EXHIBIT 4(ii)(b)
AMENDED AND RESTATED
CREDIT AGREEMENT
among
AAC FUNDING PARTNERSHIP III
as Borrower
and
CERTAIN AFFILIATES OF AAC FUNDING PARTNERSHIP III
as Guarantors
and
THE LENDERS IDENTIFIED HEREIN
and
NATIONSBANK, N.A.
as Administrative Agent
DATED AS OF DECEMBER 7, 1998
TABLE OF CONTENTS
SECTION 1 DEFINITIONS AND ACCOUNTING TERMS..................................2
1.1 Definitions..................................................2
1.2 Computation of Time Periods and
Other Definition Provisions...............................19
1.3 Accounting Terms............................................19
SECTION 2 CREDIT FACILITY..................................................20
2.1 Term Loans..................................................20
SECTION 3 GENERAL PROVISIONS APPLICABLE TO LOANS...........................21
3.1 Interest....................................................21
3.2 Place and Manner of Payments................................22
3.3 Prepayments.................................................22
3.4 Commitment Fee..............................................23
3.5 Payment in full at Maturity.................................23
3.6 Computations of Interest and Fees...........................23
3.7 Pro Rata Treatment..........................................24
3.8 Sharing of Payments.........................................25
3.9 Capital Adequacy............................................25
3.10 Inability To Determine Interest Rate.......................26
3.11 Illegality.................................................26
3.12 Requirements of Law........................................27
3.13 Taxes......................................................28
3.14 Indemnity..................................................30
SECTION 4 GUARANTY.........................................................31
4.1 Guaranty of Payment.........................................31
4.2 Obligations Unconditional...................................31
4.3 Modifications...............................................32
4.4 Waiver of Rights............................................33
4.5 Reinstatement...............................................33
4.6 Remedies....................................................33
4.7 Limitation of Guaranty......................................34
4.8 Additional Waivers..........................................34
SECTION 5 CONDITIONS PRECEDENT.............................................35
5.1 Closing Conditions..........................................35
SECTION 6 REPRESENTATIONS AND WARRANTIES...................................40
6.1 Financial Condition.........................................40
6.2 No Material Change..........................................40
6.3 Organization and Good Standing..............................41
6.4 Due Authorization...........................................41
6.5 No Conflicts................................................41
6.6 Consents....................................................41
6.7 Enforceable Obligations.....................................41
6.8 No Default..................................................42
6.9 Ownership...................................................42
6.10 Indebtedness...............................................42
6.11 Litigation.................................................42
6.12 Taxes......................................................42
6.13 Compliance with Law........................................42
6.14 Compliance with ERISA......................................43
6.16 Use of Proceeds; Margin Stock..............................44
6.17 Government Regulation......................................44
6.18 Environmental Matters......................................45
6.19 Solvency...................................................46
6.20 Investments................................................46
6.21 Location of Collateral.....................................46
6.22 Disclosure.................................................46
6.23 Licenses, etc. ............................................47
6.24 No Burdensome Restrictions.................................47
6.25 Collateral Documents.......................................47
SECTION 7 AFFIRMATIVE COVENANTS............................................47
7.1 Information Covenants.......................................48
7.2 Financial Covenants.........................................51
7.3 Preservation of Existence, Franchises, and
Management Agreements.....................................52
7.4 Books and Records...........................................52
7.5 Compliance with Law.........................................52
7.6 Payment of Taxes and Other Indebtedness.....................53
7.7 Insurance...................................................53
7.8 Maintenance of Property.....................................54
7.9 Performance of Obligations..................................54
7.10 Use of Proceeds............................................54
7.11 Audits/Inspections.........................................55
7.12 Additional Credit Parties..................................55
7.13 Refinancing of Collateral Properties.......................55
7.14 Collateral.................................................55
SECTION 8 NEGATIVE COVENANTS...............................................56
8.1 Indebtedness................................................56
8.2 Liens.......................................................56
8.3 Nature of Business..........................................57
8.4 Consolidation and Merger....................................57
8.5 Sale or Lease of Assets.....................................57
8.6 Advances, Investments and Loans.............................57
8.8 Transactions with Affiliates................................58
8.9 Fiscal Year; Organizational Documents.......................58
8.10 Limitations................................................58
8.11 Negative Pledges...........................................58
8.12 Subordinated Debt..........................................59
SECTION 9 EVENTS OF DEFAULT................................................59
9.1 Events of Default...........................................59
9.2 Acceleration; Remedies......................................62
9.3 Allocation of Payments After Event of Default...............62
SECTION 10 AGENCY PROVISIONS................................................63
10.1 Appointment................................................63
10.2 Delegation of Duties.......................................64
10.3 Exculpatory Provisions.....................................64
10.4 Reliance on Communications.................................64
10.5 Notice of Default..........................................65
10.6 Non-Reliance on Agents and Other Lenders...................65
10.7 Indemnification............................................66
10.8 Agents in Their Individual Capacity........................66
10.9 Successor Agent............................................66
SECTION 11 MISCELLANEOUS....................................................67
11.1 Notices....................................................67
11.2 Right of Set-Off...........................................67
11.3 Benefit of Agreement.......................................67
11.4 No Waiver; Remedies Cumulative.............................70
11.5 Payment of Expenses; Indemnification.......................70
11.6 Amendments, Waivers and Consents...........................71
11.11 Governing Law; Jurisdiction...............................72
11.12 Waiver of Jury Trial......................................73
11.13 Time......................................................73
11.14 Severability..............................................73
11.15 Entirety..................................................73
11.16 Binding Effect............................................74
11.17 Confidentiality...........................................74
11.18 Continuance of Indebtedness and Collateral................74
SCHEDULES
Schedule 1.1(b) Underwriting Criteria and Due Diligence Package
Schedule 1.1(c) Term Loan Commitment Percentages
Schedule 6.10 Indebtedness
Schedule 6.15 Organization Structure
Schedule 6.18 Environmental Matters
Schedule 6.21(a) Collateral Property Locations
Schedule 6.21(b) Personal Property Locations
Schedule 6.21(c) Chief Executive Offices
Schedule 7.3 Management Agreements
Schedule 7.7(a) Insurance Coverage
Schedule 7.7(b) Borrower's Use of Insurance Proceeds
Schedule 8.2 Liens
Schedule 8.6 Investments
Schedule 8.8 Affiliate Transactions
Schedule 11.1 Notices
EXHIBITS
Exhibit 2.1(e) Form of Notice of Continuation/Conversion
Exhibit 2.1(g) Form of Term Note
Exhibit 7.1(d) Form of Officer's Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3 Form of Assignment Agreement
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Credit Agreement")
is entered into as of December 7, 1998 among AAC FUNDING PARTNERSHIP III, a
Delaware general partnership ("Borrower"), UNITED DOMINION REALTY, L.P., a
Virginia limited partnership, UNITED DOMINION REALTY TRUST, INC., a Virginia
corporation, COASTAL ANAHEIM PROPERTIES, LLC, a Delaware limited liability
company, WINDWARD POINT, LLC, a California limited liability company, REGENCY
PARK, L.P., an Indiana limited partnership, and AAC FUNDING PARTNERSHIP II, a
Delaware general partnership (each individually a "Guarantor" and collectively
the "Guarantors"), the Lenders (as defined herein), NATIONSBANC MONTGOMERY
SECURITIES LLC, as Lead Arranger and Book Manager and NATIONSBANK, N.A.,
successor by merger to NationsBank of Texas, N.A. ("NationsBank"), as
Administrative Agent for the Lenders (in such capacity, the "Administrative
Agent").
RECITALS
WHEREAS, the Borrower, American Apartment Communities II, L.P. ("AAC
II, L.P."), American Apartment Communities II, Inc. ("AAC"), American Apartment
Communities Operating Partnership, L.P., AAC Funding Partnership II, the Lenders
and the Administrative Agent entered into a Credit Agreement, dated as of
December 20, 1996 (as modified by that certain Modification Agreement dated as
of December 20, 1996 and that certain Second Modification Agreement dated as of
April 18, 1997, as amended by that certain First Amendment to Credit Agreement
dated as of August 15, 1997 and as further amended, modified or supplemented,
the "Existing Credit Agreement"), pursuant to which the Lenders agreed to
provide the Borrower with a revolving credit facility in an aggregate amount of
up to $100 million;
WHEREAS, pursuant to (i) an Agreement and Plan of Merger dated as of
September 10, 1998, AAC merged with and into United Dominion Realty Trust, Inc.
("UDRT") with UDRT being the surviving entity and (ii) a Partnership Interest
Purchase and Exchange Agreement dated as of September 10, 1998, United Dominion
Realty, L.P. ("UDRLP") acquired all of the partnership interests in AAC II,
L.P.;
WHEREAS, pursuant to an Assignment, Assumption and Consent Agreement
of even date herewith among the Borrower, the Guarantors, the Administrative
Agent and the Lenders, UDRT and UDRLP agreed to assume all of the rights, duties
and obligations of UDRT and AAC II, L.P., respectively, under this Credit
Agreement and the other Credit Documents and to become "Guarantors" and "Credit
Parties" for purposes of this Credit Agreement and the other Credit Documents;
and
WHEREAS, the Lenders have agreed to amend and restate the Existing
Credit Agreement to replace AAC II, Inc. and AAC II, L.P. as Guarantors,
respectively, with UDRT and UDRLP, to convert the revolving credit facility to a
term loan credit facility and to make certain other modifications to the Credit
Agreement on the terms and conditions hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 Definitions.
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms herein shall
include in the singular number the plural and in the plural the singular:
"AAC II, Inc." means American Apartment Communities II,
Inc., a Maryland corporation, together with its successors and
permitted assigns.
"AAC II, L.P." means American Apartment Communities II,
L.P., a Delaware limited partnership, together with its successors
and permitted assigns.
"AAC Funding II" means AAC Funding Partnership II, a
Delaware general partnership, together with its successors and
permitted assigns.
"Additional Credit Party" means each Person that becomes
a Guarantor after the Closing Date, as provided in Section 7.12.
"Adjusted Eurodollar Rate" means, for the Interest
Period for each Eurodollar Loan comprising part of the same
borrowing (including conversions, extensions and renewals), a per
annum interest rate determined pursuant to the following formula:
Adjusted Eurodollar Rate = Eurodollar Rate
---------------------------------
1 - Eurodollar Reserve Percentage
"Administrative Agent" means NationsBank, N.A. (or any
successor thereto) or any successor administrative agent appointed
pursuant to Section 10.9.
"Agents" means the Administrative Agent and the
Collateral Agent and any successors and assigns in any such
capacity.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited
to all directors and officers of such Person), controlled by or
under direct or indirect common control with such Person. A Person
shall be deemed to control a corporation or partnership if such
Person possesses, directly or indirectly, the power (i) to vote 25%
or more of the securities having ordinary voting power for the
election of directors of such corporation or to vote 25% or more of
the partnership interests of such partnership or (ii) to direct or
cause direction of the management and policies of such corporation
or partnership, whether through the ownership of voting securities,
as managing or general partner, by contract or otherwise.
"Agency Services Address" means NationsBank, N.A., 6610
Rockledge Drive, 6th Floor, MD2-600-06-13, Bethesda, Maryland
20817-1876, Attn: Loan Administration, or such other address as may
be identified by written notice from the Administrative Agent to the
Borrower.
"Asset Disposition" means any disposition of any or all
of the assets (including without limitation (i) any sale or
refinancing of a Collateral Property or (ii) any sale of the capital
stock or partnership interests of a Subsidiary to an unrelated third
party) of any Credit Party whether by sale, lease, transfer or
otherwise.
"Assignment, Assumption and Consent Agreement" means
that certain Assignment, Assumption and Consent Agreement, dated as
of the date hereof, among the Borrower, the Guarantors, AAC II,
Inc., AAC II, L.P., the Administrative Agent and the Lenders.
"Assignment of Leases" means an assignment of all
leases, rents, income, issues and profits with respect to any
Collateral Property.
"Bankruptcy Code" means the Bankruptcy Code in Title 11
of the United States Code, as amended, modified, succeeded or
replaced from time to time.
"Base Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest whole multiple of
1/100 of 1%) equal to the greater of (a) the Federal Funds Rate in
effect on such day plus 1/2 of 1% or (b) the Prime Rate in effect on
such day. If for any reason the Administrative Agent shall have
determined (which determination shall be conclusive absent manifest
error) that it is unable after due inquiry to ascertain the Federal
Funds Rate for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance
with the terms hereof, the Base Rate shall be determined without
regard to clause (a) of the first sentence of this definition until
the circumstances giving rise to such inability no longer exist. Any
change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective on the effective date of such
change in the Prime Rate or the Federal Funds Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a
rate determined by reference to the Base Rate.
"Borrower" means AAC Funding Partnership III, a Delaware
general partnership, together with any successors and permitted
assigns.
"Business Day" means any day other than a Saturday, a
Sunday, a legal holiday or a day on which banking institutions are
authorized or required by law or other governmental action to close
in Charlotte, North Carolina, Bethesda, Maryland or New York, New
York; provided that in the case of Eurodollar Loans, such day is
also a day on which dealings between banks are carried on in U.S.
dollar deposits in the London interbank market.
"Businesses" has the meaning set forth in Section
6.18(a)(i).
"Capital Expenditures" means all expenditures of the
Credit Parties and their Subsidiaries which, in accordance with
GAAP, would be classified as capital expenditures, including,
without limitation, Capital Leases.
"Capital Lease" means, as applied to any Person, any
lease of any property (whether real, personal or mixed) by that
Person as lessee which, in accordance with GAAP, is or should be
accounted for as a capital lease on the balance sheet of that
Person.
"Cash Equivalents" means (a) securities issued or
directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof (provided that the
full faith and credit of the United States of America is pledged in
support thereof) having maturities of not more than twelve months
from the date of acquisition, (b) U.S. dollar denominated time and
demand deposits and certificates of deposit of (i) any Lender or any
of its Affiliates, (ii) any domestic commercial bank having capital
and surplus in excess of $500,000,000 or (iii) any bank whose
short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Moody's is at least P-1 or the equivalent
thereof (any such bank being an "Approved Bank"), in each case with
maturities of not more than 270 days from the date of acquisition,
(c) commercial paper and variable or fixed rate notes issued by any
Approved Bank (or by the parent company thereof) or any variable
rate notes issued by, or guaranteed by, any domestic corporation
rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or
the equivalent thereof) or better by Moody's and maturing within six
months of the date of acquisition, (d) repurchase agreements with a
bank or trust company (including any of the Lenders) or securities
dealer having capital and surplus in excess of $500,000,000 for
direct obligations issued by or fully guaranteed by the United
States of America in which a Credit Party shall have a perfected
first priority security interest (subject to no other Liens) and
having, on the date of purchase thereof, a fair market value of at
least 100% of the amount of the repurchase obligations and (e)
Investments, classified in accordance with GAAP as current assets,
in money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by financial
institutions having capital of at least $500,000,000 and the
portfolios of which are limited to Investments of the character
described in the foregoing subdivisions (a) through (d).
"Change of Control" means any one of the following: (a)
UDRLP shall fail to own at least 99% of the voting and economic
equity interests of the Borrower or AAC Funding III, Inc. shall fail
to own at least 1% of the voting and economic equity interests of
the Borrower, or (b) UDRT shall fail to own (i) at least 50.1% of
the voting interests of UDRLP and (ii) directly or indirectly, 60%
of the economic equity interests of UDRLP.
"Closing Date" means the date hereof.
"Coastal" means Coastal Anaheim Properties, LLC, a
Delaware limited liability company, together with its successors and
permitted assigns.
"Code" means the Internal Revenue Code of 1986, as
amended, and any successor statute thereto, as interpreted by the
rules and regulations issued thereunder, in each case as in effect
from time to time. References to sections of the Code shall be
construed also to refer to any successor sections.
"Collateral" means all collateral referred to in and
covered by the Collateral Documents.
"Collateral Agent" means NationsBank, N.A. (or any
successor thereto) or any successor collateral agent appointed
pursuant to Section 10.9.
"Collateral Documents" means the Security Agreement, the
Mortgage Documents and such other documents executed and delivered
in connection with the attachment and perfection of the Lenders'
security interests in the Collateral Properties and the personal
property owned by the Borrower and its Subsidiaries, including,
without limitation, the Mortgage Policies and UCC financing
statements.
"Collateral Guarantor" means any Guarantor that owns a
parcel of Collateral Property.
"Collateral Properties" means each Real Property as
designated as a Collateral Property on Schedule 6.21(a).
"Collateral Properties Leverage Ratio" means the ratio
of (i) the aggregate principal amount of the Term Loan outstanding
to (ii) Net Operating Income (less reserves of $300 per unit per
year) divided by 0.095.
"Commitments" means the commitment of each Lender with
respect to the Term Loan Committed Amount.
"Consolidated Basis" means, with respect to financial
statements of a Credit Party or any of its Subsidiaries, that such
financial statements are prepared on a consolidated basis consistent
with the audited financial statements of UDRT, dated December 31,
1997, prepared by Ernst & Young LLP.
"Credit Documents" means this Credit Agreement, the
Notes, any Joinder Agreement, the Collateral Documents, the Fee
Letter, the Assignment, Assumption and Consent Agreement, the
Intercreditor Agreement and all other related agreements and
documents issued or delivered hereunder or thereunder or pursuant
hereto or thereto.
"Credit Parties" means the Borrower and the Guarantors
and "Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication,
all of the obligations of the Credit Parties to the Lenders and the
Agents, whenever arising, under this Credit Agreement, the Notes,
the Collateral Documents or any of the other Credit Documents to
which the Borrower or any other Credit Party is a party.
"Debt Issuance" means the issuance of any Indebtedness
for borrowed money by a Credit Party or any of its Subsidiaries,
other than Indebtedness permitted by Section 8.1.
"Debt Service" means, as of any date of determination,
the principal and interest payments which would be due in the first
year of a loan in the amount of the aggregate principal balance
outstanding under the Notes as of the date of determination assuming
a debt constant for such loan of 10.07%.
"Debt Service Coverage Ratio" means the ratio of (a) Net
Operating Income (net of a reserve for Capital Expenditures of
$300.00 per unit per year) to (b) Debt Service.
"Default" means any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of
Default.
"Defaulting Lender" means, at any time, any Lender that,
(a) has failed to make a Loan or purchase a Participation Interest
required pursuant to the terms of this Credit Agreement (but only
for so long as such Loan is not made or such Participation Interest
is not purchased), (b) has failed to pay to the Agents or any Lender
an amount owed by such Lender pursuant to the terms of this Credit
Agreement (but only for so long as such amount has not been repaid)
or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver, trustee or
similar official.
"Dollars" and "$" means dollars in lawful currency of
the United States of America.
"Effective Date" means the date, as specified by the
Administrative Agent, on which the conditions set forth in Section
5.1 shall have been fulfilled (or waived in the sole discretion of
the Lenders) and on which the initial Loans shall have been made.
"80% Term Note" means the promissory note of the
Borrower in favor of NationsBank in the original principal amount of
$77,812,000 or any promissory note or notes made by the Borrower in
favor of any Lender in substitution for such promissory note,
individually or collectively, as appropriate, as such promissory
note or notes may be amended, modified, supplemented, extended,
renewed or replaced from time to time and as evidenced in the form
of Exhibit 2.1(g).
"Eligible Assignee" means (a) any Lender or any
Affiliate or subsidiary of a Lender and (b) any other commercial
bank, financial institution, institutional lender or "accredited
investor" (as defined in Regulation D of the Securities and Exchange
Commission) with capital of at least $500 million and with an office
in the United States.
"Environmental Claim" means any investigation, written
notice, violation, written demand, written allegation, action, suit,
injunction, judgment, order, consent decree, penalty, fine, lien,
proceeding, or written claim whether administrative, or judicial in
nature arising (a) pursuant to, or in connection with, an actual or
alleged violation of, any Environmental Law, (b) in connection with
any Hazardous Material, (c) from any assessment, abatement, removal,
remedial, corrective, or other response action in connection with an
Environmental Law or other order of a Governmental Authority or (d)
from any actual or alleged damage, injury, threat, or harm to
health, safety, natural resources, or the environment.
"Environmental Laws" means any current or future legal
requirement of any Governmental Authority pertaining to (a) the
protection of health, safety, and the indoor or outdoor environment,
(b) the conservation, management, or use of natural resources and
wildlife, (c) the protection or use of surface water and groundwater
or (d) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, release,
threatened release, abatement, removal, remediation or handling of,
or exposure to, any hazardous or toxic substance or material or (e)
pollution (including any release to land surface water and
groundwater) and includes, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986,
42 USC 9601 et seq., Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act of 1976 and Hazardous and
Solid Waste Amendment of 1984, 42 USC 6901 et seq., Federal Water
Pollution Control Act, as amended by the Clean Water Act of 1977, 33
USC 1251 et seq., Clean Air Act of 1966, as amended, 42 USC 7401 et
seq., Toxic Substances Control Act of 1976, 15 USC 2601 et seq.,
Hazardous Materials Transportation Act, 49 USC App. 1801 et seq.,
Occupational Safety and Health Act of 1970, as amended, 29 USC 651
et seq., Oil Pollution Act of 1990, 33 USC 2701 et seq., Emergency
Planning and Community Right-to-Know Act of 1986, 42 USC 11001 et
seq., National Environmental Policy Act of 1969, 42 USC 4321 et
seq., Safe Drinking Water Act of 1974, as amended, 42 USC 300(f) et
seq., any analogous implementing or successor law, and any
amendment, rule, regulation, order, or directive issued thereunder.
"Equity Issuance" means any issuance by a Credit Party
to any Person (other than a member of senior management, or an
entity composed of senior management approved by the Required
Lenders, of such Credit Party) of shares of its capital stock or
other equity interests (other than pursuant to (a) any dividend
reinvestment plan of a Credit Party, (b) any employee stock purchase
plan of a Credit Party or (c) any redemption of operating
partnership units of UDRLP), including pursuant to (i) the exercise
of options or warrants or (ii) the conversion of any debt securities
to equity.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended, and any successor statute thereto, as
interpreted by the rules and regulations thereunder, all as the same
may be in effect from time to time. References to sections of ERISA
shall be construed also to refer to any successor sections.
"ERISA Affiliate" means an entity, whether or not
incorporated, which is under common control with a Credit Party or
any of its Subsidiaries within the meaning of Section 4001(a)(14) of
ERISA, or is a member of a group which includes a Credit Party and
which is treated as a single employer under Sections 414(b) or (c)
of the Code.
"ERISA Event" means (i) with respect to any Plan, the
occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (ii)
the withdrawal of a Credit Party, any Subsidiary of a Credit Party
or any ERISA Affiliate from a Multiple Employer Plan during a plan
year in which it was a substantial employer (as such term is defined
in Section 4001(a)(2) of ERISA), or the termination of a Multiple
Employer Plan; (iii) the distribution of a notice of intent to
terminate or the actual termination of a Plan pursuant to Section
4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to
terminate or the actual termination of a Plan by the PBGC under
Section 4042 of ERISA; (v) any event or condition which might
constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Plan; (vi)
the complete or partial withdrawal of a Credit Party, any Subsidiary
of a Credit Party or any ERISA Affiliate from a Multiemployer Plan;
(vii) the conditions for imposition of a lien under Section 302(f)
of ERISA exist with respect to any Plan; or (viii) the adoption of
an amendment to any Plan requiring the provision of security to such
Plan pursuant to Section 307 of ERISA.
"Eurodollar Loan" means a Loan bearing interest based at
a rate determined by reference to the Adjusted Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page
3750 (or any successor page) as the London interbank offered rate
for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for
a term comparable to such Interest Period; provided, however, if
more than one rate is specified on Telerate Page 3750, the
applicable rate shall be the arithmetic mean of all such rates. If
for any reason such rate is not available, the term "Eurodollar
Rate" shall mean, for any Eurodollar Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the
London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period for a term comparable to such
Interest Period; provided, however, if more than one rate is
specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates.
"Eurodollar Reserve Percentage" means, for any day, that
percentage (expressed as a decimal) which is in effect from time to
time under Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as such regulation may be amended
from time to time, or any successor regulation, as the maximum
reserve requirement (including, without limitation, any basic,
supplemental, emergency, special, or marginal reserves) applicable
with respect to Eurocurrency liabilities as that term is defined in
Regulation D (or against any other category of liabilities that
includes deposits by reference to which the interest rate of
Eurodollar Loans is determined), whether or not any Lender has any
Eurocurrency liabilities subject to such reserve requirement at that
time. Eurodollar Loans shall be deemed to constitute Eurocurrency
liabilities and as such shall be deemed subject to reserve
requirements without benefits of credits for proration, exceptions
or offsets that may be available from time to time to a Lender. The
Adjusted Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Eurodollar Reserve
Percentage.
"Event of Default" means any of the events or
circumstances described in Section 9.1.
"Exchange Act" means the Securities Exchange Act of
1934, as amended, modified, succeeded or replaced from time to time,
and the rules and regulations promulgated thereunder.
"Federal Funds Rate" means, for any day, the rate per
annum (rounded upward, if necessary, to the nearest 1/100th of 1%)
equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Business Day next succeeding
such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day and (b) if no such
rate is so published on such next preceding Business Day, the
Federal Funds Rate for such day shall be the average rate quoted to
the Administrative Agent on such day on such transactions as
determined by the Administrative Agent.
"Fee Letter" means that certain letter agreement, dated
as of the Closing Date, among the Administrative Agent and the
Borrower, as amended, modified, supplemented or replaced from time
to time.
"Funded Debt" means, without duplication, the sum of (a)
all Indebtedness of UDRT and its Subsidiaries for borrowed money,
(b) all purchase money Indebtedness of UDRT and its Subsidiaries,
(c) the principal portion of all obligations of UDRT and its
Subsidiaries under Capital Leases, (d) all obligations, contingent
or otherwise, relative to the face amount of all letters of credit
(other than letters of credit supporting trade payables in the
ordinary course of business), whether or not drawn, and banker's
acceptances issued for the account of UDRT or any of its
Subsidiaries (it being understood that, to the extent an undrawn
letter of credit supports another obligation consisting of
Indebtedness, in calculating aggregated Indebtedness only such other
obligation shall be included), (e) all Guaranty Obligations of UDRT
and its Subsidiaries with respect to Funded Debt of another Person,
(f) all Funded Debt of another entity secured by a Lien on any
property of UDRT and its Subsidiaries whether or not such Funded
Debt has been assumed by UDRT or any of its Subsidiaries, (g) all
Funded Debt of any partnership or unincorporated joint venture to
the extent UDRT or one of its Subsidiaries is legally obligated or
has a reasonable expectation of being liable with respect thereto,
net of any assets of such partnership or joint venture and (h) the
principal balance outstanding under any synthetic lease, tax
retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product of UDRT or any of its
Subsidiaries where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating
lease in accordance with GAAP.
"Funds From Operations" means, for any Person and any
period, net income plus depreciation and amortization, excluding
gains (or losses) from debt restructuring and sales of properties,
as calculated in accordance with standards promulgated by the
National Association of Real Estate Investment Trusts as in effect
from time to time.
"GAAP" means generally accepted accounting principles in
the United States applied on a consistent basis and subject to
Section 1.3.
"Governmental Authority" means any Federal, state, local
or provincial court or governmental agency, authority,
instrumentality or regulatory body.
"Guarantor" means each of UDRT, UDRLP, Coastal, Regency
Park, Windward Point and AAC Funding II and each Additional Credit
Party which has executed a Joinder Agreement, together with their
successors and assigns.
"Guaranty" shall have the meaning set forth in Section
4.1.
"Guaranty Obligations" means, with respect to any
Person, without duplication, any obligations (other than
endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) guaranteeing or intended to
guarantee any Indebtedness of any other Person in any manner,
whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (a) to purchase any such
Indebtedness or other obligation or any property constituting
security therefor, (b) to advance or provide funds or other support
for the payment or purchase of such indebtedness or obligation or to
maintain working capital, solvency or other balance sheet condition
of such other Person (including, without limitation, maintenance
agreements, comfort letters, take or pay arrangements, put
agreements or similar agreements or arrangements) for the benefit of
the holder of Indebtedness of such other Person, (c) to lease or
purchase property, securities or services primarily for the purpose
of assuring the owner of such Indebtedness or (d) to otherwise
assure or hold harmless the owner of such Indebtedness or obligation
against loss in respect thereof. The amount of any Guaranty
Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding
principal amount (or maximum principal amount, if larger) of the
Indebtedness in respect of which such Guaranty Obligation is made.
"Hazardous Materials" means any substance, material or
waste defined or regulated in or under any Environmental Laws.
"Indebtedness" of any Person means, without duplication,
(a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, or upon which interest payments are customarily
made (c) all obligations of such Person under conditional sale or
other title retention agreements relating to property purchased by
such Person to the extent of the value of such property (other than
customary reservations or retentions of title under agreements with
suppliers entered into in the ordinary course of business), (d) all
obligations, other than intercompany items, of such Person issued or
assumed as the deferred purchase price of property or services
purchased by such Person which would appear as liabilities on a
balance sheet of such Person, (e) all Indebtedness of others secured
by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on, or
payable out of the proceeds of production from, property owned or
acquired by such Person, whether or not the obligations secured
thereby have been assumed, (f) all Guaranty Obligations of such
Person, (g) the principal portion of all obligations of such Person
under (i) Capital Leases and (ii) any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet
financing product of such Person where such transaction is
considered borrowed money indebtedness for tax purposes but is
classified as an operating lease in accordance with GAAP, (h) all
obligations of such Person in respect of interest rate protection
agreements, foreign currency exchange agreements, or other interest
or exchange rate or commodity price hedging agreements, (i) the
maximum amount of all performance and standby letters of credit
issued or bankers' acceptances facilities created for the account of
such Person and, without duplication, all drafts drawn thereunder
(to the extent unreimbursed), and (j) all preferred stock issued by
such Person and required by the terms thereof to be redeemed, or for
which mandatory sinking fund payments are due, by a fixed date. The
Indebtedness of any Person shall include the Indebtedness of any
partnership or unincorporated joint venture in which such Person is
legally obligated or has a reasonable expectation of being liable
with respect thereto.
"Intangible Assets" of any Person means at any date the
amount of (i) all write-ups (other than write-ups resulting from
write-ups of assets of a going concern business made within twelve
months after the acquisition of such business) in the book value of
any asset owned by such Person and (ii) all unamortized debt
discount and expense, unamortized deferred charges, capitalized
start-up costs, goodwill, patents, licenses, trademarks, trade
names, copyrights, organization or developmental expenses, covenants
not to compete and other intangible items.
"Intercreditor Agreement" means that certain
Intercreditor Agreement, dated as of the date hereof, among UDRT,
UDRLP and the Administrative Agent, as amended, modified,
supplemented or restated from time to time.
"Interest Payment Date" means the first day of each
calendar month beginning with the first of such dates to occur after
the month containing the Closing Date, and the Term Loan Maturity
Date.
"Interest Period" means, as to Eurodollar Loans, a
period of one, two, three or six months' duration, as the Borrower
may elect, commencing, in each case, on the date of the borrowing
(including continuations and conversions thereof); provided,
however, (a) if any Interest Period would end on a day which is not
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day (except that where the next succeeding
Business Day falls in the next succeeding calendar month, then on
the next preceding Business Day), (b) no Interest Period shall
extend beyond the Term Loan Maturity Date, and (c) where an Interest
Period begins on a day for which there is no numerically
corresponding day in the calendar month in which the Interest Period
is to end, such Interest Period shall end on the last Business Day
of such calendar month.
"Investment" in any Person means (a) the acquisition
(whether for cash, property, services, assumption of Indebtedness,
securities or otherwise) of assets, shares of capital stock, bonds,
notes, debentures, partnership, joint ventures or other ownership
interests or other securities of such other Person or (b) any
deposit with, or advance, loan or other extension of credit to, such
Person (other than deposits made in connection with the purchase of
equipment or other assets in the ordinary course of business) or (c)
any other capital contribution to or investment in such Person,
including, without limitation, any Guaranty Obligation (including
any support for a letter of credit issued on behalf of such Person)
incurred for the benefit of such Person.
"Joinder Agreement" means a Joinder Agreement
substantially in the form of Exhibit 7.12.
"Lender" means any of the Persons identified as a
"Lender" on the signature pages hereto, and any Person which may
become a Lender by way of assignment in accordance with the terms
hereof, together with their successors and permitted assigns.
"Lien" means any mortgage, pledge, hypothecation,
assignment, deposit arrangement, security interest, encumbrance,
lien (statutory or otherwise), preference, priority or charge of any
kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any financing
or similar statement or notice filed under the Uniform Commercial
Code as adopted and in effect in the relevant jurisdiction or other
similar recording or notice statute, and any lease in the nature
thereof).
"Loan" or "Loans" means the Term Loans (or a portion of
any Term Loan), individually or collectively, as appropriate.
"Material Adverse Effect" means a material adverse
effect on (a) the business, assets, operations, condition (financial
or otherwise) or prospects of any of the Credit Parties or any of
their subsidiaries, (b) the ability of a Credit Party to perform its
respective obligations under this Credit Agreement or any of the
other Credit Documents, or (c) the validity or enforceability of
this Credit Agreement, any of the other Credit Documents, or the
rights and remedies of the Lenders hereunder or thereunder taken as
a whole.
"Moody's" means Moody's Investors Service, Inc., or any
successor or assignee of the business of such company in the
business of rating securities.
"Mortgage Documents" means the Mortgages, the Mortgage
Policies and such other documents and agreements executed or
delivered in connection with the Collateral Properties.
"Mortgage Policies" means ALTA or other appropriate form
mortgagee title insurance policies issued by the Title Insurance
Company in amounts reasonably satisfactory to the Collateral Agent
with respect to each Collateral Property, assuring the Collateral
Agent that the applicable Mortgages create valid and enforceable
first priority mortgage liens on the respective Collateral
Properties, free and clear of all defects and encumbrances except
Permitted Liens, containing such coverage and endorsements as shall
be reasonably satisfactory to the Collateral Agent and for any other
matters that the Collateral Agent may request and providing
affirmative insurance and such reinsurance as the Collateral Agent
may request, all of the foregoing in form and substance reasonably
satisfactory to the Collateral Agent
"Mortgages" means, collectively, mortgages, deeds of
trust or deeds to secure debt encumbering the fee interests of the
Borrower and each Collateral Guarantor in each Collateral Property;
and "Mortgage" means any one of the them.
"Multiemployer Plan" means a Plan which is a
multiemployer plan as defined in Sections 3(37) or 4001(a)(3) of
ERISA.
"Multiple Employer Plan" means a Plan (other than a
Multiemployer Plan) which a Credit Party or any ERISA Affiliate and
at least one employer other than a Credit Party or any ERISA
Affiliate are contributing sponsors.
"NationsBank" means NationsBank, N.A., and its
successors and assigns.
"Net Cash Proceeds" means the aggregate cash proceeds
received from an Asset Disposition, an Equity Issuance or a Debt
Issuance net of (a) reasonable and customary transaction costs
payable to third parties, (b) taxes paid or a good faith estimate of
the taxes payable with respect to such proceeds, (c) any reserve for
adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP, provided that any subsequent
reversal or reduction of such reserves shall constitute additional
Net Cash Proceeds, (d) any proceeds from a Debt Issuance used to
refinance maturing Indebtedness, provided that such maturing
Indebtedness is permitted by Section 8.1 and (e) any proceeds from
an Asset Disposition reinvested in other real property in a manner
sufficient to defer (under Section 1031 of the Code) taxes in any
gain realized from the sale of such Collateral Property.
"Net Income" means, for any period, the net income after
taxes for such period of UDRT and its Subsidiaries on a consolidated
basis, as determined in accordance with GAAP.
"Net Operating Income" means, for the four fiscal
quarter period ending as of the date of determination, (a) for
purposes of calculating compliance with Sections 7.2(b) and (d),
earnings of the Credit Parties before deduction of interest, income
taxes, depreciation and amortization relating to the Real Properties
held at least six months, as determined in accordance with GAAP and
(b) for purposes of calculating compliance with Sections 7.2(e) and
(f), earnings of the Credit Parties before deduction of interest,
income taxes, depreciation and amortization relating to the
Collateral Properties, as determined in accordance with GAAP.
"Non-Excluded Taxes" has the meaning set forth in
Section 3.13.
"Note" or "Notes" means the Term Notes, individually or
collectively, as appropriate.
"Notice of Continuation/Conversion" means a request by
the Borrower to continue an existing Eurodollar Loan to a new
Interest Period or to convert a Eurodollar Loan to a Base Rate Loan
or a Base Rate Loan to a Eurodollar Loan, in the form of Exhibit
2.1(e).
"Participation Interest" means the Loans advanced by a
Lender by way of a purchase of a participation in any Loans as
provided in Section 3.8.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereof.
"Permitted Investments" means Investments which are (a)
cash or Cash Equivalents, (b) accounts receivable created, acquired
or made in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms, (c)
Investments by one Credit Party in another Credit Party as permitted
hereunder, (d) earnest money and similar deposits in respect of real
property made in the ordinary course of business, (e) temporary
Investments in Cash Equivalents and Investments in Real Properties
with proceeds from any Asset Disposition made in accordance with
Section 1031 of the Code and (f) the Investments set forth on
Schedule 8.6.
"Permitted Liens" means (a) Liens securing Credit Party
Obligations, (b) Liens for taxes not yet due or Liens for taxes
being contested in good faith by appropriate proceedings for which
adequate reserves determined in accordance with GAAP have been
established (and as to which the property subject to any such Lien
is not yet subject to foreclosure, sale or loss on account thereof),
(c) Liens in respect of property imposed by law arising in the
ordinary course of business such as materialmens', mechanics',
warehousemens', carriers', landlords' and other nonconsensual
statutory Liens which are not yet due and payable or which are being
contested in good faith by appropriate proceedings for which
adequate reserves determined in accordance with GAAP have been
established (and as to which the property subject to any such Lien
is not yet subject to foreclosure, sale or loss on account thereof);
provided, however, that such Liens may not secure Indebtedness in
excess of 5% of the then outstanding Term Loans, (d) Liens arising
from good faith deposits in connection with or to secure performance
of tenders, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations incurred in the
ordinary course of business (other than obligations in respect of
the payment of borrowed money), (e) Liens arising from good faith
deposits in connection with or to secure performance of statutory
obligations and surety and appeal bonds, (f) easements,
rights-of-way, restrictions (including zoning restrictions), matters
of plat, minor defects or irregularities in title, license or lease
agreements for laundry, cable tv, telephone or other comparable
items and other similar charges or encumbrances not, in any material
respect, impairing the use of the encumbered property for its
intended purposes, (g) judgment Liens that would not constitute an
Event of Default, (h) Liens arising by virtue of any statutory or
common law provision relating to bankers' liens, rights of setoff or
similar rights as to deposit accounts or other funds maintained with
a creditor depository institution, (i) Liens existing on the date
hereof and identified on Schedule 8.2; provided that no such Lien
shall extend to any property other than the property subject thereto
on the Closing Date and (j) Permitted Encumbrances (as defined in
any Mortgage Document).
"Person" means any individual, partnership, joint
venture, firm, corporation, limited liability company, association,
trust or other enterprise (whether or not incorporated), or any
Governmental Authority.
"Plan" means any employee benefit plan (as defined in
Section 3(3) of ERISA) which is covered by ERISA and with respect to
which a Credit Party or any ERISA Affiliate is (or, if such plan
were terminated at such time, would under Section 4069 of ERISA be
deemed to be) an "employer" within the meaning of Section 3(5) of
ERISA.
"Prime Rate" means the per annum rate of interest
established from time to time by the Administrative Agent at its
principal office in Charlotte, North Carolina (or such other
principal office of the Administrative Agent as communicated in
writing to the Borrower and the Lenders) as its Prime Rate. Any
change in the interest rate resulting from a change in the Prime
Rate shall become effective as of 12:01 a.m. of the Business Day on
which each change in the Prime Rate is announced by the
Administrative Agent. The Prime Rate is a reference rate used by the
Administrative Agent in determining interest rates on certain loans
and is not intended to be the lowest rate of interest charged on any
extension of credit to any debtor.
"Real Properties" means all real property assets of the
Credit Parties and their Subsidiaries and "Real Property" means any
one of them.
"Regency Park" means Regency Park, L.P., an Indiana
limited partnership, together with its successors and permitted
assigns.
"Regulation D, U, or X" means Regulation D, U or X,
respectively, of the Board of Governors of the Federal Reserve
System as from time to time in effect and any successor to all or a
portion thereof.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the
notice requirement has been waived by regulation.
"Required Lenders" means (a) if there are only two
Lenders or less, all the Lenders and (b) if there are more than two
Lenders, the Lenders whose aggregate Credit Exposure (as hereinafter
defined) constitutes more than 66% of the Credit Exposure of all
Lenders at such time; provided, however, that if any Lender shall be
a Defaulting Lender at such time then there shall be excluded from
the determination of Required Lenders the aggregate principal amount
of Credit Exposure of such Lender at such time. For purposes of the
preceding sentence, the term "Credit Exposure" as applied to each
Lender shall mean (a) at any time prior to the termination of the
Commitments, the sum of the Term Loan Commitment Percentage of such
Lender multiplied by the Term Loan Committed Amount and (b) at any
time after the termination of the Commitments, the principal balance
of the outstanding Loans of such Lender.
"Requirement of Law" means, as to any Person, the
articles or certificate of incorporation and by-laws or other
organizational or governing documents of such Person, and any law,
treaty, rule or regulation or final, non-appealable determination of
an arbitrator or a court or other Governmental Authority, in each
case applicable to or binding upon such Person or to which any of
its material property is subject.
"Revolving Notes" and "Revolving Note" means the Term
Notes and Term Note, respectively.
"S&P" means Standard & Poor's Ratings Group, a division
of McGraw Hill, Inc., or any successor or assignee of the business
of such division in the business of rating securities.
"Securities Act" means the Securities Act of 1933, as
amended, modified, succeeded or replaced from time to time, and the
rules and regulations promulgated thereunder.
"Security Agreement" means that certain security
agreement executed and delivered by the Borrower and the
Subsidiaries of the Borrower from time to time party thereto in
favor of the Collateral Agent, for the benefit of the Lenders, to
secure their obligations under the Credit Documents, as the same may
be amended, modified, extended, renewed, restated or replaced from
time to time.
"Single Employer Plan" means any Plan which is covered
by Title IV of ERISA, but which is not a Multiemployer Plan or a
Multiple Employer Plan.
"SMSA" means Standard Metropolitan Statistical Area as
defined by the United States Census Bureau.
"Solvent" means, with respect to any Person as of a
particular date, that on such date (a) such Person is able to pay
its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (b)
such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as
such debts and liabilities mature in their ordinary course, (c) such
Person is not engaged in a business or a transaction, and is not
about to engage in a business or a transaction, for which such
Person's assets would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry
in which such Person is engaged or is to engage, (d) the fair value
of the assets of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities,
of such Person and (e) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they
become absolute and matured. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will
be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Subordinated Debt" means unsecured Indebtedness issued
by a Credit Party on a subordinated basis, all of the terms and
conditions of which are acceptable to the Lenders in their sole
discretion.
"Subsidiary" means, as to any Person, (a) any
corporation more than 50% of whose stock of any class or classes
having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation (irrespective of
whether or not at the time, any class or classes of such corporation
shall have or might have voting power by reason of the happening of
any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries, and (b) any partnership,
association, joint venture or other entity in which such Person
directly or indirectly through Subsidiaries has more than a 50%
equity interest at any time.
"Tangible Fair Market Value" means, with respect to the
Credit Parties taken as a whole, the Net Operating Income associated
with the Real Properties held at least six months (net of reserves
of $300.00 per unit per year) divided by 0.095 plus the purchase
price of Real Properties held less than six months plus 40% of costs
incurred on Real Properties under development plus cash and Cash
Equivalents.
"Tangible Net Worth" means, as of any date of
determination, net worth of UDRLP and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP less the
GAAP amount of all organizational expenses, patents, copyrights,
trademarks, licenses, goodwill, covenants not to compete, research
and development costs, training costs, other intangible assets and
all unamortized debt discount, plus Subordinated Debt of UDRLP and
its Subsidiaries.
"Term Loan Commitment Percentage" means, for each
Lender, the percentage identified as its Term Loan Commitment
Percentage on Schedule 1.1(c), as such percentage may be modified in
connection with any assignment made in accordance with the
provisions of Section 11.3.
"Term Loan Committed Amount" means NINETY-SEVEN MILLION
TWO HUNDRED SIXTY-FIVE THOUSAND DOLLARS ($97,265,000).
"Term Loan Maturity Date" means December 7, 1999.
"Term Loans" means the Term Loans made to the Borrower
pursuant to Section 2.1.
"Term Note" or "Term Notes" means the 80% Term Note, the
20% Term Note and any other promissory notes of the Borrower in
favor of the Lenders evidencing the Term Loans provided pursuant to
Section 2.1, individually or collectively, as appropriate, as such
promissory notes may be amended, modified, supplemented, extended,
renewed or replaced from time to time and as evidenced in the form
of Exhibit 2.1(g).
"Termination Event" means (a) with respect to any Single
Employer Plan, the occurrence of a Reportable Event or the
substantial cessation of operations (within the meaning of Section
4062(e) of ERISA); (b) the withdrawal of any Credit Party or any of
its Subsidiaries or any ERISA Affiliate from a Multiple Employer
Plan during a plan year in which it was a substantial employer (as
such term is defined in Section 4001(a)(2) of ERISA), or the
termination of a Multiple Employer Plan; (c) the distribution of a
notice of intent to terminate or the actual termination of a Plan
pursuant to Section 4041(a)(2) or 4041A of ERISA; (d) the
institution of proceedings to terminate or the actual termination of
a Plan by the PBGC under Section 4042 of ERISA; (e) any event or
condition which might reasonably constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan; or (f) the complete or partial
withdrawal of any Credit Party or any of its Subsidiaries or any
ERISA Affiliate from a Multiemployer Plan.
"Title Insurance Company" means a title insurer
reasonably satisfactory to the Collateral Agent.
"20% Term Note" means the promissory note of the
Borrower in favor of NationsBank in the original principal amount of
$19,453,000 or any promissory note or notes made by the Borrower in
favor of any Lender in substitution for such promissory note,
individually or collectively, as appropriate, as such promissory
note or notes may be amended, modified, supplemented, extended,
renewed or replaced from time to time and as evidenced in the form
of Exhibit 2.1(g). The 20% Term Note represents Indebtedness
incurred under the Existing Credit Agreement to finance the
Collateral Properties known as Mountain View Apartments and
Grandview Terrace Apartments.
"UDRT Facility" means that certain credit facility
provided by NationsBank and other lenders to UDRT, as evidenced by a
Three Year Credit Agreement and a 364-Day Credit Agreement, each
dated as of August 4, 1997, among UDRT, the guarantors party
thereto, the lenders party thereto and NationsBank.
"Unsecured NationsBank Loan" means the unsecured term
loan provided by NationsBank to UDRT in the aggregate principal
amount of $25,000,000.
"Windward Point" means Windward Point, LLC, a California
limited liability company, together with successors and permitted
assigns.
"Year 2000 Problem" means any risk (a) that any computer
hardware, software or other equipment used by a Credit Party or any
of its Subsidiaries (or by any of its suppliers, vendors or
customers that is material to the business of such Credit Party or
Subsidiary) will not function as effectively and reliably on and
after January 1, 2000 as it does prior to January 1, 2000 or (b)
that any computer applications used by a Credit Party may not be
able to recognize and properly perform date-sensitive functions
after December 31, 1999, to the extent any such risk specified in
items (a) or (b) above would cause or be reasonably expected to
cause a Material Adverse Effect.
1.2 Computation of Time Periods and Other Definition Provisions.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding." References in this Credit Agreement to "Articles", "Sections",
"Schedules" or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits
of or to this Credit Agreement unless otherwise specifically provided.
1.3 Accounting Terms.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All financial statements delivered to the Lenders hereunder shall be
accompanied by a statement from the Borrower that GAAP has not changed since the
most recent financial statements delivered by the Borrower to the Lenders or if
GAAP has changed describing such changes in detail and explaining how such
changes affect the financial statements. All calculations made for the purposes
of determining compliance with this Credit Agreement shall (except as otherwise
expressly provided herein) be made by application of GAAP applied on a basis
consistent with the most recent annual or quarterly financial statements
delivered pursuant to Section 7.1 (or, prior to the delivery of the first
financial statements pursuant to Section 7.1, consistent with the financial
statements described in Section 5.1(d)); provided, however, if (a) the Borrower
shall object to determining such compliance on such basis at the time of
delivery of such financial statements due to any change in GAAP or the rules
promulgated with respect thereto or (b) either Agent or the Required Lenders
shall so object in writing within 60 days after delivery of such financial
statements (or after the Lenders have been informed of the change in GAAP
affecting such financial statements, if later), then such calculations shall be
made on a basis consistent with the most recent financial statements delivered
by the Borrower to the Lenders as to which no such objection shall have been
made.
SECTION 2
CREDIT FACILITY
2.1 Term Loans.
(a) Term Loan Commitment. Subject to the terms and
conditions set forth herein, all outstanding Revolving Loans (as
defined in the Existing Credit Agreement) on the Effective Date
shall be converted to a Term Loan (the "Term Loan"). The Borrower
may not repay and then reborrow all or any portion of the Term Loan.
(b) Continuation of Base Rate and Eurodollar Loans. All
Base Rate Loans and Eurodollar Loans outstanding immediately prior
to the Effective Date shall continue as Base Rate Loans and
Eurodollar Loans, respectively, on the Effective Date.
(c) [Intentionally Omitted].
(d) References to Revolving Loans and Revolving Notes.
As of the Effective Date, all references in the Credit Documents to
a Revolving Loan or the Revolving Loans and to a Revolving Note or
the Revolving Notes shall refer to the Term Loan and the Term Note,
respectively.
(e) Continuations and Conversions. The Borrower shall
have the option, on any Business Day, to continue existing
Eurodollar Loans for a subsequent Interest Period, to convert Base
Rate Loans into Eurodollar Loans or to convert Eurodollar Loans into
Base Rate Loans; provided, however, that (i) each such continuation
or conversion must be requested by the Borrower pursuant to a
written Notice of Continuation/Conversion, in the form of Exhibit
2.1(e), in compliance with the terms set forth below, (ii) except as
provided in Section 3.11, Eurodollar Loans may only be continued or
converted into Base Rate Loans on the last day of the Interest
Period applicable thereto, (iii) Eurodollar Loans may not be
continued nor may Base Rate Loans be converted into Eurodollar Loans
during the existence and continuation of a Default or Event of
Default and (iv) any request to continue a Eurodollar Loan that
fails to comply with the terms hereof or any failure to request a
continuation of a Eurodollar Loan at the end of an Interest Period
shall result in a conversion of such Eurodollar Loan to a Base Rate
Loan on the last day of the applicable Interest Period. Each
continuation or conversion must be requested by the Borrower no
later than 11:00 a.m. (A) one Business Day prior to the date for a
requested conversion of a Eurodollar Loan to a Base Rate Loan or (B)
three Business Days prior to the date for a requested continuation
of a Eurodollar Loan or conversion of a Base Rate Loan to a
Eurodollar Loan, in each case pursuant to a written Notice of
Continuation/Conversion submitted to the Administrative Agent which
shall set forth (x) whether the Borrower wishes to continue or
convert such Loans and (y) if the request is to continue a
Eurodollar Loan or convert a Base Rate Loan to a Eurodollar Loan,
the Interest Period applicable thereto.
(f) Minimum Amounts. Each request for a conversion or
continuation shall be subject to the requirements that (i) each
conversion or continuation of a Loan shall be in a minimum amount of
$1,000,000 and in integral multiples of $100,000 in excess thereof
or the remaining amount of the Term Loan and (ii) no more than four
Eurodollar Loans shall be outstanding hereunder at any one time. For
the purposes of this Section, all Eurodollar Loans with the same
Interest Periods shall be considered as one Eurodollar Loan, but
Eurodollar Loans with different Interest Periods, even if they begin
on the same date, shall be considered as separate Eurodollar Loans.
(g) Notes. The Term Loan made by each Lender shall be
evidenced by one or more duly executed promissory notes of the
Borrower to each Lender in the aggregate face amount of its Term
Loan Commitment Percentage of the Term Loan Committed Amount in
substantially the form of Exhibit 2.1(g).
SECTION 3
GENERAL PROVISIONS APPLICABLE TO LOANS
3.1 Interest.
(a) Interest Rate. All Base Rate Loans shall accrue
interest at the Base Rate plus three-fourths of one percent (.75%)
per annum and all Eurodollar Loans shall accrue interest at the
Adjusted Eurodollar Rate plus two percent (2.00%) per annum.
(b) Default Rate of Interest. Upon the occurrence, and
during the continuance, of an Event of Default, the principal of
and, to the extent permitted by law, interest on the Loans and any
other amounts owing hereunder or under the other Credit Documents
(including without limitation fees and expenses) shall bear
interest, payable on demand, at a per annum rate equal to 2% plus
the rate which would otherwise be applicable (or if no rate is
applicable, then the rate for Base Rate Loans plus two percent (2%)
per annum).
(c) Interest Payments. Interest on Loans shall be due
and payable in arrears on each Interest Payment Date. If an Interest
Payment Date falls on a date which is not a Business Day, such
Interest Payment Date shall be deemed to be the next succeeding
Business Day, except that in the case of Eurodollar Loans where the
next succeeding Business Day falls in the next succeeding calendar
month, then on the next preceding Business Day.
3.2 Place and Manner of Payments.
All payments of principal, interest, fees, expenses and other
amounts to be made by a Credit Party under this Agreement shall be received not
later than 2:00 p.m. on the date when due, in Dollars and in immediately
available funds, by the Administrative Agent at its offices in Bethesda,
Maryland. Payments received after such time shall be deemed to have been
received on the next Business Day. The Borrower shall, at the time it makes any
payment under this Agreement, specify to the Administrative Agent the Loans,
fees or other amounts payable by the Borrower hereunder to which such payment is
to be applied (and in the event that it fails to specify, or if such application
would be inconsistent with the terms hereof, the Administrative Agent shall,
subject to Section 3.7, distribute such payment to the Lenders in such manner as
the Administrative Agent may deem appropriate). The Administrative Agent will
distribute any such payment to the Lenders on the day received if such payment
is received prior to 2:00 p.m.; otherwise the Administrative Agent will
distribute such payment to the Lenders on the next succeeding Business Day.
Whenever any payment hereunder shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day (subject to accrual of interest and fees for the period of such
extension), except that in the case of Eurodollar Loans, if the extension would
cause the payment to be made in the next following calendar month, then such
payment shall instead be made on the next preceding Business Day.
3.3 Prepayments.
(a) Voluntary Prepayments. The Borrower shall have the
right to prepay Loans in whole or in part from time to time without
premium or penalty; provided, however, that (i) Eurodollar Loans may
only be prepaid on three Business Days' prior written notice to the
Administrative Agent and any prepayment of Eurodollar Loans will be
subject to Section 3.14 and (ii) each such partial prepayment of
Loans shall be in the minimum principal amount of $1,000,000 and
integral multiples of $100,000 in excess thereof.
(b) Mandatory Prepayments.
(i) [Intentionally Omitted].
(ii) Asset Disposition. Immediately upon
receipt by a Credit Party or any of its Subsidiaries of
proceeds from any Asset Disposition after the Closing
Date, the Borrower shall forward 100% of the Net Cash
Proceeds of such Asset Disposition to the Lenders as a
prepayment of the Loans (to be applied as set forth in
Section 3.3(c) below).
(iii) Issuances of Equity. Immediately upon
receipt by a Credit Party or any of its Subsidiaries of
proceeds from any Equity Issuance after the Closing
Date, the Borrower shall forward 100% of the Net Cash
Proceeds of such Equity Issuance to the Lenders as a
prepayment of the Loans (to be applied as set forth in
Section 3.3(c) below).
(iv) Issuance of Debt. Immediately upon
receipt by a Credit Party or any of its Subsidiaries of
proceeds from any Debt Issuance, the Borrower shall
forward 100% of the Net Cash Proceeds of such Debt
Issuance to the Lenders as a prepayment of the Loans (to
be applied as set forth in Section 3.3(c) below).
(c) Application of Prepayments. Prepayments pursuant to
Section 3.3(b)(ii), (iii) and (iv) shall be applied to the Term Loan
or to the Unsecured NationsBank Loan, as the Borrower may specify
or, if the Borrower has not so specified, to the Term Loan.
Prepayments on the Term Loan shall be applied first to that portion
of the Term Loan evidenced by the 20% Note and second to that
portion of the Term Loan evidenced by the 80% Note. Within the
parameters set forth in the immediately preceding sentence, such
prepayments on the Term Loan shall be applied as specified by the
Borrower or, if the Borrower has not so specified, first to Base
Rate Loans and then to Eurodollar Loans in direct order of Interest
Period maturities. All prepayments hereunder shall be subject to
Section 3.14.
3.4 Commitment Fee.
The Borrower agrees to pay to the Administrative Agent, for its own
account, a commitment fee as agreed to between the Borrower and the
Administrative Agent in the Fee Letter.
3.5 Payment in full at Maturity.
On the Term Loan Maturity Date, the entire outstanding principal
balance of the Term Loan, together with accrued but unpaid interest and all
other sums owing with respect thereto, shall be due and payable in full, unless
accelerated sooner pursuant to Section 9.
3.6 Computations of Interest and Fees.
(a) All computations of interest and fees hereunder
shall be made on the basis of the actual number of days elapsed over
a year of 360 days. Interest shall accrue from and include the date
of borrowing (or continuation or conversion) but exclude the date of
payment.
(b) It is the intent of the Lenders and the Credit
Parties to conform to and contract in strict compliance with
applicable usury law from time to time in effect. All agreements
between the Lenders and the Borrower are hereby limited by the
provisions of this paragraph which shall override and control all
such agreements, whether now existing or hereafter arising and
whether written or oral. In no way, nor in any event or contingency
(including but not limited to prepayment or acceleration of the
maturity of any obligation), shall the interest taken, reserved,
contracted for, charged, or received under this Credit Agreement,
under the Notes or otherwise, exceed the maximum nonusurious amount
permissible under applicable law. If, from any possible construction
of any of the Credit Documents or any other document, interest would
otherwise be payable in excess of the maximum nonusurious amount,
any such construction shall be subject to the provisions of this
paragraph and such interest shall be automatically reduced to the
maximum nonusurious amount permitted under applicable law, without
the necessity of execution of any amendment or new document. If any
Lender shall ever receive anything of value which is characterized
as interest on the Loans under applicable law and which would, apart
from this provision, be in excess of the maximum lawful amount, an
amount equal to the amount which would have been excessive interest
shall, without penalty, be applied to the reduction of the principal
amount owing on the Loans and not to the payment of interest, or
refunded to the Borrower or the other payor thereof if and to the
extent such amount which would have been excessive exceeds such
unpaid principal amount of the Loans. The right to demand payment of
the Loans or any other indebtedness evidenced by any of the Credit
Documents does not include the right to receive any interest which
has not otherwise accrued on the date of such demand, and the
Lenders do not intend to charge or receive any unearned interest in
the event of such demand. All interest paid or agreed to be paid to
the Lenders with respect to the Loans shall, to the extent permitted
by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term (including any renewal or extension)
of the Loans so that the amount of interest on account of such
indebtedness does not exceed the maximum nonusurious amount
permitted by applicable law.
3.7 Pro Rata Treatment.
Except to the extent otherwise provided herein, the initial Term
Loan borrowing, each payment or prepayment of principal of the Term Loan, and
each conversion or continuation of any Loan, shall (except as otherwise provided
in Section 3.11) be allocated pro rata among the Lenders in accordance with the
respective Term Loan Commitment Percentages of such Lenders (or, if the
Commitments of such Lenders have expired or been terminated, in accordance with
the respective principal amounts of the outstanding Loans and Participation
Interests of such Lenders); provided that in the event any amount paid to any
Lender pursuant to this Section 3.7 is rescinded or must otherwise be returned
by the Administrative Agent, each Lender shall, upon the request of the
Administrative Agent, repay to the Administrative Agent the amount so paid to
such Lender, with interest for the period commencing on the date such payment is
returned by the Administrative Agent until the date the Administrative Agent
receives such repayment at a rate per annum equal to, during the period to but
excluding the date two Business Days after such request, the Federal Funds Rate,
and thereafter, at the Base Rate plus four percent (4%) per annum.
3.8 Sharing of Payments.
The Lenders agree among themselves that, except to the extent
otherwise provided herein, in the event that any Lender shall obtain payment in
respect of any Loan or any other obligation owing to such Lender under this
Credit Agreement through the exercise of a right of setoff, banker's lien or
counterclaim, or pursuant to a secured claim under Section 506 of the Bankruptcy
Code or other security or interest arising from, or in lieu of, such secured
claim, received by such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means, in excess of its pro rata
share of such payment as provided for in this Credit Agreement, such Lender
shall promptly pay in cash or purchase from the other Lenders a participation in
such Loans and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all Lenders
share such payment in accordance with their respective ratable shares as
provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by payment in cash or a
repurchase of a participation theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Lender whose payment shall have been rescinded or otherwise restored.
The Borrower agrees that any Lender so purchasing such a participation may, to
the fullest extent permitted by law, exercise all rights of payment, including
setoff, banker's lien or counterclaim, with respect to such participation as
fully as if such Lender were a holder of such Loan or other obligation in the
amount of such participation. Except as otherwise expressly provided in this
Credit Agreement, if any Lender or an Agent shall fail to remit to an Agent or
any other Lender an amount payable by such Lender or such Agent to such Agent or
such other Lender pursuant to this Credit Agreement on the date when such amount
is due, such payments shall be made together with interest thereon for each date
from the date such amount is due until the date such amount is paid to such
Agent or such other Lender at a rate per annum equal to the Federal Funds Rate.
If under any applicable bankruptcy, insolvency or other similar law, any Lender
receives a secured claim in lieu of a setoff to which this Section 3.8 applies,
such Lender shall, to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights of the Lenders under
this Section 3.8 to share in the benefits of any recovery on such secured claim.
3.9 Capital Adequacy.
If, after the date hereof, any Lender has determined that the
adoption or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or administration
of, any applicable law, rule or regulation regarding capital adequacy, or
compliance by such Lender, or its parent corporation, with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's (or parent corporation's)
capital or assets as a consequence of its commitments or obligations hereunder
to a level below that which such Lender, or its parent corporation, could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's (or parent corporation's) policies with respect to
capital adequacy), then, upon notice from such Lender to the Borrower and the
Administrative Agent, within 90 days of such event occurring, the Borrower shall
be obligated to pay to such Lender such additional amount or amounts as will
compensate such Lender on an after-tax basis (after taking into account
applicable deductions and credits in respect of the amount indemnified) for such
reduction. Each determination by any such Lender of amounts owing under this
Section shall, absent manifest error, be conclusive and binding on the parties
hereto; provided, however, that such determination shall be made on a reasonable
basis. This covenant shall survive for one year following the termination of
this Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.
3.10 Inability To Determine Interest Rate.
If prior to the first day of any Interest Period, the Administrative
Agent shall have reasonably determined in good faith (which determination shall
be conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the Adjusted Eurodollar Rate for such Interest Period, the
Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter, and will also give
prompt written notice to the Borrower when such conditions no longer exist. If
such notice is given (a) any Eurodollar Loans requested to be made on the first
day of such Interest Period shall be made as Base Rate Loans and (b) any Loans
that were to have been converted on the first day of such Interest Period to or
continued as Eurodollar Loans shall be converted to or continued as Base Rate
Loans. Until such notice has been withdrawn by the Agent, no further Eurodollar
Loans shall be made or continued as such, nor shall the Borrower have the right
to convert Base Rate Loans to Eurodollar Loans.
3.11 Illegality.
Notwithstanding any other provision herein, if the adoption of or
any change in any Requirement of Law or in the interpretation or application
thereof occurring after the Closing Date shall make it unlawful for any Lender
to make or maintain Eurodollar Loans as contemplated by this Credit Agreement,
(a) such Lender shall promptly give written notice of such circumstances to the
Borrower and the Administrative Agent (which notice shall be promptly withdrawn
in a writing addressed to the Borrower and the Administrative Agent whenever
such circumstances no longer exist), (b) the commitment of such Lender hereunder
to make Eurodollar Loans, continue Eurodollar Loans as such and convert a Base
Rate Loan to Eurodollar Loans shall forthwith be canceled and, until such time
as it shall no longer be unlawful for such Lender to make or maintain Eurodollar
Loans, such Lender shall then have a commitment only to make a Base Rate Loan
when a Eurodollar Loan is requested and (c) such Lender's Loans then outstanding
as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans
on the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower shall pay to
such Lender such amounts, if any, as may be required pursuant to Section 3.14.
3.12 Requirements of Law.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Lender, or compliance by
any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority, in each case made
subsequent to the Closing Date (or, if later, the date on which such Lender
becomes a Lender):
(a) shall subject such Lender to any tax of any kind
whatsoever with respect to any Eurodollar Loans made by it or its
obligation to make Eurodollar Loans, or change the basis of taxation
of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 3.13 (including Non-Excluded
Taxes imposed solely by reason of any failure of such Lender to
comply with its obligations under Section 3.13(b)) and changes in
taxes measured by or imposed upon the overall net income, or
franchise tax (imposed in lieu of such net income tax), of such
Lender or its applicable lending office, branch, or any affiliate
thereof);
(b) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against
assets held by, deposits or other liabilities in or for the account
of, advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Adjusted Eurodollar
Rate hereunder; or
(c) shall impose on such Lender any other condition
(excluding any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender reasonably deems to be material, of making,
converting into, continuing or maintaining Eurodollar Loans or to reduce any
amount receivable hereunder in respect thereof, then, in any such case, upon
notice to the Borrower from such Lender, through the Agent, in accordance
herewith, the Borrower shall be obligated to promptly pay such Lender, upon its
written demand, any additional amounts necessary to compensate such Lender on an
after-tax basis (after taking into account applicable deductions and credits in
respect of the amount indemnified) for such increased cost or reduced amount
receivable, provided that, in any such case, the Borrower may elect to convert
the Eurodollar Loans made by such Lender hereunder to Base Rate Loans by giving
the Administrative Agent at least one Business Day's notice of such election, in
which case the Borrower shall promptly pay to such Lender, upon demand, without
duplication, such amounts, if any, as may be required pursuant to Section 3.14.
If any Lender becomes entitled to claim any additional amounts pursuant to this
Section 3.12, it shall provide prompt notice thereof to the Borrower, through
the Administrative Agent, certifying (x) that one of the events described in
this Section 3.12 has occurred and describing in reasonable detail the nature of
such event, (y) as to the increased cost or reduced amount resulting from such
event and (z) as to the additional amount demanded by such Lender and a
reasonably detailed explanation of the calculation thereof. Such a certificate
as to any additional amounts payable pursuant to this Section 3.12 submitted by
such Lender, through the Administrative Agent, to the Borrower shall be
conclusive and binding on the parties hereto in the absence of manifest error;
provided, however, that such certification shall be made on a reasonable basis.
This covenant shall survive for one year following the termination of this
Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.
3.13 Taxes.
(a) Except as provided below in this Section 3.13, all
payments made by the Borrower under this Credit Agreement and any
Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any court, or governmental body,
agency or other official, excluding taxes measured by or imposed
upon the overall net income of any Lender or its applicable lending
office, or any branch or affiliate thereof, and all franchise taxes,
branch taxes, taxes on doing business or taxes on the overall
capital or net worth of any Lender or its applicable lending office,
or any branch or affiliate thereof, in each case imposed in lieu of
net income taxes: (i) by the jurisdiction under the laws of which
such Lender, applicable lending office, branch or affiliate is
organized or is located, or in which its principal executive office
is located, or any nation within which such jurisdiction is located
or any political subdivision thereof; or (ii) by reason of any
connection between the jurisdiction imposing such tax and such
Lender, applicable lending office, branch or affiliate other than a
connection arising solely from such Lender having executed,
delivered or performed its obligations, or received payment under or
enforced, this Credit Agreement or any Notes. If any such
non-excluded taxes, levies, imposts, duties, charges, fees,
deductions or withholdings ("Non-Excluded Taxes") are required to be
withheld from any amounts payable to an Agent or any Lender
hereunder or under any Notes, (A) the amounts so payable to an Agent
or such Lender shall be increased to the extent necessary to yield
to an Agent or such Lender (after payment of all Non-Excluded Taxes)
interest on any such other amounts payable hereunder at the rates or
in the amounts specified in this Credit Agreement and any Notes,
provided, however, that the Borrower shall be entitled to deduct and
withhold any Non-Excluded Taxes and shall not be required to
increase any such amounts payable to any Lender that is not
organized under the laws of the United States of America or a state
thereof if such Lender fails to comply with the requirements of
paragraph (b) of this Section 3.13 whenever any Non-Excluded Taxes
are payable by the Borrower, and (B) as promptly as possible after
requested the Borrower shall send to such Agent for its own account
or for the account of such Lender, as the case may be, a certified
copy of an original official receipt received by the Borrower
showing payment thereof. If the Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or
fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify
the Agents and any Lender for any incremental taxes, interest or
penalties that may become payable by an Agent or any Lender as a
result of any such failure. The agreements in this subsection shall
survive for one year following the termination of this Credit
Agreement and the payment of the Loans and all other amounts payable
hereunder.
(b) Each Lender that is not incorporated under the laws
of the United States of America or a state thereof shall:
(i) (A) on or before the date of any
payment by the Borrower under this Credit Agreement or
Notes to such Lender, deliver to the Borrower and the
Administrative Agent (x) two duly completed copies of
United States Internal Revenue Service Form 1001 or
4224, or successor applicable form, as the case may be,
certifying that it is entitled to receive payments under
this Credit Agreement and any Notes without deduction or
withholding of any United States federal income taxes
and (y) an Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be,
certifying that it is entitled to an exemption from
United States backup withholding tax;
(B) deliver to the Borrower and the
Administrative Agent two further copies of any such form
or certification on or before the date that any
such form or certification expires or becomes obsolete
and after the occurrence of any event requiring a change
in the most recent form previously delivered by it to
the Borrower; and
(C) obtain such extensions of time
for filing and complete such forms or certifications as
may reasonably be requested by the Borrower or the
Administrative Agent; or
(ii) in the case of any such Lender
that is not a "bank" within the meaning of Section
881(c)(3)(A) of the Internal Revenue Code, (A) represent
to the Borrower (for the benefit of the Borrower and the
Agents) that it is not a bank within the meaning of
Section 881(c)(3)(A) of the Internal Revenue Code, (B)
agree to furnish to the Borrower, on or before the date
of any payment by the Borrower, with a copy to the
Administrative Agent, two accurate and complete original
signed copies of Internal Revenue Service Form W-8, or
successor applicable form certifying to such Lender's
legal entitlement at the date of such certificate to an
exemption from U.S. withholding tax under the provisions
of Section 881(c) of the Internal Revenue Code with
respect to payments to be made under this Credit
Agreement and any Notes (and to deliver to the Borrower
and the Administrative Agent two further copies of such
form on or before the date it expires or becomes
obsolete and after the occurrence of any event requiring
a change in the most recently provided form and, if
necessary, obtain any extensions of time reasonably
requested by the Borrower or the Administrative Agent
for filing and completing such forms), and (C) agree, to
the extent legally entitled to do so, upon reasonable
request by the Borrower, to provide to the Borrower (for
the benefit of the Borrower and the Agents) such other
forms as may be reasonably required in order to
establish the legal entitlement of such Lender to an
exemption from withholding with respect to payments
under this Credit Agreement and any Notes.
Notwithstanding the above, if any change in treaty, law or
regulation has occurred after the date such Person becomes a Lender
hereunder which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and
the Administrative Agent then such Lender shall be exempt from such
requirements. Each Person that shall become a Lender or a
participant of a Lender pursuant to Section 11.3 shall, upon the
effectiveness of the related transfer, be required to provide all of
the forms, certifications and statements required pursuant to this
subsection (b); provided that in the case of a participant of a
Lender, the obligations of such participant of a Lender pursuant to
this subsection (b) shall be determined as if the participant of a
Lender were a Lender except that such participant of a Lender shall
furnish all such required forms, certifications and statements to
the Lender from which the related participation shall have been
purchased.
3.14 Indemnity.
The Borrower promises to indemnify each Lender and to hold each
Lender harmless from any loss or expense which such Lender may sustain or incur
as a consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this Credit
Agreement, (b) default by the Borrower in making any prepayment of a Eurodollar
Loan after the Borrower has given a notice thereof in accordance with the
provisions of this Credit Agreement and (c) the making of a prepayment of
Eurodollar Loans on a day which is not the last day of an Interest Period with
respect thereto. Such indemnification may include an amount equal to (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
the applicable Interest Period (or, in the case of a failure to borrow, convert
or continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Eurodollar
Loans provided for herein minus (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank Eurodollar market. The agreements in this Section shall
survive for one year following the termination of this Credit Agreement and the
payment of the Loans and all other amounts payable hereunder.
3.15 Mitigation; Mandatory Assignment.
Each Lender shall use reasonable efforts to avoid or mitigate any
increased cost or suspension of the availability of an interest rate under
Sections 3.9 through 3.14 inclusive to the greatest extent practicable
(including transferring the Loans to another lending office or affiliate of a
Lender) unless, in the opinion of such Lender, such efforts would be likely to
have an adverse effect upon it. In the event a Lender makes a request to the
Borrower for additional payments in accordance with Sections 3.9, 3.10, 3.11,
3.12, 3.13 or 3.14, then, provided that no Default or Event of Default has
occurred and is continuing at such time, the Borrower may, at its own expense
(such expense to include any transfer fee payable to the Administrative Agent
under Section 11.3(b) and any expense pursuant to Section 3.14), and in its sole
discretion, require such Lender to transfer and assign in whole (but not in
part), without recourse (in accordance with and subject to the terms and
conditions of Section 11.3(b)), all of its interests, rights and obligations
under this Credit Agreement to an assignee which shall assume such assigned
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (a) such assignment shall not conflict with any law,
rule or regulation or order of any court or other governmental authority and (b)
the Borrower or such assignee shall have paid to the assigning Lender in
immediately available funds the principal of and interest accrued to the date of
such payment on the portion of the Loans hereunder held by such assigning Lender
and all other amounts owed to such assigning Lender hereunder, including amounts
owed pursuant to Sections 3.9 through 3.14.
SECTION 4
GUARANTY
4.1 Guaranty of Payment.
Subject to Section 4.7 below, each of the Guarantors hereby, jointly
and severally, unconditionally guarantees to each Lender and the Agents the
prompt payment of the Credit Party Obligations in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration or otherwise);
provided, however, the guaranty of UDRT shall be limited to an unconditional
guarantee of the prompt payment of all Credit Party Obligations other than the
20% Term Note in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration or otherwise). The Guarantors additionally, jointly
and severally, unconditionally guarantee to each Lender and the Agents the
timely performance of all other obligations (to the extent such obligations are
susceptible to being performed or cured by a Guarantor) under the Credit
Documents (together with the guaranty set forth in the immediately preceding
sentence, the "Guaranty"). This Guaranty is a guaranty of payment and not of
collection and is a continuing guaranty and shall apply to all Credit Party
Obligations whenever arising.
4.2 Obligations Unconditional.
The obligations of the Guarantors hereunder are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or
enforceability of any of the Credit Documents, or any other agreement or
instrument referred to therein, to the fullest extent permitted by applicable
law, irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Guarantor agrees that this Guaranty may be enforced by the Lenders without
the necessity at any time of resorting to or exhausting any other security or
collateral and without the necessity at any time of having recourse to the Notes
or any other of the Credit Documents or any collateral, if any, hereafter
securing the Credit Party Obligations or otherwise and each Guarantor hereby
waives the right to require the Lenders to proceed against the Borrower or any
other Person (including a co-guarantor) or to require the Lenders to pursue any
other remedy or enforce any other right. Each Guarantor further agrees that it
shall have no right of subrogation, indemnity, reimbursement or contribution
against the Borrower or any other Guarantor of the Credit Party Obligations for
amounts paid under this Guaranty until such time as the Lenders have been paid
in full, all Commitments under the Credit Agreement have been terminated and no
Person or Governmental Authority shall have any right to request any return or
reimbursement of funds from the Lenders in connection with monies received under
the Credit Documents. Each Guarantor further agrees that nothing contained
herein shall prevent the Lenders from suing on the Notes or any of the other
Credit Documents or foreclosing its security interest in or Lien on any
collateral, if any, securing the Credit Party Obligations or from exercising any
other rights available to it under this Credit Agreement, the Notes, any other
of the Credit Documents, or any other instrument of security, if any, and the
exercise of any of the aforesaid rights and the completion of any foreclosure
proceedings shall not constitute a discharge of any of any Guarantor's
obligations hereunder; it being the purpose and intent of each Guarantor that
its obligations hereunder shall be absolute, independent and unconditional under
any and all circumstances. Neither any Guarantor's obligations under this
Guaranty nor any remedy for the enforcement thereof shall be impaired, modified,
changed or released in any manner whatsoever by an impairment, modification,
change, release or limitation of the liability of the Borrower or by reason of
the bankruptcy or insolvency of the Borrower. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Credit Party
Obligations and notice of or proof of reliance by any Agent or any Lender upon
this Guaranty or acceptance of this Guaranty. The Credit Party Obligations, and
any of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon this
Guaranty. All dealings between the Borrower and any of the Guarantors, on the
one hand, and the Agents and the Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon this
Guaranty.
4.3 Modifications.
Each Guarantor agrees that (a) all or any part of the security now
or hereafter held for the Credit Party Obligations, if any, may be exchanged,
compromised or surrendered from time to time; (b) the Lenders shall not have any
obligation to protect, perfect, secure or insure any such security interests,
liens or encumbrances now or hereafter held, if any, for the Credit Party
Obligations or the properties subject thereto; (c) the time or place of payment
of the Credit Party Obligations may be changed or extended, in whole or in part,
to a time certain or otherwise, and may be renewed or accelerated, in whole or
in part; (d) the Borrower and any other party liable for payment under the
Credit Documents may be granted indulgences generally; (e) any of the provisions
of the Notes or any of the other Credit Documents may be modified, amended or
waived; (f) any party (including any co-guarantor) liable for the payment
thereof may be granted indulgences or be released; and (g) any deposit balance
for the credit of the Borrower or any other party liable for the payment of the
Credit Party Obligations or liable upon any security therefor may be released,
in whole or in part, at, before or after the stated, extended or accelerated
maturity of the Credit Party Obligations, all without notice to or further
assent by such Guarantor, which shall remain bound thereon, notwithstanding any
such exchange, compromise, surrender, extension, renewal, acceleration,
modification, indulgence or release.
4.4 Waiver of Rights.
Each Guarantor expressly waives to the fullest extent permitted by
applicable law: (a) notice of acceptance of this Guaranty by the Lenders and of
all extensions of credit to the Borrower by the Lenders; (b) presentment and
demand for payment or performance of any of the Credit Party Obligations; (c)
protest and notice of dishonor or of default (except as specifically required in
the Credit Agreement) with respect to the Credit Party Obligations or with
respect to any security therefor; (d) notice of the Lenders obtaining, amending,
substituting for, releasing, waiving or modifying any security interest, lien or
encumbrance, if any, hereafter securing the Credit Party Obligations, or the
Lenders' subordinating, compromising, discharging or releasing such security
interests, liens or encumbrances, if any; (e) all other notices to which such
Guarantor might otherwise be entitled; and (f) demand for payment under this
Guaranty.
4.5 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agents and each Lender on demand for all reasonable costs and expenses
(including, without limitation, reasonable fees of counsel) incurred by an Agent
or such Lender in connection with such rescission or restoration, including any
such costs and expenses incurred in defending against any claim alleging that
such payment constituted a preference, fraudulent transfer or similar payment
under any bankruptcy, insolvency or similar law.
4.6 Remedies.
The Guarantors agree that, as between the Guarantors, on the one
hand, and the Agents and the Lenders, on the other hand, the Credit Party
Obligations may be declared to be forthwith due and payable as provided in
Section 9 (and shall be deemed to have become automatically due and payable in
the circumstances provided in Section 9) notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing such Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or such Credit Party
Obligations being deemed to have become automatically due and payable), subject
to the limitation on UDRT's guaranty set forth in Section 4.1, such Credit Party
Obligations (whether or not due and payable by any other Person) shall forthwith
become due and payable by the Guarantors. Each of the Guarantors that is a
Collateral Guarantor acknowledges and agrees that its obligations hereunder are
secured in accordance with the terms of the Mortgage Documents and the other
Collateral Documents and that the Lenders may exercise their remedies thereunder
in accordance with the terms thereof.
4.7 Limitation of Guaranty.
Notwithstanding any provision to the contrary contained herein or in
any of the other Credit Documents, to the extent the obligations of any
Guarantor shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations of such
Guarantor hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the Bankruptcy Code).
4.8 Additional Waivers.
It is the intent of the parties hereto that the Guaranty and all of
the other provisions of this Section 4 be construed according to the law of the
State of North Carolina. However, if this Section 4 is ever construed under the
law of the State of California, the following provisions shall apply, to the
extent permitted by applicable law, in addition to all the other waivers agreed
to and made by each Guarantor as otherwise set forth in this Section 4:
(a) by executing this Credit Agreement each Guarantor
freely, irrevocably and unconditionally waives all rights and
defenses that such Guarantor may have because the Borrower's
Indebtedness is secured by real property; this means, among other
things:
(i) the Lenders and the Agents may collect
from any Guarantor without first foreclosing on any real
or personal property collateral pledged by the Borrower;
(ii) if the Lenders or the Agents foreclose
on any real property collateral pledged by the Borrower,
(A) the amount of the Indebtedness may
be reduced only by the price for which that
collateral is sold at the foreclosure sale,
even if the collateral is worth more than
the sale price; and
(B) the Lenders may collect from any
Guarantor even if the Agents or the
Lenders, by foreclosing on the real property
collateral, have destroyed any right such
Guarantor may have to collect from the
Borrower.
This is an unconditional and irrevocable waiver of any rights and
defenses any Guarantor may have because the Borrower's Indebtedness
is secured by real property. These rights and defenses include, but
are not limited to, any rights or defenses based upon Section 580a,
580b, 580d, or 726 of the California Code of Civil Procedure.
(b) Each Guarantor waives such Guarantor's or other
surety's rights of subrogation, reimbursement, indemnification and
contribution and other rights, benefits and defenses, if any,
otherwise available to a Guarantor pursuant to California law,
including, without limitation, the rights, benefits or defenses set
forth in California Civil Code Sections 2787 to 2855, inclusive,
2899 or 3433 and any rights, benefits or defenses resulting from
alteration, impairment or suspension in any respect or by any means
of any of the Borrower's obligations under the Credit Documents or
any of the Lender's or Agents' rights or remedies under the Credit
Documents without a Guarantor's prior consent.
(c) Each Guarantor waives all rights and defenses
arising out of an election of remedies by the Lenders or the Agents,
even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for a guaranteed obligation,
has destroyed such Guarantor's rights of subrogation and
reimbursement against the principal by the operation of Section 580d
of the California Code of Civil Procedure or otherwise.
(d) Each Guarantor waives the benefit of or right to
assert any statute of limitations affecting the liability of such
Guarantor hereunder or the enforcement thereof to the extent
permitted by law; any partial payment by the Borrower or other
circumstance which operates to toll any statute of limitations as to
the Borrower shall also operate to toll the statute of limitations
as to each Guarantor.
SECTION 5
CONDITIONS PRECEDENT
5.1 Closing Conditions.
The obligation of the Lenders to enter into this Credit Agreement
and to make the Term Loan is subject to satisfaction of the following
conditions:
(a) Executed Credit Documents. Receipt by the
Administrative Agent of duly executed copies of: (i) this Credit
Agreement; (ii) the 80% Term Note; (iii) the 20% Term Note; (iv) the
Assignment, Assumption and Consent Agreement; and (v) the
Intercreditor Agreement, each in form and substance reasonably
acceptable to the Administrative Agent in its reasonable discretion.
(b) Partnership Documents. Receipt by the
Administrative Agent of the following:
(i) Certificates of Authorization.
Certificate of authorization of the general partners of
the Borrower (and each other Credit Party that is a
partnership) as of the Effective Date, approving and
adopting the Credit Documents to be executed by the
Borrower (or such other Credit Party) and authorizing
the execution and delivery thereof.
(ii) Partnership Agreement. Certified
copies of the partnership agreement of UDRLP, together
with all amendments thereto.
(iii) Certificates of Good Standing or
Existence. Certificate of good standing or existence for
UDRLP issued as of a recent date by its state of
organization and each other state where the failure to
qualify or be in good standing could have a Material
Adverse Effect.
(c) Corporate Documents. Receipt by the
Administrative Agent of the following:
(i) Charter Documents. Copies of the
articles or certificates of incorporation or other
charter documents of UDRT certified to be true and
complete as of a recent date by the appropriate
Governmental Authority of the state or other
jurisdiction of its incorporation and certified by a
secretary or assistant secretary of UDRT to be true and
correct as of the Effective Date.
(ii) Bylaws. A copy of the bylaws of UDRT
certified by a secretary or assistant secretary of UDRT
to be true and correct as of the Effective Date.
(iii) Resolutions. Copies of resolutions of
the Board of Directors of each Credit Party that is a
corporation approving and adopting the Credit Documents
to which it is a party, the transactions contemplated
therein and authorizing execution and delivery thereof,
certified by a secretary or assistant secretary of such
Credit Party to be true and correct and in full force
and effect as of the Effective Date.
(iv) Good Standing. Copies of (A)
certificates of good standing, existence or their
equivalent with respect to UDRT certified as of a recent
date by the appropriate Governmental Authorities of the
state or other jurisdiction of incorporation and each
other jurisdiction in which the failure to so qualify
and be in good standing could have a Material Adverse
Effect and (B) to the extent available, a certificate
indicating payment of all corporate franchise taxes
certified as of a recent date by the appropriate
governmental taxing authorities.
(v) Incumbency. An incumbency certificate of
each Credit Party that is a corporation certified by a
secretary or assistant secretary of such Credit Party to
be true and correct as of the Effective Date.
(d) Limited Liability Company Documents. Receipt
by the Administrative Agent of the following:
(i) Resolutions. Copies of a certificate of
action of the members of each Credit Party that is a
limited liability company approving and adopting the
Credit Documents to which it is a party, the
transactions contemplated therein and authorizing
execution and delivery thereof, certified by an
authorized member of such Credit Party to be true and
correct and in full force and effect as of the Effective
Date.
(ii) Certificate of Action of Members. An
incumbency certificate of each Credit Party that is a
limited liability company certified by an authorized
member of such Credit Party to be true and correct as of
the Effective Date.
(e) Financial Information. Receipt and approval by the
Administrative Agent of such financial information regarding UDRT,
UDRLP and their Subsidiaries as the Administrative Agent may
reasonably request.
(f) Opinion of Counsel. Receipt by the Administrative
Agent of (i) opinions (which shall cover, among other things,
authority, legality, validity, binding effect and enforceability),
satisfactory to the Administrative Agent, addressed to the
Administrative Agent on behalf of the Lenders and dated as of the
Effective Date, from legal counsel to the Credit Parties and (ii)
written confirmation from local legal counsel to the Credit Parties
that no documents or instruments are required to be recorded, and no
filings are required to be made, in order to maintain the perfection
of the Liens and security interests of the Lenders in the
Collateral.
(g) Assignments. Receipt by the Administrative Agent of
an executed assignment agreement between NationsBank and each of the
other Lenders party to the Existing Credit Agreement assigning the
entirety of each such Lender's Commitment to NationsBank.
(h) Material Adverse Effect. There shall not have
occurred a change since December 31, 1997 that has had or could
reasonably be expected to have a Material Adverse Effect.
(i) Litigation. There shall not exist any pending or
threatened action, suit, investigation or proceeding against a
Credit Party or any of their Subsidiaries that would have or would
reasonably be expected to have a Material Adverse Effect.
(j) Fees and Expenses. Payment by the Borrower of all
fees and expenses owed by it to the Lenders and the Administrative
Agent, including, without limitation, payment to the Administrative
Agent of the fees set forth herein and in the Fee Letter.
(k) Consents and Approvals. All governmental,
shareholder, partner and third-party consents and approvals
necessary or, in the opinion of the Administrative Agent, desirable
in connection with the Loans and the transactions contemplated under
the Credit Documents shall have been duly obtained and shall be in
full force and effect, and a copy of each such consent or approval
shall have been delivered to the Administrative Agent.
(l) Other. Receipt by the Lenders of such other
documents, instruments, agreements or information as reasonably and
timely requested by any Lender, including, but not limited to, the
documents, instruments, agreements and information required in
Section 5.2 and information regarding litigation, tax, accounting,
labor, insurance, pension liabilities (actual or contingent), real
estate leases, material contracts, debt agreements, property
ownership and contingent liabilities of the Credit Parties and their
Subsidiaries.
5.2 Post-Closing Documentation and Information Requirements.
The Credit Parties agree to provide, upon the reasonable request of
the Administrative Agent, the following documents, instruments, agreements and
information if necessary to successfully syndicate this credit facility:
(a) Information. Updated information regarding any
Collateral Property in form and substance satisfactory to the
Administrative Agent, including, without limitation, updates of the
information set forth on Schedule 1.1(b) in the format and
conforming to the terms required by such Schedule 1.1(b), (or if not
conforming to the terms of Schedule 1.1(b) identifying the variance
from such terms).
(b) Real Property Collateral. The Collateral Agent
shall have received, in form and substance reasonably satisfactory
to the Collateral Agent:
(i) Title Policy Updates. A Mortgage Policy
update issued by the Title Insurance Company reasonably
satisfactory to the Collateral Agent with respect to any
Collateral Property, assuring the Collateral Agent that
the applicable Mortgage creates a valid and enforceable
first priority mortgage lien on such Collateral
Property, free and clear of all defects and encumbrances
except Permitted Liens, and for any other matters that
the Collateral Agent may request and provide affirmative
insurance and such reinsurance as the Collateral Agent
may request, all of the foregoing in form and substance
reasonably satisfactory to the Collateral Agent.
(ii) Surveys. Maps or plats of an
as-built survey of the site of any Collateral Property
certified (or recertified) to the Collateral Agent and
the Title Insurance Company in a manner reasonably
satisfactory to them, dated a date satisfactory to the
Collateral Agent and the Title Insurance Company by an
independent professional licensed land surveyor
reasonably satisfactory to the Collateral Agent and the
Title Insurance Company, which maps or plats and the
surveys on which they are based shall be sufficient to
delete any standard printed survey exception contained
in the applicable Mortgage Policy or any update to the
applicable Mortgage Policy and be made in accordance
with the Minimum Standard Detail Requirements for Land
Title Surveys jointly established and adopted by the
American Land Title Association and the American
Congress on Surveying and Mapping in 1992 (or such
alternative standards as are satisfactory to the
Collateral Agent and the Title Insurance Company), and,
without limiting the generality of the foregoing, there
shall be surveyed and shown on such maps, plats or
surveys the following: (A) the locations on such sites
of all the buildings, structures and other improvements
and the established building setback lines; (B) the
lines of streets abutting the sites and width thereof;
(C) all access and other easements appurtenant to the
sites necessary to use the sites; (D) all roadways,
paths, driveways, easements, encroachments and
overhanging projections and similar encumbrances
affecting the site, whether recorded, apparent from a
physical inspection of the sites or otherwise known to
the surveyor; (E) any encroachments on any adjoining
property by the building structures and improvements on
the sites; and (F) if the site is described as being on
a filed map, a legend relating the survey to said map.
(iii) Flood Certificates. A current
certification from a registered engineer or land
surveyor or other evidence reasonably acceptable to the
Collateral Agent as to whether any of the improvements
on any Collateral Property are located within any area
designated by the Director of the Federal Emergency
Management Agency as a "special flood hazard" area and
if any improvements on such parcel are located within a
"special flood hazard" area, evidence of a flood
insurance policy from a company and in an amount
reasonably satisfactory to the Collateral Agent for the
applicable portion of the premises, naming the
Collateral Agent, for the benefit of the Lenders, as
mortgagee.
(iv) Appraisals. A current appraisal
of any Collateral Property prepared for the benefit of
the Collateral Agent by a qualified appraiser
satisfactory to the Collateral Agent and dated a date
satisfactory to the Collateral Agent, which shall
indicate a fair market value for such Collateral
Property acceptable to the Collateral Agent and which
shall otherwise be in form and substance satisfactory to
the Collateral Agent.
(v) Environmental Reports. A current
report of an environmental assessment of any Collateral
Property of such scope (including, but not limited to,
the taking of soil borings and air and groundwater
samples and other above and below ground testing) as the
Collateral Agent may request, which report shall (A)
be certified to the benefit of the Collateral Agent
by a consulting firm acceptable to the Collateral
Agent,(B) be dated a date satisfactory to the Collateral
Agent, (C) conform to the current minimum standards for
the American Society of Testing and Materials (ASTM),
and (D) otherwise be in form and substance satisfactory
to the Collateral Agent.
(vi) Zoning Evidence. Current zoning
letters from appropriate authorities in form and
substance acceptable to the Collateral Agent or other
evidence satisfactory to the Collateral Agent that any
Collateral Property, and the uses of such Collateral
Property, are in compliance in all material respects
with all applicable zoning laws, including the zoning
designation made for such Collateral Property, the
permitted uses of such Collateral Property under such
zoning designation and zoning requirements as to
parking, lot size, ingress, egress and building
setbacks.
(vii) Engineer's Reports. A current
engineer's report for any Collateral Property prepared
for the benefit of the Collateral Agent by an engineer
approved by the Collateral Agent, each of which shall
(a) be dated a date satisfactory to the Collateral
Agent, (b) certify that such Collateral Property is in
compliance with all applicable requirements of the
Americans with Disabilities Act of 1990, and (c)
otherwise be in form and substance satisfactory to the
Collateral Agent.
(viii) Seismic Report. A current
seismic report for any Collateral Property if such
property is located in the State of California prepared
for the benefit of the Collateral Agent by an engineer
approved by the Collateral Agent, each of which shall be
dated a date satisfactory to the Collateral Agent and
otherwise be in form and substance satisfactory to the
Collateral Agent.
(c) Other. Receipt by the Lenders of such other
documents, instruments, agreements or information as reasonably
requested, including, without limitation, Uniform Commercial Code
filings and amendments or modifications to the Mortgages.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Administrative Agent and
each Lender that:
6.1 Financial Condition.
The financial statements delivered to the Lenders pursuant to
Section 5.1(d) and Section 7.1(a) and (b): (a) have been prepared in accordance
with GAAP and (b) present fairly the consolidated financial condition, results
of operations and cash flows of the Credit Parties and their Subsidiaries as of
such date and for such periods. Since December 31, 1997, there has been no sale,
transfer or other disposition by any Credit Party or any of their Subsidiaries
of any material part of the business or property of the Credit Parties, taken as
a whole, and no purchase or other acquisition by any of them of any business or
property (including any capital stock of any other Person) material in relation
to the consolidated financial condition of the Credit Parties, taken as a whole,
in each case, which, is not (i) reflected in the most recent financial
statements delivered to the Lenders pursuant to Section 5.1(d) and Section 7.1
or in the notes thereto or (ii) otherwise permitted by the terms of this Credit
Agreement and communicated to the Administrative Agent.
6.2 No Material Change.
Since December 31, 1997, there has been no development or event
relating to or affecting a Credit Party or any of its Subsidiaries which has had
or would be reasonably expected to have a Material Adverse Effect.
6.3 Organization and Good Standing.
Each Credit Party (a) is either a partnership or a limited liability
company or a corporation duly organized, validly existing and in good standing
under the laws of the State (or other jurisdiction) of its organization, (b) is
duly qualified and in good standing as either a foreign partnership, limited
liability company or corporation and authorized to do business in every other
jurisdiction unless the failure to be so qualified, in good standing or
authorized would not have a Material Adverse Effect and (c) has the power and
authority to own its properties and to carry on its business as now conducted
and as proposed to be conducted.
6.4 Due Authorization.
Each Credit Party (a) has the power and authority to execute,
deliver and perform this Credit Agreement and the other Credit Documents to
which it is a party and to incur the obligations herein and therein provided for
and (b) is duly authorized to, and has been authorized by all necessary action,
to execute, deliver and perform this Credit Agreement and the other Credit
Documents to which it is a party.
6.5 No Conflicts.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor the performance of or
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its organizational documents, (b)
violate, contravene or materially conflict with any Requirement of Law or any
other law, regulation (including, without limitation, Regulation U or Regulation
X), order, writ, judgment, injunction, decree or permit applicable to it, (c)
violate, contravene or conflict with contractual provisions of, or cause an
event of default under, any indenture, loan agreement, mortgage, deed of trust,
contract or other agreement or instrument to which it is a party or by which it
may be bound, the violation of which could have or might be reasonably expected
to have a Material Adverse Effect, or (d) result in or require the creation of
any Lien (other than those contemplated in or created in connection with the
Credit Documents) upon or with respect to its properties.
6.6 Consents.
Except for consents, approvals and authorizations which have been
obtained, no consent, approval, authorization or order of, or filing,
registration or qualification with, any court or Governmental Authority or third
party in respect of any Credit Party is required in connection with the
execution, delivery or performance of this Credit Agreement or any of the other
Credit Documents by such Credit Party.
6.7 Enforceable Obligations.
This Credit Agreement and the other Credit Documents have been duly
executed and delivered and constitute legal, valid and binding obligations of
each Credit Party enforceable against such Credit Party in accordance with their
respective terms, except as may be limited by bankruptcy or insolvency laws or
similar laws affecting creditors' rights generally or by general equitable
principles.
6.8 No Default.
No Credit Party, nor any of its Subsidiaries, is in default in any
respect under any contract, lease, loan agreement, indenture, mortgage, security
agreement or other agreement or obligation to which it is a party or by which
any of its properties is bound which default would have or would be reasonably
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred or exists except as previously disclosed in writing to the Lenders.
6.9 Ownership.
Each Credit Party, is the owner of, and has good and marketable
title to, all of its respective assets and none of such assets is subject to any
Lien other than Permitted Liens.
6.10 Indebtedness.
The Credit Parties (other than UDRT) have no Indebtedness except (a)
as disclosed in the financial statements referenced in Section 6.1, (b) as set
forth on Schedule 6.10 and (c) as otherwise permitted by this Credit Agreement.
6.11 Litigation.
There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against, a Credit Party or any of its Subsidiaries which could have
or might be reasonably expected to have a Material Adverse Effect.
6.12 Taxes.
Each Credit Party, and each of its Subsidiaries, has filed, or
caused to be filed, all tax returns (federal, state, local and foreign) required
to be filed and has paid (a) all amounts of taxes shown thereon to be due
(including interest and penalties) and (b) all other taxes, fees, assessments
and other governmental charges (including mortgage recording taxes, documentary
stamp taxes and intangibles taxes) owing by it, except for such taxes (i) which
are not yet delinquent or (ii) that are being contested in good faith and by
proper proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. No Credit Party is aware of any proposed tax assessments
against it or any of its Subsidiaries.
6.13 Compliance with Law.
Each Credit Party, and each of its Subsidiaries, is in compliance
with all Requirements of Law and all other laws, rules, regulations, orders and
decrees (including without limitation Environmental Laws) applicable to it, or
to its properties, unless such failure to comply would not have or would not be
reasonably expected to have a Material Adverse Effect. No Requirement of Law
would be reasonably expected to cause a Material Adverse Effect.
6.14 Compliance with ERISA.
Except as would not result in a Material Adverse Effect:
(a) During the five-year period prior to the date on
which this representation is made or deemed made: (i) no ERISA Event
has occurred, and, to the best of each Credit Party's, each
Subsidiary of a Credit Party's and each ERISA Affiliate's knowledge,
no event or condition has occurred or exists as a result of which
any ERISA Event could reasonably be expected to occur, with respect
to any Plan; (ii) no "accumulated funding deficiency," as such term
is defined in Section 302 of ERISA and Section 412 of the Code,
whether or not waived, has occurred with respect to any Plan; (iii)
each Plan has been maintained, operated, and funded in compliance
with its own terms and in material compliance with the provisions of
ERISA, the Code, and any other applicable federal or state laws; and
(iv) no Lien in favor or the PBGC or a Plan has arisen or is
reasonably likely to arise on account of any Plan.
(b) The actuarial present value of all "benefit
liabilities" (as defined in Section 4001(a)(16) of ERISA), whether
or not vested, under each Single Employer Plan, as of the last
annual valuation date prior to the date on which this representation
is made or deemed made (determined, in each case, in accordance with
Financial Accounting Standards Board Statement 87, utilizing the
actuarial assumptions used in such Plan's most recent actuarial
valuation report), did not exceed as of such valuation date the fair
market value of the assets of such Plan.
(c) No Credit Party, Subsidiary of a Credit Party or
ERISA Affiliate has incurred, or, to the best of each such party's
knowledge, is reasonably expected to incur, any withdrawal liability
under ERISA to any Multiemployer Plan or Multiple Employer Plan. No
Credit Party, Subsidiary of a Credit Party or ERISA Affiliate would
become subject to any withdrawal liability under ERISA if any such
party were to withdraw completely from all Multiemployer Plans and
Multiple Employer Plans as of the valuation date most closely
preceding the date on which this representation is made or deemed
made. No Credit Party, Subsidiary of a Credit Party or ERISA
Affiliate has received any notification that any Multiemployer Plan
is in reorganization (within the meaning of Section 4241 of ERISA),
is insolvent (within the meaning of Section 4245 of ERISA), or has
been terminated (within the meaning of Title IV of ERISA), and no
Multiemployer Plan is, to the best of each such party's knowledge,
reasonably expected to be in reorganization, insolvent, or
terminated.
(d) No prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility has occurred with respect to a Plan which
has subjected or may subject any Credit Party, any Subsidiary of a
Credit Party or any ERISA Affiliate to any liability under Sections
406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or
under any agreement or other instrument pursuant to which any Credit
Party, any Subsidiary of a Credit Party or any ERISA Affiliate has
agreed or is required to indemnify any person against any such
liability.
(e) Except as set forth in the Financial Statements, no
Credit Party, Subsidiary of a Credit Party nor any of their ERISA
Affiliates has material liability with respect to "expected
post-retirement benefit obligations" within the meaning of the
Financial Accounting Standards Board Statement 106. Each Plan which
is a welfare plan (as defined in Section 3(1) of ERISA) to which
Sections 601-609 of ERISA and Section 4980B of the Code apply has
been administered in compliance in all material respects with such
sections.
6.15 Organization Structure.
Set forth on Schedule 6.15 is a complete and accurate organization
chart of the Credit Parties and their Subsidiaries.
6.16 Use of Proceeds; Margin Stock.
The proceeds of the Loans hereunder will be used solely for the
purposes specified in Section 7.10. None of the proceeds of the Loans will be
used for the purpose of purchasing or carrying any "margin stock" as defined in
Regulation U or Regulation X, or for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry "margin stock"
or any "margin security" or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of Regulation U, Regulation X
or Regulation T. None of the Credit Parties owns any "margin stock."
6.17 Government Regulation.
No Credit Party nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act of 1940 or the Interstate Commerce Act, each as amended.
In addition, no Credit Party nor any of its Subsidiaries is (a) an "investment
company" registered or required to be registered under the Investment Company
Act of 1940, as amended, or controlled by such a company, or (b) a "holding
company," or a "Subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "Subsidiary" or a "holding company," within the
meaning of the Public Utility Holding Company Act of 1935, as amended. No
director, executive officer or principal shareholder of UDRT or any of its
Subsidiaries is a director, executive officer or principal shareholder of any
Lender. For the purposes hereof the terms "director," "executive officer" and
"principal shareholder" (when used with reference to any Lender) have the
respective meanings assigned thereto in Regulation O issued by the Board of
Governors of the Federal Reserve System.
6.18 Environmental Matters.
(a) Except as set forth on Schedule 6.18:
(i) Each of the Collateral Properties
and all operations at the Collateral Properties are
in material compliance with all applicable Environmental
Laws, and there is no violation of any Environmental
Law with respect to the Collateral Properties or the
businesses operated by a Credit Party or any of its
Subsidiaries (the "Businesses"), and there are no
conditions relating to the Businesses or Collateral
Properties that would be reasonably expected to give
rise to liability under any applicable Environmental
Laws.
(ii) No Credit Party nor any of its
Subsidiaries has received any written notice of, or
inquiry from any Governmental Authority regarding, any
violation, alleged violation, non-compliance, liability
or potential liability regarding Hazardous Materials or
compliance with Environmental Laws with regard to any of
the Collateral Properties or the Businesses, except for
any such notice or inquiry that has been finally
resolved without any determination of liability against
a Credit Party other than any liability which has been
paid in full or which has been adequately reserved
against in accordance with GAAP and which would not have
or be reasonably expected to have a Material Adverse
Effect, nor does any Credit Party or any of its
Subsidiaries have knowledge that any such notice is
being threatened.
(iii) Hazardous Materials have not
been transported or disposed of from the Collateral
Properties, or generated, treated, stored or disposed of
at, on or under any of the Collateral Properties or any
other location, in each case by, or on behalf or with
the permission of, any Credit Party or any of its
Subsidiaries in a manner that would reasonably be
expected to give rise to liability under any applicable
Environmental Law.
(iv) No judicial proceeding or
governmental or administrative action is pending or, to
the knowledge of any Credit Party or any of its
Subsidiaries, threatened, under any Environmental Law to
which any Credit Party or any of its Subsidiaries is or
will be named as a party, nor are there any consent
decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or
judicial requirements outstanding under any
Environmental Law with respect to any Credit Party or
any of its Subsidiaries, the Collateral Properties or
the Businesses, in any amount reportable under the
federal Comprehensive Environmental Response,
Compensation and Liability Act or any analogous state
law, except releases in compliance with any
Environmental Laws.
(v) To the best of Borrower's
knowledge, there has been no release or threat of
release of Hazardous Materials at or from the Collateral
Properties, or arising from or related to the
operations (including, without limitation, disposal)
of a Credit Party or any of its Subsidiaries in
connection with the Collateral Properties or
otherwise in connection with the Businesses except
in compliance with Environmental Laws.
(vi) None of the Collateral
Properties contains, or to the best of our knowledge has
previously contained, any Hazardous Materials at, on or
under the Collateral Properties in amounts or
concentrations that, if released, constitute or
constituted a violation of, or could give rise to
liability under, Environmental Laws.
(vii) Neither the Borrower nor any
Collateral Guarantor has knowingly assumed any liability
of any Person (other than another Credit Party) under
any Environmental Law.
(b) Each Credit Party and each of its Subsidiaries has
adopted procedures that are designed to (i) ensure that each such
party, any of its operations and each of the properties owned or
leased by such party remains in compliance with applicable
Environmental Laws and (ii) minimize any liabilities or potential
liabilities that each such party, any of its operations and each of
the properties owned or leased by each such party may have under
applicable Environmental Laws.
6.19 Solvency.
Each Credit Party, is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.
6.20 Investments.
All Investments of the Borrower and the Collateral Guarantors are
either Permitted Investments or otherwise permitted by the terms of this Credit
Agreement.
6.21 Location of Collateral.
Set forth on Schedule 6.21(a) is a list of all Collateral Properties
(with street address, county and state where located). Set forth on Schedule
6.21(b) is a list of all locations where any personal property of the Borrower
or any Collateral Guarantor is located, including county and state where
located. Set forth on Schedule 6.21(c) is the chief executive office and
principal place of business of the Borrower and each Collateral Guarantor.
Schedules 6.21(a), 6.21(b) and 6.21(c) may be updated from time to time by the
Borrower by giving written notice thereof to the Administrative Agent.
6.22 Disclosure.
Neither this Agreement nor any financial statements delivered to the
Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of any Credit Party in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein or herein not misleading.
6.23 Licenses, etc.
The Credit Parties and their Subsidiaries have obtained, and hold in
full force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way and
other rights, consents and approvals which are necessary for the operation of
their respective businesses as presently conducted, except where the failure to
obtain the same would not have a Material Adverse Effect.
6.24 No Burdensome Restrictions.
No Credit Party nor any of its Subsidiaries is a party to any
agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or regulation
which, individually or in the aggregate, would have or be reasonably expected to
have a Material Adverse Effect.
6.25 Collateral Documents.
The Collateral Documents create valid first-priority security
interests in, and first mortgage Liens on, the Collateral purported to be
covered thereby, which security interests and mortgage Liens are and will remain
perfected security interests and mortgage Liens, prior to all other Liens other
than Permitted Liens. Each of the representations and warranties made by the
Credit Parties in the Collateral Documents is true and correct in all material
respects.
6.26 Year 2000 Compliance.
Each Credit Party reasonably believes that the Year 2000 Problem has
been appropriately addressed by it, through the development of appropriate
software programs or applications or through its acquisition of any necessary
hardware, and the Year 2000 Problem will not exist with respect to it or any of
its Subsidiaries on and after January 1, 2000, to the extent such Year 2000
Problem could reasonably be expected to cause a Material Adverse Effect.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans, together with interest and
fees and other obligations hereunder, have been paid in full and the Commitments
hereunder shall have terminated:
7.1 Information Covenants.
The Borrower and Guarantors will furnish, or cause to be furnished,
to the Administrative Agent and each of the Lenders:
(a) Audited Financial Statements. As soon as available,
but in any event within 90 days after the end of each fiscal year,
an audited consolidated balance sheet of UDRT and its Subsidiaries
as of the end of the fiscal year and the related consolidated
statements of operations, shareholders' equity and cash flows for
the year, audited by Ernst & Young LLP, or other firm of independent
certified public accountants of nationally recognized standing,
setting forth in each case in comparative form the figures for the
previous year, reported without a "going concern" or like
qualification or exception, or qualification indicating that the
scope of the audit was inadequate to permit such independent
certified public accountants to certify such financial statements
without such qualification.
(b) Quarterly Financial Statements. As soon as
available, but in any event within 60 days after the end of each of
the first three fiscal quarters, a UDRT-prepared consolidated
balance sheet of UDRT and its Subsidiaries as of the end of the
quarter and related UDRT-prepared consolidated statements of
operations and cash flows for such quarterly period and for the
fiscal year to date, in each case setting forth in comparative form
the consolidated figures for the corresponding period or periods of
the preceding fiscal year or the portion of the fiscal year ending
with such period, as applicable, in each case subject to normal
recurring year-end audit adjustments. As soon as available, but in
any event within 60 days after the end of each of the first three
fiscal quarters, a UDRLP-prepared consolidated balance sheet of
UDRLP and its Subsidiaries as of the end of the quarter and related
UDRLP-prepared consolidated statements of operations and cash flows
for such quarterly period and for the fiscal year to date, in each
case setting forth in comparative form the consolidated figures for
the corresponding period or periods of the preceding fiscal year or
the portion of the fiscal year ending with such period, as
applicable, in each case subject to normal recurring year-end audit
adjustments.
All of the foregoing financial statements shall be complete and
correct in all material respects (subject, in the case of interim
statements, to normal recurring year-end audit adjustments) and
shall be prepared in reasonable detail and, in the case of the
annual and quarterly financial statements provided in accordance
with subsections (a) and (b) above, in accordance with GAAP applied
consistently throughout the periods reflected therein and further
accompanied by a description of, and an estimation of the effect on
the financial statements on account of, a change in the application
of accounting principles as provided in Section 1.3.
(c) Quarterly Reports. As soon as available and in any
event within 45 days after the end of each fiscal quarter of the
Credit Parties, detailed occupancy and net operating income reports
and detailed operations statements on each parcel of Collateral
Property.
(d) Officer's Certificate. At the time of delivery of
the financial statements provided for in Sections 7.1(a) and 7.1(b)
above, a certificate of the chief financial officer of UDRLP,
substantially in the form of Exhibit 7.1(d), (i) demonstrating
compliance with the financial covenants contained in Section 7.2 by
calculation thereof as of the end of each such fiscal period and
(ii) stating that no Default or Event of Default exists, or if any
Default or Event of Default does exist, specifying the nature and
extent thereof and what action the Borrower proposes to take with
respect thereto.
(e) Annual Projections. Within 30 days after the end of
each fiscal year of the Credit Parties, summary annual projections
for each real property owned by UDRLP or any of its Subsidiaries
(other than the Borrower and its Subsidiaries) and detailed annual
projections for each parcel of Collateral Property owned by the
Borrower and its Subsidiaries.
(f) Balance Sheets. Prior to February 15, 1999, a
balance sheet of (i) the Borrower and its Subsidiaries and (ii) UDRT
and its Subsidiaries, in each case as of December 31, 1998 and
prepared by such Credit Party in conformity with GAAP and certified
as correct by the chief financial officer of such Credit Party.
(g) Auditor's Reports. Promptly upon receipt thereof, a
copy of any "management letter" submitted by independent accountants
to any Credit Party or any of its Subsidiaries in connection with
any annual, interim or special audit of the books of such Credit
Party or any of its Subsidiaries. Without limiting the foregoing,
Concurrently with the delivery of the financial statements referred
to in subsection 7.1(a) above, 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.
(h) Reports. Promptly upon transmission or receipt
thereof, (i) copies of any filings and registrations with, and
reports to or from, the Securities and Exchange Commission, or any
successor agency, and copies of all financial statements, proxy
statements, notices and reports as any Credit Party or any of its
Subsidiaries shall send to its shareholders or partners generally
and (ii) upon the written request of the Collateral Agent, all
reports and written information to and from the United States
Environmental Protection Agency, or any state or local agency
responsible for environmental matters, the United States
Occupational Health and Safety Administration, or any state or local
agency responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health or safety
matters.
(i) Notices. Upon a Credit Party obtaining knowledge
thereof, such Credit Party will give written notice to the
Administrative Agent immediately of (i) the occurrence of an event
or condition consisting of a Default or Event of Default, specifying
the nature and existence thereof and what action the Borrower
proposes to take with respect thereto, (ii) the occurrence of any of
the following with respect to any Credit Party or any of its
Subsidiaries (A) the pendency or commencement of any litigation,
arbitral or governmental proceeding against any Credit Party or any
of its Subsidiaries which if adversely determined would have or
would be reasonably expected to have a Material Adverse Effect, or
(B) the institution of any proceedings against any Credit Party or
any of its Subsidiaries with respect to, or the receipt of notice by
such Person of potential liability or responsibility for violation,
or alleged violation of any federal, state or local law, rule or
regulation, including but not limited to, Environmental Laws, the
violation of which would have or would be reasonably expected to
have a Material Adverse Effect and (i) any information that a Credit
Party may have a Year 2000 Problem on or after January 1, 2000.
(j) ERISA. Upon a Credit Party or any ERISA Affiliate
obtaining knowledge thereof, the Borrower will give written notice
to the Administrative Agent promptly (and in any event within five
Business Days) of: (i) any event or condition, including, but not
limited to, any Reportable Event, that constitutes, or might
reasonably lead to, an ERISA Event; (ii) with respect to any
Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against a Credit
Party or any ERISA Affiliate, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within
the meaning of Title IV of ERISA); (iii) the failure to make full
payment on or before the due date (including extensions) thereof of
all amounts which a Credit Party or any ERISA Affiliate is required
to contribute to each Plan pursuant to its terms and as required to
meet the minimum funding standard set forth in ERISA and the Code
with respect thereto; or (iv) any change in the funding status of
any Plan that could have a Material Adverse Effect; together, with a
description of any such event or condition or a copy of any such
notice and a statement by the chief financial officer of a Credit
Party briefly setting forth the details regarding such event,
condition, or notice, and the action, if any, which has been or is
being taken or is proposed to be taken by a Credit Party or any
ERISA Affiliate with respect thereto. Promptly upon request, the
Borrower shall furnish the Administrative Agent and the Lenders with
such additional information concerning any Plan as may be reasonably
requested, including, but not limited to, copies of each annual
report/return (Form 5500 series), as well as all schedules and
attachments thereto required to filed with the Department of Labor
and/or the Internal Revenue Service pursuant to ERISA and the Code,
respectively, for each "plan year" (within the meaning of Section
3(39) of ERISA).
(k) Environmental.
(i) Subsequent to a notice from any
Governmental Authority that would reasonably cause
concern or during the existence of an Event of Default,
and upon the written request of the Collateral Agent,
the Borrower will furnish or cause to be furnished to
the Administrative Agent, at the Borrower's expense, an
updated report of an environmental assessment of
reasonable scope, form and depth, including, where
appropriate, invasive soil or groundwater sampling, by
a consultant reasonably acceptable to the Collateral
Agent as to the nature and extent of the presence of
any Hazardous Materials on any property owned, leased
or operated by a Borrower or Collateral Guarantor and
as to the compliance by the Borrower and Collateral
Guarantors with Environmental Laws. If the Borrower
fails to deliver such an environmental report within
seventy-five (75) days after receipt of such written
request then the Collateral Agent may arrange for same,
and the Borrower hereby grants to the Collateral Agent
and their representatives access to the Collateral
Properties and a license of a scope reasonably
necessary to undertake such an assessment (including,
where appropriate, invasive soil or groundwater
sampling). The reasonable cost of any assessment
arranged for by the Collateral Agent pursuant to this
provision will be payable by the Borrower on demand and
added to the obligations secured by the Collateral
Documents.
(ii) Each of the Borrower and the
Collateral Guarantor will conduct and complete all
investigations, studies, sampling, and testing and all
remedial, removal, and other actions necessary to
address all Hazardous Materials on, from, or affecting
any real property owned or leased by the Borrower or a
Collateral Guarantor to the extent necessary to be in
compliance with all Environmental Laws and all other
applicable federal, state, and local laws, regulations,
rules and policies and with the orders and directives of
all Governmental Authorities exercising jurisdiction
over such real property to the extent any failure would
have or be reasonably expected to have a Material
Adverse Effect.
(l) Other Information. With reasonable promptness upon
any such request, such other information regarding the business,
properties or financial condition of the Credit Parties as an Agent
or any Lender may reasonably request.
7.2 Financial Covenants.
(a) Incorporation of Financial Covenants from UDRT
Facility. The Credit Parties and the Lenders agree that the
financial covenants set forth in Section 7.9 of the UDRT Facility
(and corresponding definitions used therein), as such covenants may
be amended from time to time, are incorporated herein by reference
as if restated herein. The Credit Parties acknowledge that they
shall be bound by such financial covenants and that a breach of any
such financial covenant shall constitute an Event of Default
hereunder.
(b) Total Debt to Tangible Fair Market Value Ratio. As
of the end of each fiscal quarter commencing with the fiscal quarter
ending March 31, 1999, the ratio of total Indebtedness of the Credit
Parties to Tangible Fair Market Value shall be less than or equal to
0.60 to 1.0.
(c) Development Limitation. As of the end of each fiscal
quarter commencing with the fiscal quarter ending March 31, 1999,
the total amount of actual expenditures made by the Credit Parties
during such fiscal quarter on properties under development shall not
exceed $40,000,000.
(d) Total Budgeted Project Costs of Properties Under
Development Limitation. As of the end of each fiscal quarter
commencing with the fiscal quarter ending March 31, 1999, the total
budgeted costs (whether previously incurred or to be incurred) to
complete all properties of the Credit Parties under development
shall be less than or equal to 10% of Tangible Fair Market Value.
(e) Collateral Properties Leverage Ratio. As of the end
of each fiscal quarter commencing with the fiscal quarter ending
March 31, 1999, the Collateral Properties Leverage Ratio shall be
less than 0.75 to 1.0.
(f) Debt Service Coverage Ratio. As of the end of each
fiscal quarter commencing March 31, 1999, the Debt Service Coverage
Ratio shall be greater than or equal to 1.20 to 1.0.
(g) Tangible Net Worth. The Tangible Net Worth shall at
all times be equal to or greater than $350,000,000.
For purposes determining compliance with the financial covenants
above, a property will be deemed under development until a certificate of
occupancy is issued for the entire property and 75% of all units in such
property have been leased in accordance with the Borrower's standard leasing
practices.
7.3 Preservation of Existence, Franchises, and Management
Agreements.
Each of the Credit Parties will do all things necessary to preserve
and keep in full force and effect its existence, rights, franchises and
authority except as permitted by Section 8.4. Without limiting the generality of
the foregoing, (i) UDRT will do all things necessary to maintain its status as a
Real Estate Investment Trust (REIT) and (ii) each Credit Party which is a party
thereto shall do all things necessary to keep in full force and effect each of
the management agreements described on Schedule 7.3.
7.4 Books and Records.
Each of the Credit Parties will, and will cause its Subsidiaries to,
keep complete and accurate books and records of its transactions in accordance
with good accounting practices on the basis of GAAP (including the establishment
and maintenance of appropriate reserves).
7.5 Compliance with Law.
Each of the Credit Parties will, and will cause its Subsidiaries to,
comply with all material laws, rules, regulations and orders, and all applicable
material restrictions imposed by all Governmental Authorities, applicable to it
and its property (including, without limitation, Environmental Laws and ERISA).
7.6 Payment of Taxes and Other Indebtedness.
Each of the Credit Parties will, and will cause its Subsidiaries to,
pay, settle or discharge (a) all taxes, assessments and governmental charges or
levies imposed upon it, or upon its income or profits, or upon any of its
properties, before they shall become delinquent, (b) all lawful claims
(including claims for labor, materials and supplies) which, if unpaid, might
give rise to a Lien upon any of its properties, and (c) except as prohibited
hereunder, all of its other Indebtedness as it shall become due; provided,
however, that a Credit Party or any of its Subsidiaries shall not be required to
pay any such tax, assessment, charge, levy, claim or Indebtedness which is being
contested in good faith by appropriate proceedings and as to which adequate
reserves therefor have been established in accordance with GAAP, unless the
failure to make any such payment (i) would give rise to an immediate right to
foreclose on a Lien securing such amounts or (ii) would have a Material Adverse
Effect.
7.7 Insurance.
Each of the Credit Parties will, and will cause its Subsidiaries to,
at all times maintain in full force and effect insurance (including worker's
compensation insurance, liability insurance, casualty insurance and business
interruption insurance) in such amounts, covering such risks and liabilities and
with such deductibles or self-insurance retentions as are in accordance with
normal industry practice. All liability policies of the Borrower and any
Collateral Guarantor shall have the Collateral Agent, on behalf of the Lenders,
as an additional insured and all casualty policies shall have the Administrative
Agent, on behalf of the Lenders, as loss payee with respect to the Collateral.
In the event there occurs any material loss, damage to or destruction of the
Collateral, the Borrower shall promptly give written notice thereof to the
Collateral Agent generally describing the nature and extent of such damage or
destruction. Subsequent to any loss, damage to or destruction of the Collateral,
the Borrower, or a Collateral Guarantor, whether or not the insurance proceeds,
if any, received on account of such damage or destruction shall be sufficient
for that purpose, at the Borrower's (or such Collateral Guarantor's) cost and
expense, will promptly repair or replace the Collateral so lost, damaged or
destroyed; provided, however, that the Borrower or a Collateral Guarantor need
not repair or replace the Collateral so lost, damaged or destroyed to the extent
the failure to make such repair or replacement (a) is desirable to the proper
conduct of the business of the Borrower or a Collateral Guarantor in the
ordinary course and otherwise is in the best interest of the Borrower or a
Collateral Guarantor and (b) would not materially impair the rights and benefits
of the Agents or the Lenders under this Credit Agreement or any other Credit
Document. In the event the Borrower or a Collateral Guarantor shall receive any
insurance proceeds, as a result of any loss, damage or destruction, in a net
amount in excess of $1,000,000, the Borrower, or such Collateral Guarantor, will
immediately pay over such proceeds to the Collateral Agent as cash collateral
for the Credit Party Obligations. The Collateral Agent agrees to release such
insurance proceeds to the Borrower, or the applicable Collateral Guarantor, for
replacement or restoration of the portion of the Collateral lost, damaged or
destroyed if (A) within 15 days from the date the Collateral Agent receives such
insurance proceeds, the Collateral Agent has received written application for
such release from the Borrower, or such Collateral Guarantor, together with
evidence reasonably satisfactory to it that the Collateral lost, damaged or
destroyed has been or will be replaced or restored to its condition (or by
Collateral having a value at least equal to the condition of the asset subject
to the loss, damage or destruction) immediately prior to the loss, destruction
or other event giving rise to the payment of such insurance proceeds and (B) on
the date of such release no Default or Event of Default exists. If the
conditions in the preceding sentence are not met, the Collateral Agent shall, on
the first Business Day subsequent to the date 30 days after it received such
insurance proceeds, apply such insurance proceeds as a mandatory prepayment of
the Credit Party Obligations for application in accordance with the terms of
Section 3.3(c). All insurance proceeds shall be subject to the security interest
of the Lenders under the Collateral Documents.
The present insurance coverage of the Credit Parties and their Subsidiaries is
outlined as to carrier, policy number, expiration date, type and amount on
Schedule 7.7(a), as Schedule 7.7(a) may be amended from time to time by written
notice to the Administrative Agent.
It is the intent of the parties hereto that the application of insurance
proceeds and all of the other provisions of this Section 7.7 be construed
according to the law of the State of North Carolina. However, if this Section
7.7 is ever construed under the law of the State of California, then
notwithstanding the provisions set forth above (except for any destruction which
occurs during the six (6) months immediately preceding the Term Loan Maturity
Date), the provisions set forth on Schedule 7.7 (b) shall apply to the
Borrower's use of insurance proceeds to the extent of any conflict between the
terms of this Section 7.7 and the terms set forth on Schedule 7.7(b).
7.8 Maintenance of Property.
Each of the Credit Parties will maintain and preserve its properties
and equipment in good repair, working order and condition, normal wear and tear
excepted (subject to damage by casualties), and will make, or cause to be made,
in such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.
7.9 Performance of Obligations.
Each of the Credit Parties will perform in all material respects all
of its obligations under the terms of all material agreements, indentures,
mortgages, security agreements or other debt instruments to which it is a party
or by which it is bound.
7.10 Use of Proceeds.
The Borrower will use the proceeds of the Loans solely (a) to
refinance existing Indebtedness on the Collateral Properties and (b) for other
general corporate purposes of the Borrower and its Subsidiaries.
7.11 Audits/Inspections.
Upon reasonable notice and during normal business hours, each Credit
Party will, and will cause its Subsidiaries to, permit representatives appointed
by an Agent, including, without limitation, independent accountants, agents,
attorneys and appraisers to visit and inspect such Credit Party's or such
Subsidiary's property, including, without limitation, the Collateral Properties,
including its books and records, its accounts receivable and inventory, its
facilities and its other business assets, and to make photocopies or photographs
thereof and to write down and record any information such representative obtains
and shall permit an Agent or its representatives to investigate and verify the
accuracy of information provided to the Lenders and to discuss all such matters
with the officers, employees and representatives of the Credit Parties and their
Subsidiaries.
7.12 Additional Credit Parties.
At the time the Borrower or a Collateral Guarantor forms or acquires
a new Subsidiary, the Borrower shall so notify the Administrative Agent and
immediately shall cause such new Subsidiary to (a) execute a Joinder Agreement
in substantially the same form as Exhibit 7.12, (b) execute any and all
necessary mortgages, deeds of trust, deeds to secure debt or other appropriate
real estate collateral documentation in a form substantially similar to the
Mortgages, with appropriate covenants as necessary and (c) deliver such other
documentation as the Administrative Agent or Collateral Agent may reasonably
request in connection with the foregoing, including, without limitation,
appropriate UCC-1 financing statements, real estate title insurance policies,
environmental reports, certified resolutions and other organizational and
authorizing documents of such Subsidiary and favorable opinions of counsel to
such Subsidiary (which shall cover, among other things, the legality, validity,
binding effect and enforceability of the documentation referred to above), all
in form, content and scope reasonably satisfactory to the Administrative Agent.
7.13 Refinancing of Collateral Properties.
If the Borrower or a Collateral Guarantor refinances a Collateral
Property, the Borrower shall immediately pay to the Administrative Agent an
amount equal to at least the amount required by Section 3.3(b)(ii).
In connection with a refinancing of a Collateral Property, the
Collateral Agent agrees that it shall (and the Lenders hereby authorize the
Collateral Agent to), upon satisfaction of the above conditions and at the
Borrower's request and expense, promptly deliver to the Borrower such
documentation as is reasonably necessary to evidence the release of the Lenders'
security interest in such Collateral Property (and the personal property with
respect thereto) and, if appropriate, to release a Collateral Guarantor from its
guaranty obligations hereunder.
7.14 Collateral.
If subsequent to the Closing Date, the Borrower or a Collateral
Guarantor (a) acquires or leases any real property or (b) acquires any personal
property required to be delivered by the Collateral Documents or located in a
new jurisdiction not set forth on Schedule 6.21(b), the Borrower shall promptly
notify the Collateral Agent of same. The Borrower and the Collateral Guarantors
shall take such action as requested by the Collateral Agent, at the Borrower's
expense, to ensure the Lenders have a first priority Lien in all assets of the
Borrower and the Collateral Guarantors, subject only to Permitted Liens.
Notwithstanding this Section 7.14, the Lenders agree that the Liens in favor of
the Lenders shall be released and the Collateral Guarantors may be released from
their guaranty obligations hereunder in accordance with the terms and conditions
of Section 7.13 and 8.5 (and the Lenders hereby authorize the Collateral Agent
to execute and deliver such documentation necessary to evidence such releases).
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans, together with interest, fees
and other obligations hereunder, have been paid in full and the Commitments
hereunder shall have terminated:
8.1 Indebtedness.
No Credit Party will, nor will it permit any of its Subsidiaries to,
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement
and the other Credit Documents;
(b) Indebtedness existing as of the Closing Date as
referenced in Section 6.10 (and renewals, refinancings or extensions
thereof in a principal amount not in excess of that outstanding as
of the date of such renewal, refinancing or extension);
(c) Indebtedness in respect of current accounts payable
and accrued expenses incurred in the ordinary course of business;
and
(d) Indebtedness of a Credit Party or any of its
Subsidiaries (other than the Borrower or a Collateral Guarantor);
provided that no Default or Event of Default exists at the time of
such incurrence of Indebtedness or is caused by such incurrence of
Indebtedness.
8.2 Liens.
Neither the Borrower nor any Collateral Guarantor will contract,
create, incur, assume or permit to exist any Lien with respect to any of its
property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or after acquired, except for Permitted Liens;
provided that this Section 8.2 shall not apply to Collateral Guarantors that
have been released from their guaranty obligations hereunder pursuant to
Sections 7.13 or 8.5.
8.3 Nature of Business.
No Credit Party will alter the character of its business from that
conducted as of the Closing Date.
8.4 Consolidation and Merger.
No Credit Party (other than UDRT) will enter into any transaction of
merger or consolidation and no Credit Party (including UDRT) will enter into any
transaction to liquidate, wind up or dissolve itself (or suffer any liquidation
or dissolution); provided that notwithstanding the foregoing provisions of this
Section 8.4, any Collateral Guarantor may be merged or consolidated with or into
the Borrower or any other Collateral Guarantor if (a) the transaction is between
the Borrower and the Collateral Guarantor, the Borrower is the continuing or
surviving entity; (b) the Administrative Agent is given prior written notice of
such action, and the Borrower and the Collateral Guarantor execute and deliver
such documents, instruments and certificates as the Collateral Agent may request
in order to maintain the perfection and priority of the Liens on the assets of
the Borrower and the Collateral Guarantors; and (c) after giving effect thereto
no Default or Event of Default exists.
8.5 Sale or Lease of Assets.
No Credit Party will convey, sell, lease, transfer or otherwise
dispose of, in one transaction or a series of transactions, all or any part of
its business or assets whether now owned or hereafter acquired other than (a)
the sale or transfer of assets by a Credit Party (other than the Borrower or a
Collateral Guarantor); provided that no Default or Event of Default exists at
the time of such sale or transfer or is caused by such sale or transfer and the
Borrower makes a prepayment on the outstanding principal balance of the Term
Loan as required by Section 3.3(b)(ii) at the time of such sale and (b) the
transfer of assets which constitute a Permitted Investment.
Upon a sale of assets permitted by this Section 8.5, the Collateral
Agent shall promptly deliver to the Borrower (and the Lenders hereby authorize
the Collateral Agent to), upon the Borrower's request and at the Borrower's
expense, such documentation as is reasonably necessary to evidence the release
of the Lenders' security interest in such assets, including, without limitation,
amendments or terminations of UCC financing statements and, if appropriate, to
release a Collateral Guarantor from its guaranty obligations hereunder.
8.6 Advances, Investments and Loans.
Neither the Borrower nor any Collateral Guarantors will make any
Investments except for Permitted Investments.
8.7 Restricted Payments.
(a) No Credit Party will directly or indirectly, declare
or pay any dividends or make any other distribution upon any shares
of its capital stock of any class or with respect to any of its
partnership interests that exceeds, in the aggregate, 90% of Funds
From Operations earned subsequent to the Closing Date; provided that
any Subsidiary of the Borrower may pay dividends to the Borrower
and, without duplication, any Credit Party may make dividends or
distributions necessary to maintain its status as a real estate
investment trust; and
(b) Neither the Borrower, UDRT, UDRLP nor any Collateral
Guarantors will, at any time, purchase, redeem (other than
redemption of operating partnership units) or otherwise acquire or
retire or make any provisions for redemption, acquisition or
retirement of any shares of its capital stock of any class or any
warrants or options to purchase any such shares or with respect to
any of its partnership interests.
(c) No Credit Party shall prepay, redeem, purchase or
defease any amount of any Subordinated Debt.
8.8 Transactions with Affiliates.
Except as set forth on Schedule 8.8, no Credit Party will enter into
any transaction or series of transactions, whether or not in the ordinary course
of business, with any officer, director, shareholder, Subsidiary or Affiliate
other than on terms and conditions substantially as favorable as would be
obtainable in a comparable arm's-length transaction with a Person other than an
officer, director, shareholder, Subsidiary or Affiliate.
8.9 Fiscal Year; Organizational Documents.
No Credit Party will change its fiscal year. Neither the Borrower
nor any of the Collateral Guarantors will change its articles or certificate of
incorporation, bylaws, articles or certificate of partnership, partnership
agreement, articles of organization or operating agreement, as applicable.
8.10 Limitations.
No Credit Party will directly or indirectly, create or otherwise
cause, incur, assume, suffer or permit to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of any such
Person to pay any Indebtedness owed to the Borrower or any other Credit Party.
8.11 Negative Pledges.
Neither the Borrower nor any Collateral Guarantors will enter into,
assume or become subject to any agreement prohibiting or otherwise restricting
the creation or assumption of any Lien upon its properties or assets, whether
now owned or hereafter acquired, or requiring the grant of any security for such
obligation if security is given for some other obligation except as provided
under the Credit Documents.
8.12 Subordinated Debt.
No Credit Party will, without the written consent of the Required
Lenders, permit an amendment or modification to any Subordinated Debt if such
amendment or modification would materially adversely affect the Lenders.
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall default in the
payment (i) within ten days of when due of any principal of any
Loans in connection with mandatory prepayments required by Section
3.3(b), (ii) when due of any principal of any of the Loans in
connection with payments required by any other section of this
Credit Agreement or (iii) within three days of when due of any
interest on the Loans or any fees or other amounts owing hereunder,
under any of the other Credit Documents or in connection herewith.
(b) Representations. Any representation, warranty or
statement made or deemed to be made by any Credit Party herein, in
any of the other Credit Documents, or in any statement or
certificate delivered or required to be delivered pursuant hereto or
thereto shall prove untrue in any material respect on the date as of
which it was made or deemed to have been made.
(c) Covenants. Any Credit Party shall:
(i) default in the due performance
or observance of any term, covenant or agreement
contained in Sections 7.2, 7.6, 7.10, 7.11, 7.12, 7.13,
7.14, or 8.1 through 8.12 inclusive; or
(ii) default in the due performance
or observance by it of any term, covenant or agreement
contained in Section 7.1 and such default shall continue
unremedied for a period of five Business Days after the
earlier of an officer of a Credit Party becoming aware
of such default or notice thereof given by the
Administrative Agent; or
(iii) default in the due performance
or observance by it of any term, covenant or agreement
(other than those referred to in subsections (a), (b) or
(c)(i) or (ii) of this Section 9.1) contained in this
Credit Agreement and such default shall continue
unremedied for a period of at least 30 days after the
earlier of an officer of a Credit Party becoming aware
of such default or notice thereof given by the
Administrative Agent.
(d) Other Credit Documents. (i) Any Credit Party shall
default in the due performance or observance of any term, covenant
or agreement in any of the other Credit Documents and such default
shall continue unremedied for a period of at least 30 days after the
earlier of an officer of a Credit Party becoming aware of such
default or notice thereof given by the Administrative Agent, or (ii)
any Credit Document shall fail to be in full force and effect or any
Credit Party shall so assert or any Credit Document shall fail to
give the Administrative Agent and/or the Lenders the security
interests, liens, rights, powers and privileges purported to be
created thereby.
(e) Guaranties. The guaranty given by any of the Credit
Parties hereunder or by any Additional Credit Party hereafter or any
provision thereof shall cease to be in full force and effect, or any
Guarantor hereunder or any Person acting by or on behalf of such
Guarantor shall deny or disaffirm such Guarantor's obligations under
such guaranty.
(f) Bankruptcy, etc. The occurrence of any of the
following with respect to any Credit Party or any of its
Subsidiaries (i) a court or governmental agency having jurisdiction
in the premises shall enter a decree or order for relief in respect
of any Credit Party or any of its Subsidiaries in an involuntary
case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or appoint a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of
any Credit Party or any of its Subsidiaries or for any substantial
part of its property or ordering the winding up or liquidation of
its affairs; or (ii) an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in
effect is commenced against any Credit Party or any of its
Subsidiaries and such petition remains unstayed and in effect for a
period of 60 consecutive days; or (iii) any Credit Party or any of
its Subsidiaries shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief
in an involuntary case under any such law, or consent to the
appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of
such Person or any substantial part of its property or make any
general assignment for the benefit of creditors; or (iv) any Credit
Party or any of its Subsidiaries shall admit in writing its
inability to pay its debts generally as they become due or any
action shall be taken by such Person in furtherance of any of the
aforesaid purposes.
(g) Defaults under Other Agreements. With respect to any
Indebtedness (other than Indebtedness outstanding under this Credit
Agreement, but specifically including, without limitation, the
Indebtedness evidenced by the UDRT Facility) of any Credit Party or
any of its Subsidiaries in an aggregate principal amount in excess
of $5,000,000, (i) a Credit Party shall (A) default in any payment
(beyond the applicable grace period with respect thereto, if any)
with respect to any such Indebtedness, or (B) default (after giving
effect to any applicable grace period) in the observance or
performance of any term, covenant or agreement relating to such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event or condition shall
occur or condition exist, the effect of which default or other event
or condition is to cause, or permit, the holder or holders of such
Indebtedness (or trustee or agent on behalf of such holders) to
cause (determined without regard to whether any notice or lapse of
time is required) any such Indebtedness to become due prior to its
stated maturity; or (ii) any such Indebtedness shall be declared due
and payable, or required to be prepaid other than by a regularly
scheduled required prepayment prior to the stated maturity thereof;
or (iii) any such Indebtedness shall mature and remain unpaid.
(h) Judgments. One or more judgments, orders, or decrees
shall be entered against any one or more of the Credit Parties
involving a liability of $5,000,000 or more, in the aggregate (to
the extent not paid or covered by insurance provided by a carrier
who has acknowledged coverage), and such judgments, orders or
decrees (i) are the subject of any enforcement proceeding commenced
by any creditor or (ii) shall continue unsatisfied, undischarged and
unstayed for a period ending on the first to occur of (A) the last
day on which such judgment, order or decree becomes final and
unappealable or (B) 20 days.
(i) ERISA Events. The occurrence of any of the following
events or conditions, unless such event or occurrence would not have
or be reasonably expected to have a Material Adverse Effect: (1) any
"accumulated funding deficiency," as such term is defined in Section
302 of ERISA and Section 412 of the Code, whether or not waived,
shall exist with respect to any Plan, or any lien shall arise on the
assets of a Credit Party or any ERISA Affiliate in favor of the PBGC
or a Plan; (2) an ERISA Event shall occur with respect to a Single
Employer Plan, which is, in the reasonable opinion of the Agent,
likely to result in the termination of such Plan for purposes of
Title IV of ERISA; (3) an ERISA Event shall occur with respect to a
Multiemployer Plan or Multiple Employer Plan, which is, in the
reasonable opinion of the Administrative Agent, likely to result in
(i) the termination of such Plan for purposes of Title IV of ERISA,
or (ii) a Credit Party or any ERISA Affiliate incurring any
liability in connection with a withdrawal from, reorganization of
(within the meaning of Section 4241 of ERISA), or insolvency (within
the meaning of Section 4245 of ERISA) of such Plan; or (4) any
prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Code) or breach of fiduciary responsibility
shall occur which may subject a Credit Party or any ERISA Affiliate
to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA
or Section 4975 of the Code, or under any agreement or other
instrument pursuant to which a Credit Party or any ERISA Affiliate
has agreed or is required to indemnify any person against any such
liability.
(j) Ownership. There shall occur a Change of Control.
9.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, and at any time
thereafter unless and until such Event of Default has been waived in writing by
the Required Lenders (or the Lenders as may be required hereunder), the
Administrative Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Borrower, take any of the following actions
without prejudice to the rights of the Agents or any Lender to enforce its
claims against the Credit Parties, except as otherwise specifically provided for
herein:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately
terminated.
(b) Acceleration of Loans. Declare the unpaid principal
of and any accrued interest in respect of all Loans and any and all
other indebtedness or obligations of any and every kind owing by a
Credit Party to any of the Lenders hereunder to be due whereupon the
same shall be immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby
waived by the Credit Parties.
(c) Enforcement of Rights. Enforce any and all rights
and interests created and existing under the Credit Documents,
including, without limitation, all rights and remedies existing
under the Collateral Documents, all rights and remedies against a
Guarantor and all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all accrued interest in respect thereof, all accrued and unpaid fees and
other indebtedness or obligations owing to the Lenders hereunder shall
immediately become due and payable without the giving of any notice or other
action by the Administrative Agent or the Lenders, which notice or other action
is expressly waived by the Credit Parties.
Notwithstanding the fact that enforcement powers reside primarily with the
Administrative Agent, each Lender has, to the extent permitted by law, a
separate right of payment and shall be considered a separate "creditor" holding
a separate "claim" within the meaning of Section 101(5) of the Bankruptcy Code
or any other insolvency statute.
9.3 Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement, after
the occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Administrative Agent, the Collateral Agent or any
Lender on account of amounts outstanding under any of the Credit Documents or in
respect of the Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket
costs and expenses (including without limitation reasonable
attorneys' fees) of the Agents in connection with enforcing the
rights of the Lenders under the Credit Documents and any protective
advances made by the Agents with respect to the Collateral under or
pursuant to the terms of the Collateral Documents;
SECOND, to payment of any fees owed to an Agent;
THIRD, to the payment of all reasonable out-of-pocket
costs and expenses, (including, without limitation, reasonable
attorneys' fees) of each of the Lenders in connection with enforcing
its rights under the Credit Documents;
FOURTH, to the payment of all accrued fees and interest
payable to the Lenders hereunder;
FIFTH, to the payment of the outstanding principal
amount of the Loans, pro rata, as set forth below;
SIXTH, to all other obligations which shall have become
due and payable under the Credit Documents and not repaid pursuant
to clauses "FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to
whoever may be lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; and (b) each of the Lenders shall receive an amount equal
to its pro rata share (based on the proportion that the then outstanding Loans
held by such Lender bears to the aggregate then outstanding Loans) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH," "FIFTH," and
"SIXTH" above.
SECTION 10
AGENCY PROVISIONS
10.1 Appointment.
Each Lender hereby designates and appoints NationsBank, N.A. as
Administrative Agent and Collateral Agent of such Lender to act as specified
herein and the other Credit Documents, and each such Lender hereby authorizes
the Agents, as the agents for such Lender, to take such action on its behalf
under the provisions of this Credit Agreement and the other Credit Documents and
to exercise such powers and perform such duties as are expressly delegated by
the terms hereof and of the other Credit Documents, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere herein and in the other Credit Documents, the Agents
shall not have any duties or responsibilities, except those expressly set forth
herein and therein, or any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Credit Agreement or any of the other Credit
Documents, or shall otherwise exist against the Agents. The provisions of this
Section are solely for the benefit of the Agents and the Lenders and none of the
Credit Parties shall have any rights as a third party beneficiary of the
provisions hereof. In performing its functions and duties under this Credit
Agreement and the other Credit Documents, each Agent shall act solely as an
agent of the Lenders and does not assume and shall not be deemed to have assumed
any obligation or relationship of agency or trust with or for any Credit Party.
10.2 Delegation of Duties.
An Agent may execute any of its duties hereunder or under the other
Credit Documents by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. An Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
10.3 Exculpatory Provisions.
Neither the Agents nor any of their officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (a) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection herewith or in connection with any of the other Credit Documents
(except for its or such Person's own gross negligence or willful misconduct) or
(b) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any of the Credit Parties
contained herein or in any of the other Credit Documents or in any certificate,
report, document, financial statement or other written or oral statement
referred to or provided for in, or received by an Agent under or in connection
herewith or in connection with the other Credit Documents, or enforceability or
sufficiency therefor of any of the other Credit Documents, or for any failure of
the Borrower to perform its obligations hereunder or thereunder. The Agents
shall not be responsible to any Lender for the effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Credit
Agreement, or any of the other Credit Documents or for any representations,
warranties, recitals or statements made herein or therein or made by the
Borrower or any Credit Party in any written or oral statement or in any
financial or other statements, instruments, reports, certificates or any other
documents in connection herewith or therewith furnished or made by an Agent to
the Lenders or by or on behalf of the Credit Parties to the Agents or any Lender
or be required to ascertain or inquire as to the performance or observance of
any of the terms, conditions, provisions, covenants or agreements contained
herein or therein or as to the use of the proceeds of the Loans or of the
existence or possible existence of any Default or Event of Default or to inspect
the properties, books or records of the Credit Parties. The Agents are not
trustees for the Lenders and owe no fiduciary duty to the Lenders.
10.4 Reliance on Communications.
The Agents shall be entitled to rely, and shall be fully protected
in relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order 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, without
limitation, counsel to any of the Credit Parties, independent accountants and
other experts selected by the Agents with reasonable care). Each Agent may deem
and treat each Lender as the owner of its interests hereunder for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Administrative Agent in accordance with Section
11.3(b). The Agents shall be fully justified in failing or refusing to take any
action under this Credit Agreement or under any of the other Credit Documents
unless it shall first receive such advice or concurrence of the Required Lenders
as it deems appropriate or it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The Agents shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder or under any of the other Credit Documents in accordance with a
request of the Required Lenders (or to the extent specifically provided in
Section 11.6, all the Lenders) and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Lenders (including their
successors and assigns).
10.5 Notice of Default.
An Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless such Agent has
received notice from a Lender or a Credit Party referring to the Credit
Document, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give prompt notice
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders and as is permitted by the Credit Documents.
10.6 Non-Reliance on Agents and Other Lenders.
Each Lender expressly acknowledges that neither the Agents,
NationsBanc Montgomery Securities LLC ("NMS") nor any of their officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Agents, NMS or any
affiliate thereof hereinafter taken, including any review of the affairs of any
Credit Party, shall be deemed to constitute any representation or warranty by
the Agents or NMS to any Lender. Each Lender represents to the Agents and NMS
that it has, independently and without reliance upon the Agents or NMS or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Credit Parties and made its own decision to make its
Loans hereunder and enter into this Credit Agreement. Each Lender also
represents that it will, independently and without reliance upon the Agents, NMS
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Credit
Agreement, and to make such investigation as it deems necessary to inform itself
as to the business, assets, operations, property, financial and other
conditions, prospects and creditworthiness of the Credit Parties. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder, the Agents and NMS shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, assets, property, financial or
other conditions, prospects or creditworthiness of the Credit Parties which may
come into the possession of the Agents, NMS or any of their officers, directors,
employees, agents, attorneys-in-fact or affiliates.
10.7 Indemnification.
The Lenders agree to indemnify each Agent in its capacity as such
(to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
Commitments (or if the Commitments have expired or been terminated, in
accordance with the respective principal amounts of outstanding Loans and
Participation Interest of the Lenders), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including without limitation at any time following payment in full of the
Credit Party Obligations) be imposed on, incurred by or asserted against an
Agent in its capacity as such in any way relating to or arising out of this
Credit Agreement or the other Credit Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by an Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
gross negligence or willful misconduct of an Agent. If any indemnity furnished
to an Agent for any purpose shall, in the opinion of such Agent, be insufficient
or become impaired, such Agent may call for additional indemnity and cease, or
not commence, to do the acts indemnified against until such additional indemnity
is furnished. The agreements in this Section shall survive the payment of the
Credit Party Obligations and all other amounts payable hereunder and under the
other Credit Documents.
10.8 Agents in Their Individual Capacity.
Each Agent and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Borrower or any other
Credit Party as though such Agent were not an Agent hereunder. With respect to
the Loans made and all obligations owing to it, an Agent shall have the same
rights and powers under this Credit Agreement as any Lender and may exercise the
same as though it were not an Agent, and the terms "Lender" and "Lenders" shall
include each Agent in its individual capacity.
10.9 Successor Agent.
Any Agent may, at any time, resign upon 20 days written notice to
the Lenders. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment,
within 45 days after the notice of resignation, then the retiring Agent shall
select a successor Agent provided such successor is an Eligible Assignee. Upon
the acceptance of any appointment as an Agent hereunder by a successor, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations as an Agent, as
appropriate, under this Credit Agreement and the other Credit Documents and the
provisions of this Section 10.9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was an Agent under this Credit
Agreement.
SECTION 11
MISCELLANEOUS
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address or telecopy numbers set forth on Schedule
11.1, or at such other address as such party may specify by written notice to
the other parties hereto.
11.2 Right of Set-Off.
In addition to any rights now or hereafter granted under applicable
law or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default and the commencement of remedies described in
Section 9.2, each Lender is authorized at any time and from time to time,
without presentment, demand, protest or other notice of any kind (all of which
rights being hereby expressly waived), to set-off and to appropriate and apply
any and all deposits (general or special) and any other indebtedness at any time
held or owing by such Lender (including, without limitation, branches, agencies
or Affiliates of such Lender wherever located) to or for the credit or the
account of any Credit Party against obligations and liabilities of such Credit
Party to the Lenders hereunder, under the Notes, the other Credit Documents or
otherwise, irrespective of whether the Administrative Agent or the Lenders shall
have made any demand hereunder and although such obligations, liabilities or
claims, or any of them, may be contingent or unmatured, and any such set-off
shall be deemed to have been made immediately upon the occurrence of an Event of
Default even though such charge is made or entered on the books of such Lender
subsequent thereto; provided, however, that no right of set-off shall be
exercised against accounts identified as holding tenant security deposits. The
Credit Parties hereby agree that any Person purchasing a participation in the
Loans and Commitments hereunder pursuant to Section 11.3(c) or 3.8 may exercise
all rights of set-off with respect to its participation interest as fully as if
such Person were a Lender hereunder.
11.3 Benefit of Agreement.
(a) Generally. This Credit Agreement shall be binding
upon and inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto; provided
that none of the Credit Parties may assign and transfer any of its
interests (except as permitted by Section 8.4 or 8.5) without the
prior written consent of the Lenders; and provided further that the
rights of each Lender to transfer, assign or grant participations in
its rights and/or obligations hereunder shall be limited as set
forth below in subsections (b) and (c) of this Section 11.3.
Notwithstanding the above (including anything set forth in
subsections (b) and (c) of this Section 11.3), nothing herein shall
restrict, prevent or prohibit any Lender from (A) pledging its Loans
hereunder to a Federal Reserve Bank in support of borrowings made by
such Lender from such Federal Reserve Bank, or (B) granting
assignments or participations in such Lender's Loans and/or
Commitments hereunder to its parent company and/or to any Affiliate
of such Lender or to any existing Lender or Affiliate thereof.
(b) Assignments. In addition to the assignments
permitted by Section 11.3(a), each Lender may, with the prior
written consent of the Borrower and the Administrative Agent
(provided that no consent of the Borrower shall be required during
the existence and continuation of an Event of Default), which
consent shall not be unreasonably withheld or delayed, assign all or
a portion of its rights and obligations hereunder pursuant to an
assignment agreement substantially in the form of Exhibit 11.3 to
one or more Eligible Assignees; provided that (i) any such
assignment shall be in a minimum aggregate amount of $10,000,000 of
the Commitments and in integral multiples of $1,000,000 above such
amount (or the remaining amount of Commitments held by such Lender)
and (ii) each such assignment shall be of a constant, not varying,
percentage of all of the assigning Lender's rights and obligations
under the Commitment being assigned. Any assignment hereunder shall
be effective upon satisfaction of the conditions set forth above and
delivery to the Administrative Agent of a duly executed assignment
agreement together with a transfer fee of $3,500 payable to the
Administrative Agent for its own account. Upon the effectiveness of
any such assignment, the assignee shall become a "Lender" for all
purposes of this Credit Agreement and the other Credit Documents
and, to the extent of such assignment, the assigning Lender shall be
relieved of its obligations hereunder to the extent of the Loans and
Commitment components being assigned. The Borrower agrees that upon
notice of any such assignment and surrender of the appropriate Note
or Notes, it will promptly provide to the assigning Lender and to
the assignee separate promissory notes in the amount of their
respective interests substantially in the form of the original Note
or Notes (but with notation thereon that it is given in substitution
for and replacement of the original Note or Notes or any replacement
notes thereof).
By executing and delivering an assignment agreement in accordance
with this Section 11.3(b), the assigning Lender thereunder and the
assignee thereunder shall be deemed to confirm to and agree with
each other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner
of the interest being assigned thereby free and clear of any adverse
claim and the assignee warrants that it is an Eligible Assignee;
(ii) except as set forth in clause (i) above, such assigning Lender
makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made
in or in connection with this Credit Agreement, any of the other
Credit Documents or any other instrument or document furnished
pursuant hereto or thereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit
Agreement, any of the other Credit Documents or any other instrument
or document furnished pursuant hereto or thereto or the financial
condition of any Credit Party or the performance or observance by
any Credit Party of any of its obligations under this Credit
Agreement, any of the other Credit Documents or any other instrument
or document furnished pursuant hereto or thereto; (iii) such
assignee represents and warrants that it is legally authorized to
enter into such assignment agreement; (iv) such assignee confirms
that it has received a copy of this Credit Agreement, the other
Credit Documents and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to
enter into such assignment agreement; (v) such assignee will
independently and without reliance upon the Agents, such assigning
Lender or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under
this Credit Agreement and the other Credit Documents; (vi) such
assignee appoints and authorizes the Agents to take such action on
its behalf and to exercise such powers under this Credit Agreement
or any other Credit Document as are delegated to the Agents by the
terms hereof or thereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations which by
the terms of this Credit Agreement and the other Credit Documents
are required to be performed by it as a Lender.
(c) Participations. Each Lender may sell, transfer,
grant or assign participations in all or any part of such Lender's
interests and obligations hereunder; provided that (i) such selling
Lender shall remain a "Lender" for all purposes under this Credit
Agreement (such selling Lender's obligations under the Credit
Documents remaining unchanged) and the participant shall not
constitute a Lender hereunder, (ii) no such participant shall have,
or be granted, rights to approve any amendment or waiver relating to
this Credit Agreement or the other Credit Documents except to the
extent any such amendment or waiver would (A) reduce the principal
of or rate of interest on or fees in respect of any Loans in which
the participant is participating or increase any Commitments with
respect thereto, (B) postpone the date fixed for any payment of
principal (including the extension of the final maturity of any Loan
or the date of any mandatory prepayment), interest or fees in which
the participant is participating, or (C) release all or
substantially all of the collateral or guaranties (except as
expressly provided in the Credit Documents) supporting any of the
Loans or Commitments in which the participant is participating,
(iii) sub-participations by the participant (except to an Affiliate,
parent company or Affiliate of a parent company of the participant)
shall be prohibited and (iv) any such participations shall be in a
minimum aggregate amount of $10,000,000 of the Commitments and in
integral multiples of $1,000,000 in excess thereof. In the case of
any such participation, the participant shall not have any rights
under this Credit Agreement or the other Credit Documents (the
participant's rights against the selling Lender in respect of such
participation to be those set forth in the participation agreement
with such Lender creating such participation) and all amounts
payable by the Borrower hereunder shall be determined as if such
Lender had not sold such participation; provided, however, that such
participant shall be entitled to receive additional amounts under
Sections 3.9, 3.12, 3.13 and 3.14 to the same extent that the Lender
from which such participant acquired its participation would be
entitled to the benefit of such cost protection provisions.
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of an Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Borrower or any Credit Party and
the Agents or any Lender shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege hereunder or under any
other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights and remedies provided herein are cumulative and not exclusive of any
rights or remedies which the Agents or any Lender would otherwise have. No
notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other circumstances
or constitute a waiver of the rights of the Agents or the Lenders to any other
or further action in any circumstances without notice or demand.
11.5 Payment of Expenses; Indemnification.
The Credit Parties agree to: (a) pay all reasonable out-of-pocket
costs and expenses of (i) the Agents and NationsBanc Montgomery Securities LLC
("NMS") in connection with (A) the negotiation, preparation, execution and
delivery, syndication and administration of this Credit Agreement and the other
Credit Documents and the documents and instruments referred to therein
(including, without limitation, the reasonable fees and expenses of Moore & Van
Allen, special counsel to the Agents and the fees and expenses of counsel for
the Agents in connection with collateral issues), and (B) any amendment, waiver
or consent relating hereto and thereto including, but not limited to, any such
amendments, waivers or consents resulting from or related to any work-out,
renegotiation or restructure relating to the performance by the Credit Parties
under this Credit Agreement, and (ii) the Agents and the Lenders in connection
with (A) enforcement of the Credit Documents and the documents and instruments
referred to therein, including, without limitation, in connection with any such
enforcement, the reasonable fees and disbursements of counsel for the Agents and
each of the Lenders, and (B) any bankruptcy or insolvency proceeding of a Credit
Party or any of its Subsidiaries, and (b) indemnify each Agent, NMS and each
Lender, its officers, directors, employees, representatives and agents from and
hold each of them harmless against any and all losses, liabilities, claims,
damages or expenses incurred by any of them as a result of, or arising out of,
or in any way related to, or by reason of, any investigation, litigation or
other proceeding (whether or not any Agent, NMS or Lender is a party thereto)
related to (i) the entering into and/or performance of any Credit Document or
the use of proceeds of any Loans (including other extensions of credit)
hereunder or the consummation of any other transactions contemplated in any
Credit Document, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such losses, liabilities,
claims, damages or expenses to the extent incurred by reason of gross negligence
or willful misconduct on the part of the Person to be indemnified), (ii) any
Environmental Claim and (iii) any claims for Non-Excluded Taxes.
11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any
of the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing and signed by the Required Lenders and the then Credit Parties; provided
that no such amendment, change, waiver, discharge or termination shall without
the consent of each Lender affected thereby:
(a) extend the final maturity of any Loan or any portion
thereof or postpone any other date fixed for any payment of
principal;
(b) reduce the rate or extend the time of payment of
interest (other than as a result of waiving the applicability of any
post-default increase in interest rates) thereon or fees hereunder;
(c) reduce or waive the principal amount of any Loan;
(d) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a waiver of
any Default or Event of Default or a waiver of any mandatory
reduction in the Commitments shall not constitute a change in the
terms of any Commitment of any Lender);
(e) release all or substantially all of the Collateral
securing the Credit Party Obligations hereunder (provided that the
Collateral Agent may, without consent from any other Lender, release
any Collateral that is sold or transferred by a Credit Party in
conformance with Section 8.5 or refinanced in accordance with
Section 7.13);
(f) release the Borrower or any of the other Credit
Parties from its obligations under the Credit Documents;
(g) amend, modify or waive any provision of this Section
or Section 3.4, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 9.1(a),
11.2, 11.3 or 11.5;
(h) reduce any percentage specified in, or otherwise
modify, the definition of Required Lenders; or
(i) consent to the assignment or transfer by the
Borrower of any of its rights and obligations under (or in respect
of) the Credit Documents except as permitted under Section 8.4.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any reorganization plan that affects the Loans, and each
Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy
Code supersedes the unanimous consent provisions set forth herein and (y) the
Required Lenders may consent to allow a Credit Party to use cash collateral in
the context of a bankruptcy or insolvency proceeding.
11.7 Counterparts; Telecopy.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart. Delivery of executed counterparts by telecopy shall be
effective as an original and shall constitute a representation that an original
will be delivered.
11.8 Headings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 Defaulting Lender.
Each Lender understands and agrees that if such Lender is a
Defaulting Lender then notwithstanding the provisions of Section 11.6 it shall
not be entitled to vote on any matter requiring the consent of the Required
Lenders or to object to any matter requiring the consent of all the Lenders;
provided, however, that all other benefits and obligations under the Credit
Documents shall apply to such Defaulting Lender.
11.10 Survival of Indemnification and Representations and
Warranties.
All indemnities set forth herein and all representations and
warranties made herein shall survive the execution and delivery of this Credit
Agreement, the making of the Loans and the repayment of the Loans and other
obligations and the termination of the Commitments hereunder.
11.11 Governing Law; Jurisdiction.
(a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS (OTHER
THAN THE MORTGAGES) AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA. Any legal action or proceeding with respect to this
Agreement or any other Credit Document may be brought in the courts
of the State of North Carolina in Mecklenburg County, or of the
United States for the Western District of North Carolina and, by
execution and delivery of this Credit Agreement, each Credit Party
hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of such
courts. Each Credit Party further irrevocably consents to the
service of process out of any of the aforementioned courts in any
such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to it at the address
for notices pursuant to Section 11.1, such service to become
effective 15 days after such mailing. Nothing herein shall affect
the right of a Lender to serve process in any other manner permitted
by law or to commence legal proceedings or to otherwise proceed
against a Credit Party in any other jurisdiction. Each Credit Party
agrees that a final judgment in any action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law; provided that
nothing in this Section 11.11(a) is intended to impair a Credit
Party's right under applicable law to appeal or seek a stay of any
judgment.
(b) Each Credit Party hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in
connection with this Agreement or any other Credit Document brought
in the courts referred to in subsection (a) hereof and hereby
further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such
court has been brought in an inconvenient forum.
11.12 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
11.13 Time.
All references to time herein shall be references to Eastern
Standard Time or Eastern Daylight Time, as the case may be, unless specified
otherwise.
11.14 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.15 Entirety.
This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
11.16 Binding Effect.
This Credit Agreement shall become effective at such time when all
of the conditions set forth in Section 5.1 have been satisfied or waived by the
Lenders and it shall have been executed by the Borrower, the Guarantors and the
Agents, and the Agents shall have received copies hereof (telefaxed or
otherwise) which, when taken together, bear the signatures of each Lender, and
thereafter this Credit Agreement shall be binding upon and inure to the benefit
of the Borrower, the Guarantors, the Agents and each Lender and their respective
successors and assigns.
11.17 Confidentiality.
Each Lender agrees that it will use its reasonable best efforts to
keep confidential and to cause any representative designated under Section 7.11
to keep confidential any non-public information from time to time supplied to it
under any Credit Document; provided, however, that nothing herein shall prevent
the disclosure of any such information to (a) the extent a Lender in good faith
believes such disclosure is required by Requirement of Law, (b) counsel for a
Lender or to its accountants, (c) bank examiners or auditors or comparable
Persons, (d) any affiliate of a Lender, (e) any other Lender, or any assignee,
transferee or participant, or any potential assignee, transferee or participant,
of all or any portion of any Lender's rights under this Agreement who is
notified of the confidential nature of the information or (f) any other Person
in connection with any litigation to which any one or more of the Lenders is a
party; and provided further that no Lender shall have any obligation under this
Section 11.17 to the extent any such information becomes available on a
non-confidential basis from a source other than a Credit Party or that any
information becomes publicly available other than by a breach of this Section
11.17.
11.18 Continuance of Indebtedness and Collateral.
The parties hereto acknowledge that the Revolving Loans and
Collateral referenced in the Existing Credit Agreement are the same Loans and
Collateral referenced hereunder and that the principal amount of Revolving Loans
outstanding under the Existing Credit Agreement have not been paid in full and
reborrowed in connection with the amendment and restatement of the Existing
Credit Agreement. Furthermore, it is the intent of the parties hereto that the
Indebtedness referenced herein not constitute a novation in any manner
whatsoever.
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Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
BORROWER:
AAC FUNDING PARTNERSHIP III,
a Delaware general partnership
By: United Dominion Realty, L.P.,
a Virginia limited partnership,
its general partner
By: United Dominion Realty
Trust, Inc.,
a Virginia corporation,
its sole general partner
By: ____________________________
Name: __________________________
Title: _________________________
By: AAC Funding III, Inc.,
a Delaware corporation,
its general partner
By: ____________________________
Name: __________________________
Title: _________________________
GUARANTORS:
UNITED DOMINION REALTY, L.P.,
a Virginia limited partnership
By: United Dominion Realty
Trust, Inc.,
a Virginia corporation,
its sole general partner
By: ____________________________
Name: __________________________
Title: ________________________
UNITED DOMINION REALTY TRUST, INC.,
a Virginia corporation
By: ____________________________
Name: __________________________
Title: ________________________
AAC FUNDING PARTNERSHIP II,
a Delaware general partnership
By: United Dominion Realty, L.P.,
a Virginia limited partnership,
its general partner
By: United Dominion Realty
Trust, Inc.,
a Virginia corporation,
its sole general partner
By: _______________________
Name: _____________________
Title: ___________________
By: AAC Funding II, Inc.,
a Delaware corporation,
its general partner
By: ____________________________
Name: __________________________
Title: ________________________
COASTAL ANAHEIM PROPERTIES, LLC,
a Delaware limited liability company
By: United Dominion Realty,
L.P.,
a Virginia limited
partnership,
its ____________
By: United Dominion Realty
Trust, Inc.,
a Virginia corporation,
its sole general
partner
By: ___________________
Name: _________________
Title: ________________
WINDWARD POINT, LLC,
a California limited liability
company
By: United Dominion Realty,
L.P.,
a Virginia limited
partnership,
its ____________
By: United Dominion Realty
Trust, Inc.,
a Virginia corporation,
its sole general
partner
By: ___________________
Name: _________________
Title: _______________
REGENCY PARK, L.P.,
an Indiana limited partnership
By: United Dominion Realty,
L.P.,
a Virginia limited
partnership,
its general partner
By: United Dominion Realty
Trust, Inc.,
a Virginia
corporation,
its sole general
partner
By: __________________
Name: ________________
Title: _______________
LENDERS:
NATIONSBANK, N.A.,
individually in its capacity as a
Lender and in its capacity as
Administrative Agent and Collateral
Agent
By: _________________________________
Name: _______________________________
Title: _____________________________