapprove the use of a Loan
hereunder for part of the acquisition costs for any proposed Funded Project.
The Banks shall not unreasonably withhold their acceptance of an apartment
project owned, or to be acquired, in fee simple by the Company or any
Wholly-Owned Subsidiary offered as a Funded Project hereunder if, through the
due diligence contemplated hereby, the Banks determine that the project is of
a quality and character, and is located in a geographical market, which is
consistent with the then- current or any previous Funded Projects hereunder
and with the then current or previous Borrowing Base Properties under the
Credit Agreement or under the Previous Credit Agreement. Prior to the Banks'
approval of any Loan, the Company shall at its sole expense provide the Banks
with all requested due diligence materials and information with respect to
the Funded Project proposed to be acquired, in part, with the proceeds of
such Loan, which materials and information shall be in a form acceptable to
the Banks in their sole discretion, and shall be provided at least thirty
(30) days prior to the date on which Borrower intends to request a Loan for
acquisition of such proposed Funded Project. Such materials and information
shall include, without limitation, the following:
(i) a preliminary title report and an ALTA survey
meeting the Agent's customary requirements;
(ii) an environmental site assessment with respect
to such Funded Project, dated as of a recent date, prepared by a qualified
firm acceptable to the Agent, identifying any conditions or operations on
such property that are not in compliance with any Environmental Laws and any
Hazardous Materials located thereon, showing Estimated Remediation Costs, if
any, and stating that there are no conditions on such property or other items
requiring further investigation or remediation, and any follow-on or
supplemental report required by the Agent, together with the Agent's standard
form Environmental Questionnaire and Disclosure Statement completed by the
Company;
(iii) current, certified rent roll and other reports
of the financial and operating results (for the most recent 12-month period)
and projections for the property in such format as the Agent may require;
17
(iv) if required by the Agent, evidence of the
zoning, subdivision and entitlements status of the property, including,
without limitation, copies of the certificate of occupancy and any other
material permits, licenses or approvals required for the property;
(v) a copy of the purchase and sale agreement(s) by
which the Company or such Wholly-Owned Subsidiary has acquired or is to acquire
the property; and
(vi) such other items as the Agent may reasonably
request.
The Company acknowledges that the review of the due diligence materials
described in this Section 2.14(b) will require advance notice to the Agent and
the Banks, and the Company undertakes to provide as much advance notice as
possible to achieve timely review of such materials.
(c) Conditions to Inclusion of Proposed Projects. Each of
the following conditions must be satisfied (or waived by the Agent in
writing) prior to the Banks' agreement to advance a Loan in connection with
the acquisition of any apartment project as a proposed Funded Project:
(A) Acceptances. The Banks shall have agreed to
accept the apartment project offered by the Company for inclusion as a Funded
Project in the Banks' sole and absolute discretion in accordance with Section
2.14(b) above, and the Agent shall have so notified the Company in writing.
Any such acceptance shall be subject to the satisfaction of the other
conditions set forth in this Section 2.14(c). Each apartment project
designated in this Agreement as an Initial Funded Project shall be subject to
the same conditions for acceptance as a Funded Project as other projects
hereafter offered by the Company for inclusion as a Funded Project.
(B) INSURANCE. The Company shall have provided the
Agent with evidence satisfactory to the Requisite Banks that the Company has
obtained adequate casualty insurance and liability insurance with respect to
such Funded Project;
(C) OFFICERS' CERTIFICATE. The Company shall have
delivered to the Agent a certificate of two Responsible Officers
substantially in the form of EXHIBIT F confirming (i) that all conditions
precedent set forth in this Section 2.14(c) (other than those based solely
upon the approval of the Agent, the Banks, or the Requisite Banks) have been
satisfied with respect to such project; (ii) that all financial and operating
information delivered to the Agent pursuant to Section 2.14(b), subject to
audit, is complete and correct to the knowledge of the Company and setting
forth in detail the calculation which would be required for the calculation
of the Revolving Facility Debt Service Coverage-Based Principal Limit for
such project under the Credit Agreement; (iii) that the Company would not be
required to prepay any Loan with respect to such Funded Project pursuant to
Section 2.14(d); and (iv) the Company's purchase price for the property, upon
which the Agent and the Banks shall be entitled to rely; and
18
(D) Equity Interests Pledge Agreement. The Company
shall have delivered to the Agent a Equity Interests Pledge Agreement
pursuant to Section 2.13, together with such legal opinions or other evidence
to confirm the Lien thereof as further 'provided in Section 2.13.
Under no circumstances shall the Agent or the Banks have or be deemed
to have any Lien on any Funded Project as security for the Obligations.
(d) MANDATORY PREPAYMENT FOR FUNDED PROJECt. The Company shall be
required to prepay in full all Loans advanced with respect to the acquisition of
a Funded Project:
(i) Within ten (10) days after demand from the Agent to
the Company following the occurrence of any one of the following events:
(A) any Event of Loss with respect to such
Funded Project; or
(B) the occurrence of an adverse change in the
environmental condition of the Funded Project from that described in the
materials described in Section 2.14(b)(ii) above;
(ii) Immediately upon any Disposition of such Funded
Project or any portion thereof or interest therein.
2.15 PAYMENTS BY THE BANKS TO THE AGENT.
(a) RELIANCE OF AGENT ON PAYMENTS BY THE BANK. Unless
the Agent shall have received notice from a Bank on the Closing Date or, with
respect to each borrowing after the Closing Date, at least one Business Day
prior to the date of any proposed borrowing, that such Bank will not make
available to the Agent for the account of the Company the amount of that
Bank's Bridge Commitment Percentage of the Loan to be funded on such date,
the Agent may assume that each Bank has made such amount available to the
Agent on the borrowing date, and the Agent may (but shall not be required
to), in reliance upon such assumption, make available to the Company a
corresponding amount on such date. If and to the extent any Bank shall not
have made its full amount available to the Agent and the Agent in such
circumstances has made available to the Company such amount, that Bank shall
on the next Business Day following the date of such borrowing make such
amount available to the Agent, together with interest at the Federal Funds
Rate for and determined as of each day during such period. A certificate of
the Agent submitted to any Bank with respect to amounts owing under this
Section 2.15(a) shall be conclusive, absent manifest error. If such amount is
so made available, such payment to the Agent shall constitute such Bank's
Loan (as of the date of the borrowing) for all purposes of this Agreement. If
such amount is not made available to the Agent on the next Business Day
following the borrowing date, the Agent shall notify the Company of such
failure to fund and, upon demand by the Agent, the Company shall pay such
amount to the Agent for the Agent's account, together with interest thereon
for each day elapsed since the date of such 19
19
borrowing, at a rate per annum equal to the interest rate applicable at the time
to the Loans comprising such borrowing.
(b) OBLIGATIONS OF AGENT: Bank. The failure of any Bank to
make any Loan on any date of borrowing shall not relieve any other Bank of any
obligation hereunder to make a Loan on the date of such borrowing, but no Bank
shall be responsible for the failure of any other Bank to make the Loan to be
made by such other Bank on the date of any borrowing.
2.16 SHARING OF PAYMENTS. ETC. If, other than as expressly
contemplated elsewhere herein, any Bank shall obtain on account of the Loans
made by it any payment (whether voluntary, involuntary, through exercise of
any right of setoff, or otherwise) in excess of its Bridge Commitment
Percentage of payments on account of the Loans obtained by all the Banks,
such Bank shall forthwith (a) notify the Agent of such fact, and (b) purchase
from the other Banks such participations in the Loans made by them as shall
be necessary to cause such purchasing Bank to share the excess payment
ratably with each of them; PROVIDED, HOWEVER, that if all or any portion of
such excess payment is thereafter recovered from the purchasing Bank, such
purchase shall to that extent be rescinded and each other Bank shall repay to
the purchasing Bank the purchase price paid thereto together with a
percentage (calculated by dividing (i) the amount of such paying Bank's
required repayment by (ii) the total amount so recovered from the purchasing
Bank) of any interest or other amount paid or payable by the purchasing Bank
in respect of the total amount so recovered. The Company agrees that any Bank
so purchasing a participation from another Bank pursuant to this Section 2.16
may, to the fullest extent permitted by law, exercise all of such purchasing
Bank's rights of payment (including the right of setoff, but subject to
Section 10.08) with respect to such participation as fully as if such
purchasing Bank were the direct creditor of the Company in the amount of such
participation. The Agent shall keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased
pursuant to this Section 2.16 and shall in each case notify the Banks
following any such purchases.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Subject to Section 3.01(g), any and all payments by
the Company to the Agent or the Banks under this Agreement shall be made free
and clear of, and without deduction or withholding for, any and all present
or future taxes, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding such taxes (including income
taxes or franchise taxes) as are imposed on or measured by the recipient's
net income by the jurisdiction under the laws of which the recipient is
organized or maintains a Lending Office, or otherwise does business, or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred
to as "Taxes").
20
(b) In addition, the Company shall pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or from
the execution, delivery, recordation or registration of, or otherwise with
respect to, this Agreement or any other Loan Documents (hereinafter referred
to as "Other Taxes").
(c) The Company shall indemnify and hold harmless the
Agent and each Bank for the full amount of Taxes or Other Taxes (including
any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under
this Section 3.01) paid by the Agent or such Bank and any liability
(including penalties, interest, additions to tax and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted. Payment under this indemnification shall
be made within thirty (30) days from the date the Agent or any Bank makes
written demand therefor.
(d) If the Company shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to the Agent or any Bank, then, subject to Section 3.01(g):
(i) the sum payable shall be increased as necessary
so that, after making all required deductions (including deductions
applicable to additional sums payable under this Section 3.01) the Agent or
such Bank, as the case may be, receives an amount equal to the sum it would
have received had no such deductions been made;
(ii) the Company shall make such deductions; and
(iii) the Company shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law.
(e) Within 30 days after the date of any payment by the
Company of Taxes or Other Taxes, the Company shall furnish to the Agent the
original or a certified copy of a receipt evidencing payment thereof, or
other evidence of payment satisfactory to the Agent. (f) Each Bank which is a
foreign person (i.e., a person other than a United States person for United
States Federal income tax purposes) agrees that:
(i) such Bank shall, no later than the Closing Date
(or, in the case of a Bank which becomes a party hereto pursuant to Section
10.08 after the Closing Date, the date upon which such Bank becomes a party
hereto), deliver to the Company through the Agent two (2) accurate and
complete signed originals of Internal Revenue Service Form 4224 or any
successor thereto ("Form 4224"), or two (2) accurate and complete signed
originals of Internal Revenue Service Form 1001 or any successor thereto
("Form 1001"), as appropriate, in each case indicating that the Bank is on
the date of delivery thereof entitled to receive payments of principal,
interest and fees under this Agreement free from withholding of United States
Federal income tax;
21
(ii) if at any time such Bank makes any changes
necessitating a new form, such Bank shall with reasonable promptness deliver
to the Company through the Agent in replacement for, or in addition to, the
forms previously delivered by such Bank hereunder, two (2) accurate and
complete signed originals of Form 4224, or two (2) accurate and complete
signed originals of Form 1001, as appropriate, in each case indicating that
such Bank is on the date of delivery thereof entitled to receive payments of
principal, interest and fees under this Agreement free from withholding of
United States Federal income tax;
(iii) such Bank shall, before or promptly after the
occurrence of any event (including the passing of time but excluding any
event mentioned in (ii) above) requiring a change in or renewal of the most
recent Form 4224 or Form 1001 previously delivered by such Bank, deliver to
the Company through the Agent two (2) accurate and complete original signed
copies of Form 4224 or Form 1001, as appropriate, in replacement of the forms
previously delivered by such Bank; and
(iv) such Bank shall, promptly upon the Company's
reasonable request to that effect, deliver to the Company such other forms or
similar documentation as may be required from time to time by any applicable
law, treaty, rule or regulation in order to establish such Bank's tax status
for withholding purposes.
(g) The Company shall not be required to pay any
additional amounts in respect of United States Federal or state income tax
pursuant to Section 3.01(d) to any Bank or any duly appointed assignee for
the account of any Lending Office of such Bank or such assignee:
(i) if the obligation to pay such additional amounts
arises as a result of a failure by such Bank or assignee to comply with its
obligations under Section 3.01(f) in respect of such Lending Office;
(ii) if such Bank or assignee shall have delivered
to the Company a Form 4224 in respect of such Lending Office pursuant to
Section 3.01(f), and such Bank or assignee shall not at any time be entitled
to exemption from deduction or withholding of United States Federal income
tax in respect of payments by the Company hereunder for the account of such
Lending Once for any reason other than a change in United States law or
regulations or in the official interpretation of such law or regulations by
any governmental authority charged with the interpretation or administration
thereof (whether or not having the force of law) after the date of delivery
of such Form 4224; or
(iii) if such Bank or assignee shall have delivered
to the Company a Form 1001 in respect of such Lending Once pursuant to
Section 3.01(f), and such Bank or assignee shall not at any time be entitled
to reduction, partial exemption or exemption from deduction or withholding of
United States federal income tax in respect of payments by the Company
hereunder for the account of such Lending Office for any reason other than a
change in United States law or regulations or any applicable tax treaty or
regulations or in the official interpretation of such law, treaty or
regulations by any governmental authority charged with the
22
interpretation or administration thereof (whether or not having the force of
law) after the date of delivery of such Form 1001.
(h) If, at any time, the Company requests any Bank to
deliver any forms or other documentation pursuant to Section 3.01(f)(iv),
then the Company shall, on demand of such Bank, through the Agent reimburse
such Bank for any costs and expenses (including Attorney Costs) reasonably
incurred by such Bank in the preparation or delivery of such forms or other
documentation.
(i) If the Company is required to pay additional amounts
to the Agent or any Bank pursuant to Section 3.01(d), then such Bank shall
use its reasonable best efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office so as to
eliminate any such additional payment by the Company which may thereafter
accrue if such change in the judgment of such Bank is not otherwise
disadvantageous to such Bank.
3.02 Illegality.
(a) If any Bank shall determine that the introduction of
any Requirement of Law or any change therein or in the interpretation or
administration thereof has made it unlawful, or that any central bank or
other Governmental Authority has asserted that it is unlawful, for such Bank
or its Lending Office to make LIBOR Loans, then, on notice thereof by such
Bank to the Company through the Agent, the obligation of such Bank to make
LIBOR Loans shall be suspended until such Bank shall have notified the Agent
and the Company that the circumstances giving rise to such determination no
longer exist.
(b) If any Bank shall reasonably determine that it is
unlawful to maintain any LIBOR Loan, the Company shall notify Bank that the
Company shall either (i) prepay in full all LIBOR Loans of such bank then
outstanding, together with interest accrued thereon, or (ii) elect to convert
in accordance with Section 2.04 all LIBOR Loans then outstanding, after
payment to such Bank of all interest accrued thereon, into Base Rate Loans,
either on the last day of the Interest Period thereof if such Bank may
lawfully continue to maintain such LIBOR Loans to such day, or immediately if
such Bank may not lawfully continue to maintain such LIBOR Loans, together
with any amounts required to be paid in connection therewith pursuant to
Section 3.04.
(c) If the obligation of any Bank to make or maintain
LIBOR Loans has been terminated, the Company may elect, by giving notice to
such Bank through the Agent, that all Loans which would otherwise be made by
such Bank as LIBOR Loans shall instead be made as Base Rate Loans.
3.03 Increased Costs and Reduction of Return.
(a) If any Bank shall determine that, due to either (i)
the introduction of or any change in or in the interpretation of any
Requirement of Law or (ii) the compliance with any guideline or request from
any central bank or other Governmental Authority (whether or not having the
force of law), there shall be any increase in the cost to such Bank of
agreeing to23
23
make or of making, funding or maintaining any LIBOR Loans hereunder, then the
Company shall be liable for, and shall from time to time, upon written demand
therefor by such Bank (with a copy of such demand to the Agent), which demand
shall set forth the basis of such increased cost in reasonable detail, pay to
the Agent for the account of such Bank, such additional amounts as are
sufficient to compensate such Bank for such increased costs.
(b) If any Bank shall have reasonably determined that (i)
the introduction of any Capital Adequacy Regulation, (ii) any change in any
Capital Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or
other Governmental Authority charged with the interpretation or
administration thereof, or (iv) compliance with any Capital Adequacy
Regulation by such Bank (or its Lending Office) or any corporation
controlling such Bank, effects or would effect an increase in the amount of
capital required or expected to be maintained by such Bank or any corporation
controlling such Bank (taking into consideration such Bank's or such
corporation's policies with respect to capital adequacy and such Bank's
desired return on capital), then, upon written demand of such Bank (with a
copy to the Agent), which demand shall set forth in reasonable detail the
basis for any such increase in required capital, the Company shall
immediately pay to such Bank, from time to time as specified by such Bank,
additional amounts sufficient to compensate such Bank for such increase.
(c) If any Bank shall have determined that any of the
events described in Sections 3.03(a) or 3.03(b) affects or would affect an
increase in cost or reduction of return resulting in an additional
Obligations hereunder, such Bank shall, with reasonable promptness, notify
the Company and the Agent of such determination, PROVIDEd that no failure to
do so shall relieve the Company of any Obligation hereunder.
3.04 FUNDING LOSSES. The Company agrees to reimburse each Bank
for, and to hold each Bank harmless from, any loss or expense that such Bank
may sustain or incur as a consequence of:
(a) the failure of the Company to make any required
payment or prepayment of principal of any LIBOR Loan or Base Rate Loan
(including payments to be made after any acceleration thereof);
(b) the failure of the Company to borrow, continue or
convert a Loan after the Company has given (or is deemed to have given) a
Borrowing Notice or a Notice of Conversion/Continuation;
(c) the failure of the Company to make any prepayment
after the Company has given a notice in accordance with Section 2.05;
(d) the prepayment of a LIBOR Loan on a day which is not
the last day of the Interest Period with respect thereto; or
(e) the conversion of any LIBOR Loan to a Base Rate Loan
on a day that is not the last day of the Interest Period with respect thereto;
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such amount or amounts to include an amount equal to the excess, if any, of (a)
the amount of interest that would have accrued on the amount not paid, not
borrowed, not prepaid, prepaid, or converted for the period from the date of
such failure to pay, failure to borrow, failure to prepay, prepayment, or
conversion to the last day of then current Interest Period (or in the case of a
failure to borrow, the Interest Period which would have commenced on the date of
such failure) at the interest rate applicable to that LIBOR Loan, over (b) the
amount of interest that would accrue to the Bank on such amount at the LIBO Rate
in effect on such date by placing such amount on deposit for a comparable period
with leading banks in the London interbank market.
3.05 INABILITY TO DETERMINE RATES. If the Agent shall have
determined that for any reason adequate and reasonable means do not exist for
ascertaining the LIBO Rate for any requested Interest Period with respect to
a proposed LIBOR Loan or that the LIBO Rate applicable pursuant to Section
2.09(a) for any requested Interest Period with respect to a proposed LIBOR
Loan does not adequately and fairly reflect the cost to such Banks of funding
such Loan, the Agent will forthwith give notice of such determination to the
Company and each Bank. Thereafter, the obligation of the Banks to make or
maintain LIBOR Loans hereunder shall be suspended until the Agent revokes
such notice in writing. Upon receipt of such notice, the Company may revoke
any Borrowing Notice or Notice of Conversion/Continuation then submitted by
it. If the Company does not revoke such notice, the Banks shall make, convert
or continue the Loans, as proposed by the Company, in the amount specified in
the applicable notice submitted by the Company, but such Loans shall be made,
converted or continued as Base Rate Loans instead of LIBOR Loans.
3.06 CERTIFICATES OF INKS. Any Bank claiming reimbursement or
compensation pursuant to this Article III, shall deliver to the Company (with
a copy to the Agent) a certificate setting forth in reasonable detail a
summary of the basis of such demand and the amount payable to such Bank
hereunder.
3.07 SURVIVAL. The agreements and obligations of the Company
in this Article III shall survive the payment of all other obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 CONDITIONS OF FIRST LOAN. The obligation of each Bank to
make its first Loan hereunder is subject to the condition that the Agent
shall have received on or before the Closing Date, the following, in the case
of agreements, documents and other instruments, in form and substance
satisfactory to the Agent, each Bank and their respective counsel in their
sole discretion and in sufficient copies for each Bank:
(a) BRIDGE AGREEMENT AND NOTES. This Agreement executed
by the Company, the Agent and each of the Banks, a Note executed by the
Company in favor of each of the Banks, and the REIT Guaranty Documents
executed by the guarantors thereunder; the Notes shall be dated the Closing
Date;
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(b) CERTIFICATE. A certificate signed by at least two (2)
Responsible Officers, dated as of the Closing Date, stating that:
(i) the representations and warranties of the Company
and the REIT contained in Article V hereof and of the Company, the REIT and
their Subsidiaries contained in the Loan Documents are true and correct on
and as of such date, as though made on and as of such date;
(ii) no Default or Event of Default exists or would
result from the initial borrowing;
(iii) there has occurred since December 31, 1995 no
act, omission, change or occurrence which would have a Material Adverse Effect;
and
(iv) all conditions precedent set forth in this
Section 4.01 have been satisfied (other than those based solely on the
approval of the Agent, the Banks or the Requisite Banks);
(c) LEGAL OPINIONS. The Agent shall have received an
opinion of Colorado counsel to the Company and addressed to the Agent and the
Banks in form acceptable to Agent;
(d) Costs; Expenses; Fees.. Payment of all costs,
expenses, and accrued and unpaid fees (including legal fees and expenses) to
the extent then due and payable on the Closing Date, including any arising
under Sections 2.10, 3.01 and 10.04;
(e) CREDIT AGREEMENT. All conditions precedent set forth
in the Credit Agreement shall have been satisfied; and
(f) OTHER DOCUMENTS. Such other approvals, opinions, or
documents as the Agent or the Requisite Banks may reasonably request.
4.02 CONDITIONS TO EACH LOAN. The obligation of each Bank to
make any Loan (including its first Loan) is subject to the satisfaction of
the following conditions precedent:
(a) BORROWING NOTICE. The Agent shall have received in
the case of a Loan (with, in the case of the first Loan only, a copy for each
Bank) a Borrowing Notice or Notice of Conversion/Continuation in compliance
with the terms of Section 2.03 or Section 2.04, as applicable;
(b) OTHER DOCUMENTS. The Agent shall have received such
other approvals, opinions and documents as the Agent or any Bank may
reasonably request;
(c) AVAILABILITY LIMITS. The Outstanding Amount shall
not, as a result of the making, continuation or conversion of such Loan,
exceed the Bridge Availability;
26
(d) REPRESENTATIONS AND WARRANTIES. The representations
and warranties made by the Company, the REIT and their respective
Subsidiaries contained in the Loan Documents, including Article V of this
Agreement, shall be true and correct on and as of the date such Loan is made,
with the same effect as if made on and as of such date;
(e) NO EXISTING DEFAULT. No Default or Event of Default
shall exist or shall result from the making, continuation or conversion of
such Loan;
(f) NO MATERIAL ADVERSE EFFECT. No act, omission, change,
occurrence or event which has a Material Adverse Effect shall have occurred
since the Closing Date; and
(g) NO FUTURE ADVANCE NOTICE. Neither the Agent nor any
Bank shall have received from the Company, the REIT or any Subsidiary
thereof, any notice that any Pledge Agreement will no longer secure, or that
the REIT Guaranty Documents will no longer guaranty, future Loans to be made
under this Agreement.
Each Borrowing Notice and Notice of Continuation/Conversion submitted by the
Company hereunder shall constitute a representation and warranty by the Company
hereunder, as of the date of such notice and as of the date of the making,
continuation or conversion of the corresponding Loan, that the conditions in
this Section 4.02 have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Bank
that:
5.01 Representations under the Credit Agreement. All of the
representations and warranties of the Company under the Credit Agreement are
true and correct (as if the terms "Loan Documents" and "Obligations" as used
in the Credit Agreement included not only the "Loan Documents" and
"Obligations" as defined therein but also the "Loan Documents" and
"Obligations" as defined herein).
5.02 TITLE TO THE FUNDED PROJECTS. The Company and the
Wholly-Owned Subsidiaries have good record and marketable title in fee simple
to any Funded Projects owned thereby, subject only to title exceptions
disclosed to and approved by the Banks pursuant to Section 2.14(b).
5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with,
any Governmental Authority (except for recordings in connection with the
Liens granted to the Agent under the Equity Interests Pledge Documents) is
necessary or required in connection with the execution, delivery or
performance by, or enforcement against, the Company or any of its
Subsidiaries of this Agreement or any other Loan Document.
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5.04 CERTAIN REPRESENTATIONS CONCERNING FUNDED PROJEct. The
representations of the Company under Sections 5.11 and 5.20 through 5.25,
inclusive, of the Credit Agreement made with respect to the Borrowing Base
Properties are true and correct as if made herein with respect to the Funded
Projects.
5.05 Equity Interest Pledge Agreements. When executed and
delivered pursuant hereto, the Equity Interests Pledge Agreements shall be
effective to create in favor of the Agent, for the benefit of the Banks,
legal, valid and enforceable first-priority Liens in the Collateral described
therein and the proceeds thereof. All action shall have been taken that is
necessary or appropriate to perfect the Agent's Lien, for the benefit of the
Banks, in the Collateral. All representations and warranties of the Company
and any other Person party thereto contained in any Equity Interests Pledge
Documents are true and correct.
5.06 USE OF PROCEEDS: MARGIN REGULATIONS. The proceeds of the
Loans are intended to be and shall be used solely for the purposes set forth
in and permitted by Sections 2.01(b) and Section 6.06, and are intended to be
and shall be used in compliance with Section 7.03.
5.07 NOT A "FOREIGN PERSON." Neither the Company nor any
Wholly-Owned Subsidiary which owns a Funded Project is a "foreign person"
within the meaning of Section 1445(f)(3) of the Internal Revenue Code.
5.08 FULL DISCLOSURE. None of the representations or
warranties made by the Company, the REIT, the Management Entity or any
Subsidiary in the Loan Documents as of the date such representations and
warranties are made or deemed made, and none of the statements contained in
each exhibit, report, statement or certificate furnished by or on behalf of
any such Person in connection with the Loan Documents, contains any untrue
statement of a material fact or omits any material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading. There is no fact, to
the Knowledge of the Company, which materially and adversely affects the
business, operations, properties, assets or condition (financial or
otherwise) of the Company, the REIT, the Management Entities, or any of the
Subsidiaries which has not been disclosed herein or in other documents,
certificates and statements furnished to the Agent and each Bank hereunder or
pursuant hereto. The copies of all documents delivered to the Agent and/or
the Banks from time to time in connection with this Agreement are and shall
be true and complete copies of the originals thereof and have not been or
shall not be amended except as disclosed to the Agent and/or the Banks, as
applicable.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as any Bank shall have any Bridge
Commitment hereunder, or any Loan or other obligation shall remain unpaid or
unsatisfied, unless the Requisite Banks waive compliance in writing:
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6.01 FINANCIAL INFORMATION. In addition to providing the
financial information required under Section 6.01 of the Credit Agreement,
the Company shall deliver to the Agent, in form and detail satisfactory to
the Agent and the Banks, such information with respect to the Funded Projects
as is required thereunder with respect to the Borrowing Base Properties.
6.02 CERTIFICATES; OTHER INFORMATION. The Company shall
furnish to the Agent with sufficient copies for each Bank:
(a) ACCOUNTING CERTIFIcates. Concurrently with the
delivery of the annual financial statements required under Section 6.01(a) of
the Credit Agreement, a certificate of the independent certified public
accountants reporting on such financial statements stating that, in making
the examination necessary therefor, no knowledge was obtained of any Default
or Event of Default, except as specified in such certificate;
(b) OFFICERS' CERTIFICATES. Concurrently with the
delivery of the quarterly and annual financial statements required under
Sections 6.01(a) and (b) of the Credit Agreement, a compliance certificate,
substantially in the form of EXHIBIT G, signed by at least two (2)
Responsible Officers stating that, to the best of such officers' knowledge,
each of the Company, the REIT and their respective Subsidiaries, during such
period, has observed or performed all of its covenants and other agreements,
and satisfied every condition contained in this Agreement and the other Loan
Documents to be observed, performed or satisfied by it, and that such
officers have no knowledge of any Default or Event of Default except as
specified in such certificate. Notwithstanding anything to the contrary
contained herein and without limiting the Banks' other rights and remedies,
if such certificate is not provided on the due date therefor, the Company
shall be prohibited from any further borrowings under the Bridge Facility
until such certificate is provided, and the Company shall make successive,
cumulative payments in the amount of ten percent (10%) of the outstanding
balance of the Loans at the end of each seven (7) day period during which the
Company continues to fail to provide such certificate after the due date
therefor;
(c) OTHER INFORMATION. Promptly, such additional
financial and other information as the Agent may from time to time reasonably
request.
6.03 NOTICES. The Company shall promptly (and in no event
later than ten (10) days after the Company has reason to know of the same)
notify the Agent and each Bank of:
(a) DEFAULT: EVENT OF DEFAULt. The occurrence of any
Default or Event of Default, and of the occurrence or existence of any event
or circumstance that is likely to become a Default or Event of Default;
(b) Legal Compliance. Any material notice received from
any Governmental Authority asserting that any Funded Project is not in
compliance with any Requirements of Law;.
29
(c) DEFAULT EVENT OF DEFAULT. The occurrence of any
Default or Event of Default, and of the occurrence or existence of any event
or circumstance that is likely to become a Default or Event of Default;
(d) MATERIAL ADVERSE EFFECT. The occurrence of any act,
development or other matter which would reasonably be expected to have a
Material Adverse Effect; and
(e) Events REQUIRING Mandatory Prepayment. The occurrence
of any event or circumstance that causes, or is likely to cause, the
Company's obligation to prepay a Loan to arise under Section 2.14(d).
6.04 Insurance. The Company shall maintain, and shall cause
each Wholly-Owned Subsidiary to maintain, with financially sound and
reputable independent insurers, insurance with respect to the Funded Products
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or a similar business, of such types and in such amounts
as are customarily carried under similar circumstances by such other Persons;
including workers' compensation insurance, public liability and property and
casualty insurance (which amount shall not be reduced in the absence of 30
days' prior notice to the Agent).
6.05 ENVIRONMENTAL LAWS. The Company shall, and shall cause
each Wholly-Owned Subsidiary to, keep and maintain its Funded Projects in
compliance in all material respects with all Environmental Laws.
6.06 USE OF PROCEEDS. The Company shall use the proceeds of
the Loans solely in accordance with Section 2.01(b) above.
6.07 Inspection of Property and Books and Records. The Company
shall maintain, and shall cause each Wholly-Owned Subsidiary to maintain,
proper books of record and account, in which full, true and correct entries
in conformity with GAAP consistently applied shall be made of all financial
transactions and matters involving the Funded Projects. The Company shall
permit, and shall cause each Wholly-Owned Subsidiary to permit,
representatives of the Agent or any Bank to visit and inspect any of its
Funded Projects, to conduct audits thereof, to examine their respective
corporate, financial and operating records, and make copies thereof or
abstracts therefrom, all at the expense of the Company and at any time during
normal business hours and as often as may be reasonably desired, upon no less
than forty-eight (48) hours advance notice to the Company; PROVIDED, HOWEVER,
when an Event of Default exists, the Agent or any Bank may visit and inspect
at the expense of the Company such Funded Projects at any time during
business hours and without advance notice.
6.08 ADDITIONAL GUARANTIES. Promptly upon the formation by the
REIT of any Wholly-Owned Subsidiary of the REIT, the REIT shall cause such
Wholly-Owned Subsidiary to deliver to the Agent for the ratable benefit of
the Banks a guaranty of the Obligations in the form attached hereto as
EXHIBIT D.
6.09 COVENANTS RELATING TO FUNDED PROJECTS. The Company hereby
agrees as follows:
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(a) MAINTENANCE. The Company shall maintain each Funded
Project in good order and condition in accordance with the Company's past
practices.
(b) LEASES. The Company shall not enter into any lease of
any Funded Project other than apartment leases or other ordinary course
leases consistent with past practice and having terms of less than one (1)
year on market terms. The Company shall deliver to the Agent a copy of the
standard lease forms utilized for the Funded Project from time to time.
(c) MATERIAL AGREEMENTS. The Company shall obtain the
prior written approval of the Agent and the Requisite Banks prior to entering
into any reciprocal easement or similar agreement, ground lease or any other
material agreement affecting any Funded Project.
(d) MANAGEMENT CONTRACTS. The Company shall obtain the
prior written approval of the Agent and the Requisite Banks prior to entering
into any property management agreement with a Person other than the Company,
one of the Management Entities (as defined in the Credit Agreement) or any of
their Subsidiaries, or replacing the property manager for any Funded Project
with a Person other than the Company, one of the Management Entities or any
of their Subsidiaries. The Company shall cause all property management
contracts affecting Funded Projects to permit termination of the manager
(whether such manager is one of the Management Entities or otherwise) by the
owner within thirty days' written notice, without penalty, and the Company
shall not permit the management fee payable under any such property
management agreement to exceed three percent (3%) of gross receipts from such
property per fiscal year.
(e) CONSTRUCTION. The Company shall obtain the prior
written approval of the Agent and the Requisite Banks prior to entering into
any major construction or renovation affecting a Funded Project and shall
discharge all mechanic's liens resulting from any such construction or
renovation.
(f) LIENS. The Company shall keep each Funded Project at
all times free and clear of all Liens (unless such Liens are bonded and
thereby released of record in a manner satisfactory to the Agent), except for
title exceptions disclosed to and approved by the Banks pursuant to Section
2.14(b)(i).
6.10 Payment of Obligations. The Company shall, and shall
cause each Wholly-Owned Subsidiary to, pay and discharge as the same shall
become due and payable and otherwise comply with, all their respective
obligations and liabilities, including (a) all tax liabilities, assessments
and governmental charges or levies upon it or its Funded Projects, unless the
same are being contested in good faith by appropriate proceedings and
adequate reserves in accordance with GAAP are being maintained by the Company
or such Person, (b) all lawful claims which, if unpaid, would by law become a
Lien upon its Funded Projects, (c) all Indebtedness, as and when due and
payable, but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness, and (d) all Contractual
Obligations.
6.11 FURTHER ASSURANCES. 31
31
(a) FULL DISCLOSURE. The Company will ensure that all
other written information, exhibits and reports furnished to any Agent or
Bank by the Company or any Wholly-Owned Subsidiary do not contain any untrue
statement of a material fact and do not and will not omit to state any
material fact or any fact necessary to make the statements contained therein
not misleading in light of the circumstances in which made, and will promptly
disclose to the Agent and the Banks and correct any defect or error that may
be discovered therein or in any Loan Document or in the execution,
acknowledgment or recordation thereof.
(b) FURTHER ACTS. Promptly upon request by the Agent or
the Requisite Banks, the Company shall (and shall cause each Wholly-Owned
Subsidiary to) do, execute, acknowledge, deliver, record, re-record, file,
re-file, register and re-register, any and all such further acts, deeds,
conveyances, security agreements, mortgages, deeds of trust, assignments,
estoppel certificates, financing statements and continuations thereof,
termination statements, notices of assignment, transfers, certificates,
assurances and other instruments that the Agent or such Banks, as the case
may be, may reasonably require from time to time in order (i) to carry out
more effectively the purposes of this Agreement or any other Loan Document,
(ii) to subject to the Liens created by any of the Equity Interests Pledge
Documents any of the Collateral, (iii) to perfect and maintain the validity,
effectiveness and priority of any of the Equity Interests Pledge Documents
and the Liens intended to be created thereby, and (iv) to better assure,
convey, grant, assign, transfer, preserve, protect and confirm to the Agent
and Banks the rights granted or now or hereafter intended to be granted under
any Loan Document, or any other document executed in connection herewith or
therewith.
6 12 Covenant to Indemnify Regarding Construction and Other
Risks. The Company hereby indemnifies, defends and holds the Agent and the
Banks and their respective affiliates, assignees, successors, officers,
directors, employees and agents (collectively, the "Indemnified Parties")
harmless from and against any and all Indemnified Costs (defined below)
directly or indirectly arising out of or resulting from construction of any
improvements on any of the Funded Projects, including any defective
workmanship or materials; or any failure to satisfy any requirements of any
laws, regulations, ordinances, governmental policies or standards, reports,
subdivision maps or development agreements that apply or pertain to any of
the Funded Projects; or breach of any representation or warranty made or
given by the Company to any of the Indemnified Parties or to any prospective
or actual buyer of all or any portion of any of the Funded Projects; or any
claim or cause of action of any kind by any party that any Indemnified Party
is liable for any act or omission of the Company, its Subsidiaries or any
other person or entity in connection with the ownership, sale, operation or
development of any of the Funded Projects. Upon demand by any Indemnified
Party, the Company shall defend any investigation, action or proceeding
involving any Indemnified Costs which is brought or commenced against any
Indemnified Party, whether alone or together with the Company or any other
person, all at the Company's own cost and by counsel to be approved by the
Indemnified Party in the exercise of its reasonable judgment. In the
alternative, any Indemnified Party may elect to conduct its own defense at
the expense of the Company. As used in this Agreement, "Indemnified Costs"
means all actual or threatened liabilities, claims, actions, causes of
action, judgments, orders, damages (including foreseeable and unforeseeable
consequential damages), costs, expenses,
32
fines, penalties and losses (including sums paid in settlement of claims and all
consultant, expert and legal fees and expenses of the relevant Indemnified
Party's counsel), including those incurred in connection with any repair or
restoration work of the real property owned by the Company, or any resulting
damages, harm or injuries to the person or property of any third parties or to
any natural resources. The foregoing indemnity shall not cover any Indemnified
Costs which arise as the result of the gross negligence or willful misconduct of
any Indemnified Party. Any Indemnified Parties who are not parties to this
Agreement are also intended beneficiaries of this Section, as well as the Agent
and the Banks.
6.13 INDEMNITY REGARDING HAZARDOUS SUBSTANCES.
(a) INDEMNITY. The Company hereby indemnifies, defends
and holds the Indemnified Parties harmless from and against any and all
Indemnified Costs directly or indirectly arising out of or resulting from any
Hazardous Substance being present or released in, on or around any part of
any Funded Project, or in the soil, groundwater or soil vapor on or under any
Funded Project, including:
(i) Any claim for such Indemnified Costs asserted by any
federal, state or local governmental agency, including the United States
Environmental Protection Agency and the California Department of Health
Services, and including any claim that any Indemnified Party is liable for
any such Indemnified Costs as an "owner" or "operator" of any Funded Project
under any law relating to Hazardous Substances; and
(ii) Any such Indemnified Costs claimed against any
Indemnified Party by any person other than a governmental agency, including
any person who may purchase or lease all or any portion of any Funded Project
from the Company or its Subsidiaries, from any Indemnified Party, or from any
other purchaser or lessee; any person who may at any time have any interest
in all or any portion of the any Funded Project; any person who may at any
time be responsible for any clean-up costs or other Indemnified Costs
relating to any Funded Project; and any person claiming to have been injured
in any way as a result of exposure to any Hazardous Substance; and
(iii) Any such Indemnified Costs which any Indemnified
Party reasonably believes at any time must be incurred to comply with any
law, judgment, order, regulation or regulatory directive relating to
Hazardous Substances, or which any Indemnified Party reasonably believes at
any time must be incurred to protect the public health or safety; and
(iv) Any such Indemnified Costs resulting from currently
existing conditions in, on or around any Funded Project, whether known or
unknown by the Company, its Subsidiaries or the Indemnified Parties at the
time each Funded Project is acquired, and any such Indemnified Costs
resulting from the activities of the Company, it Subsidiaries or the tenants
of either of them, or any other person in, on or around any Funded Project.
(b) NO INDEMNITY FOR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
Notwithstanding anything contained in this Agreement which may be construed
to the contrary,
33
the Company and its Subsidiaries shall have no obligation to indemnify any
Indemnified Party for any Indemnified Costs arising out of the gross negligence
or willful misconduct of an Indemnified Party.
(c) DEFENSE OF INDEMNIFIED PARTIES. Upon demand by any
Indemnified Party, the Company and its Subsidiaries shall defend any
investigation, action or proceeding involving any Indemnified Costs which is
brought or commenced against any Indemnified Party, whether alone or together
with the Company or any other person, all at the Company's own, cost and by
counsel to be approved by the Indemnified Party in the exercise of its
reasonable judgment. In the alternative, any Indemnified Party may elect to
conduct its own defense at the expense of the Company and its Subsidiaries.
(d) COMPLIANCE REGARDING HAZARDOUS SUBSTANCES. The
Company shall, and shall cause its Subsidiaries to, comply and cause all
tenants and any other persons who may come upon any Funded Project to comply,
with all laws, regulations and ordinances governing or applicable to
Hazardous Substances, including those requiring disclosures to prospective
and actual buyers of all or any portion of any Funded Project. The Company
also shall, and shall also cause its Subsidiaries to, comply with the
recommendations of any qualified environmental engineer or other expert which
apply or pertain to any Funded Project.
(e) NOTICES REGARDING HAZARDOUS SUBSTANCES. The Company
shall, and shall cause its Subsidiaries to, promptly notify the Agent if it
knows, suspects or believes there may be any Hazardous Substance in or around
any Funded Project, or in the soil, groundwater or soil vapor on or under
such Funded Project, or that the Company, any of its Subsidiaries or any
Funded Project may be subject to any threatened or pending investigation by
any governmental agency under any law, regulation or ordinance pertaining to
any Hazardous Substance.
(f) SITE VISITS, OBSERVATIONS AND TESTING. The
Indemnified Parties and their agents and representatives shall have the right
at any reasonable time to enter and visit any Funded Project for the purposes
of observing the Funded Project, taking and removing soil or groundwater
samples, and conducting tests on any part of the Funded Project. The
Indemnified Parties have no duty, however, to visit or observe the any Funded
Project or to conduct tests, and no site visit, observation or testing by any
Indemnified Party shall impose any liability on any Indemnified Party. In no
event shall any site visit, observation or testing by any Indemnified Party
be a representation that Hazardous Substances are or are not present in, on
or under any Funded Project, or that there has been or shall be compliance
with any law, regulation or ordinance pertaining to Hazardous Substances or
any other applicable governmental law. Neither the Company, its Subsidiaries
nor any other party is entitled to rely on any site visit, observation or
testing by any Indemnified Party. The Indemnified Parties owe no duty of care
to protect the Company or any other party against, or to inform the Company,
its Subsidiaries or any other party of, any Hazardous Substances or any other
adverse condition affecting any Funded Project. Any Indemnified Party shall
give the Company reasonable notice before entering any Funded Project. The
Indemnified Party shall make reasonable efforts to avoid interfering with the
Company's or any tenant's use of any Funded Project in exercising any
34
rights provided for in this Section. Each Indemnified Party will use reasonable
business practices in conducting its site visits, observations and testing.
ARTICLE VII
NEGATIVE COVENANTS
The Company hereby covenants and agrees that, so long as any
Bank shall have any Bridge Commitment hereunder, or any Loan or other
Obligation shall remain unpaid or unsatisfied, unless the Requisite Banks
waive compliance in writing:
7.01 LIENS. Neither the Company nor any Wholly-Owned
Subsidiary shall, directly or indirectly, make, create, incur, assume or
suffer to exist any Lien upon or with respect to any part of its Funded
Projects, whether now owned or hereafter acquired, other than the title
exceptions disclosed to and approved by the Banks pursuant to Section
2.14(b)(i).
7.02 DISPOSITION OF FUNDED PROJECTS. The Company shall not,
and shall not suffer or permit any of its Subsidiaries to, directly or
indirectly, make any Disposition of any Funded Project or any portion thereof
or interest therein; provided, however, so long as no Default or Event of
Default is then continuing, the Company shall have the right to make a
Disposition of any Funded Project by paying to the Agent for distribution to
the Banks an amount equal to the greater of the Loan applicable to such
Funded Project or the amount which would be required to be paid to the Banks
so that the Outstanding Amount of the Bridge Loan immediately after such
Disposition would not exceed the Bridge Availability (calculated without
including the Funded Project to which such Disposition would be effective),
and upon receipt of such payment, such project shall no longer be deemed a
"Funded Project" hereunder..
7.03 USE OF PROCEEDS. The Company shall not use any portion of
the Loan proceeds, directly or indirectly, (a) to purchase or carry Margin
Stock, (b) to repay or otherwise refinance indebtedness of the Company or
others incurred to purchase or carry Margin Stock, (c) to extend credit for
the purpose of purchasing or carrying any Margin Stock, (d) to acquire any
security in any transaction that is subject to Section 13 or 14 of the
Exchange Act, or (e) for any purpose other than those permitted by Section
6.06.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 EVENT OF DEFAULT. Any of the following shall constitute
an "Event of Default":
(a) NON-PAYMENT. The Company shall fail to pay, (i) when
and as required to be paid herein, any amount of principal of any Loan, or
(ii) within five days after the same shall become due, any amount of interest
on any Loan or any fee or other amount payable hereunder or pursuant to any
other Loan Document; or
35
(b) REPRESENTATION OR WARRANTY. Any representation or
warranty by the Company, the REIT, any Management Entity or any Subsidiary
made or deemed made herein, in any Loan Document, or in any certificate,
document or financial or other statement by the Company, the REIT, any
Management Entity or any Subsidiary, or any Responsible Officer, furnished at
any time under this Agreement, or in or under any Loan Document, shall prove
to have been incorrect in any material respect on or as of the date made or
deemed made; or
(c) SPECIFIC Defaults. The Company shall fail to perform
or observe any term, covenant or agreement contained in Section 2.01(b) or in
Article VII; or
(d) OTHER DEFAULTS. The Company shall fail to perform or
observe any other term or covenant contained in this Agreement or any Loan
Document, and such default shall continue unremedied for a period of 20 days
after the earlier of (i) the date upon which a Responsible Officer knew or
received written notice of such failure or (ii) the date upon which written
notice thereof is given to the Company by any Agent or Bank; or
(e) CROSS-DEFAULt. An "Event of Default" (as such term is
defined in the Credit Agreement) occurs and is continuing; or
(f) COLLATERAL AND GUARANTY DOCUMENTS.
(i) Any provision of a Pledge Agreement shall for
any reason (other than pursuant to the terms thereof) cease to be valid and
binding on or enforceable against the Company or other Person party thereto
(except to the extent that the same results solely from an act or omission of
the Agent or the Banks), or the Company or such Person shall so state in
writing or bring an action to limit its obligations or liabilities
thereunder; or
(ii) Any Pledge Agreement shall for any reason
(other than pursuant to the terms thereof) cease to create a valid security
interest in the Collateral purported to be covered thereby, or such security
interest shall for any reason cease to be a perfected and first-priority
security interest; or
(iii) Any party to a Pledge Agreement (other than
the Agent or Banks) shall fail to perform or observe any term or covenant
contained in such Pledge Agreement, and such failure shall continue
unremedied for a period of 20 days after the earlier of (a) the date upon
which a Responsible Officer knew or received written notice of such failure
or (b) the date upon which written notice thereof is given to the Company by
the Agent, or any other event or condition shall occur or exist under a
Pledge Agreement that constitutes an "Event of Default" as defined therein; or
(g) Environmental Liens. Any Funded Project shall become
subject to one or more Liens in any amount under any Environmental Law and
such Liens shall remain in place for thirty (30) days after the creation
thereof. 36
36
8.02 REMEDIES.
If any Event of Default occurs, the Agent shall, at the
request of, or may, with the consent of, the Requisite Banks:
(a) TERMINATION OF BRIDGE COMMITMENt. Declare the Bridge
Commitment of each Bank to make Loans to be terminated, whereupon such Bridge
Commitments shall forthwith be terminated;
(b) ACCELERATION. Declare (i) the unpaid principal amount
of all outstanding Loans and all interest accrued and unpaid thereon, and
(ii) all other amounts owing or payable hereunder or under any other Loan
Document to be immediately due and payable, without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly
waived; and
(c), OTHER REMEDIES. Exercise on behalf of itself and the
Banks all rights and remedies available to it and the Banks under the Loan
Documents or applicable law;
PROVIDED, however, that upon the occurrence of any event specified in Section
8.01(f) or 8.01(g) of the Credit Agreement (and in the case of clause (i) of
said Section 8.01(g) upon the expiration of the sixty (60)-day period mentioned
therein), the Bridge Commitment of each Bank to make Loans shall automatically
terminate, and the unpaid principal amount of all outstanding Loans and interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder as
aforesaid shall automatically. become due and payable without further act of any
Agent or Bank.
8.03 RIGHTS NOT EXCLUSIVE. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are not exclusive
of any other rights, powers, privileges or remedies provided by law or in
equity, or under any other instrument, document or agreement now existing or
hereafter arising.
ARTICLE IX
THE AGENT
9.01 APPOINTMENT AND AUTHORIZATION. Each Bank hereby
irrevocably appoints, designates and authorizes the Agent to take such action
on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, Agent shall not have any duties or
responsibilities except those expressly set forth herein, nor shall Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist on the part of Agent.
9.02 DELEGATION OF DUTIES. Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact
37
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. Agent shall not be responsible for the negligence or misconduct of
any agent or attorney-in-fact that it selects with reasonable care.
9.03 LIABILITY OF AGENT. The Agent, its respective Affiliates,
or their respective officers, directors, employees, agents, or
attorneys-in-fact (all of the foregoing being collectively referred to as the
"Agent-Related Persons") shall not (a) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Agreement
or any other Loan Document (except for its own gross negligence or willful
misconduct), or (b) be responsible in any manner to any of the Banks for any
recital, statement, representation or warranty made by the Company, the REIT,
any Management Entity or Subsidiary or any Affiliate of any such Person, or
any officer thereof, contained in this Agreement or in any other Loan
Document, or in any certificate, report, statement or other document referred
to or provided for in, or received by Agent under or in connection with, this
Agreement or any other Loan Document, or for the value of any Collateral or
the validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement, any other Loan Document, or for any failure of the Company,
the REIT or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the Properties, books or
records of the Company, the REIT, any Management Entity or Subsidiary or
Affiliates thereof.
9.04 Reliance by Agent.
(a) GENERALLY. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, telecopy, telex or
telephone message, statement or other document or conversation believed by it
to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to the Company), independent accountants and other experts selected
by the Agent. The Agent shall be fully justified in failing or refusing to
take any action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Requisite Banks as it
deems appropriate and, if it so requests, it shall first be indemnified to
its satisfaction by the Banks against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Requisite Banks, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all of the Banks.
(b) CONDITIONS PRECEDENT. For purposes of determining
compliance with the conditions specified in Sections 4.01 and 4.02 (as to the
initial borrowing hereunder), each Bank that has executed this Agreement
shall be deemed to have consented to, approved or accepted or to be satisfied
with each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to such Bank, unless an officer of
the Agent responsible for the transactions contemplated by the Loan Documents
shall have received
38
notice from such Bank prior to the initial borrowing specifying its objection
thereto and either such objection shall not have been withdrawn by notice to the
Agent to that effect or such Bank shall not have made available to the Agent the
Bank's ratable portion of such borrowing.
9.05 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and
fees required to be paid to the Agent for the account of the Banks, unless
the Agent shall have received written notice from a Bank or the Company
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." In the event that the
Agent receives such a notice, the Agent shall give notice thereof to the
Banks. The Agent shall take such action with respect to such Default or Event
of Default as shall be requested by the Requisite Banks in accordance with
Article VIII; PROVIDED, HOWEVER, that unless and until the Agent shall have
received any such request, it may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable or in the best interest of the
Banks.
9.06 CREDIT DECISION. Each Bank expressly acknowledges that
none of the Agent-Related Persons has made any representation or warranty to
such Bank and that no act by the Agent hereinafter taken, including any
review of the affairs of the Company, the REIT, any Management Entity or
Subsidiary, shall be deemed to constitute any representation or warranty by
the Agent to any Bank. Each Bank represents to the Agent that such Bank has,
independently and without reliance upon the Agent and based on such documents
and information as such Bank has deemed appropriate, made its own appraisal
of and investigation into the business, prospects, operations, Properties,
financial and other condition and creditworthiness of the Company, the REIT,
any Management Entity or Subsidiary, and all applicable bank regulatory laws
relating to the transactions contemplated thereby, and made its own decision
to enter into this Agreement and extend credit to the Company hereunder. Each
Bank also represents that it will, independently and without reliance upon
the Agent and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the
other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, Properties,
financial and other condition and creditworthiness of the Company, the REIT,
the Management Entities and the Subsidiaries. Except for notices, reports and
other documents expressly herein required to be furnished to the Banks by the
Agent, Agent shall have no duty or responsibility to provide any Bank with
any credit or other information concerning the business, prospects,
operations, Properties, financial and other condition or creditworthiness of
the Company, the REIT, the Management Entities and the Subsidiaries which may
come into the possession of any of the Agent-Related Persons.
9.07 INDEMNIFICATION. The Banks shall indemnify upon demand
the Agent-Related Persons (to the extent not reimbursed by or on behalf of
the Company and without limiting the obligation of the Company to do so)
ratably from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind whatsoever which may at any time (including at any
time following the repayment of the Loans) be imposed on, incurred by or
asserted against any such Person in
39
any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by any such Person
under or in connection with any of the foregoing; PROVIDED, HOWEVER, that no
Bank shall be liable for the payment to the Agent-Related Persons of any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from such
Person's gross negligence or willful misconduct. Without limitation of the
foregoing, each Bank shall reimburse the Agent upon demand (to the extent the
Agent is not reimbursed upon demand by the Company, unless the Agent is legally
restricted from making such demand upon the Company, in which case demand need
not be made upon the Company) for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Company. Without limiting
the generality of the foregoing, if the IRS or any authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Bank (because the
appropriate form was not delivered or was not properly executed, or because such
Bank failed to notify the Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason), such Bank shall indemnify the Agent fully for all amounts paid,
directly or indirectly, by the Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to the Agent under this Section 9.07, together with all costs, expenses
and attorneys' fees (including allocated costs for in-house legal services). The
obligation of the Banks in this Section shall survive the payment of all
Obligations.
9.08 AGENT IN INDIVIDUAL CAPACITY. BofA (and any other Bank
that may hereafter serve as Agent) and each of their respective Affiliates
may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind
of banking, trust, financial advisory or other business with, the Company,
the REIT, the Management Entities and the Subsidiaries and Affiliates as
though BofA (or any other such Bank) were not the agent hereunder and without
notice to the Banks. With respect to its Loans, BofA (and any other Bank that
may hereafter serve as Agent), shall have the same rights and powers under
this Agreement as any other Bank and may exercise the same as though each of
them were not an agent, and the terms "Bank" and "Banks" shall include BofA
(and any other Bank that may hereafter serve as Agent), in its individual
capacity.
9.09 SUCCESSOR AGENTS. The Agent may resign as Agent upon 30
days' notice to the Banks. If an Agent shall resign under this Agreement, the
Requisite Banks shall appoint from among the Banks a successor Agent for the
Banks, which successor Agent shall, if no Default or Event of Default exists
hereunder, be subject to the approval of the Company. If no successor Agent
is appointed prior to the effective date of the resignation of the retiring
Agent, the retiring Agent shall appoint, after consulting with the Banks and
the Company, a successor Agent. Upon the acceptance of its appointment as
successor Agent hereunder, such successor
40
Agent shall succeed to all the rights, powers and duties of the retiring Agent,
and the term "Agent" shall mean such successor Agent, and the retiring Agent's
rights, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article IX and
Sections 10.04 and 10.05 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was an Agent under this Agreement.
9.10 COLLATERAL MATTERS.
(a) PERFECTION. The Agent is authorized on behalf of all
the Banks, without the necessity of any notice to or further consent from the
Banks, from time to time to take any action with respect to any Collateral or
the Equity Interests Pledge Documents which may be necessary to perfect and
maintain perfected the security interest in and Liens upon the Collateral
granted pursuant to the Equity Interests Pledge Documents.
(b) NO OTHER COLLATERAL. Each Bank agrees with and in
favor of each other (which agreement shall not be for the benefit of the
Company, the REIT, the Management Entities or any Subsidiaries) that the
Company's obligation to such Bank under this Agreement and the other Loan
Documents is not and shall not be secured by any real property collateral now
or hereafter acquired by such Bank other than the Collateral hereunder.
ARTICLE X
MISCELLANEOUS
10.01 Amendments and Waivers.
(a) Generally. No amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent with respect to
any departure therefrom, shall be effective unless the same shall be in
writing and signed by the Requisite Banks, and then such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
(b) Matters Requiring Unanimous Consent. Not withstanding
the terms of Section 10.01(a), no amendment or waiver of any provision of
this Agreement or any other Loan Document, no agreement to forebear from
acting upon any departure by the Company therefrom, and no consent with
respect to any departure by the Company therefrom, shall be effective to do
any of the following unless the same is in writing and signed by all the
Banks:
(i) increase the Bridge Commitment of any Bank;
(ii) postpone or delay any date fixed for any
payment of principal, interest, fees or other amounts due hereunder or under
any Loan Document whether by acceleration or otherwise;
41
(iii) reduce the principal of, or the rate of
interest specified herein on, any Loan, or any fees or other amounts payable
hereunder or under any Loan Document;
(iv) change the percentage of the Bridge Commitments
or of the aggregate unpaid principal amount of the Loans required for the
Banks or any of them to take any action hereunder;
(v) amend Section 2.16 (Sharing of Payments, Etc.),
Section 6.10 (Use of Proceeds), Section 8.02 (Remedies), Section 10.15
(Governing Law and Jurisdiction) or this Section 10.01;
(vi) release any portion of the Collateral except
for the release, upon the written request of the Company, and with the
consent of the Requisite Banks, of the Stock in a Wholly-Owned Subsidiary
upon the repayment of all Loans made with respect to the acquisition of
Funded Projects by such Subsidiary; or
(vii) release any guarantor from liability under the
REIT Guaranty Documents.
(c) Matters Requires Agents' CONSENT. Notwithstanding the
terms of Section 10.01(a), no amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure by the Company therefrom, shall be effective to affect the rights
or duties of the Agent under this Agreement or any other Loan Document unless
the same is in writing and signed by the Agent.
10.02 NOTICES.
(a) DELIVERY. All notices, requests and other
communications provided for hereunder shall be in writing (including, unless
the context expressly otherwise provides, telegraphic, telex, facsimile
transmission or cable communication) and mailed, telegraphed, telexed or
delivered, (i) if to the Company, to its address specified on the signature
pages hereof, (ii) if to any Bank, to its Domestic Lending Office, and (iii)
if to Agent, to its address specified on the signature pages hereof; or, as
to the Company or the Agent, to such other address as shall be designated by
such party in a written notice to the other parties, and as to each other
party, at such other address as shall be designated by such party in a
written notice to the Company and the Agent.
(b) Receipt. All such notices and communications shall,
when transmitted by overnight delivery, telegraphed, telecopied by facsimile,
telexed or cabled, be effective when delivered for overnight delivery or to
the telegraph company, transmitted by telecopier, confirmed by telex
answerback or delivered to the cable company, respectively, or if delivered,
upon delivery, except that notices pursuant to Article II or VIII shall not
be effective until actually received by the Agent.
42
(c) RELIANCE. The Company acknowledges and agrees that
any agreement of the Agent and the Banks under Article II to receive certain
notices by telephone and facsimile is solely for the convenience and at the
request of the Company. The Agent and the Banks shall be entitled to rely on
the. authority of any Person purporting to be a Person authorized by the
Company to give such notice, and the Agent and the Banks shall not have any
liability to the Company or any other Person on account of any action taken
or not taken by the Agent and the Banks in reliance upon such telephonic or
facsimile notice. The obligation of the Company to repay the Loans shall not
be affected in any way or to any extent by any failure by the Agent and the
Banks to receive written confirmation of any telephonic or facsimile notice
or the receipt by the Agent and the Banks of a confirmation which is at
variance with the terms understood by the Agent and the Banks to be contained
in the telephonic or facsimile notice.
10.03 NO WAIVER: CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of any Agent or Bank, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege.
10.04 COSTS AND EXPENSES. The Company shall, whether or not
the transactions contemplated hereby shall be consummated:
(a) FACILITY EXPENSES. Pay or reimburse the Agent on
demand for all costs and expenses incurred in connection with the
development, preparation, delivery, administration and execution of, and any
amendment, supplement, waiver or modification to, this Agreement, any Loan
Document and any other documents prepared in connection herewith or
therewith, the consummation of the transactions contemplated hereby and
thereby, and any proposal for consideration of potential Funded Projects,
including, without limitation, title insurance company charges, survey costs,
recording costs and taxes, travel expenses incurred by representatives of the
Agent, and the reasonable Attorney Costs incurred by the Agent with respect
thereto;
(b) ENFORCEMENT EXPENSES. Pay or reimburse the Agent and
Banks on demand for all costs and expenses incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies (including in connection with any "workout" or restructuring
regarding the Loans) under this Agreement, any other Loan Document, and any
such other documents, including reasonable Attorney Costs incurred by the
Agent and Bank; and
(c) COLLATERAL EXPenses. Pay or reimburse the Agent on
demand for all audits, environmental inspections and reviews (including the
allocated costs of such internal services), search and filing costs, fees and
expenses, incurred or sustained by the Agent in connection with the matters
referred to under paragraphs (a) and (b) of this Section.
10.05 INDEMNITY. The Company shall indemnify and hold harmless
the Agent, each Bank and each of their respective officers, directors,
employees, counsel, agents and attorneys-in-fact (each, an "Indemnified
Person") from and against and pay them for any and all
43
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, charges, expenses or disbursements (including Attorney Costs) of any kind
or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement and any other Loan Documents,
or the transactions contemplated hereby and thereby, and with respect to any
investigation, litigation or proceeding related to this Agreement or the Loans
or the use of the proceeds thereof, whether or not any Indemnified Person is a
party thereto (all the foregoing, collectively, the "Indemnified Liabilities");
PROVIDED, that the Company shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of such Indemnified Person. The
agreements in this Section 10.05 shall survive payment of all other Obligations.
10.06 MarshalliNG PAYMENTS Set Aside. Neither the Agent nor
any Bank shall be under any obligation to marshall any assets in favor of the
Company or any other Person or against or in payment of any or all of the
Obligations. To the extent that the Company makes a payment or payments to
the Agent or any Bank, or the Agent or any Bank enforces its Liens or
exercises its rights of setoff, and such payment or payments or the proceeds
of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
to be repaid to a trustee, receiver or any other party in connection with any
Insolvency Proceeding, or otherwise, then to the extent of such recovery the
obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not
been made or such enforcement or setoff had not occurred.
10.07 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns, except that the Company may not
assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of the Agent and each Bank, which may be
withheld in their sole and absolute discretion.
10.08 ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) ASSIGNMENTS. Subject to the further provisions of
this Section 10.08(a), any Bank may, with the written consent of the Agent,
which consent shall not be unreasonably withheld, at any time assign and
delegate to one or more Eligible Assignees (provided that no written consent
of the Agent shall be required in connection with any assignment and
delegation by a Bank to a Bank Affiliate of such Bank) (each an "Assignee")
all, or any ratable part of all, of the Loans, the Bridge Commitments and the
other rights and obligations of such Bank hereunder, in a minimum amount of
$5,000,000 and in additional increments of $250,000 so long as such Bank
concurrently transfers to such Assignee the same proportionate share of its
interests and obligations with respect to its Revolving Commitment under (and
as such term is defined in) the Credit Agreement) PROVIDED, HOWEVER, that the
Company and the Agent may continue to deal solely and directly with such Bank
in connection with the interest so assigned to an Assignee until (a) written
notice of such assignment, together with payment instructions, addresses and
related information with respect to the Assignee, shall
44
have been given to the Company and the Agent by such Bank and the Assignee; (b)
such Bank and its Assignee shall have delivered to the Company and the Agent an
Assignment and Acceptance in the form of EXHIBIT H ("Assignment and
Acceptance") together with any Note or Notes subject to such assignment; (c)
such Bank shall have paid to the Agent, for its own account, an assignment fee
in the amount of $1500, if the Assignee is a Bank (without giving effect to the
Assignment), and $3000 in all other cases; and (d) such Bank shall have
delivered to the Agent such documents as may be required by Section 3.01(f). Any
such assignment requiring the approval of the Agent shall also require the
approval of the Company (such approval not to be unreasonably withheld or
delayed), provided that the Company's failure to approve or disapprove such
assignment within five days' after receiving written notice thereof shall be
deemed approval by the Company of such assignment, and provided further, that no
such approval from the Company shall be required during the continuation of a
Default or Event of Default.
(b) RIGHTS ASSIGNEE. From and after the date that the
Agent notifies the assignor Bank that the Agent has received an executed
Assignment and Acceptance and payment of the assignment fee specified in
Section 10.08(a), (i) the Assignee thereunder shall, subject to Section
10.08(a), be a party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Bank under the Loan
Documents, and (ii) the assignor Bank shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights and be released from its obligations
under the Loan Documents.
(c) REPLACEMENT NOTES. Within thirty (30) Business Days
after its receipt of notice by the Agent that the Agent has received an
executed Assignment and Acceptance and payment of the processing fee, the
Company shall execute and deliver to the Agent, new Notes evidencing such
Assignee's assigned Loans and Bridge Commitment and, if the assignor Bank has
retained a portion of its Loans and its Bridge Commitment, replacement Notes
in the principal amount of the Loans retained by the assignor Bank (such
Notes to be in exchange for, but not in payment of, the Notes held by such
Bank). Immediately upon each Assignee's making its payment under the
Assignment and Acceptance, this Agreement shall be deemed to be amended to
the extent, but only to the extent, necessary to reflect the addition of the
Assignee and the resulting adjustment of the Bridge Commitments arising
therefrom. The Bridge Commitment allocated to each Assignee shall reduce such
Bridge Commitment of the assigning Bank PRO TANTO.
(d) PARTICIPATIONS. Any Bank may at any time sell to one
or more commercial banks (a "Participant") participating interests in any
Loans and Bridge Commitment of that Bank and the other interests of that Bank
(the "originating Bank") hereunder and under the other Loan Documents so long
as such Bank concurrently transfers to such Participant the same
proportionate share of its interests and obligations with respect to its
Revolving Commitment under (and as such term is defined in) the Credit
Agreement; PROVIDED, HOWEVER, that (i) the originating Bank's obligations
under this Agreement shall remain unchanged, (ii) the originating Bank shall
remain solely responsible for the performance of such obligations, (iii) the
45
Company and the Agent shall continue to deal solely and directly with the
originating Bank in connection with the originating Bank's rights and
obligations under this Agreement and the other Loan Documents, (iv) no Bank
shall transfer or grant any participating interest under which the Participant
shall have rights to approve any amendment to, or any consent or waiver with
respect to, this Agreement or any other Loan Document, except to the extent such
amendment, consent or waiver would require unanimous consent as described in the
FIRST PROVISO to Section 10.01; and (v) the Company shall have approved the
transfer or grant of any participating interest in any Loans and Bridge
Commitment of the originating Bank to a Participant that has not theretofore
previously held a participating interest therein (such approval not to be
unreasonably withheld or delayed), provided that the Company's failure to
approve or disapprove in writing such Participant within five days' after
receiving written notice thereof shall be deemed approval by the Company of such
transfer or grant to such Participant, and provided further, that no such
approval from the Company shall be required during the continuation of a Default
or Event of Default. In the case of any such participation, the Participant
shall not have any rights under this Agreement, or any of the other Loan
Documents, and all amounts payable by the Company hereunder shall be determined
as if such Bank had not sold such participation; except that, if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Bank under this Agreement.
(e) ASSIGNMENTS TO FEDERAL RESERVE BANK. Notwithstanding
any other provision contained in this Agreement or any other Loan Document to
the contrary, any Bank may assign all or any portion of the Loans or Notes
held by it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal
Reserve Bank, provided that any payment in respect of such assigned Loans or
Notes made by the Company to or for the account of the assigning and/or
pledging Bank in accordance with the terms of this Agreement shall satisfy
the Company's obligations hereunder in respect of such assigned Loans or
Notes to the extent of such payment. No such assignment shall release the
assigning Bank from its obligations hereunder.
10.09 SETOFF
In addition to any rights and remedies of the Banks provided
by law, if an Event of Default exists, each Bank is authorized at any time
and from time to time, without prior notice to the Company, any such notice
being waived by the Company to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other indebtedness at any time
owing to, such Bank to or for the credit or the account of the Company
against any and all obligations owing to such Bank, now or hereafter
existing, irrespective of whether the Agent or such Bank shall have made
demand under this Agreement or any Loan Document and whether such obligations
may be contingent or unmatured. Each Bank agrees to promptly notify the
Company and the Agent after any such setoff and application made by such
Bank; PROVIDED, HOWEVER, that the failure to give such notice
46
shall not affect the validity of such setoff and application. The rights of each
Bank under this Section 10.09 are in addition to the other rights and remedies
(including other rights of setoff) that such Bank may have. NOTWITHSTANDING THE
FOREGOING, NO BANK SHALL EXERCISE, OR ATTEMPT TO EXERCISE, ANY RIGHT OF SETOFF,
BANKER'S LIEN, OR THE LIKE, AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF THE
COMPANY, THE REIT, ANY MANAGEMENT ENTITY OR ANY SUBSIDIARY HELD OR MAINTAINED BY
ANY BANK, WITHOUT THE PRIOR WRITTEN CONSENT OF THE REQUISITE BANKS.
10.10 Notification of Addresses, Lending Offices, Ect. Each
Bank shall notify the Agent in writing of any changes in the address to which
notices to such Bank should be directed, of addresses of its Offshore Lending
Office, of payment instructions in respect of all payments to be made to it
hereunder and of such other administrative information as the Agent shall
reasonably request.
10.11 COUNTERPARTS. This Agreement may be executed by one or
more of the parties to this Agreement in any number of separate counterparts,
each of which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the
same instrument. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Company and the Agent.
10.12 SEVERABILITY,. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement
required hereunder.
10.13 NO THIRD PARTIES BENEFITED. This Agreement is made and
entered into for the sole protection and legal benefit of the Company, the
Agent and the Banks, and their permitted successors and assigns, and no other
Person shall be a direct or indirect legal beneficiary of, or have any direct
or indirect cause of action or claim in connection with, this Agreement or
any of the other Loan Documents. No Agent or Bank shall have any obligation
to any Person not a party to this Agreement or the other Loan Documents.
10.14 TIME. Time is of the essence of each term and provision
of this Agreement and each of the other Loan Documents.
10.15 GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
COLORADO; PROVIDED THAT THE AGENT AND THE BANKS SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.
10.16 WAIVER OF JURY TRIAL. THE COMPANY, THE AGENT, AND THE
BANKS EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY,
IN ANY ACTION, PROCEEDING OR OTHER
47
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
SUBJECT TO SECTION 10.17 BELOW, THE COMPANY, THE AGENT, AND THE BANKS EACH AGREE
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO
ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART,
TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS.
10.17 Arbitration.
(a) MANDATORY ARBITRATION. Any controversy or claim
between or among the parties arising out of or relating to this Agreement,
the Loan Documents, and any claim based on or arising from an alleged tort,
shall at the request of any party be determined by arbitration. The
arbitration shall be conducted in Los Angeles, California, in accordance with
the United States Arbitration Act (Title 9, U.S. Code), notwithstanding any
choice of law provision in this Agreement, and under the Commercial Rules of
the American Arbitration Association (the "AAA"). The arbitrator(s) shall
give effect to statutes of limitation in determining any claim. Any
controversy concerning whether an issue is arbitrable shall be determined by
the arbitrator(s). Judgment upon the arbitration award may be entered in any
court having jurisdiction. The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests
such action for judicial relief.
(b) PROVISIONAL REMEDIES. SELF-HELP AND FORECLOSURE. No
provision of this Section 10.17 shall limit the right of any party to this
Agreement to exercise self-help remedies such as setoff, foreclosure against
or sale of any real or personal property collateral or security, or to obtain
provisional or ancillary remedies from a court of competent jurisdiction
before, after, or during the pendency of any arbitration or other proceeding.
The exercise of a remedy does not waive the right of either party to resort
to arbitration.
10.18 NOTICE CLAIMS BAR. THE COMPANY HEREBY AGREES THAT IT
SHALL GIVE PROMPT WRITTEN NOTICE TO THE AGENT OF ANY CLAIM OR CAUSE OF ACTION
IT BELIEVES IT HAS, OR MAY SEEK TO ASSERT OR ALLEGE AGAINST THE AGENT OR ANY
BANK, WHETHER SUCH CLAIM IS BASED IN LAW OR EQUITY, ARISING UNDER OR RELATED
TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR TO THE LOANS (OR THE
COLLATERAL THEREFOR), OR ANY ACT OR OMISSION TO ACT BY THE AGENT OR ANY BANK
WITH RESPECT HERETO OR THERETO, AND THAT IF THE COMPANY SHALL FAIL
48
TO GIVE SUCH PROMPT NOTICE TO THE AGENT WITH REGARD TO ANY SUCH CLAIM OR CAUSE
OF ACTION, THE COMPANY SHALL BE DEEMED TO HAVE WAIVED, AND SHALL BE FOREVER
BARRED FROM BRINGING OR ASSERTING, SUCH CLAIM OR CAUSE OF ACTION IN ANY
ARBITRATION OR ANY SUIT, ACTION OR PROCEEDING IN ANY COURT OR BEFORE ANY
GOVERNMENTAL AGENCY.
10.19 ENTIRE AGREEMENT. This Agreement, together with the
other Loan Documents, embodies the entire Agreement and understanding between
the Company, the Agent and the Banks. Accordingly, this Agreement, together
with the other Loan Documents, supersedes all prior or contemporaneous
agreements and understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof, except for any prior arrangements made
with respect to the payment by the Company of (or any indemnification for)
any fees, costs or expenses payable to or incurred (or to be incurred) by or
on behalf of the Agent or the Banks.
10.20 INTERPRETATION. This Agreement together with the other
Loan Documents is the result of negotiations between and has been reviewed by
counsel to the Agent, the Banks and the Company and other parties, and is the
product of all parties hereto. Accordingly, this Agreement and the other Loan
Documents shall not be construed against the Banks or the Agent merely
because of the Agent's or Bank's involvement in the preparation of such
documents and agreements.
10.21 EXCULPATION OF BANKS. No Bank undertakes or assumes any
responsibility or duty to the Company or any third party to select, review,
inspect, examine, supervise, pass judgment upon or inform the Company or any
third party of the existence, quality, adequacy or suitability of: (a) any
appraisals of any Funded Project, (b) any environmental report related to a
Funded Project, or (c) any other matters or items, including, but not limited
to, engineering, soils and seismic reports which are related to a Funded
Project. Any such selection, review, inspection, examination and the like is
solely for the purpose of protecting the Banks' interests and preserving the
Banks' rights under the Loan Documents, and shall not render any Bank liable
to the Company or any third party for the existence, sufficiency, accuracy,
completeness or legality thereof. No Bank owes any duty of care to protect or
inform the Company or any third party against negligent, faulty, inadequate
or defective building or construction or the existence of any environmentally
hazardous condition affecting any Funded Project.
10.22 RELATIONSHIP. Nothing herein contained shall in any
manner be construed as creating any relationship between the Agent and the
Banks, on the one hand, and the Company, on the other hand, other than as
creditor and debtor. The Company agrees to indemnify, protect, defend and
hold the Agent and each Bank harmless from and against any and all losses,
liabilities, damages, and costs and expenses (including, but not limited to,
reasonable attorneys' fees and disbursements, including reasonably allocated
costs of in-house counsel) resulting from any other construction of the
parties' relationship.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first written above.
COMPANY
AIMCO PROPERTIES, L.P.,
a Delaware limited partnership
By: AIMCO -GP, Inc.,
a Delaware corporation, its
general partner
By: /s/ Illegible
----------------------------
Its: Vice President
Notices to be sent to:
1873 South Bellaire Street
17th Floor
Denver, Colorado 80222
Attention: Peter K. Kompaniez,
Vice Chairman
Facsimile:__________________________
AGENT
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By: /s/ Derik J. Hart
---------------------------------
Name: Derik J. Hart
-------------------------------
Title: Assistant Vice President
-------------------------------
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Notices to be sent to:
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
Payments to be made to:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
ABA #:_________________________________
Account #:_____________________________
Attention:_____________________________
Ref:___________________________________
Facsimile:_____________________________
B OF A
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Bank
By: /s/ Derik J. Hart
----------------------------------
Name: Derik J. Hart
--------------------------------
Title: Assistant Vice President
-------------------------------
Notices to be sent to:
-------------------------------------
-------------------------------------
-------------------------------------
Attention:___________________________
Telephone:___________________________
Facsimile:___________________________
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