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EXHIBIT 10.1
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SECOND AMENDED AND RESTATED
REVOLVING LOAN AGREEMENT
dated as of November 21, 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
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TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS; ETC. .............................................. 2
Section 1.01 Definitions ............................................. 2
Section 1.02 Accounting Terms ........................................ 15
Section 1.03 Computation of Time Periods ............................. 15
Section 1.04 Rules of Construction ................................... 15
ARTICLE II. THE LOANS ...................................................... 16
Section 2.01 Ratable Loans; Bid Rate Loans; Purpose .................. 16
Section 2.02 Bid Rate Loans .......................................... 17
Section 2.03 Advances, Generally ..................................... 20
Section 2.04 Procedures for Advances ................................. 20
Section 2.05 Interest Periods; Renewals .............................. 21
Section 2.06 Interest ................................................ 21
Section 2.07 Fees .................................................... 22
Section 2.08 Notes ................................................... 22
Section 2.09 Prepayments ............................................. 23
Section 2.10 Cancellation of Commitments ............................. 23
Section 2.11 Method of Payment ....................................... 24
Section 2.12 Elections, Conversions or Continuation of Loans ......... 24
Section 2.13 Minimum Amounts ......................................... 24
Section 2.14 Certain Notices Regarding Elections,
Conversions and Continuations of Loans ................ 24
Section 2.15 Late Payment Premium .................................... 25
Section 2.16 Letters of Credit ....................................... 25
Section 2.17 Special Provisions Regarding Advances in
Connection with Acquisitions .......................... 27
ARTICLE III. YIELD PROTECTION; ILLEGALITY, ETC. ............................ 28
Section 3.01 Additional Costs ........................................ 28
Section 3.02 Limitation on Types of Loans ............................ 29
Section 3.03 Illegality .............................................. 30
Section 3.04 Treatment of Affected Loans ............................. 30
Section 3.05 Certain Compensation .................................... 30
Section 3.06 Capital Adequacy ........................................ 31
Section 3.07 Substitution of Banks ................................... 32
Section 3.08 Applicability ........................................... 33
(i)
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PAGE
ARTICLE IV. CONDITIONS PRECEDENT ........................................... 33
Section 4.01 Conditions Precedent to the Initial Advance ............. 33
Section 4.02 Conditions Precedent to Advances After the
Initial Advance ....................................... 35
Section 4.03 Deemed Representations .................................. 35
ARTICLE V. REPRESENTATIONS AND WARRANTIES .................................. 36
Section 5.01 Due Organization ........................................ 36
Section 5.02 Power and Authority; No Conflicts; Compliance With Laws.. 36
Section 5.03 Legally Enforceable Agreements .......................... 36
Section 5.04 Litigation .............................................. 36
Section 5.05 Good Title to Properties ................................ 36
Section 5.06 Taxes ................................................... 37
Section 5.07 ERISA ................................................... 37
Section 5.08 No Default on Outstanding Judgments or Orders ........... 37
Section 5.09 No Defaults on Other Agreements ......................... 37
Section 5.10 Government Regulation ................................... 38
Section 5.11 Environmental Protection ................................ 38
Section 5.12 Solvency ................................................ 38
Section 5.13 Financial Statements .................................... 38
Section 5.14 Valid Existence of Affiliates ........................... 38
Section 5.15 Insurance ............................................... 38
Section 5.16 Accuracy of Information; Full Disclosure ................ 39
ARTICLE VI. AFFIRMATIVE COVENANTS .......................................... 39
Section 6.01 Maintenance of Existence ................................ 39
Section 6.02 Maintenance of Records .................................. 39
Section 6.03 Maintenance of Insurance ................................ 39
Section 6.04 Compliance with Laws; Payment of Taxes .................. 39
Section 6.05 Right of Inspection ..................................... 40
Section 6.06 Compliance With Environmental Laws ...................... 40
Section 6.07 Maintenance of Properties ............................... 40
Section 6.08 Payment of Costs ........................................ 40
Section 6.09 Reporting and Miscellaneous Document Requirements ....... 40
Section 6.10 Principal Prepayments as a Result of Reduction
in Adjusted Total Loan Commitment ..................... 42
ARTICLE VII. NEGATIVE COVENANTS ............................................ 43
Section 7.01 Mergers Etc ............................................. 43
Section 7.02 Investments ............................................. 43
(ii)
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PAGE
Section 7.03 Sale of Assets .......................................... 43
ARTICLE VIII. FINANCIAL COVENANTS .......................................... 43
Section 8.01 Equity Value ............................................ 43
Section 8.02 Relationship of Total Outstanding Indebtedness to
Capitalization Value .................................. 43
Section 8.03 Relationship of Combined EBITDA to Interest Expense ..... 43
Section 8.04 Relationship of Combined EBITDA to Combined Debt
Service ............................................... 44
Section 8.05 Relationship of Combined EBITDA to Total Outstanding
Indebtedness .......................................... 44
Section 8.06 Unsecured Debt Yield .................................... 44
Section 8.07 Relationship of Unencumbered Combined EBITDA to
Unsecured Interest Expense ............................ 44
Section 8.08 Relationship of Dividends to Funds From Operations ...... 44
Section 8.09 Relationship of Secured Indebtedness to
Capitalization Value .................................. 44
ARTICLE IX. EVENTS OF DEFAULT .............................................. 44
Section 9.01 Events of Default ....................................... 44
Section 9.02 Remedies ................................................ 46
ARTICLE X. ADMINISTRATIVE AGENT; RELATIONS AMONG BANKS ..................... 47
Section 10.01 Appointment, Powers and Immunities of Administrative
Agent ................................................. 47
Section 10.02 Reliance by Administrative Agent ........................ 47
Section 10.03 Defaults ................................................ 48
Section 10.04 Rights of Administrative Agent as a Bank ................ 48
Section 10.05 Indemnification of Administrative Agent ................. 48
Section 10.06 Non-Reliance on Administrative Agent and Other Banks .... 49
Section 10.07 Failure of Administrative Agent to Act .................. 49
Section 10.08 Resignation or Removal of Administrative Agent .......... 49
Section 10.09 Amendments Concerning Agency Function ................... 50
Section 10.10 Liability of Administrative Agent ....................... 50
Section 10.11 Transfer of Agency Function ............................. 50
Section 10.12 Non-Receipt of Funds by Administrative Agent ............ 50
Section 10.13 Withholding Taxes ....................................... 51
Section 10.14 Minimum Commitment by Co-Agents ......................... 51
Section 10.15 Pro Rata Treatment ...................................... 51
Section 10.16 Sharing of Payments Among Banks ......................... 51
Section 10.17 Possession of Documents ................................. 52
(iii)
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PAGE
ARTICLE XI. NATURE OF OBLIGATIONS .......................................... 52
Section 11.01 Absolute and Unconditional Obligations .................. 52
Section 11.02 Non-Recourse to Borrower's Principals ................... 52
ARTICLE XII. MISCELLANEOUS ................................................. 53
Section 12.01 Binding Effect of Request for Advance ................... 53
Section 12.02 Amendments and Waivers .................................. 53
Section 12.03 Usury ................................................... 54
Section 12.04 Expenses; Indemnification ............................... 54
Section 12.05 Assignment; Participation ............................... 54
Section 12.06 Documentation Satisfactory .............................. 56
Section 12.07 Notices ................................................. 56
Section 12.08 Setoff .................................................. 56
Section 12.09 Table of Contents; Headings ............................. 57
Section 12.10 Severability ............................................ 57
Section 12.11 Counterparts ............................................ 57
Section 12.12 Integration ............................................. 57
Section 12.13 Governing Law ........................................... 57
Section 12.14 Waivers ................................................. 57
Section 12.15 Jurisdiction; Immunities ................................ 58
Section 12.16 Designated Lender ....................................... 58
Section 12.17 No Bankruptcy Proceedings ............................... 59
EXHIBIT A - AUTHORIZATION LETTER ......................................... A-1
EXHIBIT B - RATABLE LOAN NOTE ............................................ B-1
EXHIBIT B-1 - BID RATE LOAN NOTE ......................................... B-1-1
EXHIBIT C - MATERIAL AFFILIATES .......................................... C-1
EXHIBIT D - SOLVENCY CERTIFICATE ......................................... D-1
EXHIBIT E - ASSIGNMENT AND ASSUMPTION AGREEMENT .......................... E-1
EXHIBIT G-1 - BID RATE QUOTE REQUEST ..................................... G-1-1
EXHIBIT G-2 - INVITATION FOR BID RATE QUOTES ............................. G-2-1
EXHIBIT G-3 - BID RATE QUOTE ............................................. G-3-1
(iv)
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PAGE
EXHIBIT G-4 - ACCEPTANCE OF BID RATE QUOTE ............................... G-4-1
EXHIBIT H - DESIGNATION AGREEMENT ........................................ H-1
(v)
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SECOND AMENDED AND RESTATED REVOLVING LOAN AGREEMENT dated as of November
21, 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, UBC and the other lenders signatory thereto and
Administrative Agent entered into an Amended and Restated Revolving Loan
Agreement dated as of July 2, 1997 (the "Prior Credit Agreement") which provided
for a revolving line of credit in the amount of up to $200,000,000 in favor of
Borrower. Borrower has requested a $150,000,000 increase in the amount of the
credit provided by the Prior Credit Agreement, as well as certain amendments
thereto. Administrative Agent and the Banks have agreed to Borrower's requests
pursuant to the terms and conditions of this Second Amended and Restated
Revolving Loan Agreement, which amends and restates the Prior Credit Agreement
in its entirety.
In order to facilitate the implementation of the $150,000,000 increase in
the Total Loan Commitment and in the individual Loan Commitment of UBS from that
set forth in the Prior Credit Agreement to that set forth herein, the parties
hereto agree that on the date hereof UBS will make an "equalization" payment to
each of the other Banks in reduction of the principal currently outstanding
under each of said Banks' respective Ratable Loan Notes so that, following such
increase and the making of such payments, the outstanding percentage of each
Bank's Loan Commitment (I.E., the ratio of the outstanding principal amount
under each Bank's Ratable Loan Note to its Loan Commitment) shall be the same as
the outstanding percentage of every other Bank's Loan Commitment. The aggregate
amount of such payment by UBS shall constitute outstanding principal under the
Ratable Loan Note(s) held by UBS. The principal amount outstanding under each
Bank's Ratable Loan Note prior and subsequent to the increase in the Total Loan
Commitment and in the individual Loan Commitment of UBS provided for herein, and
the amount of the aforesaid payment to be made by UBS to each of the Banks in
order to effect equalization, are as set forth on Schedule A attached hereto and
made a part hereof. Notwithstanding anything herein to the contrary, Borrower
shall not be responsible for any LIBOR "breakage" costs in connection with the
aforesaid equalization payments.
NOW, THEREFORE, in consideration of the premises and the mutual agreements,
covenants and conditions hereinafter set forth, the Prior Credit Agreement is
hereby amended and restated in its entirety and Borrower, Administrative Agent
and each of the Banks agree as follows:
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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.
"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
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(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):
Range of Borrower's
Credit Rating
(S&P/Moody's/ Applicable Margin
Other Agency Ratings) (% per annum)
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below BBB-/below Baa3/
other agency equivalent (or unrated) 1.25
BBB-/Baa3/ other agency equivalent 1.00
BBB/Baa2/other agency equivalent 0.90
BBB+/Baa1/other agency equivalent 0.80
A-or higher/A3 or higher/other agency equivalent 0.70.
"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.
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"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 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
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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.
"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
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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.
"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
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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.
"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
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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 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
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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.
"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
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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) 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
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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 substantially 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 $180,000,000
UBC 30,000,000
The First National Bank of Chicago 25,000,000
Kredietbank N.V. 21,000,000
Commerzbank AG 20,000,000
Bank of Montreal 20,000,000
Fleet National Bank 19,000,000
CoreStates Bank, N.A. 17,500,000
Dresdner Bank AG 17,500,000
TOTAL: $350,000,000
============
"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
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expected to, either (1) materially and adversely impair the 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, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
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"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 (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.
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"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. ss.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, July 2, 1997 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, 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).
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"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 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
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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 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
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.
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(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 2.02 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 and 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 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
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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.
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;
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(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;
(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
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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 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
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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 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
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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 during periods when
Borrower's Credit Rating is below BBB- by S&P or below Baa3 by Moody's or
unrated, pay to Administrative Agent for the account of each Bank a
commitment fee computed on the daily unused Loan Commitment of such Bank at
a rate per annum equal to .15%, calculated on the basis of a year of three
hundred sixty (360) days for the 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.
(c) Borrower shall, during the term of the Loans during periods when
Borrower's Credit Rating is BBB- or higher by S&P or Baa3 or higher by
Moody's, pay to Administrative Agent for the account of each Bank a
facility fee computed on the daily Loan Commitment of such Bank
(irrespective of usage) at a rate per annum equal to 15%, calculated on the
basis of a year of three hundred sixty (360) days for the actual number of
days elapsed. The accrued facility 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
$33,500,000. The Bid Rate Loans of the Banks shall be evidenced by a single
global promissory note of Borrower, in the form of
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EXHIBIT B-1, duly completed and executed by Borrower, in the principal amount of
$175,000,000, 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"). The parties hereto acknowledge that, as
of the date hereof, the aggregate outstanding principal amount under the Bid
Rate Loan Note is $97,500,000, allocated as follows: UBS - $50,000,000, First
Chicago - $5,000,000, Bank of Montreal - $15,000,000, CoreStates - $20,000,000
and Kredietbank - $7,500,000. 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
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
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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.
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.
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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:
NOTICE NUMBER OF BANKING DAYS PRIOR
Conversions into Base Rate Loans two (2)
Elections of, Conversions into or
Continuations as, LIBOR Loans three (3)
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 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
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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 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
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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
documents as Administrative Agent reasonably requests to confirm and
perfect the assignment of such cash collateral to Administrative Agent.
The parties hereto acknowledge that, as of the date hereof, the only
outstanding Letter of Credit which has been issued pursuant to this Section is
that certain $1,000,000 Letter of Credit (No. SBY 505309) dated September 15,
1997 issued by Administrative Agent in favor of Avondale Bear Creek Limited
Partnership.
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:
(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);
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(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.
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
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(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 E1.01), 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 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
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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.
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
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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
(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
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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 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 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
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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 Adminitrative 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.
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,
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each duly executed by Borrower (each of which Notes shall be substituted
for and in lieu of the Notes executed and delivered by Borrower to the
Banks and Administrative Agent, respectively, on July 2, 1997 pursuant to
the Prior Credit Agreement);
(3) FINANCIALS OF BORROWER. Audited Borrower's ConsolidatedFinancial
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;
(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
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(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;
(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.
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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, 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
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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; 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,
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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 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
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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 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,
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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 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
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occurred and 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;
(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.
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(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
(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.
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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.
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
$600,000,000.
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.
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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.
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
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(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 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
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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 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. ss.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,
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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.
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
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participation in any Loan or 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, 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
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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 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
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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 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.
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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
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 and provided there exists no Event of Default, UBS agrees to maintain a
Loan Commitment in an amount no less than 8.57% of the Total Loan Commitment and
UBC agrees to maintain a Loan Commitment in an amount no less than 7.14% of the
Total Loan Commitment, in either case as the same may be decreased from time to
time in accordance with the provisions hereof. UBS and UBC further agree to hold
and not to participate or assign any of such respective amounts other than an
assignment to a Federal Reserve Bank or to their Parent or a majority-owned
subsidiary.
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 fees accruing under paragraphs (b) and (c) of Section 2.07 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
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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.
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,
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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 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
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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-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 respective successors and permitted assigns. Borrower may not
assign or transfer its rights or obligations hereunder.
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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 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 purpose 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
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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, 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
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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.
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.
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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 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"
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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 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.
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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/ Xiomara Martez
________________________________________
Name: Xiomara Martez
Title: Assistant Vice President
By: /s/ Joseph M. Bassil
________________________________________
Name: Joseph M. Bassil
Title: Director
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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
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Ronald S. Ortiz
_______________________________________
Name: Ronald S. Ortiz
Title: Vice President
By: /s/ James B. Wohlleb
_______________________________________
Name: James B. Wohlleb
Title: Senior Vice President
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
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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/ Henry Blagden
______________________________________
Name: Henry Blagden
Title: Assistant Treasurer
By: /s/ Thomas J. Carney
______________________________________
Name: Thomas J. Carney
Title: Vice President
Applicable Lending Office:
Commerzbank Aktiengesellschaft,
Los Angeles Branch
633 West Fifth Street
Suite 6600
Los Angeles, California 90017
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Address for Notices:
Commerzbank AG
2 World Financial Center
34th Floor
New York, New York 10281
Attention: Mr. David Schwartz/
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
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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/ Beverly G. Cason
____________________________________
Name: Beverly G. Cason
Title: Vice President
By: /s/ John Sweeney
____________________________________
Name: John Sweeney
Title: Assistant Vice President
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
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FLEET NATIONAL BANK
By: /s/ Eben R. Myrik
_____________________________________
Name: Eben R. Myrik
Title: Vice President
Applicable Lending Office and Address
for Notices:
Fleet National Bank
111 Westminster Street
Suite 800
Providence, Rhode Island 02903
Attention: Mr. Randy Myrick
Telephone: (401) 278-3745
Telecopy: (401) 278-5166
KREDIETBANK N.V., GRAND CAYMAN BRANCH
By: _____________________________________
Name:
Title:
By: /s/ Michael V. Curran
_____________________________________
Name: Michael V. Curran
Title: Vice President
Applicable Lending Office:
Kredietbank N.V., Grand Cayman Branch
125 West 55th Street
10th Floor
New York, New York 10019
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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: Ms. Christine Park
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. Jean Frammolino
Telephone: (213) 624-0401
Telecopy: (213) 629-5801
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EXHIBIT A - AUTHORIZATION LETTER
_______________, 1997
Union Bank of Switzerland
(New York Branch)
299 Park Avenue
New York, New York 10171
Re: Second 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.
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
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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:
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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 Second
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.
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.
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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 ________________________________[SEAL]
Name:
Title:
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Date Amount of Advance Amount of Payment Balance Outstanding Notation By
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EXHIBIT B-1 - BID RATE LOAN NOTE
$175,000,000 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
Seventy-Five Million Dollars ($175,000,000), 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 Second 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.
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.
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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 ________________________________[SEAL]
Name:
Title:
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Date of Maturity (i.e., Expiration
Bid Rate Loan # Bank Advance Principal Amount Interest Rate of Interest Period
B-1-3
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EXHIBIT C - MATERIAL AFFILIATES
STATE OF BORROWER'S % PRINCIPAL
NAME 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 Partners, Inc. Maryland 100 Owning/Managing Apartments
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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 Second 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.
Name:_____________________________________
____________________________________
Name:
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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 Second 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.
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
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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.
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.
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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.
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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:
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87
By ___________________________________
Name:
Title:
By ___________________________________
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
(as Co-Agent)
By ___________________________________
Name:
Title:
By ___________________________________
Name:
Title:
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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: Second 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(1) INTEREST PERIOD(2)
$
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:
- --------
(1) Subject to the minimum amount and other requirements set forth in
Section 2.02(a) of the Loan Agreement.
(2) Subject to the provisions of the definition of "Interest Period" in
the Loan Agreement.
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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 Second 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
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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 the Second 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: ____________________________(1)
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 Amount(2) Interest Period(3) LIBOR Bid Margin(4)
$
$
[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.
- ---------------------------
(1) As specified in the related Invitation for Bid Rate Quotes.
(2) 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.
(3) No more than three (3) bids are permitted for each Interest Period.
(4) 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
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Very truly yours,
[NAME OF BANK]
Date: _____________________________ By: _____________________________
Authorized Officer
G-3-2
92
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: Second 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:
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EXHIBIT H - DESIGNATION AGREEMENT
Reference is made to that certain Second 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 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
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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.
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.
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95
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:
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SCHEDULE A
OUTSTANDING PRINCIPAL OUTSTANDING PRINCIPAL UNDER
UNDER RATABLE LOAN NOTE RATABLE LOAN NOTE
PRIOR TO INCREASE IN TOTAL AMOUNT OF EQUALIZATION SUBSEQUENT TO INCREASE IN TOTAL
BANK LOAN COMMITTMENT PAYMENT FROM UBS LOAN COMMITMENT
UBS $5,025,000 _______________ $17,228,571.43
UBC 5,025,000 2,153,571.43 2,871,428.57
First Chicago 4,187,500 1,794,642.86 2,392,857.14
Commerzbank 3,350,000 1,435,714.29 1,914,285.71
Bank of Montreal 3,350,000 1,435,714.29 1,914,285.71
Corestates 2,931,250 1,256,250.00 1,675,000.00
Dresdner 2,931,250 1,256,250.00 1,675,000.00
Fleet 3,182,500 1,363,928.57 1,818,571.43
Kredietbank 3,517,500 1,507,500.00 2,010,000.00
TOTAL $33,500,000 $12,203,571.44 $33,500,000.00
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