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EXHIBIT 10.4
REVOLVING LOAN AGREEMENT
dated as of May 8, 1996
among
BAY APARTMENT COMMUNITIES, INC.,
as Borrower,
UNION BANK OF SWITZERLAND
(New York Branch),
as Co-Agent and Bank
and
UNION BANK OF SWITZERLAND
(New York Branch),
as Administrative Agent
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TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS; ETC................................................ 1
Section 1.01 Definitions......................................... .1
Section 1.02 Accounting Terms.................................... 13
Section 1.03 Computation of Time Periods......................... 13
Section 1.04 Rules of Construction............................... 13
ARTICLE II. THE LOANS...................................................... 13
Section 2.01 The Loans........................................... 13
Section 2.02 Purpose............................................. 14
Section 2.03 Advances, Generally................................. 14
Section 2.04 Procedures for Advances............................. 15
Section 2.05 Interest Periods; Renewals.......................... 15
Section 2.06 Interest............................................ 15
Section 2.07 Fees................................................ 16
Section 2.08 Notes............................................... 16
Section 2.09 Prepayments......................................... 16
Section 2.10 Cancellation of Commitments......................... 17
Section 2.11 Method of Payment................................... 17
Section 2.12 Elections, Conversions or Continuation of Loans..... 17
Section 2.13 Minimum Amounts..................................... 18
Section 2.14 Certain Notices Regarding Elections, Conversions
and Continuations of Loans.......................... 18
Section 2.15 Late Payment Premium................................ 18
Section 2.16 Letters of Credit................................... 19
Section 2.17 Special Provisions Regarding Advances in
Connection with Acquisitions........................ 20
ARTICLE III. YIELD PROTECTION; ILLEGALITY; ETC............................. 21
Section 3.01 Additional Costs.................................... 21
Section 3.02 Limitation on Types of Loans........................ 22
Section 3.03 Illegality.......................................... 23
Section 3.04 Treatment of Affected Loans......................... 23
Section 3.05 Certain Compensation................................ 23
Section 3.06 Capital Adequacy.................................... 24
Section 3.07 Substitution of Banks............................... 25
Section 3.08 Applicability....................................... 26
(i)
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ARTICLE IV. CONDITIONS PRECEDENT........................................... 26
Section 4.01 Conditions Precedent to the Initial Advance......... 26
Section 4.02 Conditions Precedent to Advances After the
Initial Advance..................................... 28
Section 4.03 Deemed Representations.............................. 28
ARTICLE V. REPRESENTATIONS AND WARRANTIES.................................. 28
Section 5.01 Due Organization.................................... 29
Section 5.02 Power and Authority; No Conflicts; Compliance
With Laws........................................... 29
Section 5.03 Legally Enforceable Agreements...................... 29
Section 5.04 Litigation......................................... 29
Section 5.05 Good Title to Properties........................... 29
Section 5.06 Taxes.............................................. 30
Section 5.07 ERISA.............................................. 30
Section 5.08 No Default on Outstanding Judgments or Orders...... 30
Section 5.09 No Defaults on Other Agreements.................... 30
Section 5.10 Government Regulation.............................. 31
Section 5.11 Environmental Protection........................... 31
Section 5.12 Solvency........................................... 31
Section 5.13 Financial Statements............................... 31
Section 5.14 Valid Existence of Affiliates...................... 31
Section 5.15 Insurance.......................................... 31
Section 5.16 Accuracy of Information; Full Disclosure........... 32
ARTICLE VI. AFFIRMATIVE COVENANTS......................................... 32
Section 6.01 Maintenance of Existence........................... 32
Section 6.02 Maintenance of Records............................. 32
Section 6.03 Maintenance of Insurance........................... 32
Section 6.04 Compliance with Laws; Payment of Taxes............. 32
Section 6.05 Right of Inspection................................ 33
Section 6.06 Compliance With Environmental Laws................. 33
Section 6.07 Maintenance of Properties.......................... 33
Section 6.08 Payment of Costs................................... 33
Section 6.09 Reporting and Miscellaneous Document
Requirements........................................ 33
Section 6.10 Principal Prepayments as a Result of
Reduction in Available Loan Commitment.............. 35
ARTICLE VII. NEGATIVE COVENANTS............................................ 36
Section 7.01 Mergers Etc......................................... 36
Section 7.02 Investments......................................... 36
Section 7.03 Sale of Assets...................................... 36
Section 7.04 Encumbrance of Restricted Properties................ 36
ARTICLE VIII. FINANCIAL COVENANTS.......................................... 36
(ii)
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Section 8.01 Equity Value........................................ 36
Section 8.02 Relationship of Total Outstanding Indebtedness
to Capitalization Value............................. 37
Section 8.03 Relationship of Combined EBITDA to Interest
Expense............................................. 37
Section 8.04 Relationship of Combined EBITDA to Combined
Debt Service........................................ 37
Section 8.05 Relationship of Combined EBITDA to Total
Outstanding Indebtedness............................ 37
Section 8.06 Unsecured Debt Yield................................ 37
Section 8.07 Relationship of Unencumbered Combined EBITDA
to Unsecured Interest Expense....................... 37
Section 8.08 Relationship of Dividends to Funds From
Operations.......................................... 37
ARTICLE IX. EVENTS OF DEFAULT.............................................. 37
Section 9.01 Events of Default................................... 37
Section 9.02 Remedies............................................ 39
ARTICLE X. ADMINISTRATIVE AGENT; RELATIONS AMONG BANKS..................... 40
Section 10.01 Appointment, Powers and Immunities of
Administrative Agent................................ 40
Section 10.02 Reliance by Administrative Agent.................... 40
Section 10.03 Defaults............................................ 41
Section 10.04 Rights of Administrative Agent as a Bank............ 41
Section 10.05 Indemnification of Administrative Agent............. 41
Section 10.06 Non-Reliance on Administrative Agent and
Other Banks......................................... 42
Section 10.07 Failure of Administrative Agent to Act.............. 42
Section 10.08 Resignation or Removal of Administrative Agent...... 42
Section 10.09 Amendments Concerning Agency Function............... 43
Section 10.10 Liability of Administrative Agent................... 43
Section 10.11 Transfer of Agency Function......................... 43
Section 10.12 Non-Receipt of Funds by Administrative Agent........ 43
Section 10.13 Withholding Taxes................................... 44
Section 10.14 Minimum Commitment by Co-Agents..................... 44
Section 10.15 Pro Rata Treatment.................................. 44
Section 10.16 Sharing of Payments Among Banks..................... 44
Section 10.17 Possession of Documents............................. 45
ARTICLE XI. NATURE OF OBLIGATIONS.......................................... 45
Section 11.01 Absolute and Unconditional Obligations.............. 45
Section 11.02 Non-Recourse to Borrower's Principals............... 45
ARTICLE XII. MISCELLANEOUS................................................. 46
Section 12.01 Binding Effect of Request for Advance............... 46
Section 12.02 Amendments and Waivers.............................. 46
Section 12.03 Usury............................................... 47
(iii)
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Section 12.04 Expenses; Indemnification......................... 47
Section 12.05 Assignment; Participation......................... 47
Section 12.06 Documentation Satisfactory........................ 49
Section 12.07 Notices........................................... 49
Section 12.08 Setoff............................................ 49
Section 12.09 Table of Contents; Headings....................... 50
Section 12.10 Severability...................................... 50
Section 12.11 Counterparts...................................... 50
Section 12.12 Integration....................................... 50
Section 12.13 Governing Law..................................... 50
Section 12.14 Waivers........................................... 50
Section 12.15 Jurisdiction; Immunities.......................... 50
EXHIBIT A - Authorization Letter
EXHIBIT B - Note
EXHIBIT C - Information Regarding Material Affiliates
EXHIBIT D - Solvency Certificate
EXHIBIT E - Assignment and Assumption Agreement
EXHIBIT F - Restricted Properties
(iv)
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REVOLVING LOAN AGREEMENT dated as of May 8, 1996 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") 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 and the other lenders who from time to time become Banks pursuant to Section
3.07 or 12.05, each a "Bank" and collectively, the "Banks").
Borrower desires that each Co-Agent (as hereinafter defined) and the
other Banks extend credit as provided herein, and each Co-Agent and the other
Banks are prepared to extend such credit. Accordingly, Borrower, each Co-Agent,
each other Bank and Administrative Agent agree as follows:
ARTICLE I. DEFINITIONS; ETC.
Section 1.01 Definitions. As used in this Agreement the following terms
have the following meanings (except as otherwise provided, terms defined in the
singular to have a correlative meaning when used in the plural and vice versa):
"Acquisition" means the acquisition by Borrower, directly or
indirectly, of an interest in real estate.
"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 Revolving Loan Agreement.
"Applicable Lending Office" means, for each Bank and for its LIBOR Loan
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 or Base Rate Loan, as applicable, is to be made and maintained.
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"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 (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)
--------------------- -------------
below BBB-/below Baa3/ 1.55
other agency equivalent
(or unrated)
BBB-/Baa3/ 1.45
other agency equivalent
BBB/Baa2/ 1.30
other agency equivalent
BBB+/Baa1/ 1.15
other agency equivalent
A-or higher/A3 or higher/ 1.00.
other agency equivalent
"Assignee" has the meaning specified in Section 12.05.
"Assignment and Assumption Agreement" means an Assignment and
Assumption Agreement, substantially in the form of EXHIBIT E, pursuant to which
a Bank assigns and an Assignee assumes rights and obligations in accordance with
Section 12.05.
"Authorization Letter" means a letter agreement executed by Borrower in
the form of EXHIBIT A.
"Available Loan Commitment" means with respect to each Bank, at any
time, such Bank's Pro Rata Share of the Available Total Loan Commitment.
"Available Total Loan Commitment" means (1) the lesser of the Total
Loan Commitment or the Borrowing Base less (2) the Mark Apartments Holdback.
"Bank" and "Banks" have the respective meanings specified in the
preamble.
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"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, an Interest Period with respect to a LIBOR Loan, or
notice with respect to any LIBOR 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.
"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 Loan which shall accrue interest at a rate determined in relation to
the Base Rate.
"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 (or, if more than one, the
lower of the ratings) 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.
"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.
"Borrowing Base" means, at any time, Combined EBITDA from Restricted
Properties at such time divided by (1) in the event Unencumbered Combined EBITDA
for the most recently ended calendar quarter for which Borrower is required to
have reported financial results pursuant to Section 6.09, annualized (i.e.,
multiplied by four (4)) is less than $10,000,000, 15% or (2) otherwise, 12%;
provided, however, that the Borrowing Base shall be recalculated from time to
time pursuant to Section 2.17, and such recalculated Borrowing Base shall be
effective until the next regular quarterly calculation thereof.
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"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 UBS, and following such time as Union Bank of
California, N.A. ("UBC") becomes a Bank in accordance with Section 12.05 with a
Loan Commitment of $50,000,000, 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 deemed annual capital expense charge of $150 per apartment unit owned
by the UJVs.
"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
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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.
"Combined EBITDA from Restricted Properties" means, at any time, the
contribution by the Restricted Properties to Combined EBITDA for the most
recently ended calendar quarter for which Borrower is required to have delivered
the certificate required by paragraph (3) of Section 6.09, annualized (i.e.,
multiplied by four (4)).
"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 Loan from one Applicable Lending
Office to another.
"Debt" means (1) indebtedness or liability for borrowed money, or for
the deferred purchase price of property or services (including trade
obligations); (2) obligations as lessee under Capital Leases; (3) current
liabilities in respect of unfunded vested benefits under any Plan; (4)
obligations under letters of credit issued for the account of any Person; (5)
all obligations arising under bankers' or trade acceptance facilities; (6) all
guarantees, endorsements (other than for collection or deposit in the ordinary
course of business), and other contingent obligations to purchase any of the
items included in this definition, to provide funds for payment, to supply funds
to invest in any Person, or otherwise to assure a creditor against loss; (7) all
obligations secured by any Lien on property owned by the Person whose Debt is
being measured, whether or not the obligations have been assumed; and (8) all
obligations under any agreement providing for contingent participation or other
hedging mechanisms with respect to interest payable on any of the items
described above in this definition.
"Default" means any event which with the giving of notice or lapse of
time, or both, would become an Event of Default.
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"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, a fixed rate 3% above the rate(s)
of interest in effect thereon (including the Applicable Margin) 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.
"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
Loans be outstanding as LIBOR Loans.
"Environmental Discharge" means any discharge or release of any
Hazardous Materials in violation of any applicable Environmental Law.
"Environmental Law" means any applicable Law relating to pollution or
the environment, including Laws relating to noise or to emissions, discharges,
releases or threatened releases of Hazardous Materials into the work place, the
community or the environment, or otherwise relating to the generation,
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials.
"Environmental Notice" means any written complaint, order, citation or
notice from any Person (1) affecting or relating to Borrower's compliance with
any Environmental Law in connection with any activity or operations at any time
conducted by Borrower, (2) relating to (a) the existence of any Hazardous
Materials contamination or Environmental Discharges or threatened Hazardous
Materials contamination or Environmental Discharges at any of Borrower's
locations or facilities or (b) remediation of any Environmental Discharge or
Hazardous Materials at any such location or facility or any part thereof; or (3)
any violation or alleged violation by Borrower of any relevant Environmental
Law.
"Equity Value" means, at any time, (1) Capitalization Value less (2)
Total Outstanding Indebtedness.
"ERISA" means the Employee Retirement Income Security Act of 1974,
including the rules and regulations promulgated thereunder.
"ERISA Affiliate" means any corporation which is a member of
the same controlled group of corporations (within the meaning of Section 414(b)
of the Code) as Borrower, or any trade or business which is under common control
(within the meaning of Section 414(c) of the Code) with Borrower, or any
organization which is required to be treated as a single employer with Borrower
under Section 414(m) or 414(o) of the Code.
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"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 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.
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"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, 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.
"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.
"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 in
question outstanding during such Interest Period.
"LIBOR Interest Rate" means, for any LIBOR 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 for the Interest Period therefor divided by (2) one minus the
LIBOR Reserve Requirement for such LIBOR Loan for such Interest Period.
"LIBOR Loan" means all or any portion (as the context requires) of any
Bank's Loan which shall accrue interest at rate(s) determined in relation to
LIBOR Interest Rate(s).
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"LIBOR Reserve Requirement" means, for any LIBOR 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 under Regulation D by member banks of the Federal Reserve System
in New York City with deposits exceeding $1,000,000,000 against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting the effect
of the foregoing, the LIBOR Reserve Requirement shall also reflect any other
reserves required to be maintained by such member banks by reason of any
Regulatory Change against (1) any category of liabilities which includes
deposits by reference to which the LIBOR Base Rate is to be determined as
provided in the definition of "LIBOR Base Rate" in this Section 1.01 or (2) any
category of extensions of credit or other assets which include loans the
interest rate on which is determined on the basis of rates referred to in said
definition of "LIBOR Base Rate".
"Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment for collateral purposes, deposit arrangement, lien
(statutory or other), or other security agreement or charge of any kind or
nature whatsoever of any third party (excluding any right of setoff but
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having 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" and "Loans" have the respective meanings specified in Section
2.01.
"Loan Commitment" means, with respect to each Bank, the obligation to
make a Loan in the principal amount set forth below:
Loan
Bank Commitment
---- ----------
UBS $150,000,000
Total $150,000,000
(subject, however, to the provisions of the third paragraph of Section 2.01)
"Loan Documents" means this Agreement, the Notes, the Authorization
Letter and the Solvency Certificate.
"Majority Banks" means at any time the Banks holding at least 51% of
the then aggregate unpaid principal amount of the Loans.
"Mark Apartments" means the 709-unit apartment project owned by
Borrower, known as the Mark Apartments, currently under construction on an
approximately 17.8-acre parcel of land in Sunnyvale, California.
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"Mark Apartments Holdback" means, at any time (1) prior to completion
of the Mark Apartments, the amount by which the estimated costs to complete the
Mark 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) and (2) after such completion, zero.
"Material Adverse Change" means either (1) a material adverse change in
the status of the business, results of operations or financial condition of
Borrower or (2) any event or occurrence of whatever nature which is likely to
have a material adverse effect on the ability of Borrower to repay the Loans and
otherwise perform its obligations under the Loan Documents.
"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, 1999.
"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.
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"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.
"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.
"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
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States, federal, state, municipal or foreign laws or regulations (whether or not
having the force of law) by any court or governmental or monetary authority
charged with the interpretation or administration thereof.
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the thirty (30) day notice period
is waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.
Section2615.
"Required Banks" means at any time the Banks holding at least 66 2/3%
of the then aggregate unpaid principal amount of the Loans.
"Restricted Properties" means those properties listed in EXHIBIT F.
"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 Corporation.
"Supplemental Fee Letter" means that certain letter, dated the date
hereof, between Administrative Agent and Borrower.
"Total Loan Commitment" means an amount equal to the aggregate amount
of all Loan Commitments.
"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.
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"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 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 The Loans. Subject to the terms and conditions of this
Agreement, each of the Banks severally agrees to make a loan to Borrower (each
such loan by
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a Bank, a "Loan"; such loans, collectively, the "Loans") pursuant to which the
Bank shall from time to time advance and re-advance to Borrower an amount equal
to the excess of such Bank's Available Loan Commitment over all previous
advances made by such Bank which remain unpaid. Within the limits set forth
herein, Borrower may borrow from time to time under this Section 2.01 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 Section 2.01. The 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 and Base Rate Loan of each Bank shall be maintained at such Bank's
Applicable Lending Office for its LIBOR Loan and Base Rate Loan, respectively.
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.
Notwithstanding anything to the contrary contained in this Agreement,
UBS shall have no obligation hereunder in respect of a Loan Commitment in excess
of $100,000,000. It is anticipated by UBS and Borrower that, within a short
period of time following the Closing Date, UBC will become a Bank pursuant to
Section 12.05 with a $50,000,000 Loan Commitment. Until such time, the Total
Loan Commitment hereunder shall be deemed to be $100,000,000, and at such time
the respective Loan Commitments of UBS and UBC shall be $100,000,000 and
$50,000,000. It is understood that the foregoing does not constitute a
commitment by UBC to become a Bank hereunder.
Section 2.02 Purpose. 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 2.03 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.
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Section 2.04 Procedures for Advances. Borrower shall submit to
Administrative Agent a request for each advance hereunder, 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. Administrative Agent, upon its receipt and
approval of the request for advance, will so notify the Banks. Not later than
11:00 a.m. (New York time) on the date of each advance, each Bank 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 five (5) discrete
segments of a Bank's 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 Loan corresponding to a proportionate segment of each of the other Banks'
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; and (2) for LIBOR Loans at a rate equal
to the applicable LIBOR Interest Rate plus the Applicable Margin. 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 and LIBOR Loans shall not exceed the
maximum amount
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permitted under applicable law. Interest shall be calculated for the actual
number of days elapsed on the basis of, in the case of both Base Rate Loans and
LIBOR 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, for both Base Rate Loans
and LIBOR Loans, on the first Banking Day of each calendar month; provided,
however, that interest accruing at the Default Rate shall be due and payable on
demand.
Section 2.07 Fees. (a) Borrower agrees to pay to Administrative Agent,
for the accounts of the parties specified therein, the fees provided for in the
Supplemental Fee Letter.
(b) Borrower shall, during the term of the Loans, pay to Administrative
Agent for the account of each Bank a commitment fee computed 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 or earlier termination of the Loan Commitments.
Section 2.08 Notes. The 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 "Note"; all such notes, as so amended,
modified, extended, severed, assigned, renewed, restated and substituted,
collectively, the "Notes"). Each Note shall mature, and all outstanding
principal and other sums thereunder shall be paid in full, on the Maturity Date.
Each Bank is hereby authorized by Borrower to endorse on the schedule
attached to the 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 Loan, which endorsement shall, in the absence of
manifest error, be conclusive as to the outstanding balance of the Loan made by
such Bank; provided, however, that the failure to make such notation with
respect to the Loan or each advance or payment shall not limit or otherwise
affect the obligations of Borrower under this Agreement or the Note held by such
Bank.
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
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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 Loans, provided that (1) any partial prepayment under this Section shall be
in integral multiples of $1,000,000; (2) a LIBOR Loan may be prepaid only on the
last day of the applicable Interest Period for such LIBOR Loan; and (3) each
prepayment under this Section shall include all interest accrued on the amount
of principal prepaid through the date of prepayment.
Section 2.10 Cancellation of Commitments. (a) At any time, Borrower
shall have the right, without premium or penalty, to terminate any unused Loan
Commitments, in whole or in part, from time to time, provided that: (1) Borrower
shall give notice of each such termination to Administrative Agent no later then
10:00 a.m. (New York time) on the date which is fifteen (15) Banking Days prior
to the effectiveness of such termination; (2) the Loan Commitments of each of
the Banks must be terminated ratably and simultaneously with those of the other
Banks; and (3) each partial termination of the Loan Commitments as a whole (and
corresponding reduction of the Total Loan Commitment) shall be in an integral
multiple of $1,000,000.
(b) The Loan Commitments, to the extent terminated, may not be
reinstated.
Section 2.11 Method of Payment. Borrower shall make each payment under
this Agreement and under the Notes not later than 11:00 A.M. (New York time) on
the date when due in Dollars to Administrative Agent at Administrative Agent's
Office in immediately available funds. Administrative Agent will thereafter, on
the day of its receipt of each such payment, cause to be distributed to each
Bank (1) such Bank's ratable 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 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
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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 Loan in
accordance with its Pro Rata Share.
Section 2.13 Minimum Amounts. With respect to the Loans as a whole,
each Election and each Conversion shall be in an amount at least equal to
$1,000,000 and in integral multiples of $100,000.
Section 2.14 Certain Notices Regarding Elections, Conversions and
Continuations of Loans. Notices by Borrower to Administrative Agent of
Elections, Conversions and Continuations of LIBOR Loans shall be irrevocable and
shall be effective only if received by Administrative Agent not later than 10:00
a.m. (New York time) on the number of Banking Days prior to the date of the
relevant Election, Conversion or Continuation specified below:
Number of Banking
Notice Days Prior
------ ----------
Conversions into Base Rate two (2)
Loans
Elections of, Conversions into or Continuations three (3)
as, LIBOR Loans
Promptly following its receipt of any such notice, Administrative Agent shall so
advise the Banks. 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 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
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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 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 amount of proceeds of the Loans available to be
advanced pursuant to Section 2.01 (including taking into account the Mark
Apartments Holdback), it being understood that the amount of each Letter of
Credit issued and outstanding shall (1) effect a reduction, by an equal amount,
of proceeds available to Borrower under the Loans as a whole (such reduction to
be allocated to each Bank's 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 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
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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 Loan, in an amount equal to its Pro Rata
Share of such drawing, which advance shall be made to Administrative Agent to
reimburse Administrative Agent, for its own account, for such drawing. Each of
the Banks further acknowledges that its obligation to fund its Pro Rata Share of
drawings under Letters of Credit as aforesaid shall survive the Banks'
termination of this Agreement or enforcement of remedies hereunder or under the
other Loan Documents.
(h) Borrower agrees, upon the occurrence of an Event of Default and at
the written request of Administrative Agent, (1) to deposit with Administrative
Agent cash collateral in the amount of all the outstanding Letters of Credit,
which cash collateral shall be held by Administrative Agent as security for
Borrower's obligations in connection with the Letters of Credit and (2) to
execute and deliver to Administrative Agent such documents as Administrative
Agent reasonably requests to confirm and perfect the assignment of such cash
collateral to Administrative Agent.
Section 2.17 Special Provisions Regarding Advances in Connection with
Acquisitions. In the case of each advance relating to an Acquisition, the
Borrowing Base shall be recalculated, and 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 Borrowing Base and the Available 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
Available 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.
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In connection with each advance of Loan proceeds relating to an
Acquisition, the following pro-forma adjustments shall be made to the Borrowing
Base/Available 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);
(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 the LIBOR Interest Rate for an Interest Period of one (1) month, plus
1.55% per annum, 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 its obligation to
make or maintain a LIBOR 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 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:
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(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 (other than changes in the rate of general corporate,
franchise, branch profit, net income or other income tax imposed on
such Bank or its Applicable Lending Office by the jurisdiction in which
such Bank has its principal office or such Applicable Lending Office);
or
(2) (other than to the extent the LIBOR Reserve Requirement is
taken into account in determining the LIBOR Rate at the commencement of
the applicable Interest Period) imposes or modifies any reserve,
special deposit, deposit insurance or assessment, minimum capital,
capital ratio or similar requirements relating to any extensions of
credit or other assets of, or any deposits with or other liabilities
of, such Bank (including any LIBOR Loan or any deposits referred to in
the definition of "LIBOR Interest Rate" in Section 1.01), or any
commitment of such Bank (including such Bank's Loan Commitment
hereunder); or
(3) imposes any other condition affecting this Agreement or
the Notes (or any of such extensions of credit or liabilities).
Without limiting the effect of the provisions of the first
paragraph of this Section, in the event that, by reason of any Regulatory
Change, any Bank either (1) incurs Additional Costs based on or measured by the
excess above a specified level of the amount of a category of deposits of other
liabilities of such Bank which includes deposits by reference to which the LIBOR
Interest Rate is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Bank which includes loans based on
the LIBOR Interest Rate or (2) becomes subject to restrictions on the amount of
such a category of liabilities or assets which it may hold, then, if such Bank
so elects by notice to Borrower (with a copy to Administrative Agent), the
obligation of such Bank to permit Elections of, to 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
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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 as
provided in this Agreement; or
(2) a Bank reasonably determines (which determination shall be
conclusive) and promptly notifies Administrative Agent that the
relevant rates of interest referred to in the definition of "LIBOR
Interest Rate" in Section 1.01 upon the basis of which the rate of
interest for LIBOR Loans for such Interest Period is to be determined
do not adequately cover the cost to such Bank of making or maintaining
such LIBOR 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, either prepay the affected LIBOR Loans or Convert the affected LIBOR
Loans into Base Rate Loans in accordance with 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
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, 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.
Section 3.04 Treatment of Affected Loans. If the obligations of any
Bank 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 so affected being herein called an "Affected
Loan"), such Bank's Affected Loan shall be automatically Converted into a Base
Rate Loan on the last day of the then current Interest Period for the Affected
Loan (or, in the case of a 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, 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 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
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of the applicable Bank, upon the request of such Bank through Administrative
Agent which request includes a calculation of the amount(s) due, such amount or
amounts as shall be sufficient (in the reasonable opinion of such Bank) to
compensate it for any loss, cost or expense which such Bank reasonably
determines is attributable to:
(1) any payment, prepayment, Conversion or Continuation of a
LIBOR Loan made by such Bank on a date other than the last day of an
applicable Interest Period for such LIBOR Loan 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 which would otherwise be made hereunder on
the date specified in the relevant Election notice under Section 2.14
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 for the LIBOR Loan (or,
in the case of a failure to Convert, Continue or borrow, to the last day of the
applicable Interest Period for the LIBOR Loan which would have commenced on the
date specified therefor in the relevant notice) at the applicable rate of
interest for the LIBOR Loan provided for herein, over (2) the amount of interest
(as reasonably determined by such Bank) based upon the interest rate which such
Bank would have bid in the London interbank market for Dollar deposits, for
amounts comparable to such principal amount and maturities comparable to such
period. A determination of any Bank as to the amounts payable pursuant to this
Section shall be conclusive absent manifest error.
Section 3.06 Capital Adequacy. If any Bank shall have
determined that, after the date hereof, the adoption of any applicable law, rule
or regulation regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such Governmental Authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on capital of such Bank (or its Parent) as a consequence of such
Bank's obligations hereunder to a level below that which such Bank (or its
Parent) could have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, within
fifteen (15)
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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 its LIBOR 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 Section 3.01.
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 such assignment and
assumption, Borrower shall have paid to such Affected Bank all
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amounts properly demanded and unreimbursed under Section 3.01. 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 note shall be issued to
the Replacement Bank by Borrower, in exchange for the return of the Affected
Bank's Note. Such substitute note shall constitute a "Note" and the obligations
evidenced by such substitute note shall constitute "Obligations" for all
purposes of this Agreement and the other Loan Documents. In connection with
Borrower's execution of substitute notes as aforesaid, Borrower shall deliver to
Administrative Agent evidence, satisfactory to Administrative Agent, of all
requisite corporate action to authorize Borrower's execution and delivery of the
substitute notes and any related documents. If the Replacement Bank is not
incorporated under the laws of the United States of America or a state thereof,
it shall, prior to the first date on which interest or fees are payable
hereunder for its account, deliver to Borrower and Administrative Agent
certification as to exemption from deduction or withholding of any United States
federal income taxes in accordance with Section 10.13. Each Replacement Bank
shall be deemed to have made the representations contained in, and shall be
bound by the provisions of, Section 10.13.
Borrower, Administrative Agent and the Banks shall execute
such modifications to the Loan Documents as shall be reasonably required in
connection with and to effectuate the foregoing.
Section 3.08 Applicability. The provisions of this Article III
shall be applied to Borrower so as not to discriminate against Borrower
vis-a-vis similarly situated customers of the Banks.
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;
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(2) Notes. The Note in the amount of $150,000,000 for UBS,
duly executed by Borrower;
(3) Financials of Borrower. Audited Borrower's Consolidated
Financial Statements as of and for the year ended December 31, 1995;
(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
(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;
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(12) Supplemental Fee Letter. The Supplemental Fee Letter,
duly executed by Borrower;
(13) Mark Apartments. A complete project budget regarding the
construction of the Mark 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.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Administrative Agent and
each Bank as follows:
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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, 1995 financial statements
referred to in Section 5.13), only with exceptions which do not materially
detract from the value of such property or assets or the use thereof in
Borrower's and such Material Affiliate's business, and except to the extent that
any such properties and assets have been encumbered or disposed of since the
date of such financial statements without violating any of the covenants
contained in Article VII or elsewhere in this Agreement. Borrower and its
Material Affiliates enjoy peaceful and undisturbed possession of all leased
property
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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,
covenants or conditions contained in any agreement or instrument which is likely
to result in a Material Adverse Change.
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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 such amounts and covering such risks as
are usually carried by companies engaged in the same type of business and
similarly situated.
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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, assessments and governmental
charges imposed upon it or upon its property, except to the extent they are the
subject of a Good Faith Contest.
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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 Mark Apartments and of all
project work and budget compliance in respect thereof.
Section 6.06 Compliance With Environmental Laws. Comply in all
material respects with all applicable Environmental Laws and timely pay or cause
to be paid all costs and expenses incurred in connection with such compliance,
except to the extent there is a Good Faith Contest.
Section 6.07 Maintenance of Properties. Do all things
reasonably necessary to maintain, preserve, protect and keep its properties in
good repair, working order and condition except where the cost thereof is not in
Borrower's best interests and the failure to do so would not result in a
Material Adverse Change.
Section 6.08 Payment of Costs. Pay all costs and expenses
required for the satisfaction of the conditions of this Agreement.
Section 6.09 Reporting and Miscellaneous Document
Requirements. Furnish directly to each of the Banks:
(1) Annual Financial Statements. As soon as available and in
any event within ninety (90) days after the end of each Fiscal Year, Borrower's
Consolidated Financial Statements as of the end of and for such Fiscal Year, in
reasonable detail and stating in comparative form the respective figures for the
corresponding date and period in the prior Fiscal Year and audited by Borrower's
Accountants;
(2) Quarterly Financial Statements. As soon as available and
in any event within forty-five (45) days after the end of each calendar quarter
(other than the last quarter of the Fiscal Year), the unaudited Borrower's
Consolidated Financial Statements as of the end of and for such calendar
quarter, in reasonable detail and stating in comparative form the respective
figures for the corresponding date and period in the prior Fiscal Year;
(3) Certificate of No Default and Financial Compliance. Within
forty-five (45) days after the end of each calendar quarter, a certificate of
Borrower's chief financial officer or treasurer (a) stating that, to the best of
his or her knowledge, no Default or Event of Default has occurred and is
continuing, or if a Default or Event of Default has occurred and 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 Borrowing Base and the
Available Total Loan Commitment; (c) stating that the covenants contained in
Sections 7.02, 7.03 and
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7.04 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; (e) containing a schedule of the
calculation, prepared by property, of Combined EBITDA for Restricted Properties;
and (f) 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) Mark 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 Mark 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
Available Loan Commitment. If, as a result of a reduction in the Available Total
Loan Commitment, the outstanding principal amount under the Notes at any time
exceeds the Available 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.
Section 7.04 Encumbrance of Restricted Properties. At any
time, (1) effect a Disposition of, mortgage, hypothecate or otherwise encumber
to secure a Debt any of the Restricted Properties or (2) enter into a pledge or
agreement not to encumber any of the Restricted Properties.
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 $225,000,000.
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Section 8.02 Relationship of Total Outstanding Indebtedness to
Capitalization Value. At any time, Total Outstanding Indebtedness to exceed 50%
of Capitalization Value.
Section 8.03 Relationship of Combined EBITDA to Interest
Expense. For any calendar quarter, the ratio of (1) Combined EBITDA to (2)
Interest Expense (each for such calendar quarter and annualized, i.e.,
multiplied by four (4)), to be less than 2.50 to 1.00.
Section 8.04 Relationship of Combined EBITDA to Combined Debt
Service. For any calendar quarter, the ratio of (1) Combined EBITDA to (2)
Combined Debt Service (each for such quarter and annualized, i.e., multiplied by
four (4)), to be less than 2.00 to 1.00.
Section 8.05 Relationship of Combined EBITDA to Total
Outstanding Indebtedness. For any calendar quarter, the ratio of (1) Combined
EBITDA for such calendar quarter annualized (i.e., multiplied by four (4)) to
(2) Total Outstanding Indebtedness as of the end of such calendar quarter to be
less than 15%.
Section 8.06 Unsecured Debt Yield. For any calendar quarter,
Unsecured Debt Yield for such calendar quarter to be less than 12%.
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.
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
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(2) If any representation or warranty made by Borrower in this
Agreement or in any other Loan Document or which is contained in any
certificate, document, opinion, financial or other statement furnished at any
time under or in connection with a Loan Document shall prove to have been
incorrect in any material respect on or as of the date made; or
(3) If Borrower shall fail (a) to perform or observe any term,
covenant or agreement contained in Article VII or Article VIII; or (b) to
perform or observe any term, covenant or agreement contained in this Agreement
(other than obligations specifically referred to elsewhere in this Section 9.01)
or any Loan Document, or any other document executed by Borrower and delivered
to Administrative Agent or the Banks in connection with the transactions
contemplated hereby and such failure under this clause (b) shall remain
unremedied for thirty (30) consecutive calendar days after notice thereof (or
such shorter cure period as may be expressly prescribed in the applicable
document); provided, however, that if any such default under clause (b) above
cannot by its nature be cured within such thirty (30) day, or shorter, as the
case may be, grace period and so long as Borrower shall have commenced cure
within such thirty (30) day, or shorter, as the case may be, grace period and
shall, at all times thereafter, diligently prosecute the same to completion,
Borrower shall have an additional period, not to exceed sixty (60) days, to cure
such default; in no event, however, is the foregoing intended to effect an
extension of the Maturity Date; or
(4) If Borrower shall fail (a) to pay any Recourse Debt (other
than the payment obligations described in paragraph (1) of this Section) in any
amount, or any Debt (other than Recourse Debt) in an amount equal to or greater
than $10,000,000, in any such case when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) after the expiration of
any applicable grace period, or (b) to perform 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
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it, in which an adjudication or appointment is made or order for relief is
entered, or which petition, application or proceeding remains undismissed or
unstayed for a period of sixty (60) days or more; or (e) be the subject of any
proceeding under which all or a substantial part of its assets may be subject to
seizure, forfeiture or divestiture; or (f) by any act or omission indicate its
consent to, approval of or acquiescence in any such petition, application or
proceeding or order for relief or the appointment of a custodian, receiver or
trustee for all or any substantial part of its property; or (g) suffer any such
custodianship, receivership or trusteeship for all or any substantial part of
its property, to continue undischarged for a period of sixty (60) days or more;
or
(6) If one or more judgments, decrees or orders for the
payment of money in excess of $10,000,000 (excluding any such judgments, decrees
or orders which are fully covered by insurance) in the aggregate shall be
rendered against Borrower or any of its Material Affiliates, and any such
judgments, decrees or orders shall continue unsatisfied and in effect for a
period of thirty (30) consecutive days without being vacated, discharged,
satisfied or stayed or bonded pending appeal; or
(7) If any of the following events shall occur or exist with
respect to Borrower or any ERISA Affiliate: (a) any Prohibited Transaction
involving any Plan; (b) any Reportable Event with respect to any Plan; (c) the
filing under Section 4041 of ERISA of a notice of intent to terminate any Plan
or the termination of any Plan; (d) any event or circumstance which would
constitute grounds for the termination of, or for the appointment of a trustee
to administer, any Plan under Section 4042 of ERISA, or the institution by the
PBGC of proceedings for any such termination or appointment under Section 4042
of ERISA; or (e) complete or partial withdrawal under Section 4201 or 4204 of
ERISA from a Multiemployer Plan or the reorganization, insolvency, or
termination of any Multiemployer Plan; and in each case above, if such event or
conditions, if any, could in the reasonable opinion of any Bank subject Borrower
to any tax, penalty, or other liability to a Plan, Multiemployer Plan, the PBGC
or otherwise (or any combination thereof) which in the aggregate exceeds or is
likely to exceed $50,000; or
(8) If at any time Borrower is not a qualified real estate
investment trust under Sections 856 through 860 of the Code or is not a publicly
traded company listed on the New York Stock Exchange; or
(9) If at any time any portion of Borrower's assets constitute
plan assets for ERISA purposes (within the meaning of C.F.R. Section
2510.3-101); or
(10) If 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
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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.
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. Administrative Agent shall not be responsible to the Banks for
any recitals, statements, representations or warranties made by Borrower or any
officer, partner or official of Borrower or any other Person contained in this
Agreement or any other Loan Document, or in any certificate or other document or
instrument referred to or provided for in, or received by any of them under,
this Agreement or any other Loan Document, or for the value, legality, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or any other document or instrument referred to or
provided for herein or therein, for the perfection or priority of any Lien
securing the Obligations or for any failure by Borrower to perform any of its
obligations hereunder or thereunder. Administrative Agent may employ agents and
attorneys-in-fact and shall not be responsible, except as to money or securities
received by it or its authorized agents, for the negligence or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care. Neither
Administrative Agent nor any of its directors, officers, employees or agents
shall be liable or responsible for any action taken or omitted to be taken by it
or them hereunder or under any other Loan Document or in connection herewith or
therewith, except for its or their own gross negligence or willful misconduct.
Borrower shall pay any fee agreed to by Borrower and Administrative Agent with
respect to Administrative Agent's services hereunder.
Section 10.02 Reliance by Administrative Agent. Administrative
Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telegram or cable)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by
Administrative Agent. Administrative Agent may deem and treat each Bank as the
holder of the Loan made by it for all purposes hereof and shall not be required
to deal with any Person who has acquired a participation in any Loan or
participation from a Bank. As to any matters not expressly provided for by this
Agreement or any other Loan Document, Administrative
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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 for (1) any of the foregoing to the extent they arise from the gross
negligence or willful
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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
one of the Banks. The Required Banks or the retiring Administrative Agent, as
the case may
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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, each of the Co-Agents hereby agrees to maintain a Loan
Commitment in an amount no less than 16.67% of the Total Loan Commitment, as the
same may be decreased from time to time in accordance with the provisions
hereof, and further agrees to hold and not to participate or assign any of such
amount other than an assignment to a Federal Reserve Bank or to the Parent or a
majority-owned subsidiary of such Co-Agent.
Section 10.15 Pro Rata Treatment. Except to the extent
otherwise provided, (1) each advance of proceeds of the Loans shall be made by
the Banks; (2) each reduction of the amount of the Total Loan Commitment under
Section 2.10 shall be applied to the Loan Commitments of the Banks; and (3) each
payment of the commitment fee accruing under Section 2.07(b) and clause (i) of
Section 2.16(f) shall be made for the account of the Banks, ratably according to
the amounts of their respective Loan Commitments.
Section 10.16 Sharing of Payments Among Banks. If a Bank shall
obtain payment of any principal of or interest on any Loan made by it through
the exercise of any right of setoff, banker's lien, counterclaim, or by any
other means (including direct payment), and such payment results in such Bank
receiving a greater payment than it would have been entitled to had such payment
been paid directly to Administrative Agent for disbursement to the Banks, then
such Bank shall promptly purchase for cash from the other Banks participations
in the Loans made by the other Banks in such amounts, and make such other
adjustments from time to time as shall be equitable to the end that all the
Banks shall share ratably the benefit of such payment. To such end the Banks
shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such
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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 the fulfillment by Borrower of
all of the conditions precedent thereto,
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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 and other than reasonable legal and other costs, fees
and charges in connection with the addition of UBC and/or other lenders as Banks
pursuant to Section 12.05 having, in the aggregate, a Loan Commitment of
$50,000,000). 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 having a
Loan Commitment in an amount of $30,000,000 or more may at any time assign to
any bank or other institution with the acknowledgment of Administrative Agent
and the consent of Co- Agents and Borrower, which consent 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 Bank, provided that, in each case,
after giving effect to such assignment each Bank's and each Assignee's portion
of the Loan will be equal to or greater than $15,000,000. Upon execution and
delivery of such instrument and payment by such Assignee to the Bank of an
amount equal to the purchase price agreed between the Bank and such Assignee,
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 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 notes shall be issued to the assigning Bank and Assignee by Borrower,
in exchange for the return of the original Note. All such substitute notes shall
constitute "Notes" and the obligations evidenced by such substitute notes shall
constitute "Obligations" for all purposes of this Agreement and the other Loan
Documents. In connection with Borrower's execution of substitute notes as
aforesaid, Borrower shall deliver to Administrative Agent evidence, satisfactory
to Administrative Agent, of all requisite corporate action to authorize
Borrower's execution and delivery of the substitute notes and any related
documents. If the Assignee is not incorporated under the laws of the United
States of America or a state thereof, it shall, prior to the first date on which
interest or fees are payable hereunder for its account, deliver to Borrower and
Administrative Agent certification as to exemption from deduction or withholding
of any United States federal income taxes in
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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 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.
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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.
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
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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 LOAN.
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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/ Gilbert M. Meyer
-------------------------
Name: Gilbert M. Meyer
Title: President
Address for Notices:
4340 Stevens Creek Blvd.
Suite 275
San Jose, CA 95129
Attention: Gilbert M. Meyer, President and CEO
Telephone: (408) 556-1815
UNION BANK OF SWITZERLAND
(New York Branch)
(as Co-Agent, Bank and Administrative Agent)
By: /s/ Joseph Bassil
-------------------------
Name: Joseph Bassil
Title: Vice President
By: /s/ Albert Rabil, III
-------------------------
Name: Albert Rabil, III
Title: Vice President
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Address for Notices and Applicable Lending Office for
Base Rate Loan and LIBOR Loan:
Union Bank of Switzerland
299 Park Avenue
38th Floor
New York, New York 10171-0026
Attention: Xiomara Martez
Telephone: (212) 821-3872
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