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EXHIBIT 10.22
UNSECURED LOAN AGREEMENT
dated as of November 20, 1998
by and among
IRVINE APARTMENT COMMUNITIES, L.P.,
THE BANKS LISTED HEREIN,
▇▇▇▇▇ FARGO BANK, N.A.,
as Co-Arranger and Administrative Agent
and
U.S. BANK NATIONAL ASSOCIATION,
as Co-Arranger
===============================================================================
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TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS......................................................................1
SECTION 1.1. Definitions............................................................1
SECTION 1.2. Accounting Terms and Determinations...................................21
SECTION 1.3. Borrowings............................................................21
ARTICLE II. THE CREDITS....................................................................21
SECTION 2.1. Loans.................................................................21
SECTION 2.2. Funding of Loans......................................................22
SECTION 2.3. Notes.................................................................22
SECTION 2.4. Interest Rates........................................................22
SECTION 2.5. Fees..................................................................23
SECTION 2.6. Maturity Date.........................................................24
SECTION 2.7. First Option To Extend................................................24
SECTION 2.8. Second Option To Extend...............................................24
SECTION 2.9. Lockout; Optional Prepayments.........................................25
SECTION 2.10. General Provisions as to Payments....................................25
SECTION 2.11. Funding Losses.......................................................26
SECTION 2.12. Computation of Interest and Fees.....................................27
SECTION 2.13. Use of Proceeds......................................................27
SECTION 2.14. Method of Electing Interest Rates....................................27
ARTICLE III. CONDITIONS....................................................................28
SECTION 3.1. Closing...............................................................28
SECTION 3.2. Borrowings............................................................30
ARTICLE IV. REPRESENTATIONS AND WARRANTIES.................................................31
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SECTION 4.1. Existence and Power...................................................31
SECTION 4.2. Power and Authority...................................................31
SECTION 4.3. No Violation..........................................................31
SECTION 4.4. Financial Information.................................................32
SECTION 4.5. Litigation............................................................33
SECTION 4.6. Compliance with ERISA.................................................33
SECTION 4.7. Environmental Matters.................................................33
SECTION 4.8. Taxes.................................................................34
SECTION 4.9. Full Disclosure.......................................................34
SECTION 4.10. Solvency.............................................................34
SECTION 4.11. Use of Proceeds; Margin Regulations..................................34
SECTION 4.12. Governmental Approvals...............................................34
SECTION 4.13. Investment Company Act; Public Utility Holding Company Act...........35
SECTION 4.14. Principal Offices....................................................35
SECTION 4.15. REIT Status..........................................................35
SECTION 4.16. Patents, Trademarks, etc.............................................35
SECTION 4.17. Qualifying Unencumbered Properties...................................35
SECTION 4.18. No Default...........................................................36
SECTION 4.19. Licenses, etc........................................................36
SECTION 4.20. Compliance With Law..................................................36
SECTION 4.21. No Burdensome Restrictions...........................................36
SECTION 4.22. Brokers' Fees........................................................36
SECTION 4.23. Labor Matters........................................................36
SECTION 4.24. Insurance............................................................37
SECTION 4.25. Organizational Documents.............................................37
SECTION 4.26. Year 2000 Compliance.................................................37
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ARTICLE V. AFFIRMATIVE AND NEGATIVE COVENANTS..............................................37
SECTION 5.1. Financial Information.................................................37
SECTION 5.2. Other Information.....................................................39
SECTION 5.3. Payment of Obligations................................................41
SECTION 5.4. Maintenance of Property; Insurance; Leases............................41
SECTION 5.5. Conduct of Business and Maintenance of Existence......................41
SECTION 5.6. Compliance with Laws..................................................41
SECTION 5.7. Inspection of Property, Books and Records.............................42
SECTION 5.8. Existence.............................................................42
SECTION 5.9. Financial Covenants...................................................42
SECTION 5.10. Restriction on Fundamental Changes...................................43
SECTION 5.11. Changes in Business..................................................44
SECTION 5.12. Margin Stock.........................................................44
SECTION 5.13. Hedging Requirements.................................................44
SECTION 5.14. Guarantor Status.....................................................44
SECTION 5.15. Environmental Matters................................................45
SECTION 5.16. Cooperation..........................................................46
SECTION 5.17. Distributions........................................................46
ARTICLE VI. DEFAULTS.......................................................................46
SECTION 6.1. Events of Default.....................................................46
SECTION 6.2. Rights and Remedies...................................................49
SECTION 6.3. Notice of Default.....................................................50
SECTION 6.4. Distribution of Proceeds after Default................................50
ARTICLE VII. THE AGENTS....................................................................51
SECTION 7.1. Appointment and Authorization.........................................51
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SECTION 7.2. Agency and Affiliates.................................................51
SECTION 7.3. Action by Administrative Agent........................................51
SECTION 7.4. Consultation with Experts.............................................51
SECTION 7.5. Liability of Administrative Agent.....................................52
SECTION 7.6. Indemnification.......................................................52
SECTION 7.7. Credit Decision.......................................................52
SECTION 7.8. Successor Administrative Agent........................................53
SECTION 7.9. Consents and Approvals................................................53
ARTICLE VIII. CHANGE IN CIRCUMSTANCES......................................................54
SECTION 8.1. Basis for Determining Interest Rate Inadequate or Unfair..............54
SECTION 8.2. Illegality............................................................55
SECTION 8.3. Increased Cost and Reduced Return.....................................55
SECTION 8.4. Taxes.................................................................57
SECTION 8.5. Base Rate Loans Substituted for Affected LIBOR Loans..................59
ARTICLE IX. MISCELLANEOUS..................................................................60
SECTION 9.1. Notices...............................................................60
SECTION 9.2. No Waivers............................................................60
SECTION 9.3. Expenses; Indemnification.............................................60
SECTION 9.4. Sharing of Set-Offs...................................................62
SECTION 9.5. Amendments and Waivers................................................63
SECTION 9.6. Successors and Assigns................................................63
SECTION 9.7. Collateral............................................................65
SECTION 9.8. Governing Law; Submission to Jurisdiction.............................65
SECTION 9.9. Counterparts; Integration; Effectiveness..............................66
SECTION 9.10. WAIVER OF JURY TRIAL.................................................66
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SECTION 9.11. Survival.............................................................66
SECTION 9.12. Domicile of Loans....................................................67
SECTION 9.13. Limitation of Liability..............................................67
SECTION 9.14. Recourse Obligation..................................................67
SECTION 9.15. Bank's Failure to Fund...............................................67
SECTION 9.16. Dispute Resolution...................................................72
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Schedule 1 - Commitments
Schedule 4.6 - Borrower and Guarantor ERISA Plans
Schedule 4.17 - Initial Qualifying Unencumbered Properties
Schedule 5.14(c)(i) - Guarantor Investments
Schedule 5.14(c)(2) - Guarantor Property
Exhibit A - Form of Note (Section 2.3(a))
Exhibit B - Transfer Supplement (Section 9.6(c))
Exhibit C - Form of Notice of Interest Period Election (Section 2.14(a))
Exhibit D - Form of Compliance Certificate (Section 5.1(c))
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UNSECURED LOAN AGREEMENT
THIS UNSECURED LOAN AGREEMENT (this "Agreement") dated as of
November 20, 1998 is made by and among IRVINE APARTMENT COMMUNITIES, L.P., a
Delaware limited partnership (the "Borrower"), the BANKS listed on the signature
pages hereof, ▇▇▇▇▇ FARGO BANK, N.A., as Co-Arranger and Administrative Agent,
and U.S. BANK NATIONAL ASSOCIATION, as Co-Arranger.
ARTICLE I.
DEFINITIONS
SECTION 1.1. Definitions. The following terms, as used herein,
have the following meanings:
"Acquired Asset" means a Qualifying Unencumbered Property which
has been acquired by Borrower (directly or indirectly) after June 27, 1997.
"Acquired Stabilized Asset" means a Qualifying Unencumbered
Property which had an Occupancy Rate greater than or equal to 85% on the date
acquired by Borrower.
"Adjusted London Interbank Offered Rate" has the meaning set
forth in Section 2.4(a).
"Administrative Agent" shall mean ▇▇▇▇▇ Fargo Bank, N.A. in its
capacity as Administrative Agent hereunder, and its permitted successors in such
capacity in accordance with the terms of this Agreement.
"Administrative Questionnaire" means, with respect to each Bank,
an administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrower) duly
completed by such Bank.
"Aggregate Commitments" shall mean the aggregate of all of the
Commitments hereunder, for a total of $100,000,000 unless and until such time as
the Commitments are reduced pursuant hereto.
"Agreement" shall mean this Unsecured Loan Agreement as the same
may from time to time hereafter be modified, supplemented or amended.
"Applicable Interest Rate" means (i) with respect to any Fixed
Rate Indebtedness, the fixed interest rate applicable to such Fixed Rate
Indebtedness at the time in question, and (ii) with respect to any Floating Rate
Indebtedness, either (x) the rate at which the interest rate applicable to such
Floating Rate Indebtedness is actually capped (or fixed pursuant to an interest
rate hedging device), at the time of calculation, if
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Borrower has entered into an interest rate cap agreement or other interest rate
hedging device with respect thereto or (y) if Borrower has not entered into an
interest rate cap agreement or other interest rate hedging device with respect
to such Floating Rate Indebtedness, the greater of (A) the rate at which the
interest rate applicable to such Floating Rate Indebtedness could be fixed for
the remaining term of such Floating Rate Indebtedness, at the time of
calculation, by Borrower's entering into any unsecured interest rate hedging
device either not requiring an upfront payment or if requiring an upfront
payment, such upfront payment shall be amortized over the term of such device
and included in the calculation of the interest rate (or, if such rate is
incapable of being fixed by entering into an unsecured interest rate hedging
device at the time of calculation, a fixed rate equivalent reasonably determined
by Administrative Agent) or (B) the floating rate applicable to such Floating
Rate Indebtedness at the time in question.
"Applicable Lending Office" means, with respect to any Bank, (i)
in the case of a Base Rate Loan, its Domestic Lending Office, and (ii) in the
case of a LIBOR Loan, its LIBOR Lending Office.
"Applicable Margin" means, with respect to each Loan, the
respective percentages per annum determined, at any time, in accordance with the
table set forth below.
Applicable Margin
for Loans
Time Period (% per annum)
----------- -----------------
From the Closing Date until the
Original Maturity Date 1.50
From the Original Maturity Date until 1.50
the First Extended Maturity Date
From the First Extended Maturity Date until 1.525
the Second Extended Maturity Date
"Approved Financial Institutions" shall mean financial
institutions which have (i)(a) a minimum net worth of $500,000,000 or (b) total
assets of $10,000,000,000, and (ii) a minimum long term debt rating of (a) BBB+
or higher by S&P, and (b) Baa1 or higher by ▇▇▇▇▇'▇.
"Assignee" has the meaning set forth in Section 9.6(c).
"Bank" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 9.6(c), and their respective
successors and assigns.
"Bankruptcy Code" shall mean Title 11 of the United States Code,
entitled "Bankruptcy", as amended from time to time, and any successor statute
or statutes.
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"Base Rate" means, for any day, a rate per annum equal to the
greater of (i) the rate of interest most recently publicly announced by the
Administrative Agent in San Francisco, California from time to time as its rate
for domestic commercial loans for such day and (ii) the sum of 0.5% plus the
Federal Funds Rate for such day.
"Base Rate Loan" means a Loan made by a Bank which accrues
interest at an interest rate based on the Base Rate.
"Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Borrower" means Irvine Apartment Communities, L.P., a Delaware
limited partnership.
"Borrower Party" means the Borrower and any Subsidiary of the
Borrower. "Borrower Parties" shall mean each of the foregoing Persons
individually, and all of the foregoing Persons collectively.
"Borrower's Share" means Borrower's or Guarantor's share of the
liabilities of an Investment Affiliate based upon Borrower's or Guarantor's
percentage ownership of such Investment Affiliate, as the case may be.
"Borrowing" has the meaning set forth in Section 1.3.
"Capital Leases" as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"Cap Rate" means the Treasury Rate plus 2.8%.
"Capital Reserve" shall mean, for any period, $50.00 for each
Fiscal Quarter to occur during such period.
"Capital Stock" means, with respect to any Person, all (i)
shares, interests, participations or other equivalents (however designated) of
capital stock and other equity interests of such Person and (ii) rights (other
than debt securities convertible into capital stock or other equity interests),
warrants or options to acquire any such capital stock or other equity interests.
"Cash and Cash Equivalents" shall mean (i) cash, (ii) direct
obligations of the United States Government, including without limitation,
treasury bills, notes and bonds, (iii) interest bearing or discounted
obligations of Federal agencies and Government sponsored entities or pools of
such instruments offered by Approved Financial Institutions and dealers,
including without limitation, Federal Home Loan
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Mortgage Corporation participation sale certificates, Government National
Mortgage Association modified pass through certificates, Federal National
Mortgage Association bonds and notes, and Federal Farm Credit System securities,
(iv) time deposits, Domestic and Eurodollar certificates of deposit, bankers
acceptances, commercial paper rated at least A-1 by S&P and P-1 by ▇▇▇▇▇'▇
and/or guaranteed by an Aa rating by ▇▇▇▇▇'▇, a AA rating by S&P or better rated
credit, floating rate notes, other money market instruments and letters of
credit each issued by Approved Financial Institutions (and in the case of a
letter of credit, an Approved Financial Institution which is a bank) (provided
that the same shall cease to be a "Cash or Cash Equivalent" if at any time any
such bank shall cease to be an Approved Financial Institution), (v) obligations
of domestic corporations, including, without limitation, commercial paper,
bonds, debentures and loan participations, each of which is rated at least AA by
S&P and/or Aa2 by ▇▇▇▇▇'▇ and/or guaranteed by an Aa rating by ▇▇▇▇▇'▇, a AA
rating by S&P or better rated credit, (vi) obligations issued by states and
local governments or their agencies, rated at least MIG-1 by ▇▇▇▇▇'▇ and/or SP-1
by S&P and/or guaranteed by an irrevocable letter of credit of an Approved
Financial Institution, which is a bank (provided that the same shall cease to be
a "Cash or Cash Equivalent" if at any time any such financial institution shall
cease to be an Approved Financial Institution), (vii) repurchase agreements with
major financial institutions and primary government security dealers fully
secured by the U.S. Government or agency collateral equal to or exceeding the
principal amount on a daily basis and held in safekeeping, and (viii) real
estate loan pool participations, guaranteed by an AA rating given by S&P or Aa2
rating given by ▇▇▇▇▇'▇ or better rated credit.
"Certifying Officer" has the meaning set forth in Section 5.1(c).
"Closing Date" has the meaning set forth in Section 3.1.
"Co-Arranger" shall mean each of ▇▇▇▇▇ Fargo Bank, N.A. and U.S.
Bank National Association.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
and as it may be further amended from time to time, any successor statutes
thereto, and applicable U.S. Department of Treasury regulations issued pursuant
thereto in temporary or final form.
"Commitment" means, with respect to each Bank, the amount set
forth in Schedule 1 attached hereto and incorporated herein by this reference
(and, for each Bank which is an Assignee, the amount set forth in the Transfer
Supplement entered into pursuant to Section 9.6(c) as the Assignee's
Commitment), as such amount may be reduced from time to time in connection with
an assignment to an Assignee.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity which is consolidated with Borrower in accordance with GAAP.
"Consolidated Tangible Net Worth" means at any date the
consolidated partners' capital (determined on a book basis and without
duplication), less their
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consolidated Intangible Assets and loans to officers and directors of Borrower
or its Consolidated Subsidiaries, all determined as of such date. For purposes
of this definition "Intangible Assets" means the amount (to the extent reflected
in determining such consolidated partners' capital) of (i) unamortized deferred
charges and debt discount; (ii) all write-ups (other than write-ups resulting
from foreign currency translations and write-ups of assets of a going concern
business made within twelve months after the acquisition of such business)
subsequent to December 31, 1996 in the book value of any asset owned by the
Borrower or a Consolidated Subsidiary and (iii) goodwill, patents, trademarks,
service marks, trade names, anticipated future benefit of tax loss carry
forwards, copyrights, organization or developmental expenses and other
intangible assets.
"Contingent Obligation" means, as to any Person, without
duplication, any obligation, direct or indirect, contingent or otherwise, of
such Person (i) with respect to any Indebtedness or other obligation of another
Person, including any direct or indirect guarantee of such Indebtedness (other
than any endorsement for collection in the ordinary course of business) or any
other direct or indirect obligation, by agreement or otherwise, to purchase or
repurchase any such Indebtedness or obligation or any security therefor, or to
provide funds for the payment or discharge of any such Indebtedness or
obligation (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise), (ii) to provide funds to maintain the financial
condition of any other Person, (iii) otherwise to assure or hold harmless the
holders of Indebtedness or other obligations of another Person against loss in
respect thereof, or (iv) under Hedging Contracts other than Exempt Hedging
Contracts. The amount of any Contingent Obligation under clause (i) or (ii)
shall be the lesser of (a) the amount of such Indebtedness or obligation
guaranteed or otherwise supported thereby, or (b) the maximum amount so
guaranteed or supported. The amount of any obligation under a Hedging Contract
shall be determined in accordance with standard methods of calculating credit
exposure under similar arrangements as prescribed by the Administrative Agent
from time to time, taking into account potential movements in interest rates,
exchange rates or other relevant indices and the notional principal amount, term
and termination provisions of the arrangement. For the purposes of this
definition only, "Indebtedness" shall be deemed not to include subclause (c) of
the definition of "Indebtedness" set forth in this Agreement.
"Contractual Obligation," as applied to any Person, means any
provision of any Securities issued by that Person or any indenture, mortgage,
deed of trust, lease, contract, undertaking, document or instrument to which
that Person is a party or by which it or any of its properties is bound, or to
which it or any of its properties is subject (including without limitation any
restrictive covenant affecting such Person or any of its properties).
"Convertible Securities" means evidences of shares of stock,
limited or general partnership interests or other ownership interests, warrants,
options, or other rights or securities which are convertible into or
exchangeable for, with or without payment of additional consideration, shares of
common stock of Guarantor or partnership
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interests of Borrower, as the case may be, either immediately or upon the
arrival of a specified date or the happening of a specified event.
"Credit Rating" means the rating(s) assigned by the Rating
Agencies to Borrower's senior unsecured long term indebtedness.
"Debt Restructuring" means a restatement of, or material change
in, the amortization or other financial terms of any Indebtedness of Guarantor,
the Borrower or any Investment Affiliate.
"Debt Service" means, for any period, Interest Expense for such
period plus scheduled principal amortization (excluding any individual scheduled
principal payment which exceeds 25% of the original principal amount of an
issuance of Indebtedness) for such period on all Indebtedness of Guarantor
(calculated as provided in Section 1.2), on a consolidated basis, plus
Borrower's Share of scheduled principal amortization for such period on all
Indebtedness of Investment Affiliates for which there is no recourse to
Guarantor or Borrower (or any Property thereof), plus, without duplication,
Guarantor's and Borrower's actual or potential liability for principal
amortization for such period on all Indebtedness of Investment Affiliates that
is recourse to Guarantor or Borrower (or any Property thereof).
"Default" means any condition or event which with the giving of
notice or lapse of time or both would, unless cured or waived, become an Event
of Default.
"Default Rate" shall mean a rate per annum equal to the sum of
four percent (4%) plus the Base Rate.
"Domestic Business Day" means any day except a Saturday, Sunday
or other day on which commercial banks in San Francisco, California are
authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its office
located at its address in the United States set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its Domestic
Lending office) or such other office as such Bank may hereafter designate as its
Domestic Lending Office by notice to the Borrower and the Administrative Agent.
"EBITDA" means, for any period, (i) Net Income for such period,
plus (ii) depreciation and amortization expense and other non-cash items
deducted in the calculation of Net Income for such period, plus (iii) Interest
Expense deducted in the calculation of Net Income for such period, plus (iv)
Taxes deducted in the calculation of Net Income for such period, plus (v)
Borrower's Share of distributed earnings of Investment Affiliates for such
period, minus (vi) the gains (and plus the losses) from extraordinary items or
asset sales or write-ups or forgiveness of indebtedness included in the
calculation of Net Income, for such period, minus (vii) Borrower's Share of
accrued income and losses of Investment Affiliates for such period minus (viii)
earnings of
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Subsidiaries for such period distributed to third parties, all of the foregoing
without duplication.
"Effective Date" means the date this Agreement becomes effective
in accordance with Section 9.9.
"Environmental Affiliate" means any partnership, joint venture,
trust or corporation for which Borrower or Guarantor is liable contractually or
under applicable law for Environmental Claims against such entity.
"Environmental Approvals" means any permit, license, approval,
ruling, variance, exemption or other authorization required under applicable
Environmental Laws.
"Environmental Claim" means, with respect to any Person, any
notice, claim, demand or similar communication (written or oral) by any other
Person alleging potential liability of such Person for investigatory costs,
cleanup costs, governmental response costs, natural resources damage, property
damages, personal injuries, fines or penalties arising out of, based on or
resulting from (i) the presence, or release into the environment, of any
Materials of Environmental Concern at any location, whether or not owned by such
Person or (ii) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law.
"Environmental Laws" means any and all federal, state, and local
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, licenses,
agreements and other governmental restrictions relating to the environment, or
to emissions, discharges or releases of Materials of Environmental Concern into
the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Materials of Environmental Concern or the clean up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members
of a controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Code.
"Estimated Environmental Cost" shall have the meaning set forth
in Section 5.15 hereof.
"Exempt Hedging Contract" means a Hedging Contract existing on
June 27, 1997 relating to any tax-exempt bond financing of the Borrower (or
refinancing
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thereof) which financing is outstanding on June 27, 1997, together with any
replacement or successor Hedging Contract entered into by the Borrower with
respect to such Hedging Contract.
"Event of Default" has the meaning set forth in Section 6.1.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such day is not a
Domestic Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Domestic Business Day as so published on
the next succeeding Domestic Business Day, and (ii) if no such rate is so
published on such next succeeding Domestic Business Day, the Federal Funds Rate
for such day shall be the average rate quoted to the Administrative Agent on
such day on such transactions as determined by the Administrative Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System as constituted from time to time.
"FFO" means "Funds From Operations" computed in accordance with
standards promulgated by the National Association of Real Estate Investment
Trusts ("NAREIT") as of June 27, 1997, and is defined to mean, for any period,
Net Income before Borrower's Share of the Net Income or loss of any Investment
Affiliate, plus any and all cash distributions received by Borrower representing
Borrower's Share of the Net Income (plus Borrower's Share of depreciation and
amortization expenses of Investment Affiliates) of any Investment Affiliate,
plus depreciation and amortization expense for such period and excluding gains
(or losses) from Debt Restructurings and sales or other dispositions of Property
of the Borrower or any Investment Affiliate.
"First Extended Maturity Date" means May 19, 2000.
"First Option To Extend" means the Borrower's option, subject to
the terms and conditions of Section 2.7 hereof, to extend the term of the Loans
from the Original Maturity Date to the First Extended Maturity Date.
"Fiscal Quarter" means a fiscal quarter of a Fiscal Year.
"Fiscal Year" means the fiscal year of Borrower, Guarantor and
their Consolidated Subsidiaries which shall be the twelve (12) month period
ending on the last day of December in each year.
"Fitch" means Fitch Investors Service, or any successor thereto.
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"Fixed Charges" for any Fiscal Quarter period means the sum of
(i) Debt Service for such period, plus (ii) the greater of (a) the product of
the number of apartment units owned (directly or beneficially) by Borrower at
the beginning of the applicable period and the Capital Reserve for such period
or (b) the average quarterly amount of recurring capital expenditures of the
Borrower based upon the actual recurring capital expenditures of Borrower and
Consolidated Subsidiaries over the immediately preceding four calendar quarters,
plus (iii) Borrower's Share of the aggregate sum of the product of the number of
apartment units owned (directly or beneficially) by each Investment Affiliate at
the beginning of the applicable period and the Capital Reserve for such period,
plus (iv) dividends on preferred units payable by Borrower or on preferred stock
payable by Guarantor for such period.
"Fixed Rate Indebtedness" means all Indebtedness which accrues
interest at a fixed rate.
"Floating Rate Indebtedness" means all Indebtedness which is not
Fixed Rate Indebtedness and which is not a Contingent Obligation or an Unused
Commitment.
"FMV Cap Rate" means 8.0%.
"Funds Available for Distribution" means FFO, plus amortization
of deferred financing costs, plus amortization of non-real estate assets, less
capital expenditures for the preceding four Fiscal Quarters.
"GAAP" means generally accepted accounting principles recognized
as such in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of the date of determination.
"Gross Asset Value" means, with respect to any Person or
Property, (i) the product of four (4) and a fraction, the numerator of which is
EBITDA for such Fiscal Quarter (exclusive of EBITDA from any Property which has
been acquired or been disposed of by the Borrower in the Fiscal Quarter most
recently ended) and the denominator of which is the FMV Cap Rate, plus (ii) for
any Property which has been acquired by the Borrower in the Fiscal Quarter most
recently ended, the Net Price of the Property paid by Borrower for such
Property, plus (iii) in the case of any Person, the value of any Cash or Cash
Equivalents owned by such Person and not subject to any Lien, plus (iv) the
value of all construction in process (including, without limitation, the value
of the land owned by the Borrower or any Subsidiary upon which construction has
commenced, at the lower of cost or fair market value determined in accordance
with GAAP) plus (v) the value of all land owned by the Borrower or any
Subsidiary for which construction has not commenced, as of the end of the most
recently concluded Fiscal Quarter, calculated at the lower of cost or fair
market value (in each case determined in accordance with GAAP).
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"Guarantor" means Irvine Apartment Communities, Inc., a Maryland
corporation, and any successor thereto.
"Guaranty" means the General Continuing Repayment Guaranty, dated
as of the Closing Date, executed by Guarantor in favor of Administrative Agent
and the Banks.
"Guarantor 1997 Form 10-K" means Guarantor's annual report on
Form 10-K for 1997, as filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934.
"Hedging Contract" means, for any Person, any interest rate,
commodity, foreign exchange or other hedging agreement (including swaps,
collars, caps and forward contracts) between such Person and one or more
counterparties providing for the transfer or mitigation of fluctuations of
interest rates, exchange rates or other prices either generally or under
specific contingencies.
"Indebtedness" as applied to any Person (and without
duplication), means (a) all indebtedness, obligations or other liabilities of
such Person for borrowed money, (b) all indebtedness, obligations or other
liabilities of such Person evidenced by Securities or other similar instruments,
(c) all Contingent Obligations of such Person exclusive of all indebtedness,
obligations and other liabilities in respect of Hedging contracts purchased to
hedge Indebtedness, (d) all reimbursement obligations and other liabilities of
such Person with respect to letters of credit or banker's acceptances issued for
such Person's account or other similar instruments for which a contingent
liability exists, (e) all obligations of such Person to pay the deferred
purchase price of Property or services, (f) all obligations in respect of
Capital Leases (including ground leases) of such Person, (g) all indebtedness
obligations or other liabilities of such Person or others secured by a Lien on
any asset of such Person, whether or not such indebtedness, obligations or
liabilities are assumed by, or are a personal liability of such Person, (h) all
indebtedness, obligations or other liabilities (other than interest expense
liability) in respect of Interest Rate Contracts and foreign currency exchange
agreements (other than Interest Rate Contracts purchased to hedge Indebtedness),
(i) ERISA obligations currently due and payable, and (j) all trade payables for
construction in progress. As used herein, "Indebtedness" shall not include
assessment district or community facilities district indebtedness not shown on
the Borrower's balance sheet.
"Indemnitee" has the meaning set forth in Section 9.3(b).
"Initial Term" means the period commencing as of the Closing Date
and ending as of the Original Maturity Date
"Interest Expense" means, for any period, the sum (without
duplication) for such period of (i) total interest expense, whether paid or
accrued, of the Borrower and the Consolidated Subsidiaries, including without
limitation the portion of any obligations under any Capital Lease allocable to
interest expense, and the Borrower's Share of
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interest expenses in Unconsolidated Joint Ventures but excluding amortization or
write-off of debt discount and expense, (ii) capitalized interest, (iii) to the
extent not included in clauses (i) and (ii) the Borrower's pro rata share of
interest expense and other amounts of the type referred to in such clauses of
the Unconsolidated Joint Ventures, and (iv) interest incurred on any liability
or obligation that constitutes a contingent Obligation of Borrower or any
Consolidated Subsidiary, and in each case taking into account the benefit of any
Hedging Contract and the amortized cost therefor for the applicable period. For
purposes of clause (iii), Borrower's pro rata share of interest expense or other
amount of any Unconsolidated Joint Venture shall be deemed equal to the product
of (a) the interest expense or other relevant amount of such Unconsolidated
Joint Venture, multiplied by (b) the percentage of the total outstanding Capital
Stock of such Person held by Borrower or any Consolidated Subsidiary, expressed
as a decimal.
"Interest Period" means, with respect to each LIBOR Borrowing (or
relevant portion thereof) or continuation thereof, the period commencing on the
date of such Borrowing or continuation thereof, as applicable, as specified in
the applicable Notice of Interest Period Election and ending 1, 2, 3, or 6
months thereafter, as the Borrower may elect in the applicable Notice of
Interest Period Election; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a LIBOR Business Day shall be extended to the next
succeeding LIBOR Business Day unless such LIBOR Business Day
falls in another calendar month, in which case such Interest
Period shall end on the next preceding LIBOR Business Day;
(b) any Interest Period which begins on the last LIBOR
Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end
of such Interest Period) shall, subject to clause (c) below, end
on the last LIBOR Business Day of a calendar month; and
(c) no Interest Period shall extend beyond the Maturity
Date.
"Interest Rate Contracts" means, collectively, interest rate
swap, collar, cap or similar agreements providing interest rate protection.
"Interest Rate ▇▇▇▇▇▇" has the meaning set forth in Section 5.13.
"Investment" means, with respect to any Person, (i) any direct or
indirect purchase or other acquisition by that Person of stock or securities, or
any beneficial interest in stock or other securities, of any other Person, any
partnership interest (whether general or limited) in any other Person, or all or
any substantial part of the business or assets of any other Person, (ii) any
direct or indirect loan, advance or capital contribution by that Person to any
other Person, including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business. The amount of any Investment shall be
the
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original cost of such Investment plus the cost of all additions thereto, without
any adjustments for increases or decreases in value, or write-ups, write-downs
or write-offs with respect to such Investment.
"Investment Affiliate" means any Person in whom Guarantor or
Borrower holds an equity interest, directly or indirectly, whose financial
results are not consolidated under GAAP with the financial results of Guarantor
or Borrower on the consolidated financial statements of Guarantor and Borrower.
"Joint Venture" means a joint venture, partnership or similar
arrangement, whether in corporate, partnership or other legal form.
"LIBOR Borrowing" has the meaning set forth in Section 1.3.
"LIBOR Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"LIBOR Lending Office" means, as to each Bank, its office, branch
or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its LIBOR
Lending Office) or such other office, branch or affiliate of such Bank as it may
hereafter designate as its LIBOR Lending Office by notice to the Borrower and
the Administrative Agent.
"LIBOR Loan" means a Loan made by a Bank which accrues interest
at an interest rate based on the Adjusted London Interbank Offered Rate.
"LIBOR Reserve Percentage" has the meaning set forth in Section
2.4(a).
"Lien" means with respect to any Property, any mortgage, pledge,
negative pledge, charge, security interest or encumbrance of any kind, or any
other type of preferential arrangement, in each case that has the effect of
creating a security interest, in respect of such Property, including without
limitation, all assessment district and community facility district debt shown
on the balance sheet of the owner of such Property. For the purposes of this
Agreement, the Borrower or any Consolidated Subsidiary shall be deemed to own
subject to a Lien any Property which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such Property.
"Loan" means, with respect to any Bank, the principal sum in the
amount of such Bank's Commitment that such Bank agrees to lend and Borrower
agrees to borrow pursuant to Section 2.1 hereof, and "Loans" means,
collectively, the Loans made by all Banks.
"Loan Documents" means this Agreement, the Notes and the Guaranty.
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"London Interbank Offered Rate" or "LIBOR" has the meaning set
forth in Section 2.4(a).
"Margin Stock" shall have the meaning provided such term in
Regulation U and Regulation G of the Federal Reserve Board.
"Material Adverse Effect" means an effect resulting from any
circumstance or event or series of circumstances or events, of whatever nature
(but excluding general economic conditions), which does or could reasonably be
expected to, materially and adversely (i) effect the business, operations,
properties, assets or financial condition of the Borrower and its Consolidated
Subsidiaries taken as a whole, or (ii) impair the ability of the Borrower and
its Consolidated Subsidiaries, taken as a whole, to perform their respective
obligations under the Loan Documents.
"Materials of Environmental Concern" means any chemical substance
(i) the presence of which requires investigation or remediation under any
Environmental Laws; or (ii) that is or becomes defined as a "hazardous waste" or
"hazardous substance" under any Environmental Laws, including the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601
et seq.) or the Resource Conservation and Recovery Act (42 U.S.C. Section 6901
et seq.); or (iii) that is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic, or otherwise hazardous and is or becomes
regulated by any governmental authority; or (iv) the presence of which on any
Real Property Asset causes a nuisance upon the Real Property Asset or to
adjacent properties or poses a hazard to any Real Property Asset or to the
health or safety of Persons on or about any Real Property Asset; or (v) without
limitation, which contains gasoline, diesel fuel or other petroleum
hydrocarbons; or (vi) without limitation which contains polychlorinated
biphenyls (PCBs) or asbestos.
"Maturity Date" shall mean the date when all of the Obligations
hereunder shall be due and payable which shall be: (i) the Original Maturity
Date, unless accelerated pursuant to the terms hereof or extended in accordance
with the terms of Section 2.7 hereof, (ii) the First Extended Maturity Date, if
extended in accordance with the terms of Section 2.7 hereof, unless accelerated
pursuant to the terms hereof or extended in accordance with the terms of Section
2.8 hereof, or (iii) the Second Extended Maturity Date, if extended in
accordance with the terms of Section 2.8 hereof, unless accelerated pursuant to
the terms hereof.
"▇▇▇▇▇'▇" means ▇▇▇▇▇'▇ Investors Services, Inc. or any successor
thereto.
"Multiemployer Plan" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any
member of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions,
including for these purposes any Person which ceased to be a member of the ERISA
Group during such five year period.
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"Multiple Employer Plan" means a Plan to which Section 413(c) of
the Code applies.
"Net Income" means, for any period, the net earnings (or loss)
after Taxes of the Borrower, on a consolidated basis for such period, calculated
in conformity with GAAP.
"Net Offering Proceeds" means all cash or other assets received
by Guarantor or Borrower as a result of the sale or issuance of common shares of
beneficial interest, preferred shares of beneficial interest, partnership
interests, limited liability company interests, Convertible Securities or other
ownership or equity interests in Guarantor or Borrower less customary costs and
discounts of issuance paid by Guarantor or Borrower, as the case may be.
"Net Operating Income" means, for any period with respect to any
Property owned (directly or beneficially) by Borrower, the net operating income
of such Property for such period (i) determined in accordance with GAAP, (ii)
determined in a manner which is consistent with the past practices of Guarantor
and Borrower, and (iii) inclusive of an allocation of reasonable management fees
and administrative costs to each Property, consistent with the past practices of
Guarantor and Borrower, except that, for purposes of determining Net Operating
Income, income shall not (a) include any items reasonably deemed by
Administrative Agent to be of a non-recurring nature or (b) be reduced by
depreciation or amortization.
"Net Price" means, with respect to the purchase and sale of any
Property, without duplication, (i) Cash and Cash Equivalents paid as
consideration for such purchase or sale (after adjusting for the proration of
taxes, assessments, utility and security deposits and other items prorated or
adjusted) plus (ii) the principal amount of any note received or other deferred
payment to be made in connection with such purchase or sale (except as described
in clause (iv) below), plus (iii) the value of any other considerations
delivered in connection with such purchase or sale (including, without
limitation, shares of beneficial interest in Guarantor) (as reasonably
determined by Administrative Agent), minus (only in the case of a sale) (iv)
until actually received, the value of any consideration deposited into escrow or
subject to disbursement or claim upon the occurrence of any event, minus (only
in the case of a sale), (v) the value of any consideration required to be paid
to any Person other than the Borrower and its Subsidiaries owning a beneficial
interest in such Property, minus (vi) reasonable costs of sale and taxes paid or
payable in connection with such purchase or sale.
"Net Present Value" shall mean, as to a specified or
ascertainable dollar amount, the present value, as of the date of calculation of
any such amount using a discount rate equal to the Base Rate in effect as of the
date of such calculation.
"Non-Recourse Indebtedness" means Indebtedness with respect to
which recourse is limited to (i) specific assets related to a particular
Property or group of Properties encumbered by a Lien securing such Indebtedness
or (ii) any Subsidiary
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(provided that if a Subsidiary is a partnership, there is no recourse to
Borrower or Guarantor as a general partner of such partnership); provided,
however, that personal recourse of Borrower or Guarantor for any such
Indebtedness for fraud, misrepresentation, misapplication of cash, waste,
environmental claims and liabilities and other circumstances customarily
excluded by institutional lenders from exculpation provisions and/or included in
separate indemnification agreements in non-recourse financing of real estate
shall not, by itself, prevent such Indebtedness from being characterized as
Non-Recourse Indebtedness.
"Notes" means promissory notes of the Borrower, substantially in
the form of Exhibit A hereto, evidencing the obligation of the Borrower to repay
the Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Interest Period Election" has the meaning set forth in
Section 2.14.
"Obligations" means all obligations, liabilities, indemnity
obligations and Indebtedness of every nature of the Borrower, from time to time
owing to Administrative Agent or any Bank under or in connection with this
Agreement or any other Loan Document.
"Occupancy Rate" with respect to any Real Property Asset, shall
mean the ratio of (a) apartment units in such Real Property Asset which are
physically occupied by tenants paying rent pursuant to a lease to (b) the number
of apartment units in such Real Property Asset, expressed as a percentage.
"Original Maturity Date" means November 19, 1999.
"Other Indebtedness" means all Indebtedness other than the
Obligations.
"Parent" means, with respect to any Bank, any Person controlling
such Bank.
"Participant" has the meaning set forth in Section 9.6(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Liens" means:
a. liens for Taxes, assessments or other governmental charges not
yet due and payable or which are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted in
accordance with the terms hereof;
b. statutory liens of carriers, warehousemen, mechanics,
materialmen and other similar liens imposed by law, which are incurred
in the ordinary course
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of business for sums not more than sixty (60) days delinquent or which
are being contested in good faith in accordance with the terms hereof;
c. deposits made in the ordinary course of business to secure
liabilities to insurance carriers;
d. liens for purchase money obligations for equipment; provided
that (i) the Indebtedness secured by any such Lien does not exceed the
purchase price of such equipment, and (ii) any such Lien encumbers only
the asset so purchased and the proceeds upon sale, disposition, loss or
destruction thereof;
e. easements, rights-of-way, zoning restrictions, other similar
charges or encumbrances and all other items listed on Schedule B to
Borrower's owner's title insurance policies, except in connection with
any Indebtedness, for any of Borrower's Real Property Assets, so long as
the foregoing do not interfere in any material respect with the use or
ordinary conduct of the business of Borrower and do not diminish in any
material respect the value of the Property to which it is attached or
for which it is listed;
f. liens and judgments which have been or will be bonded or
released of record within thirty (30) days after the date such Lien or
judgment is entered or filed against Guarantor, Borrower, or any
Subsidiary;
g. liens on Property of the Borrower or its Subsidiaries (other
than Qualifying Unencumbered Property) securing Indebtedness which may
be incurred or remain outstanding without resulting in an Event of
Default hereunder; and
h. assessment or community facilities district indebtedness, in
each case not then in default, building restrictions, zoning laws and
the like, and residential leases entered into in the ordinary course of
business.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other
than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Code and either (i) is
maintained, or contributed to, by any member of the ERISA Group for employees of
any member of the ERISA Group or (ii) has at any time within the preceding five
years been maintained, or contributed to, by any Person which was at such time a
member of the ERISA Group for employees of any Person which was at such time a
member of the ERISA Group.
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"Property" means, with respect to any Person, any real or
personal property, building, facility, structure, equipment or unit, or other
asset owned by such Person.
"Qualifying Unencumbered Property" means, as of the Closing Date,
the Real Property Assets set forth on Schedule 4.17 hereto (the "Initial
Qualifying Unencumbered Properties") and thereafter any other Real Property
Assets (without duplication) as designated by Borrower from time to time;
provided, however that each such Real Property Asset, including the Initial
Qualifying Unencumbered Property, must: (v) be a Real Property Asset upon which
an apartment project and related improvements has been, or is being,
constructed; (w) be wholly-owned (directly or beneficially) by Borrower; (x) not
be subject (nor may any equity interests in such Property be subject) to a Lien
(other than Permitted Liens) which secures Indebtedness of any Person; (y) not
be subject (nor may any equity interests in such Property be subject) to any
covenant, condition, or other restriction which prohibits the creation or
assumption of any Lien upon such Real Property Asset; and (z) to the best
knowledge of Borrower, not have Materials of Environmental Concern located on,
under or above such Real Property Asset, which are reasonably expected, pursuant
to Section 5.15, to involve an expenditure of Significant Environmental Cost.
The Borrower may designate, in its sole discretion and at any time, the Real
Property Assets which satisfy the requirements set forth herein and are thus
Qualifying Unencumbered Properties. If, at any time, a Real Property Asset does
not satisfy the requirements of subclauses (v) through (z) above, then it shall
not be a Qualifying Unencumbered Property.
"Rating Agencies" means, collectively, S&P, ▇▇▇▇▇'▇ and Fitch;
other nationally recognized rating agencies shall be "Rating Agencies" following
approval thereof by the Administrative Agent.
"Real Property Asset(s)" means as of any time, the real property
asset(s) owned directly or indirectly by the Borrower and the Consolidated
Subsidiaries at such time.
"Recourse Debt" shall mean Indebtedness that is not Non-Recourse
Indebtedness.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having at least
sixty-six and two thirds percent (66 2/3%) of the Aggregate Commitments, but in
no event less than two (2) Banks.
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any Capital Stock of any
Borrower Party now or hereafter outstanding, except (a) a dividend or other
distribution payable solely in shares or equivalents of the same class of
Capital Stock and (b) the issuance of equity interests
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upon the exercise of outstanding warrants, options or other rights, or (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Capital Stock of any Borrower
Party now or hereafter outstanding.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor thereto.
"Second Extended Maturity Date" means November 17, 2000.
"Secured Debt" means Indebtedness, the payment of which is
secured by a Lien on any Property owned or leased by Guarantor, Borrower, or any
Subsidiary.
"Securities" means any stock, partnership interests, shares,
shares of beneficial interest, voting trust certificates, bonds, debentures,
notes or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities," or any certificates of interest, shares, or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire any of the foregoing, but shall not
include any evidence of the obligations.
"Significant Environmental Costs" means, as to any Real Property
Asset, Estimated Environmental Costs determined pursuant to Section 5.15 hereof,
to exceed one and one-half percent (1.5%) of (i) the Gross Asset Value of such
Real Property Asset in the case of a Real Property Asset that has been fully
constructed, or (ii) the sum of land cost (at the lower of cost or fair market
value) plus Borrower's estimated construction cost in the case of any other Real
Property Asset.
"Stabilized Asset" means any Qualifying Unencumbered Property
which, while owned by Borrower achieved (i) an average Occupancy Rate greater
than or equal to 85% during a calendar month and (ii) an Occupancy Rate of at
least 85% on the last day of such month. As used herein, "Stabilized Asset"
means any Qualifying Unencumbered Property which, while owned by Borrower, at
one time satisfied the foregoing requirements, regardless of whether such
Property subsequently fails to maintain such Occupancy Rates.
"Solvent" means, with respect to any Person, that the fair
saleable value of such Person's assets exceeds the Indebtedness of such Person.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by the Borrower.
"Taxes" means all federal, state, local and foreign income and
gross receipts taxes.
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"Termination Event" shall mean (i) a "reportable event", as such
term is described in Section 4043 of ERISA (other than a "reportable event" not
subject to the provision for 30-day notice to the PBGC), or an event described
in Section 4062(e) of ERISA, (ii) the withdrawal by any member of the ERISA
Group from a Multiple Employer Plan during a plan year in which it is a
"substantial employer" (as defined in Section 4001(a)(2) of ERISA), or the
incurrence of liability by any member of the ERISA Group under Section 4064 of
ERISA upon the termination of a Multiple Employer Plan, (iii) the filing of a
notice of intent to terminate any Plan under Section 4041 of ERISA, other than
in a standard termination within the meaning of Section 4041 of ERISA, or the
treatment of a Plan amendment as a distress termination under Section 4041 of
ERISA, (iv) the institution by the PBGC of proceedings to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or cause a trustee to be appointed to administer, any Plan or (v) any other
event or condition that might reasonably constitute grounds for the termination
of, or the appointment of a trustee to administer, any Plan or the imposition of
any liability or encumbrance or Lien on the Real Property Assets or any member
of the ERISA Group under ERISA.
"Total Liabilities" means, as of the date of determination and
without duplication, all Indebtedness of Guarantor (calculated as provided in
Section 1.2), on a consolidated basis, plus Borrower's Share of all Indebtedness
of Investment Affiliates for which there is no recourse to Guarantor or Borrower
(or any Property thereof) plus the actual or potential liability of Guarantor,
Borrower or any Subsidiary for any Indebtedness of Investment Affiliates that is
recourse to Guarantor or Borrower (or Property thereof) plus accounts payable
incurred in the ordinary course of business, plus all other items which, in
accordance with GAAP, would be included as liabilities on the liability side of
the balance sheet of such Person.
"Treasury Rate" means, as of any date, a rate equal to the annual
yield to maturity on the U.S. Treasury Constant Maturity Series with a ten year
maturity, as such yield is reported in Federal Reserve Statistical Release H.15
-- Selected Interest Rates, published most recently prior to the date the
applicable Treasury Rate is being determined. Such yield shall be determined by
straight line linear interpolation between the yields reported in Release H.15,
if necessary. In the event Release H.15 is no longer published, the
Administrative Agent shall select, in its reasonable discretion, an alternate
basis for the determination of Treasury yield for U.S. Treasury Constant
Maturity Series with ten year maturities.
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"Unconsolidated Joint Venture" means (i) any Joint Venture of
Borrower or any Consolidated Subsidiary in which Borrower or such Consolidated
Subsidiary holds any Capital Stock but which would not be combined with Borrower
or such Consolidated Subsidiary in the consolidated financial statements of
Borrower in accordance with GAAP, and (ii) any Investment of Borrower or any
Consolidated Subsidiary in any Person that is not a Joint Venture.
"Unencumbered Asset Pool Value" means, without duplication, the
sum of the following with respect to Qualifying Unencumbered Properties:
(i) the Net Price of any Acquired Asset that was acquired
(directly or indirectly) by the Borrower during the most recent Fiscal Quarter;
plus
(ii) the aggregate Unencumbered Net Operating Income for the
three (3) calendar months most recently ended multiplied by four (4) and divided
by the FMV Cap Rate with respect to (v) any Acquired Stabilized Asset that was
acquired (directly or indirectly) by the Borrower during one of the four (4)
consecutive Fiscal Quarters most recently ended (other than the most recent
Fiscal Quarter), (w) any Acquired Asset which was not an Acquired Stabilized
Asset and which has not become a Stabilized Asset during one of the four (4)
consecutive Fiscal Quarters most recently ended, (x) any Acquired Asset which
was not an Acquired Stabilized Asset but which has become a Stabilized Asset
during one of the four (4) consecutive Fiscal Quarters most recently ended, (y)
any Qualifying Unencumbered Property which became a Stabilized Asset during the
four (4) consecutive Fiscal Quarters most recently ended, and (z) any Qualifying
Unencumbered Property which is not a Stabilized Asset (provided, however, that
the Unencumbered Asset Pool Value attributable to the Qualifying Unencumbered
Properties included in subclauses (w) and (z) above, together with Acquired
Assets in (i) above which were not Acquired Stabilized Assets, may not exceed
twenty-five percent (25%) of the aggregate Unencumbered Asset Pool Value); and
(iii) the aggregate Unencumbered Net Operating Income for the
four (4) consecutive Fiscal Quarters most recently ended divided by the FMV Cap
Rate with respect to (x) any Acquired Stabilized Asset which has been owned
(directly or beneficially) by the Borrower for more than four (4) consecutive
Fiscal Quarters and which is a Qualifying Unencumbered Property, and (y) any
Qualifying Unencumbered Property which became a Stabilized Asset prior to the
beginning of the four (4) consecutive Fiscal Quarters most recently ended and
which has been owned (directly or indirectly) by the Borrower for more than four
(4) consecutive Fiscal Quarters. Notwithstanding the foregoing, in the event
that Borrower or Administrative Agent has determined that there is a Significant
Environmental Cost with respect to any Real Property Asset referred to in this
definition (and only for so long as Borrower or Administrative Agent has made
such determination), then the value attributed to such asset shall be reduced,
but not below zero, by the amount of such Significant Environmental Cost.
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"Unencumbered Net Operating Income" means for any period for all
Qualifying Unencumbered Properties owned (directly or beneficially) by the
Borrower during the applicable period, Net Operating Income from each such
Qualifying Unencumbered Property.
"United States" means the United States of America, including the
fifty states and the District of Columbia.
"Unsecured Debt" means Indebtedness of Borrower which is not
Secured Debt, including without limitation the aggregate amount of all Loans
outstanding hereunder.
"Unsecured Interest Expense" means Interest Expense other than
Interest Expense payable in respect of Secured Debt.
"Unused Commitments" shall mean an amount equal to all unadvanced
funds (other than unadvanced funds in connection with any construction loan)
which any third party is obligated to advance to Borrower or another Person or
otherwise pursuant to any loan document, written instrument or otherwise.
"▇▇▇▇▇ Fargo" means ▇▇▇▇▇ Fargo Bank, N.A., in its individual
capacity.
SECTION 1.2. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent (except for changes concurred
in by Ernst & Young LLP) with the most recent audited consolidated financial
statements of the Borrower and its Consolidated Subsidiaries delivered to the
Administrative Agent; provided that for purposes of references to the financial
results and information of "Guarantor, on a consolidated basis," Guarantor shall
be deemed to own one hundred percent (100%) of the partnership interests in
Borrower; and provided further that, if the Borrower notifies the Administrative
Agent that the Borrower wishes to amend any covenant in Article V to eliminate
the effect of any change in GAAP on the operation of such covenant (or if the
Administrative Agent notifies the Borrower that the Required Banks wish to amend
Article V for such purpose), then the Borrower's compliance with such covenant
shall be determined on the basis of GAAP in effect immediately before the
relevant change in GAAP became effective, until either such notice is withdrawn
or such covenant is amended in a manner reasonably satisfactory to the Borrower
and the Required Banks.
SECTION 1.3. Borrowings. The term "Borrowing" denotes the
aggregation of Loans of one or more Banks made to the Borrower pursuant to
Article 2 on the same date. In the event that the First Option To Extend and/or
the Second Option To Extend are exercised in accordance with the terms of
Sections 2.7 and/or 2.8 hereof, respectively, the continuation of the Loans into
the applicable extension term shall be deemed to constitute a new Borrowing as
of the first day of the Interest Period applicable
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to such extension term (notwithstanding the fact that no new Loans are actually
being funded). The term "LIBOR Borrowing" shall mean a Borrowing comprised of
LIBOR Loans. The term "Base Rate Borrowing" shall mean a Borrowing comprised of
Base Rate Loans.
ARTICLE II.
THE CREDITS
SECTION 2.1. Loans. By and subject to the terms and conditions
set forth in this Agreement, each Bank severally agrees to lend to the Borrower
and Borrower agrees to borrow from each Bank on the Closing Date an amount equal
to such Bank's Commitment. Notwithstanding anything to the contrary herein, no
Bank, subsequent to funding its Loan in the amount of its Commitment, shall have
any further commitment or obligation to fund any Loans under this Agreement and
in no event shall any Bank be obligated to lend an amount exceeding such Bank's
Commitment.
SECTION 2.2. Funding of Loans.
(a) Not later than 12:00 Noon (San Francisco time) on the Closing
Date, each Bank shall make available an amount equal to its Commitment in
Federal funds immediately available in San Francisco, to the Administrative
Agent at its address referred to in Section 9.1.
(b) Unless the Administrative Agent shall have received notice
from a Bank prior to the Closing Date that such Bank will not make available to
the Administrative Agent such Bank's share of the initial Borrowing, the
Administrative Agent may assume that such Bank has made such share available to
the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) of this Section 2.2 and the Administrative Agent may, in reliance
upon such assumption, but shall not be obligated to, make available to the
Borrower on such date a corresponding amount on behalf of such Bank. If and to
the extent that such Bank shall not have so made such share available to the
Administrative Agent, such Bank and the Borrower severally agree to repay to the
Administrative Agent forthwith on demand, and in the case of the Borrower two
(2) Domestic Business Days after demand, such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Administrative Agent,
at (i) in the case of the Borrower, a rate per annum equal to the interest rate
applicable thereto pursuant to Section 2.4 and (ii) in the case of such Bank,
the Federal Funds Rate. If such Bank shall repay to the Administrative Agent
such corresponding amount, such amount so repaid shall constitute such Bank's
Loan included in such Borrowing for purposes of this Agreement.
SECTION 2.3. Notes.
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(a) The Loan of each Bank shall be evidenced by a single Note in
the form of Exhibit "A" attached hereto payable to the order of such Bank for
the account of its Applicable Lending Office and in the principal amount of such
Bank's Commitment.
(b) Upon receipt of each Bank's Note pursuant to Section 3.1(a)
hereof, the Administrative Agent shall forward such Note to such Bank.
(c) The Loans shall mature, and the principal amount thereof
shall be due and payable, on the Maturity Date.
SECTION 2.4. Interest Rates.
(a) Each Loan shall bear interest on the outstanding principal
amount thereof, for each day during the Interest Period applicable thereto, at a
rate per annum equal to the sum of the Applicable Margin for LIBOR Loans for
such day plus the Adjusted London Interbank Offered Rate applicable to such
Interest Period. Such interest shall be payable for each Interest Period on the
first day of each calendar month.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upward, if necessary, to the next higher 1/100 of 1%) by dividing (i) the London
Interbank Offered Rate applicable during such Interest Period by (ii) 1.00 minus
the LIBOR Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest
Period means the rate of interest (rounded upward, if necessary, to the next
highest 1/100 of 1%) quoted by the Administrative Agent as the London Inter-Bank
Offered Rate for deposits in U.S. Dollars at approximately 11:00 a.m. (London
time) two LIBOR Business Days before the first day of such Interest Period in an
amount approximately equal to the principal amount of the Loans or portion
thereof to which such Interest Period is to apply and for a period of time
comparable to such Interest Period.
"LIBOR Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) under
Regulation D, as Regulation D may be amended, modified or supplemented, for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
LIBOR Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the LIBOR Reserve
Percentage.
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(b) In the event that, and for so long as, any Event of Default
shall have occurred and be continuing, the outstanding principal amount of the
Loans, and, to the extent permitted by applicable law, overdue interest in
respect of all Loans, shall bear interest at the Default Rate.
(c) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give prompt
notice to the Borrower and the Banks of each rate of interest so determined, and
its determination thereof shall be conclusive in the absence of demonstrable
error.
SECTION 2.5. Fees.
(a) Up-Front Fee. On or before the Closing Date, the Borrower
shall pay to the Administrative Agent for the account of the Banks ratably in
proportion to their respective Commitments an Up-Front Fee (the "Up-Front Fee")
in an amount equal to One Hundred Fifty Thousand Dollars ($150,000.00).
(b) Fees Non-Refundable. All fees set forth in this Section 2.5
shall be deemed to have been earned on the earlier of when accrued or when
payable hereunder and shall be non-refundable. The obligation of the Borrower to
pay such fees in accordance with provisions hereof shall be binding upon the
Borrower and shall inure to the benefit of the Administrative Agent and the
Banks regardless of whether any Loans are actually made.
SECTION 2.6. Maturity Date. The entire principal balance of the
Loans (together with accrued and unpaid interest thereon) and all other
Obligations hereunder shall be due and payable on the Maturity Date. All
payments due to the Administrative Agent under this Agreement, whether at the
Maturity Date or otherwise, shall be paid in immediately available funds.
SECTION 2.7. First Option To Extend.
The Borrower shall have the option to extend the term of the
Loans from the Maturity Date (for purposes of this Section, "Original Maturity
Date"), to the First Extended Maturity Date, upon satisfaction of each of the
following conditions precedent:
(a) The Borrower shall provide the Administrative Agent with
written notice of the Borrower's request to exercise the First Option to Extend
not more than ninety (90) days but not less than thirty (30) days prior to the
Original Maturity Date;
(b) As of the date of the Borrower's delivery of notice of
request to exercise the First Option to Extend, and as of the Original Maturity
Date, no Event of Default shall have occurred and be continuing, and the
Borrower shall so certify in writing; and
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(c) On or before the Original Maturity Date, the Borrower shall
pay to the Administrative Agent on behalf of the Banks an extension fee in the
amount of One Hundred Fifty Thousand Dollars ($150,000.00).
SECTION 2.8. Second Option To Extend.
The Borrower shall have the option to extend the term of the
Loans from the Maturity Date (for purposes of this Section, "First Extended
Maturity Date"), to the Second Extended Maturity Date, upon satisfaction of each
of the following conditions precedent:
(a) The Borrower shall provide the Administrative Agent with
written notice of the Borrower's request to exercise the Second Option to Extend
not more than ninety (90) days but not less than thirty (30) days prior to the
First Extended Maturity Date;
(b) As of the date of the Borrower's delivery of notice of
request to exercise the Second Option to Extend, and as of the First Extended
Maturity Date, no Event of Default shall have occurred and be continuing, and
the Borrower shall so certify in writing;
(c) On or before the First Extended Maturity Date, the Borrower
shall pay to the Administrative Agent on behalf of the Banks an extension fee in
the amount of One Hundred Fifty Thousand Dollars ($150,000.00); and
(d) The Borrower shall have previously exercised the First Option
to Extend in accordance with the terms of Section 2.7 hereof.
SECTION 2.9. Lockout; Optional Prepayments.
(a) During the Initial Term, the Borrower shall have no right to
prepay all or any portion of the principal amount of any Loan (excluding payment
in full on the Maturity Date). After the Initial Term, if the Maturity Date is
extended as herein provided, the Borrower may prepay the Loans in accordance
with Sections 2.9(b) and (c) below.
(b) The Borrower may, upon at least one (1) Domestic Business
Day's notice to the Administrative Agent, prepay any Base Rate Loans, in whole
or in part at any time, or from time to time in part in amounts aggregating Five
Hundred Thousand Dollars ($500,000) or any larger multiple of One Hundred
Thousand Dollars ($100,000), by paying the principal amount thereof. Each such
optional prepayment shall be applied to prepay ratably the Loans of the several
Banks included in such Borrowing.
(c) Except as provided in Article VIII and except with respect to
any LIBOR Loan which has been converted to a Base Rate Loan pursuant to Sections
8.1, 8.2 or 8.5 hereof, the Borrower may not prepay all or any portion of the
principal amount of
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any LIBOR Loan prior to the end of the Interest Period applicable thereto unless
the Borrower shall also pay any applicable expenses pursuant to Section 2.11.
The Borrower shall provide at least three (3) LIBOR Business Days' notice to the
Administrative Agent prior to any such optional prepayment. Each such optional
prepayment shall be in the amounts set forth in Section 2.9(b) above, except
that any LIBOR Loan which has been converted to a Base Rate Loan pursuant to
Sections 8.1, 8.2 or 8.5 hereof may be prepaid without ratable payment of other
Loans which have not been so converted.
(d) In no event shall any amounts prepaid be reborrowed.
SECTION 2.10. General Provisions as to Payments.
(a) The Borrower shall make each payment of interest and
principal on the Loans and of fees hereunder, not later than 10:00 A.M. (San
Francisco time) on the date when due, in Federal or other funds immediately
available in San Francisco, to the Administrative Agent at its address referred
to in Section 9.1. The Administrative Agent will promptly (and in any event
within one (1) Domestic Business Day after receipt thereof) distribute to each
Bank its ratable share of each such payment received by the Administrative Agent
for the account of the Banks. If and to the extent that the Administrative Agent
shall receive any such payment for the account of the Banks on or before 10:00
A.M. (San Francisco time) on any Domestic Business Day, and Administrative Agent
shall not have distributed to any Bank its applicable share of such payment on
such Domestic Business Day, Administrative Agent shall distribute such amount to
such Bank together with interest thereon, for each day from the date such amount
should have been distributed to such Bank until the date Administrative Agent
distributes such amount to such Bank, at the Federal Funds Rate. Whenever any
payment of principal of, or interest on the Base Rate Loans or of fees shall be
due on a day which is not a Domestic Business Day, the date for payment thereof
shall be extended to the next succeeding Domestic Business Day. Whenever any
payment of principal of, or interest on, the LIBOR Loans shall be due on a day
which is not a LIBOR Business Day, the date for payment thereof shall be
extended to the next succeeding LIBOR Business Day unless such LIBOR Business
Day falls in another calendar month, in which case the date for payment thereof
shall be the next preceding LIBOR Business Day. If the date for any payment of
principal is extended by operation of law or otherwise, interest thereon shall
be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the Banks
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Bank on such due
date an amount equal to the amount then due such Bank. If and to the extent that
the Borrower shall not have so made such payment, each Bank shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such
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amount is distributed to such Bank until the date such Bank repays such amount
to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.11. Funding Losses. If the Borrower makes any payment
of principal with respect to any LIBOR Loan (pursuant to Article II, VI or VIII
or otherwise) on any day other than the last day of the Interest Period
applicable thereto, or if the Borrower shall deliver a Notice of Interest Period
Election specifying that a LIBOR Loan shall be continued on a date other than
the last day of the then current Interest Period applicable thereto, the
Borrower shall reimburse each Bank within fifteen (15) days after certification
of such Bank of such loss or expense (which shall be delivered by each such Bank
to Administrative Agent for delivery to Borrower) for any resulting loss or
expense incurred by it (or by an existing Participant in the related Loan),
including (without limitation) any loss incurred in obtaining, liquidating or
employing deposits from third parties, but excluding loss of margin for the
period after any such payment, provided that such Bank shall have delivered to
Administrative Agent and Administrative Agent shall have delivered to the
Borrower a certification as to the amount of such loss or expense, which
certification shall set forth in reasonable detail the basis for and calculation
of such loss or expense and shall be conclusive in the absence of demonstrable
error.
SECTION 2.12. Computation of Interest and Fees. All interest and
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
SECTION 2.13. Use of Proceeds. The Borrower shall use the
proceeds of the Loans for general corporate purposes, including, without
limitation, the acquisition of multifamily apartment projects and real property
to be used in connection with construction, management, development, acquisition
and operation of multifamily apartment projects and for general working capital
needs of the Borrower.
SECTION 2.14. Method of Electing Interest Rates. (a) The Loans
included in the initial Borrowing shall bear interest initially at the interest
rate(s) applicable thereto pursuant to Section 2.4 hereof during the Interest
Period(s) specified by the Borrower in the initial Notice of Interest Period
Election. Thereafter, the Borrower may from time to time elect to change or
continue the Interest Period(s) applicable to the LIBOR Loans, or the applicable
portions thereof (subject in each case to the provisions of Article VIII), as
follows:
(i) if such Loans are LIBOR Loans, the Borrower may elect to
continue all or any portion of such Loans as LIBOR Loans for an additional
Interest Period or additional Interest Periods, in each case effective on the
last day of the then current Interest Period applicable to such Loans, or on
such other date designated by Borrower in the Notice of Interest Period Election
provided Borrower shall pay any losses pursuant to Section 2.11.
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Each such election shall be made by delivering a notice in the
form of Exhibit "C" (a "Notice of Interest Period Election") to the
Administrative Agent by 11:00 A.M. (San Francisco time) at least three (3) LIBOR
Business Days before the continuation is to be effective. A Notice of Interest
Period Election may, if it so specifies, apply to only a portion of the
aggregate principal amount of the LIBOR Loans; provided that (i) such portion is
allocated ratably among all LIBOR Loans, (ii) there shall be no more than five
(5) LIBOR fixings outstanding at any time, and (iii) no Interest Period shall
extend beyond the Maturity Date.
(b) Each Notice of Interest Period Election shall specify:
(i) the portion of the LIBOR Loans to which such notice
applies;
(ii) the date on which the continuation is to be effective,
which shall comply with the terms of subsection (a) above; and
(iii) if such Loans are to be continued as LIBOR Loans for
an additional Interest Period, the duration of such additional Interest Period,
which shall comply with the terms of subsection (a) above.
Each Interest Period specified in a Notice of Interest Period Election shall
comply with the provisions of the definition of Interest Period; provided that
the Borrower may request an additional Interest Period of less than one (1)
month if and only if all of the Banks, in their sole and absolute discretion,
approve of such request.
(c) Upon receipt of a Notice of Interest Period Election from the
Borrower pursuant to subsection (a) above, the Administrative Agent shall notify
each Bank the same day as it receives such Notice of Interest Period Election of
the contents thereof and the Interest Periods (if different from those requested
by the Borrower) and such notice shall not thereafter be revocable by the
Borrower. If the Borrower fails to deliver a timely Notice of Interest Period
Election to the Administrative Agent for the LIBOR Loans (or the relevant
portions thereof), such Loans (or the relevant portions thereof) shall be
continued as LIBOR Loans on the last day of the then current Interest Period
applicable thereto for an additional Interest Period of one (1) month; provided,
however, that if such additional Interest Period would extend beyond the
Maturity Date, then such Loans (or the relevant portions thereof) shall be
converted into Base Rate Loans on the last day of the then current Interest
Period applicable thereto. Within one LIBOR Business Day after receipt of a
Notice of Interest Period Election from the Borrower pursuant to subsection (a)
above, the Administrative Agent shall notify each Bank of the interest rates
determined pursuant thereto.
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ARTICLE III.
CONDITIONS
SECTION 3.1. Closing. The closing hereunder shall occur on the
date when each of the following conditions is satisfied (or waived by the
Administrative Agent and the Banks) (provided that if not all of the conditions
are satisfied or waived until after 9:00 A.M. P.S.T. on a particular date, then
the closing hereunder shall occur on the LIBOR Business Day next succeeding such
date) (the "Closing Date"), each document to be dated the Closing Date unless
otherwise indicated:
(a) the Borrower shall have executed and delivered to the
Administrative Agent duly executed original Notes for the account of each Bank
dated as of the Closing Date complying with the provisions of Section 2.3;
(b) the Borrower, the Administrative Agent and each of the Banks
shall have executed and delivered to the Borrower and the Administrative Agent a
duly executed original of this Agreement;
(c) Guarantor shall have executed and delivered to the
Administrative Agent a duly executed original of the Guaranty;
(d) the Administrative Agent shall have received an opinion of
O'Melveny & ▇▇▇▇▇, LLP, counsel for the Borrower and the Guarantor, acceptable
to the Administrative Agent, and its counsel;
(e) the Administrative Agent shall have received all documents
the Administrative Agent may reasonably request relating to the existence of the
Borrower and Guarantor, the authority for and the validity of this Agreement and
the other Loan Documents, and any other matters relevant hereto, all in form and
substance satisfactory to the Administrative Agent. Such documentation shall
include, without limitation, the agreement of limited partnership of the
Borrower, as well as the certificate of limited partnership of the Borrower,
both as amended, modified or supplemented to the Closing Date, certified to be
true, correct and complete by a senior officer of the Borrower as of a date not
more than ten (10) days prior to the Closing Date, together with a long-form
certificate of good standing as to the Borrower from the Secretary of State (or
the equivalent thereof) of Delaware, a good standing certificate issued by the
Secretary of State of the State of California, each to be dated not more than
thirty (30) days prior to the Closing Date, as well as the articles of
incorporation and bylaws of Guarantor, as amended, modified or supplemented to
the Closing Date, certified to be true, correct and complete by a senior officer
of Guarantor as of a date not more than ten (10) days prior to the Closing Date,
together with a good standing certificate as to Guarantor from the Secretary of
State (or the equivalent thereof) of Maryland, to be dated not more than thirty
(30) days prior to the Closing Date;
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(f) the Administrative Agent shall have received all
certificates, agreements and other documents and papers referred to in this
Section 3.1, unless otherwise specified, in sufficient counterparts,
satisfactory in form and substance to the Administrative Agent in its sole
discretion;
(g) the Borrower shall have taken all actions required to
authorize the execution and delivery of this Agreement and the other Loan
Documents and the performance thereof by the Borrower;
(h) the Administrative Agent shall be satisfied in its reasonable
discretion that none of the Borrower, Guarantor nor any Consolidated Subsidiary
is subject to any present or contingent environmental liability which could have
a Material Adverse Effect;
(i) the Administrative Agent shall have received, for its and any
other Bank's account, all fees due and payable pursuant to Section 2.5 hereof on
or before the Closing Date, and the fees and expenses accrued through the
Closing Date of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP;
(j) the Administrative Agent shall have received copies of all
consents, licenses and approvals, if any, required in connection with the
execution, delivery and performance by the Borrower, Guarantor and the
applicable Consolidated Subsidiaries, and the validity and enforceability, of
the Loan Documents, or in connection with any of the transactions contemplated
thereby, and such consents, licenses and approvals shall be in full force and
effect;
(k) the Administrative Agent shall have received the audited
financial statements of the Borrower and its Consolidated Subsidiaries and of
Guarantor for the Fiscal Year ending December 31, 1997; and
(l) no Default or Event of Default shall have occurred.
SECTION 3.2. Borrowings. The obligation of any Bank to make a
Loan on the Closing Date in the amount of its Commitment is subject to the
satisfaction of each of the following conditions:
(a) each of the conditions in Section 3.1 shall have been
satisfied (or waived by the Administrative Agent and the Banks) on or before
9:00 A.M. P.S.T. on the Closing Date;
(b) the representations and warranties of the Borrower contained
in this Agreement shall be true and correct in all material respects on and as
of the Closing Date both before and after giving effect to the making of such
Loans;
(c) no law or regulation shall have been adopted, no order,
judgment or decree of any governmental authority shall have been issued, and no
litigation shall be
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pending, which does or seeks to enjoin, prohibit or restrain, the making or
repayment of the Loans or the consummation of the transactions contemplated by
this Agreement; and
(d) the Borrower shall have delivered to the Administrative Agent
the initial Notice of Interest Period Election at least two (2) LIBOR Business
Days prior to the Closing Date.
Each Borrowing hereunder (including, without limitation, any deemed Borrowing
upon an extension of the term hereof) shall be deemed to be a representation and
warranty by the Borrower on the date of such Borrowing as to the facts specified
in clauses (a), (b) and (c) of this section, except as otherwise disclosed in
writing by Borrower to the Banks.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and each of the other
Banks which is or may become a party to this Agreement to make the Loans, the
Borrower makes the following representations and warranties as of the Closing
Date. Such representations and warranties shall survive the effectiveness of
this Agreement, the execution and delivery of the other Loan Documents and the
making of the Loans.
SECTION 4.1. Existence and Power. The Borrower is a limited
partnership, duly formed and validly existing as a limited partnership under the
laws of the State of Delaware and has all powers and all material governmental
licenses, authorizations, consents and approvals required to own its property
and assets and carry on its business as now conducted or as it presently
proposes to conduct and has been duly qualified and is in good standing in the
State of California and in every other jurisdiction in which the failure to be
so qualified and/or in good standing is likely to have a Material Adverse
Effect. Guarantor is a corporation, duly formed, validly existing and in good
standing as a real estate investment trust under the laws of the State of
Maryland and has all powers and all material governmental licenses,
authorizations, consents and approvals required to own its property and assets
and carry on its business as now conducted or as it presently proposes to
conduct and has been duly qualified and is in good standing in every
jurisdiction in which the failure to be so qualified and/or in good standing is
reasonably expected to have a Material Adverse Effect.
SECTION 4.2. Power and Authority. The Borrower has the
partnership power and authority to execute, deliver and carry out the terms and
provisions of each of the Loan Documents to which it is a party and has taken
all necessary partnership action, if any, to authorize the execution and
delivery on behalf of the Borrower and the performance by the Borrower of such
Loan Documents. The Borrower has duly executed and delivered each Loan Document
to which it is a party in accordance with the terms of this Agreement, and each
such Loan Document constitutes the legal, valid and binding obligation of the
Borrower, enforceable in accordance with its terms, except as enforceability may
be limited by applicable insolvency, bankruptcy or other laws
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affecting creditors rights generally, or general principles of equity, whether
such enforceability is considered in a proceeding in equity or at law. Guarantor
has the power and authority to execute, deliver and carry out the terms and
provisions of each of the Loan Documents on behalf of the Borrower to which the
Borrower is a party and has taken all necessary action to authorize the
execution and delivery on behalf of the Borrower and the performance by the
Borrower of such Loan Documents.
SECTION 4.3. No Violation. Neither the execution, delivery or
performance by or on behalf of the Borrower of the Loan Documents to which it is
a party, nor compliance by the Borrower with the terms and provisions thereof
nor the consummation of the transactions contemplated by the Loan Documents, (i)
will contravene any applicable provision of any law, statute, rule, regulation,
order, writ, injunction or decree of any court or governmental instrumentality,
(ii) will conflict with or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien upon
any of the property or assets of the Borrower or any of its Consolidated
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, or
other agreement or other instrument to which the Borrower (or of any partnership
of which the Borrower is a partner) or any of its Consolidated Subsidiaries is a
party or by which it or any of its property or assets is bound or to which it is
subject, or (iii) will cause a default by the Borrower under any organizational
document of any Person in which the Borrower has an interest, or cause a default
under the Borrower's agreement or certificate of limited partnership, the
consequences of any such contravention, conflict, breach or default described in
clauses (i), (ii) or (iii) is reasonably expected to have a Material Adverse
Effect, or result in or require the creation or imposition of any Lien
whatsoever upon any Property (except as contemplated herein).
SECTION 4.4. Financial Information.
(a) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries, dated as of December 31, 1997, and the related
consolidated statements of Borrower's financial position for the Fiscal Year
then ended, reported on by Ernst & Young LLP, a copy of which has been delivered
to each of the Banks, fairly present, in conformity with GAAP, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
date and their consolidated results of operations and cash flows for such Fiscal
Year.
(b) The consolidated balance sheet of Guarantor, dated as of
December 31, 1997, and the related consolidated statements of Guarantor's
financial position for the Fiscal Year then ended, reported on by Ernst & Young
LLP and set forth in the Guarantor's 1997 Form 10-K, a copy of which has been
delivered to each of the Banks, fairly present, in conformity with GAAP, the
consolidated financial position of Guarantor and its Consolidated Subsidiaries
as of such date and their consolidated results of operations and cash flows for
such Fiscal Year.
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(c) The unaudited consolidated balance sheet of Guarantor as at
September 30, 1998 and related statements of income, retained earnings and cash
flow for the period then ended, certified by the chief accounting officer or
chief financial officer of Guarantor, a copy of which has been delivered to
Administrative Agent, were prepared in accordance with GAAP consistently applied
(except to the extent noted therein) and fairly present the consolidated
financial position of Guarantor, Borrower and the Consolidated Subsidiaries as
of such date and the results of operations and cash flow for the period covered
thereby, subject to normal year-end adjustments. Neither Borrower, Guarantor nor
any Consolidated Subsidiary had on such date any material Contingent
Obligations, liabilities for taxes or long-term leases, unusual forward or
long-term commitments or unrealized losses from any unfavorable commitments
which are not reflected in the foregoing statements or in the notes thereto and
which are material.
(d) Since December 31, 1997, (i) except as may have been
disclosed in writing to the Banks, nothing has occurred having a Material
Adverse Effect, and (ii) except as previously disclosed to the Banks, neither
the Borrower nor Guarantor has incurred any material indebtedness or guaranty on
or before the Closing Date.
SECTION 4.5. Litigation. Except as previously disclosed by the
Borrower in writing to the Banks, there is no action, suit or proceeding pending
against, or to the knowledge of the Borrower threatened against or affecting,
(i) the Borrower, Guarantor or any of their Consolidated Subsidiaries, (ii) the
Loan Documents or any of the transactions contemplated by the Loan Documents or
(iii) any of their assets, before any court or arbitrator or any governmental
body, agency or official in which there is a reasonable possibility of an
adverse decision which actions, suits or proceedings described in clauses (i),
(ii) or (iii) would, individually, or in the aggregate have a Material Adverse
Effect or which in any manner draws into question the validity of this Agreement
or the other Loan Documents.
SECTION 4.6. Compliance with ERISA.
(a) Except as set forth on Schedule 4.6 attached hereto, neither
Borrower nor Guarantor is a member of any Plan or Multiemployer Plan or any
other Benefit Arrangement.
(b) The transactions contemplated by the Loan Documents will not
constitute a nonexempt prohibited transaction (as such term is defined in
Section 4975 of the Code or Section 406 of ERISA) which would, individually or
in the aggregate, have a Material Adverse Effect on Borrower or that could
subject the Administrative Agent or the Banks to any tax or penalty or
prohibited transactions imposed under Section 4975 of the Code or Section 502(i)
of ERISA.
SECTION 4.7. Environmental Matters. The Borrower conducts reviews
of the effect of Environmental Laws on the business, operations and properties
of the Borrower and its Consolidated Subsidiaries when necessary in the course
of which it identifies and evaluates associated liabilities and costs
(including, without limitation, any
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capital or operating expenditures required for clean-up or closure of properties
presently owned, any capital or operating expenditures required to achieve or
maintain compliance with environmental protection standards imposed by law or as
a condition of any license, permit or contract, any related constraints on
operating activities, and any actual or potential liabilities to third parties,
including employees, and any related costs and expenses). On the basis of this
review, the Borrower has reasonably concluded that no such associated
liabilities and costs, including the costs of compliance with Environmental
Laws, (i) are, as of the date hereof, Significant Environmental Costs, or (ii)
would have a Material Adverse Effect on the Borrower, Guarantor and their
Consolidated Subsidiaries.
SECTION 4.8. Taxes. United States Federal income tax returns of
the Borrower, Guarantor and their Consolidated Subsidiaries have been prepared
and filed through the Fiscal Year ended December 31, 1997. The Borrower,
Guarantor and their Consolidated Subsidiaries have filed all United States
Federal income tax returns and all other material tax returns which are required
to be filed by them and have paid all taxes due pursuant to such returns or
pursuant to any assessment received by the Borrower, Guarantor or any
Consolidated Subsidiary, except such taxes, if any, as are reserved against in
accordance with GAAP, such taxes as are being contested in good faith by
appropriate proceedings or such taxes, the failure to make payment of which when
due and payable will not have, in the aggregate, a Material Adverse Effect. The
charges, accruals and reserves on the books of the Borrower, Guarantor and their
Consolidated Subsidiaries in respect of taxes or other governmental charges are,
in the opinion of the Borrower, adequate.
SECTION 4.9. Full Disclosure. All factual information heretofore
prepared by the Borrower and furnished by the Borrower to the Administrative
Agent or any Bank for purposes of or in connection with this Agreement or any
transaction contemplated hereby or thereby is true and accurate in all material
respects as of the date as of which such information is stated or certified.
There is no fact known to the Borrower (other than matters of a general economic
nature) that has had or could reasonably be expected to have a Material Adverse
Effect and that has not been disclosed herein or in such other documents,
certificates or statements executed or delivered in connection herewith.
SECTION 4.10. Solvency. On the Closing Date and after giving
effect to the transactions contemplated by the Loan Documents occurring on the
Closing Date, the Borrower will be Solvent.
SECTION 4.11. Use of Proceeds; Margin Regulations. All proceeds
of the Loans will be used by the Borrower only in accordance with the provisions
hereof. No part of the proceeds of any Loan will be used by the Borrower to
purchase or carry any Margin Stock or to extend credit to others for the purpose
of purchasing or carrying any Margin Stock. Neither the making of any Loan nor
the use of the proceeds thereof
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will violate or be inconsistent with the provisions of Regulations G, T, U or X
of the Federal Reserve Board.
SECTION 4.12. Governmental Approvals. No order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to authorize, or is required
in connection with the execution, delivery and performance of any Loan Document
or the consummation of any of the transactions contemplated thereby other than
those that have already been duly made or obtained and remain in full force and
effect or those which, if not made or obtained, would not have a Material
Adverse Effect.
SECTION 4.13. Investment Company Act; Public Utility Holding
Company Act. Neither the Borrower, Guarantor nor any Consolidated Subsidiary is
(x) an "investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended,
(y) a "holding company" or a subsidiary company" of a "holding company" or an
"affiliate" of either a "holding company" or a "subsidiary company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended, or (z)
subject to any other federal or state law or regulation which purports to
restrict or regulate its ability to borrow money.
SECTION 4.14. Principal Offices. As of the Closing Date, the
principal office, chief executive office and principal place of business of the
Borrower is ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 4.15. REIT Status. For the Fiscal Year ended December 31,
1997, Guarantor qualified and Guarantor shall continue to qualify as a real
estate investment trust under the Code.
SECTION 4.16. Patents, Trademarks, etc. The Borrower has obtained
and holds in full force and effect all patents, trademarks, servicemarks, trade
names, copyrights and other such rights, free from burdensome restrictions,
which are necessary for the operation of its business as presently conducted,
the impairment of which is reasonably expected to have a Material Adverse
Effect.
SECTION 4.17. Qualifying Unencumbered Properties. Schedule 4.17
attached hereto and made a part hereof sets forth all the Qualifying
Unencumbered Property owned by the Borrower, directly or indirectly, as of the
Closing Date. As of the Closing Date, all of the Properties set forth in
Schedule 4.17 are Qualifying Unencumbered Properties.
Borrower represents and warrants that, as of the Closing Date,
the Borrower has good and insurable fee title to the Qualifying Unencumbered
Property, free of all Liens other than Permitted Liens and that to its best
knowledge, except as disclosed in writing to the Administrative Agent in
connection with the extension of credit contemplated hereby or hereafter
disclosed in writing to the Administrative Agent from
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time to time, no Materials of Environmental Concern are located on, under, over
or about such real property.
SECTION 4.18. No Default. As of the date hereof, no event of
default or default exists under or with respect to any Indebtedness of the
Borrower and the Borrower is not in default in any material respect beyond any
applicable grace period under or with respect to any other material agreement,
instrument or undertaking to which it is a party or by which it or any of its
property is bound in any respect in any such case, the existence of which
default is reasonably expected to result in a Material Adverse Effect.
SECTION 4.19. Licenses, etc. The Borrower has obtained and does
hold in full force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditation, easements, rights of way and
other consents and approvals which are necessary for the operation of its
businesses as presently conducted, the absence of which is reasonably expected
to have a Material Adverse Effect.
SECTION 4.20. Compliance With Law. The Borrower and each of the
Real Property Assets are in compliance with all laws, rules, regulations,
orders, judgments, writs and decrees, including, without limitation, all
building and zoning ordinances and codes, the failure to comply with which is
reasonably expected to have a Material Adverse Effect.
SECTION 4.21. No Burdensome Restrictions. Except as may have been
disclosed by the Borrower in writing to the Banks, Borrower is not a party to
any agreement or instrument or subject to any other obligation or any charter or
corporate or partnership restriction, as the case may be, which, individually or
in the aggregate, is reasonably expected to have a Material Adverse Effect.
SECTION 4.22. Brokers' Fees. The Borrower has not dealt with any
broker or finder with respect to the transactions contemplated by this Agreement
or otherwise in connection with this Agreement, and the Borrower has not done
any act, had any negotiations or conversation, or made any agreements or
promises which will in any way create or give rise to any obligation or
liability for the payment by the Borrower of any brokerage fee, charge,
commission or other compensation to any party with respect to the transactions
contemplated by the Loan Documents, other than the fees payable to the
Administrative Agent and the Banks, and certain other Persons as previously
disclosed in writing to the Administrative Agent.
SECTION 4.23. Labor Matters. As of the date hereof, there are no
collective bargaining agreements or Multiemployer Plans covering the employees
of the Borrower. As of the date hereof, the Borrower is not suffering any
strikes, walkouts, work stoppages or other material labor difficulty which are
reasonably expected to result in a Material Adverse Effect.
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SECTION 4.24. Insurance. The Borrower currently maintains 100%
replacement cost insurance coverage (subject to customary deductibles) in
respect of each of the Real Property Assets, as well as commercial general
liability insurance (including "builders' risk" where applicable) against claims
for personal, and bodily injury and/or death, to one or more persons, or
property damage, as well as workers' compensation insurance, in each case with
respect to liability and casualty insurance with insurers having an A.M. Best
policyholders, rating of not less than A-VII (or such lesser rating satisfactory
to Administrative Agent in its reasonable discretion) in amounts that prudent
owner of assets such as the Real Property Assets would maintain.
SECTION 4.25. Organizational Documents. The documents delivered
pursuant to Section 3.1(e) constitute, as of the Closing Date, all of the
material organizational documents (together with all amendments and
modifications thereof) of the Borrower and Guarantor. The Borrower represents
that it has delivered to the Administrative Agent true, correct and complete
copies of each of the documents set forth in Section 3.1(e).
SECTION 4.26. Year 2000 Compliance. The Borrower and Guarantor
have each conducted a comprehensive review and assessment of the Borrower's and
Guarantor's computer applications and made inquiry of the Borrower's and
Guarantor's key suppliers, vendors and customers with respect to the "year 2000
problem" (that is the risk that computer applications may not be able to
properly perform date-sensitive functions after December 31, 1999) and, based on
that review and inquiry, neither the Borrower nor Guarantor believes the year
2000 problem will result in a material adverse change in the Borrower's or
Guarantor's ability to repay the Loans.
ARTICLE V.
AFFIRMATIVE AND NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as any
Obligations remain unpaid:
SECTION 5.1. Financial Information. The Borrower will deliver to
Administrative Agent (with sufficient copies to distribute to all of the Banks):
(a) as soon as available and in any event within five (5)
Domestic Business Days after the same is required to be filed with the
Securities and Exchange Commission (but in no event later than 95 days after the
end of each Fiscal Year of the Borrower) an audited consolidated balance sheet
of the Borrower, Guarantor and their Consolidated Subsidiaries as of the end of
such Fiscal Year and the related consolidated statements of Borrower's and
Guarantor's operations and consolidated statements of Borrower's and Guarantor's
cash flow for such Fiscal Year, setting forth in each case in comparative form
the figures for the previous Fiscal Year, all reported on in a manner acceptable
to the Securities and Exchange Commission on Borrower's and Guarantor's
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Form 10K and reported on by ▇▇▇▇▇ ▇▇▇▇▇ LLP or other independent public
accountants of nationally recognized standing;
(b) as soon as available and in any event within five (5)
Domestic Business Days after the same is required to be filed with the
Securities and Exchange Commission (but in no event later than sixty (60) days
after the end of each of the first three Fiscal Quarters of the Borrower and
Guarantor), (i) a consolidated balance sheet of the Borrower, Guarantor and
their Consolidated Subsidiaries as of the end of such quarter and the related
consolidated statements of Borrower's and Guarantor's operations and
consolidated statements of Borrower's and Guarantor's cash flow for such Fiscal
Quarter and for the portion of the Borrower's or Guarantor's Fiscal Year ended
at the end of such Fiscal Quarter, all reported on in the form provided to the
Securities and Exchange Commission on Borrower's and Guarantor's Form 10Q, and
(ii) and such other information reasonably requested by the Administrative Agent
or any Bank;
(c) within forty-five (45) days after the end of each Fiscal
Quarter, a certificate in the form of Exhibit D attached hereto of the chief
financial officer or the chief accounting officer of the Borrower or its general
partner (the "Certifying Officer") (i) setting forth in reasonable detail the
calculations required to establish whether the Borrower was in compliance with
the requirements of Section 5.9 on the date of such financial statements; (ii)
certifying (x) that such financial statements fairly present the financial
condition and the results of operations of the Borrower on the dates and for the
periods indicated, on the basis of GAAP, with respect to the Borrower subject,
in the case of interim financial statements, to normally recurring year-end
adjustments, and (y) that such officer has reviewed the terms of the Loan
Documents and has made, or caused to be made under his or her supervision, a
review in reasonable detail of the business and condition of the Borrower during
the period beginning on the date through which the last such review was made
pursuant to this Section 5.1(c) (or, in the case of the first certification
pursuant to this Section 5.1(c), the Closing Date) and ending on a date not more
than ten (10) Domestic Business Days prior to the date of such delivery and that
(1) on the basis of such financial statements and such review of the Loan
Documents, no Event of Default existed under Section 6.1(b) with respect to
Sections 5.9 and 5.10 at or as of the date of said financial statements, and (2)
on the basis of such review of the Loan Documents and the business and condition
of the Borrower, to the best knowledge of such officer, as of the last day of
the period covered by such certificate no Default or Event of Default under any
other provision of Section 6.1 occurred and is continuing or, if any such
Default or Event of Default has occurred and is continuing, specifying the
nature and extent thereof and, the action the Borrower proposes to take in
respect thereof. Such certificate shall set forth the calculations required to
establish the matters described in clause (1) above and shall attach as exhibits
thereto the following: escrow closing statements, certified by the Certifying
Officer, for each Qualifying Unencumbered Property which was acquired during the
preceding Fiscal Quarter; an occupancy report setting forth the average
Occupancy Rate for each Qualifying Unencumbered Property during the preceding
Fiscal Quarter; and a report stating the Net Operating Income for
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each Qualifying Unencumbered Property during the preceding Fiscal Quarter with
reasonable detail as to all property expenses and capital expenditures.
(d) not less frequently than annually, and in any event within
fifteen (15) days after adoption by Borrower's Board of Directors, the
Borrower's business plan, any subsequent material revisions thereto, and a
statement of projected cash flow of the Borrower and its Consolidated
Subsidiaries for the twelve (12) month period following the date of such
Business Plan.
SECTION 5.2. Other Information. The Borrower will deliver to the
Administrative Agent (with sufficient copies to distribute to all of the Banks):
(a) (i) within five (5) Domestic Business Days after any
executive officer of the Borrower or its general partner obtains knowledge of
any Default, if such Default is then continuing, a certificate of a Certifying
Officer, or other executive officer of the Borrower or its general partner
setting forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto; and (ii) promptly and in any event within
five (5) Domestic Business Days after an executive officer of the Borrower or
its general partner obtains knowledge thereof, notice of (y) any litigation or
governmental proceeding pending or threatened against the Borrower or the Real
Property Assets as to which there is a reasonable possibility of an adverse
determination and which, if adversely determined, would individually or in the
aggregate, result in a Material Adverse Effect and (z) any other event, act or
condition which is reasonably expected to result in a Material Adverse Effect;
(b) promptly upon the mailing thereof to the shareholders of
Guarantor generally, copies of all financial statements, reports and proxy
statements so mailed;
(c) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) (other than the exhibits thereto, which exhibits will be provided
upon request therefor by any Bank) which Guarantor shall have filed with the
Securities and Exchange Commission;
(d) promptly and in any event within thirty (30) days after any
member of the ERISA Group (i) gives or is required to give notice to the PBGC of
any "reportable event" (as defined in Section 4043 of ERISA) with respect to any
Plan which might constitute grounds for a termination of such Plan under Title
IV of ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the notice of
such reportable event given or required to be given to the PBGC; (ii) receives
notice of complete or partial withdrawal liability under Title IV of ERISA or
notice that any Multiemployer Plan is in reorganization, is insolvent or has
been terminated, a copy of such notice; (iii) receives notice from the PBGC
under Title IV of ERISA of an intent to terminate, impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice; (iv) applies for a waiver of the
minimum funding standard under
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Section 412 of the Code, a copy of such application; (v) gives notice of intent
to terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (vi) gives notice of withdrawal from any
Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to
make any payment or contribution to any Plan or Multiemployer Plan or in respect
of any Benefit Arrangement or makes any amendment to any Plan or Benefit
Arrangement which has resulted or could result in the imposition of a Lien or
the posting of a bond or other security, and in the case of clauses (i) through
(vii) above, which event could result in a Material Adverse Effect, a
certificate of the chief financial officer or the chief accounting officer of
the Borrower setting forth details as to such occurrence and action, if any,
which the Borrower or applicable member of the ERISA Group is required or
proposes to take;
(e) promptly and in any event within ten (10) days after an
executive officer of the Borrower or its general partner obtains actual
knowledge of any of the following events, a certificate of the Borrower,
executed by a Certifying Officer of the Borrower or its general partner,
specifying the nature of such condition, and the Borrower's or, if the Borrower
has actual knowledge thereof, the Environmental Affiliate's proposed initial
response thereto: (i) the receipt by an executive officer of the Borrower or its
general partner, or, if the Borrower has actual knowledge thereof, any of the
Environmental Affiliates of any communication (written or oral), whether from a
governmental authority, citizens group, employee or otherwise, that alleges that
the Borrower, or, if the Borrower has actual knowledge thereof, any of the
Environmental Affiliates, is not in compliance with applicable Environmental
Laws, and such noncompliance is reasonably expected to have a Material Adverse
Effect, (ii) the Borrower shall obtain actual knowledge that there exists any
Environmental Claim pending against the Borrower or any Environmental Affiliate
and such Environmental Claim is reasonably expected to have a Material Adverse
Effect or is reasonably expected to involve an expenditure of Significant
Environmental Cost or (iii) the Borrower obtains actual knowledge of any
release, emission, discharge or disposal of any Material of Environmental
Concern that is likely to form the basis of any Environmental Claim against the
Borrower or any Environmental Affiliate which in any such event is likely to
have a Material Adverse Effect or is reasonably expected to involve an
expenditure of Significant Environmental Cost;
(f) promptly and in any event within five (5) Domestic Business
Days after receipt of any material notices or correspondence from any company or
agent for any company providing insurance coverage to the Borrower relating to
any loss which is reasonably expected to result in a Material Adverse Effect,
copies of such notices and correspondence;
(g) promptly and in any event within five (5) days after an
executive officer of the Borrower or its general partner obtains actual
knowledge of a change in the Credit Rating, a certificate of the Borrower,
executed by a Certifying Officer of the Borrower or its general partner,
specifying the new Credit Rating, and
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(h) from time to time such additional information regarding the
financial position or business of the Borrower, Guarantor and their Subsidiaries
as the Administrative Agent, at the request of any Bank, may reasonably request
in writing.
SECTION 5.3. Payment of Obligations. The Borrower, Guarantor and
their Consolidated Subsidiaries will pay and discharge, at or before maturity,
all its respective material obligations and liabilities including, without
limitation, Taxes and any obligation pursuant to any agreement by which it or
any of its properties is bound, in each case where the failure to so pay or
discharge such obligations or liabilities is reasonably expected to result in a
Material Adverse Effect, and will maintain in accordance with GAAP, appropriate
reserves for the accrual of any of the same.
SECTION 5.4. Maintenance of Property; Insurance; Leases
(a) The Borrower will keep, and will cause each Consolidated
Subsidiary to keep, all property useful and necessary in its business, including
without limitation the Real Property Assets (for so long as it constitutes Real
Property Assets), in good repair, working order and condition, ordinary wear and
tear excepted, in each case where the failure to so maintain and repair will
have a Material Adverse Effect.
(b) The Borrower shall maintain, or cause to be maintained,
insurance comparable to that described in Section 4.24 hereof with insurers
meeting the qualifications described therein, which insurance shall in any event
not provide for less coverage than insurance customarily carried by owners of
properties similar to, and in the same locations as, the Real Property Assets.
The Borrower will deliver to the Administrative Agent (i) upon the reasonable
request of the Administrative Agent from time to time full information as to the
insurance carried, and (ii) forthwith, notice of any cancellation or nonrenewal
of coverage by any insurer of the Borrower (other than any cancellation or
non-renewal due to Borrower's placement of replacement coverage with new
insurers meeting the requirements of this Section 5.4(b)).
SECTION 5.5. Conduct of Business and Maintenance of Existence.
The Borrower and Guarantor will continue to engage in business of the same
general type as now conducted by the Borrower and Guarantor, and each will
preserve, renew and keep in full force and effect, its partnership and corporate
existence and its respective rights, privileges and franchises necessary for the
normal conduct of business unless the failure to maintain such rights and
franchises does not have a Material Adverse Effect.
SECTION 5.6. Compliance with Laws. The Borrower will and will
cause its Subsidiaries to comply in all material respects with all applicable
laws, ordinances, rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental Laws, and all zoning
and building codes with respect to the Real Property Assets and ERISA and the
rules and regulations thereunder and all federal securities laws) except where
the necessity of compliance therewith is contested in good faith by appropriate
proceedings or where the failure to do so will not have a Material
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Adverse Effect or expose Administrative Agent or Banks to any material liability
therefor.
SECTION 5.7. Inspection of Property, Books and Records. The
Borrower (i) will keep proper books of record and account in which full, true
and correct entries shall be made of all dealings and transactions in relation
to its business and activities in conformity with GAAP, modified as required by
this Agreement and applicable law; (ii) will permit representatives of any Bank
at such Bank's expense to visit any of its properties, including without
limitation the Real Property Assets, without notice; provided that the Bank
shall not unreasonably interfere with the operation of such properties or any
tenants thereon and such visitation shall occur within normal business hours;
(iii) will permit the representatives of any Bank, at such Bank's expense, to
inspect its properties, examine and make abstracts from any of its books and
records and to discuss its affairs, finances and accounts with its executive
officers, property managers and independent public accountants, in each such
case under this subclause (iii) all at such reasonable times during normal
business hours, upon reasonable prior notice and as often as may reasonably be
desired. Administrative Agent shall coordinate any such visit or inspection to
arrange for review by any Bank requesting any such visit or inspection.
SECTION 5.8. Existence. The Borrower shall do or cause to be
done, all things necessary to preserve and keep in full force and effect its,
Guarantor's and their Consolidated Subsidiaries' existence and its patents,
trademarks, servicemarks, tradenames, copyrights, franchises, licenses, permits,
certificates, authorizations, qualifications, accreditation, easements, rights
of way and other rights, consents and approvals the nonexistence of which is
reasonably expected to have a Material Adverse Effect.
SECTION 5.9. Financial Covenants.
(a) Total Liabilities to Gross Asset Value. Borrower shall not
permit the ratio of Total Liabilities to Gross Asset Value of Borrower and its
Subsidiaries to exceed 0.55:1 at any time.
(b) Secured Debt to Gross Asset Value. Borrower shall not permit
the ratio of Secured Debt to Gross Asset Value of Borrower and its Subsidiaries
to exceed 0.45:1 at any time.
(c) Unencumbered Pool. Borrower shall not permit the ratio of the
Unencumbered Asset Pool Value to outstanding Unsecured Debt to be less than
1.75:1 at any time.
(d) EBITDA to Fixed Charges Ratio. Borrower shall not permit the
ratio of EBITDA for the then most recently completed Fiscal Quarter to Fixed
Charges for the then most recently completed Fiscal Quarter to be less than
1.75:1.
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(e) Interest Coverage Ratio. Borrower shall not permit the ratio
of EBITDA for the then most recently completed Fiscal Quarter to Interest
Expense for the then most recently completed Fiscal Quarter to be less than
2.25:l.
(f) Dividends. The Borrower will not, as determined for any four
(4) consecutive Fiscal Quarters, pay any partnership distributions in excess of
100% of the Borrower's Funds Available For Distribution calculated for such four
(4) Fiscal Quarters.
(g) Minimum Consolidated Tangible Net Worth. The Consolidated
Tangible Net Worth of the Borrower and its Consolidated Subsidiaries will at no
time be less than $200,000,000 plus ninety percent (90%) of all Net Offering
Proceeds received by Guarantor or Borrower after December 31, 1996.
SECTION 5.10. Restriction on Fundamental Changes.
(a) Neither the Borrower, the Guarantor, nor any Consolidated
Subsidiary shall directly or indirectly enter into any merger or consolidation
without the prior written consent of the Required Banks which consent may be
withheld in its sole and absolute discretion unless (i) the Borrower or the
Guarantor is the surviving entity, (ii) the entity which is merged into the
Borrower or the Guarantor is not engaged in any substantial business other than
the management, development, ownership or operation of multifamily residential
apartment communities, and (iii) the gross fair market value of the assets of
the entity which is merged into the Borrower or the Guarantor is not in excess
of ten percent (10%) of Borrower's aggregate Gross Asset Value immediately prior
to such merger or consolidation. Neither the Borrower, the Guarantor, nor any
Consolidated Subsidiary shall directly or indirectly enter into any
reorganization or recapitalization, reclassify its Capital Stock, liquidate,
wind up or dissolve or sell, lease, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or substantially all of its or
their business or assets, whether now owned or hereafter acquired. Nothing in
this Section shall be deemed to prohibit the sale or leasing of portions of the
Real Property Assets in the ordinary course of business.
(b) The Borrower shall not amend its agreement of limited
partnership or other organizational documents in any manner that would have a
Material Adverse Effect. Guarantor shall not amend its articles of
incorporation, by-laws, or other organizational documents in any manner that
would have a Material Adverse Effect.
(c) The Borrower shall deliver to Administrative Agent copies of
all amendments to its agreement of limited partnership or to Guarantor's
articles of incorporation, by-laws, or other organizational documents (other
than amendments solely reflecting changes in ownership interests occurring in
the ordinary course of business) no less than ten (10) Domestic Business Days
after the effective date of any such amendment.
SECTION 5.11. Changes in Business.
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(a) The Borrower shall carry on its business operations through
the Borrower and its Subsidiaries.
(b) All or substantially all of Borrower's assets shall be
multifamily residential properties, unimproved land held for the development of
multifamily residential property, or equity interests in companies whose primary
business is the ownership, operation, development or management of multifamily
residential property. Borrower shall not engage in any line of business other
than ownership, operation and development of multifamily residential property
and the provision of services incidental thereto, whether directly or through
its Subsidiaries and Investment Affiliates.
SECTION 5.12. Margin Stock. None of the proceeds of the Loan will
be used, directly or indirectly, for the purpose, whether immediate, incidental
or ultimate, of buying or carrying any Margin Stock.
SECTION 5.13. Hedging Requirements. Within five (5) Domestic
Business Days after the last day of each calendar quarter, commencing December
31, 1998, the Borrower shall have in effect "Interest Rate ▇▇▇▇▇▇" on Borrower's
Indebtedness so that such Indebtedness, together with all Fixed Rate
Indebtedness of Borrower, shall constitute at least fifty percent (50%) of the
then aggregate Indebtedness of the Borrower. "Interest Rate ▇▇▇▇▇▇" shall mean
(A) Exempt Hedging Contracts, or (B) interest rate exchange, collar, cap, swap,
adjustable strike cap, adjustable strike corridor or similar agreements, each of
which (i) shall have a minimum term of two (2) years, or, in the case of loans
pursuant to which interest shall accrue at a rate other than a fixed rate, a
term equal to the term of such floating rate loan (to the extent the term of
such floating rate loan is less than two (2) years), (ii) shall have the effect
of capping the interest rates covered thereby at a rate equal to or lower than
the Cap Rate at the time of purchase or execution, and (iii) shall be with an
Approved Financial Institution as the counterparty. It is acknowledged and
agreed that the Borrower shall have no obligation to replace any Interest Rate
Hedge even if the counterparty thereto shall cease to be an Approved Financial
Institution. The Borrower shall certify its compliance with Interest Rate ▇▇▇▇▇▇
to the Administrative Agent in the certificate required to be delivered by the
Borrower pursuant to Section 5.1(c), which certificate shall be in the form of
Exhibit D attached hereto.
SECTION 5.14. Guarantor Status.
(a) Status. Guarantor shall at all times (i) remain a publicly
traded company listed on the New York Stock Exchange, and (ii) maintain its
status as a self-directed and self-administered real estate investment trust
under the Code.
(b) Indebtedness. Guarantor shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, create, incur, assume or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(1) the Obligations; and
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(2) indebtedness which, after giving effect thereto, may be
incurred or may remain outstanding without giving rise to an Event of
Default or Default under any provision of this Article V.
(c) Restriction on Fundamental Changes.
(1) Guarantor shall not have an Investment in any Person other
than Borrower and the interests identified on Schedule 5.14(c)(1) as
being owned by Guarantor.
(2) Guarantor shall not acquire an interest in any Property other
than Securities issued by Borrower and the interests identified on
Schedule 5.14(c)(2).
(d) Disposal of Partnership Interests. Guarantor will not
directly or indirectly convey, sell, transfer, assign, pledge or otherwise
encumber or dispose of any of its partnership interests in Borrower.
SECTION 5.15. Environmental Matters.
(a) Promptly upon the discovery of any Environmental Claim or of
any violation or alleged violation of Environmental Laws with respect to any
Qualifying Unencumbered Asset, the Borrower shall attempt in good faith, as soon
as practicable, to determine all costs it reasonably expects any party to expend
in connection with the investigation and resolution of such Environmental Claim
or of such violation or alleged violation of Environmental Laws. The Borrower
shall thereupon notify the Administrative Agent in writing of the Borrower's
reasonable, good faith estimate of the cost to investigate and resolve such
Environmental Claim or such violation or alleged violation if such cost is equal
to or greater than $250,000. Such good faith estimate of such costs, as revised
from time to time pursuant hereto, shall be deemed to be the "Estimated
Environmental Cost" of such Environmental Claim or such violation or alleged
violation of Environmental Laws. After the end of each Fiscal Quarter, the
Borrower shall review and update all Estimated Environmental Costs and shall
deliver, with the Borrower's quarterly reports delivered in accordance with
Section 5.1 hereof, a written report to the Administrative Agent, setting forth,
in reasonable detail, each Estimated Environmental Cost which is in excess of
$250,000, the basis for the determination of such Estimated Environmental Cost,
and the Borrower's plans with respect to such Environmental Claim or such
violation or alleged violation of Environmental Laws. If the Borrower at any
time is not diligently and in good faith pursuing a determination of or an
update of a Estimated Environmental Cost which exceeds $250,000, the
Administrative Agent may, in reliance upon the opinions and judgments of
environmental consultants (either independent or employed by the Administrative
Agent), estimate or update, in good faith, the cost to investigate and resolve
an Environmental Claim or alleged or actual violation of Environmental Laws. In
the event that the Administrative Agent makes any such determination, the
Estimated Environmental Cost of investigating and resolving such Environmental
Claim or such alleged or actual violation of Environmental Laws shall be the
Administrative Agent's
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estimate, until such time as Borrower again diligently pursues in good faith the
determination or update of Estimated Environmental Cost, and upon Borrower's
determination of a Estimated Environmental Cost in compliance herewith the
Estimated Environmental Cost shall thereafter be Borrower's estimate thereof, as
set forth herein.
(b) The Borrower shall, at all times, diligently and in good
faith pursue resolution of all Environmental Claims, and all violations or
alleged violations of Environmental Laws, with respect to its Properties.
SECTION 5.16. Cooperation. The Borrower shall take any action
reasonably requested by the Administrative Agent to carry out the intent of the
Loan Documents.
SECTION 5.17. Distributions. Unless waived by the Required Banks,
no Borrower Party shall make any Restricted Payments after the occurrence of and
during the continuation of an Event of Default under Section 6.1(a); provided
however that Borrower may make Restricted Payments to partners in Borrower to
the extent necessary to enable Guarantor to make dividend payments to its
stockholders as required for Guarantor to maintain its status as a real estate
investment trust under the Code. In such case, Borrower shall cause Guarantor to
make such dividend payments.
ARTICLE VI.
DEFAULTS
SECTION 6.1. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) (i) the Borrower shall fail to pay when due any principal of
any Loan; or (ii) the Borrower shall fail to pay when due interest on any Loan
or any fees or any other amount payable hereunder and the same shall continue
for a period of ten (10) calendar days after the same becomes due;
(b) the Borrower shall fail to observe or perform any covenant
contained in Section 5.9, Section 5.10(a) or (b), or Sections 5.11, 5.12, and
5.14;
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause (a),
(b), (e), (f), (g), (h), (j), (n), (o) or (p) of this Section 6.1) for 30 days
after written notice thereof has been given to the Borrower by the
Administrative Agent, or if such default is of such a nature that it cannot with
reasonable effort be completely remedied within said period of thirty (30) days
such additional period of time as may be reasonably necessary to cure same,
provided Borrower commences such cure within said thirty (30) day period and
diligently prosecutes same, until completion, but in no event shall such
extended period exceed ninety (90) days;
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(d) any representation, warranty, certification or statement made
by the Borrower in this Agreement or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made) and the defect
causing such representation or warranty to be incorrect when made (or deemed
made) is not removed within thirty (30) days after written notice thereof from
Administrative Agent to Borrower, or if such default is of such a nature that it
cannot with reasonable effort be completely removed within said period of thirty
(30) days such additional period of time as may be reasonably necessary to
remove same, provided Borrower commences such removal within said thirty (30)
day period and diligently prosecutes same, until completion, but in no event
shall such extended period exceed ninety (90) days;
(e) the Borrower, Guarantor, any Subsidiary or any Investment
Affiliate shall default in the payment when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) of any amount owing in
respect of any Recourse Debt (other than the Obligations) for which the
aggregate outstanding principal amount exceeds $10,000,000 and such default
shall continue beyond the giving of any required notice and the expiration of
any applicable grace period and such default has not been waived, in writing, by
the holder of any such Debt; or the Borrower, Guarantor, any Subsidiary or any
Investment Affiliate shall default in the performance or observance of any other
obligation or condition with respect to any such Recourse Debt or any other
event shall occur or condition exist beyond the giving of any required notice
and the expiration of any applicable grace period, if the effect of such other
default, event or condition is to accelerate the maturity of any such
indebtedness or to permit (without any further requirement of notice or lapse of
time) the holder or holders thereof, or any trustee or agent for such holders,
to accelerate the maturity of any such indebtedness;
(f) the Borrower or Guarantor shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any action to authorize any of the foregoing;
(g) an involuntary case or other proceeding shall be commenced
against the Borrower or Guarantor seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 90 days; or an order for
relief shall be entered against the Borrower or Guarantor under the federal
bankruptcy laws as now or hereafter in effect;
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(h) one or more final, non-appealable judgments or decrees in an
aggregate amount of Ten Million Dollars ($10,000,000) or more shall be entered
by a court or courts of competent jurisdiction against the Borrower, Guarantor
or its Consolidated Subsidiaries (other than any judgment as to which, and only
to the extent, a reputable insurance company has acknowledged coverage of such
claim in writing) and (i) any such judgments or decrees shall not be stayed,
discharged, paid, bonded or vacated within thirty (30) days or (ii) enforcement
proceedings shall be commenced by any creditor on any such judgments or decrees
and such enforcement proceedings shall not immediately be stayed;
(i) there shall be a change in the majority of the Board of
Directors of Guarantor during any twelve (12) month period, excluding any change
in directors resulting from (x) the death, resignation (in the ordinary course
and not in connection with any change in control) or disability of any director,
or (y) satisfaction of any requirement for the majority of the members of the
board of directors of Guarantor to qualify under applicable law as independent
directors or (z) the replacement of any director who is an officer or employee
of Guarantor or an affiliate of Guarantor with any other officer or employee of
Guarantor or an affiliate of Guarantor;
(j) any Person (including affiliates of such Person) or "group"
(as such term is defined in applicable federal securities laws and regulations)
shall acquire more than thirty percent (30%) of the common shares of Guarantor;
(k) Guarantor shall cease at any time to qualify as a real estate
investment trust under the Code;
(l) if any Termination Event with respect to a Plan shall occur
as a result of which Termination Event or Events any member of the ERISA Group
has incurred or may incur any liability to the PBGC or any other Person and the
sum (determined as of the date of occurrence of such Termination Event) of the
insufficiency of such Plan and the insufficiency of any and all other Plans with
respect to which such a Termination Event shall occur and be continuing (or, in
the case of a Multiple Employer Plan with respect to which a Termination Event
described in clause (ii) of the definition of Termination Event shall occur and
be continuing, the liability of the Borrower) is equal to or greater than
$10,000,000 and which the Administrative Agent reasonably determines will have a
Material Adverse Effect;
(m) if, any member of the ERISA Group shall commit a failure
described in Section 302(f)(1) of ERISA or Section 412(n)(1) of the Code and the
amount of the lien determined under Section 302(f)(3) of ERISA or Section
412(n)(3) of the Code that could reasonably be expected to be imposed on any
member of the ERISA Group or their assets in respect of such failure shall be
equal to or greater than $10,000,000 and which the Administrative Agent
reasonably determines will have a Material Adverse Effect;
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(n) at any time, for any reason the Borrower seeks to repudiate
its obligations under any Loan Document;
(o) a default beyond any applicable notice and grace period under
any of the other Loan Documents; or
(p) a default beyond any applicable notice and grace period shall
have occurred under that certain Revolving Credit Agreement dated as of June 27,
1997 among the Borrower, the banks listed therein, Bank of America NT&SA, as
Administrative Agent, and ▇▇▇▇▇ Fargo Bank, N.A., as Documentation Agent, with
▇.▇. ▇▇▇▇▇▇ Securities, Inc., as Syndication Agent, as amended by that certain
First Amendment To Revolving Credit Agreement dated as of July 10, 1998, as
further amended by that certain Second Amendment To Revolving Credit Agreement
dated as of August 4, 1998, as it may be amended hereafter from time to time.
SECTION 6.2. Rights and Remedies.
(a) Upon the occurrence of any Event of Default described in
Sections 6.1(f) or (g), the Commitment shall immediately terminate and the
unpaid principal amount of, and any and all accrued interest on, the Loans and
any and all accrued fees and other Obligations hereunder shall automatically
become immediately due and payable, with all additional interest from time to
time accrued thereon and without presentation, demand, or protest or other
requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and notice of acceleration), all of which are hereby expressly waived by the
Borrower; and upon the occurrence and during the continuance of any other Event
of Default, the Administrative Agent upon the demand of the Required Banks
shall, by written notice to the Borrower, in addition to the exercise of all of
the rights and remedies permitted the Administrative Agent and the Banks at law
or equity or under any of the other Loan Documents, declare the unpaid principal
amount of and any and all accrued and unpaid interest on the Loans and any and
all accrued fees and other obligations hereunder to be, and the same shall
thereupon be, immediately due and payable with all additional interest from time
to time accrued thereon and (except as otherwise as provided in the Loan
Documents) without presentation, demand, or protest or other requirements of any
kind (including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by the Borrower.
(b) Notwithstanding anything to the contrary contained in this
Agreement or in any other Loan Document, the Administrative Agent, and the Banks
each agree that any exercise or enforcement of the rights and remedies granted
to the Administrative Agent or the Banks under this Agreement or at law or in
equity with respect to this Agreement or any other Loan Documents shall be
commenced and maintained by the Administrative Agent on behalf of the
Administrative Agent and/or the Banks. The Administrative Agent shall act at the
direction of the Required Banks in
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connection with the exercise of any and all remedies at law, in equity or under
any of the Loan Documents or, if the Required Banks are unable to reach
agreement on the exercise of remedies, then, from and after Administrative Agent
shall have declared the Loan immediately due and payable, the Administrative
Agent may pursue such rights and remedies as it may determine.
SECTION 6.3. Notice of Default. The Administrative Agent shall
give notice to the Borrower under Section 6.1(c) promptly upon being requested
to do so by the Required Banks and shall thereupon notify all the Banks thereof.
The Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default (other than nonpayment of
principal of or interest on the Loans) unless the Administrative Agent has
received notice in writing from a Bank or Borrower referring to this Agreement
or the other Loan Documents, describing such event or condition. Should
Administrative Agent receive notice of the occurrence of a Default or Event of
Default expressly stating that such notice is a notice of a Default or Event of
Default, or should Administrative Agent send Borrower a notice of Default or
Event of Default, Administrative Agent, shall promptly give notice thereof to
each Bank.
SECTION 6.4. Distribution of Proceeds after Default. Subject to
Section 7.6, from and after an Event of Default, to the extent proceeds are
received by Administrative Agent, such proceeds will be distributed to the Banks
pro rata in accordance with the unpaid principal amount of the Loans. Regardless
of how each Bank may treat payments received by it pursuant to this Agreement
and the Notes delivered to evidence debt hereunder for the purpose of its own
accounting, for the purpose of computing the Borrower's and Guarantor's
obligations under this Agreement and under such Notes, the payments shall be
applied first, to the costs and expenses (including attorneys' fees and
disbursements and the allocated costs and expenses of in-house legal and other
professional services) of the Administrative Agent, acting as Administrative
Agent, and of the Banks as set forth herein, second, to the payment of accrued
and unpaid interest on all Notes to and including the date of such application
(ratably according to the accrued and unpaid interest on the Notes), third, to
the ratable payment of the unpaid principal of all the Notes, and fourth, to the
payment of all other amounts (including fees) then owing to the Administrative
Agents or the Banks under the Loan Documents. No application of the payments
will cure any Event of Default or prevent acceleration, or continued
acceleration, of amounts payable under the Loan Documents or prevent the
exercise, or continued exercise, of rights or remedies of the Banks under this
Agreement or under law.
ARTICLE VII.
THE AGENTS
SECTION 7.1. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the other Loan
Documents
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as are delegated to the Administrative Agent by the terms hereof or thereof,
together with all such powers as are reasonably incidental thereto. Except as
set forth in Sections 7.8 and 7.9 hereof, the provisions of this Article VII are
solely for the benefit of Administrative Agent and the Banks, and Borrower shall
not have any rights to rely on or enforce any of the provisions hereof. In
performing its functions and duties under this Agreement, the Administrative
Agent shall act solely as an agent of the Banks and shall not assume and shall
not be deemed to have assumed any obligation toward or relationship of agency or
trust with or for the Borrower.
SECTION 7.2. Agency and Affiliates. ▇▇▇▇▇ Fargo shall have the
same rights and powers under this Agreement as any other Bank and may exercise
or refrain from exercising the same as though it were not the Administrative
Agent. ▇▇▇▇▇ Fargo (and its affiliates) may accept deposits from, lend money to,
and generally engage in any kind of business with the Borrower, Guarantor or any
Subsidiary or affiliate of the Borrower as if it were not the Administrative
Agent hereunder, and the term "Bank" and "Banks" shall include ▇▇▇▇▇ Fargo in
its individual capacity.
SECTION 7.3. Action by Administrative Agent. The obligations of
the Administrative Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, the Administrative Agent shall
not be required to take any action with respect to any Default or Event of
Default, except as expressly provided in Article VI. The duties of
Administrative Agent shall be administrative in nature. Subject to the
provisions of Sections 7.1, 7.5 and 7.6, Administrative Agent shall administer
the Loans in the same manner as it administers its own loans.
SECTION 7.4. Consultation with Experts. As between Administrative
Agent and the Banks, the Administrative Agent may consult with legal counsel
(who may be counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
SECTION 7.5 Liability of Administrative Agent. As between
Administrative Agent and the Banks, none of the Administrative Agent nor any of
its affiliates nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or not taken by it in connection
herewith (i) with the consent or at the request of the Required Banks or (ii) in
the absence of its own gross negligence or willful misconduct. As between
Administrative Agent and the Banks, none of the Administrative Agent nor any of
its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with this Agreement or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of the Borrower; (iii) the satisfaction of any condition specified in
Article III, except receipt of items required to be delivered to the
Administrative Agent; or (iv) the validity, effectiveness or genuineness of this
Agreement, the other Loan Documents or any other instrument or writing furnished
in connection herewith. As between Administrative
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Agent and the Banks, the Administrative Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex or similar writing) believed by it to
be genuine or to be signed by the proper party or parties.
SECTION 7.6. Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Administrative Agent and its
affiliates and its respective directors, officers, agents and employees (to the
extent not reimbursed by the Borrower) against any cost, expense (including
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from such indemnitee's gross negligence or willful
misconduct) that such indemnitee may suffer or incur in connection with its
duties as Administrative Agent under this Agreement, the other Loan Documents or
any action taken or omitted by such indemnitee hereunder. In the event that the
Administrative Agent shall, subsequent to its receipt of indemnification
payment(s) from Banks in accordance with this Section, recoup any amount from
the Borrower, or any other party liable therefor in connection with such
indemnification, the Administrative Agent shall reimburse the Banks which
previously made the payment(s) pro rata, based upon the actual amounts which
were theretofore paid by each Bank. The Administrative Agent shall reimburse
such Banks so entitled to reimbursement within two (2) Domestic Business Days of
its receipt of such funds from the Borrower or such other party liable therefor.
SECTION 7.7. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Bank, and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each
Bank also acknowledges that it will, independently and without reliance upon the
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
credit decisions in taking or not taking any action under this Agreement.
SECTION 7.8. Successor Administrative Agent. The Administrative
Agent may resign at any time by giving notice thereof to the Banks and the
Borrower and the Administrative Agent shall resign in the event its Commitment
is reduced to below five percent (5%) of the Aggregate Commitments. Upon any
such resignation, the Required Banks shall have the right to appoint a successor
Administrative Agent, which successor Administrative Agent shall, provided no
Event of Default has occurred and is then continuing, be subject to Borrower's
approval, which approval shall not be unreasonably withheld or delayed. If no
successor Administrative Agent shall have been so appointed by the Required
Banks and approved by the Borrower, and shall have accepted such appointment,
within 30 days after the retiring Administrative Agent gives notice of
resignation, then the retiring Administrative Agent may, on behalf of the Banks,
appoint a successor Administrative Agent, who shall act until the Required Banks
shall appoint a Administrative Agent. Upon the acceptance of its appointment as
the Administrative Agent hereunder by a successor Administrative Agent, such
successor
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Administrative Agent shall thereupon succeed to and become vested with all the
rights 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 resignation hereunder, the
provisions of this Article shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Administrative Agent. For gross
negligence or willful misconduct, as determined by the Required Banks (excluding
for such determination Administrative Agent in its capacity as a Bank, but in no
event shall such determination be made by less than two (2) Banks),
Administrative Agent may be removed at any time by giving at least thirty (30)
Domestic Business Days prior written notice to Administrative Agent and
Borrower. Such resignation or removal shall take effect upon the acceptance of
appointment by a successor Administrative Agent, in accordance with the
provisions of this Section 7.8.
SECTION 7.9. Consents and Approvals. All communications from
Administrative Agent to the Banks requesting the Banks' determination, consent,
approval or disapproval (i) shall be given in the form of a written notice to
each Bank (ii) shall be accompanied by a description of the matter or item as to
which such determination, approval, consent or disapproval is requested, or
shall advise each Bank where such matter or item may be inspected, or shall
otherwise describe the matter or issue to be resolved, (iii) shall include, if
reasonably requested by a Bank and to the extent not previously provided to such
Bank, written materials and a summary of all oral information provided to
Administrative Agent by Borrower in respect of the matter or issue to be
resolved, and (iv) shall include Administrative Agent's recommended course of
action or determination in respect thereof. Each Bank shall reply promptly, but
in any event within ten (10) Domestic Business Days after receipt of the request
therefor from Administrative Agent (the "Bank Reply Period"). Unless a Bank
shall give written notice to Administrative Agent that it objects to the
recommendation or determination of Administrative Agent (together with a written
explanation of the reasons behind such objection) within the Bank Reply Period,
such Bank shall be deemed to have approved of or consented to such
recommendation or determination. With respect to decisions requiring the
approval of the Required Banks or all the Banks, Administrative Agent shall
submit its recommendation or determination for approval of or consent to such
recommendation or determination to all Banks and upon receiving the required
approval or consent shall follow the course of action or determination of the
Required Banks (and each non-responding Bank shall be deemed to have concurred
with such recommended course of action) or all the Banks, as the case may be.
ARTICLE VIII.
CHANGE IN CIRCUMSTANCES
SECTION 8.1. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any LIBOR
Borrowing or any continuation of the LIBOR Loans (or portions thereof)
comprising such Borrowing:
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(a) the Administrative Agent has determined in good faith that
deposits in dollars (in the applicable amounts) are not being offered in the
relevant market for such Interest Period, or
(b) Banks having 50% or more of the Aggregate Commitments advise
the Administrative Agent that the Adjusted London Interbank Offered Rate, as
determined by the Administrative Agent, will not adequately and fairly reflect
the cost to such Bank of continuing its Loans as LIBOR Loans for such Interest
Period,
the Administrative Agent shall forthwith give notice thereof to
the Borrower and the Banks, whereupon until the Administrative Agent notifies
the Borrower that the circumstances giving rise to such suspension no longer
exist, the obligations of the Banks to continue their Loans as LIBOR Loans for
such Interest Period shall be suspended. With respect to any Borrowing to be
made upon the commencement of an extension term, unless the Borrower notifies
the Administrative Agent at least two Domestic Business Days before the date of
such Borrowing that it elects not to exercise the First Option To Extend or the
Second Option To Extend, as applicable, the Borrowing shall instead be made as a
Base Rate Borrowing and the Loans comprising such Borrowing shall bear interest
for each day from and including the first day to but excluding the last day of
the Interest Period applicable thereto at the Base Rate for such day. For
purposes of this Section 8.1(b), in determining whether the Adjusted London
Interbank Offered Rate, as determined by Administrative Agent, will not
adequately and fairly reflect the cost to any Bank of continuing its Loans as
LIBOR Loans for such Interest Period, such determination will be based solely on
the ability of such Bank to obtain matching funds in the London interbank market
at a reasonably equivalent rate.
SECTION 8.2. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any change
in any applicable law, rule or regulation, 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
compliance by any Bank (or its LIBOR Lending Office) with any request or
directive (whether or not having the force of law) made after the Closing Date
of any such authority, central bank or comparable agency shall make it unlawful
for any Bank (or its LIBOR Lending Office) to make, maintain or fund its LIBOR
Loans, the Administrative Agent shall forthwith give notice thereof to the other
Banks and the Borrower, whereupon until such Bank notifies the Borrower and the
Administrative Agent that the circumstances giving rise to such suspension no
longer exist, the obligation of such Bank, if any, to continue its Loan as a
LIBOR Loan for any subsequent Interest Period shall be suspended and, to the
extent such Bank has an obligation to continue its Loan after the expiration of
the then current Interest Period, such Loan shall be continued as a Base Rate
Loan as set forth below. With respect to any such LIBOR Loan, before giving any
notice to the Administrative Agent pursuant to this Section, such Bank shall
designate a different LIBOR Lending Office if such designation will avoid the
need for giving such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. Notwithstanding anything in the
foregoing to
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the contrary, if such Bank shall determine that it may not lawfully continue to
maintain any of its outstanding LIBOR Loans to maturity and shall so specify in
such notice, such LIBOR Loan shall be converted as of such date to a Base Rate
Loan (without payment of any amounts that Borrower would otherwise be obligated
to pay pursuant to Section 2.11 hereof with respect to Loans converted pursuant
to this Section 8.2) in an equal principal amount from such Bank (on which
interest and principal shall be payable contemporaneously with the related LIBOR
Loans of the other Banks), and such Bank shall make such a Base Rate Loan.
If at any time, it shall be unlawful for any Bank to make,
maintain or continue its LIBOR Loan, the Borrower shall have the right, upon
five (5) Domestic Business Day's notice to the Administrative Agent, to either
(x) cause a bank, reasonably acceptable to the Administrative Agent, to offer to
purchase the Commitments of such Bank for an amount equal to such Bank's
outstanding Loan, and to become a Bank hereunder, or obtain the agreement of one
or more existing Banks to offer to purchase the Commitments of such Bank for
such amount, which offer such Bank is hereby required to accept, or (y) to repay
in full all Loans then outstanding of such Bank, together with interest and all
other amounts due thereon, upon which event, the Aggregate Commitments shall be
reduced by the amount of such Bank's Commitment and such Bank shall cease to be
a Bank hereunder.
SECTION 8.3. Increased Cost and Reduced Return.
(a) If, on or after the date hereof, the adoption of any
applicable law, rule or regulation, or any change in any applicable law, rule or
regulation, 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 compliance by any Bank (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) made at the Closing Date of any such authority, central bank
or comparable agency shall impose, modify or deem applicable any reserve
(including, without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System (but excluding with respect to any LIBOR
Loan any such requirement reflected in an applicable LIBOR Reserve Percentage)),
special deposit, insurance assessment or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Bank (or its
Applicable Lending Office) or shall impose on any Bank (or its Applicable
Lending Office) or on the London interbank market any other condition materially
more burdensome in nature, extent or consequence than those in existence as of
the Closing Date affecting such Bank's LIBOR Loan, its Note, or its obligation
to make LIBOR Loans, and the result of any of the foregoing is to increase the
cost to such Bank (or its Applicable Lending Office) of making or maintaining
any LIBOR Loan, or to reduce the amount of any sum received or receivable by
such Bank (or its Applicable Lending Office) under this Agreement or under its
Note with respect to such LIBOR Loan, by an amount deemed by such Bank to be
material, then, within fifteen (15) days after demand by such Bank (with a copy
to the Administrative Agent), the Borrower shall pay to such Bank such
additional amount or
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amounts (based upon a reasonable allocation thereof by such Bank to the LIBOR
Loan made by such Bank hereunder) as will compensate such Bank for such
increased cost or reduction to the extent such Bank generally imposes such
additional amounts on other borrowers of such Bank in similar circumstances.
(b) If any Bank shall have reasonably determined that, after the
date hereof, the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change in any such law, rule or regulation, 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) made after the Closing Date of any such
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 reasonably deemed by such Bank to be material,
then from time to time, within fifteen (15) days after demand by such Bank (with
a copy to the Administrative Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank (or its Parent) for
such reduction to the extent such Bank generally imposes such additional amounts
on other borrowers of such Bank in similar circumstances.
(c) Each Bank will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Bank to compensation pursuant to this
Section and will designate a different Applicable Lending office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the reasonable judgment of such Bank, be otherwise
disadvantageous to such Bank. If such Bank shall fail to notify Borrower of any
such event within ninety (90) days following the end of the month during which
such event occurred, then Borrower's liability for any amounts described in this
Section incurred by such Bank as a result of such event shall be limited to
those attributable to the period occurring subsequent to the ninetieth (90th)
day prior to the date upon which such Bank actually notified Borrower of the
occurrence of such event. A certificate of any Bank claiming compensation under
this Section and setting forth a reasonably detailed calculation of the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of demonstrable error. In determining such amount, such Bank may use
any reasonable averaging and attribution methods.
(d) If at any time, any Bank shall be owed amounts pursuant to
this Section 8.3, the Borrower shall have the right, upon five (5) Domestic
Business Day's notice to the Administrative Agent to either (x) cause a bank,
reasonably acceptable to the Administrative Agent, to offer to purchase the
Commitment of such Bank for an amount equal to such Bank's outstanding Loan, and
to become a Bank hereunder, or to obtain the agreement of one or more existing
Banks to offer to purchase the Commitment of such Bank for such amount, which
offer such Bank is hereby required to accept, or (y) to repay
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in full all Loans then outstanding of such Bank, together with interest and all
other amounts due thereon, upon which event, the Aggregate Commitments shall be
reduced by the amount of such Bank's Commitment and such Bank shall cease to be
a Bank hereunder.
SECTION 8.4. Taxes.
(a) Any and all payments by the Borrower to or for the account of
any Bank or the Administrative Agent hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, in the case of each Bank and
the Administrative Agent, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Bank or the
Administrative Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Bank, taxes imposed on its income,
and franchise or similar taxes imposed on it, by the jurisdiction of such Bank's
Applicable Lending Office or any political subdivision thereof or by any other
jurisdiction (or any political subdivision thereof) as a result of a present or
former connection between such Bank or Administrative Agent and such other
jurisdiction or by the United States (all such non-excluded taxes, duties,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Non-Excluded Taxes"). If the Borrower shall be
required by law to deduct any Non-Excluded Taxes from or in respect of any sum
payable hereunder or under any Note, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 8.4) such Bank or the
Administrative Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions, (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
law and (iv) the Borrower shall furnish to the Administrative Agent, at its
address referred to in Section 9.1, the original or a certified copy of a
receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or charges or
similar levies which arise from any payment made hereunder or under any Note or
from the execution or delivery of, or otherwise with respect to, this Agreement
or any Note (hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Bank and the
Administrative Agent for the full amount of Non-Excluded Taxes or Other Taxes
(including, without limitation, any Non-Excluded Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section 8.4) paid by
such Bank or the Administrative Agent (as the case may be) and, so long as such
Bank or Administrative Agent has promptly paid any such Non-Excluded Taxes or
Other Taxes, any liability for penalties and interest arising therefrom or with
respect thereto. This
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indemnification shall be made within fifteen (15) days from the date such Bank
or the Administrative Agent (as the case may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other Bank,
shall provide the Borrower with (a) two duly completed copies of Internal
Revenue Service form 1001 or 4224, as appropriate, or any successor form
prescribed by the Internal Revenue Service, and (b) an Internal Revenue Service
Form W-8 or W-9, or any successor form prescribed by the Internal Revenue
Service, and shall provide Borrower with two further copies of any such form or
certification on or before the date that any such form or certification expires
or becomes obsolete and after the occurrence of any event requiring a change in
the most recent form previously delivered by it to Borrower, certifying (i) in
the case of a Form 1001 or 4224, that such Bank is entitled to benefits under an
income tax treaty to which the United States is a party which reduces the rate
of withholding tax on payments of interest or certifying that the income
receivable pursuant to this Agreement is effectively connected with the conduct
of a trade or business in the United States, and (ii) in the case of a Form W-8
or W-9, that it is entitled to an exemption from United States backup
withholding tax. If the form provided by a Bank at the time such Bank first
becomes a party to this Agreement indicates a United States interest withholding
tax rate in excess of zero, withholding tax at such rate shall be considered
excluded from "Non-Excluded Taxes" as defined in Section 8.4(a).
(e) For any period with respect to which a Bank has failed to
provide the Borrower with the appropriate form pursuant to Section 8.4(d)
(unless such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Bank shall not be entitled to indemnification under Section 8.4(c) with
respect to Non-Excluded Taxes imposed by the United States, provided, however,
that should a Bank, which is otherwise exempt from or subject to a reduced rate
of withholding tax, become subject to Non-Excluded Taxes because of its failure
to deliver a form required hereunder, the Borrower shall take such steps as such
Bank shall reasonably request to assist such Bank to recover such Taxes so long
as Borrower shall incur no cost or liability as a result thereof.
(f) If the Borrower is required to pay additional amounts to or
for the account of any Bank pursuant to this Section 8.4, then such Bank will
change the jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such change,
in the judgment of such Bank, is not otherwise disadvantageous to such Bank.
(g) If at any time, any Bank shall be owed amounts pursuant to
this Section 8.4, the Borrower shall have the right, upon five (5) Domestic
Business Day's notice to the Administrative Agent to either (x) cause a bank,
reasonably acceptable to the Administrative Agent, to offer to purchase the
Commitment of such Bank for an amount
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equal to such Bank's outstanding Loan, and to become a Bank hereunder, or to
obtain the agreement of one or more existing Banks to offer to purchase the
Commitment of such Bank for such amount, which offer such Bank is hereby
required to accept, or (y) to repay in full all Loans then outstanding of such
Bank, together with interest and all other amounts due thereon, upon which
event, the Aggregate Commitments shall be reduced by the amount of such Bank's
Commitment and such Bank shall cease to be a Bank hereunder.
SECTION 8.5. Base Rate Loans Substituted for Affected LIBOR
Loans. If (i) the obligation of any Bank to continue its Loan as a LIBOR Loan
has been suspended pursuant to Sections 8.1 or 8.2 or (ii) any Bank has demanded
compensation under Section 8.3 or 8.4 with respect to its LIBOR Loan and the
Borrower shall, by at least five LIBOR Business Days' prior notice to such Bank
through the Administrative Agent, have elected that the provisions of this
Section 8.5 shall apply to such Bank, then, unless and until such Bank notifies
the Borrower that the circumstances giving rise to such suspension or demand for
compensation no longer exist:
(a) any Loan which would otherwise be continued by such Bank as a
LIBOR Loan shall be continued instead as a Base Rate Loan (on which interest and
principal shall be payable contemporaneously with the related LIBOR Loans of the
other Banks), and
(b) all payments of principal which would otherwise be applied to
repay such LIBOR Loan shall be applied to repay its Base Rate Loan instead, and
(c) Borrower will not be required to make any payment which would
otherwise be required by Section 2.11 with respect to such LIBOR Loan converted
to a Base Rate Loan pursuant to clause (a) above.
ARTICLE IX.
MISCELLANEOUS
SECTION 9.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission followed by telephonic confirmation or similar
writing) and shall be given to such party: (x) in the case of the Borrower or
the Administrative Agent, at its address, telex number or facsimile number set
forth on the signature pages hereof with a duplicate copy thereof, in the case
of the Borrower, to the Borrower, at Irvine Apartment Communities, L.P. ▇/▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Vice President, Corporate Finance and Controller, and to
O'Melveny & ▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq., (y) in the case of any Bank, at
its address, telex number or facsimile number set forth on the signature pages
hereof or (z) in the case of any party, such other address, telex number or
facsimile number as such party may hereafter specify for the purpose by notice
to the
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Administrative Agent and the Borrower. Each such notice, request or other
communication shall be effective (i) if given by telex or facsimile
transmission, when such telex or facsimile is transmitted to the telex number or
facsimile number specified in this Section and the appropriate answerback or
facsimile confirmation is received (provided, however, if the date of such
transmission and confirmation is not a Domestic Business Day, then the next
succeeding Domestic Business Day), (ii) if given by certified registered mail,
return receipt requested, with first class postage prepaid, addressed as
aforesaid, upon receipt or refusal to accept delivery, (iii) if given by a
nationally recognized overnight carrier, 24 hours after such communication is
deposited with such carrier with postage prepaid for next day delivery, or (iv)
if given by any other means, when delivered at the address specified in this
Section; provided that notices to the Administrative Agent under Article II or
Article VIII shall not be effective until received.
SECTION 9.2. No Waivers. No failure or delay by the
Administrative Agent or any Bank in exercising any right, power or privilege
hereunder or under any Note shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 9.3. Expenses; Indemnification.
(a) The Borrower shall pay within thirty (30) days after written
notice from the Administrative Agent all reasonable out-of-pocket costs and
expenses of the Administrative Agent (including the fees and disbursements of
outside counsel as well as the allocated cost of Administrative Agent's internal
legal services), in connection with the preparation of this Agreement, the Loan
Documents and the documents and instruments referred to therein, and any waiver,
consent hereunder and any amendment hereof, the administration hereof and any
Default or alleged Default hereunder, (ii) in connection with the syndication of
the Loans and (iii) if an Event of Default occurs, all reasonable out-of-pocket
expenses incurred by the Administrative Agent and the Banks as a group,
including fees and disbursements of counsel for the Administrative Agent and
each of the Banks, in connection with the enforcement of the Loan Documents and
the instruments referred to therein and such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings resulting therefrom;
provided, however, that the attorneys' fees and disbursements for which Borrower
is obligated under this subsection (a)(iii) shall be limited to the reasonable
non-duplicative fees and disbursements of (a) counsel for Administrative Agent
and (b) counsel for all of the Banks as a group. For purposes of this Section
9.3(a)(iii), (1) counsel for Administrative Agent shall mean a single outside
law firm representing Administrative Agent together with the allocated cost of
Administrative Agent's internal legal services, and (2) counsel for all of the
Banks as a group shall mean a single outside law firm representing such Banks as
a group (which law firm may or may not be the same law firm representing
Administrative Agent).
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(b) The Borrower agrees to indemnify the Administrative Agent,
each Bank and their respective affiliates and the respective directors,
officers, agents and employees of the foregoing (each an "Indemnitee") and hold
each Indemnitee harmless from and against any and all liabilities, losses,
damages, costs and expenses of any kind, including, without limitation, the
reasonable fees and disbursements of counsel, which may be incurred by such
Indemnitee in connection with any investigative, administrative or judicial
proceeding that may at any time (including, without limitation, at any time
following the payment of the Obligations) be asserted against any Indemnitee, as
a result of, or arising out of, or related to or by reason of, (i) any of the
transactions contemplated by the Loan Documents or the execution, delivery or
performance of any Loan Document, (ii) any violation by the Borrower or the
Environmental Affiliates of any applicable Environmental Law, (iii) any
Environmental Claim arising out of the management, use, control, ownership or
operation of property or assets by the Borrower or any of the Environmental
Affiliates, including, without limitation, all on-site and off-site activities
of Borrower or any Environmental Affiliate involving Materials of Environmental
Concern, (iv) the breach of any environmental representation or warranty set
forth herein, but in all cases excluding those liabilities, losses, damages,
costs and expenses (a) for which such Indemnitee has been compensated pursuant
to the terms of this Agreement, (b) incurred solely by reason of the gross
negligence, willful misconduct, bad faith or fraud of any Indemnitee as finally
determined by a court of competent jurisdiction, (c) violations of Environmental
Laws relating to a Property which are caused by the act or omission of such
Indemnitee after such Indemnitee takes possession or control (but in no event
shall appointment of a receiver or a trustee be deemed control) of such Property
or (d) any liability of such Indemnitee to any third party based upon
Contractual Obligations of such Indemnitee owing to such third party which are
not expressly set forth in the Loan Documents. In addition, the indemnification
set forth in this Section 9.3(b) in favor of any director, officer, agent or
employee of Administrative Agent or any Bank shall be solely in their respective
capacities as such director, officer, agent or employee. The Borrower's
obligations under this Section shall survive the termination of this Agreement
and the payment of the Obligations.
(c) Each Indemnitee will promptly notify the Borrower of each
event of which it has knowledge that may give rise to a claim under clause (b)
of Section 9.3, provided that the failure to so notify the Borrower shall in no
way impair the Borrower's obligations under this Section 9.3 (except to the
extent that such failure to so notify arises from the gross negligence or
willful misconduct of such Indemnitee and has an adverse effect on the
Borrower). If any investigative, judicial or administrative proceeding is
brought against any Indemnitee indemnified or intended to be indemnified
pursuant to this Section 9.3, the Borrower, to the extent and in the manner
directed by the Indemnitee, will resist and defend such proceeding with counsel
designated by the Borrower (which counsel shall be reasonably satisfactory to
the Indemnitee). Each Indemnitee will use its best efforts to cooperate in the
defense of any such action, writ, or proceeding. The Borrower shall keep such
Indemnitee advised of the status of such defense and consult with such
Indemnitee prior to taking any material position with respect thereto. Such
Indemnitee shall, however, be entitled to employ counsel separate
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from counsel for the Borrower and from any other party in such proceeding if
such Indemnitee shall reasonably determine that a conflict of interest or other
circumstance exists that makes representation by counsel chosen by the Borrower
not advisable. The fees and disbursements of such separate counsel shall be paid
by the Borrower. Such Indemnitee shall not agree to the settlement of any such
claim without the consent of the Borrower, unless the Borrower shall have been
given notice of the commencement of an action and shall have failed to provide
the defense thereof as herein provided or an Event of Default shall have
occurred.
SECTION 9.4. Sharing of Set-Offs. In addition to any rights now
or hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, and after acceleration of the Obligations, each
Bank is hereby authorized at any time or from time to time, without presentment,
demand, protest or other notice of any kind to the Borrower or to any other
Person, any such notice being hereby expressly waived, but subject to the prior
consent of the Administrative Agent, to set off and to appropriate and apply any
and all deposits (general or special, time or demand, provisional or final) and
any other indebtedness at any time held or owing by such Bank (including,
without limitation, by branches and agencies of such Bank wherever located) to
or for the credit or the account of the Borrower against and on account of the
Obligations of the Borrower then due and payable to such Bank under this
Agreement or under any of the other Loan Documents, including, without
limitation, all interests in Obligations purchased by such Bank. Each Bank shall
notify the Borrower in writing promptly after any such set-off and the
application thereof made by such Bank; provided however that the failure to give
such notice shall not affect the validity of such set-off and application. Each
Bank agrees that if it shall by exercising any right of set-off or counterclaim
or otherwise, receive payment of a proportion of the aggregate amount of
principal and interest due with respect to any Note held by it which is greater
than the proportion received by any other Bank, the Bank receiving such
proportionately greater payment shall purchase such participations in the Notes
held by the other Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest with respect to the
Notes held by the Banks shall be shared by the Banks pro rata; provided that
nothing in this Section shall impair the right of any Bank to exercise any right
of setoff or counterclaim it may have to any deposits not received in connection
with the Loans and to apply the amount subject to such exercise to the payment
of indebtedness of the Borrower other than its indebtedness under the Notes. The
Borrower agrees, to the fullest extent it may effectively do so under applicable
law, that any holder of a participation in a Note, whether or not acquired
pursuant to the foregoing arrangements, may exercise rights of set-off or
counterclaim and other rights with respect to such participation as fully as if
such holder of a participation were a direct creditor of the Borrower in the
amount of such participation. Notwithstanding anything to the contrary contained
herein, any Bank may, by separate agreement with the Borrower, waive its right
to set off contained herein or granted by law and any such written waiver shall
be effective against such Bank under this Section 9.4.
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SECTION 9.5. Amendments and Waivers. Any provision of this
Agreement, the Notes or any other Loan Documents may be amended or waived if,
but only if, such amendment or waiver is in writing and is signed by the
Borrower and the Required Banks; provided that no such amendment or waiver with
respect to this Agreement, the Notes or any other Loan Documents shall, unless
signed by all the Banks, (i) subject any Bank to any additional obligation, (ii)
reduce the principal of or rate of interest on any Loan or any fees hereunder,
(iii) postpone the date fixed for any payment of principal of or interest on any
Loan or any fees hereunder, (iv) except as contemplated by this Agreement,
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Notes, or the number of Banks, which shall be required for the
Banks or any of them to take any action under this Section or any other
provision of this Agreement, release the Guaranty or (vi) modify the provisions
of this Section 9.5. No amendment or waiver shall be binding against the
Administrative Agent until it shall have been notified thereof in writing.
SECTION 9.6. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower may not assign or otherwise transfer any of
its rights under this Agreement or the other Loan Documents without the prior
written consent of all Banks and the Administrative Agent and a Bank may not
assign or otherwise transfer any of its interest under this Agreement except as
permitted in subsection (b) and (c) of this Section 9.6.
(b) Any Bank may at any time grant to any Person in any amount,
participating interests in any Loans made pursuant to this Agreement. In
addition, any Bank may at any time grant to any existing Bank or one or more
banks, finance companies, insurance or other financial institutions which (A)
has (or, in the case of a bank which is a subsidiary, such bank's parent has) a
rating of its senior debt obligations of not less than Baa-1 by Moody's, BBB by
S&P or a comparable rating by a rating agency acceptable to Administrative Agent
and (B) has total assets in excess of Ten Billion Dollars ($10,000,000,000),
participating interests in its Loan, in an amount not less than $10,000,000;
provided that such Bank retains at least one-half of its interest in its Loan
free and clear of any participation interest. If any Bank sells or grants an
interest to a Person described above (in each case, a "Participant"), (i) such
Bank shall make and receive all payments for the account of its Participant,
(ii) such Bank's obligations under this Agreement shall remain unchanged, (iii)
such Bank shall continue to be the sole holder of its Notes and other Loan
Documents subject to the participation and shall have the sole right to enforce
its rights and remedies under the Loan Documents, (iv) the Borrower, the
Administrative Agent and the Banks shall continue to deal solely and directly
with such Bank in connection with such Bank's rights and obligations under the
Loan Documents, and (v) the participation agreement shall not restrict such
Bank's ability to agree to any amendment of the terms of the Loan Documents, or
to exercise or refrain from exercising any powers or rights that such Bank may
have under or in respect of the Loan Documents, except that the Participant may
be granted the right to consent to any
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(A) reduction of the rate or amount, or any extension of the stated maturity or
due date (except as to any extension of the Maturity Date provided for in this
Agreement), of any principal, interest or fees payable by the Borrower and
subject to the participation, or (B) release of the Guaranty, except to the
extent otherwise provided in the Loan Documents. The Borrower agrees that each
Participant shall, to the extent provided in its participation agreement, be
entitled to the benefits of Article VIII with respect to its participating
interest.
(c) Subject to the requirement that each Bank continues to hold a
minimum of five percent (5%) of the Aggregate Commitments for so long as it is a
Bank hereunder, any Bank may at any time assign, prior to the occurrence of an
Event of Default, to an existing Bank or one or more banks, finance companies,
insurance or other financial institutions which (A) has (or, in the case of a
bank which is a subsidiary, such bank's parent has) a rating of its senior debt
obligations of not less than Baa-1 by Moody's, BBB by S&P or a comparable rating
by a rating agency acceptable to Administrative Agent and (B) has total assets
in excess of Ten Billion Dollars ($10,000,000,000), in minimum amounts of not
less than five percent (5%) of the Aggregate Commitments and integral multiples
of One Million Dollars ($1,000,000) thereafter (or any lesser amount in the case
of assignments to an existing Bank) so long as such assignment is made with (and
subject to) the consent of the Administrative Agent, which shall not be
unreasonably withheld or delayed; provided that if an Assignee is an affiliate
of such transferor Bank or was a Bank immediately prior to such assignment, no
such consent shall be required. After the occurrence and during the continuance
of an Event of Default, any Bank may at any time assign to any Person in any
amount, all or a proportionate part of all, of its rights and obligations under
this Agreement, the Notes and the other Loan Documents. In either case, such
Person (in each case, an "Assignee") shall assume such rights and obligations,
pursuant to a Transfer Supplement in substantially the form of Exhibit "B"
attached hereto executed by such Assignee and such transferor Bank, and a copy
thereof shall be promptly furnished to the Administrative Agent. Upon execution
and delivery of a Transfer Supplement and payment by such Assignee to such
transferor Bank of an amount equal to the purchase price agreed between such
transferor 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 with a
Commitment as set forth in such Transfer Supplement, and no further consent or
action by any party shall be required and the transferor Bank shall be released
from its obligations hereunder to a corresponding extent. Upon the consummation
of any assignment pursuant to this subsection (c), the transferor Bank, the
Administrative Agent and the Borrower shall make appropriate arrangements so
that, if required, new Notes are issued to the Assignee and to the transferor
Bank in replacement of its old Note. In connection with any such assignment, the
transferor Bank shall pay to the Administrative Agent an administrative fee for
processing such assignment in the amount of $2,500. If the Assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall deliver to the Borrower and the 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 8.4. Any assignment, made during the continuation of an
Event of Default shall not be affected by any subsequent cure of such Event of
Default.
(d) 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.
(e) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.3 or 8.4
than such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 8.2, 8.3 or 8.4 requiring such
Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
SECTION 9.7. Collateral. Each of the Banks represents to the
Administrative Agent and each of the other Banks that it in good faith is not
relying upon any "margin stock" (as defined in Regulation U) as collateral in
the extension or maintenance of the credit provided for in this Agreement.
SECTION 9.8. Governing Law; Submission to Jurisdiction. THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA EXCEPT TO THE EXTENT PREEMPTED
BY FEDERAL LAW (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO
CONFLICTS OF LAW).
(b) Any legal action or proceeding with respect to this Agreement
or any other Loan Document and any action for enforcement of any judgment in
respect thereof may be brought in the courts of the State of California or of
the United States of America located in Orange County, California, and, by
execution and delivery of this Agreement, the Banks and the Borrower each hereby
accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts and
appellate courts from any thereof. The Banks and the Borrower irrevocably
consent to the service of process out of any of the aforementioned courts in any
such action or proceeding by the hand delivery, or mailing of copies thereof by
registered or certified mail, postage prepaid, to the Banks and the Borrower at
their respective addresses set forth below. The Banks and the Borrower hereby
irrevocably waive any objection which it may now or hereafter have to the laying
of venue of any of the aforesaid actions or proceedings arising out of or in
connection with this Agreement or any other Loan Document brought in the courts
referred to above and hereby further irrevocably waive and agree not to plead or
claim in any such court that any such action or proceeding brought in any such
court has been brought in an inconvenient forum. Nothing herein shall affect the
right of the Borrower or Administrative Agent to serve
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process in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against any other party in any other jurisdiction.
SECTION 9.9. Counterparts; Integration; Effectiveness. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof. This Agreement shall become effective upon receipt by the Administrative
Agent and the Borrower of counterparts hereof signed by each of the parties
hereto (or, in the case of any party as to which an executed counterpart shall
not have been received, receipt by the Administrative Agent in form satisfactory
to it of telegraphic, telex or other written confirmation from such party of
execution of a counterpart hereof by such party), and the date on which such
receipt occurs shall be the "Effective Date."
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 9.11. Survival. All indemnities set forth herein shall
survive the execution and delivery of this Agreement and the other Loan
Documents and the making and repayment of the Loans hereunder.
SECTION 9.12. Domicile of Loans. Each Bank may transfer and carry
its Loans at, to or for the account of any domestic or foreign branch office,
subsidiary or affiliate of such Bank.
SECTION 9.13. Limitation of Liability. No claim may be made by
the Borrower or any other Person acting by or through Borrower against the
Administrative Agent or any Bank or the affiliates, directors, officers,
employees, attorneys or agent of any of them for any consequential or punitive
damages in respect of any claim for breach of contract or any other theory of
liability arising out of or related to the transactions contemplated by this
Agreement or by the other Loan Documents, or any act, omission or event
occurring in connection therewith; and the Borrower hereby waives, releases and
agrees not to ▇▇▇ upon any claim for any such damages, whether or not accrued
and whether or not known or suspected to exist in its favor.
SECTION 9.14. Recourse Obligation. This Agreement and the
Obligations hereunder are fully recourse to the Borrower. Notwithstanding the
foregoing, no recourse under or upon any obligation, covenant, or agreement
contained in this Agreement shall be had against any limited partner of
Borrower, any shareholder of Guarantor or any of their or Borrower's or
Guarantor's respective officers, directors,
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shareholders or employees except in the event of fraud or misappropriation of
funds on the part of such officer, director, shareholder or employee.
SECTION 9.15. Bank's Failure to Fund.
(a) Unless the Administrative Agent shall have received notice
from a Bank prior to the Closing Date that such Bank will not make available to
the Administrative Agent such Bank's share of the initial Borrowing, the
Administrative Agent may assume that such Bank has made such share available to
the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) of Section 2.2 hereof, and the Administrative Agent may, in
reliance upon such assumption, make available to Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Administrative Agent, such Bank and Borrower
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, in accordance with the
provisions of Section 2.2(b) hereof. If such Bank shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for purposes of this
Agreement. Nothing contained in this Section or Section 2.2(b) shall be deemed
to reduce the Commitment of any Bank or in any way affect the rights of Borrower
with respect to any defaulting Bank or Administrative Agent. The failure of any
Bank to make available to the Administrative Agent such Bank's share of the
initial Borrowing in accordance with Section 2.2(a) hereof shall not relieve any
other Bank of its obligations to fund its Commitment, in accordance with the
provisions hereof.
(b) If a Bank does not advance to Administrative Agent such
Bank's pro rata share of the initial Borrowing in accordance herewith, then
neither Administrative Agent nor the other Banks shall be required or obligated
to fund such Bank's pro rata share of such initial Borrowing.
(c) As used herein, the following terms shall have the meanings
set forth below:
(i) "Defaulting Bank" shall mean any Bank which (x) does
not advance to the Administrative Agent such Bank's pro rata share of the
initial Borrowing in accordance herewith for a period of five (5) Domestic
Business Days after notice of such failure from Administrative Agent, (y) shall
otherwise fail to perform such Bank's obligations under the Loan Documents for a
period of five (5) Domestic Business Days after notice of such failure from
Administrative Agent, or (z) shall fail to pay the Administrative Agent or any
other Bank, as the case may be, upon demand, such Bank's pro rata share of any
costs, expenses or disbursements incurred or made by the Administrative Agent
pursuant to the terms of the Loan Documents for a period of five (5) Domestic
Business Days after notice of such failure from Administrative Agent, and in all
cases, such failure is not as a result of a good faith dispute as to whether
such advance is properly required to be made pursuant to the provisions of this
Agreement, or
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as to whether such other performance or payment is properly required pursuant to
the provisions of this Agreement.
(ii) "Junior Creditor" means any Defaulting Bank which has
not (x) fully cured each and every default on its part under the Loan Documents
and (y) unconditionally tendered to the Administrative Agent such Defaulting
Bank's pro rata share of all costs, expenses and disbursements required to be
paid or reimbursed pursuant to the terms of the Loan Documents.
(iii) "Payment in Full" means, as of any date, the receipt by
the Banks who are not Junior Creditors of an amount of cash, in lawful currency
of the United States, sufficient to indefeasibly pay in full all Senior Debt.
(iv) "Senior Debt" means (x) collectively, any and all
indebtedness, obligations and liabilities of the Borrower to the Banks who are
not Junior Creditors from time to time, whether fixed or contingent, direct or
indirect, joint or several, due or not due, liquidated or unliquidated,
determined or undetermined, arising by contract, operation of law or otherwise,
whether on open account or evidenced by one or more instruments, and whether for
principal, premium, interest (including, without limitation, interest accruing
after the filing of a petition initiating any proceeding referred to in Section
6.1(f) or (g)), reimbursement for fees, indemnities, costs, expenses or
otherwise, which arise under, in connection with or in respect of the Loans or
the Loan Documents, and (y) any and all deferrals, renewals, extensions and
refundings of, or amendments, restatements, rearrangements, modifications or
supplements to, any such indebtedness, obligation or liability.
(v) "Subordinated Debt" means (x) any and all indebtedness,
obligations and liabilities of Borrower to one or more Junior Creditors from
time to time, whether fixed or contingent, direct or indirect, joint or several,
due or not due, liquidated or unliquidated, determined or undetermined, arising
by contract, operation of law or otherwise, whether on open account or evidenced
by one or more instruments, and whether for principal, premium, interest
(including, without limitation, interest accruing after the filing of a petition
initiating any proceeding referred to in Section 6.1(f) or (g)), reimbursement
for fees, indemnities, costs, expenses or otherwise, which arise under, in
connection with or in respect of the Loans or the Loan Documents, and (y) any
and all deferrals, renewals, extensions and refundings of, or amendments,
restatements, rearrangements, modifications or supplements to, any such
indebtedness, obligation or liability.
(d) Immediately upon a Bank's becoming a Junior Creditor, no
Junior Creditor shall, prior to Payment in Full of all Senior Debt:
(i) accelerate, demand payment of, ▇▇▇ upon, collect, or
receive any payment upon, in any manner, or satisfy or otherwise discharge, any
Subordinated Debt, whether for principal, interest and otherwise;
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(ii) take or enforce any Liens to secure Subordinated Debt
or attach or levy upon any assets of Borrower, to enforce any Subordinated Debt;
(iii) enforce or apply any security for any Subordinated
Debt; or
(iv) incur any debt or liability, or the like, to, or
receive any loan, return of capital, advance, gift or any other property, from,
the Borrower.
(e) In the event of:
(i) any insolvency, bankruptcy, receivership, liquidation,
dissolution, reorganization, readjustment, composition or other similar
proceeding relating to Borrower;
(ii) any liquidation, dissolution or other winding-up of the
Borrower, voluntary or involuntary, whether or not involving insolvency,
reorganization or bankruptcy proceedings;
(iii) any assignment by the Borrower for the benefit of
creditors;
(iv) any sale or other transfer of all or substantially all
assets of the Borrower; or
(v) any other marshaling of the assets of the Borrower;
each of the Banks shall first have received Payment in Full of all Senior Debt
before any payment or distribution, whether in cash, securities or other
property, shall be made in respect of or upon any Subordinated Debt. Any payment
or distribution, whether in cash, securities or other property that would
otherwise be payable or deliverable in respect of Subordinated Debt to any
Junior Creditor but for this Agreement shall be paid or delivered directly to
the Administrative Agent for distribution to the Banks in accordance with this
Agreement until Payment in Full of all Senior Debt. If any Junior Creditor
receives any such payment or distribution, it shall promptly pay over or deliver
the same to the Administrative Agent for application in accordance with the
preceding sentence.
(f) Each Junior Creditor shall file in any bankruptcy or other
proceeding of Borrower in which the filing of claims is required by law, all
claims relating to Subordinated Debt that such Junior Creditor may have against
Borrower and assign to the Banks who are not Junior Creditors all rights of such
Junior Creditor thereunder. If such Junior Creditor does not file any such claim
prior to forty-five (45) days before the expiration of the time to file such
claim, Administrative Agent, as attorney-in-fact for such Junior Creditor, is
hereby irrevocably authorized to do so in the name of such Junior Creditor or,
in Administrative Agent's sole discretion, to assign the claim to a nominee and
to cause proof of claim to be filed in the name of such nominee. The foregoing
power of attorney is coupled with an interest and cannot be revoked. The
Administrative Agent shall, to the exclusion of each Junior Creditor, have the
sole right,
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subject to Section 9.5 hereof, to accept or reject any plan proposed in any such
proceeding and to take any other action that a party filing a claim is entitled
to take. In all such cases, whether in administration, bankruptcy or otherwise,
the Person or Persons authorized to pay such claim shall pay to Administrative
Agent the amount payable on such claim and, to the full extent necessary for
that purpose, each Junior Creditor hereby transfers and assigns to the
Administrative Agent all of the Junior Creditor's rights to any such payments or
distributions to which Junior Creditor would otherwise be entitled.
(g) (i) If any payment or distribution of any character or any
security, whether in cash, securities or other property, shall be received by
any Junior Creditor in contravention of any of the terms hereof, such payment or
distribution or security shall be received in trust for the benefit of, and
shall promptly be paid over or delivered and transferred to, Administrative
Agent for application to the payment of all Senior Debt, to the extent necessary
to achieve Payment in Full. In the event of the failure of any Junior Creditor
to endorse or assign any such payment, distribution or security, Administrative
Agent is hereby irrevocably authorized to endorse or assign the same as
attorney-in-fact for such Junior Creditor.
(ii) Each Junior Creditor shall take such action (including,
without limitation, the execution and filing of a financing statement with
respect to this Agreement and the execution, verification, delivery and filing
of proofs of claim, consents, assignments or other instructions that
Administrative Agent may require from time to time in order to prove or realize
upon any rights or claims pertaining to Subordinated Debt or to effectuate the
full benefit of the subordination contained herein) as may, in Administrative
Agent's sole and absolute discretion, be necessary or desirable to assure the
effectiveness of the subordination effected by this Agreement.
(h) (i) Each Bank that becomes a Junior Creditor understands and
acknowledges by its execution hereof that each other Bank is entering into this
Agreement and the Loan Documents in reliance upon the absolute subordination in
right of payment and in time of payment of Subordinated Debt to Senior Debt as
set forth herein.
(ii) Only upon the Payment in Full of all Senior Debt shall
any Junior Creditor be subrogated to any remaining rights of the Banks which are
not Defaulting Banks to receive payments or distributions of assets of the
Borrower made on or applicable to any Senior Debt.
(iii) Each Junior Creditor agrees that it will deliver all
instruments or other writings evidencing any Subordinated Debt held by it to
Administrative Agent, promptly after request therefor by the Administrative
Agent.
(iv) No Junior Creditor may at any time sell, assign or
otherwise transfer any Subordinated Debt, or any portion thereof, including,
without limitation, the granting of any Lien thereon, unless and until
satisfaction of the requirements of Section 9.6 above and the proposed
transferee shall have assumed in writing the
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obligation of the Junior Creditor to the Banks under this Agreement, in a form
acceptable to the Administrative Agent.
(v) If any of the Senior Debt, should be invalidated,
avoided or set aside, the subordination provided for herein nevertheless shall
continue in full force and effect and, as between the Banks which are not
Defaulting Banks and all Junior Creditors, shall be and be deemed to remain in
full force and effect.
(vi) Each Junior Creditor hereby irrevocably waives, in
respect of Subordinated Debt, all rights (x) under Sections 361 through 365,
502(e) and 509 of the Bankruptcy Code (or any similar sections hereafter in
effect under any other Federal or state laws or legal or equitable principles
relating to bankruptcy, insolvency, reorganizations, liquidations or otherwise
for the relief of debtors or protection of creditors), and (y) to seek or obtain
conversion to a different type of proceeding or to seek or obtain dismissal of a
proceeding, in each case in relation to a bankruptcy, reorganization, insolvency
or other proceeding under similar laws with respect to the Borrower. Without
limiting the generality of the foregoing, each Junior Creditor hereby
specifically waives (A) the right to seek to give credit (secured or otherwise)
to the Borrower in any way under Section 364 of the Bankruptcy Code unless the
same is subordinated in all respects to Senior Debt in a manner acceptable to
Administrative Agent in its sole and absolute discretion and (B) the right to
receive any collateral security (including any "super priority" or equal or
"priming" or replacement Lien) for any Subordinated Debt unless the Banks which
are not Defaulting Banks have received a senior position acceptable to the Banks
in their sole and absolute discretion to secure all Senior Debt (in the same
collateral to the extent collateral is involved).
(i) (i) In addition to and not in limitation of the subordination
effected by this Section 9.15, the Administrative Agent and each of the Banks
which are not Defaulting Banks may in their respective sole and absolute
discretion, also exercise any and all other rights and remedies available at law
or in equity in respect of a Defaulting Bank; and
(ii) The Administrative Agent shall give each of the Banks
notice of the occurrence of a default under this Section 9.15 by a Defaulting
Bank and if the Administrative Agent and/or one or more of the other Banks
shall, at their option, fund any amounts required to be paid or advanced by a
Defaulting Bank, the other Banks who have elected not to fund any portion of
such amounts shall not be liable for any reimbursements to the Administrative
Agent and/or to such other funding Banks.
(j) Notwithstanding anything to the contrary contained or implied
herein, a Defaulting Bank shall not be entitled to vote on any matter as to
which a vote by the Banks is required hereunder, including, without limitation,
any actions or consents on the part of the Administrative Agent as to which the
approval or consent of all the Banks or the Required Banks is required under
Article VIII, Section 9.5 or elsewhere, so long as such Bank is a Defaulting
Bank; provided, however, that in the case of any vote requiring
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the unanimous consent of the Banks, if all the Banks other than the Defaulting
Bank shall have voted in accordance with each other, then the Defaulting Bank
shall be deemed to have voted in accordance with such Banks.
(k) Each of the Administrative Agent and any one or more of the
Banks which are not Defaulting Banks may, at their respective option, (i)
advance to the Borrower such Bank's pro rata share of the portion of the initial
Borrowing not advanced by a Defaulting Bank in accordance with the Loan
Documents, or (ii) pay to the Administrative Agent such Bank's pro rata share of
any costs, expenses or disbursements incurred or made by the Administrative
Agent pursuant to the terms of this Agreement not theretofore paid by a
Defaulting Bank. Immediately upon the making of any such advance by the
Administrative Agent or any one of the Banks, such Bank's pro rata share and the
pro rata share of the Defaulting Bank shall be recalculated to reflect such
advance. All payments, repayments and other disbursements of funds by the
Administrative Agent to Banks shall thereupon and, at all times thereafter be
made in accordance with such Bank's recalculated pro rata share unless and until
a Defaulting Bank shall fully cure all defaults on the part of such Defaulting
Bank under the Loan Documents or otherwise existing in respect of the Loans or
this Agreement, at which time the pro rata share of the Bank(s) which advanced
sums on behalf of the Defaulting Bank and of the Defaulting Bank shall be
restored to their original percentages.
SECTION 9.16. Dispute Resolution.
(a) Mandatory Arbitration
(i) If requested by any party thereto, any controversy or
claim between the parties hereto arising out of or relating to this Agreement or
any of the other Loan Documents (including any controversy or claim regarding
the arbitrability of such controversy or claim or based on or arising out of an
alleged tort) shall be determined by arbitration to be held in Orange County,
California in accordance with Title 9 of the U.S. Code and the Commercial
Arbitration Rules of the American Arbitration Association (the "AAA") and the
AAA's Supplementary Procedures for Large, Complex Disputes.
(ii) Any arbitration hereunder shall be held before a
single arbitrator mutually agreed to by the parties thereto, except that, if the
parties shall fail to agree to such an arbitrator within ten (10) days from the
date on which the claimant's request for arbitration is delivered to the other
party to the arbitration, such arbitration shall be held before a panel of three
arbitrators and each party shall appoint one arbitrator. The arbitrator(s) must
be either a retired judge from the California Superior or Appellate Courts or
the United States District Courts located in California or a member of the AAA
panel for hearing large, complex cases in Orange County, California. If a party
fails to nominate an arbitrator within 10 days from the date on which the
claimant's request for arbitration has been communicated to the other party, the
appointment shall be made by the AAA. The two arbitrators so appointed shall
attempt to agree upon the third arbitrator to act as chairman. If the two
arbitrators fail to nominate the chairman within 10 days
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from the date of appointment of the later appointed arbitrator, the chairman
shall be selected by the AAA.
(iii) Discovery may be taken in the arbitration
proceedings pursuant to the provisions of California Code of Civil Procedure
Section 1283.05, which are incorporated herein by reference and made applicable
to any arbitration held pursuant to this Section.
(iv) The award of the arbitrator(s) shall be final, and
the parties agree to waive their right to any form of appeal, to the greatest
extent allowed by law, and to share equally the fees and expenses of the
arbitrators. Judgment upon any award of the arbitrators may be entered in any
court having jurisdiction or application may be made to such court for the
judicial acceptance of the award and for order of enforcement. All statutes of
limitation and waivers that would otherwise be applicable shall apply to any
arbitration proceeding under this Section 9.16(a).
(b) Judicial Reference
If any such controversy or claim is not submitted to arbitration
as provided in subsection (a), but becomes the subject of a judicial action, it
shall be resolved solely and exclusively pursuant to the provisions for
reference and trial by referee set forth in California Code of Civil Procedure
Section 638 et seq., or any statute containing reasonably similar provisions
that replaces such sections, except as expressly modified by the provisions
hereof. The referee shall be a retired or former Superior Court judge practicing
in Orange County, California, who is either (i) agreed to by the parties within
ten (10) days of the notice by any party to the other of the intention to invoke
this Section to resolve the dispute, or (ii) failing such agreement, is
appointed pursuant to California Code of Civil Procedure Section 638.l (or any
statute containing reasonably similar provisions that replaces such section) in
an action filed in the Superior Court of Orange County, California. The parties
agree that any party may file (and, if necessary, the other party shall join in
such filing) with the Clerk of the Orange County Superior Court, or with the
appropriate judge of such Court, any and all petitions, motions, applications or
other documents necessary to obtain the appointment of such a referee
immediately upon the commencement of any action or proceeding to resolve any
such dispute and to conduct all necessary discovery and to proceed to a trial as
expeditiously as possible. All proceedings, including trial, before the referee
shall be conducted at a neutral location (unless otherwise stipulated by the
parties) within five miles of the Orange County Superior Court. The parties
agree that the referee shall be a judge for all purposes (including (i) ruling
on any and all discovery matters and motions and any and all pretrial or trial
motions, (ii) setting a schedule of pretrial proceedings, and (iii) making any
other orders or rulings a sitting judge of the Superior Court would be empowered
to make in any action or proceeding in the Superior Court). Any matter before
the referee shall be governed by the California Code of Civil Procedure, the
California Rules of Court, the California Evidence Code and the Local Rules of
the Orange County Superior Court. Any decision of the referee shall be
appealable to the same extent and in the same manner
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that such decisions would be appealable if rendered by a judge of the Orange
County Superior Court. The Referee shall in his or her statement of decision set
forth his or her findings of fact and conclusions of law. The parties intend
this reference agreement to be specifically enforceable in accordance with
Section 638.l of the California Code of Civil Procedure.
(c) Provisional Remedies, Self-Help
Subject to Section 9.4, nothing herein shall limit the right of
any party to exercise self-help remedies such as setoff or to obtain provisional
or ancillary remedies, including an order of attachment, a temporary restraining
order, preliminary injunction or other interim relief from any court of
competent jurisdiction if such is necessary to preserve that party's rights
before, during or after the pendency of any arbitration, reference or bankruptcy
proceeding.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
IRVINE APARTMENT COMMUNITIES, L.P.,
a Delaware limited partnership
By: Irvine Apartment Communities,
Inc., a Maryland corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
and Chief Financial Officer
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Corporate Finance and
Controller
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
Address:
c/o Irvine Apartment Communities, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Vice President, Corporate Finance
and Controller
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Commitment Amount
$66,000,000
LIBOR Lending Office: ▇▇▇▇▇ FARGO BANK, ▇.▇.
▇▇▇▇▇ Fargo Bank, NA By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Disbursement and Operations Center -------------------------------------
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Title: Vice President
Attn:
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Domestic Lending Office:
▇▇▇▇▇ Fargo Bank, NA
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Office Manager
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
84
Commitment Amount
-----------------
$34,000,000
LIBOR Lending Office: U.S. BANK NATIONAL ASSOCIATION
U.S. Bank National Association By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ -------------------------------------
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Domestic Lending Office:
U.S. Bank National Association
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
85
Address: ▇▇▇▇▇ FARGO BANK, N.A.,
as Co-Arranger and Administrative Agent
▇▇▇▇▇ Fargo Bank, NA By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ -------------------------------------
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Attn: Office Manager
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
86
Address: U.S. BANK NATIONAL ASSOCIATION,
as Co-Arranger
U.S. Bank National Association By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ -------------------------------------
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
87
SCHEDULE 1
Bank Commitments
--------------------------------------------------------------------------------
SHARE OF AGGREGATE
BANK COMMITMENT COMMITMENTS
--------------------------------------------------------------------------------
▇▇▇▇▇ Fargo Bank, N.A. $ 66,000,000 66.00%
--------------------------------------------------------------------------------
U.S. Bank National Association $ 34,000,000 34.00%
--------------------------------------------------------------------------------
Total $100,000,000 100.00%
--------------------------------------------------------------------------------
88
SCHEDULE 4.6
Borrower and Guarantor ERISA Plans
Irvine Apartment Communities, Inc. Savings Plan
Customary health, life and disability plans for active employees
89
Schedule 4.17
Initial Qualifying Unencumbered Properties
Amherst Court
Arcadia at Stonecrest
Baypointe
Berkeley Court
Brittany
Cedar Creek
Champagne Towers (▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇)
▇▇▇▇▇▇▇▇ Court
Cornell Court
Cross Creek
Dartmouth Court
Deerfield II
Harvard Court
▇▇▇▇▇▇▇▇
Newport North
Newport Ridge
Northwood Park
Northwood Place
Orchard Park
Park Place (land)
Rancho Alisal
Rancho Maderas
Rancho Monterey
Rancho Santa Fe
Rancho Tierra
San Carlo
San ▇▇▇▇
San Marco
San Marino
San Mateo
San Remo
Santa ▇▇▇▇▇
Santa ▇▇▇▇▇
Santa ▇▇▇▇
Santa ▇▇▇▇ ▇▇
Sierra Vista
Sonoma
Stanford Court
90
The Colony
The Colony at Aventine
The Hamptons
The Villas at ▇▇▇▇ Island Marina
Turtle Rock Canyon
Villa Coronado
Villas of Renaissance
Windwood ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Woodbridge Oaks
Woodbridge Villas
Woodbridge Willows
2
91
SCHEDULE 5.14(c)(1)
San ▇▇▇▇▇▇ Limited Partnership, L.P.
IAC Management, Inc.
IAC Capital Trust
IAC Park Place, LLC
92
SCHEDULE 5.14(c)(2)
None
93
Exhibit A
EXHIBIT A
NOTE
Irvine, California
$______________ November 20, 1998
For value received, IRVINE APARTMENT COMMUNITIES, L.P., a
Delaware limited partnership (the "Borrower"), promises to pay to the order of
__________________ (the "Bank"), for the account of its Applicable Lending
Office, the principal sum of _______________ ($________). The Borrower promises
to pay interest on the unpaid principal amount of the Loan owing to the Bank on
the dates and at the rate or rates provided for in the Loan Agreement referred
to below. All such payments of principal and interest shall be made in lawful
money of the United States in Federal or other immediately available funds at
the office designated by Bank.
Any Loan made by the Bank, the type and maturity thereof and all
repayments of the principal thereof shall be recorded by the Bank and, if the
Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to such
Loan then outstanding may be endorsed by the Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a part
hereof; provided that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under
the Loan Agreement.
This note is one of the Notes referred to in, and is delivered
pursuant to and subject to all of the terms of, the Unsecured Loan Agreement
dated as of November 20, 1998 by and among the Borrower, the banks listed on the
signature pages thereof, ▇▇▇▇▇ Fargo Bank, N.A., as Co-Arranger and
Administrative Agent, and U.S. Bank National Association, as Co-Arranger (as the
same may be amended, supplemented, replaced, renewed or otherwise modified from
time to time, the "Loan Agreement"). Terms defined in the Loan Agreement are
used herein with the same meanings.
A-1
94
Reference is made to the Loan Agreement for provisions for the
prepayment hereof and the acceleration of the maturity hereof.
IRVINE APARTMENT COMMUNITIES, L.P.,
a Delaware limited partnership
By: Irvine Apartment Communities,
Inc., a Maryland corporation,
its general partner
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
A-2
95
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Amount Principal Notation
Date Loan Type of Loan Repaid Maturity Date Made By
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
A-3
96
Exhibit B
EXHIBIT B
TRANSFER SUPPLEMENT
TRANSFER SUPPLEMENT (this "Transfer Supplement") dated as of
_______________, 199__ between _________________ (the "Assignor") and
____________________ having an address at ____________________________ (the
"Purchasing Bank").
W I T N E S S E T H:
WHEREAS, the Assignor has made a loan to Irvine Apartment
Communities, L.P., a Delaware limited partnership (the "Borrower"), pursuant to
the Unsecured Loan Agreement, dated as of November 20, 1998 (as the same may be
amended, supplemented, replaced, renewed or otherwise modified from time to time
through the date hereof, the "Loan Agreement"), by and among the Borrower, the
banks listed on the signature pages thereof, ▇▇▇▇▇ Fargo Bank, N.A., as
Co-Arranger and Administrative Agent, and U.S. Bank National Association, as
Co-Arranger. All capitalized terms used and not otherwise defined herein shall
have the respective meanings set forth in the Loan Agreement;
WHEREAS, the Purchasing Bank desires to purchase and assume from
the Assignor, and the Assignor desires to sell and assign to the Purchasing
Bank, certain rights, title, interests and obligations under the Loan Agreement.
NOW, THEREFORE, IT IS AGREED:
1. In consideration of the amount set forth in the receipt (the
"Receipt") given by the Assignor to the Purchasing Bank of even date herewith,
and transferred by wire to the Assignor, the Assignor hereby assigns and sells,
without recourse, representation or warranty except as specifically set forth
herein, to the Purchasing Bank, and the Purchasing Bank hereby purchases and
assumes from the Assignor, a ___% interest (the "Purchased Interest") of the
Loan owing to the Assignor and constituting a portion of the Assignor's rights
and obligations under the Loan Agreement as of the Effective Date (as defined
below) including, without limitation, such percentage interest of the Assignor
in any Loan owing to the Assignor, and Note held by the Assignor, any Commitment
of the Assignor and any other interest of the Assignor under any of the Loan
Documents.
2. The Assignor (i) represents and warrants that as of the date
hereof the aggregate outstanding principal amount of its share of the Loan owing
to it (without giving effect to assignments thereof which have not yet become
effective) is $______________; (ii) represents and warrants that it is the legal
and beneficial owner of the interests being assigned by it hereunder and that
such interests are free and clear of any adverse claim; (iii) represents and
warrants that it has not received any notice of Default or Event of Default from
the Borrower; (iv) represents and warrants that it has
B-1
97
full power and authority to execute and deliver, and perform under, this
Transfer Supplement, and all necessary corporate and/or partnership action has
been taken to authorize, and all approvals and consents have been obtained for,
the execution, delivery and performance thereof; (v) represents and warrants
that this Transfer Supplement constitutes its legal, valid and binding
obligation enforceable in accordance with its terms; (vi) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations (or the truthfulness or accuracy
thereof) made in or in connection with the Loan Agreement, or the other Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Agreement, or the other Loan Documents or any
other instrument or document furnished pursuant thereto; and, (vii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under the Loan Agreement or the other Loan
Documents or any other instrument or document furnished pursuant thereto. Except
as specifically set forth in this Paragraph 2, this assignment shall be without
recourse to Assignor.
3. The Purchasing Bank (i) confirms that it has received a copy of
the Loan Agreement, and the other Loan Documents, together with such financial
statements and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Transfer
Supplement and to become a party to the Loan Agreement, and has not relied on
any statements made by Assignor or ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP; (ii) agrees that
it will, independently and without reliance upon any of the Administrative
Agent, the Assignor or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of the Borrower
and will make its own credit analysis, appraisals and decisions in taking or not
taking action under the Loan Agreement, and the other Loan Documents; (iii)
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under the Loan Agreement, and the other
Loan Documents, as are delegated to the Agent by the terms thereof, together
with such powers as are incidental thereto; (iv) agrees that it will be bound by
and perform in accordance with their terms all of the obligations which by the
terms of the Loan Agreement are required to be performed by it as a Bank; (v)
specifies as its address for notices and lending office, the office set forth
beneath its name on the signature page hereof; (vi) it has full power and
authority to execute and deliver, and perform under, this Transfer Supplement,
and all necessary corporate and/or partnership action has been taken to
authorize, and all approvals and consents have been obtained for, the execution,
delivery and performance thereof; (vii) this Transfer Supplement constitutes its
legal, valid and binding obligation enforceable in accordance with its terms;
and (viii) the interest being assigned hereunder is being acquired by it for its
own account, for investment purposes only and not with a view to the public
distribution thereof and without any present intention of its resale in either
case that would be in violation of applicable securities laws.
B-2
98
4. This Transfer Supplement shall be effective on the date (the
"Effective Date") on which all of the following have occurred (i) it shall have
been executed and delivered by the parties hereto, (ii) copies hereof shall have
been delivered to the Administrative Agent and the Borrower, (iii) the
Purchasing Bank shall have received an original Note and (iv) the Purchasing
Bank shall have paid to the Assignor the agreed purchase price as set forth in
the Receipt.
5. On and after the Effective Date, (i) the Purchasing Bank shall be
a party to the Loan Agreement and, to the extent provided in this Transfer
Supplement, have the rights and obligations of a Bank thereunder and be entitled
to the benefits and rights of the Banks thereunder and (ii) the Assignor shall,
to the extent provided in this Transfer Supplement as to the Purchased Interest,
relinquish its rights and be released from its obligations under the Loan
Agreement.
6. From and after the Effective Date, the Assignor shall cause the
Administrative Agent to make all payments under the Loan Agreement, and the
Notes in respect of the Purchased Interest assigned hereby (including, without
limitation, all payments of principal, fees and interest with respect thereto
and any amounts accrued but not paid prior to such date) to the Purchasing Bank.
7. This Transfer Supplement may be executed in any number of
counterparts which, when taken together, shall be deemed to constitute one and
the same instrument.
8. The Assignor hereby represents and warrants to the Purchasing
Bank that it has made all payments demanded to date by the Administrative Agent
in connection with the Assignor's pro rata share of the obligation to reimburse
the Administrative Agent for its expenses and made all Loans required. In the
event that the Administrative Agent shall demand reimbursement for fees and
expenses from the Purchasing Bank for any period prior to the Effective Date,
Assignor hereby agrees to promptly pay the Administrative Agent such sums
directly, subject, however, to Paragraph 12 hereof.
9. The Assignor will, at the cost of the Assignor, and without
expense to the Purchasing Bank, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, assignments, notices of
assignments, transfers and assurances as the Purchasing Bank shall, from time to
time, reasonably require, for the better assuring conveying, assigning,
transferring and confirming unto the Purchasing Bank the property and rights
hereby given, granted, bargained, sold, aliened, enfeoffed, conveyed, confirmed,
assigned and/or intended now or hereafter so to be, on which the Assignor may be
or may hereafter become bound to convey or assign to the Purchasing Bank, or for
carrying out the intention or facilitating the performance of the terms of this
Agreement or for filing, registering or recording this Agreement.
10. The parties agree that no broker or finder was instrumental in
bringing about this transaction. Each party shall indemnify, defend the other
and hold the other free and harmless from and against any damages, costs or
expenses (including, but not limited to, reasonable attorneys, fees and
disbursements) suffered by such party arising
B-3
99
from claims by any broker or finder that such broker or finder has dealt with
said party in connection with this transaction.
11. Subject to the provisions of Paragraph 12 hereof, if, with
respect to the Purchased Interest only, the Assignor shall on or after the
Effective Date receive (a) any cash, note, securities, property, obligations or
other consideration in respect of or relating to the Loan or the Loan Documents
or issued in substitution or replacement of the Loan or the Loan Documents, (b)
any cash or non-cash consideration in any form whatsoever distributed, paid or
issued in any bankruptcy proceeding in connection with the Loan or the Loan
Documents or (c) any other distribution (whether by means of repayment,
redemption, realization of security or otherwise), the Assignor shall accept the
same as the Purchasing Bank's agent and hold the same in trust on behalf of and
for the benefit of the Purchasing Bank, and shall deliver the same forthwith to
the Purchasing Bank in the same form received, with the endorsement (without
recourse) of the Assignor when necessary or appropriate. If the Assignor shall
fail to deliver any funds received by it within the same business day of
receipt, unless such funds are received by the Assignor after 4:00 p.m., Pacific
Standard Time, then the following business day after receipt, said funds shall
accrue interest at the Federal Funds Rate and in addition to promptly remitting
said amount, the Assignor shall remit such interest from the date received to
the date such amount is remitted to the Purchasing Bank.
12. The Assignor and the Purchasing Bank each hereby agree to
indemnify and hold harmless the other, each of its directors and each of its
officers in connection with any claim or cause of action based on any matter or
claim based on the acts of either while acting as a Bank under the Loan
Agreement. Promptly after receipt by the indemnified party under this Section of
notice of the commencement of any action, such indemnified party shall notify
the indemnifying party in writing of the commencement thereof. If any such
action is brought against any indemnified party and that party notifies the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein, and to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after receipt of notice from the
indemnifying party to such indemnified party of its election to so assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof. In no event
shall the indemnified party settle or consent to a settlement of such cause of
action or claim without the consent of the indemnifying party.
B-4
100
13. THIS TRANSFER SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAWS OF THE STATE OF CALIFORNIA.
Wire Transfer Instructions:
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
By:
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Receipt and Consent acknowledged this
_________ day of ____________, 199__:
▇▇▇▇▇ FARGO BANK, N.A.,
as Administrative Agent
By:
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[IF REQUIRED ADD THE FOLLOWING:]
IRVINE APARTMENT COMMUNITIES, L.P.,
By: Irvine Apartment Communities, Inc.
By: [Certifying Officer]
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
B-5
101
Exhibit C
EXHIBIT C
[FORM OF NOTICE OF INTEREST PERIOD ELECTION]
NOTICE OF INTEREST PERIOD ELECTION
Pursuant to that certain Unsecured Loan Agreement dated as of
November 20, 1998 by and among Irvine Apartment Communities, L.P., a Delaware
limited partnership (the "Borrower"), the banks listed on the signature pages
thereof, ▇▇▇▇▇ Fargo Bank, N.A., as Co-Arranger and Administrative Agent, and
U.S. Bank National Association, as Co-Arranger (as the same may be amended,
supplemented, replaced, renewed or otherwise modified from time to time, the
"Loan Agreement"), this represents Borrower's request to continue as LIBOR Loans
$___________ in principal amount of presently outstanding Loans having an
Interest Period that expires on ____________, ____. The Interest Period for such
LIBOR Loans commencing on _________, ____ is requested to be a _______ [SELECT A
1, 2, 3 OR 6 MONTH PERIOD] month period. Terms with initial capital letters used
but not defined herein have the meanings assigned to them in the Loan Agreement.
The undersigned Certifying Officer, to the best of his or her
knowledge, and Borrower certify that no Event of Default or Default has occurred
and is continuing under the Loan Agreement.
IRVINE APARTMENT COMMUNITIES, L.P.,
a Delaware limited partnership
By: Irvine Apartment Communities, Inc.,
a Maryland corporation,
its general partner
By: [Certifying Officer]
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
C-1
102
Exhibit D
EXHIBIT D
[FORM OF COMPLIANCE CERTIFICATE]
COMPLIANCE CERTIFICATE
TO: ▇▇▇▇▇ Fargo Bank, N.A.
Reference is hereby made to the Unsecured Loan Agreement, dated as of November
20, 1998 (as the same may be amended, supplemented, replaced, renewed or
otherwise from time to time, the "Loan Agreement"), by and among IRVINE
APARTMENT COMMUNITIES, L.P., a Delaware limited partnership (the "Borrower"),
the Banks listed therein, ▇▇▇▇▇ FARGO BANK, N.A., as Co-Arranger and
Administrative Agent, and U.S. BANK NATIONAL ASSOCIATION, as Co-Arranger. Terms
with initial capital letters used but not defined herein have the meanings
assigned to them in the Loan Agreement.
This Compliance Certificate is being delivered by the Borrower pursuant to
Section 5.1(c) of the Loan Agreement and relates to certain financial statements
of the Borrower (the "Financial Statements") as of and for periods ended
_________________, ______ (the "Financial Statement Date"). The undersigned is
the __________________ [insert title of Certifying Officer] of the sole general
partner of the Borrower, and hereby further certifies as of the date hereof, in
his capacity as an officer of the general partner of the Borrower, as follows:
1. I have reviewed the terms of the Loan Documents and have made, or
have caused to be made under my supervision, a review in
reasonable detail of the transactions and condition of the
Borrower Parties during the accounting period covered by the
Financial Statements.
2. Such review has not disclosed the existence of any Default or
Event of Default during such accounting period or as of the
Financial Statement Date and I do not have knowledge of the
existence, as at the date of this certificate, of any Default or
Event of Default.
3. Attached as Appendix A hereto are calculations by which I have
determined that the Borrower is in compliance with the
requirements of Section 5.9 of the Loan Agreement as of the
Financial Statement Date.
4. The Financial Statements fairly present the financial condition
and the results of operations of the Borrower on the dates and
for the periods indicated, on the basis of GAAP.
5. The Borrower is in compliance with the Interest Rate Hedge
requirements set forth in Section 5.13 of the Loan Agreement.
D-1
103
DATE: ____________________ IRVINE APARTMENT COMMUNITIES, L.P.,
a Delaware limited partnership
By: IRVINE APARTMENT COMMUNITIES, INC.,
a Maryland corporation, its sole
General Partner
By:
--------------------------------
Name:
Title:
D-2