1
EXHIBIT 10.1
AMENDED AND RESTATED
REVOLVING LOAN AGREEMENT
dated as of July 2, 1997
among
BAY APARTMENT COMMUNITIES, INC.,
as Borrower,
UNION BANK OF SWITZERLAND
(New York Branch),
as Co-Agent and Bank,
UNION BANK OF CALIFORNIA, N.A.,
as Co-Agent and Bank,
the other banks signatory hereto,
each as a Bank
and
UNION BANK OF SWITZERLAND
(New York Branch),
as Administrative Agent
2
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS; ETC............................................... 1
Section 1.01 Definitions........................................... 1
Section 1.02 Accounting Terms...................................... 16
Section 1.03 Computation of Time Periods........................... 16
Section 1.04 Rules of Construction................................. 16
ARTICLE II. THE LOANS..................................................... 17
Section 2.01 Ratable Loans......................................... 17
Section 2.02 Bid Rate Loans........................................ 18
Section 2.03 Advances, Generally................................... 21
Section 2.04 Procedures for Advances............................... 22
Section 2.05 Interest Periods; Renewals............................ 22
Section 2.06 Interest.............................................. 23
Section 2.07 Fees.................................................. 23
Section 2.08 Notes................................................. 24
Section 2.09 Prepayments........................................... 25
Section 2.10 Cancellation of Commitments........................... 25
Section 2.11 Method of Payment..................................... 25
Section 2.12 Elections, Conversions or Continuation
of Loans............................................. 26
Section 2.13 Minimum Amounts....................................... 26
Section 2.14 Certain Notices Regarding Elections,
Conversions and Continuations of Loans............... 26
Section 2.15 Late Payment Premium.................................. 27
Section 2.16 Letters of Credit..................................... 27
Section 2.17 Special Provisions Regarding Advances in
Connection with Acquisitions......................... 29
ARTICLE III. YIELD PROTECTION; ILLEGALITY; ETC............................ 31
Section 3.01 Additional Costs...................................... 31
Section 3.02 Limitation on Types of Loans.......................... 32
Section 3.03 Illegality............................................ 33
Section 3.04 Treatment of Affected Loans........................... 33
Section 3.05 Certain Compensation.................................. 33
Section 3.06 Capital Adequacy...................................... 34
Section 3.07 Substitution of Banks................................. 35
Section 3.08 Applicability......................................... 36
ARTICLE IV. CONDITIONS PRECEDENT.......................................... 37
Section 4.01 Conditions Precedent to the Initial
Advance.............................................. 37
Section 4.02 Conditions Precedent to Advances After
the Initial Advance.................................. 38
Section 4.03 Deemed Representations................................ 39
ARTICLE V. REPRESENTATIONS AND WARRANTIES................................. 39
Section 5.01 Due Organization...................................... 39
Section 5.02 Power and Authority; No Conflicts;
Compliance With Laws................................. 39
i
3
Page
Section 5.03 Legally Enforceable Agreements........................ 40
Section 5.04 Litigation............................................ 40
Section 5.05 Good Title to Properties.............................. 40
Section 5.06 Taxes................................................. 40
Section 5.07 ERISA................................................. 40
Section 5.08 No Default on Outstanding Judgments or
Orders............................................... 41
Section 5.09 No Defaults on Other Agreements....................... 41
Section 5.10 Government Regulation................................. 41
Section 5.11 Environmental Protection.............................. 41
Section 5.12 Solvency.............................................. 42
Section 5.13 Financial Statements.................................. 42
Section 5.14 Valid Existence of Affiliates......................... 42
Section 5.15 Insurance............................................. 42
Section 5.16 Accuracy of Information; Full
Disclosure........................................... 42
ARTICLE VI. AFFIRMATIVE COVENANTS......................................... 43
Section 6.01 Maintenance of Existence.............................. 43
Section 6.02 Maintenance of Records................................ 43
Section 6.03 Maintenance of Insurance.............................. 43
Section 6.04 Compliance with Laws; Payment of Taxes................ 43
Section 6.05 Right of Inspection................................... 43
Section 6.06 Compliance With Environmental Laws.................... 44
Section 6.07 Maintenance of Properties............................. 44
Section 6.08 Payment of Costs...................................... 44
Section 6.09 Reporting and Miscellaneous Document
Requirements......................................... 44
Section 6.10 Principal Prepayments as a Result of
Reduction in Adjusted Total Loan
Commitment........................................... 47
ARTICLE VII. NEGATIVE COVENANTS........................................... 47
Section 7.01 Mergers Etc........................................... 47
Section 7.02 Investments........................................... 47
Section 7.03 Sale of Assets........................................ 47
ARTICLE VIII. FINANCIAL COVENANTS......................................... 48
Section 8.01 Equity Value.......................................... 48
Section 8.02 Relationship of Total Outstanding
Indebtedness to Capitalization Value................. 48
Section 8.03 Relationship of Combined EBITDA to
Interest Expense..................................... 48
Section 8.04 Relationship of Combined EBITDA to
Combined Debt Service................................ 48
Section 8.05 Relationship of Combined EBITDA to Total
Outstanding Indebtedness............................. 48
Section 8.06 Unsecured Debt Yield.................................. 48
Section 8.07 Relationship of Unencumbered Combined
EBITDA to Unsecured Interest Expense................. 48
ii
4
Page
Section 8.08 Relationship of Dividends to Funds From
Operations........................................... 48
Section 8.09 Relationship of Secured Indebtedness to
Capitalization Value................................. 48
ARTICLE IX. EVENTS OF DEFAULT............................................. 49
Section 9.01 Events of Default..................................... 49
Section 9.02 Remedies.............................................. 51
ARTICLE X. ADMINISTRATIVE AGENT; RELATIONS AMONG BANKS.................... 52
Section 10.01 Appointment, Powers and Immunities of
Administrative Agent................................. 52
Section 10.02 Reliance by Administrative Agent...................... 52
Section 10.03 Defaults.............................................. 53
Section 10.04 Rights of Administrative Agent as a
Bank................................................. 53
Section 10.05 Indemnification of Administrative Agent............... 53
Section 10.06 Non-Reliance on Administrative Agent and
Other Banks.......................................... 54
Section 10.07 Failure of Administrative Agent to Act................ 54
Section 10.08 Resignation or Removal of Administrative
Agent................................................ 55
Section 10.09 Amendments Concerning Agency Function................. 55
Section 10.10 Liability of Administrative Agent..................... 55
Section 10.11 Transfer of Agency Function........................... 55
Section 10.12 Non-Receipt of Funds by Administrative
Agent................................................ 56
Section 10.13 Withholding Taxes..................................... 56
Section 10.14 Minimum Commitment by Co-Agents....................... 57
Section 10.15 Pro Rata Treatment.................................... 57
Section 10.16 Sharing of Payments Among Banks....................... 57
Section 10.17 Possession of Documents............................... 57
ARTICLE XI. NATURE OF OBLIGATIONS......................................... 58
Section 11.01 Absolute and Unconditional Obligations................ 58
Section 11.02 Non-Recourse to Borrower's Principals................. 58
ARTICLE XII. MISCELLANEOUS................................................ 59
Section 12.01 Binding Effect of Request for Advance................. 59
Section 12.02 Amendments and Waivers................................ 59
Section 12.03 Usury................................................. 60
Section 12.04 Expenses; Indemnification............................. 60
Section 12.05 Assignment; Participation............................. 60
Section 12.06 Documentation Satisfactory............................ 62
Section 12.07 Notices............................................... 63
Section 12.08 Setoff................................................ 63
Section 12.09 Table of Contents; Headings........................... 63
Section 12.10 Severability.......................................... 63
Section 12.11 Counterparts.......................................... 63
Section 12.12 Integration........................................... 64
Section 12.13 Governing Law......................................... 64
iii
5
Page
Section 12.14 Waivers............................................... 64
Section 12.15 Jurisdiction; Immunities.............................. 64
Section 12.16 Designated Lender..................................... 65
Section 12.17 No Bankruptcy Proceedings............................. 66
EXHIBIT A - Authorization Letter
EXHIBIT B - Ratable Loan Note
EXHIBIT B-1 - Bid Rate Loan Note
EXHIBIT C - Information Regarding Material Affiliates
EXHIBIT D - Solvency Certificate
EXHIBIT E - Assignment and Assumption Agreement
EXHIBIT F - Intentionally omitted
EXHIBIT G-1 - Bid Rate Quote Request
EXHIBIT G-2 - Invitation for Bid Rate Quotes
EXHIBIT G-3 - Bid Rate Quote
EXHIBIT G-4 - Borrower's Acceptance of Bid Rate Quote
EXHIBIT H - Designation Agreement
iv
6
AMENDED AND RESTATED REVOLVING LOAN AGREEMENT dated as of July
2, 1997 among BAY APARTMENT COMMUNITIES, INC., a corporation organized and
existing under the laws of the State of Maryland ("Borrower"), UNION BANK OF
SWITZERLAND (New York Branch) (in its individual capacity and not as
Administrative Agent, "UBS"), UNION BANK OF CALIFORNIA, N.A. ("UBC"), the other
lenders signatory hereto and UNION BANK OF SWITZERLAND (New York Branch), as
administrative agent for the Banks (in such capacity, together with its
successors in such capacity, "Administrative Agent"; UBS, UBC, the other lenders
signatory hereto, such other lenders who from time to time become Banks pursuant
to Section 3.07 or 12.05 and, if applicable, any of the foregoing lenders'
Designated Lender, each a "Bank" and collectively, the "Banks").
Borrower, UBS and Administrative Agent entered into a
Revolving Loan Agreement dated as of May 8, 1996 (the "Prior Credit Agreement"),
which provided, for a revolving line of credit in the amount of up to
$150,000,000 in favor of Borrower. The Prior Credit Agreement was amended by
letter agreement dated August 30, 1996 (which, among other things, increased the
amount of the credit provided thereby to up to $200,000,000). In addition,
pursuant to the terms and provisions of the Prior Credit Agreement, the lenders
who are identified on the signature pages hereof have become "Banks" thereunder.
Borrower has now requested certain additional amendments to
the Prior Credit Agreement (as heretofore modified as set forth above) to, among
other things, (i) extend the Maturity Date and (ii) provide for Bid Rate Loans
(as such term is hereinafter defined). Administrative Agent and the Banks have
agreed to Borrower's request pursuant to the terms and conditions of this
Amended and Restated Revolving Loan Agreement, which amends and restates the
Prior Credit Agreement (as previously modified) in its entirety.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements, covenants and conditions hereinafter set forth, the Prior
Credit Agreement (as previously modified) is hereby amended and restated in its
entirety and Borrower, Administrative Agent and each of the Banks agree as
follows:
ARTICLE
I. DEFINITIONS; ETC.
Section 1.01 Definitions. As used in this Agreement the
following terms have the following meanings (except as otherwise provided, terms
defined in the singular to have a correlative meaning when used in the plural
and vice versa):
"Acquisition" means the acquisition by Borrower,
directly or indirectly, of an interest in real estate.
7
"Adjusted Loan Commitment" means with respect to each Bank, at
any time, such Bank's Pro Rata Share of the Adjusted Total Loan Commitment.
"Adjusted Total Loan Commitment" means the Total Loan
Commitment less the Toscana Apartments Holdback.
"Administrative Agent" has the meaning specified in the
preamble.
"Administrative Agent's Office" means Administrative Agent's
address located at 299 Park Avenue, New York, NY 10171, or such other address in
the United States as Administrative Agent may designate by written notice to
Borrower and the Banks.
"Affiliate" means, with respect to any Person (the "first
Person"), any other Person (1) which directly or indirectly controls, or is
controlled by, or is under common control with the first Person; or (2) 10% or
more of the beneficial interest in which is directly or indirectly owned or held
by the first Person. The term "control" means the possession, directly or
indirectly, of the power, alone, to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise.
"Agreement" means this Amended and Restated Revolving
Loan Agreement.
"Applicable Lending Office" means, for each Bank and for its
LIBOR Loan, Bid Rate Loan(s) or Base Rate Loan, as applicable, the lending
office of such Bank (or of an Affiliate of such Bank) designated as such on its
signature page hereof or in the applicable Assignment and Assumption Agreement,
or such other office of such Bank (or of an Affiliate of such Bank) as such Bank
may from time to time specify to Administrative Agent and Borrower as the office
by which its LIBOR Loan, Bid Rate Loan(s) or Base Rate Loan, as applicable, is
to be made and maintained.
"Applicable Margin" means, with respect to the LIBOR Interest
Rate and LIBOR Loans (and for purposes of determining the Banks' L/C Fee Rate
under Section 2.16(f)), the respective rates per annum determined at any time,
based on the range into which Borrower's Credit Rating then falls, in accordance
with the following table, subject to possible adjustment in accordance with the
definition of "Borrower's Credit Rating" set forth in this Section 1.01 (any
change in Borrower's Credit Rating causing it to move to a different range on
the table shall effect an immediate change in the Applicable Margin):
2
8
Range of Borrower's
Credit Rating
(S+P/Moody's/ Applicable Margin
Other Agency Ratings) (% per annum)
--------------------- -------------
below BBB-/below Baa3/ 1.25
other agency equivalent
(or unrated)
BBB-/Baa3/ 1.00
other agency equivalent
BBB/Baa2/ 0.90
other agency equivalent
BBB+/Baa1/ 0.80
other agency equivalent
A-or higher/A3 or higher/ 0.70.
other agency equivalent
"Assignee" has the meaning specified in Section 12.05.
"Assignment and Assumption Agreement" means an Assignment and
Assumption Agreement, substantially in the form of EXHIBIT E, pursuant to which
a Bank assigns and an Assignee assumes rights and obligations in accordance with
Section 12.05.
"Authorization Letter" means a letter agreement executed by
Borrower in the form of EXHIBIT A.
"Available Total Loan Commitment" has the meaning specified in
Section 2.01(b).
"Bank" and "Banks" have the respective meanings specified in
the preamble; provided, however, that the term "Bank" shall exclude each
Designated Lender when used in reference to a Ratable Loan, the Loan Commitments
or terms relating to the Ratable Loans and the Loan Commitments.
"Bank Parties" means Administrative Agent and the Banks.
"Banking Day" means (1) any day on which commercial banks are
not authorized or required to close in New York City and (2) whenever such day
relates to a LIBOR Loan, a Bid Rate Loan, an Interest Period with respect to a
LIBOR Loan or a Bid Rate Loan, or notice with respect to a LIBOR Loan or a Bid
Rate Loan, a day on which dealings in Dollar deposits are also carried out in
the London interbank market and banks are open for business in London.
3
9
"Base Rate" means, for any day, the higher of (1) the Federal
Funds Rate for such day plus .50%, or (2) the Prime Rate for such day.
"Base Rate Loan" means all or any portion (as the context
requires) of a Bank's Ratable Loan which shall accrue interest at a rate
determined in relation to the Base Rate.
"Bid Borrowing Limit" means 50% of the Total Loan Commitment.
"Bid Rate Loan" has the meaning specified in Section 2.01(c).
"Bid Rate Loan Note" has the meaning specified in Section
2.08.
"Bid Rate Quote" means an offer by a Bank to make a Bid Rate
Loan in accordance with Section 2.02.
"Bid Rate Quote Request" has the meaning specified in Section
2.02(a).
"Borrower" has the meaning specified in the preamble.
"Borrower's Accountants" means Coopers & Lybrand, or such
other accounting firm(s) selected by Borrower and reasonably acceptable to the
Required Banks.
"Borrower's Consolidated Financial Statements" means the
consolidated balance sheet and related consolidated statement of operations,
accumulated deficiency in assets and cash flows, and footnotes thereto, of
Borrower, prepared in accordance with GAAP.
"Borrower's Credit Rating" means the rating assigned from time
to time to Borrower's unsecured and unsubordinated long-term indebtedness by,
respectively, S+P, Moody's and/or another rating agency acceptable to
Administrative Agent in its sole discretion, provided, however, that prior to
such time as Borrower's unsecured and unsubordinated long-term indebtedness is
so rated, and if Borrower's preferred stock is so rated, "Borrower's Credit
Rating" shall be deemed to be one-half (1/2) ratings level higher than the
actual rating given to Borrower's preferred stock by, respectively, S+P, Moody's
and/or another rating agency acceptable to Administrative Agent in its sole
discretion. In connection with the foregoing, it is understood that if more than
one (1) of the rating agencies identified above assigns a rating to Borrower's
long-term indebtedness (or preferred stock), the following shall apply: (i) if
the aforesaid ratings are greater than one (1) ratings level apart, "Borrower's
Credit Rating" shall be the lower of the ratings assigned to Borrower's long
term indebtedness (or one-half a ratings level
4
10
above the lower of the ratings assigned to Borrower's preferred stock); or (ii)
if the aforesaid ratings are less than or equal to one (1) ratings level apart,
the Applicable Margin shall be the average of the Applicable Margins
corresponding to such ratings of Borrower's long-term indebtedness (or one-half
a ratings level above such ratings of Borrower's preferred stock) as set forth
in the table in the definition of "Applicable Margin" in this Section 1.01. (For
purposes of the foregoing, "one (1) ratings level apart" means, for example, the
increment between S&P's BBB- and BBB+, and "one half (1/2) ratings level apart"
means, for example, the increment between S&P's BBB- and BBB.) Unless such
indebtedness or preferred stock of Borrower, as the case may be, is rated by at
least one of the rating agencies identified above, "Borrower's Credit Rating"
shall be considered unrated for purposes of this Agreement.
"Borrower's Principals" means the officers and directors of
Borrower at any applicable time.
"Borrower's Share of UJV Combined Outstanding Indebtedness"
means the sum of the indebtedness of each of the UJVs contributing to UJV
Combined Outstanding Indebtedness multiplied by Borrower's respective beneficial
fractional interests in each such UJV.
"Capitalization Value" means, as of the end of any calendar
quarter, the sum of (1) Combined EBITDA (less all leasing commissions and
management and development fees, net of any expenses applicable thereto,
contributing to Combined EBITDA) for such quarter annualized (i.e., multiplied
by four (4)), capitalized at a rate of 8.25% per annum (i.e., divided by 8.25%),
and (2) such leasing commissions and management and development fees for such
quarter, annualized, (i.e., multiplied by four (4)), capitalized at a rate of
25% per annum (i.e., divided by 25%), (3) cash and marketable securities of
Borrower and its Consolidated Businesses, as of the end of such quarter, as
reflected in Borrower's Consolidated Financial Statements, and (4) the lesser of
(a) the aggregate book value (on a cost basis) of the properties of Borrower and
its Consolidated Businesses under development plus Borrower's beneficial
interest in the book value (on a cost basis) of the properties of the UJVs under
development or (b) 25% of the sum of the amounts determined pursuant to clauses
(1), (2) and (3) of this definition.
"Capital Lease" means any lease which has been or should be
capitalized on the books of the lessee in accordance with GAAP.
"Closing Date" means the date this Agreement has been
executed by all parties.
"Co-Agent" means each of UBS and UBC and "Co-Agents" means UBS
and UBC collectively.
5
11
"Code" means the Internal Revenue Code of 1986.
"Combined Debt Service" means, for any period of time, (1)
total debt service (including principal) paid or payable by Borrower and its
Consolidated Businesses during such period (other than debt service on
construction loans until completion of the relevant construction) plus a deemed
annual capital expense charge of $150 per apartment unit owned by Borrower or
its Consolidated Businesses plus (2) Borrower's beneficial interest in (a) total
debt service (including principal) paid or payable by the UJVs during such
period (other than debt service on construction loans until completion of the
relevant construction plus (b) a deemed annual capital expense charge of $150
per apartment unit owned by the UJVs plus (3) preferred dividends paid or
payable by Borrower and its Consolidated Businesses during such period.
"Combined EBITDA" means, for any period of time, the sum,
without duplication, of (1) revenues less operating expenses and property taxes
before Interest Expense, general and administrative expenses (for purposes of
this calculation, such general and administrative expenses not to exceed 5% of
total revenues), income taxes, gains or losses on the sale of real estate and/or
marketable securities, depreciation and amortization and extraordinary items for
Borrower and its Consolidated Businesses, and (2) Borrower's beneficial interest
in revenues less operating expenses and property taxes before Interest Expense,
general and administrative expenses (for purposes of this calculation, such
general and administrative expenses not to exceed 5% of total revenues), income
taxes, gains or losses on the sale of real estate and/or marketable securities,
depreciation and amortization and extraordinary items (after eliminating
appropriate intercompany amounts) applicable to each of the UJVs, in all cases
as reflected in Borrower's Consolidated Financial Statements.
"Consolidated Businesses" means, collectively, each Affiliate
of Borrower who is or should be included in Borrower's Consolidated Financial
Statements in accordance with GAAP.
"Consolidated Outstanding Indebtedness" means, as of any time,
all indebtedness and liability for borrowed money, secured or unsecured, of
Borrower and its Consolidated Businesses, including mortgage and other notes
payable but excluding any indebtedness which is margin indebtedness on cash and
cash equivalent securities, all as reflected in Borrower's Consolidated
Financial Statements.
"Continue", "Continuation" and "Continued" refer to the
continuation pursuant to Section 2.12 of a LIBOR Loan as a LIBOR Loan from one
Interest Period to the next Interest Period.
6
12
"Convert", "Conversion" and "Converted" refer to a conversion
pursuant to Section 2.12 of a Base Rate Loan into a LIBOR Loan or a LIBOR Loan
into a Base Rate Loan, each of which may be accompanied by the transfer by a
Bank (at its sole discretion) of all or a portion of its Ratable Loan from one
Applicable Lending Office to another.
"Debt" means (1) indebtedness or liability for borrowed money,
or for the deferred purchase price of property or services (including trade
obligations); (2) obligations as lessee under Capital Leases; (3) current
liabilities in respect of unfunded vested benefits under any Plan; (4)
obligations under letters of credit issued for the account of any Person; (5)
all obligations arising under bankers' or trade acceptance facilities; (6) all
guarantees, endorsements (other than for collection or deposit in the ordinary
course of business), and other contingent obligations to purchase any of the
items included in this definition, to provide funds for payment, to supply funds
to invest in any Person, or otherwise to assure a creditor against loss; (7) all
obligations secured by any Lien on property owned by the Person whose Debt is
being measured, whether or not the obligations have been assumed; and (8) all
obligations under any agreement providing for contingent participation or other
hedging mechanisms with respect to interest payable on any of the items
described above in this definition.
"Default" means any event which with the giving of notice or
lapse of time, or both, would become an Event of Default.
"Default Rate" means a rate per annum equal to: (1) with
respect to Base Rate Loans, a variable rate 3% above the rate of interest then
in effect thereon; and (2) with respect to LIBOR Loans and Bid Rate Loans, a
fixed rate 3% above the rate(s) of interest in effect thereon (including the
Applicable Margin or the LIBOR Bid Margin, as the case may be) at the time of
Default until the end of the then current Interest Period therefor and,
thereafter, a variable rate 3% above the rate of interest for a Base Rate Loan.
"Designated Lender" means a special purpose corporation that
(i) shall have become a party to this Agreement pursuant to Section 12.16 and
(ii) is not otherwise a Bank.
"Designating Lender" has the meaning specified in
Section 12.16.
"Designation Agreement" means an agreement in substantially
the form of EXHIBIT H, entered into by a Bank and a Designated Lender and
accepted by Administrative Agent.
"Disposition" means a sale (whether by assignment,
transfer or Capital Lease) of an asset.
7
13
"Dollars" and the sign "$" mean lawful money of the United
States of America.
"Elect", "Election" and "Elected" refer to election, if any,
by Borrower pursuant to Section 2.12 to have all or a portion of an advance of
the Ratable Loans be outstanding as LIBOR Loans.
"Environmental Discharge" means any discharge or release of
any Hazardous Materials in violation of any applicable Environmental Law.
"Environmental Law" means any applicable Law relating to
pollution or the environment, including Laws relating to noise or to emissions,
discharges, releases or threatened releases of Hazardous Materials into the work
place, the community or the environment, or otherwise relating to the
generation, manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials.
"Environmental Notice" means any written complaint, order,
citation or notice from any Person (1) affecting or relating to Borrower's
compliance with any Environmental Law in connection with any activity or
operations at any time conducted by Borrower, (2) relating to (a) the existence
of any Hazardous Materials contamination or Environmental Discharges or
threatened Hazardous Materials contamination or Environmental Discharges at any
of Borrower's locations or facilities or (b) remediation of any Environmental
Discharge or Hazardous Materials at any such location or facility or any part
thereof; or (3) any violation or alleged violation by Borrower of any relevant
Environmental Law.
"Equity Value" means, at any time, (1) Capitalization Value
less (2) Total Outstanding Indebtedness.
"ERISA" means the Employee Retirement Income Security Act of
1974, including the rules and regulations promulgated thereunder.
"ERISA Affiliate" means any corporation which is a member of
the same controlled group of corporations (within the meaning of Section 414(b)
of the Code) as Borrower, or any trade or business which is under common control
(within the meaning of Section 414(c) of the Code) with Borrower, or any
organization which is required to be treated as a single employer with Borrower
under Section 414(m) or 414(o) of the Code.
"Event of Default" has the meaning specified in Section
9.01.
"Federal Funds Rate" means, for any day, the rate per annum
(expressed on a 360-day basis of calculation) equal to the weighted average of
the rates on overnight federal funds
8
14
transactions as published by the Federal Reserve Bank of New York for such day
provided that (1) if such day is not a Banking Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the immediately preceding
Banking Day as so published on the next succeeding Banking Day; and (2) if no
such rate is so published on such next succeeding Banking Day, the Federal Funds
Rate for such day shall be the average of the rates quoted by three (3) Federal
Funds brokers to Administrative Agent on such day on such transactions.
"Fiscal Year" means each period from January 1 to December 31.
"Funds From Operations" means Combined EBITDA less the sum of
Interest Expense and income taxes included in Combined EBITDA.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time, applied on a basis
consistent with those used in the preparation of the financial statements
referred to in Section 5.13 (except for changes concurred in by Borrower's
Accountants).
"Good Faith Contest" means the contest of an item if: (1) the
item is diligently contested in good faith, and, if appropriate, by proceedings
timely instituted; (2) reserves that are adequate based on reasonably
foreseeable likely outcomes are established with respect to the contested item;
(3) during the period of such contest, the enforcement of any contested item is
effectively stayed, delayed or postponed; and (4) the failure to pay or comply
with the contested item during the period of the contest is not likely to result
in a Material Adverse Change.
"Governmental Approvals" means any authorization, consent,
approval, license, permit, certification, or exemption of, registration or
filing with or report or notice to, any Governmental Authority.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Hazardous Materials" means any pollutant, effluents,
emissions, contaminants, toxic or hazardous wastes or substances, as any of
those terms are defined from time to time in or for the purposes of any relevant
Environmental Law, including asbestos fibers and friable asbestos,
polychlorinated biphenyls, and any petroleum or hydrocarbon-based products or
derivatives.
"Initial Advance" means the first advance of proceeds
of the Loans.
9
15
"Interest Expense" means, for any period of time, the
consolidated interest expense (without deduction of consolidated interest
income, and excluding (x) interest expense on construction loans and (y) other
capitalized interest expense in respect of construction loans, in any such case
under clauses (x) or (y), only until completion of the relevant construction) of
Borrower and its Consolidated Businesses, including, without limitation or
duplication (or, to the extent not so included, with the addition of), (1) the
portion of any rental obligation in respect of any Capital Lease obligation
allocable to interest expense in accordance with GAAP; (2) the amortization of
Debt discounts; (3) any payments or fees (other than up-front fees) with respect
to interest rate swap or similar agreements; and (4) the interest expense and
items listed in clauses (1) through (3) above applicable to each of the UJVs
multiplied by Borrower's respective beneficial interests in the UJVs, in all
cases as reflected in Borrower's Consolidated Financial Statements.
"Interest Period" means, (1) with respect to any LIBOR Loan,
the period commencing on the date the same is advanced, converted from a Base
Rate Loan or Continued, as the case may be, and ending, as Borrower may select
pursuant to Section 2.05, on the numerically corresponding day in the first,
second or third calendar month thereafter, provided that each such Interest
Period which commences on the last Banking Day of a calendar month (or on any
day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Banking Day of the appropriate
calendar month; and (2) with respect to any Bid Rate Loan, the period commencing
on the date the same is advanced and ending, as Borrower may select pursuant to
Section 2.02, on the numerically corresponding day in the first, second or third
calendar month thereafter, provided that each such Interest Period which
commences on the last Banking Day of a calendar month (or on any day for which
there is no numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last Banking Day of the appropriate calendar month.
"Invitation for Bid Rate Quotes" has the meaning specified in
Section 2.02 (b).
"Law" means any federal, state or local statute, law, rule,
regulation, ordinance, order, code, or rule of common law, now or hereafter in
effect, and in each case as amended, and any judicial or administrative order,
consent decree or judgment.
"Letter of Credit" has the meaning specified in Section
2.16(a).
"LIBOR Base Rate" means, with respect to any Interest Period
therefor, the rate per annum (rounded upwards if necessary to the nearest 1/16
of 1%) quoted at approximately 11:00 a.m., New York time, by the principal New
York branch of UBS two (2)
10
16
Banking Days prior to the first day of such Interest Period for the offering to
leading banks in the London interbank market of Dollar deposits in immediately
available funds, for a period, and in an amount, comparable to such Interest
Period and principal amount of the LIBOR Loan or Bid Rate Loan, as the case may
be, in question outstanding during such Interest Period.
"LIBOR Bid Margin" has the meaning specified in Section
2.02(c)(2).
"LIBOR Bid Rate" means the rate per annum equal to the sum of
(1) the LIBOR Interest Rate for the Bid Rate Loan and Interest Period in
question and (2) the LIBOR Bid Margin.
"LIBOR Interest Rate" means, for any LIBOR Loan or Bid Rate
Loan, a rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) determined by Administrative Agent to be equal to the quotient of (1) the
LIBOR Base Rate for such LIBOR Loan or Bid Rate Loan, as the case may be, for
the Interest Period therefor divided by (2) one minus the LIBOR Reserve
Requirement for such LIBOR Loan or Bid Rate Loan, as the case may be, for such
Interest Period.
"LIBOR Loan" means all or any portion (as the context
requires) of any Bank's Ratable Loan which shall accrue interest at rate(s)
determined in relation to LIBOR Interest Rate(s).
"LIBOR Reserve Requirement" means, for any LIBOR Loan or Bid
Rate Loan, the average maximum rate at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during the
Interest Period for such LIBOR Loan or Bid Rate Loan under Regulation D by
member banks of the Federal Reserve System in New York City with deposits
exceeding $1,000,000,000 against "Eurocurrency liabilities" (as such term is
used in Regulation D). Without limiting the effect of the foregoing, the LIBOR
Reserve Requirement shall also reflect any other reserves required to be
maintained by such member banks by reason of any Regulatory Change against (1)
any category of liabilities which includes deposits by reference to which the
LIBOR Base Rate is to be determined as provided in the definition of "LIBOR Base
Rate" in this Section 1.01 or (2) any category of extensions of credit or other
assets which include loans the interest rate on which is determined on the basis
of rates referred to in said definition of "LIBOR Base Rate".
"Lien" means any mortgage, deed of trust, pledge, security
interest, hypothecation, assignment for collateral purposes, deposit
arrangement, lien (statutory or other), or other security agreement or charge of
any kind or nature whatsoever of any third party (excluding any right of setoff
but including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substan-
11
17
tially the same economic effect as any of the foregoing, and the filing of any
financing statement under the Uniform Commercial Code or comparable law of any
jurisdiction to evidence any of the foregoing).
"Loan" means, with respect to each Bank, its Ratable Loan and
Bid Rate Loan(s), collectively.
"Loan Commitment" means, with respect to each Bank, the
obligation to make a Ratable Loan in the principal amount set forth below
(subject to change as a result of assignments by one or more of the Banks
pursuant to the third paragraph of Section 12.05) as such amount may be reduced
from time to time in accordance with the provisions of Section 2.10:
Bank Loan
---- Commitment
----------
UBS $30,000,000
UBC 30,000,000
The First National Bank of Chicago 22,500,000
Commerzbank AG 20,000,000
Bank of Montreal 20,000,000
CoreStates Bank, N.A. 16,000,000
Dresdner Bank AG 16,000,000
Fleet National Bank 16,000,000
Kredietbank N.V. 16,000,000
Comerica Bank-California 13,500,000
TOTAL: $200,000,000
============
"Loan Documents" means this Agreement, the Notes, the
Authorization Letter and the Solvency Certificate.
"Majority Banks" means at any time the Banks having Pro Rata
Shares aggregating at least 51%; provided, however, that during the existence of
an Event of Default, the "Majority Banks" shall be the Banks holding at least
51% of the then aggregate unpaid principal amount of the Loans.
"Material Adverse Change" means an effect resulting from any
circumstance or event or series of circumstances or events, of whatever nature,
which does or could reasonably be expected to, either (1) materially and
adversely impair the
12
18
ability of Borrower and its Consolidated Businesses, taken as a whole, to
fulfill its material obligations or (2) cause a Default.
"Material Affiliates" means the Affiliates of Borrower
described on EXHIBIT C, together with (or excluding) any Affiliates of Borrower
which are hereafter from time to time reasonably determined by Administrative
Agent to be material (or no longer material), upon written notice to Borrower,
based on the most recent Borrower's Consolidated Financial Statements.
"Maturity Date" means May 1, 2000.
"Moody's" means Moody's Investor Service, Inc.
"Multiemployer Plan" means a Plan defined as such in Section
3(37) of ERISA to which contributions have been made by Borrower or any ERISA
Affiliate and which is covered by Title IV of ERISA.
"Note" and "Notes" have the respective meanings
specified in Section 2.08.
"Obligations" means each and every obligation, covenant and
agreement of Borrower, now or hereafter existing, contained in this Agreement,
and any of the other Loan Documents, whether for principal, reimbursement
obligations, interest, fees, expenses, indemnities or otherwise, and any
amendments or supplements thereto, extensions or renewals thereof or
replacements therefor, including but not limited to all indebtedness,
obligations and liabilities of Borrower to Administrative Agent and any Bank now
existing or hereafter incurred under or arising out of or in connection with the
Notes, this Agreement, the other Loan Documents, and any documents or
instruments executed in connection therewith; in each case whether direct or
indirect, joint or several, absolute or contingent, liquidated or unliquidated,
now or hereafter existing, renewed or restructured, whether or not from time to
time decreased or extinguished and later increased, created or incurred, and
including all indebtedness of Borrower, under any instrument now or hereafter
evidencing or securing any of the foregoing.
"Parent" means, with respect to any Bank, any Person
controlling such Bank.
"PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership,
13
19
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by Borrower or any ERISA
Affiliate and which is covered by Title IV of ERISA or to which Section 412 of
the Code applies.
"presence", when used in connection with any Environmental
Discharge or Hazardous Materials, means and includes presence, generation,
manufacture, installation, treatment, use, storage, handling, repair,
encapsulation, disposal, transportation, spill, discharge and release.
"Prime Rate" means that rate of interest from time to time
announced by UBS at its Principal Office as its prime commercial lending rate.
"Principal Office" means the principal office of UBS in the
United States, presently located at 299 Park Avenue, New York, New York 10171.
"Pro Rata Share" means, for purposes of this Agreement and
with respect to each Bank, a fraction, the numerator of which is the amount of
such Bank's Loan Commitment and the denominator of which is the Total Loan
Commitment.
"Prohibited Transaction" means any transaction proscribed by
Section 406 of ERISA or Section 4975 of the Code and to which no statutory or
administrative exemption applies.
"Ratable Loan" has the meaning specified in Section 2.01(b).
"Ratable Loan Note" has the meaning specified in Section 2.08.
"Recourse Debt" means Debt, recourse for the satisfaction of
which is not limited to specified collateral.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System, as the same may be amended or supplemented from time
to time, or any similar Law from time to time in effect.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as the same may be amended or supplemented from time
to time.
"Regulatory Change" means, with respect to any Bank, any
change after the date of this Agreement in United States federal, state,
municipal or foreign laws or regulations
14
20
(including Regulation D) or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks including
such Bank of or under any United States, federal, state, municipal or foreign
laws or regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the thirty (30)
day notice period is waived under subsections .13, .14, .16, .18, .19 or .20 of
PBGC Reg. Section 2615.
"Required Banks" means at any time the Banks having Pro Rata
Shares aggregating at least 66 2/3%; provided, however, that during the
existence of an Event of Default, the "Required Banks" shall be the Banks
holding at least 66 2/3% of the then aggregate unpaid principal amount of the
Loans.
"Secured Indebtedness" means that portion of Total Outstanding
Indebtedness that is secured.
"Solvency Certificate" means a certificate in the form of
EXHIBIT D, to be delivered by Borrower pursuant to the terms of this Agreement.
"Solvent" means, when used with respect to any Person, that
the fair value of the property of such Person, on a going concern basis, is
greater than the total amount of liabilities (including, without limitation,
contingent liabilities) of such Person.
"S+P" means Standard and Poor's Ratings Services, a division
of McGraw-Hill Companies.
"Supplemental Fee Letter" means that certain letter dated May
8, 1996, as amended by agreements dated August 30, 1996 and the date hereof,
between Administrative Agent and Borrower.
"Toscana Apartments" means the 709-unit apartment project
owned by Borrower, known as the Toscana Apartments, currently under construction
on an approximately 17.8-acre parcel of land in Sunnyvale, California.
"Toscana Apartments Holdback" means, at any time (1) prior to
completion of the Toscana Apartments, the amount by which the estimated costs to
complete the Toscana Apartments (as determined by Administrative Agent) exceeds
the budget for such costs submitted to and approved by Administrative Agent
pursuant to Section 4.01(13), less the portion, if any, of such excess as
Borrower can demonstrate (by reasonably satisfactory evidence) to Administrative
Agent that Borrower has already paid (subject,
15
21
however, to further increase for subsequent budget overruns not paid by
Borrower) and (2) after such completion, zero.
"Total Loan Commitment" means an amount equal to the aggregate
amount of all Loan Commitments (i.e., $200,000,000).
"Total Outstanding Indebtedness" means the sum, without
duplication, of (1) Consolidated Outstanding Indebtedness and (2) Borrower's
Share of UJV Combined Outstanding Indebtedness.
"UJV Combined Outstanding Indebtedness" means, as of any time,
all indebtedness and liability for borrowed money, secured or unsecured, of the
UJV's, on a combined basis, including mortgage and other notes payable but
excluding any indebtedness which is margin indebtedness on cash and cash
equivalent securities, all as reflected in the balance sheets of each of the
UJVs, prepared in accordance with GAAP.
"UJVs" means the unconsolidated joint ventures (including
general and limited partnerships) in which Borrower owns a beneficial interest
and which are accounted for under the equity method in Borrower's Consolidated
Financial Statements.
"Unencumbered Combined EBITDA" means that portion of Combined
EBITDA attributable to Unencumbered Wholly-Owned Assets (assuming corporate
overhead is allocated proportionately to
Unencumbered Wholly-Owned Assets).
"Unencumbered Wholly-Owned Assets" means assets, reflected on
Borrower's Consolidated Financial Statements, wholly owned, directly or
indirectly, by Borrower and not subject to any Lien to secure all or any portion
of Secured Indebtedness.
"Unsecured Debt Yield" means, for any calendar quarter, the
ratio of (1) Unencumbered Combined EBITDA for such quarter, annualized (i.e.,
multiplied by four (4)) to (2) Unsecured Indebtedness as of the end of such
calendar quarter.
"Unsecured Indebtedness" means that portion of Total
Outstanding Indebtedness that is unsecured.
"Unsecured Interest Expense" means that portion of
Interest Expense relating to Unsecured Indebtedness.
Section 1.02 Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP, and all
financial data required to be delivered hereunder shall be prepared in
accordance with GAAP.
Section 1.03 Computation of Time Periods. Except as otherwise
provided herein, in this Agreement, in the computation of periods of time from a
specified date to a later specified
16
22
date, the word "from" means "from and including" and words "to" and "until" each
means "to but excluding".
Section 1.04 Rules of Construction. Except as provided
otherwise, when used in this Agreement (1) "or" is not exclusive; (2) a
reference to a Law includes any amendment or modification to such Law; (3) a
reference to a Person includes its permitted successors and permitted assigns;
(4) all references to the singular shall include the plural and vice versa; (5)
a reference to an agreement, instrument or document shall include such
agreement, instrument or document as the same may be amended, modified or
supplemented from time to time in accordance with its terms and as permitted by
the Loan Documents; (6) all references to Articles, Sections or Exhibits shall
be to Articles, Sections and Exhibits of this Agreement unless otherwise
indicated; (7) "hereunder", "herein", "hereof" and the like refer to this
Agreement as a whole; and (8) all Exhibits to this Agreement shall be
incorporated into this Agreement.
ARTICLE II. THE LOANS
Section 2.01 Ratable Loans; Bid Rate Loans; Purpose. (a)
Subject to the terms and conditions of this Agreement, the Banks agree to make
loans to Borrower as provided in this Article II.
(b) Each of the Banks severally agrees to make a loan to
Borrower (each such loan by a Bank, a "Ratable Loan") in an amount up to its
Loan Commitment pursuant to which the Bank shall from time to time advance and
re-advance to Borrower an amount equal to its Pro Rata Share of the excess (the
"Available Total Loan Commitment") of the Adjusted Total Loan Commitment over
the sum of (1) all previous advances (including Bid Rate Loans) made by the
Banks which remain unpaid and (2) the outstanding amount of all Letters of
Credit. Within the limits set forth herein, Borrower may borrow from time to
time under this paragraph (b) and prepay from time to time pursuant to Section
2.09 (subject, however, to the restrictions on prepayment set forth in said
Section), and thereafter re-borrow pursuant to this paragraph (b). The Ratable
Loans may be outstanding as (1) Base Rate Loans; (2) LIBOR Loans; or (3) a
combination of the foregoing, as Borrower shall elect and notify Administrative
Agent in accordance with Section 2.14. The LIBOR Loan, Bid Rate Loan and Base
Rate Loan of each Bank shall be maintained at such Bank's Applicable Lending
Office.
(c) In addition to Ratable Loans pursuant to paragraph (b)
above, so long as Borrower's Credit Rating is BBB- or better by S+P or Baa3 or
better by Moody's (or other agency equivalent, as approved by Administrative
Agent in its sole discretion) one or more Banks may, at Borrower's request and
in their sole discretion, make non-ratable loans which shall bear interest at
the LIBOR Bid Rate in accordance with Section 2.02 (such loans
17
23
being referred to in this Agreement as "Bid Rate Loans"). Borrower may borrow
Bid Rate Loans from time to time pursuant to this paragraph (c) in an amount up
to the Available Total Loan Commitment at the time of the borrowing (taking into
account any repayments of the Loans made simultaneously therewith) and shall
repay such Bid Rate Loans as required by Section 2.08, and it may
18
24
thereafter re-borrow pursuant to this paragraph (c); provided, however, that the
aggregate outstanding principal amount of Bid Rate Loans at any particular time
shall not exceed the Bid Borrowing Limit.
(d) The obligations of the Banks under this Agreement are
several, and no Bank shall be responsible for the failure of any other Bank to
make any advance of a Loan to be made by such other Bank. However, the failure
of any Bank to make any advance of the Loan to be made by it hereunder on the
date specified therefor shall not relieve any other Bank of its obligation to
make any advance of its Loan specified hereby to be made on such date.
(e) Borrower shall use the proceeds of the Loans for general
capital and working capital requirements of Borrower and its Consolidated
Businesses and UJVs and for Acquisitions or real estate development,
construction or reconstruction costs. In no event shall proceeds of the Loans be
used in a manner that would violate Regulation U.
Section 1.022 Bid Rate Loans. (a) When Borrower has the
Borrower's Credit Rating required by Section 2.01(c) and wishes to request
offers from the Banks to make Bid Rate Loans, it shall transmit to
Administrative Agent by facsimile a request (a "Bid Rate Quote Request")
substantially in the form of EXHIBIT G-1 so as to be received not later than
12:00 Noon (New York time) on the fifth Banking Day prior to the date for
funding of the Bid Rate Loan(s) proposed therein, specifying:
(1) the proposed date of funding of the Bid Rate
Loan(s), which shall be a Banking Day;
(2) the aggregate amount of the Bid Rate Loans
requested, which shall be $10,000,000 or a larger integral
multiple of $1,000,000; and
(3) the duration of the Interest Period(s) applicable
thereto, subject to the provisions of the definition of
"Interest Period" in Section 1.01.
Borrower may request offers to make Bid Rate Loans for more than one (1)
Interest Period in a single Bid Rate Quote Request. No more than two (2) Bid
Rate Quote Requests may be submitted by Borrower during any calendar month;
provided, however, that Bid Rate Quote Requests in respect of which no Bank
submits a Bid Rate Quote shall not be counted for purposes of the foregoing. In
addition, there shall be no more than twelve (12) fundings of Bid Rate Loans
during any calendar year.
(b) Promptly (the same day, if possible) upon receipt of a Bid
Rate Quote Request, Administrative Agent shall send to the Banks by facsimile an
invitation (an "Invitation for Bid Rate Quotes") substantially in the form of
EXHIBIT G-2, which shall constitute an invitation by Borrower to the Banks to
submit Bid
19
25
Rate Quotes offering to make Bid Rate Loans to which such Bid Rate Quote Request
relates in accordance with this Section.
(c) (1) Each Bank may submit a Bid Rate Quote containing an
offer or offers to make Bid Rate Loans in response to any Invitation for Bid
Rate Quotes. Each Bid Rate Quote must comply with the requirements of this
paragraph (c) and must be submitted to Administrative Agent by facsimile not
later than 2:00 P.M. (New York time) on the fourth Banking Day prior to the
proposed date of the Bid Rate Loan(s); provided that Bid Rate Quotes submitted
by UBS (or any Affiliate of Administrative Agent) in its capacity as a Bank may
be submitted, and may only be submitted, if UBS or such Affiliate notifies
Borrower of the terms of the offer or offers contained therein not later than
one (1) hour prior to the deadline for the other Banks. Any Bid Rate Quote so
made shall (subject to Borrower's satisfaction of the conditions precedent set
forth in this Agreement to its entitlement to an advance) be irrevocable except
with the written consent of Administrative Agent given on the instructions of
Borrower. Bid Rate Loans to be funded pursuant to a Bid Rate Quote may, as
provided in Section 12.16, be funded by a Bank's Designated Lender. A Bank
making a Bid Rate Quote shall specify in its Bid Rate Quote whether the related
Bid Rate Loans are intended to be funded by such Bank's Designated Lender, as
provided in Section 12.16.
(2) Each Bid Rate Quote shall be in substantially the form
of EXHIBIT G-3 and shall in any case specify:
(i) the proposed date of funding of the Bid Rate
Loan(s);
(ii) the principal amount of the Bid Rate Loan(s) for which
each such offer is being made, which principal amount (w) may be
greater than or less than the Loan Commitment of the quoting Bank, (x)
must be in the aggregate $10,000,000 or a larger integral multiple of
$1,000,000, (y) may not exceed the principal amount of Bid Rate Loans
for which offers were requested and (z) may be subject to an aggregate
limitation as to the principal amount of Bid Rate Loans for which
offers being made by such quoting Bank may be accepted;
(iii) the margin above or below the applicable LIBOR Interest
Rate (the "LIBOR Bid Margin") offered for each such Bid Rate Loan,
expressed as a percentage per annum (specified to the nearest 1/1,000th
of 1%) to be added to (or subtracted from) the applicable LIBOR
Interest Rate;
(iv) the applicable Interest Period; and
(v) the identity of the quoting Bank.
20
26
A Bid Rate Quote may set forth up to three (3) separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Bid Rate Quotes.
(3) Any Bid Rate Quote shall be disregarded if it:
(i) is not substantially in conformity with EXHIBIT G-3 or
does not specify all of the information required by sub-paragraph
(c)(2) above;
(ii) contains qualifying, conditional or similar language
(except for an aggregate limitation as provided in sub-paragraph
(c)(2)(ii) above);
(iii) proposes terms other than or in addition to those set
forth in the applicable Invitation for Bid Rate Quotes; or
(iv) arrives after the time set forth in sub-paragraph (c)(1)
above.
(d) Administrative Agent shall on the Banking Day of receipt
thereof notify Borrower in writing of the terms of (x) any Bid Rate Quote
submitted by a Bank that is in accordance with paragraph (c) and (y) any Bid
Rate Quote that amends, modifies or is otherwise inconsistent with a previous
Bid Rate Quote submitted by such Bank with respect to the same Bid Rate Quote
Request. Any such subsequent Bid Rate Quote shall be disregarded by
Administrative Agent unless such subsequent Bid Rate Quote is submitted solely
to correct a manifest error in such former Bid Rate Quote. Administrative
Agent's notice to Borrower shall specify (A) the aggregate principal amount of
Bid Rate Loans for which offers have been received for each Interest Period
specified in the related Bid Rate Quote Request, (B) the respective principal
amounts and LIBOR Bid Margins so offered and (C) if applicable, limitations on
the aggregate principal amount of Bid Rate Loans for which offers in any single
Bid Rate Quote may be accepted.
(e) Not later than 11:30 p.m. (California time) on the fourth
Banking Day prior to the proposed date of funding of the Bid Rate Loan, Borrower
shall notify Administrative Agent of its acceptance or non-acceptance of the
offers so notified to it pursuant to paragraph (d). A notice of acceptance shall
be substantially in the form of EXHIBIT G-4 and shall specify the aggregate
principal amount of offers for each Interest Period that are accepted. Borrower
may accept any Bid Rate Quote in whole or in part; provided that:
(i) the principal amount of each Bid Rate Loan may not exceed
the applicable amount set forth in the related Bid Rate Quote Request
or be less than $1,000,000 per Bank and shall be an integral multiple
of $100,000;
21
27
(ii) acceptance of offers with respect to a particular
Interest Period may only be made on the basis of ascending LIBOR Bid
Margins offered for such Interest Period from the lowest effective
cost; and
(iii) Borrower may not accept any offer that is described in
sub-paragraph (c)(3) or that otherwise fails to comply with the
requirements of this Agreement.
(f) If offers are made by two (2) or more Banks with the same
LIBOR Bid Margins, for a greater aggregate principal amount than the amount in
respect of which such offers are accepted for the related Interest Period, the
principal amount of Bid Rate Loans in respect of which such offers are accepted
shall be allocated by Administrative Agent among such Banks as nearly as
possible (in multiples of $100,000, as Administrative Agent may deem
appropriate) in proportion to the aggregate principal amounts of such offers.
Administrative Agent shall promptly (and in any event within one (1) Banking Day
after such offers are accepted) notify Borrower and each such Bank in writing of
any such allocation of Bid Rate Loans. Determinations by Administrative Agent of
the allocation of Bid Rate Loans shall be conclusive in the absence of manifest
error.
(g) In the event that Borrower accepts the offer(s) contained
in one (1) or more Bid Rate Quotes in accordance with paragraph (e), the Bank(s)
making such offer(s) shall make a Bid Rate Loan in the accepted amount (as
allocated, if necessary, pursuant to paragraph (f)) on the date specified
therefor, in accordance with the procedures specified in Section 2.04.
(h) Notwithstanding anything to the contrary contained herein,
each Bank shall be required to fund its Pro Rata Share of the Available Total
Loan Commitment in accordance with Section 2.01(b) despite the fact that any
Bank's Loan Commitment may have been or may be exceeded as a result of such
Bank's making Bid Rate Loans.
(i) A Bank who is notified that it has been selected to make a
Bid Rate Loan as provided above may designate its Designated Lender (if any) to
fund such Bid Rate Loan on its behalf, as described in Section 12.16. Any
Designated Lender which funds a Bid Rate Loan shall on and after the time of
such funding become the obligee under such Bid Rate Loan and be entitled to
receive payment thereof when due. No Bank shall be relieved of its obligation to
fund a Bid Rate Loan, and no Designated Lender shall assume such obligation,
prior to the time the applicable Bid Rate Loan is funded.
Section 2.03 Advances, Generally. The Initial Advance shall
be in the minimum amount of $1,000,000 and in integral multiples of $100,000
above such amount and shall be made upon satisfaction of the conditions set
forth in Section
22
28
4.01. Subsequent advances shall be made no more frequently than weekly
thereafter, upon satisfaction of the conditions set forth in Section 4.02. The
amount of each advance subsequent to the Initial Advance shall be in the minimum
amount of $1,000,000 (unless less than $1,000,000 is available for disbursement
pursuant to the terms hereof at the time of any subsequent advance, in which
case the amount of such subsequent advance shall be equal to such remaining
availability) and in integral multiples of $100,000 above such amount.
Additional restrictions on the amounts and timing of, and conditions to the
making of, advances of Bid Rate Loans are set forth in Section 2.02.
Section 2.04 Procedures for Advances. In the case of advances
of Ratable Loans hereunder, Borrower shall submit to Administrative Agent a
request for each advance, stating the amount requested and certifying the
purpose, in reasonable detail, for which such advance is to be used, no later
than 11:00 a.m. (New York time) on the date, in the case of advances of Base
Rate Loans, which is one (1) Banking Day, and, in the case of advances of LIBOR
Loans, which is three (3) Banking Days, prior to the date the advance is to be
made. In the case of advances of Bid Rate Loans hereunder, Borrower shall submit
a Bid Rate Quote Request at the time specified in Section 2.02, accompanied by a
certification of the purpose for which the advance is to be used. Administrative
Agent, upon its receipt and approval of the request for advance, will so notify
the Banks either by telephone or by facsimile. Not later than 11:00 a.m. (New
York time) on the date of each advance, each Bank (in the case of Ratable Loans)
or the applicable Bank(s) (in the case of Bid Rate Loans) shall, through its
Applicable Lending Office and subject to the conditions of this Agreement, make
the amount to be advanced by it on such day available to Administrative Agent,
at Administrative Agent's Office and in immediately available funds for the
account of Borrower. The amount so received by Administrative Agent shall,
subject to the conditions of this Agreement, be made available to Borrower, in
immediately available funds, by Administrative Agent's crediting an account of
Borrower designated by Borrower and maintained with Administrative Agent at
Administrative Agent's Office.
Section 2.05 Interest Periods; Renewals. In the case of the
LIBOR Loans, Borrower shall select an Interest Period of any duration in
accordance with the definition of Interest Period in Section 1.01, subject to
the following limitations: (1) no Interest Period may extend beyond the Maturity
Date; (2) if an Interest Period would end on a day which is not a Banking Day,
such Interest Period shall be extended to the next Banking Day, unless such
Banking Day would fall in the next calendar month, in which event such Interest
Period shall end on the immediately preceding Banking Day; and (3) only seven
(7) discrete segments of a Bank's Ratable Loan bearing interest at a LIBOR
Interest Rate, for a designated Interest Period, pursuant to a particular
Election, Conversion or Continuation, may be outstanding at any
23
29
one time (each such segment of each Bank's Ratable Loan corresponding to a
proportionate segment of each of the other Banks' Ratable Loans).
Upon notice to Administrative Agent as provided in Section
2.14, Borrower may Continue any LIBOR Loan on the last day of the Interest
Period of the same or different duration in accordance with the limitations
provided above. If Borrower shall fail to give notice to Administrative Agent of
such a Continuation, such LIBOR Loan shall automatically become a LIBOR Loan
with an Interest Period of one (1) month on the last day of the current Interest
Period.
Section 2.06 Interest. Borrower shall pay interest to
Administrative Agent for the account of the applicable Bank on the outstanding
and unpaid principal amount of the Loans, at a rate per annum as follows: (1)
for Base Rate Loans at a rate equal to the Base Rate; (2) for LIBOR Loans at a
rate equal to the applicable LIBOR Interest Rate plus the Applicable Margin; and
(3) for Bid Rate Loans at a rate equal to the applicable LIBOR Bid Rate. Any
principal amount not paid when due (when scheduled, at acceleration or
otherwise) shall bear interest thereafter, payable on demand, at the Default
Rate.
The interest rate on Base Rate Loans shall change when the
Base Rate changes. Interest on Base Rate Loans, LIBOR Loans and Bid Rate Loans
shall not exceed the maximum amount permitted under applicable law. Interest
shall be calculated for the actual number of days elapsed on the basis of, in
the case of Base Rate Loans, LIBOR Loans and Bid Rate Loans, three hundred sixty
(360) days.
Accrued interest shall be due and payable in arrears upon and
with respect to any payment or prepayment of principal and, (x) in the case of
both Base Rate Loans and LIBOR Loans, on the first Banking Day of each calendar
month and (y) in the case of Bid Rate Loans, at the expiration of the Interest
Period applicable thereto; provided, however, that interest accruing at the
Default Rate shall be due and payable on demand.
Section 2.07 Fees. (a) Borrower agrees to pay to
Administrative Agent, for the accounts of the parties specified
therein, the fees provided for in the Supplemental Fee Letter.
(b) Borrower shall, during the term of the Loans, pay to
Administrative Agent for the account of each Bank a commitment fee computed (1)
during periods when Borrower's Credit Rating is below BBB- by S+P or below Baa3
by Moody's or unrated, on the daily unused Loan Commitment of such Bank and (2)
during periods when Borrower's Credit Rating is BBB- or higher by S+P or Baa3 or
higher by Moody's, on the daily Loan Commitment of such Bank, in either such
case at a rate per annum equal to .15%, calculated on the basis of a year of
three hundred sixty (360) days for the
24
30
actual number of days elapsed. The accrued commitment fee shall be due and
payable quarterly in arrears on the tenth (10th) day of August, November,
February and May of each year, commencing on the first such date after the
Closing Date, and upon the Maturity Date (as stated, by acceleration or
otherwise) or earlier termination of the Loan Commitments.
Section 2.08 Notes. The Ratable Loan made by each Bank under
this Agreement shall be evidenced by, and repaid with interest in accordance
with, a single promissory note of Borrower in the form of EXHIBIT B duly
completed and executed by Borrower, in the principal amount equal to such Bank's
Loan Commitment, payable to such Bank for the account of its Applicable Lending
Office (each such note, as the same may hereafter be amended, modified,
extended, severed, assigned, renewed or restated from time to time, including
any substitute notes pursuant to Section 3.07 or 12.05, a "Ratable Loan Note").
The parties hereto acknowledge that, as of the date hereof, the aggregate
outstanding principal amount under the Ratable Loan Notes of all of the Banks is
$40,800,000. The Bid Rate Loans of the Banks shall be evidenced by a single
global promissory note of Borrower, in the form of EXHIBIT B-1, duly completed
and executed by Borrower, in the principal amount of $100,000,000, payable to
Administrative Agent for the account of the respective Banks making Bid Rate
Loans (such note, as the same may hereafter be amended, modified, extended,
severed, assigned, substituted, renewed or restated from time to time, the "Bid
Rate Loan Note". A particular Bank's Ratable Loan Note, together with its
interest, if any, in the Bid Rate Loan Note, are referred to collectively in
this Agreement as such Bank's "Note"; all such Ratable Loan Notes and interests
are referred to collectively in this Agreement as the "Notes". The Ratable Loan
Notes shall mature, and all outstanding principal and accrued interest and other
sums thereunder shall be paid in full, on the Maturity Date, as the same may be
accelerated. The outstanding principal amount of each Bid Rate Loan evidenced by
the Bid Rate Loan Note, and all accrued interest and other sums with respect
thereto, shall become due and payable to the Bank making such Bid Rate Loan at
the earlier of the expiration of the Interest Period applicable thereto or the
Maturity Date, as the same may be accelerated.
Each Bank is hereby authorized by Borrower to endorse on the
schedule attached to the Ratable Loan Note held by it, the amount of each
advance and each payment of principal received by such Bank for the account of
its Applicable Lending Office(s) on account of its Ratable Loan, which
endorsement shall, in the absence of manifest error, be conclusive as to the
outstanding balance of the Ratable Loan made by such Bank. Administrative Agent
is hereby authorized by Borrower to endorse on the schedule attached to the Bid
Rate Loan Note the amount of each Bid Rate Loan, the name of the Bank making the
same, the date of the advance thereof, the interest rate applicable thereto and
the
25
31
expiration of the Interest Period applicable thereto (i.e., the maturity date
thereof). The failure by Administrative Agent or any Bank to make such notations
with respect to the Loans or each advance or payment shall not limit or
otherwise affect the obligations of Borrower under this Agreement or the Notes.
Section 2.09 Prepayments. Without prepayment premium or
penalty but subject to Section 3.05, Borrower may, upon at least one (1) Banking
Day's notice to Administrative Agent in the case of the Base Rate Loans, and at
least three (3) Banking Days' notice to Administrative Agent in the case of
LIBOR Loans, prepay the Ratable Loans, provided that (1) any partial prepayment
under this Section shall be in integral multiples of $1,000,000; (2) a LIBOR
Loan may be prepaid only on the last day of the applicable Interest Period for
such LIBOR Loan; and (3) each prepayment under this Section shall include all
interest accrued on the amount of principal prepaid through the date of
prepayment.
Section 2.10 Cancellation of Commitments. (a) At any time,
Borrower shall have the right, without premium or penalty, to terminate any
unused Loan Commitments, in whole or in part, from time to time, provided that:
(1) Borrower shall give notice of each such termination to Administrative Agent
no later then 10:00 a.m. (New York time) on the date which is fifteen (15)
Banking Days prior to the effectiveness of such termination; (2) the Loan
Commitments of each of the Banks must be terminated ratably and simultaneously
with those of the other Banks; and (3) each partial termination of the Loan
Commitments as a whole (and corresponding reduction of the Total Loan
Commitment) shall be in an integral multiple of $1,000,000.
(b) The Loan Commitments, to the extent terminated, may not be
reinstated.
Section 2.11 Method of Payment. Borrower shall make each
payment under this Agreement and under the Notes not later than 11:00 A.M. (New
York time) on the date when due in Dollars to Administrative Agent at
Administrative Agent's Office in immediately available funds. Administrative
Agent will thereafter, on the day of its receipt of each such payment, cause to
be distributed to each Bank (1) such Bank's appropriate share (based upon the
respective outstanding principal amounts and rate(s) of interest under the Notes
of the Banks) of the payments of principal and interest in like funds for the
account of such Bank's Applicable Lending Office; and (2) fees payable to such
Bank in accordance with the terms of this Agreement. Borrower hereby authorizes
Administrative Agent and the Banks, if and to the extent payment by Borrower is
not made when due under this Agreement or under the Notes, to charge from time
to time against any account Borrower maintains with Administrative Agent or any
Bank any amount so due to Administrative Agent and/or the Banks.
26
32
Except to the extent provided in this Agreement, whenever any
payment to be made under this Agreement or under the Notes is due on any day
other than a Banking Day, such payment shall be made on the next succeeding
Banking Day, and such extension of time shall in such case be included in the
computation of the payment of interest and other fees, as the case may be.
Section 2.12 Elections, Conversions or Continuation of Loans.
Subject to the provisions of Article III and Sections 2.05 and 2.13, Borrower
shall have the right to Elect to have all or a portion of any advance of the
Ratable Loans be LIBOR Loans, to Convert Base Rate Loans into LIBOR Loans, to
Convert LIBOR Loans into Base Rate Loans, or to Continue LIBOR Loans as LIBOR
Loans, at any time or from time to time, provided that (1) Borrower shall give
Administrative Agent notice of each such Election, Conversion or Continuation as
provided in Section 2.14; and (2) a LIBOR Loan may be Converted or Continued
only on the last day of the applicable Interest Period for such LIBOR Loan.
Except as otherwise provided in this Agreement, each Election, Continuation and
Conversion shall be applicable to each Bank's Ratable Loan in accordance with
its Pro Rata Share.
Section 2.13 Minimum Amounts. With respect to the Ratable
Loans as a whole, each Election and each Conversion shall be in an amount at
least equal to $1,000,000 and in integral multiples of $100,000.
Section 2.14 Certain Notices Regarding Elections, Conversions
and Continuations of Loans. Notices by Borrower to Administrative Agent of
Elections, Conversions and Continuations of LIBOR Loans shall be irrevocable and
shall be effective only if received by Administrative Agent not later than 10:00
a.m. (New York time) on the number of Banking Days prior to the date of the
relevant Election, Conversion or Continuation specified below:
Number of Banking
Notice Days Prior
------ ----------
Conversions into Base Rate two (2)
Loans
Elections of, Conversions into or three (3)
Continuations as, LIBOR Loans
Promptly following its receipt of any such notice, Administrative Agent shall so
advise the Banks either by telephone or by facsimile. Each such notice of
Election shall specify the
27
33
portion of the amount of the advance that is to be LIBOR Loans (subject to
Section 2.13) and the duration of the
Interest Period applicable thereto (subject to Section 2.05); each such notice
of Conversion shall specify the LIBOR Loans or Base Rate Loans to be Converted;
and each such notice of Conversion or Continuation shall specify the date of
Conversion or Continuation (which shall be a Banking Day), the amount thereof
(subject to Section 2.13) and the duration of the Interest Period applicable
thereto (subject to Section 2.05). In the event that Borrower fails to Elect to
have any portion of an advance of the Ratable Loans be LIBOR Loans, the entire
amount of such advance shall constitute Base Rate Loans. In the event that
Borrower fails to Continue LIBOR Loans within the time period and as otherwise
provided in this Section, such LIBOR Loans will automatically become LIBOR Loans
with an Interest Period of one (1) month on the last day of the then current
applicable Interest Period for such LIBOR Loans.
Section 2.15 Late Payment Premium. Borrower shall, at
Administrative Agent's option, pay to Administrative Agent for the account of
the Banks a late payment premium in the amount of 4% of any payments of interest
under the Loans made more than ten (10) days after the due date thereof, which
shall be due with any such late payment.
Section 2.16 Letters of Credit. (a) Borrower, by notice to
Administrative Agent, may request, in lieu of advances of proceeds of the
Ratable Loans, that Administrative Agent issue unconditional, irrevocable
standby letters of credit (each, a "Letter of Credit") for the account of
Borrower, payable by sight drafts, for such beneficiaries and with such other
terms as Borrower shall specify. Promptly upon issuance of a Letter of Credit,
Administrative Agent shall notify each of the Banks.
(b) The amount of any Letter of Credit shall be limited to the
lesser of (x) $50,000,000 less the aggregate amount of all Letters of Credit
theretofore issued or (y) the Available Total Loan Commitment, it being
understood that the amount of each Letter of Credit issued and outstanding shall
(1) effect a reduction, by an equal amount, of the Available Total Loan
Commitment (such reduction to be allocated to each Bank's Ratable Loan ratably
in accordance with the Banks' respective Pro Rata Shares) and (2) be treated as
advanced as of the date of issuance of the Letter of Credit for purposes of
calculating the commitment fee under clause (1) of Section 2.07(b).
(c) The amount of each Letter of Credit shall be further
subject to the limitations applicable to amounts of advances set forth in
Section 2.03 and the procedures for the issuance of each Letter of Credit shall
be the same as the procedures applicable to the making of advances as set forth
in the first sentence of Section 2.04. Administrative Agent's issuance of each
Letter of Credit shall be subject to
28
34
Administrative Agent's determination that Borrower has satisfied all conditions
precedent to its entitlement to an advance of proceeds of the Loans.
(d) Each Letter of Credit shall expire no later than one (1)
month prior to the Maturity Date.
(e) In connection with, and as a further condition to the
issuance of, each Letter of Credit, Borrower shall execute and deliver to
Administrative Agent an application for the Letter of Credit on Administrative
Agent's standard form therefor, together with such other documents, opinions and
assurances as Administrative Agent shall reasonably require.
(f) In connection with each Letter of Credit, Borrower hereby
covenants to pay to Administrative Agent the following fees each payable
quarterly in arrears (on the first Banking Day of each calendar quarter
following the issuance of the Letter of Credit): (1) a fee for the account of
the Banks, computed daily on the amount of the Letter of Credit issued and
outstanding at a rate per annum equal to the "Banks' L/C Fee Rate" (as
hereinafter defined) and (2) a fee, for Administrative Agent's own account,
computed daily on the amount of the Letter of Credit issued and outstanding at a
rate per annum equal to 0.125%. For purposes of this Agreement, the "Banks' L/C
Fee Rate" shall mean, at any time, a rate per annum equal to the Applicable
Margin less 0.125% per annum. It is understood and agreed that the last
installment of the fees provided for in this paragraph (f) with respect to any
particular Letter of Credit shall be due and payable on the first day of the
calendar quarter following the return, undrawn, or cancellation of such Letter
of Credit.
(g) The parties hereto acknowledge and agree that, immediately
upon notice from Administrative Agent of any drawing under a Letter of Credit,
each Bank shall, notwithstanding the existence of a Default or Event of Default
or the non-satisfaction of any conditions precedent to the making of an advance
of the Loans, advance proceeds of its Ratable Loan, in an amount equal to its
Pro Rata Share of such drawing, which advance shall be made to Administrative
Agent to reimburse Administrative Agent, for its own account, for such drawing.
Each of the Banks further acknowledges that its obligation to fund its Pro Rata
Share of drawings under Letters of Credit as aforesaid shall survive the Banks'
termination of this Agreement or enforcement of remedies hereunder or under the
other Loan Documents.
(h) Borrower agrees, upon the occurrence of an Event of
Default and at the written request of Administrative Agent, (1) to deposit with
Administrative Agent cash collateral in the amount of all the outstanding
Letters of Credit, which cash collateral shall be held by Administrative Agent
as security for Borrower's obligations in connection with the Letters of Credit
and (2) to execute and deliver to Administrative Agent such
29
35
documents as Administrative Agent reasonably requests to confirm and perfect the
assignment of such cash collateral to Administrative Agent.
Notwithstanding the foregoing provisions of this Section,
which contemplate the issuance of standby Letters of Credit, the undersigned
Banks previously agreed, as an accommodation to Borrower, to permit the issuance
by Administrative Agent on July 19, 1996 of a $7,823,330 direct-pay Letter of
Credit in connection with Borrower's acquisition of the Larkspur Canyon
(formerly Villa Marguerite) Apartments. Said Letter of Credit remains
outstanding as of the date hereof. As a further accommodation in connection with
the aforesaid Letter of Credit, the undersigned Banks agreed to waive the
minimum amounts set forth in Section 2.03 (with respect to advances of proceeds
of the Loan subsequent to the Initial Advance) in the event such advances are
made to repay Administrative Agent for drawings under said Letter of Credit.
Section 2.17 Special Provisions Regarding Advances in
Connection with Acquisitions. In the case of each advance relating to an
Acquisition, adjustments shall be made with respect to determinations of
compliance with the covenants contained in Article VIII, all as set forth in
this Section, and the making of the advance shall be subject, in addition to the
limitations and conditions applicable to advances of the Loans generally, to the
satisfaction of the conditions set forth in this Section. As conditions to each
advance relating to an Acquisition, Borrower shall be required to submit to
Administrative Agent, no later than five (5) Banking Days prior to the date such
advance is to be made: (1) a certificate, from the officer of Borrower specified
in paragraph (3) of Section 6.09, containing (x) a computation of the Adjusted
Total Loan Commitment as specified in clause (b) of said paragraph (3) and (y)
covenant compliance calculations as specified in clause (c) of said paragraph
(3), except including, in each case, the pro-forma adjustments described below,
which certificate shall (a) indicate that the outstanding principal amount under
the Notes, together with the amount of the requested advance, does not exceed
the Adjusted Total Loan Commitment and (b) demonstrate Borrower's compliance, as
of the end of the most recently ended calendar quarter for which financial
results are required under Section 6.09 to have been reported by Borrower (the
"Reference Date"), with all covenants enumerated in said clause (c) of said
paragraph (3) and (2) a certificate by the same officer setting forth the income
projected to be generated from such Acquisition for purposes of determining
Combined EBITDA and the type of income so generated.
In connection with each advance of Loan proceeds relating to
an Acquisition, the following pro-forma adjustments shall be made to the
Adjusted Total Loan Commitment and covenant compliance calculations:
30
36
(i) Total Outstanding Indebtedness shall be adjusted by adding
thereto all indebtedness that is assumed or incurred by Borrower in
connection with the Acquisition (and any other Acquisition since the
Reference Date);
(ii) Combined EBITDA, for the relevant period(s), shall be
adjusted by adding thereto (or subtracting therefrom, in the case of a
loss) actual revenues less operating costs before interest expense,
income taxes, depreciation, amortization and extraordinary items, for
the same period(s), from the acquired property (and any other property
acquired since the Reference Date);
(iii) If, upon its Acquisition, the acquired property would
become (or any other property acquired since the Reference Date shall
have become) part of Unencumbered Wholly-Owned Assets, Unencumbered
Combined EBITDA, for the relevant period(s), shall be adjusted by
adding thereto (or subtracting therefrom, in the case of a loss) actual
income before interest expense, income taxes, depreciation,
amortization and extraordinary items, for the same period(s), from the
acquired property (and such other acquired property); and
(iv) Interest Expense, Unsecured Interest Expense and Combined
Debt Service for the relevant period(s), shall be adjusted by adding
thereto interest expense incurred on, respectively, all indebtedness
and unsecured indebtedness that is assumed and/or incurred by Borrower
in connection with the Acquisition (and any other property acquired
since the Reference Date), assuming, for purposes of this calculation,
that such indebtedness were to bear interest for the entire relevant
period(s) at a rate per annum equal to (x) the LIBOR Interest Rate,
plus the Applicable Margin, then in effect hereunder or (y) if there is
no LIBOR Interest Rate then in effect hereunder, the LIBOR Interest
Rate for an Interest Period of one (1) month, plus the Applicable
Margin that would then apply if a LIBOR Interest Rate was in effect
hereunder, as of the date of the Acquisition and would be amortized
over a twenty-five (25)-year period.
31
37
ARTICLE III. YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01 Additional Costs. Borrower shall pay directly to
each Bank from time to time on demand such amounts as such Bank may determine to
be necessary to compensate it for any increased costs which such Bank determines
are attributable to its making or maintaining a LIBOR Loan or a Bid Rate Loan,
or its obligation to make or maintain a LIBOR Loan or a Bid Rate Loan, or its
obligation to Convert a Base Rate Loan to a LIBOR Loan hereunder, or any
reduction in any amount receivable by such Bank hereunder in respect of its
LIBOR Loan or Bid Rate Loan(s) or such obligations (such increases in costs and
reductions in amounts receivable being herein called "Additional Costs"), in
each case resulting from any Regulatory Change which:
(1) changes the basis of taxation of any amounts payable to
such Bank under this Agreement or the Notes in respect of any such
LIBOR Loan or Bid Rate Loan (other than changes in the rate of general
corporate, franchise, branch profit, net income or other income tax
imposed on such Bank or its Applicable Lending Office by the
jurisdiction in which such Bank has its principal office or such
Applicable Lending Office); or
(2) (other than to the extent the LIBOR Reserve Requirement is
taken into account in determining the LIBOR Rate at the commencement of
the applicable Interest Period) imposes or modifies any reserve,
special deposit, deposit insurance or assessment, minimum capital,
capital ratio or similar requirements relating to any extensions of
credit or other assets of, or any deposits with or other liabilities
of, such Bank (including any LIBOR Loan or Bid Rate Loan or any
deposits referred to in the definition of "LIBOR Interest Rate" in
Section 1.01), or any commitment of such Bank (including such Bank's
Loan Commitment hereunder); or
(3) imposes any other condition affecting this Agreement or
the Notes (or any of such extensions of credit or liabilities).
Without limiting the effect of the provisions of the first
paragraph of this Section, in the event that, by reason of any Regulatory
Change, any Bank either (1) incurs Additional Costs based on or measured by the
excess above a specified level of the amount of a category of deposits of other
liabilities of such Bank which includes deposits by reference to which the LIBOR
Interest Rate is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Bank which includes loans based on
the LIBOR Interest Rate or (2) becomes subject to restrictions on the amount of
such a category of liabilities or assets which it may hold, then, if such Bank
so elects by notice to Borrower (with a copy to Administrative Agent), the
obligation of such Bank to permit Elections of, to
32
38
Continue, or to Convert Base Rate Loans into, LIBOR Loans shall be suspended (in
which case the provisions of Section 3.04 shall be applicable) until such
Regulatory Change ceases to be in effect.
Determinations and allocations by a Bank for purposes of this
Section of the effect of any Regulatory Change pursuant to the first or second
paragraph of this Section, on its costs or rate of return of making or
maintaining its Loan or portions thereof or on amounts receivable by it in
respect of its Loan or portions thereof, and the amounts required to compensate
such Bank under this Section, shall be included in a calculation of such amounts
given to Borrower and shall be conclusive absent manifest error.
Section 3.02 Limitation on Types of Loans. Anything herein to
the contrary notwithstanding, if, on or prior to the determination of the LIBOR
Interest Rate for any Interest Period:
(1) Administrative Agent reasonably determines (which
determination shall be conclusive) that quotations of interest rates
for the relevant deposits referred to in the definition of "LIBOR
Interest Rate" in Section 1.01 are not being provided in the relevant
amounts or for the relevant maturities for purposes of determining
rates of interest for the LIBOR Loans or Bid Rate Loans as provided in
this Agreement; or
(2) a Bank reasonably determines (which determination shall be
conclusive) and promptly notifies Administrative Agent that the
relevant rates of interest referred to in the definition of "LIBOR
Interest Rate" in Section 1.01 upon the basis of which the rate of
interest for LIBOR Loans or Bid Rate Loans for such Interest Period is
to be determined do not adequately cover the cost to such Bank of
making or maintaining such LIBOR Loan or Bid Rate Loan for such
Interest Period;
then Administrative Agent shall give Borrower prompt notice thereof, and so long
as such condition remains in effect, the Banks (or, in the case of the
circumstances described in clause (2) above, the affected Bank) shall be under
no obligation to permit Elections of LIBOR Loans, to Convert Base Rate Loans
into LIBOR Loans or to Continue LIBOR Loans and Borrower shall, on the last
day(s) of the then current Interest Period(s) for the affected outstanding LIBOR
Loans or Bid Rate Loans, either (x) prepay the affected LIBOR Loans or Bid Rate
Loans or (y) Convert the affected LIBOR Loans into Base Rate Loans in accordance
with Section 2.12 or convert the rate of interest under the affected Bid Rate
Loans to the rate applicable to Base Rate Loans by following the same procedures
as are applicable for Conversions into Base Rate Loans set forth in Section
2.12.
33
39
Section 3.03 Illegality. Notwithstanding any other provision
of this Agreement, in the event that it becomes unlawful for any Bank or its
Applicable Lending Office to honor its obligation to make or maintain a LIBOR
Loan or Bid Rate Loan hereunder, to allow Elections of a LIBOR Loan or to
Convert a Base Rate Loan into a LIBOR Loan, then such Bank shall promptly notify
Administrative Agent and Borrower thereof and such Bank's obligation to make or
maintain a LIBOR Loan or Bid Rate Loan, or to permit Elections of, to Continue,
or to Convert its Base Rate Loan into, a LIBOR Loan shall be suspended (in which
case the provisions of Section 3.04 shall be applicable) until such time as such
Bank may again make and maintain a LIBOR Loan or a Bid Rate Loan.
Section 3.04 Treatment of Affected Loans. If the obligations
of any Bank to make or maintain a LIBOR Loan or a Bid Rate Loan, or to permit an
Election of a LIBOR Loan, to Continue its LIBOR Loan, or to Convert its Base
Rate Loan into a LIBOR Loan, are suspended pursuant to Sections 3.01 or 3.03
(each LIBOR Loan or Bid Rate Loan so affected being herein called an "Affected
Loan"), such Bank's Affected Loan shall be automatically Converted into a Base
Rate Loan (or, in the case of an Affected Loan that is a Bid Rate Loan, the
interest rate thereon shall be converted to the rate applicable to Base Rate
Loans) on the last day of the then current Interest Period for the Affected Loan
(or, in the case of a Conversion (or conversion) required by Sections 3.01 or
3.03, on such earlier date as such Bank may specify to Borrower).
To the extent that such Bank's Affected Loan has been so
Converted (or the interest rate thereon so converted), all payments and
prepayments of principal which would otherwise be applied to such Bank's
Affected Loan shall be applied instead to its Base Rate Loan (or to its Bid Rate
Loan bearing interest at the converted rate) and such Bank shall have no
obligation to Convert its Base Rate Loan into a LIBOR Loan.
Section 3.05 Certain Compensation. Other than in connection
with a Conversion of an Affected Loan, Borrower shall pay to Administrative
Agent for the account of the applicable Bank, upon the request of such Bank
through Administrative Agent which request includes a calculation of the
amount(s) due, such amount or amounts as shall be sufficient (in the reasonable
opinion of such Bank) to compensate it for any loss, cost or expense which such
Bank reasonably determines is attributable to:
(1) any payment or prepayment of a LIBOR Loan or Bid Rate Loan
made by such Bank, or any Conversion or Continuation of a LIBOR Loan
made by such Bank, in any such case on a date other than the last day
of an applicable Interest Period, whether by reason of acceleration or
otherwise; or
34
40
(2) any failure by Borrower for any reason to Convert or
Continue a LIBOR Loan to be Converted or Continued by such Bank on the
date specified therefor in the relevant notice under Section 2.14; or
(3) any failure by Borrower to borrow (or to qualify for a
borrowing of) a LIBOR Loan or Bid Rate Loan which would otherwise be
made hereunder on the date specified in the relevant Election notice
under Section 2.14 or Bid Rate Quote acceptance under Section 2.02(e)
given or submitted by Borrower.
Without limiting the foregoing, such compensation shall
include an amount equal to the present value (using as the discount rate an
interest rate equal to the rate determined under (2) below) of the excess, if
any, of (1) the amount of interest which otherwise would have accrued on the
principal amount so paid, prepaid, Converted or Continued (or not Converted,
Continued or borrowed) for the period from the date of such payment, prepayment,
Conversion or Continuation (or failure to Convert, Continue or borrow) to the
last day of the then current applicable Interest Period (or, in the case of a
failure to Convert, Continue or borrow, to the last day of the applicable
Interest Period which would have commenced on the date specified therefor in the
relevant notice) at the applicable rate of interest for the LIBOR Loan or Bid
Rate Loan provided for herein, over (2) the amount of interest (as reasonably
determined by such Bank) based upon the interest rate which such Bank would have
bid in the London interbank market for Dollar deposits, for amounts comparable
to such principal amount and maturities comparable to such period. A
determination of any Bank as to the amounts payable pursuant to this Section
shall be conclusive absent manifest error.
Section 3.06 Capital Adequacy. If any Bank shall have
determined that, after the date hereof, the adoption of any applicable law, rule
or regulation regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such Governmental Authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on capital of such Bank (or its Parent) as a consequence of such
Bank's obligations hereunder to a level below that which such Bank (or its
Parent) could have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, within
fifteen (15) days after demand by such Bank (with a copy to Administrative
Agent), Borrower shall pay to such Bank such additional amount or amounts as
will compensate such Bank (or its
35
41
Parent) for such reduction. A certificate of any Bank claiming compensation
under this Section, setting forth in reasonable detail the basis therefor, shall
be conclusive absent manifest error.
Section 3.07 Substitution of Banks. If any Bank (an "Affected
Bank") (1) makes demand upon Borrower for (or if Borrower is otherwise required
to pay) Additional Costs pursuant to Section 3.01 or (2) is unable to make or
maintain a LIBOR Loan or Bid Rate Loan as a result of a condition described in
Section 3.03 or clause (2) of Section 3.02, Borrower may, within ninety (90)
days of receipt of such demand or notice (or the occurrence of such other event
causing Borrower to be required to pay Additional Costs or causing said Section
3.03 or clause (2) of Section 3.02 to be applicable), as the case may be, give
written notice (a "Replacement Notice") to Administrative Agent and to each Bank
of Borrower's intention either (x) to prepay in full the Affected Bank's Note
and to terminate the Affected Bank's entire Loan Commitment or (y) to replace
the Affected Bank with another financial institution (the "Replacement Bank")
designated in such Replacement Notice.
In the event Borrower opts to give the notice provided for in
clause (x) above, and if the Affected Bank shall not agree within thirty (30)
days of its receipt thereof to waive the payment of the Additional Costs in
question or the effect of the circumstances described in Section 3.03 or clause
(2) of Section 3.02, then, so long as no Default or Event of Default shall
exist, Borrower may (notwithstanding the provisions of clause (2) of Section
2.10(a)) terminate the Affected Bank's entire Loan Commitment, provided that in
connection therewith it pays to the Affected Bank all outstanding principal and
accrued and unpaid interest under the Affected Bank's Note, together with all
other amounts, if any, due from Borrower to the Affected Bank, including all
amounts properly demanded and unreimbursed under Sections 3.01 and 3.05.
In the event Borrower opts to give the notice provided for in
clause (y) above, and if (i) Administrative Agent shall, within thirty (30) days
of its receipt of the Replacement Notice, notify Borrower and each Bank in
writing that the Replacement Bank is reasonably satisfactory to Administrative
Agent and (ii) the Affected Bank shall not, prior to the end of such thirty
(30)-day period, agree to waive the payment of the Additional Costs in question
or the effect of the circumstances described in Section 3.03 or clause (2) of
Section 3.02, then the Affected Bank shall, so long as no Default or Event of
Default shall exist, assign its Note and all of its rights and obligations under
this Agreement to the Replacement Bank, and the Replacement Bank shall assume
all of the Affected Bank's rights and obligations, pursuant to an agreement,
substantially in the form of an Assignment and Assumption Agreement, executed by
the Affected Bank and the Replacement Bank. In connection with such
36
42
assignment and assumption, the Replacement Bank shall pay to the Affected Bank
an amount equal to the outstanding principal amount under the Affected Bank's
Note plus all interest accrued thereon, plus all other amounts, if any (other
than the Additional Costs in question), then due and payable to the Affected
Bank; provided, however, that prior to or simultaneously with any such
assignment and assumption, Borrower shall have paid to such Affected Bank all
amounts properly demanded and unreimbursed under Sections 3.01 and 3.05. Upon
the effective date of such assignment and assumption, the Replacement Bank shall
become a Bank Party to this Agreement and shall have all the rights and
obligations of a Bank as set forth in such Assignment and Assumption Agreement,
and the Affected Bank shall be released from its obligations hereunder, and no
further consent or action by any party shall be required. Upon the consummation
of any assignment pursuant to this Section, a substitute Ratable Loan Note shall
be issued to the Replacement Bank by Borrower, in exchange for the return of the
Affected Bank's Ratable Loan Note. The obligations evidenced by such substitute
note shall constitute "Obligations" for all purposes of this Agreement and the
other Loan Documents. In connection with Borrower's execution of substitute
notes as aforesaid, Borrower shall deliver to Administrative Agent evidence,
satisfactory to Administrative Agent, of all requisite corporate action to
authorize Borrower's execution and delivery of the substitute notes and any
related documents. If the Replacement Bank is not incorporated under the laws of
the United States of America or a state thereof, it shall, prior to the first
date on which interest or fees are payable hereunder for its account, deliver to
Borrower and Administrative Agent certification as to exemption from deduction
or withholding of any United States federal income taxes in accordance with
Section 10.13. Each Replacement Bank shall be deemed to have made the
representations contained in, and shall be bound by the provisions of, Section
10.13.
Borrower, Administrative Agent and the Banks shall execute
such modifications to the Loan Documents as shall be reasonably required in
connection with and to effectuate the foregoing.
Section 3.08 Applicability. The provisions of this Article
III shall be applied to Borrower so as not to discriminate against Borrower
vis-a-vis similarly situated customers of the Banks.
37
43
ARTICLE IV. CONDITIONS PRECEDENT
Section 4.01 Conditions Precedent to the Initial Advance. The
obligations of the Banks hereunder and the obligation of each Bank to make the
Initial Advance are subject to the condition precedent that Co-Agents shall have
received and approved on or before the Closing Date (other than with respect to
paragraph (10) below which shall be required prior to the Initial Advance) each
of the following documents, and each of the following requirements shall have
been fulfilled:
(1) Fees and Expenses. The payment of (A) all fees and
expenses incurred by Co-Agents and Administrative Agent (including,
without limitation, the reasonable fees and expenses of legal counsel);
and (B) those fees specified in the Supplemental Fee Letter to be paid
by Borrower on or before the Closing Date;
(2) Notes. The Ratable Loan Notes for UBS, UBC and each of the
other Banks signatory hereto and the Bid Rate Loan Note for UBS, as
Administrative Agent, each duly executed by Borrower;
(3) Financials of Borrower. Audited Borrower's Consolidated
Financial Statements as of and for the year ended December 31, 1996;
(4) Evidence of Formation of Borrower. Certified (as of the
Closing Date) copies of Borrower's certificate of incorporation and
by-laws, with all amendments thereto, and a certificate of the
Secretary of State of the jurisdiction of formation as to its good
standing therein;
(5) Evidence of All Corporate Action. Certified (as of the
Closing Date) copies of all documents evidencing the corporate action
taken by Borrower authorizing the execution, delivery and performance
of the Loan Documents and each other document to be delivered by or on
behalf of Borrower pursuant to this Agreement;
(6) Incumbency and Signature Certificate of Borrower. A
certificate (dated as of the Closing Date) of the secretary of Borrower
certifying the names and true signatures of each person authorized to
sign on behalf of Borrower;
(7) Solvency Certificate. A duly executed Solvency
Certificate;
(8) Opinion of Counsel for Borrower. A favorable opinion,
dated the Closing Date, of Goodwin, Procter & Hoar, counsel for
Borrower, as to such matters as Administrative Agent may reasonably
request;
38
44
(9) Authorization Letter. The Authorization Letter, duly
executed by Borrower;
(10) Request for Advance. A request for an advance in
accordance with Section 2.04;
(11) Certificate. The following statements shall be true and
Administrative Agent shall have received a certificate dated the
Closing Date signed by a duly authorized signatory of Borrower stating,
to the best of the certifying party's knowledge, the following:
(a) All representations and warranties contained in
this Agreement and in each of the other Loan Documents are
true and correct on and as of the Closing Date as though made
on and as of such date, and
(b) No Default or Event of Default has occurred and
is continuing, or could result from the transactions
contemplated by this Agreement and the other Loan Documents;
(12) Supplemental Fee Letter. The Supplemental Fee Letter,
duly executed by Borrower;
(13) Toscana Apartments. A complete project budget regarding
the construction of the Toscana Apartments;
(14) Covenant Compliance. A covenant compliance certificate of
the sort required by paragraph (3) of Section 6.09; and
(15) Additional Materials. Such other approvals, documents,
instruments or opinions as Administrative Agent or either Co-Agent may
reasonably request.
Section 4.02 Conditions Precedent to Advances After the
Initial Advance. The obligation of each Bank to make advances of the Loans
subsequent to the Initial Advance shall be subject to satisfaction of the
following conditions precedent:
(1) All conditions of Section 4.01 shall have been and remain
satisfied as of the date of the advance;
(2) No Default or Event of Default shall have occurred and be
continuing as of the date of the advance;
(3) Each of the representations and warranties contained in
this Agreement and in each of the other Loan Documents shall be true
and correct as of the date of the advance;
39
45
(4) Administrative Agent shall have received a request for an
advance in accordance with Section 2.04; and
(5) In the case of each advance in connection with an
Acquisition, the conditions set forth in Section 2.17 shall have been
satisfied.
Section 4.03 Deemed Representations. Each request by Borrower
for, and acceptance by Borrower of, an advance of proceeds of the Loans shall
constitute a representation and warranty by Borrower that, as of both the date
of such request and the date of the advance (1) no Default or Event of Default
has occurred and is continuing and (2) each representation or warranty contained
in this Agreement or the other Loan Documents is true and correct in all
material respects.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Administrative Agent and
each Bank as follows:
Section 5.01 Due Organization. Borrower is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, has the power and authority to own its assets and to transact the
business in which it is now engaged, and, if applicable, is duly qualified for
the conduct of business and in good standing under the laws of each other
jurisdiction in which such qualification is required and where the failure to be
so qualified would cause a Material Adverse Change.
Section 5.02 Power and Authority; No Conflicts; Compliance
With Laws. The execution, delivery and performance of the obligations required
to be performed by Borrower of the Loan Documents does not and will not (a)
require the consent or approval of its shareholders or such consent or approval
has been obtained, (b) contravene either its certificate of incorporation or
by-laws, (c) to the best of Borrower's knowledge, violate any provision of, or
require any filing, registration, consent or approval under, any Law (including,
without limitation, Regulation U), order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to it, (d)
result in a breach of or constitute a default under or require any consent under
any indenture or loan or credit agreement or any other agreement, lease or
instrument to which it may be a party or by which it or its properties may be
bound or affected except for consents which have been obtained, (e) result in,
or require, the creation or imposition of any Lien, upon or with respect to any
of its properties now owned or hereafter acquired, or (f) to the best of
Borrower's knowledge, cause it to be in default under any such Law, order, writ,
judgment, injunction, decree, determination or award or any such indenture,
40
46
agreement, lease or instrument; to the best of its knowledge, Borrower is in
material compliance with all Laws applicable to it and its properties.
Section 5.03 Legally Enforceable Agreements. Each Loan
Document is a legal, valid and binding obligation of Borrower, enforceable
against Borrower in accordance with its terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency and other
similar laws affecting creditors' rights generally.
Section 5.04 Litigation. There are no actions, suits or
proceedings pending or, to its knowledge, threatened against Borrower or any of
its Affiliates before any court or arbitrator or any Governmental Authority
which are reasonably likely to result in a Material Adverse Change.
Section 5.05 Good Title to Properties. Borrower and each of
its Material Affiliates have good, marketable and legal title to all of the
properties and assets each of them purports to own (including, without
limitation, those reflected in the December 31, 1996 financial statements
referred to in Section 5.13), only with exceptions which do not materially
detract from the value of such property or assets or the use thereof in
Borrower's and such Material Affiliate's business, and except to the extent that
any such properties and assets have been encumbered or disposed of since the
date of such financial statements without violating any of the covenants
contained in Article VII or elsewhere in this Agreement. Borrower and its
Material Affiliates enjoy peaceful and undisturbed possession of all leased
property necessary in any material respect in the conduct of their respective
businesses. All such leases are valid and subsisting and are in full force and
effect.
Section 5.06 Taxes. Borrower has filed all tax returns
(federal, state and local) required to be filed and has paid all taxes,
assessments and governmental charges and levies due and payable without the
imposition of a penalty, including interest and penalties, except to the extent
they are the subject of a Good Faith Contest.
Section 5.07 ERISA. Borrower is in compliance in all material
respects with all applicable provisions of ERISA. Neither a Reportable Event nor
a Prohibited Transaction has occurred with respect to any Plan which could
result in liability of Borrower; no notice of intent to terminate a Plan has
been filed nor has any Plan been terminated within the past five (5) years; no
circumstance exists which constitutes grounds under Section 4042 of ERISA
entitling the PBGC to institute proceedings to terminate, or appoint a trustee
to administer, a Plan, nor has the PBGC instituted any such proceedings;
Borrower and the ERISA Affiliates have not completely or partially withdrawn
under Sections 4201 or 4204 of ERISA from a Multiemployer Plan;
41
47
Borrower and the ERISA Affiliates have met the minimum funding requirements of
Section 412 of the Code and Section 302 of ERISA of each with respect to the
Plans of each and there is no material "Unfunded Current Liability" (as such
quoted term is defined in ERISA) with respect to any Plan established or
maintained by each; and Borrower and the ERISA Affiliates have not incurred any
liability to the PBGC under ERISA (other than for the payment of premiums under
Section 4007 of ERISA). No part of the funds to be used by Borrower in
satisfaction of its obligations under this Agreement constitute "plan assets" of
any "employee benefit plan" within the meaning of ERISA or of any "plan" within
the meaning of Section 4975(e)(1) of the Code, as interpreted by the Internal
Revenue Service and the U.S. Department of Labor in rules, regulations,
releases, bulletins or as interpreted under applicable case law.
Section 5.08 No Default on Outstanding Judgments or Orders.
Borrower and each of its Material Affiliates have satisfied all judgments which
are not being appealed or which are not fully covered by insurance, and are not
in default with respect to any judgment, order, writ, injunction, decree, rule
or regulation of any court, arbitrator or federal, state, municipal or other
Governmental Authority, commission, board, bureau, agency or instrumentality,
domestic or foreign.
Section 5.09 No Defaults on Other Agreements. Except as
disclosed to Co-Agents and Administrative Agent in writing, Borrower is not a
party to any indenture, loan or credit agreement or any lease or other agreement
or instrument or subject to any partnership, trust or other restriction which is
likely to result in a Material Adverse Change. Borrower is not in default in any
respect in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement or instrument which is likely
to result in a Material Adverse Change.
Section 5.10 Government Regulation. Borrower is not subject to
regulation under the Investment Company Act of 1940 or any statute or regulation
limiting its ability to incur indebtedness for money borrowed as contemplated
hereby.
Section 5.11 Environmental Protection. To the best of
Borrower's knowledge, none of Borrower's or its Material Affiliates' properties
contains any Hazardous Materials that, under any Environmental Law currently in
effect, (1) would impose liability on Borrower that is likely to result in a
Material Adverse Change, or (2) is likely to result in the imposition of a Lien
on any assets of Borrower or its Material Affiliates, in each case if not
properly handled in accordance with applicable Law. To the best of Borrower's
knowledge, neither it nor any of its Material Affiliates is in material
violation of, or subject to any existing, pending or threatened material
investigation or
42
48
proceeding by any Governmental Authority under any Environmental Law.
Section 5.12 Solvency. Borrower is, and upon consummation of
the transactions contemplated by this Agreement, the other Loan Documents and
any other documents, instruments or agreements relating thereto, will be,
Solvent.
Section 5.13 Financial Statements. Borrower's Consolidated
Financial Statements most recently delivered to the Banks pursuant to the terms
of this Agreement are in all material respects complete and correct and fairly
present the financial condition of the subjects thereof as of the dates of and
for the periods covered by such statements, all in accordance with GAAP. There
has been no Material Adverse Change since the date of such most recently
delivered Borrower's Consolidated Financial Statements.
Section 5.14 Valid Existence of Affiliates. At the Closing
Date, the only Material Affiliates of Borrower are listed on EXHIBIT C. Each
Material Affiliate is a corporation duly organized and existing in good standing
under the laws of the jurisdiction of its formation. As to each Material
Affiliate, its correct name, the jurisdiction of its formation, Borrower's
percentage of beneficial interest therein, and the type of business in which it
is primarily engaged, are set forth on said EXHIBIT C. Borrower and each of its
Material Affiliates have the power to own their respective properties and to
carry on their respective businesses now being conducted. Each Material
Affiliate is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which the nature of the respective
businesses conducted by it or its respective properties, owned or held under
lease, make such qualification necessary and where the failure to be so
qualified would cause a Material Adverse Change.
Section 5.15 Insurance. Borrower and each of its Material
Affiliates have in force paid insurance with financially sound and reputable
insurance companies or associations in such amounts and covering such risks as
are usually carried by companies engaged in the same type of business and
similarly situated.
Section 5.16 Accuracy of Information; Full Disclosure. Neither
this Agreement nor any documents, financial statements, reports, notices,
schedules, certificates, statements or other writings furnished by or on behalf
of Borrower to Administrative Agent or any Bank in connection with the
negotiation of this Agreement or the consummation of the transactions
contemplated hereby, or required herein to be furnished by or on behalf of
Borrower (other than projections which are made by Borrower in good faith),
contains any untrue or misleading statement of a material fact or omits a
material fact
43
49
necessary to make the statements herein or therein not misleading. To the best
of Borrower's knowledge, there is no fact which Borrower has not disclosed to
Administrative Agent and the Banks in writing which materially affects adversely
nor, so far as Borrower can now foresee, will materially affect adversely the
business affairs or financial condition of Borrower or the ability of Borrower
to perform this Agreement and the other Loan Documents.
ARTICLE VI. AFFIRMATIVE COVENANTS
So long as any of the Notes shall remain unpaid or the Loan
Commitments remain in effect, or any other amount is owing by Borrower to any
Bank hereunder or under any other Loan Document, Borrower shall, and, in the
case of Sections 6.01 through 6.07, inclusive, shall cause each of its Material
Affiliates to:
Section 6.01 Maintenance of Existence. Preserve and maintain
its legal existence and good standing in the jurisdiction of its organization,
and qualify and remain qualified as a corporation in each other jurisdiction in
which such qualification is required except to the extent that failure to be so
qualified in such other jurisdictions is not likely to result in a Material
Adverse Change.
Section 6.02 Maintenance of Records. Keep adequate records
and books of account, in which complete entries will be made reflecting all of
its financial transactions, in accordance with GAAP.
Section 6.03 Maintenance of Insurance. At all times, maintain
and keep in force insurance with financially sound and reputable insurance
companies or associations in such amounts and covering such risks as are usually
carried by companies engaged in the same type of business and similarly
situated, which insurance shall be acceptable to Administrative Agent and may
provide for reasonable deductibility from coverage thereof. In connection with
the foregoing, it is understood that Borrower's earthquake insurance coverage in
place as of the Closing Date is acceptable to Administrative Agent.
Section 6.04 Compliance with Laws; Payment of Taxes. Comply
in all material respects with all Laws applicable to it or to any of its
properties or any part thereof, such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property, except to the extent they are the
subject of a Good Faith Contest.
Section 6.05 Right of Inspection. At any reasonable time and
from time to time upon reasonable notice, permit
44
50
Administrative Agent or any Bank or any agent or representative thereof to
examine and make copies and abstracts from its records and books of account and
visit its properties and to discuss its affairs, finances and accounts with the
independent accountants of Borrower. The foregoing shall include, without
limitation, the right of inspection and review by Administrative Agent, its
agents and representatives (including an engineering firm selected by it) of the
Toscana Apartments and of all project work and budget compliance in respect
thereof.
Section 6.06 Compliance With Environmental Laws. Comply in
all material respects with all applicable Environmental Laws and timely pay or
cause to be paid all costs and expenses incurred in connection with such
compliance, except to the extent there is a Good Faith Contest.
Section 6.07 Maintenance of Properties. Do all things
reasonably necessary to maintain, preserve, protect and keep its properties in
good repair, working order and condition except where the cost thereof is not in
Borrower's best interests and the failure to do so would not result in a
Material Adverse Change.
Section 6.08 Payment of Costs. Pay all costs and expenses
required for the satisfaction of the conditions of this Agreement.
Section 6.09 Reporting and Miscellaneous Document
Requirements. Furnish directly to each of the Banks:
(1) Annual Financial Statements. As soon as available and in
any event within ninety (90) days after the end of each Fiscal Year, Borrower's
Consolidated Financial Statements as of the end of and for such Fiscal Year, in
reasonable detail and stating in comparative form the respective figures for the
corresponding date and period in the prior Fiscal Year and audited by Borrower's
Accountants;
(2) Quarterly Financial Statements. As soon as available and
in any event within forty-five (45) days after the end of each calendar quarter
(other than the last quarter of the Fiscal Year), the unaudited Borrower's
Consolidated Financial Statements as of the end of and for such calendar
quarter, in reasonable detail and stating in comparative form the respective
figures for the corresponding date and period in the prior Fiscal Year;
(3) Certificate of No Default and Financial Compliance. Within
forty-five (45) days after the end of each calendar quarter, a certificate of
Borrower's chief financial officer or treasurer (a) stating that, to the best of
his or her knowledge, no Default or Event of Default has occurred and is
continuing, or if a Default or Event of Default has occurred and
45
51
is continuing, specifying the nature thereof and the action which is proposed to
be taken with respect thereto; (b) setting forth the computation of the Adjusted
Total Loan Commitment; (c) stating that the covenants contained in Sections 7.02
and 7.03 and in Article VIII have been complied with (or specifying those that
have not been complied with) and including computations demonstrating such
compliance (or non-compliance); (d) setting forth the details of all items
comprising Total Outstanding Indebtedness (including amount, maturity, interest
rate and amortization requirements), Secured Indebtedness, Unencumbered Combined
EBITDA, Interest Expense and Unsecured Indebtedness; and (e) only at the end of
each Fiscal Year, stating Borrower's taxable income;
(4) Certificate of Borrower's Accountants. Simultaneously with
the delivery of the annual financial statements required by paragraph (1) of
this Section, (a) a statement of Borrower's Accountants who audited such
financial statements comparing the computations set forth in the financial
compliance certificate required by paragraph (3) of this Section to the audited
financial statements required by paragraph (1) of this Section and (b) when the
audited financial statements required by paragraph (1) of this Section have a
qualified auditor's opinion, a statement of Borrower's Accountants who audited
such financial statements of whether any Default or Event of Default has
occurred and is continuing;
(5) Notice of Litigation. Promptly after the commencement and
knowledge thereof, notice of all actions, suits, and proceedings before any
court or arbitrator, affecting Borrower which, if determined adversely to
Borrower is likely to result in a Material Adverse Change;
(6) Notices of Defaults and Events of Default. As soon as
possible and in any event within ten (10) days after Borrower becomes aware of
the occurrence of a material Default or any Event of Default, a written notice
setting forth the details of such Default or Event of Default and the action
which is proposed to be taken with respect thereto;
(7) Sales or Acquisitions of Assets. Promptly after the
occurrence thereof, written notice of any Disposition or acquisition (including
Acquisitions) of assets (other than acquisitions or Dispositions of investments
such as certificates of deposit, Treasury securities, money market deposits and
other similar financial instruments in the ordinary course of Borrower's cash
management) in excess of $25,000,000 together with, in the case of any
acquisition of such an asset, copies of all material agreements governing the
acquisition and historical financial information and Borrower's projections with
respect to the property acquired;
46
52
(8) Material Adverse Change. As soon as is practicable and in
any event within five (5) days after knowledge of the occurrence of any event or
circumstance which is likely to result in or has resulted in a Material Adverse
Change, written notice thereof;
(9) Intentionally Omitted.
(10) Offices. Thirty (30) days' prior written notice of any
change in the chief executive office or principal place of business of Borrower;
(11) Environmental and Other Notices. As soon as possible and
in any event within ten (10) days after receipt, copies of all Environmental
Notices received by Borrower which are not received in the ordinary course of
business and which relate to a situation which is likely to result in a Material
Adverse Change;
(12) Insurance Coverage. Promptly, such information concerning
Borrower's insurance coverage as Administrative Agent may reasonably request;
(13) Proxy Statements, Etc.. Promptly after the sending or
filing thereof, copies of all proxy statements, financial statements and reports
which Borrower or its Material Affiliates sends to its shareholders, and copies
of all regular, periodic and special reports, and all registration statements
which Borrower or its Material Affiliates files with the Securities and Exchange
Commission or any Governmental Authority which may be substituted therefor, or
with any national securities exchange;
(14) Rent Rolls, Etc.. As soon as available and in any event
within forty-five (45) days after the end of each calendar quarter, a rent roll
and operating statement for each property directly or indirectly owned in whole
or in part by Borrower;
(15) Capital Expenditures. As soon as available and in any
event within forty-five (45) days after the end of each Fiscal Year, a schedule
of such Fiscal Year's capital expenditures and a budget for the next Fiscal
Year's planned capital expenditures for each property directly or indirectly
owned in whole or in part by Borrower;
(16) Toscana Apartments. As soon as available and in any event
within fifteen (15) days after the end of each calendar quarter, construction
progress and budget compliance reports in respect of the Toscana Apartments,
certified by Borrower to be accurate and complete; and
47
53
(17) General Information. Promptly, such other information
respecting the condition or operations, financial or otherwise, of Borrower or
any properties of Borrower as Administrative Agent may from time to time
reasonably request.
Section 6.10 Principal Prepayments as a Result of Reduction in
Adjusted Total Loan Commitment. If the outstanding principal amount under the
Notes at any time exceeds the Adjusted Total Loan Commitment, Borrower shall,
within ten (10) days of Administration Agent's written demand, make a payment in
the amount of such excess in reduction of such outstanding principal balance.
ARTICLE VII. NEGATIVE COVENANTS
So long as any of the Notes shall remain unpaid, or the Loan
Commitments remain in effect, or any other amount is owing by Borrower to
Administrative Agent or any Bank hereunder or under any other Loan Document,
Borrower shall not do any or all of the following:
Section 7.01 Mergers Etc. Merge or consolidate with (except
where Borrower is the surviving entity), or sell, assign, lease or otherwise
dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) (or
enter into any agreement to do any of the foregoing).
Section 7.02 Investments. Directly or indirectly, make any
loan or advance to any Person or purchase or otherwise acquire any capital
stock, assets, obligations or other securities of, make any capital contribution
to, or otherwise invest in, or acquire any interest in, any Person (any such
transaction, an "Investment") if such Investment constitutes the acquisition of
a minority interest in a Person (a "Minority Interest") and the amount of such
Investment, together with the value of all other Minority Interests acquired
after the Closing Date, would exceed 15% of Capitalization Value, determined as
of the end of the most recent calendar quarter for which Borrower is required to
have reported financial results pursuant to Section 6.09. A 50% beneficial
interest in a Person, in connection with which the holder thereof exercises
joint control over such Person with the holder(s) of the other 50% beneficial
interest, shall not constitute a "Minority Interest" for purposes of this
Section.
Section 7.03 Sale of Assets. Effect a Disposition of any of
its now owned or hereafter acquired assets, including assets in which Borrower
owns a beneficial interest through its ownership of interests in joint ventures,
aggregating more than 25% of Capitalization Value.
48
54
ARTICLE VIII. FINANCIAL COVENANTS
So long as any of the Notes shall remain unpaid, or the Loan
Commitments remain in effect, or any other amount is owing by Borrower to
Administrative Agent or any Bank under this Agreement or under any other Loan
Document, Borrower shall not permit or suffer any or all of the following:
Section 8.01 Equity Value. At any time, Equity Value to be
less than $450,000,000.
Section 8.02 Relationship of Total Outstanding Indebtedness
to Capitalization Value. At any time, Total Outstanding Indebtedness to exceed
50% of Capitalization Value.
Section 8.03 Relationship of Combined EBITDA to Interest
Expense. For any calendar quarter, the ratio of (1) Combined EBITDA to (2)
Interest Expense (each for such calendar quarter and annualized, i.e.,
multiplied by four (4)), to be less than 2.50 to 1.00.
Section 8.04 Relationship of Combined EBITDA to Combined Debt
Service. For any calendar quarter, the ratio of (1) Combined EBITDA to (2)
Combined Debt Service (each for such quarter and annualized, i.e., multiplied by
four (4)), to be less than 2.00 to 1.00.
Section 8.05 Relationship of Combined EBITDA to Total
Outstanding Indebtedness. For any calendar quarter, the ratio of (1) Combined
EBITDA for such calendar quarter annualized (i.e., multiplied by four (4)) to
(2) Total Outstanding Indebtedness as of the end of such calendar quarter to be
less than 15%.
Section 8.06 Unsecured Debt Yield. For any calendar quarter,
Unsecured Debt Yield for such calendar quarter to be less than 15%.
Section 8.07 Relationship of Unencumbered Combined EBITDA to
Unsecured Interest Expense. For any calendar quarter, the ratio of (1)
Unencumbered Combined EBITDA to (2) Unsecured Interest Expense (each for such
calendar quarter and annualized, i.e., multiplied by four (4)), to be less than
1.50 to 1.00.
Section 8.08 Relationship of Dividends to Funds From
Operations. For any calendar year, dividends declared by Borrower to exceed 95%
of Funds From Operations, each for such calendar year.
Section 8.09 Relationship of Secured Indebtedness to
Capitalization Value. At any time, Secured Indebtedness to exceed 40% of
Capitalization Value.
49
55
ARTICLE IX. EVENTS OF DEFAULT
Section 9.01 Events of Default. Any of the following events
shall be an "Event of Default":
(1) If Borrower shall: fail to pay the principal of any Notes
or fail to pay interest accruing on any Notes as and when due, and such failure
to pay shall continue unremedied for five (5) days after the due date of such
amount; or fail to make any payment required under Section 6.10 as and when due;
or fail to pay any fee or any other amount due under this Agreement, any other
Loan Document or the Supplemental Fee Letter as and when due and such failure to
pay shall continue unremedied for two (2) Banking Days after written notice by
Administrative Agent of such failure to pay; or
(2) If any representation or warranty made by Borrower in this
Agreement or in any other Loan Document or which is contained in any
certificate, document, opinion, financial or other statement furnished at any
time under or in connection with a Loan Document shall prove to have been
incorrect in any material respect on or as of the date made; or
(3) If Borrower shall fail (a) to perform or observe any term,
covenant or agreement contained in Article VII or Article VIII; or (b) to
perform or observe any term, covenant or agreement contained in this Agreement
(other than obligations specifically referred to elsewhere in this Section 9.01)
or any Loan Document, or any other document executed by Borrower and delivered
to Administrative Agent or the Banks in connection with the transactions
contemplated hereby and such failure under this clause (b) shall remain
unremedied for thirty (30) consecutive calendar days after notice thereof (or
such shorter cure period as may be expressly prescribed in the applicable
document); provided, however, that if any such default under clause (b) above
cannot by its nature be cured within such thirty (30) day, or shorter, as the
case may be, grace period and so long as Borrower shall have commenced cure
within such thirty (30) day, or shorter, as the case may be, grace period and
shall, at all times thereafter, diligently prosecute the same to completion,
Borrower shall have an additional period, not to exceed sixty (60) days, to cure
such default; in no event, however, is the foregoing intended to effect an
extension of the Maturity Date; or
(4) If Borrower shall fail (a) to pay any Recourse Debt (other
than the payment obligations described in paragraph (1) of this Section) in any
amount, or any Debt (other than Recourse Debt) in an amount equal to or greater
than $10,000,000, in any such case when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) after the expiration of
any applicable grace period, or (b) to perform
50
56
or observe any material term, covenant, or condition under any agreement or
instrument relating to any such Debt, when required to be performed or observed,
if the effect of such failure to perform or observe is to accelerate, or to
permit the acceleration of, after the giving of notice or the lapse of time, or
both (other than in cases where, in the judgment of the Required Banks,
meaningful discussions likely to result in (i) a waiver or cure of the failure
to perform or observe, or (ii) otherwise averting such acceleration are in
progress between Borrower and the obligee of such Debt), the maturity of such
Debt, or any such Debt shall be declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled or otherwise required
prepayment), prior to the stated maturity thereof; or
(5) If Borrower, or any Affiliate of Borrower to which
$50,000,000 or more of Capitalization Value is attributable, shall (a) generally
not, or be unable to, or shall admit in writing its inability to, pay its debts
as such debts become due; or (b) make an assignment for the benefit of
creditors, petition or apply to any tribunal for the appointment of a custodian,
receiver or trustee for it or a substantial part of its assets; or (c) commence
any proceeding under any bankruptcy, reorganization, arrangement, readjustment
of debt, dissolution or liquidation Law of any jurisdiction, whether now or
hereafter in effect; or (d) have had any such petition or application filed or
any such proceeding shall have been commenced, against it, in which an
adjudication or appointment is made or order for relief is entered, or which
petition, application or proceeding remains undismissed or unstayed for a period
of sixty (60) days or more; or (e) be the subject of any proceeding under which
all or a substantial part of its assets may be subject to seizure, forfeiture or
divestiture; or (f) by any act or omission indicate its consent to, approval of
or acquiescence in any such petition, application or proceeding or order for
relief or the appointment of a custodian, receiver or trustee for all or any
substantial part of its property; or (g) suffer any such custodianship,
receivership or trusteeship for all or any substantial part of its property, to
continue undischarged for a period of sixty (60) days or more; or
(6) If one or more judgments, decrees or orders for the
payment of money in excess of $10,000,000 (excluding any such judgments, decrees
or orders which are fully covered by insurance) in the aggregate shall be
rendered against Borrower or any of its Material Affiliates, and any such
judgments, decrees or orders shall continue unsatisfied and in effect for a
period of thirty (30) consecutive days without being vacated, discharged,
satisfied or stayed or bonded pending appeal; or
(7) If any of the following events shall occur or exist with
respect to Borrower or any ERISA Affiliate: (a) any Prohibited Transaction
involving any Plan; (b) any Reportable
51
57
Event with respect to any Plan; (c) the filing under Section 4041 of ERISA of a
notice of intent to terminate any Plan or the termination of any Plan; (d) any
event or circumstance which would constitute grounds for the termination of, or
for the appointment of a trustee to administer, any Plan under Section 4042 of
ERISA, or the institution by the PBGC of proceedings for any such termination or
appointment under Section 4042 of ERISA; or (e) complete or partial withdrawal
under Section 4201 or 4204 of ERISA from a Multiemployer Plan or the
reorganization, insolvency, or termination of any Multiemployer Plan; and in
each case above, if such event or conditions, if any, could in the reasonable
opinion of any Bank subject Borrower to any tax, penalty, or other liability to
a Plan, Multiemployer Plan, the PBGC or otherwise (or any combination thereof)
which in the aggregate exceeds or is likely to exceed $50,000; or
(8) If at any time Borrower is not a qualified real estate
investment trust under Sections 856 through 860 of the Code or is not a publicly
traded company listed on the New York Stock Exchange; or
(9) If at any time any portion of Borrower's assets constitute
plan assets for ERISA purposes (within the meaning of C.F.R. Section
2510.3-101); or
(10) If, in the reasonable judgment of all of the Banks, there
shall occur a Material Adverse Change.
Section 9.02 Remedies. If any Event of Default shall occur
and be continuing, Administrative Agent shall, upon request of the Majority
Banks, by notice to Borrower, (1) declare the outstanding balance of the Notes,
all interest thereon, and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon such balance, all such interest, and all
such amounts due under this Agreement and under any other Loan Document shall
become and be forthwith due and payable, without presentment, demand, protest,
or further notice of any kind, all of which are hereby expressly waived by
Borrower; and/or (2) exercise any remedies provided in any of the Loan Documents
or by law. Notwithstanding the foregoing, if an Event of Default under Section
9.01(10) shall occur and be continuing, Administrative Agent shall not be
entitled to exercise the foregoing remedies until (1) it has received a written
notice from all of the Banks (the "Unanimous Bank Notices") (i) requesting
Administrative Agent exercise such remedies and (ii) indicating each Bank's
conclusion in its reasonable judgment that a Material Adverse Change has
occurred and (2) Administrative Agent has provided notice to Borrower, together
with copies of all of the Unanimous Bank Notices.
52
58
ARTICLE X. ADMINISTRATIVE AGENT; RELATIONS AMONG BANKS
Section 10.01 Appointment, Powers and Immunities of
Administrative Agent. Each Bank hereby irrevocably appoints and authorizes
Administrative Agent to act as its agent hereunder and under any other Loan
Document with such powers as are specifically delegated to Administrative Agent
by the terms of this Agreement and any other Loan Document, together with such
other powers as are reasonably incidental thereto. Administrative Agent shall
have no duties or responsibilities except those expressly set forth in this
Agreement and any other Loan Document or required by law, and shall not by
reason of this Agreement be a fiduciary or trustee for any Bank except to the
extent that Administrative Agent acts as an agent with respect to the receipt or
payment of funds (nor shall Administrative Agent have any fiduciary duty to
Borrower nor shall any Bank have any fiduciary duty to Borrower or to any other
Bank). Administrative Agent shall not be responsible to the Banks for any
recitals, statements, representations or warranties made by Borrower or any
officer, partner or official of Borrower or any other Person contained in this
Agreement or any other Loan Document, or in any certificate or other document or
instrument referred to or provided for in, or received by any of them under,
this Agreement or any other Loan Document, or for the value, legality, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or any other document or instrument referred to or
provided for herein or therein, for the perfection or priority of any Lien
securing the Obligations or for any failure by Borrower to perform any of its
obligations hereunder or thereunder. Administrative Agent may employ agents and
attorneys-in-fact and shall not be responsible, except as to money or securities
received by it or its authorized agents, for the negligence or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care. Neither
Administrative Agent nor any of its directors, officers, employees or agents
shall be liable or responsible for any action taken or omitted to be taken by it
or them hereunder or under any other Loan Document or in connection herewith or
therewith, except for its or their own gross negligence or willful misconduct.
Borrower shall pay any fee agreed to by Borrower and Administrative Agent with
respect to Administrative Agent's services hereunder.
Section 10.02 Reliance by Administrative Agent. Administrative
Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telegram or cable)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by
Administrative Agent. Administrative Agent may deem and treat each Bank as the
holder of the Loan made by it for all purposes hereof and shall not be required
to deal with any Person who has acquired a participation in any Loan or
53
59
participation from a Bank. As to any matters not expressly provided for by this
Agreement or any other Loan Document, Administrative Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder in accordance
with instructions signed by the Required Banks, and such instructions of the
Required Banks and any action taken or failure to act pursuant thereto shall be
binding on all of the Banks and any other holder of all or any portion of any
Loan or participation.
Section 10.03 Defaults. Administrative Agent shall not be
deemed to have knowledge of the occurrence of a Default or Event of Default
unless Administrative Agent has received notice from a Bank or Borrower
specifying such Default or Event of Default and stating that such notice is a
"Notice of Default." In the event that Administrative Agent receives such a
notice of the occurrence of a Default or Event of Default, Administrative Agent
shall give prompt notice thereof to the Banks. Administrative Agent, following
consultation with the Banks, shall (subject to Section 10.07) take such action
with respect to such Default or Event of Default which is continuing as shall be
directed by the Majority Banks; provided that, unless and until Administrative
Agent shall have received such directions, Administrative Agent may take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interest of the Banks;
and provided further that Administrative Agent shall not send a notice of
Default or acceleration to Borrower without the approval of the Majority Banks.
In no event shall Administrative Agent be required to take any such action which
it determines to be contrary to law.
Section 10.04 Rights of Administrative Agent as a Bank. With
respect to its Loan Commitment and the Loan provided by it, Administrative Agent
in its capacity as a Bank hereunder shall have the same rights and powers
hereunder as any other Bank and may exercise the same as though it were not
acting as Administrative Agent, and the term "Bank" or "Banks" shall, unless the
context otherwise indicates, include Administrative Agent in its capacity as a
Bank. Administrative Agent and its Affiliates may (without having to account
therefor to any Bank) accept deposits from, lend money to (on a secured or
unsecured basis), and generally engage in any kind of banking, trust or other
business with Borrower (and any Affiliates of Borrower) as if it were not acting
as Administrative Agent.
Section 10.05 Indemnification of Administrative Agent. Each
Bank agrees to indemnify Administrative Agent (to the extent not reimbursed
under Section 12.04 or under the applicable provisions of any other Loan
Document, but without limiting the obligations of Borrower under Section 12.04
or such provisions), for its Pro Rata Share of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
54
60
expenses or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against Administrative Agent in any way relating to
or arising out of this Agreement, any other Loan Document or any other documents
contemplated by or referred to herein or the transactions contemplated hereby or
thereby (including, without limitation, the costs and expenses which Borrower is
obligated to pay under Section 12.04) or under the applicable provisions of any
other Loan Document or the enforcement of any of the terms hereof or thereof or
of any such other documents or instruments; provided that no Bank shall be
liable for (1) any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified, (2) any loss of
principal or interest with respect to Administrative Agent's Loan or (3) any
loss suffered by Administrative Agent in connection with a swap or other
interest rate hedging arrangement entered into with Borrower.
Section 10.06 Non-Reliance on Administrative Agent and Other
Banks. Each Bank agrees that it has, independently and without reliance on
Administrative Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of
Borrower and the decision to enter into this Agreement and that it will,
independently and without reliance upon Administrative Agent or any other Bank,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking or not taking
action under this Agreement or any other Loan Document. Administrative Agent
shall not be required to keep itself informed as to the performance or
observance by Borrower of this Agreement or any other Loan Document or any other
document referred to or provided for herein or therein or to inspect the
properties or books of Borrower. Except for notices, reports and other documents
and information expressly required to be furnished to the Banks by
Administrative Agent hereunder, Administrative Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the affairs, financial condition or business of Borrower (or any
Affiliate of Borrower) which may come into the possession of Administrative
Agent or any of its Affiliates. Administrative Agent shall not be required to
file this Agreement, any other Loan Document or any document or instrument
referred to herein or therein, for record or give notice of this Agreement, any
other Loan Document or any document or instrument referred to herein or therein,
to anyone.
Section 10.07 Failure of Administrative Agent to Act. Except
for action expressly required of Administrative Agent hereunder, Administrative
Agent shall in all cases be fully justified in failing or refusing to act
hereunder unless it shall have received further assurances (which may include
cash collateral) of the indemnification obligations of the Banks under Section
10.05 in respect of any and all liability and expense
55
61
which may be incurred by it by reason of taking or continuing to take any such
action.
Section 10.08 Resignation or Removal of Administrative Agent.
Administrative Agent hereby agrees not to unilaterally resign except in the
event it becomes an Affected Bank and is removed or replaced as a Bank pursuant
to Section 3.07, in which event it shall have the right to resign.
Administrative Agent may be removed at any time with cause by the Required
Banks, provided that Borrower and the other Banks shall be promptly notified
thereof. Upon any such removal, the Required Banks shall have the right to
appoint a successor Administrative Agent which successor Administrative Agent,
so long as it is reasonably acceptable to the Required Banks, shall be that Bank
then having the greatest Loan Commitment. If no successor Administrative Agent
shall have been so appointed by the Required Banks and shall have accepted such
appointment within thirty (30) days after the Required Banks' removal of the
retiring Administrative Agent, then the retiring Administrative Agent may, on
behalf of the Banks, appoint a successor Administrative Agent, which shall be
one of the Banks. The Required Banks or the retiring Administrative Agent, as
the case may be, shall upon the appointment of a successor Administrative Agent
promptly so notify Borrower and the other Banks. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After any retiring Administrative
Agent's removal hereunder as Administrative Agent, the provisions of this
Article X shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Administrative Agent.
Section 10.09 Amendments Concerning Agency Function.
Notwithstanding anything to the contrary contained herein, Administrative Agent
shall not be bound by any waiver, amendment, supplement or modification hereof
or of any other Loan Document which affects its duties, rights, and/or function
hereunder or thereunder unless it shall have given its prior written consent
thereto.
Section 10.10 Liability of Administrative Agent.
Administrative Agent shall not have any liabilities or responsibilities to
Borrower on account of the failure of any Bank to perform its obligations
hereunder or to any Bank on account of the failure of Borrower to perform its
obligations hereunder or under any other Loan Document.
Section 10.11 Transfer of Agency Function. Without the consent
of Borrower or any Bank, Administrative Agent may at any time or from time to
time transfer its functions as
56
62
Administrative Agent hereunder to any of its offices wherever located in the
United States, provided that Administrative Agent shall promptly notify Borrower
and the Banks thereof.
Section 10.12 Non-Receipt of Funds by Administrative Agent.
Unless Administrative Agent shall have received notice from a Bank or Borrower
(either one as appropriate being the "Payor") prior to the date on which such
Bank is to make payment hereunder to Administrative Agent of the proceeds of a
Loan or Borrower is to make payment to Administrative Agent, as the case may be
(either such payment being a "Required Payment"), which notice shall be
effective upon receipt, that the Payor will not make the Required Payment in
full to Administrative Agent, Administrative Agent may assume that the Required
Payment has been made in full to Administrative Agent on such date, and
Administrative Agent in its sole discretion may, but shall not be obligated to,
in reliance upon such assumption, make the amount thereof available to the
intended recipient on such date. If and to the extent the Payor shall not have
in fact so made the Required Payment in full to Administrative Agent, the
recipient of such payment shall repay to Administrative Agent forthwith on
demand such amount made available to it together with interest thereon, for each
day from the date such amount was so made available by Administrative Agent
until the date Administrative Agent recovers such amount, at the customary rate
set by Administrative Agent for the correction of errors among Banks for three
(3) Banking Days and thereafter at the Base Rate.
Section 10.13 Withholding Taxes. Each Bank represents that it
is entitled to receive any payments to be made to it hereunder without the
withholding of any tax and will furnish to Administrative Agent such forms,
certifications, statements and other documents as Administrative Agent may
request from time to time to evidence such Bank's exemption from the withholding
of any tax imposed by any jurisdiction or to enable Administrative Agent or
Borrower to comply with any applicable Laws or regulations relating thereto.
Without limiting the effect of the foregoing, if any Bank is not created or
organized under the laws of the United States of America or any state thereof,
such Bank will furnish to Administrative Agent a United States Internal Revenue
Service Form 4224 in respect of all payments to be made to such Bank by Borrower
or Administrative Agent under this Agreement or any other Loan Document or a
United States Internal Revenue Service Form 1001 establishing such Bank's
complete exemption from United States withholding tax in respect of payments to
be made to such Bank by Borrower or Administrative Agent under this Agreement or
any other Loan Document, or such other forms, certifications, statements or
documents, duly executed and completed by such Bank as evidence of such Bank's
exemption from the withholding of U.S. tax with respect thereto. Administrative
Agent shall not be obligated to make any payments hereunder to such Bank in
respect of any Loan or participation or such Bank's Loan Commitment or
obligation to purchase
57
63
participations until such Bank shall have furnished to Administrative Agent the
requested form, certification, statement or document.
Section 10.14 Minimum Commitment by Co-Agents. Subsequent to
the Closing Date, each of the Co-Agents hereby agrees to maintain a Loan
Commitment in an amount no less than 12.50% of the Total Loan Commitment, as the
same may be decreased from time to time in accordance with the provisions
hereof, and further agrees to hold and not to participate or assign any of such
amount other than an assignment to a Federal Reserve Bank or to the Parent or a
majority-owned subsidiary of such Co-Agent.
Section 10.15 Pro Rata Treatment. Except to the extent
otherwise provided, (1) each advance of proceeds of the Ratable Loans shall be
made by the Banks; (2) each reduction of the amount of the Total Loan Commitment
under Section 2.10 shall be applied to the Loan Commitments of the Banks; and
(3) each payment of the commitment fee accruing under Section 2.07(b) and clause
(i) of Section 2.16(f) shall be made for the account of the Banks, ratably
according to the amounts of their respective Loan Commitments.
Section 10.16 Sharing of Payments Among Banks. If a Bank shall
obtain payment of any principal of or interest on any Loan made by it through
the exercise of any right of setoff, banker's lien, counterclaim, or by any
other means (including direct payment), and such payment results in such Bank
receiving a greater payment than it would have been entitled to had such payment
been paid directly to Administrative Agent for disbursement to the Banks, then
such Bank shall promptly purchase for cash from the other Banks participations
in the Loans made by the other Banks in such amounts, and make such other
adjustments from time to time as shall be equitable to the end that all the
Banks shall share ratably the benefit of such payment. To such end the Banks
shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored. Borrower agrees that any Bank so purchasing a participation in the
Loans made by other Banks may exercise all rights of setoff, banker's lien,
counterclaim or similar rights with respect to such participation. Nothing
contained herein shall require any Bank to exercise any such right or shall
affect the right of any Bank to exercise, and retain the benefits of exercising,
any such right with respect to any other indebtedness of Borrower.
Section 10.17 Possession of Documents. Each Bank shall keep
possession of its own Note. Administrative Agent shall hold all the other Loan
Documents and related documents in its possession and maintain separate records
and accounts with respect thereto, and shall permit the Banks and their
representatives access at all reasonable times to inspect such Loan Documents,
related documents, records and accounts.
58
64
ARTICLE XI. NATURE OF OBLIGATIONS
Section 11.01 Absolute and Unconditional Obligations. Borrower
acknowledges and agrees that its obligations and liabilities under this
Agreement and under the other Loan Documents shall be absolute and unconditional
irrespective of (1) any lack of validity or enforceability of any of the
Obligations, any Loan Documents, or any agreement or instrument relating
thereto; (2) any change in the time, manner or place of payment of, or in any
other term in respect of, all or any of the Obligations, or any other amendment
or waiver of or consent to any departure from any Loan Documents or any other
documents or instruments executed in connection with or related to the
Obligations; (3) any exchange or release of any collateral, if any, or of any
other Person from all or any of the Obligations; or (4) any other circumstances
which might otherwise constitute a defense available to, or a discharge of,
Borrower or any other Person in respect of the Obligations.
The obligations and liabilities of Borrower under this
Agreement and other Loan Documents shall not be conditioned or contingent upon
the pursuit by any Bank or any other Person at any time of any right or remedy
against Borrower or any other Person which may be or become liable in respect of
all or any part of the Obligations or against any collateral or security or
guarantee therefor or right of setoff with respect thereto.
Section 11.02 Non-Recourse to Borrower's Principals.
Notwithstanding anything to the contrary contained herein, in any of the other
Loan Documents, or in any other instruments, certificates, documents or
agreements executed in connection with the Loans (all of the foregoing, for
purposes of this Section, hereinafter referred to, individually and
collectively, as the "Relevant Documents"), no recourse under or upon any
Obligation, representation, warranty, promise or other matter whatsoever shall
be had against any of Borrower's Principals and each Bank expressly waives and
releases, on behalf of itself and its successors and assigns, all right to
assert any liability whatsoever under or with respect to the Relevant Documents
against, or to satisfy any claim or obligation arising thereunder against, any
of Borrower's Principals or out of any assets of Borrower's Principals,
provided, however, that nothing in this Section shall be deemed to (1) release
Borrower from any personal liability pursuant to, or from any of its respective
obligations under, the Relevant Documents, or from personal liability for its
fraudulent actions or fraudulent omissions; (2) release any of Borrower's
Principals from personal liability for its or his own fraudulent actions or
fraudulent omissions; (3) constitute a waiver of any obligation evidenced or
secured by, or contained in, the Relevant Documents or affect in any way the
validity or enforceability of the Relevant Documents; or (4) limit the right of
Administrative Agent and/or the Banks to proceed against or
59
65
realize upon any collateral hereafter given for the Loans or any and all of the
assets of Borrower (notwithstanding the fact that any or all of Borrower's
Principals have an ownership interest in Borrower and, thereby, an interest in
the assets of Borrower) or to name Borrower (or, to the extent that the same are
required by applicable law or are determined by a court to be necessary parties
in connection with an action or suit against Borrower or any collateral
hereafter given for the Loans, any of Borrower's Principals) as a party
defendant in, and to enforce against any collateral hereafter given for the
Loans and/or assets of Borrower any judgment obtained by Administrative Agent
and/or the Banks with respect to, any action or suit under the Relevant
Documents so long as no judgment shall be taken (except to the extent taking a
judgment is required by applicable law or determined by a court to be necessary
to preserve Administrative Agent's and/or Banks' rights against any collateral
hereafter given for the Loans or Borrower, but not otherwise) or shall be
enforced against Borrower's Principals or their assets.
ARTICLE XII. MISCELLANEOUS
Section 12.01 Binding Effect of Request for Advance. Borrower
agrees that, by its acceptance of any advance of proceeds of the Loans under
this Agreement, it shall be bound in all respects by the request for advance
submitted on its behalf in connection therewith with the same force and effect
as if Borrower had itself executed and submitted the request for advance and
whether or not the request for advance is executed and/or submitted by an
authorized person.
Section 12.02 Amendments and Waivers. Amendments to EXHIBIT F
may be made by written agreement among Borrower and Co-Agents. No other
amendment or any material waiver of any provision of this Agreement or any other
Loan Document nor consent to any material departure by Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Required Banks and, solely for purposes of its acknowledgment thereof,
Administrative Agent, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given, provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Banks do any of the following: (1) reduce the principal of, or
interest on, the Notes or any fees due hereunder or any other amount due
hereunder or under any Loan Document; (2) postpone any date fixed for any
payment of principal of, or interest on, the Notes or any fees due hereunder or
under any Loan Document; (3) change the definition of Required Banks; (4) amend
this Section or any other provision requiring the consent of all the Banks; or
(5) waive any default under paragraph (5) of Section 9.01. Any advance of
proceeds of the Loans made prior to or without the fulfillment by Borrower of
all of the conditions precedent thereto, whether or not known to Administrative
Agent and the Banks, shall not constitute a waiver of the requirement that all
conditions, including the non-
60
66
performed conditions, shall be required with respect to all future advances. No
failure on the part of Administrative Agent or any Bank to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof or
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Section 12.03 Usury. Anything herein to the contrary
notwithstanding, the obligations of Borrower under this Agreement and the Notes
shall be subject to the limitation that payments of interest shall not be
required to the extent that receipt thereof would be contrary to provisions of
law applicable to a Bank limiting rates of interest which may be charged or
collected by such Bank.
Section 12.04 Expenses; Indemnification. Borrower agrees to
reimburse Co-Agents and Administrative Agent on demand for all costs, expenses,
and charges (including, without limitation, all reasonable fees and charges of
engineers, appraisers and legal counsel) incurred by any of them in connection
with the Loans and to reimburse each of the Banks for reasonable legal costs,
expenses and charges incurred by each of the Banks in connection with the
performance or enforcement of this Agreement, the Notes, or any other Loan
Documents; provided, however, that Borrower is not responsible for costs,
expenses and charges incurred by the Bank Parties in connection with the
administration or syndication of the Loans (other than the fees required by the
Supplemental Fee Letter). Borrower agrees to indemnify Administrative Agent and
each Bank and their respective directors, officers, employees and agents from,
and hold each of them harmless against, any and all losses, liabilities, claims,
damages or expenses incurred by any of them arising out of or by reason of (x)
any claims by brokers due to acts or omissions by Borrower, or (y) any
investigation or litigation or other proceedings (including any threatened
investigation or litigation or other proceedings) relating to any actual or
proposed use by Borrower of the proceeds of the Loans, including without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation or litigation or other proceedings (but
excluding any such losses, liabilities, claims, damages or expenses incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified).
The obligations of Borrower under this Section shall survive
the repayment of all amounts due under or in connection with any of the Loan
Documents and the termination of the Loans.
Section 12.05 Assignment; Participation. This Agreement shall
be binding upon, and shall inure to the benefit of, Borrower, Administrative
Agent, the Banks and their
61
67
respective successors and permitted assigns. Borrower may not assign or transfer
its rights or obligations hereunder.
Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Loan (the
"Participations"), provided, however, that each Participation shall be in the
minimum amount of $10,000,000. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not Borrower or
Administrative Agent was given notice, such Bank shall remain responsible for
the performance of its obligations hereunder, and Borrower and Administrative
Agent shall continue to deal solely and directly with such Bank in connection
with such Bank's rights and obligations hereunder. Any agreement pursuant to
which any Bank may grant such a participating interest shall provide that such
Bank shall retain the sole right and responsibility to enforce the obligations
of Borrower hereunder and under any other Loan Document including, without
limitation, the right to approve any amendment, modification or waiver of any
provision of this Agreement or any other Loan Document; provided that such
participation agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement described in clause (1)
through (5) of Section 12.02 without the consent of the Participant.
Subject to the provisions of Section 10.14, any Bank may at
any time assign to any bank or other institution with the acknowledgment of
Administrative Agent and the consent of Co-Agents and, provided there exists no
Event of Default, Borrower, which consents shall not be unreasonably withheld or
delayed (such assignee, a "Consented Assignee"), or to one or more banks or
other institutions which are majority owned subsidiaries of a Bank or to the
Parent of a Bank (each Consented Assignee or subsidiary bank or institution, an
"Assignee") all, or a proportionate part of all, of its rights and obligations
under this Agreement and its Note, and such Assignee shall assume rights and
obligations, pursuant to an Assignment and Assumption Agreement executed by such
Assignee and the assigning Bank, provided that, in each case, after giving
effect to such assignment the Assignee's Loan Commitment, and, in the case of a
partial assignment, the assigning Bank's Loan Commitment, each will be equal to
or greater than $10,000,000, provided, further, however, that the assigning Bank
shall not be required to maintain a Loan Commitment in the minimum amount
aforesaid in the event it assigns all of its rights and obligations under this
Agreement and its Note. Upon (i) execution and delivery of such instrument, (ii)
payment by such Assignee to the Bank of an amount equal to the purchase price
agreed between the Bank and such Assignee and (iii) payment by such Assignee to
Administrative Agent of a fee, for Administrative Agent's own account, in the
amount of $2,500, such Assignee shall be a Bank Party to this Agreement and
shall have all the rights and obligations of a Bank as set forth in such
Assignment and
62
68
Assumption Agreement, and the assigning Bank shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this paragraph, substitute Ratable Loan Notes shall be issued to the
assigning Bank and Assignee by Borrower, in exchange for the return of the
original Ratable Loan Note. The obligations evidenced by such substitute notes
shall constitute "Obligations" for all purposes of this Agreement and the other
Loan Documents. In connection with Borrower's execution of substitute notes as
aforesaid, Borrower shall deliver to Administrative Agent evidence, satisfactory
to Administrative Agent, of all requisite corporate action to authorize
Borrower's execution and delivery of the substitute notes and any related
documents. If the Assignee is not incorporated under the laws of the United
States of America or a state thereof, it shall, prior to the first date on which
interest or fees are payable hereunder for its account, deliver to Borrower and
Administrative Agent certification as to exemption from deduction or withholding
of any United States federal income taxes in accordance with Section 10.13. Each
Assignee shall be deemed to have made the representations contained in, and
shall be bound by the provisions of, Section 10.13.
Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
Borrower recognizes that in connection with a Bank's selling
of Participations or making of assignments, any or all documentation, financial
statements, appraisals and other data, or copies thereof, relevant to Borrower
or the Loans may be exhibited to and retained by any such Participant or
assignee or prospective Participant or assignee. In connection with a Bank's
delivery of any financial statements and appraisals to any such Participant or
assignee or prospective Participant or assignee, such Bank shall also indicate
that the same are delivered on a confidential basis. Borrower agrees to provide
all assistance reasonably requested by a Bank to enable such Bank to sell
Participations or make assignments of its Loan as permitted by this Section.
Each Bank agrees to provide Borrower with notice of all Participations sold by
such Bank.
Section 12.06 Documentation Satisfactory. All documentation
required from or to be submitted on behalf of Borrower in connection with this
Agreement and the documents relating hereto shall be subject to the prior
approval of, and be satisfactory in form and substance to, Administrative Agent,
its counsel and, where specifically provided herein, the Banks. In addition, the
persons or parties responsible for the execution and delivery of, and
signatories to, all of such documentation,
63
69
shall be acceptable to, and subject to the approval of, Administrative Agent and
its counsel and the Banks.
Section 12.07 Notices. Unless the party to be notified
otherwise notifies the other party in writing as provided in this Section, and
except as otherwise provided in this Agreement, notices shall be given to
Administrative Agent by telephone, confirmed by writing, and to the Banks and to
Borrower by ordinary mail or overnight courier, receipt confirmed, addressed to
such party at its address on the signature page of this Agreement. Notices shall
be effective (1) if by telephone, at the time of such telephone conversation,
(2) if given by mail, three (3) days after mailing; and (3) if given by
overnight courier, upon receipt.
Section 12.08 Setoff. Borrower agrees that, in addition to
(and without limitation of) any right of setoff, bankers' lien or counterclaim a
Bank may otherwise have, each Bank shall be entitled, at its option, to offset
balances (general or special, time or demand, provisional or final) held by it
for the account of Borrower at any of such Bank's offices, in Dollars or in any
other currency, against any amount payable by Borrower to such Bank under this
Agreement or such Bank's Note, or any other Loan Document which is not paid when
due (regardless of whether such balances are then due to Borrower), in which
case it shall promptly notify Borrower and Administrative Agent thereof;
provided that such Bank's failure to give such notice shall not affect the
validity thereof. Payments by Borrower hereunder or under the other Loan
Documents shall be made without setoff or counterclaim.
Section 12.09 Table of Contents; Headings. Any table of
contents and the headings and captions hereunder are for convenience only and
shall not affect the interpretation or construction of this Agreement.
Section 12.10 Severability. The provisions of this Agreement
are intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 12.11 Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one and
the same instrument, and any party hereto may execute this Agreement by signing
any such counterpart.
64
70
Section 12.12 Integration. The Loan Documents and Supplemental
Fee Letter set forth the entire agreement among the parties hereto relating to
the transactions contemplated thereby and supersede any prior oral or written
statements or agreements with respect to such transactions.
Section 12.13 Governing Law. This Agreement shall be governed
by, and interpreted and construed in accordance with, the laws of the State of
New York.
Section 12.14 Waivers. In connection with the obligations and
liabilities as aforesaid, Borrower hereby waives (1) promptness and diligence;
(2) notice of any actions taken by any Bank Party under this Agreement, any
other Loan Document or any other agreement or instrument relating thereto except
to the extent otherwise provided herein; (3) all other notices, demands and
protests, and all other formalities of every kind in connection with the
enforcement of the Obligations, the omission of or delay in which, but for the
provisions of this Section, might constitute grounds for relieving Borrower of
its obligations hereunder; (4) any requirement that any Bank Party protect,
secure, perfect or insure any Lien on any collateral or exhaust any right or
take any action against Borrower or any other Person or any collateral; (5) any
right or claim of right to cause a marshalling of the assets of Borrower; and
(6) all rights of subrogation or contribution, whether arising by contract or
operation of law (including, without limitation, any such right arising under
the Federal Bankruptcy Code) or otherwise by reason of payment by Borrower,
either jointly or severally, pursuant to this Agreement or other Loan Documents.
Section 12.15 Jurisdiction; Immunities. Borrower,
Administrative Agent and each Bank hereby irrevocably submit to the jurisdiction
of any New York State or United States Federal court sitting in New York City
over any action or proceeding arising out of or relating to this Agreement, the
Notes or any other Loan Document. Borrower, Administrative Agent, and each Bank
irrevocably agree that all claims in respect of such action or proceeding may be
heard and determined in such New York State or United States Federal court.
Borrower, Administrative Agent, and each Bank irrevocably consent to the service
of any and all process in any such action or proceeding by the mailing of copies
of such process to Borrower, Administrative Agent or each Bank, as the case may
be, at the addresses specified herein. Borrower, Administrative Agent and each
Bank agree that a final judgment in any such 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. Borrower, Administrative Agent and each
Bank further waive any objection to venue in the State of New York and any
objection to an action or proceeding in the State of New York on the basis of
forum non conveniens. Borrower, Administrative Agent and each Bank agree that
any action or proceeding brought against Borrower, Administrative
65
71
Agent or any Bank, as the case may be, shall be brought only in a New York State
court sitting in New York City or a United States Federal court sitting in New
York City, to the extent permitted or not expressly prohibited by applicable
law.
Nothing in this Section shall affect the right of Borrower,
Administrative Agent or any Bank to serve legal process in any other manner
permitted by law.
To the extent that Borrower, Administrative Agent or any Bank
have or hereafter may acquire any immunity from jurisdiction of any court or
from any legal process (whether from service or notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) with respect
to itself or its property, Borrower, Administrative Agent and each Bank hereby
irrevocably waive such immunity in respect of its obligations under this
Agreement, the Notes and any other Loan Document.
BORROWER, ADMINISTRATIVE AGENT AND EACH BANK WAIVE ANY RIGHT
EACH SUCH PARTY MAY HAVE TO JURY TRIAL IN CONNECTION WITH ANY SUIT, ACTION OR
PROCEEDING BROUGHT WITH RESPECT TO THIS AGREEMENT, THE NOTES OR THE LOANS.
Section 12.16 Designated Lender. Any Bank (other than a Bank
who is such solely because it is a Designated Lender) (each, a "Designating
Lender") may at any time designate one (1) Designated Lender to fund Bid Rate
Loans on behalf of such Designating Lender subject to the terms of this Section
and the provisions in Section 12.05 shall not apply to such designation. No Bank
may designate more than one (1) Designated Lender. The parties to each such
designation shall execute and deliver to Administrative Agent for its acceptance
a Designation Agreement. Upon such receipt of an appropriately completed
Designation Agreement executed by a Designating Lender and a designee
representing that it is a Designated Lender, Administrative Agent will accept
such Designation Agreement and give prompt notice thereto to Borrower,
whereupon, (i) from and after the "Effective Date" specified in the Designation
Agreement, the Designated Lender shall become a party to this Agreement with a
right to make Bid Rate Loans on behalf of its Designating Lender pursuant to
Section 2.02 after Borrower has accepted the Bid Rate Quote of the Designating
Lender and (ii) the Designated Lender shall not be required to make payments
with respect to any obligations in this Agreement except to the extent of excess
cash flow of such Designated Lender which is not otherwise required to repay
obligations of such Designated Lender which are then due and payable; provided,
however, that regardless of such designation and assumption by the Designated
Lender, the Designating Lender shall be and remain obligated to Borrower,
Administrative Agent and the Banks for each and every of the obligations of the
Designating Lender and its related Designated Lender with respect to this
Agreement, including, without limitation, any
66
72
indemnification obligations under Section 10.05. Each Designating Lender shall
serve as the administrative agent of its Designated Lender and shall on behalf
of, and to the exclusion of, the Designated Lender: (i) receive any and all
payments made for the benefit of the Designated Lender and (ii) give and receive
all communications and notices and take all actions hereunder, including,
without limitation, votes, approvals, waivers and consents under or relating to
this Agreement and the other Loan Documents. Any such notice, communication,
vote, approval, waiver or consent shall be signed by the Designating Lender as
administrative agent for the Designated Lender and shall not be signed by the
Designated Lender on its own behalf, but shall be binding on the Designated
Lender to the same extent as if actually signed by the Designated Lender.
Borrower, Administrative Agent and the Banks may rely thereon without any
requirement that the Designated Lender sign or acknowledge the same. No
Designated Lender may assign or transfer all or any portion of its interest
hereunder or under any other Loan Document, other than assignments to the
Designating Lender which originally designated such Designated Lender.
Section 12.17 No Bankruptcy Proceedings. Each of Borrower, the
Banks and Administrative Agent hereby agrees that it will not institute against
any Designated Lender or join any other Person in instituting against any
Designated Lender any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding under any federal or state bankruptcy or similar law, for
one (1) year and one (1) day after the payment in full of the latest maturing
commercial paper note issued by such Designated Lender.
67
73
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
BAY APARTMENT COMMUNITIES, INC.
By: /s/ Jeffrey B. Van Horn
-----------------------------------
Name: Jeffrey B. Van Horn
Title: Chief Financial Officer
Address for Notices:
4340 Stevens Creek Blvd.
Suite 275
San Jose, CA 95129
Attention: Jeffrey B. Van Horn
Chief Financial Officer
Telephone: (408) 556-1812
Telecopy: (408) 556-1863
UNION BANK OF SWITZERLAND
(New York Branch)
(as Co-Agent, Bank and Administrative
Agent)
By: /s/ Susan Le Boutillier
-----------------------------------
Name: Susan Le Boutillier
Title: Director
By: /s/ Meenakshi Pursnani
-----------------------------------
Name: Meenakshi Pursnani
Title: Director
Address for Notices and Applicable
Lending Office:
Union Bank of Switzerland
299 Park Avenue
38th Floor
New York, New York 10171-0026
Attention: Xiomara Martez
Telephone: (212) 821-3872
Telecopy: (212) 821-4138
68
74
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Ronald S. Ortiz
----------------------------------
Name: Ronald S. Ortiz
Title: Vice President
By: /s/ James B. Wohlles
----------------------------------
Name: James B. Wohlles
Title: S. V. P.
Applicable Lending Office:
Union Bank of California, N.A.
200 Pringle Avenue
Suite 200
Walnut Creek, CA 94596
Address for Notices:
Union Bank of California, N.A.
200 Pringle Avenue
Suite 200
Walnut Creek, CA 94596
Attention: Mr. Ron Ortiz
Telephone: (510) 947-2485
Telecopy: (510) 947-2416
THE FIRST NATIONAL BANK
OF CHICAGO
By: /s/ Kevin L. Gillen
----------------------------------
Name: Kevin L. Gillen
Title: Assistant Vice President
Applicable Lending Office and
Address for Notices:
The First National Bank of Chicago
One First National Plaza
Suite 0151
Chicago, Illinois 60670
Attention: Mr. Kevin Gillen
Telephone: (312) 732-5067
Telecopy: (312) 732-1117
COMMERZBANK AKTIENGESELLSCHAFT,
LOS ANGELES BRANCH
By: /s/ Christian Jagenberg
----------------------------------
Name: Christian Jagenberg
Title: Senior Vice President and
Manager
69
75
By: /s/ Stephen F. Larsen
----------------------------------
Name: Stephen F. Larsen
Title: Vice President
Applicable Lending Office:
Commerzbank Aktiengesellschaft,
Los Angeles Branch
633 West Fifth Street
Suite 6600
Los Angeles, California 90017
Address for Notices:
Commerzbank AG
2 World Financial Center
34th Floor
New York, New York 10281
Attention: Mr. David Schwarz/
Ms. Christine Finkel
Telephone: (212) 266-7632
Telecopy: (212) 266-7530
- and -
Commerzbank Aktiengesellschaft,
Los Angeles Branch
633 West Fifth Street
Suite 6600
Los Angeles, California 90017
Attention: Mr. Steven F. Larsen
Telephone: (213) 623-8223
Telecopy: (213) 623-0039
BANK OF MONTREAL, CHICAGO BRANCH
By: /s/ Maureen T. Mills
----------------------------------
Name: Maureen T. Mills
Title: Director
Applicable Lending Office and
Address for Notices:
Bank of Montreal, Chicago Branch
115 South LaSalle Street
Chicago, Illinois 60603
Attention: Ms. Maureen T. Mills
Telephone: (312) 750-4388
Telecopy: (312) 750-4352
70
76
CORESTATES BANK, N.A.
By: /s/ Mark A. Duffy
----------------------------------
Name: Mark A. Duffy
Title: Vice President
Applicable Lending Office and
Address for Notices:
CoreStates Bank, N.A.
1339 Chestnut Street
FC 1-8-10-67
Philadelphia, Pennsylvania 19107
Attention: Mr. William J. Lloyd, Jr.
Telephone: (215) 786-4244
Telecopy: (215) 786-6381
DRESDNER BANK, AG, New York
Branch and Grand Cayman Branch
By: /s/ Thomas J. Nadramia
----------------------------------
Name: Thomas J. Nadramia
Title: Vice President
By: /s/ Brigitte Sacin
----------------------------------
Name: Brigitte Sacin
Title: Assistant Treasurer
Applicable Lending Office and
Address for Notices:
Dresdner Bank AG, New York Branch
and Grand Cayman Branch
c/o Dresdner Bank AG
333 South Grand Avenue
Suite 1700
Los Angeles, California 90017
Attention: Mr. Vitol Wiacek
Telephone: (213) 630-5420
Telecopy: (213) 473-5450
FLEET NATIONAL BANK
By: /s/ Eben R. Myrick
----------------------------------
Name: Eben R. Myrick
Title: Vice President
Applicable Lending Office and
Address for Notices:
Fleet National Bank
111 Westminster Street
Suite 800
71
77
Providence, Rhode Island 02903
Attention: Mr. Randy Myrick
Telephone: (401) 278-3745
Telecopy: (401) 278-5166
KREDIETBANK N.V., GRAND
CAYMAN BRANCH
By: /s/ Robert Snauffer
---------------------------------
Name: Robert Snauffer
Title: Vice President
By: /s/ Raymond F. Murray
---------------------------------
Name: Raymond F. Murray
Title: Vice President
Applicable Lending Office:
Kredietbank N.V., Grand
Cayman Branch
125 West 55th Street
10th Floor
New York, New York 10019
Address for Notices:
Kredietbank N.V., Grand
Cayman Branch
c/o Kredietbank N.V., New
York Branch
125 West 55th Street
10th Floor
New York, New York 10019
Attention: Mr. Michael V. Curran
Telephone: (212) 541-0707
Telecopy: (212) 956-5580
with a copy to:
Kredietbank N.A., Los Angeles
Representative Office
550 South Hope Street
Suite 1775
Los Angeles, California 90071
Attention: Ms. Roxanne Cheng
Telephone: (213) 624-0401
Telecopy: (213) 629-5801
72
78
COMERICA BANK - CALIFORNIA
By: /s/ Bruce Lawrie
-----------------------------
Name: Bruce Lawrie
Title: Vice President
Applicable Lending Office and
Address for Notices:
Comerica Bank - California
333 West Santa Clara Street
5th Floor
San Jose, California 95113
Attention: Mr. Bruce Lawrie
Telephone: (408) 556-5328
Telecopy: (408) 556-5391
73
79
EXHIBIT A
AUTHORIZATION LETTER
________ ___, 1997
Union Bank of Switzerland
(New York Branch)
299 Park Avenue
New York, New York 10171
Re: Amended and Restated Revolving Loan Agreement dated
as of ____________, 1997 (the "Loan Agreement";
capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Loan
Agreement) among us, as Borrower, the Banks named
therein, and you, as Administrative Agent for said
Banks
Gentlemen:
In connection with the captioned Loan Agreement, we hereby
designate any of the following persons to give to you instructions, including
notices required pursuant to the Loan Agreement, orally, by telephone or
teleprocess, or in writing:
[NAMES]
Instructions may be honored on the oral, telephonic,
teleprocess or written instructions of anyone purporting to be any one of the
above designated persons even if the instructions are for the benefit of the
person delivering them. We will furnish you with written confirmation of each
such instruction signed by any person designated above (including any telecopy
which appears to bear the signature of any person designated above) on the same
day that the instruction is provided to you, but your responsibility with
respect to any instruction shall not be affected by your failure to receive such
confirmation or by its contents.
(A-1)
80
Without limiting the foregoing, we hereby unconditionally
authorize any one of the above-designated persons to execute and submit requests
for advances of proceeds of the Loans (including the Initial Advance) and
notices of Elections, Conversions and Continuations to you under the Loan
Agreement with the identical force and effect in all respects as if executed and
submitted by us.
You shall be fully protected in, and shall incur no liability
to us for, acting upon any instructions which you in good faith believe to have
been given by any person designated above, and in no event shall you be liable
for special, consequential or punitive damages. In addition, we agree to hold
you and your agents harmless from any and all liability, loss and expense
arising directly or indirectly out of instructions that we provide to you in
connection with the Loan Agreement except for liability, loss or expense
occasioned by your gross negligence or willful misconduct.
Upon notice to us, you may, at your option, refuse to execute
any instruction, or part thereof, without incurring any responsibility for any
loss, liability or expense arising out of such refusal if you in good faith
believe that the person delivering the instruction is not one of the persons
designated above or if the instruction is not accompanied by an authentication
method that we have agreed to in writing.
We will promptly notify you in writing of any change in the
persons designated above and, until you have actually received such written
notice and have had a reasonable opportunity to act upon it, you are authorized
to act upon instructions, even though the person delivering them may no longer
be authorized.
Very truly yours,
BAY APARTMENT COMMUNITIES, INC.
By______________________________
Name:
Title:
(A-2)
81
EXHIBIT B
RATABLE LOAN NOTE
$___________ New York, New York
__________, 199_
For value received, Bay Apartment Communities, Inc., a
Maryland corporation ("Borrower"), hereby promises to pay to the order of
___________ or its successors or assigns (collectively, the "Bank"), at the
principal office of Union Bank of Switzerland (New York Branch) located at 299
Park Avenue, New York, New York 10171 ("Administrative Agent") for the account
of the Applicable Lending Office of the Bank, the principal sum of ________
Dollars ($____________), or if less, the amount loaned by the Bank under its
Ratable Loan to Borrower pursuant to the Loan Agreement (as defined below) and
actually outstanding, in lawful money of the United States and in immediately
available funds, in accordance with the terms set forth in the Loan Agreement.
Borrower also promises to pay interest on the unpaid principal balance hereof,
for the period such balance is outstanding, in like money, at said office for
the account of said Applicable Lending Office, at the time and at a rate per
annum as provided in the Loan Agreement. Any amount of principal hereof which is
not paid when due, whether at stated maturity, by acceleration, or otherwise,
shall bear interest from the date when due until said principal amount is paid
in full, payable on demand, at the rate set forth in the Loan Agreement.
The date and amount of each advance of the Ratable Loan made
by the Bank to Borrower under the Loan Agreement referred to below, and each
payment of said Ratable Loan, shall be recorded by the Bank on its books and,
prior to any transfer of this Note (or, at the discretion of the Bank, at any
other time), may be endorsed by the Bank on the schedule attached hereto and any
continuation thereof.
This Note is one of the Ratable Loan Notes referred to in the
Amended and Restated Revolving Loan Agreement dated as of ________ __, 1997 (as
the same may be amended from time to time, the "Loan Agreement") among Borrower,
the Banks named therein (including the Bank) and Administrative Agent, as
administrative agent for the Banks. All of the terms, conditions and provisions
of the Loan Agreement are hereby incorporated by reference. All capitalized
terms used herein and not defined herein shall have the meanings given to them
in the Loan Agreement.
The Loan Agreement contains, among other things, provisions
for the prepayment of and acceleration of this Note upon the happening of
certain stated events.
(B-1)
82
No recourse shall be had under this Note against Borrower's
Principals except as and to the extent set forth in Section 11.02 of the Loan
Agreement.
All parties to this Note, whether principal, surety, guarantor
or endorser, hereby waive presentment for payment, demand, protest, notice of
protest and notice of dishonor.
This Note shall be governed by the Laws of the State of New
York, provided that, as to the maximum lawful rate of interest which may be
charged or collected, if the Laws applicable to the Bank permit it to charge or
collect a higher rate than the Laws of the State of New York, then such Law
applicable to the Bank shall apply to the Bank under this Note.
BAY APARTMENT COMMUNITIES, INC.
By______________________________
Name:
Title:
(B-2)
83
Amount Amount Balance
Date of Advance of Payment Outstanding Notation By
- ---- ---------- ---------- ----------- -----------
(B-3)
84
EXHIBIT B-1
BID RATE LOAN NOTE
$100,000,000 New York, New York
__________, 199_
For value received, Bay Apartment Communities, Inc., a Maryland
corporation ("Borrower"), hereby promises to pay to the order of Union Bank of
Switzerland (New York Branch) ("Administrative Agent") or its successors or
assigns for the account of the respective Banks making Bid Rate Loans or their
respective successors or assigns (for the further account of their respective
Applicable Lending Offices), at the principal office of Administrative Agent
located at 299 Park Avenue, New York, New York 10171, the principal sum of One
Hundred Million Dollars ($100,000,000), or if less, the amount loaned by said
Banks under their respective Bid Rate Loans to Borrower pursuant to the Loan
Agreement (as defined below) and actually outstanding, in lawful money of the
United States and in immediately available funds, in accordance with the terms
set forth in the Loan Agreement. Borrower also promises to pay interest on the
unpaid principal balance hereof, for the period such balance is outstanding, in
like money, at said office for the account of said Banks for the further account
of their respective Applicable Lending Offices, at the times and at the rates
per annum as provided in the Loan Agreement. Any amount of principal hereof
which is not paid when due, whether at stated maturity, by acceleration, or
otherwise, shall bear interest from the date when due until said principal
amount is paid in full, payable on demand, at the rate set forth in the Loan
Agreement.
The date and amount of each Bid Rate Loan to Borrower under the Loan
Agreement referred to below, the name of the Bank making the same, the interest
rate applicable thereto and the maturity date thereof (i.e., the end of the
Interest Period Applicable thereto) shall be recorded by Administrative Agent on
its records and may be endorsed by Administrative Agent on the schedule attached
hereto and any continuation thereof.
This Note is the Bid Rate Loan Note referred to in the Amended and
Restated Revolving Loan Agreement dated as of ______________, 1997 (as the same
may be amended from time to time, the "Loan Agreement") among Borrower, the
Banks named therein and Administrative Agent, as administrative agent for the
Banks. All of the terms, conditions and provisions of the Loan Agreement are
hereby incorporated by reference. All capitalized terms used herein and not
defined herein shall have the meanings given to them in the Loan Agreement.
(B-1-1)
85
The Loan Agreement contains, among other things, provisions for the
prepayment of and acceleration of this Note upon the happening of certain stated
events.
No recourse shall be had under this Note against the Borrower's
Principals except as and to the extent set forth in Section 11.02 of the Loan
Agreement.
All parties to this Note, whether principal, surety, guarantor or
endorser, hereby waive presentment for payment, demand, protest, notice of
protest and notice of dishonor.
This Note shall be governed by the laws of the State of New York,
provided that, as to the maximum lawful rate of interest which may be charged or
collected, if the laws applicable to a particular Bank permit it to charge or
collect a higher rate than the laws of the State of New York, then such law
applicable to such Bank shall apply to such Bank under this Note.
BAY APARTMENT COMMUNITIES, INC.
By____________________________
Name:
Title:
(B-1-2)
86
Bid Maturity (i.e.,
Rate Date of Principal Interest Expiration of
Loan # Bank Advance Amount Rate Interest Period)
- ------ ---- ------- ------ ---- ----------------
(B-1-3)
87
EXHIBIT C
MATERIAL AFFILIATES
Name State of Borrower's % Principal
Formation age Interest Business
---- --------- ------------ ---------
1. Bay Asset Group, Inc. Maryland 100 Owning/Managing
Apartments
2. Bay Waterford, Inc. Maryland 100 Owning/Managing
Apartments
3. Bay Development Maryland 100 Owning/Managing
Partners, Inc. Apartments
(C-1)
88
EXHIBIT D
SOLVENCY CERTIFICATE
The person executing this certificate is the _______________ of Bay
Apartment Communities, Inc., a Maryland corporation ("Borrower"), and is
familiar with its properties, assets and businesses, and is duly authorized to
execute this certificate on behalf of Borrower pursuant to Section 4.01(7) of
the Amended and Restated Revolving Loan Agreement dated the date hereof (the
"Loan Agreement") among Borrower, the banks party thereto (each a "Bank" and
collectively, the "Banks") and Union Bank of Switzerland (New York Branch), as
administrative agent for the Banks (in such capacity, together with its
successors in such capacity, "Administrative Agent"). In executing this
Certificate, such person is acting solely in his or her capacity as the
_________ of Borrower, and not in his or her individual capacity. Unless
otherwise defined herein, terms defined in the Loan Agreement are used herein as
therein defined.
The undersigned further certifies that he or she has carefully
reviewed the Loan Agreement and the other Loan Documents and the contents of
this Certificate and, in connection herewith, has made such investigation and
inquiries as he or she deems reasonably necessary and prudent therefor. The
undersigned further certifies that the financial information and assumptions
which underlie and form the basis for the representations made in this
Certificate were reasonable when made and were made in good faith and continue
to be reasonable as of the date hereof.
The undersigned understands that Administrative Agent, Co-Agents and
the Banks are relying on the truth and accuracy of this Certificate in
connection with the transactions contemplated by the Loan Agreement.
The undersigned certifies that Borrower is Solvent.
IN WITNESS WHEREOF, the undersigned has executed this Certificate on
________ ___, 1997.
------------------------------
(D-1)
89
EXHIBIT E
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT dated as of __________, 199_,
among [insert name of assigning Bank] ("Assignor"), [insert name of Assignee]
("Assignee"), Bay Apartment Communities, Inc., a Maryland corporation
("Borrower") and Union Bank of Switzerland (New York Branch), as administrative
agent for the Banks referred to below (in such capacity, together with its
successors in such capacity, the "Administrative Agent").
Preliminary Statement
1. This Assignment and Assumption Agreement (this "Agreement")
relates to the Amended and Restated Revolving Loan Agreement dated
_____________, 1997 (as the same may be amended from time to time, the "Loan
Agreement") among Borrower, the banks party thereto (each a "Bank" and,
collectively, the "Banks") and the Administrative Agent. All capitalized terms
not otherwise defined herein shall have the respective meanings set forth in the
Loan Agreement.
2. Subject to the terms and conditions set forth in the Loan
Agreement, Assignor has made a Loan Commitment to Borrower in an aggregate
principal amount of ___________ Dollars ($____________) ("Assignor's Loan
Commitment").
3. The aggregate outstanding principal amount of Assignor's Ratable
Loan made pursuant to Assignor's Loan Commitment at commencement of business on
the date hereof is __________ Dollars ($__________). The aggregate outstanding
principal amount of Bid Rate Loans made by Assignor to Borrower at the
commencement of business on the date hereof is ______________________________
Dollars ($______________).
4. Assignor desires to assign to Assignee (a) all of the rights of
Assignor under the Loan Agreement in respect of a portion of its (i) Ratable
Loan and Loan Commitment thereunder in an amount equal to __________ Dollars
($__________) and (ii) Bid Rate Loans in an amount equal to
______________________ Dollars ($__________________) (collectively, the
"Assigned Loan and Commitment"); and Assignee desires to accept assignment of
such rights and assume the corresponding obligations from Assignor on such
terms.
(E-1)
90
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Assignment. Assignor hereby assigns and sells to Assignee
all of the rights of Assignor under the Loan Agreement in and to the Assigned
Loan and Commitment, and Assignee hereby accepts such assignment from Assignor
and assumes all of the obligations of Assignor under the Loan Agreement with
respect to the Assigned Loan and Commitment. Upon the execution and delivery
hereof by Assignor, Assignee, Borrower and the Administrative Agent and the
payment of the amount specified in Section 2 hereof required to be paid on the
date hereof, (1) Assignee shall, as of the commencement of business on the date
hereof, succeed to the rights and obligations of a Bank under the Loan Agreement
with a Loan and a Loan Commitment in amounts equal to the Assigned Loan and
Commitment, and (2) the Loan and Loan Commitment of Assignor shall, as of the
commencement of business on the date hereof, be reduced correspondingly and
Assignor released from its obligations under the Loan Agreement to the extent
such obligations have been assumed by Assignee. The assignment provided for
herein shall be without recourse to Assignor.
SECTION 2. Payments. As consideration for the assignment and sale
contemplated in Section 1 hereof, Assignee shall pay to Assignor on the date
hereof in immediately available funds an amount equal to __________ Dollars
($___________) [insert the amount of that portion of Assignor's Loan being
assigned]. It is understood that any fees paid to Assignor under the Loan
Agreement are for the account of Assignor. Each of Assignor and Assignee hereby
agrees that if it receives any amount under the Loan Agreement which is for the
account of the other party hereto, it shall receive the same for the account of
such other party to the extent of such other party's interest therein and shall
promptly pay the same to such other party.
SECTION 3. [Consent of Borrower and Acknowledgment by the
Administrative Agent;] Execution and Delivery of Note. [This Agreement is
conditioned upon the consent of Co-Agents and, provided there exists no Event of
Default, Borrower and acknowledgment by the Administrative Agent pursuant to
Section 12.05 of the Loan Agreement. The execution of this Agreement by Borrower
and the Administrative Agent is evidence of this consent and acknowledgment,
respectively. ONLY NECESSARY IF ASSIGNEE IS NOT A MAJORITY OWNED SUBSIDIARY OF A
BANK OR OF THE PARENT OF A BANK] Pursuant to Section 12.05 of the Loan
Agreement, Borrower has agreed to execute and deliver Ratable Loan Notes payable
to the respective orders of Assignee and Assignor to evidence the assignment and
assumption provided for herein.
(E-2)
91
SECTION 4. Non-Reliance on Assignor. Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of Borrower or
any other party to any Loan Document, or the validity and enforceability of the
obligations of Borrower or any other party to a Loan Document in respect of the
Loan Agreement or any other Loan Document. Assignee acknowledges that it has,
independently and without reliance on Assignor, and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and will continue to be responsible for
making its own independent appraisal of the business, affairs and financial
condition of Borrower and the other parties to the Loan Documents.
SECTION 5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 6. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
SECTION 7. Certain Representations and Agreements by Assignee.
Reference is made to Section 10.13 of the Loan Agreement. Assignee hereby
represents that it is entitled to receive any payments to be made to it under
the Loan Agreement or hereunder without the withholding of any tax and agrees to
furnish the evidence of such exemption as specified therein and otherwise to
comply with the provisions of said Section 10.13.
(E-3)
92
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
[NAME OF ASSIGNOR]
By____________________________
Name:
Title:
[NAME OF ASSIGNEE]
By____________________________
Name:
Title:
Applicable Lending Office:
Address for Notices:
[Assignee]
[Address]
Attention: _______________
Telephone: (___) ________
Telecopy: (___) ________
BAY APARTMENT COMMUNITIES, INC.
By____________________________
Name:
Title:
UNION BANK OF SWITZERLAND
(New York Branch)
(as Co-Agent and Administrative
Agent)
By____________________________
Name:
Title:
By____________________________
Name:
Title:
(E-4)
93
UNION BANK OF CALIFORNIA, N.A.
(as Co-Agent)
By____________________________
Name:
Title:
By____________________________
Name:
Title:
(E-5)
94
EXHIBIT G-1
BID RATE QUOTE REQUEST
[Date]
To: Union Bank of Switzerland (New York Branch), as
Administrative Agent (the "Administrative Agent")
From: [Borrower]
Re: Amended and Restated Revolving Loan Agreement (the
"Loan Agreement") dated as of _____________, 1997 among
[Borrower], the Banks parties thereto and the
Administrative Agent
We hereby give notice pursuant to Section 2.02 of the Loan Agreement
that we request Bid Rate Quotes for the following proposed Bid Rate Loans:
Date of Borrowing: _______________________
Principal Amount* Interest Period**
- ----------------- -----------------
$
Such Bid Rate Quotes should offer a LIBOR Bid Margin.
Terms used herein have the meanings assigned to them in the Loan
Agreement.
[BORROWER]
By________________________________
Name:
Title:
- --------
* Subject to the minimum amount and other requirements set forth in
Section 2.02(a) of the Loan Agreement.
** Subject to the provisions of the definition of "Interest Period" in the
Loan Agreement.
(G-1-1)
95
EXHIBIT G-2
INVITATION FOR BID RATE QUOTES
To: [Bank]
Re: Invitation for Bid Rate Quotes to [Borrower]
("Borrower")
Pursuant to Section 2.02 of the Amended and Restated Revolving Loan
Agreement dated as of _____________, 1997 among Borrower, the Banks parties
thereto and the undersigned, as Administrative Agent, we are pleased on behalf
of Borrower to invite you to submit Bid Rate Quotes to Borrower for the
following proposed Bid Rate Loans:
Date of Borrowing: ________________________
Principal Amount Interest Period
- ---------------- ---------------
$
Such Bid Rate Quotes should offer a LIBOR Bid Margin.
Please respond to this invitation by no later than 2:00 P.M. (New
York time) on [date].
UNION BANK OF SWITZERLAND
(New York Branch), as
Administrative Agent
By_________________________________
Name:
Title:
By_________________________________
Name:
Title:
(G-2-1)
96
EXHIBIT G-3
BID RATE QUOTE
To: Union Bank of Switzerland (New York Branch), as
Administrative Agent
Re: Bid Rate Quote to [Borrower] ("Borrower") pursuant to
Amended and Restated Revolving Loan Agreement dated
__________, 1997 among Borrower, the Banks party
thereto and Administrative Agent (the "Loan Agreement")
In response to your invitation on behalf of Borrower dated
_______________, 19__, we hereby make the following Bid Rate Quote on the
following terms:
1. Quoting Bank:
2. Person to contact at quoting Bank:
____________________________________________
3. Date of borrowing: ____________________________*
4. We hereby offer to make Bid Rate Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
Principal Interest LIBOR Bid
Amount** Period*** Margin****
$
$
- --------
* As specified in the related Invitation for Bid Rate Quotes.
** Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the individual
offers exceeds the amount the Bank is willing to lend. Amounts of bids are
subject to the requirements of Section 2.02(c) of the Loan Agreement.
*** No more than three (3) bids are permitted for each Interest Period.
**** Margin over or under the LIBOR Interest Rate determined for the
applicable Interest Period. Specify percentage (to the nearest 1/1,000 of 1%)
and specify whether "PLUS" or "MINUS".
(G-3-1)
97
[Provided, that the aggregate principal amount of Bid Rate Loans for which
the above offers may be accepted shall not exceed $____________.]
5. LIBOR Reserve Requirement, if any: _____________________.
6. Terms used herein have the meanings assigned to them in the
Loan Agreement.
We understand and agree that the offer(s) set forth above, subject
to the satisfaction of the applicable conditions set forth in the Loan
Agreement, irrevocably obligates us to make the Bid Rate Loan(s) for which
any offer(s) are accepted, in whole or in part.
Very truly yours,
[NAME OF BANK]
Date:__________________ By:_______________________
Authorized Officer
(G-3-2)
98
EXHIBIT G-4
ACCEPTANCE OF BID RATE QUOTE
To: Union Bank of Switzerland (New York Branch), as
Administrative Agent (the "Administrative Agent")
From: [Borrower]
Re: Amended and Restated Revolving Loan Agreement (the
"Loan Agreement") dated as of _____________, 1997 among
[Borrower], the Banks parties thereto and the
Administrative Agent
We hereby accept the offers to make Bid Rate Loan(s) set forth in
the Bid Rate Quote(s) identified below:
Date of Bid Principal Interest LIBOR Bid
Bank Rate Quote Amount Period Margin
- ---- ---------- ------ ------ ------
Very truly yours,
[BORROWER]
By:______________________________
Name:
Title:
(G-4-1)
99
EXHIBIT H
Designation Agreement
Reference is made to that certain Amended and Restated Revolving
Loan Agreement dated as of ____________, 1997 (as amended, supplemented or
otherwise modified from time to time, the "Loan Agreement") among Bay Apartment
Communities, Inc., a Maryland corporation, the banks parties thereto, and Union
Bank of Switzerland (New York Branch), as administrative agent for said banks.
Terms defined in the Loan Agreement not otherwise defined herein are used herein
with the same meaning.
[BANK] ("Designor") and ____________________, a
____________________ ("Designee") agree as follows:
1. Designor hereby designates Designee, and Designee hereby accepts
such designation, to have a right to make Bid Rate Loans pursuant to Section
2.02 of the Loan Agreement. Any assignment by Designor to Designee of its rights
to make a Bid Rate Loan pursuant to such Section shall be effective at the time
of the funding of such Bid Rate Loan and not before such time.
2. Except as set forth in Section 6 below, Designor makes no
representation or warranty and assumes no responsibility pursuant to this
Designation Agreement with respect to (a) any statements, warranties or
representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Loan Document or any other instrument and document furnished pursuant
thereto and (b) the financial condition of Borrower or the performance or
observance by Borrower of any of its obligations under any Loan Document or any
other instrument or document furnished pursuant thereto.
3. Designee (a) confirms that it has received a copy of each Loan
Document, together with copies of such financial statements and other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Designation Agreement; (b) agrees that it will
independently and without reliance upon Administrative Agent, Designor or any
other Bank, 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 any Loan Document; (c) represents that it is a
Designated Lender; (d) appoints and authorizes Administrative Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
any Loan Document as are delegated to Administrative Agent by the terms thereof,
together with such powers and discretion as are reasonably incidental thereto;
and (e) agrees that it will perform in accordance with their terms
(H-1)
100
all of the obligations which by the terms of any Loan Document are required to
be performed by it as a Bank.
4. Designee hereby appoints Designor as Designee's agent and
attorney-in-fact, and grants to Designor an irrevocable power of attorney, to
receive payments made for the benefit of Designee under the Loan Agreement, to
deliver and receive all communications and notices under the Loan Agreement and
other Loan Documents and to exercise on Designee's behalf all rights to vote and
to grant and make approvals, waivers, consents or amendments to or under the
Loan Agreement or other Loan Documents. Any document executed by Designor on
Designee's behalf in connection with the Loan Agreement or other Loan Documents
shall be binding on Designee. Borrower, Administrative Agent and each of the
Banks may rely on and are beneficiaries of this Designation Agreement.
5. Following the execution of this Designation Agreement by Designor
and Designee, it will be delivered to Administrative Agent for acceptance by
Administrative Agent. The effective date for this Designation Agreement (the
"Effective Date") shall be the date of acceptance hereof by Administrative
Agent.
6. Designor unconditionally agrees to pay or reimburse Designee and
save Designee harmless against all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed or asserted by any of the parties
to the Loan Documents against Designee, in its capacity as such, in any way
relating to or arising out of this Agreement or any other Loan Documents or any
action taken or omitted by the Designee hereunder or thereunder, provided that
Designor shall not be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements if the same results from Designee's gross negligence or willful
misconduct.
7. As of the Effective Date, Designee shall be a party to the Loan
Agreement with a right to make Bid Rate Loans as a Bank pursuant to Section 2.02
of the Loan Agreement and the rights and obligations of a Bank related thereto;
provided, however, that Designee shall not be required to make payments with
respect to such obligations except to the extent of excess cash flow of such
Designee which is not otherwise required to repay obligations of such Designated
Lender which are then due and payable. Notwithstanding the foregoing, Designor,
as administrative agent for Designee, shall be and remain obligated to Borrower,
Administrative Agent and the Banks for each and every of the obligations of
Designee and its Designor with respect to the Loan Agreement, including, without
limitation, any indemnification obligations under Section 10.05 of the Loan
Agreement.
(H-2)
101
8. This Designation Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
9. This Designation Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, Designor and Designee have executed and
delivered this Designation Agreement as of the date first set forth above.
[DESIGNOR]
By__________________________
Name:
Title:
[DESIGNEE]
By__________________________
Name:
Title:
Applicable Lending Office
and Address for Notices:
____________________________
____________________________
____________________________
Attention: _______________
Telephone: (___) ________
Telecopy: (___) ________
ACCEPTED AS OF THE ___ DAY OF
___________, 199__.
UNION BANK OF SWITZERLAND,
(New York Branch), as
Administrative Agent
By__________________________
Name:
Title:
By__________________________
Name:
Title:
(H-3)