EXHIBIT 10.8
AMENDED AND RESTATED CREDIT AGREEMENT
Dated
August 16, 1996
among
SECURITY CAPITAL PACIFIC TRUST
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Administrative Agent
▇▇▇▇▇ FARGO REALTY ADVISORS FUNDING, INCORPORATED,
as Co-Agent
and
the Lenders
TABLE OF CONTENTS
1. Definitions.................................................................... 1
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2. The Loans...................................................................... 15
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2.1 Advances................................................................ 15
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2.2 Term Loan Conversion.................................................... 17
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2.3 Payments................................................................ 18
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2.4 Pro Rata Treatment...................................................... 20
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2.5 Non-Receipt of Funds by the Agent....................................... 20
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2.6 Sharing of Payments, Etc................................................ 20
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2.7 Fees.................................................................... 21
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3. Conditions..................................................................... 22
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3.1 All Loans............................................................... 22
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3.2 First Loan.............................................................. 22
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3.3 Options Available....................................................... 23
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3.4 Designation and Conversion.............................................. 23
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3.5 Special Provisions Applicable to Eurodollar Re Borrowings............... 24
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3.6 Funding Offices; Adjustments Automatic.................................. 27
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3.7 Funding Sources, Payment Obligations.................................... 27
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3.8 Mitigation, Non-Discrimination.......................................... 27
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4. Representations and Warranties................................................. 28
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4.1. Organization............................................................ 28
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4.2 Financial Statements.................................................... 28
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4.3 Enforceable Obligations; Authorization.................................. 29
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4.4 Other Debt.............................................................. 29
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4.5 Litigation.............................................................. 29
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4.6 Taxes................................................................... 29
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4.7 Regulation U............................................................ 29
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4.8 Subsidiaries............................................................ 30
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4.9 Securities Act of 1933.................................................. 30
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4.10 No Contractual or Corporate Restrictions................................ 30
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4.11 Investment Company Act Not Applicable................................... 30
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4.12 Public Utility Holding Company Act Not Applicable....................... 30
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4.13 ERISA Not Applicable.................................................... 30
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5. Affirmative Covenants.......................................................... 30
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5.1 Taxes, Insurance, Existence, Regulations, Property, etc................. 30
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(i)
5.2 Financial Statements and Information.................................... 31
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5.3 Financial Tests......................................................... 31
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5.4 Inspection.............................................................. 32
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5.5 Further Assurances...................................................... 32
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5.7 Insurance............................................................... 32
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5.8 Notice of Certain Matters............................................... 32
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5.9 Use of Proceeds......................................................... 32
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5.10 Expenses of and Claims Against the Agent and he Lenders................. 33
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5.11 Legal Compliance; Indemnification....................................... 33
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5.12 Borrower's Performance.................................................. 34
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5.13 Professional Services................................................... 34
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5.14 Capital Adequacy........................................................ 34
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5.15 Property Pool........................................................... 35
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6. Negative Covenants............................................................. 36
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6.1 Indebtedness............................................................ 36
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6.2 Mergers, Consolidations and Acquisitions of Assets...................... 36
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6.3 Redemption.............................................................. 37
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6.4 Nature of Business; Management.......................................... 37
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6.5 Transactions with Related Parties....................................... 37
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6.6 Loans and Investments................................................... 37
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6.7 Limiting Agreements..................................................... 39
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6.8 Nature of Assets........................................................ 40
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7. Events of Default and Remedies................................................. 40
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7.1. Events of Default....................................................... 40
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7.2 Remedies Cumulative..................................................... 42
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8. The Agent...................................................................... 42
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8.1 Appointment, Powers and Immunities...................................... 42
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8.2 Reliance................................................................ 44
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8.3 Defaults................................................................ 44
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8.4 Rights as a Lender...................................................... 45
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8.5 Indemnification......................................................... 45
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8.6 Non-Reliance on Agent and Other Lenders................................. 45
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8.7 Failure to Act.......................................................... 46
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8.8 Resignation of Agent.................................................... 46
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8.9 No Partnership.......................................................... 47
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(ii)
9. Renewal and Extension.......................................................... 47
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9.1 Procedure for Consideration of Renewal and Extension Requests........... 47
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9.2 Conditions to Renewal and Extension..................................... 48
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9.3 No Obligation to Renew and Extend....................................... 48
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10. Miscellaneous.................................................................. 49
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10.1 No Waiver, Amendments................................................... 49
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10.2 Notices................................................................. 49
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10.3 Venue................................................................... 49
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10.4 Choice of Law........................................................... 50
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10.5 Survival; Parties Bound; Successors and Assigns......................... 50
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10.6 Counterparts............................................................ 52
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10.7 Usury Not Intended; Refund of Any Excess Payments....................... 52
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10.8 Captions................................................................ 52
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10.9 Severability............................................................ 52
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10.10 Disclosures............................................................. 52
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10.11 NO NOVATION............................................................. 53
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10.12 LIMITATION OF LIABILITY................................................. 53
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10.13 ENTIRE AGREEMENT........................................................ 53
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EXHIBITS
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A - Officer's Certificate
B - Request for Loan
C - Note
C-1 - Swing Loan Note
D - Legal Opinion
(iii)
AMENDED AND RESTATED CREDIT AGREEMENT
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THIS AMENDED AND RESTATED CREDIT AGREEMENT (the "Agreement") is made and
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entered into as of August 16, 1996, by and among SECURITY CAPITAL PACIFIC TRUST,
a Maryland real estate investment trust (the "Borrower"), the financial
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institutions (including TCB and ▇▇▇▇▇ Fargo Realty Advisors Funding,
Incorporated, the "Lenders") which are now or may hereafter become signatories
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hereto, TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a national banking association
("TCB"), as administrative agent for Lenders (in such capacity, "Agent"), and
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▇▇▇▇▇ FARGO REALTY ADVISORS FUNDING, INCORPORATED, as co-agent for Lenders (in
such capacity, "Co-Agent").
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W I T N E S E T H:
- - - - - - - - -
WHEREAS, the Borrower, the Agent, the Co-Agent and certain Lenders (the
"Existing Lenders") entered into an Amended and Restated Credit Agreement dated
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as of August 11, 1995 (the "Original Credit Agreement"); and
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WHEREAS, the Borrower, the Agent, the Co-Agent, and the Lenders desire to
amend and restate the Original Credit Agreement upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE in consideration of the mutual covenants, agreements and
undertakings herein contained, the parties hereto agree as follows:
1. Definitions.
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Unless a particular word or phrase is otherwise defined or the context
otherwise requires, capitalized words and phrases used in Credit Documents have
the meanings provided below.
Accounts, Equipment and Inventory shall have the respective meanings
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assigned to them in the Texas Business and Commerce Code in force on the date
the document using such term was executed.
Adjusted Eurodollar Interbank Rate shall mean, with respect to each
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Interest Period applicable to a Eurodollar Rate Borrowing, a rate per annum
equal to the quotient, expressed as a percentage, of (a) the Eurodollar
Interbank Rate with respect to such Interest Period divided by (b) 1.0000 minus
the Eurodollar Reserve Requirement in effect on each day during such Interest
Period.
Affiliate shall mean any Person controlling, controlled by or under common
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control with any other Person. For purposes of this definition, "control"
(including "controlled by" and "under
common control with") means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or otherwise.
Annual Audited Financial Statements shall mean the annual financial
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statements of a Person, including all notes thereto, which statements shall
include a balance sheet as of the end of such fiscal year and an income
statement and a statement of cash flows, all setting forth in comparative form
the corresponding figures from the previous fiscal year, all prepared in
conformity with Generally Accepted Accounting Principles and accompanied by a
report and opinion of independent certified public accountants satisfactory to
the Agent, which shall state that such financial statements, in the opinion of
such accountants, present fairly the financial position of such Person as of the
date thereof and the results of its operations for the period covered thereby in
conformity with Generally Accepted Accounting Principles. Such statements shall
be accompanied by a certificate of such accountants that in making the
appropriate audit and/or investigation in connection with such report and
opinion, such accountants did not become aware of any Default or, if in the
opinion of such accountant any such Default exists, a description of the nature
and status thereof. The Annual Audited Financial Statements shall be prepared
on a consolidated basis in accordance with Generally Accepted Accounting
Principles.
Applicable Margin shall mean the following percentage which will be in
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effect whenever and for so long as the Borrower has received the corresponding
S&P Rating or ▇▇▇▇▇'▇ Rating, whichever is lower:
S&P RATING/ APPLICABLE MARGIN
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▇▇▇▇▇'▇ RATING EURODOLLAR RATE BASE RATE
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BORROWING BORROWING
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A/A2 or better 0.750% 0
A-/A3 0.875% 0
BBB+/Baa1 1.000% 0
BBB/Baa2 1.125% 0
BBB-/Baa3 1.250% 0
Worse than BBB-/Baa3 1.500% .25%;
Base Rate shall mean for any day a rate per annum equal to the Applicable
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Margin on that day plus the greater on a daily basis of (a) the Prime Rate for
that day, or (b) the Federal Funds Effective Rate for that day plus one-half of
one percent (1/2%).
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Base Rate Borrowing shall mean that portion of the principal balance of the
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Loans at any time bearing interest at the Base Rate.
Borrower's REIT Manager shall mean Security Capital Pacific Incorporated,
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manager to the Borrower, or any successor manager to the Borrower permitted by
this Agreement.
Business Day shall mean a day other than (a) a day when the main office of
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the Agent is not open for business, or (b) a day that is a federal banking
holiday in the United States of America.
Ceiling Rate shall mean, on any day, the maximum nonusurious rate of
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interest permitted for that day by whichever of applicable federal or Texas laws
permits the higher interest rate, stated as a rate per annum. On each day, if
any, that Chapter One establishes the Ceiling Rate, the Ceiling Rate shall be
the "indicated rate ceiling" (as defined in Chapter One) for that day. The Agent
may from time to time, as to current and future balances, implement any other
ceiling under Chapter One by notice to the Borrower, if and to the extent
permitted by Chapter One. Without notice to the Borrower or any other person or
entity, the Ceiling Rate shall automatically fluctuate upward and downward as
and in the amount by which such maximum nonusurious rate of interest permitted
by applicable law fluctuates.
Chapter One shall mean Chapter One of Title 79, Texas Revised Civil
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Statutes, 1925, as amended.
Code shall mean the Internal Revenue Code of 1986, as amended, as now or
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hereafter in effect, together with all regulations, rulings and interpretations
thereof or thereunder by the Internal Revenue Service.
Commitment shall mean the commitment of the Lenders to lend funds under
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Section 2.1 of this Agreement, other than Swing Loans.
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Construction Interest shall mean Borrower's interest expense for the
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construction of projects, which is capitalized in accordance with Generally
Accepted Accounting Principles; provided, however, that notwithstanding
Generally Accepted Accounting Principles, interest applicable to each building
under construction shall be capitalized as to such building only until
substantial completion thereof and such building is ready for its intended use
and thereafter interest attributable thereto shall be expensed.
Conversion Date has the meaning given to it in Section 2.2 hereof.
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Coverage Ratio shall mean the ratio of (a) the Borrower's Funds From
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Operations plus all of the Borrower's Interest Expense for the period used to
calculate Funds From Operations, to (b) dividends of any kind or character or
other proceeds paid or payable with respect to any Disqualified Stock plus all
of the Borrower's Interest Expense, in each case for the period used to
calculate the Funds From Operations.
Credit Documents shall mean this Agreement, the Notes, all instruments,
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certificates and agreements now or hereafter executed or delivered to the Agent
or the Lenders pursuant to any of the foregoing, and all amendments,
modifications, renewals, extensions, increases and rearrangements of, and
substitutions for, any of the foregoing.
Debt to Tangible Net Worth Ratio shall mean the ratio of Indebtedness to
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Tangible Net Worth.
Debt to Total Asset Value Ratio shall mean the ratio (expressed as a
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percentage) of Indebtedness to Total Asset Value.
Determination Date shall mean the date that is one (1) year prior to the
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then existing Revolving Credit Termination Date.
Disqualified Stock shall mean any of the Borrower's capital stock which by
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its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable or exercisable) (a) matures or is subject to mandatory
redemption, pursuant to a sinking fund obligation or otherwise, (b) is
convertible into or exchangeable or exercisable for Indebtedness or
Disqualified Stock, (c) is redeemable at the option of the holder of such stock,
or (d) otherwise requires any payments by Borrower, in each case on or before
the Maturity Date.
Eligible Institution shall mean a commercial bank or a finance company,
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insurance company or other financial institution which is regularly engaged in
making, purchasing or investing in loans, but shall not include any Person which
is an Affiliate of the Borrower or of the Borrower's REIT Manager.
Equity Percentage shall mean the following percentage for each
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Unconsolidated Affiliate which will be in effect whenever and for so long as the
Unconsolidated Affiliate Ratio for that Unconsolidated Affiliate equals the
corresponding amount:
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Unconsolidated Affiliate Ratio Equity Percentage
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1.5:1.0 or less 100%
Greater than 1.5:1.0 but less 50%
than or equal to 1.86:1.0
Greater than 1.86:1.0 0%
Eurodollar Business Day shall mean a Business Day on which transactions in
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United States dollar deposits between banks may be carried on in the London
interbank dollar market.
Eurodollar Interbank Rate shall mean, for each Interest Period, the rate of
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interest per annum, rounded, if necessary, to the next highest whole multiple of
one-sixteenth per cent (1/16%), quoted by Agent at or before 11:00 a.m., London
time (or as soon thereafter as practicable), on the date two (2) Eurodollar
Business Days before the first day of such Interest Period, to be the arithmetic
average of the prevailing rates per annum at the time of determination and in
accordance with the then existing practice in the London interbank dollar
market, for the offering to Agent by one or more prime banks selected by Agent
in its sole discretion, in the London interbank dollar market, of deposits in
United States dollars for delivery on the first day of such Interest Period and
having a maturity equal to the length of such Interest Period and in an amount
equal (or as nearly equal as may be) to the Eurodollar Rate Borrowing to which
such Interest Period relates. Each determination by Agent of the Eurodollar
Interbank Rate shall be prima facie evidence thereof.
Eurodollar Rate shall mean for any day a rate per annum equal to the sum of
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the Applicable Margin for that day plus the Adjusted Eurodollar Interbank Rate
in effect on the first day of the Interest Period for the applicable Eurodollar
Rate Borrowing. Each Eurodollar Rate is subject to adjustments for reserves,
insurance assessments and other matters as provided for in Section 3.5 hereof.
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Eurodollar Rate Borrowing shall mean that portion of the principal balance
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of the Loans at any time bearing interest at a Eurodollar Rate.
Eurodollar Reserve Requirement shall mean, on any day, that percentage
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(expressed as a decimal fraction and rounded, if necessary, to the next highest
one ten thousandth) which is in effect on such day for determining all reserve
requirements (including, without limitation, basic, supplemental, marginal and
emergency reserves) applicable to "Eurocurrency liabilities," as
-5-
currently defined in Regulation D, all as specified by any Governmental
Authority, including but not limited to those imposed under Regulation D. Each
determination of the Eurodollar Reserve Requirement by Agent shall be prima
facie evidence thereof.
Event of Default shall mean any of the events specified as an event of
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default in Section 7 of this Agreement, and Default shall mean any of such
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events, whether or not any requirement for notice, grace or cure has been
satisfied.
Federal Funds Effective Rate shall to the extent necessary be determined by
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the Agent separately for each day and shall for each such day be a rate per
annum 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, as published for each such day (or if any such day is not a
Business Day, for the next immediately preceding Business Day) by the Federal
Reserve Bank of New York, or if the weighted average of such rates is not so
published for any such day which is a Business Day, the average of the
quotations for any such day on such transactions received by the Agent from
three Federal funds brokers of recognized standing selected by the Agent.
Fixed Charge Coverage Ratio shall mean the ratio of (a) the Borrower's
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Funds From Operations plus all of the Borrower's Interest Expense for the period
used to calculate Funds From Operations, less Unit Capital Expenditures, to (b)
dividends of any kind or character or other proceeds paid or payable with
respect to any Disqualified Stock, plus all of the principal payable and
principal paid on the Borrower's Indebtedness other than (i) in the case of the
Borrower, any scheduled principal payments on the Term Loans and (ii) any
regularly scheduled principal payments on any Indebtedness which pays such
Indebtedness in full, to the extent the amount of such final scheduled principal
payment is greater than the scheduled principal payment immediately preceding
such final scheduled principal payment, plus all of the Borrower's Interest
Expense, in each case for the period used to calculate the Funds From
Operations.
Funding Loss shall mean, with respect to (a) Borrower's payment or
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prepayment of principal of a Eurodollar Rate Borrowing on a day other than the
last day of the applicable Interest Period; (b) Borrower's failure to borrow a
Eurodollar Rate Borrowing on the date specified by Borrower; (c) Borrower's
failure to make any prepayment of the Loans (other than Base Rate Borrowings) on
the date specified by Borrower, or (d) any cessation of a Eurodollar Rate to
apply to the Loans or any part thereof pursuant to Section 3.5, in each case
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whether voluntary or involuntary, any direct loss, expense, penalty, premium or
liability incurred by any Lender (including but not limited to any loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by a Lender to fund or maintain a Loan).
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Funds From Operations shall mean gross cash revenues (excluding unforfeited
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security deposits) actually received by the Borrower, less all cash
disbursements characterized as expenses and all proper charges against income,
plus depreciation of Property and deferred taxes, reserves and other non-cash
charges, all determined in accordance with Generally Accepted Accounting
Principles; provided, that there shall not be included in such revenues (i) any
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proceeds of any insurance policy other than rental or business interruption
insurance received by the Borrower, (ii) any gain which is classified as
"extraordinary" in accordance with Generally Accepted Accounting Principles, or
(iii) any capital gains. Funds From Operations will be calculated, on an
annualized basis, on the four (4) calendar quarters immediately preceding the
date of the calculation. Funds From Operations shall not be increased or
decreased by gains or losses from sales of Property. Funds From Operations
shall be calculated on a consolidated basis in accordance with Generally
Accepted Accounting Principles.
Generally Accepted Accounting Principles shall mean, as to a particular
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Person, such accounting practice as, in the opinion of the independent
accountants of recognized national standing regularly retained by such Person
and acceptable to the Agent, conforms at the time to generally accepted
accounting principles, consistently applied. Generally Accepted Accounting
Principles means those principles and practices (a) which are recognized as such
by the Financial Accounting Standards Board, (b) which are applied for all
periods after the date hereof in a manner consistent with the manner in which
such principles and practices were applied to the most recent audited financial
statements of the relevant Person furnished to the Lenders or where a change
therein has been concurred in by such Person's independent auditors, and (c)
which are consistently applied for all periods after the date hereof so as to
reflect properly the financial condition, and results of operations and changes
in financial position, of such Person. If there is a change in such accounting
practice as to the Borrower that could affect the Borrower's ability to comply
with the terms of this Agreement, the parties hereto agree to review and discuss
such changes in accounting practice and the terms of this Agreement for a period
of no more than thirty (30) days with a view to amending this Agreement so that
the financial measures of the Borrower's operating performance and financial
condition are substantially the same after such change as they were immediately
before such change.
Governmental Authority shall mean any foreign governmental authority, the
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United States of America, any State of the United States and any political
subdivision of any of the foregoing, and any agency, department, commission,
board, bureau, court or other tribunal having jurisdiction over the Agent, any
Lender or the Borrower or their respective Property.
Historical Value shall mean the purchase price of Property (including
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improvements) and ordinary related purchase transaction costs, plus the cost of
subsequent capital improvements made
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by the Borrower, less any provision for losses, all determined in accordance
with Generally Accepted Accounting Principles. If the Property is purchased as a
part of a group of properties, the Historical Value shall be calculated based
upon a reasonable allocation of the aggregate purchase price by the Borrower for
all purposes, and consistent with Generally Accepted Accounting Principles.
Indebtedness shall mean and include, without duplication (1) all
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obligations for borrowed money, (2) all obligations evidenced by bonds,
debentures, notes or other similar agreements, (3) all obligations to pay the
deferred purchase price of Property or services, except trade accounts payable
arising in the ordinary course of business (unless included in (6) below), (4)
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all guaranties, endorsements and other contingent obligations in respect of, or
any obligations to purchase or otherwise acquire, Indebtedness of others, (5)
all Indebtedness secured by any Lien existing on any interest of the Person with
respect to which Indebtedness is being determined in Property owned subject to
such Lien whether or not the Indebtedness secured thereby shall have been
assumed, and (6) accounts payable, dividends of any kind or character or other
proceeds payable with respect to any stock and accrued expenses which in the
aggregate are in excess of five percent (5%) of the undepreciated value of the
assets of the Borrower, in each case including Non-recourse Debt. Indebtedness
shall be calculated on a consolidated basis in accordance with Generally
Accepted Accounting Principles.
Interest Expense shall mean all of a Person's paid, accrued or capitalized
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interest expense on such Person's Indebtedness (whether direct, indirect or
contingent, and including, without limitation, interest on all convertible
debt), but excluding Construction Interest.
Interest Options shall mean the Base Rate and the Eurodollar Rate, and
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"Interest Option" means either of them.
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Interest Payment Dates shall mean the first (1st) day of each calendar
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month and the Maturity Date, for both Base Rate Borrowings and Eurodollar Rate
Borrowings.
Interest Period shall mean, for each Eurodollar Rate Borrowing, a period
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commencing on the date such Eurodollar Rate Borrowing was made and ending on the
numerically corresponding day which is, subject to availability, (a) one (1),
two (2), three (3) or six (6) months thereafter, or (b) seven (7), fourteen (14)
or twenty-one (21) days thereafter for no more than three (3) time periods each
calendar year in connection with payments of the Loans because of debt and/or
equity sales by the Borrower, changes in the Lender Commitments in connection
with an extension pursuant to Section 9.1 hereof or sales of major assets by the
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Borrower; provided, (v) any Interest Period which would otherwise end on a day
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which is not a Eurodollar Business
-8-
Day shall be extended to the next succeeding Eurodollar Business Day, unless
such Eurodollar Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Eurodollar Business Day; (w) any
Interest Period which begins on the last Eurodollar 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 end on the last
Eurodollar Business Day of the appropriate calendar month; (x) no Interest
Period shall ever extend beyond the Maturity Date; and (y) Interest Periods
shall be selected by Borrower in such a manner that the Interest Period with
respect to any portion of the Loans which shall become due shall not extend
beyond such due date.
Legal Requirement shall mean any law, statute, ordinance, decree,
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requirement, order, judgment, rule, regulation (or interpretation of any of the
foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority.
Lender Commitment means, for any Lender, the amount set forth opposite such
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Lender's name on its signature page of this Agreement, or as may hereafter
become a signatory hereto.
Lien shall mean any mortgage, pledge, charge, encumbrance, security
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interest, collateral assignment or other lien or restriction of any kind,
whether based on common law, constitutional provision, statute or contract, and
shall include reservations, exceptions, encroachments, easements, rights of way,
covenants, conditions, restrictions, leases and other title exceptions.
Loans shall mean the Loans described in Sections 2.1 and 2.2 hereof. Loan
----- ------------ --- ----
shall mean any such Loan.
Majority Lenders shall mean the Lenders with an aggregate amount of at
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least sixty-six and 67/100 percent (66.67%) of the amount of the Commitment then
outstanding.
Material Adverse Change shall mean a change which could reasonably be
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expected to have a Material Adverse Effect.
Material Adverse Effect means a material adverse effect on (a) the
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financial condition, or results of operations of Borrower and its Subsidiaries
taken as a whole, (b) the ability of Borrower to perform its obligations under
any Credit Document to which it is a party, (c) the validity or enforceability
of any of such Credit Documents, or (d) the rights and remedies of Lenders and
Agent under any of the Credit Documents.
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Maturity Date shall mean (a) the Revolving Credit Termination Date prior to
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any conversion of the Loans to the Term Loans, and (b) the Termination Date as
to the Term Loans.
▇▇▇▇▇'▇ Rating shall mean the senior unsecured debt rating from time to
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time received by the Borrower from ▇▇▇▇▇'▇ Investor Service.
Net Operating Income shall mean, for any income producing operating
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properties, the difference between (a) any cash rentals, proceeds and other
income received from such Property (but excluding security or other deposits,
late fees, early lease termination or other penalties, or other income of a non-
recurring nature) during the determination period, less (b) all cash costs and
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expenses (excluding interest expense and any expenditures that are capitalized
in accordance with Generally Accepted Accounting Principles) incurred as a
result of, or in connection with, or properly allocated to, the operation or
leasing of such Property during the determination period. Net Operating Income
shall be calculated on a consolidated basis in accordance with Generally
Accepted Accounting Principles.
Non-recourse Debt shall mean any Indebtedness the payment of which the
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Borrower or any of its Subsidiaries is not obligated to make other than to the
extent of any security therefor.
Notes shall mean the promissory notes of the Borrower described in Section
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2.1 hereof, including the Swing Loan Note, any and all renewals, extensions,
---
modifications, rearrangements and replacements thereof and any and all
substitutions therefor, and Note shall mean any one of them.
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Obligations shall mean, as at any date of determination thereof, the sum of
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(a) the aggregate amount of Loans outstanding hereunder plus (b) all other
liabilities, obligations and Indebtedness of any Parties under any Credit
Document.
Officer's Certificate shall mean a certificate in the form attached hereto
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as Exhibit A.
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Operating Sub-Pool Value means, with respect to properties in the Operating
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Sub-Pool (as defined in Section 5.15 hereof), for the period being measured, the
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lesser of (a) the aggregate Historical Value of such properties; and (b) the sum
of (i) the aggregate Net Operating Income of such properties that during such
measurement period have reached the beginning of the first full calendar quarter
after the Stabilization Date (the "Calculation Date") ((1) beginning with the
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Calculation Date until the end of the third full calendar quarter after the
Stabilization Date, based on the annualized Net Operating Income from the
Calculation Date until the time of measurement, and (2) after the third full
calendar quarter after the Stabilization Date, based on the immediately
-10-
preceding twelve (12) calendar month period) divided by nine and one-fourth
percent (9.25%), plus (ii) the Historical Value of such properties that have not
reached the Calculation Date during the measurement period.
Organizational Documents shall mean, with respect to a corporation, the
------------------------
certificate of incorporation, articles of incorporation and bylaws of such
corporation; with respect to a partnership, the partnership agreement
establishing such partnership; with respect to a joint venture, the joint
venture agreement establishing such joint venture, and with respect to a trust,
the instrument establishing such trust; in each case including any and all
modifications thereof as of the date of the Credit Document referring to such
Organizational Document and any and all future modifications thereof which are
consented to by the Lenders.
Opinion Letters shall mean the opinion letters of independent counsel for
---------------
the Borrower, each in Proper Form.
Parties shall mean all Persons other than the Agent, the Co-Agent or any
-------
Lender executing any Credit Document.
Past Due Rate shall mean, on any day, a rate per annum equal to the Ceiling
-------------
Rate for that day, or only if applicable law imposes no maximum nonusurious rate
of interest for that day, then the Past Due Rate for that day shall be a rate
per annum equal to the Base Rate plus an additional three percent (3%) per
annum, but in any event not to exceed the Ceiling Rate.
Percentage shall mean the amount, expressed as a percentage, of each Lender
----------
Commitment as compared to the Commitment, set forth opposite the Lender's name
on its signature page of this Agreement, or as may hereafter become signatory
hereto.
Permitted Encumbrances shall mean (a) encumbrances consisting of zoning
----------------------
restrictions, easements, or other restrictions on the use of real property,
provided that such items do not materially impair the use of such property for
the purposes intended and none of which is violated in any material respect by
existing or proposed structures or land use; (b) the following: (i) Liens for
taxes not yet due and payable, or being diligently contested in good faith, or
where no Material Adverse Effect could reasonably be expected to result from
such nonpayment or the imposition of such Lien; or (ii) materialmen's,
mechanic's, warehousemen's and other like Liens arising in the ordinary course
of business, securing payment of Indebtedness whose payment is not yet due, or
that are being contested in good faith by appropriate proceedings diligently
conducted, and for or against which the Borrower has established adequate
reserves in accordance with Generally Accepted Accounting Principles; (c) Liens
for taxes, assessments and
-11-
governmental charges or assessments that are being contested in good faith by
appropriate proceedings diligently conducted, and for or against which the
Borrower has established adequate reserves in accordance with Generally Accepted
Accounting Principles; (d) Liens on real property which are insured around or
against by title insurance; (e) Liens securing assessments or charges payable to
a property owner association or similar entity which assessments are not yet due
and payable or are being diligently contested in good faith; and (f) Liens
securing this Agreement and Indebtedness hereunder.
Person shall mean any individual, corporation, trust, unincorporated
------
organization, Governmental Authority or any other form of entity.
Prime Rate shall mean, as of a particular date, the prime rate of interest
----------
per annum most recently determined by the Agent and thereafter entered in the
minutes of the Agent's Loan and Discount Committee, automatically fluctuating
upward or downward with and at the time specified in each such determination
without notice to Borrower or any other Person; each change in the Prime Rate
shall be effective on the date such change is determined; which Prime Rate may
not necessarily represent the Agent's lowest or best rate actually charged to a
customer.
Proper Form shall mean in form and substance satisfactory to the Lenders.
-----------
Property shall mean any interest in any kind of property or asset, whether
--------
real, personal or mixed, tangible or intangible.
Quarterly Unaudited Financial Statements shall mean the quarterly financial
----------------------------------------
statements of a Person, including all notes thereto, which statements shall
include a balance sheet as of the end of such quarter and an income statement
for such fiscal quarter, and for the fiscal year to date, a statement of cash
flows for such quarter and for the fiscal year to date, subject to normal year-
end adjustments, and a detailed listing of the Borrower's Property and the
Historical Value thereof, all setting forth in comparative form the
corresponding figures for the corresponding fiscal period of the preceding year
(or, in the case of the balance sheet, the end of the preceding fiscal year),
prepared in accordance with Generally Accepted Accounting Principles except that
the Quarterly Unaudited Financial Statements may contain condensed footnotes as
permitted by regulations of the United States Securities and Exchange
Commission, and certified as true and correct by a managing director or vice
president of Borrower's REIT Manager. The Quarterly Unaudited Financial
Statements shall be prepared on a consolidated basis in accordance with
Generally Accepted Accounting Principles.
-12-
Rate Designation Date shall mean 12:00 noon, Houston, Texas time, on the
---------------------
date three (3) Eurodollar Business Days preceding the first day of any proposed
Interest Period.
Regulation D shall mean Regulation D of the Board of Governors of the
------------
Federal Reserve System from time to time in effect and shall include any
successor or other regulation relating to reserve requirements applicable to
member lenders of the Federal Reserve System.
Request for Loan shall mean a written request substantially in the form of
----------------
Exhibit B.
---------
Revolving Credit Termination Date shall mean the earlier to occur of (a)
---------------------------------
August 13, 1998 as the same may hereafter be accelerated pursuant to the
provisions of any of the Credit Documents, and (b) the Conversion Date.
S&P Rating shall mean the senior unsecured debt rating from time to time
----------
received by the Borrower from Standard & Poor's Corporation.
Stabilization Date shall mean, with respect to a property, the earlier of
------------------
(a) twelve (12) months from the date of acquisition of an income producing
property by the Borrower or twelve (12) months after substantial completion of
construction or development of a new construction or development property, and
(b) the date on which the occupancy level is at least ninety percent (90%).
Stated Rate shall, on any day, mean whichever of the Base Rate or the
-----------
Eurodollar Rate has been designated and provided pursuant to this Agreement;
provided that, if on any day such rate shall exceed the Ceiling Rate for that
--------
day, the Stated Rate shall be fixed at the Ceiling Rate on that day and on each
day thereafter until the total amount of interest accrued at the Stated Rate on
the unpaid principal balance of the Notes equals the total amount of interest
which would have accrued if there had been no Ceiling Rate. If the Notes mature
(or are prepaid) before such equality is achieved, then, in addition to the
unpaid principal and accrued interest then owing pursuant to the other
provisions of the Credit Documents, Borrower promises to pay on demand to the
order of the holders of the Notes interest in an amount equal to the excess (if
any) of (a) the lesser of (i) the total interest which would have accrued on the
Notes if the Stated Rate had been defined as equal to the Ceiling Rate from time
to time in effect and (ii) the total interest which would have accrued on the
Notes if the Stated Rate were not so prohibited from exceeding the Ceiling Rate,
over (b) the total interest actually accrued on the Notes to such maturity (or
prepayment) date.
-13-
Subsidiary shall mean, as to a particular parent entity, any entity of
----------
which more than fifty percent (50%) of the indicia of voting equity or ownership
rights (whether outstanding capital stock or otherwise) is at the time directly
or indirectly owned by, such parent entity, or by one or more of its other
Subsidiaries.
Swing Loan shall mean a Loan made pursuant to Section 2.1(c) hereof.
---------- --------------
Swing Loan Note shall mean that certain promissory note dated of even date
---------------
herewith in the original principal amount of $75,000,000.00 executed by the
Borrower payable to the order of TCB.
Tangible Net Worth shall mean total assets (valued at cost without
------------------
deduction for depreciation, and including the book value of equity investments
in each Unconsolidated Affiliate multiplied by the Equity Percentage for that
Unconsolidated Affiliate), less (1) all intangibles and (2) all liabilities
(including contingent and indirect liabilities), all determined in accordance
with Generally Accepted Accounting Principles. The term "intangibles" shall
include, without limitation, (i) deferred charges, (ii) the amount of any write-
up in the book value of any assets contained in any balance sheet resulting from
revaluation thereof or any write-up in excess of the cost of such assets
acquired, and (iii) the aggregate of all amounts appearing on the assets side of
any such balance sheet for franchises, licenses, permits, patents, patent
applications, copyrights, trademarks, trade names, goodwill, treasury stock,
experimental or organizational expenses and other like intangibles. The term
"liabilities" shall include, without limitation, (i) Indebtedness secured by
Liens on Property of the Person with respect to which Tangible Net Worth is
being computed whether or not such Person is liable for the payment thereof,
(ii) deferred liabilities, and (iii) obligations under leases which have been
capitalized. Tangible Net Worth shall be calculated on a consolidated basis in
accordance with Generally Accepted Accounting Principles.
Taxes shall mean any tax, levy, impost, duty, charge or fee.
-----
Term Loan has the meaning given it in Section 2.2 hereof.
--------- -----------
Termination Date shall mean the date three (3) years after the Conversion
----------------
Date, as the same may hereafter be accelerated pursuant to the provisions of any
of the Credit Documents.
Total Asset Value shall mean the sum of (a) the Borrower's aggregate Net
-----------------
Operating Income (based on the immediately preceding calendar quarter and
annualized, and adjusted to exclude the Net Operating Income from any properties
not owned for the full quarter and the properties described in (iii) below)
-----
divided by eight and three-fourths percent (8.75%), plus (b)
-14-
the total book value of (i) properties acquired during the immediately preceding
calendar quarter, (ii) land not yet being developed, and (iii) land (and any
improvements being constructed thereon) on which the construction of new income
producing improvements has been commenced and is continuing and for up to six
(6) months after completion of all improvements thereon, plus (c) the amount of
any cash and cash equivalents, excluding tenant security and other restricted
deposits, plus (d) the total book value of all of the Borrower's other assets
not described in (a), (b) or (c) above, excluding all intangibles and all equity
--- --- ---
investments in Unconsolidated Affiliates, plus (e) the total book value of the
Borrower's equity investments in each Unconsolidated Affiliate multiplied by the
Equity Percentage for that Unconsolidated Affiliate. Total Asset Value shall be
calculated on a consolidated basis in accordance with Generally Accepted
Accounting Principles.
Unconsolidated Affiliate shall mean, in respect of any Person, any other
------------------------
Person in whom such Person holds a voting equity or ownership interest and whose
financial results would not be consolidated under Generally Accepted Accounting
Principles with the financial results of such Person on the consolidated
financial statements of such Person.
Unconsolidated Affiliate Ratio shall mean, for each Unconsolidated
------------------------------
Affiliate, the ratio of the Indebtedness of the Unconsolidated Affiliate to the
Tangible Net Worth of the Unconsolidated Affiliate.
Unit Capital Expenditure shall mean, on an annual basis, an amount equal to
------------------------
the product of (a) the number of apartment units contained in each completed,
operating Property owned by Borrower and any Subsidiary as of the last day of
each of the immediately preceding five (5) calendar quarters, divided by five
(5); and multiplied by (b) $200.00.
The following terms shall have the respective meanings ascribed to them in
the Uniform Commercial Code as enacted and in force in the State of Texas on the
date hereof:
accessions, continuation statement, fixtures, general intangibles,
proceeds, security interest and security agreement.
2. The Loans.
---------
2.1 Advances. (a) Subject to the terms and conditions of this
--------
Agreement, each Lender severally agrees to make Loans (other than Swing Loans)
prior to the Revolving Credit Termination Date to the Borrower not to exceed an
amount (in the aggregate, the "Commitment") at any one time outstanding equal to
----------
the Lender's Lender Commitment. Each such request for a Loan by Borrower shall
be deemed a request for a Loan from each Lender equal to such
-15-
Lender's Percentage of the aggregate amount so requested, and such aggregate
amount shall be in an amount at least equal to $1,000,000.00 and equal to a
multiple of $250,000.00, or the difference between the Commitment and the
aggregate principal balance of the Notes, whichever is less. Each repayment of
the Loans shall be deemed a repayment of each Lender's Loan equal to such
Lender's Percentage of the amount so repaid. The obligations of the Lenders
hereunder are several and not joint, and the preceding two sentences will give
rise to certain inappropriate results if special provisions are not made to
accommodate the failure of a Lender to fund a Loan as and when required by this
Agreement; therefore, notwithstanding anything herein to the contrary, (A) no
Lender shall be required to make Loans at any one time outstanding in excess of
such Lender's Percentage of the Commitment and (B) if a Lender fails to make a
Loan as and when required hereunder and Borrower subsequently makes a repayment
on the Loans, such repayment shall be split among the non-defaulting Lenders
ratably in accordance with their respective Percentages until each Lender has
its Percentage of all of the outstanding Loans, and the balance of such
repayment shall be divided among all of the Lenders in accordance with their
respective Percentages. Notwithstanding the foregoing, borrowings and payments
---------------
of Swing Loans shall be for TCB's own account. The Loans (other than Swing
Loans) shall be evidenced by the Notes substantially in the form of Exhibit C
---------
attached hereto. The Borrower, the Agent and the Lenders agree that Chapter 15
of the Texas Credit Code shall not apply to this Agreement, the Notes or any
Loan.
(b) The Borrower shall give the Agent notice of each borrowing to be
made hereunder as provided in Section 3.1 hereof, and the Agent shall deliver
-----------
same to each Lender promptly thereafter. Not later than 11:00 a.m., Houston,
Texas time, on the date specified for each such borrowing hereunder other than
Swing Loans, each Lender shall make available the amount of the Loan, if any, to
be made by it on such date to the Agent at the Agent's principal office in
Houston, Texas, in immediately available funds, for the account of the Borrower.
Such amounts received by the Agent will be held in Agent's general ledger
account. The amounts so received by the Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Borrower by wiring or
otherwise transferring, in immediately available funds not later than 12:00
noon, Houston, Texas time, such amount to an account designated by the Borrower
and maintained with Texas Commerce Bank National Association in El Paso, Texas
or any other account or accounts which the Borrower may from time to time
designate to the Agent by a written notice as the account or accounts to which
borrowings hereunder are to be wired or otherwise transferred. TCB shall make
available the amount of each Swing Loan by depositing the same in immediately
available funds, in the foregoing account by 2:00 p.m., Houston, Texas time, on
the date of the borrowing.
-16-
(c) Subject to the terms and conditions hereof, if necessary to meet the
Borrower's funding deadlines, TCB agrees to make Swing Loans to the Borrower at
any time on or prior to the Revolving Credit Termination Date, not to exceed an
amount at any one time outstanding equal to the lesser of (i) $75,000,000.00, or
(ii) the difference between the Commitment and the unpaid principal balance of
all Loans. Swing Loans shall constitute "Loans" for all purposes hereunder.
Notwithstanding the foregoing, the aggregate amount of all Loans (including,
without limitation, all Swing Loans) shall not at any time exceed the
Commitment. Each request for a Swing Loan shall be in an amount at least equal
to $1,000,000.00 and equal to a multiple of $250,000.00. If necessary to meet
the Borrower's funding deadlines, the Agent may treat any Request for Loan as a
request for a Swing Loan from TCB and TCB may fund it as a Swing Loan. Within
two (2) Business Days after each Swing Loan is funded, TCB shall request that
each Lender, and each Lender shall, on the first Business Day after such request
is made, purchase a portion of any one or more Swing Loans in an amount equal to
that Lender's Percentage of such Swing Loans by funding under such Lender's
Note, such purchase to be made in accordance with the terms of Section 2.1(b) of
--------------
this Agreement just as if the Lender were funding directly to the Borrower under
its Note (such that all Lenders other than TCB shall fund only under their
respective Note and not under the Swing Loan Note). Unless the Agent knew or
should have known when TCB funded a Swing Loan that the Borrower had not
satisfied the conditions in this Agreement to obtain a Loan, each Lender's
obligation to purchase an interest in the Swing Loans shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which such Lender or any other Person may have against TCB or any other Person
for any reason whatsoever; (ii) the occurrence or continuance of a Default or
Event of Default or the termination of any Lender Commitment; (iii) any adverse
change in the condition (financial or otherwise) of the Borrower or any of its
Subsidiaries; (iv) any breach of this Agreement or any other Credit Documents by
the Borrower, any of its Subsidiaries, the Agent or any other Lender; or (v) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing. Any portion of a Swing Loan not so purchased and converted
may be treated by TCB as a Loan which was not funded by the non-purchasing
Lenders as contemplated in Section 2.1(a) of this Agreement, and as a funding by
--------------
TCB under the Commitment in excess of TCB's Percentage. Each Swing Loan, once
so sold, shall cease to be a Swing Loan for the purposes of this Agreement, but
shall be a Loan made under the Commitment and each Lender's Lender Commitment.
The Swing Loans shall be evidenced by the Swing Loan Note substantially in the
form of Exhibit C-1 attached hereto.
-----------
2.2 Term Loan Conversion.
--------------------
-17-
(a) Subject to the terms and conditions of this Agreement, if
any Extension Request (as defined in Section 9) shall be denied, the Borrower
---------
may elect to convert the aggregate unpaid principal amount of the Loans (other
than the Swing Loans) outstanding on the date (if the conversion election is
chosen, the "Conversion Date") one (1) year prior to the then existing Revolving
---------------
Credit Termination Date into a term loan owing to each of the Lenders (each a
"Term Loan"), so long as (i) the Borrower has given the Agent at least fifteen
---------
(15) days prior written notice of the Borrower's intention to so convert the
Loans, (ii) no amounts remain unpaid under the Swing Loan Note, and (iii) the
conditions to make a Loan set forth in Section 3 are satisfied as of the
---------
Conversion Date. After the Conversion Date, the Borrower shall have no further
right to receive, and no Lender shall have the obligation to make, any advances
of Loans.
(b) The Borrower shall repay the principal balance of each Term
Loan in quarterly installments due on November 13 first following the Conversion
Date, and continuing on the thirteenth (13th) day of each subsequent February,
May, August and November until the Termination Date. The amount of each
quarterly principal installment shall be equal to the following amount during
the corresponding period:
PERIOD PAYMENT AMOUNT
------ --------------
During the first year after Quarterly amount necessary to amortize
the Conversion Date the unpaid principal balance of the
Term Loan on the Conversion Date over a
seven (7) year period
During the second year after Quarterly amount necessary to amortize the
the Conversion Date unpaid principal balance of the Term
Loan on the Conversion Date over seven
(5) year period
During the third year after Quarterly amount necessary to amortize
the Conversion Date the unpaid principal balance of the
Term Loan on the Conversion Date over a
seven (3) year period
Accrued and unpaid interest on the unpaid principal balance of the Term Loans
shall continue to be due and payable on the Interest Payment Dates. The entire
unpaid principal balance, and all accrued and unpaid interest thereon, of the
Term Loans, together with all other amounts due under this Agreement, shall be
due and payable in full on the Termination Date.
2.3 Payments. (a) Except to the extent otherwise provided herein, all
--------
payments of principal, interest and other amounts to be made by the Borrower
hereunder, under the Notes and
-18-
under the other Credit Documents shall be made in immediately available funds to
the Agent at its principal office in Houston, Texas (or in the case of a
successor Agent, at the principal office of such successor Agent in the United
States), not later than 12:00 noon Houston, Texas time on the date on which such
payment shall become due (each such payment made after such time on such due
date to be deemed to have been made on the next succeeding Business Day).
(b) The Borrower may, at the time of making each payment hereunder,
under any Note or under any other Credit Document, specify to the Agent the
Loans or other amounts payable by the Borrower hereunder or thereunder to which
such payment is to be applied (and in the event that it fails so to specify,
such payment shall be applied to the Loans (first to the Swing Loans) or, if no
Loans are outstanding, to other amounts then due and payable, provided that if
--------
no Loans or other amounts are then due and payable or an Event of Default has
occurred and is continuing, the Agent may apply such payment to the Obligations
in such order as it may elect in its sole discretion, but subject to the other
terms and conditions of this Agreement, including without limitation Section 2.4
-----------
hereof). Each payment received by the Agent hereunder, under any Note or under
any other Credit Document for the account of a Lender shall be paid promptly to
such Lender, in immediately available funds. If the Agent receives a payment
for the account of a Lender prior to 12:00 noon Houston, Texas time, such
payment must be delivered to the Lender on that same day and if it is not so
delivered due to the fault of the Agent, the Agent shall pay to the Lender
entitled to the payment the interest accrued on the amount of the payment
pursuant to said Lender's Note from the date the Agent receives the payment to
the date the Lender received the payment. The Agent may apply payments received
from the Borrower to pay any unpaid principal and interest on the Swing Loans
before making payment to each Lender of amounts due under the Notes other than
the Swing Loan Note.
(c) If the due date of any payment hereunder or under any Note falls on
a day which is not a Business Day or a Eurodollar Business Day, as the case may
be, the due date for such payments shall be extended to the next succeeding
Business Day or Eurodollar Business Day, respectively, and interest shall be
payable for any principal so extended for the period of such extension;
provided, however, that with respect to Eurodollar Rate Borrowings if such
extension would cause the Eurodollar Business Day of payment to fall in another
calendar month, the payment shall be due on the Eurodollar Business Day next
preceding the due date of the payment.
(d) The Borrower shall give the Agent at least one (1) Business Day's
prior written notice of the Borrower's intent to make any payment of principal
or interest under the Credit Documents not scheduled to be paid under the Credit
Documents. Any such notification of payment shall be irrevocable after it is
made by the Borrower. Upon receipt by the Agent of such notification of payment,
it shall deliver same to the other Lenders.
-19-
2.4 Pro Rata Treatment. Except to the extent otherwise provided herein:
------------------
(a) each borrowing from the Lenders under Section 2.1(a) hereof shall be made
--------------
ratably from the Lenders on the basis of their respective Percentages, each
payment of the Fee (hereinafter defined) shall be made for the account of the
Lenders, and shall be applied, pro rata, according to the Lenders' respective
--------
Lender Commitment; and (b) each payment by the Borrower of principal or
interest on the Loans other than the Swing Loans, of any other sums advanced by
the Lenders pursuant to the Credit Documents, and of any other amount owed to
the Lenders other than the Fee, payments of Swing Loans, or any other sums
designated by this Agreement as being owed to a particular Lender, shall be made
to the Agent for the account of the Lenders pro rata in accordance with the
respective unpaid principal amounts of the Loans (other than Swing Loans) held
by the Lenders. Payments of Swing Loans shall be for TCB's own account.
2.5 Non-Receipt of Funds by the Agent. Unless the Agent shall have been
---------------------------------
notified by a Lender or the Borrower (the "Payor") prior to the date on which
such Lender is to make payment to the Agent of the proceeds of a Loan (or
purchase of a portion of a Swing Loan) to be made by it hereunder or the
Borrower is to make a payment to the Agent for the account of one or more of the
Lenders, as the case may be (such payment being herein called the "Required
Payment"), which notice shall be effective upon receipt, that the Payor does not
intend to make the Required Payment to the Agent, the Agent may assume that the
Required Payment has been made and may, in reliance upon such assumption (but
shall not be required to), make the amount thereof available to the intended
recipient on such date and, if the Payor has not in fact made the Required
Payment to the Agent, the recipient of such payment shall, on demand, pay to the
Agent the amount made available by the Agent together with interest thereon in
respect of the period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate per annum
equal to (a) the Past Due Rate for such period if the recipient returning a
Required Payment is the Borrower, or (b) the Federal Funds Effective Rate for
such period if the recipient returning a Required Payment is the Agent or a
Lender.
2.6 Sharing of Payments, Etc. The Borrower agrees that, in addition to
-------------------------
(and without limitation of) any right of set-off, bankers' lien or counterclaim
a Lender may otherwise have, each Lender shall be entitled, at its option, to
offset balances held by it for the account of the Borrower at any of its
offices, against any principal of or interest on any of such Lender's Loans to
the Borrower hereunder, or other Obligations of the Borrower hereunder, which is
not paid (regardless of whether such balances are then due to the Borrower), in
which case it shall promptly notify the Borrower and the Agent thereof, provided
--------
that such Lender's failure to give such notice shall not affect the validity
thereof. If a Lender shall obtain payment of any principal of or interest on
any Loan made by it under this Agreement (other than Swing Loans made by TCB),
or other Obligation then due to such Lender hereunder, through the exercise of
any right
-20-
of set-off, banker's lien, counterclaim or similar right, or otherwise, it shall
promptly purchase from the other Lenders portions of the Loans made or other
Obligations held (other than Swing Loans made by TCB), by the other Lenders in
such amounts, and make such other adjustments from time to time as shall be
equitable to the end that all the Lenders shall share the benefit of such
payment (net of any expenses which may be incurred by such Lender in obtaining
or preserving such benefit) pro rata in accordance with the unpaid principal and
interest on the Obligations then due to each of them. To such end all the
Lenders shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored. Nothing contained herein shall require any Lender to exercise any
such right or shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of the Borrower.
2.7 Fees. The Borrower shall pay to the Agent for the account of each
----
Lender fees (collectively, the "Fee") equal to (a) an amount payable as a
---
commitment fee by the Borrower to the Agent for the account of each Lender equal
to the portion of the daily unused amount of the Commitment (Swing Loans shall
be deemed to be a utilization of the Commitment solely for the purposes of this
Section 2.7(a)) listed below multiplied by the corresponding rate per annum
--------------
applicable to that portion:
Unused Commitment Rate
----------------- ----
Up to but not including $115,000,000 0.1250%
$115,000,000 up to and including
$230,000,000 0.1875%
Over $230,000,000 0.2500%
such commitment fee to be payable in arrears on or before the tenth (10th) day
of each April, July, October and January, (b) if the Revolving Credit
Termination Date is extended pursuant to Section 9 of this Agreement, an amount
---------
payable as an extension fee by the Borrower to the Agent for the account of each
Lender that extends its Loans equal to 0.1500% of each Lender's Lender
Commitment at that time payable on the Determination Date, and (c) if the Loans
are converted to the Term Loans pursuant to Section 2.2 of this Agreement, an
-----------
amount payable as a conversion fee by the Borrower to the Agent for the account
of each Lender that converts its Loans equal to one-fourth of one percent (1/4%)
of the aggregate unpaid principal balance of each Loan on the date one (1) year
after the Conversion Date payable to each Lender on the date one (1) year after
-21-
the Conversion Date, plus one-fourth of one percent (1/4%) of the aggregate
unpaid principal balance of each Loan on the date (2) years after the Conversion
Date payable to each Lender on the date two (2) years after the Conversion Date
if any portion of the Term Loan is unpaid on that date. The Fee shall not be
refundable (except as required by Section 3.1(c) of this Agreement). Any
--------------
portion of the Fee which is not paid by the Borrower when due shall bear
interest at the Past Due Rate from the date due until the date paid by the
Borrower. The Fee shall be calculated on the actual number of days elapsed in a
year deemed to consist of 360 days.
3. Conditions.
----------
3.1 All Loans. The obligation of any Lender to make any Loan is subject
---------
to the accuracy of all representations and warranties of the Borrower on the
date of such Loan, to the performance by the Borrower of its obligations under
the Credit Documents and to the satisfaction of the following further
conditions: (a) the Agent shall have received the following, all of which shall
be duly executed and in Proper Form: (1) a Request for Loan (i) by 11:00 a.m.,
Houston, Texas time, one (1) Business Day before the date (which shall also be a
Business Day) of the proposed Loan which is to be a Base Rate Borrowing (other
than Swing Loans), (ii) by 11:00 a.m., Houston, Texas time, on the same Business
Day of any proposed Swing Loan, provided that by 11:00 a.m., Houston, Texas time
on the date of the proposed Swing Loan, Borrower shall also have notified TCB by
telephone of its request for a Swing Loan, or (iii) by the Rate Designation Date
of the proposed Loan which is to be a Eurodollar Rate Borrowing; and (2) such
other documents as the Agent may reasonably require to satisfy itself or the
request of any Lender; (b) no Default or Event of Default shall have occurred
and be continuing; (c) the making of the Loan shall not be prohibited by any
Legal Requirement (in which event the applicable portion of the Fee will not be
charged to the Borrower); (d) the Borrower shall have paid all legal fees and
expenses of the type described in Section 5.10 hereof through the date of such
------------
Loan; and (e) in the case of a Loan other than a Swing Loan, all Swing Loans
then outstanding shall have been paid or shall be paid with the proceeds of such
Loan.
3.2 First Loan. In addition to the matters described in Section 3.1
---------- -----------
hereof, the obligation of the Lenders to make the first Loan under this
Agreement is subject to the receipt by the Lenders of each of the following, in
Proper Form: (a) the Notes, executed by the Borrower; (b) a certificate executed
by the Secretary of the Borrower dated as of the date hereof; (c) a certificate
from the Secretary of State or other appropriate public official of Maryland as
to the continued existence and good standing of the Borrower; (d) a certificate
from the appropriate public official of every state where the location of the
Borrower's Property requires it to be qualified to do business as to the due
qualification and good standing of the Borrower; (e) a legal opinion from
independent counsel for the Borrower as to the matters set forth on Exhibit D
---------
-22-
acceptable to the Lenders; (f) policies of insurance addressed to the Agent
reflecting the insurance required by Section 5.7 hereof; and (g) an Officer's
-----------
Certificate in the form of Exhibit A; and to the further condition that, at the
---------
time of the initial Loan, all legal matters incident to the transactions herein
contemplated shall be satisfactory to Liddell, Sapp, Zivley, Hill & ▇▇▇▇▇▇,
L.L.P., counsel for the Agent.
3.3 Options Available. The outstanding principal balance of the Notes
-----------------
shall bear interest at the Base Rate; provided, that (1) all past due amounts,
--------
both principal and accrued interest, shall bear interest at the Past Due Rate,
and (2) subject to the provisions hereof, Borrower shall have the option of
having all or any portion of the principal balance of the Notes, other than the
Swing Loan Note, from time to time outstanding bear interest at a Eurodollar
Rate. The records of the Lenders with respect to Interest Options, Interest
Periods and the amounts of Loans to which they are applicable shall be prima
facie evidence thereof. Interest on the Loans shall be calculated at the Base
Rate except where it is expressly provided pursuant to this Agreement that a
Eurodollar Rate is to apply.
3.4 Designation and Conversion. Borrower shall have the right to
--------------------------
designate or convert its Interest Options in accordance with the provisions
hereof. Provided no Event of Default has occurred and is continuing and subject
--------
to the provisions of Section 3.5, Borrower may elect to have a Eurodollar Rate
-----------
apply or continue to apply to all or any portion of the principal balance of the
Notes, other than the Swing Loan Note. Each change in Interest Options shall be
a conversion of the rate of interest applicable to the specified portion of the
Loans, but such conversion shall not change the respective outstanding principal
balance of the Notes. The Interest Options shall be designated or converted in
the manner provided below:
(a) Borrower shall give Agent a Request for Loan. Each such written notice
shall specify the amount of Loan which is the subject of the designation, if
any; the amount of borrowings into which such borrowings are to be converted or
for which an Interest Option is designated; the proposed date for the
designation or conversion and the Interest Period, if any, selected by Borrower.
The Request for Loan shall be irrevocable and shall be given to Agent no later
than the applicable Rate Designation Date. The Agent shall promptly deliver the
Request for Loan to the Lenders.
(b) No more than twelve (12) Eurodollar Rate Borrowings with twelve (12)
Interest Periods shall be in effect at any time.
(c) Each designation or conversion of a Eurodollar Rate Borrowing shall
occur on a Eurodollar Business Day.
-23-
(d) Except as provided in Section 3.5 hereof, no Eurodollar Rate Borrowing
-----------
shall be converted on any day other than the last day of the applicable Interest
Period.
(e) Unless a Request for Loan to the contrary is received as provided in
this Agreement, each Eurodollar Rate Borrowing will convert to a Base Rate
Borrowing after the expiration of the Interest Period.
3.5 Special Provisions Applicable to Eurodollar Rate Borrowings.
-----------------------------------------------------------
(a) Options Unlawful. If the adoption of any applicable Legal Requirement
----------------
or any change in any applicable Legal Requirement or in the interpretation or
administration thereof by any Governmental Authority or compliance by the
Lenders with any request or directive (whether or not having the force of law)
of any central bank or other Governmental Authority shall at any time make it
unlawful or impossible for any Lender to permit the establishment of or to
maintain any Eurodollar Rate Borrowing, the commitment of the Lenders to
establish or maintain such Eurodollar Rate Borrowing shall forthwith be
suspended until such condition shall cease to exist and Borrower shall
forthwith, upon demand by Agent to Borrower, (1) convert the Eurodollar Rate
Borrowing with respect to which such demand was made to a Base Rate Borrowing;
(2) pay all accrued and unpaid interest to date on the amount so converted; and
(3) pay any amounts required to compensate the Lenders for any additional cost
or expense which the Lenders may incur as a result of such adoption of or change
in such Legal Requirement or in the interpretation or administration thereof and
any Funding Loss which the Lenders may incur as a result of such conversion.
If, when Agent so notifies Borrower, Borrower has given a Request for Loan
specifying a Eurodollar Rate Borrowing but the selected Interest Period has not
yet begun, such Request for Loan shall be deemed to be of no force and effect,
as if never made, and the balance of the Loans specified in such Request for
Loan shall bear interest at the Base Rate until a different available Interest
Option shall be designated in accordance herewith.
(b) Increased Cost of Borrowings. If the adoption of any applicable Legal
----------------------------
Requirement or any change in any applicable Legal Requirement or in the
interpretation or administration thereof by any Governmental Authority or
compliance by any Lender with any request or directive of general applicability
(whether or not having the force of law) of any central bank or Governmental
Authority shall at any time as a result of any portion of the principal balance
of the Notes being maintained on the basis of a Eurodollar Rate:
(1) subject any Lender (or make it apparent that any Lender is subject) to
any Taxes, or any deduction or withholding for any Taxes, on or from
any payment due under any Eurodollar Rate Borrowing or other amount
due
-24-
hereunder, other than income and franchise taxes of the United
States and its political subdivisions; or
(2) change the basis of taxation of payments due from Borrower to
any Lender under any Eurodollar Rate Borrowing (otherwise than
by a change in the rate of taxation of the overall net income
of a Lender); or
(3) impose, modify, increase or deem applicable any reserve
requirement (excluding that portion of any reserve requirement
included in the calculation of the applicable Eurodollar Rate),
special deposit requirement or similar requirement (including,
but not limited to, state law require ments and Regulation D)
imposed, modified, increased or deemed applicable by any
Governmental Authority against assets held by any Lender, or
against deposits or accounts in or for the account of any
Lender, or against loans made by any Lender, or against any
other funds, obligations or other property owned or held by any
Lender; or
(4) impose on any Lender any other condition regarding any
Eurodollar Rate Borrowing;
and the result of any of the foregoing is to increase the cost to
any Lender of agreeing to make or of making, renewing or maintaining
such Eurodollar Rate Borrowing, or reduce the amount of principal or
interest received by any Lender, then, upon demand by Agent,
Borrower shall pay to such Lender, from time to time as specified by
such Lender, additional amounts which shall compensate such Lender
for such increased cost or reduced amount. Agent will promptly
notify Borrower in writing of any event which will entitle any
Lender to additional amounts pursuant to this paragraph. A Lender's
determination of the amount of any such increased cost, increased
reserve requirement or reduced amount shall be prima facie evidence
thereof. Borrower shall have the right, if it receives from Agent
any notice referred to in this paragraph, upon three Business Days'
notice to Agent, either (i) to repay in full (but not in part) any
borrowing with respect to which such notice was given, together with
any accrued interest thereon, or (ii) to convert the Eurodollar Rate
Borrowing which is the subject of the notice to a Base Rate
Borrowing; provided, that any such repayment or conversion shall be
--------
accompanied by payment of (x) the amount required to compensate a
Lender for the increased cost or reduced amount referred to in the
preceding paragraph; (y) all accrued and unpaid interest to date on
the amount so repaid or converted, and
-25-
(z) any Funding Loss which any Lender may incur as a result of such
repayment or conversion.
(c) Inadequacy of Pricing and Rate Determination. If for any
--------------------------------------------
reason with respect to any Interest Period Agent shall have
determined (which determination shall be prima facie evidence
thereof) that:
(1) Agent is unable through its customary general practices to
determine any applicable Eurodollar Rate, or
(2) by reason of circumstances affecting the applicable market
generally, Agent is not being offered deposits in United States
dollars in such market, for the applicable Interest Period and
in an amount equal to the amount of any applicable Eurodollar
Rate Borrowing requested by Borrower, or
(3) any applicable Eurodollar Rate will not adequately and fairly
reflect the cost to the Lenders of making and maintaining such
Eurodollar Rate Borrowing hereunder for any proposed Interest
Period,
then Agent shall give Borrower notice thereof and thereupon, (A) any
Request for Loan previously given by Borrower designating the
applicable Eurodollar Rate Borrowing which has not commenced as of
the date of such notice from Agent shall be deemed for all purposes
hereof to be of no force and effect, as if never given, and (B)
until Agent shall notify Borrower that the circumstances giving rise
to such notice from Agent no longer exist, each Request for Loan
requesting the applicable Eurodollar Rate shall be deemed a request
for a Base Rate Borrowing, and any applicable Eurodollar Rate
Borrowing then outstanding shall be converted, without any notice to
or from Borrower, upon the termination of the Interest Period then
in effect with respect to it, to a Base Rate Borrowing.
(d) Funding Losses. Borrower shall indemnify the Agent and each Lender
--------------
against and hold the Agent and each Lender harmless from any Funding Loss. This
agreement shall survive the payment of the Notes. A certificate as to any
additional amounts payable pursuant to this subsection and setting forth the
reasons for the Funding Loss submitted by Agent to Borrower shall be prima facie
evidence thereof.
-26-
3.6 Funding Offices; Adjustments Automatic. Any Lender may, if it so
--------------------------------------
elects, fulfill its obligation as to any Eurodollar Rate Borrowing by causing a
branch or affiliate of such Lender to make such Loan and may transfer and carry
such Loan at, to, or for the account of, any branch office or affiliate of such
Lender; provided, that in such event for the purposes of this Agreement such
--------
Loan shall be deemed to have been made by such Lender and the obligation of
Borrower to repay such Loan shall nevertheless be to such Lender and shall be
deemed held by it for the account of such branch or affiliate. Without notice
to Borrower or any other person or entity, each rate required to be calculated
or determined under this Agreement shall automatically fluctuate upward and
downward in accordance with the provisions of this Agreement.
3.7 Funding Sources, Payment Obligations. Notwithstanding any provision
------------------------------------
of this Agreement to the contrary, each Lender shall be entitled to fund and
maintain its funding of all or any part of the Loans in any manner it sees fit,
it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if each Lender had actually funded and
maintained each Eurodollar Rate Borrowing during each Interest Period through
the purchase of deposits having a maturity corresponding to such Interest Period
and bearing an interest rate equal to the Eurodollar Rate for such Interest
Period. Notwithstanding the foregoing, Funding Losses, increased costs and
other obligations relating to Eurodollar Rate Borrowings described in Section
-------
3.5 of this Agreement will only be paid by the Borrower as and when actually
---
incurred by the Lenders.
3.8 Mitigation, Non-Discrimination. (a) Each Lender will notify the
------------------------------
Borrower through the Agent of any event occurring after the date of this
Agreement which will require or enable such Lender to take the actions described
in Sections 3.5(a) or (b) of this Agreement as promptly as practicable after it
--------------- ---
obtains knowledge thereof and determines to request such action, and (if so
requested by the Borrower through the Agent) will designate a different lending
office of such Lender for the applicable Eurodollar Rate Borrowing or will take
such other action as the Borrower reasonably requests if such designation or
action is consistent with the internal policy of such Lender and legal and
regulatory restrictions, can be undertaken at no additional cost, will avoid the
need for, or reduce the amount of, such action and will not, in the sole opinion
of such Lender, be disadvantageous to such Lender (provided that such Lender
--------
will have no obligation to designate a different lending office which is located
in the United States of America).
(b) None of the Lenders shall be able to pass through to the Borrower
changes and costs under Section 3.5 of this Agreement on a discriminating basis,
-----------
such that such changes and costs are not also passed through by each Lender to
other customers of such Lender similarly situated where such customer is subject
to documents providing for such pass through.
-27-
(c) If any Lender elects under Section 3.5 of this Agreement to
-----------
suspend or terminate the availability of Eurodollar Rate Borrowings for any
material period of time, and the event giving rise to such election is not
generally applicable to all of the Lenders, the Borrower may within sixty (60)
days after notification of such Lender's election, and so long as no Event of
Default is then in existence, either (i) demand that such Lender, and upon such
demand, such Lender shall promptly, assign its Lender Commitment to another
financial institution subject to and in accordance with the provisions of
Section 10.5 of this Agreement for a purchase price equal to the unpaid balance
------------
of principal, accrued interest, the unpaid balance of the Fee and expenses owing
to such Lender pursuant to this Agreement, or (ii) pay such Lender the unpaid
balance of principal, accrued interest, the unpaid balance of the Fee and
expenses owing to such Lender pursuant to this Agreement, whereupon, such Lender
shall no longer be a party to this Agreement or have any rights or obligations
hereunder or under any other Credit Documents, and the Commitment shall
immediately and permanently be reduced by an amount equal to the Lender
Commitment of such Lender.
4. Representations and Warranties.
------------------------------
To induce the Lenders to enter into this Agreement and to make the Loans,
the Borrower represents and warrants to the Agent and the Lenders as follows:
4.1. Organization. The Borrower is duly organized, validly existing
------------
and in good standing as a real estate investment trust under the laws of the
state of Maryland; has all power and authority to conduct its business as
presently conducted; and is duly qualified to do business and in good standing
in every state where the location of its Property requires it to be qualified to
do business, unless the failure to be so qualified could not reasonably be
expected to have a Material Adverse Effect.
4.2 Financial Statements. The financial statements delivered to the
--------------------
Agent fairly present, in accordance with Generally Accepted Accounting
Principles (provided, however, that the Quarterly Unaudited Financial Statements
are subject to normal year-end adjustments and may contain condensed footnotes
as permitted by regulations of the United States Securities and Exchange
Commission), the financial condition and the results of operations of the
Borrower as at the dates and for the periods indicated. No Material Adverse
Change has occurred since the dates of such financial statements. The Borrower
is not subject to any instrument or agreement which would materially prevent it
from conducting its business as it is now conducted or as it is contemplated to
be conducted.
-28-
4.3 Enforceable Obligations; Authorization. The Credit Documents are
--------------------------------------
legal, valid and binding obligations of the Parties, enforceable in accordance
with their respective terms, except as may be limited by bankruptcy, insolvency
and other laws affecting creditors' rights generally and by general equitable
principles. The execution, delivery and performance of the Credit Documents
have all been duly authorized by all necessary action; are within the power and
authority of the Parties; do not and will not contravene or violate any Legal
Requirement or the Organizational Documents of the Parties; do not and will not
result in the breach of, or constitute a default under, any agreement or
instrument by which the Parties or any of their respective Property may be bound
or affected, except where such breach or default could not reasonably be
expected to have a Material Adverse Effect; and do not and will not result in
the creation of any Lien upon any Property of any of the Parties except as
expressly contemplated therein. All necessary permits, registrations and
consents for such making and performance have been obtained except where the
lack thereof could not reasonably be expected to have a Material Adverse Effect.
4.4 Other Debt. The Borrower is not in default in the payment of any
----------
other Indebtedness or under any agreement, mortgage, deed of trust, security
agreement or lease to which it is a party which default could reasonably be
expected to have a Material Adverse Effect.
4.5 Litigation. There is no litigation or administrative proceeding
----------
pending or, to the knowledge of the Borrower, threatened against, or any
outstanding judgment, order or decree affecting, the Borrower before or by any
Governmental Authority which is not adequately covered by insurance or which, if
determined adversely to the Borrower could reasonably be expected to have a
Material Adverse Effect. The Borrower is not in default with respect to any
judgment, order or decree of any Governmental Authority which default could
reasonably be expected to have a Material Adverse Effect.
4.6 Taxes. The Borrower has filed all tax returns required to have been
-----
filed and paid all taxes shown thereon to be due, except those for which
extensions have been obtained, those which are being contested in good faith and
those for which the Borrower's failure to file a return or pay could not
reasonably be expected to have a Material Adverse Effect.
4.7 Regulation U. None of the proceeds of any Loan will be used for the
------------
purpose of purchasing or carrying directly or indirectly any margin stock or for
any other purpose that would constitute this transaction a "purpose credit"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System.
-29-
4.8 Subsidiaries. The Borrower has no Subsidiaries which individually
------------
or in the aggregate own more than twenty-five percent (25%) in value of the
Borrower's and the Subsidiaries' consolidated assets determined in accordance
with Generally Accepted Accounting Principles. Each of the Borrower's
Subsidiaries is a "qualified REIT subsidiary" under Section 856 of the Code.
4.9 Securities Act of 1933. Other than the Agent's efforts in
----------------------
syndicating the Loans (for which the Agent is responsible) neither the Borrower
nor any agent acting for it has offered the Notes or any similar obligation of
the Borrower for sale to or solicited any offers to buy the Notes or any similar
obligation of the Borrower from any Person other than the Agent or any Lender,
and neither the Borrower nor any agent acting for it will take any action which
would subject the sale of the Note to the provisions of Section 5 of the
Securities Act of 1933, as amended.
4.10 No Contractual or Corporate Restrictions. The Borrower is not a
----------------------------------------
party to, or bound by, any contract, agreement or charter or other corporate
restriction materially and adversely affecting its business, Property, assets,
operations or condition, financial or otherwise.
4.11 Investment Company Act Not Applicable. The Borrower is not an
-------------------------------------
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
4.12 Public Utility Holding Company Act Not Applicable. The Borrower is
-------------------------------------------------
not a "holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company", or an affiliate of a "subsidiary company" of
a "holding company", as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended.
4.13 ERISA Not Applicable. The Borrower is not subject to any
--------------------
requirements of the Employee Retirement Income Security Act of 1974 as amended
from time to time, or any rules, regulations, rulings or interpretations adopted
by the Internal Revenue Service or the Department of Labor thereunder.
5. Affirmative Covenants.
---------------------
The Borrower covenants and agrees with the Agent and the Lenders that prior
to the termination of this Agreement it will do, and if necessary cause to be
done, each and all of the following:
5.1 Taxes, Insurance, Existence, Regulations, Property, etc. At all
-------------------------------------------------------
times (a) pay when due all taxes and governmental charges of every kind upon it
or against its income, profits or
-30-
Property, unless and only to the extent that the same shall be contested in good
faith and reserves which are adequate under Generally Accepted Accounting
Principles have been established therefor, or unless such failure to pay could
not reasonably be expected to have a Material Adverse Effect; (b) do all things
necessary to preserve its existence, qualifications, rights and franchises in
all States where such qualification is necessary or desirable, except where
failure to obtain the same could not reasonably be expected to have a Material
Adverse Effect; (c) comply with all applicable Legal Requirements in respect of
the conduct of its business and the ownership of its Property except where
failure to so comply could not reasonably be expected to have a Material Adverse
Effect; and (d) cause its Property to be protected, maintained and kept in good
repair (reasonable wear and tear excepted) and make all replacements and
additions to its Property as may be reasonably necessary to conduct its
business.
5.2 Financial Statements and Information. Furnish to the Agent each of
------------------------------------
the following: (a) as soon as available and in any event within 90 days after
the end of each fiscal year of the Borrower, Annual Audited Financial Statements
of the Borrower (which shall include an unaudited statement of Funds From
Operations); (b) as soon as available and in any event within 45 days after the
end of each quarter (except the last quarter) of each fiscal year of the
Borrower, Quarterly Unaudited Financial Statements of the Borrower (which shall
include a statement of Funds From Operations); (c) concurrently with the
financial statements provided for in Subsections 5.2(a) and (b) hereof, an
------------------ ---
Officer's Certificate, together with such schedules, computations and other
information (including, without limitation, if provided to Borrower information
as to Unconsolidated Affiliates of the Borrower), in reasonable detail, as may
be required by the Agent to demonstrate compliance with the covenants set forth
herein or reflecting any non-compliance therewith as of the applicable date, all
certified as true, correct and complete by a managing director, vice president
or controller of Borrower's REIT Manager; (d) promptly after the filing thereof,
all reports to or filings made by the Borrower or any of its Subsidiaries with
the Securities and Exchange Commission, including, without limitation,
registration statements and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents); (e) within two (2) Business Days after the receipt thereof, a copy
of the notification to the Borrower of the Borrower's S&P Rating or ▇▇▇▇▇'▇
Rating, or change therein, and (f) such other information relating to the
financial condition and affairs of the Borrower as from time to time may be
reasonably requested by any Lender. The Agent will send to each Lender the
information received by the Agent pursuant to this Section 5.2 promptly after
-----------
the receipt thereof by Agent.
5.3 Financial Tests. Have and maintain, on a consolidated basis in
---------------
accordance with Generally Accepted Accounting Principles: (a) a Debt to Tangible
Net Worth Ratio no greater than 1.0:1.0 at all times; (b) a Coverage Ratio of
not less than 2.0:1.0 at all times; (c) a Fixed Charge Coverage Ratio of not
less than 1.4:1.0 at all times; (d) a Tangible Net Worth of at least
-31-
One Billion Dollars ($1,000,000,000.00) at all times; and (e) a Debt to Total
Asset Value Ratio no greater than (i) fifty-five percent (55%) during the first
year after the Conversion Date, if any, and (ii) fifty percent (50%) thereafter.
5.4 Inspection. In order to permit the Agent to ascertain compliance
----------
with the Credit Documents, during normal business hours permit the Agent to
inspect its Property, to examine its files, books and records and make and take
away copies thereof, and to discuss its affairs with its officers and
accountants, all at such times and intervals and to such extent as a Lender may
reasonably desire.
5.5 Further Assurances. Promptly execute and deliver any and all other
------------------
and further instruments which may be requested by the Agent to cure any defect
in the execution and delivery of any Credit Document or more fully to describe
particular aspects of the Borrower's agreements set forth in the Credit
Documents or so intended to be.
5.6 Books and Records. Maintain books of record and account in
-----------------
accordance with Generally Accepted Accounting Principles.
5.7 Insurance. Maintain insurance with such insurers, on such of its
---------
properties, in such amounts and against such risks as is consistent with
insurance maintained by businesses of comparable type and size in the industry,
and furnish the Agent satisfactory evidence thereof promptly upon request.
5.8 Notice of Certain Matters. Notify the Agent promptly upon acquiring
-------------------------
knowledge of the occurrence of any of the following: the institution or
threatened institution of any lawsuit or administrative proceeding affecting the
Borrower in which the claim exceeds $250,000.00 and if determined adversely
could have a Material Adverse Effect; when the Borrower believes that there has
been a Material Adverse Change; or the occurrence of any Event of Default or any
Default. The Borrower will notify the Agent in writing at least thirty (30)
Business Days prior to the date that the Borrower changes its name or the
location of its chief executive office or principal place of business or the
place where it keeps its books and records.
5.9 Use of Proceeds. The proceeds of the Loans will be used for general
---------------
business purposes including (without limitation) for acquisition of multi-family
real estate properties, for the development and enhancement of multi-family real
estate properties, for investment in convertible mortgages issued by Homestead
Village Properties Incorporated or for the costs of construction of multi-family
real estate projects owned or to be acquired by the Borrower.
-32-
Notwithstanding the foregoing, none of the proceeds of the Loans will be used to
finance, fund or complete any hostile acquisition of any Person.
5.10 Expenses of and Claims Against the Agent and the Lenders. To the
--------------------------------------------------------
extent not prohibited by applicable law, the Borrower will pay all reasonable
costs and expenses incurred to third parties and reimburse the Agent and each
Lender, as the case may be, for any and all reasonable expenditures of every
character incurred or expended from time to time, in connection with (a)
regardless of whether a Default or Event of Default shall have occurred, the
Agent's preparation, negotiation and completion of the Credit Documents, and (b)
during the continuance of an Event of Default, all costs and expenses relating
to the Agent's and such Lender's exercising any of its rights and remedies under
this or any other Credit Document, including, without limitation, attorneys'
fees, legal expenses, and court costs; provided, that no rights or option
--------
granted by the Borrower to the Agent or any Lender or otherwise arising pursuant
to any provision of this or any other instrument shall be deemed to impose or
admit a duty on the Agent or any Lender to supervise, monitor or control any
aspect of the character or condition of any property or any operations conducted
in connection with it for the benefit of the Borrower or any other person or
entity other than the Agent or such Lender. Notwithstanding the foregoing, the
Borrower shall not be charged with any cost or expense incurred by the Agent or
any Lender relating to disputes or claims among or between the Agent, the
Lenders, or any of them unless during the continuance of an Event of Default and
related to details of enforcement of the Lenders' rights under the Credit
Documents.
5.11 Legal Compliance; Indemnification. The Borrower shall operate its
---------------------------------
Property and businesses in full compliance with all Legal Requirements. It
shall not constitute an Event of Default if there is a failure to comply with
any Legal Requirement which failure could not reasonably be expected to have a
Material Adverse Effect. The Borrower shall indemnify the Agent and each
Lender, their directors, officers, employees and shareholders (the "Indemnified
-----------
Parties") for and defend and hold the Indemnified Parties harmless against any
-------
and all claims, demands, liabilities, causes of action, penalties, obligations,
damages, judgments, deficiencies, losses, costs or expenses (including, without
limitation, interest, penalties, attorneys' fees, and amounts paid in
settlement) threatened or incurred by reason of, arising out of or in any way
related to any failure of the Borrower to so comply with the provisions of any
Legal Requirement, this Agreement or the other Credit Documents, and any and all
matters arising out of any act, omission, event or circumstance, regardless of
whether the act, omission, event or circumstance constituted a violation of any
such Legal Requirement, this Agreement or the other Credit Documents at the time
of its existence or occurrence. THE BORROWER SHALL INDEMNIFY THE AGENT AND EACH
LENDER PURSUANT TO THIS SECTION REGARDLESS OF WHETHER THE ACT, OMISSION, FACTS,
CIRCUMSTANCES OR
-33-
CONDITIONS GIVING RISE TO SUCH INDEMNIFICATION WERE CAUSED IN WHOLE OR IN PART
BY THE AGENT'S OR SUCH LENDER'S NEGLIGENCE (SIMPLE, BUT NOT GROSS NEGLIGENCE).
The Borrower will comply with all Legal Requirements to maintain, and will at
all times qualify as and maintain, its status as a real estate investment trust
under Section 856(c)(1) of the Code.
5.12 Borrower's Performance. If the Borrower should fail to comply with
----------------------
any of the agreements, covenants or obligations of the Borrower under this
Agreement or any other Credit Document, then the Agent (in the Borrower's name
or in Agent's name) may perform them or cause them to be performed for the
account of the Borrower and at the Borrower's sole expense, but shall not be
obligated to do so. Any and all expenses thus incurred or paid by the Agent and
by any Lender shall be the Borrower's demand obligations to the Agent or such
Lender and shall bear interest from the date of demand therefor until the date
that the Borrower repays it to the Agent or the applicable Lender at the Past
Due Rate. Upon making any such payment or incurring any such expense, the Agent
or the applicable Lender shall be fully subrogated to all of the rights of the
Person receiving such payment. Any amounts owing by the Borrower to the Agent
or any Lender pursuant to this provision or any other provision of this
Agreement shall automatically and without notice be secured by any collateral
provided by the Credit Documents. The amount and nature of any such expense and
the time when paid shall, absent manifest error, be fully established by the
affidavit of the Agent or the applicable Lender or any of the Agent's or the
applicable Lender's officers or agents.
5.13 Professional Services. Promptly upon the Agent's request to satisfy
---------------------
itself or the request of any Lender, the Borrower, at the Borrower's sole cost
and expense, provided, however, that so long as no Event of Default has occurred
and is continuing, such items will not be at the Borrower's expense, shall: (a)
allow an inspection and/or appraisal of the Borrower's Property to be made by a
Person approved by the Agent in its sole discretion; and (b) if the Agent
believes that an Event of Default has occurred or is about to occur, cause to be
conducted or prepared any other written report, summary, opinion, inspection,
review, survey, audit or other professional service relating to the Borrower's
Property or any operations in connection with it (all as designated in the
Agent's request), including, without limitation, any accounting, auctioneering,
architectural, consulting, engineering, design, legal, management, pest control,
surveying, title abstracting or other technical, managerial or professional
service relating to such property or its operations.
5.14 Capital Adequacy. (a) If after the date of this Agreement, the
----------------
Agent or any Lender shall have determined that the adoption or effectiveness of
any applicable law, rule or regulation regarding capital adequacy of general
applicability, or any change therein, or any change in the
-34-
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by the Agent or any Lender with any request or directive
regarding capital adequacy of general applicability (whether or not having the
force of law) of any such Governmental Authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
Agent's or any Lender's capital as a consequence of its obligations hereunder to
a level below that which the Agent or such Lender could have achieved but for
such adoption, change or compliance (taking into consideration the Agent's or
such Lender's policies with respect to capital adequacy) by an amount deemed by
the Agent or such Lender to be material, then from time to time, the Borrower
shall pay to the Agent or such Lender such additional amount or amounts as will
compensate the Agent or such Lender for such reduction.
(b) A certificate of the Agent or such Lender setting forth such
amount or amounts as shall be necessary to compensate the Agent or such Lender
as specified in Section 5.14(a) hereof and making reference to the applicable
---------------
law, rule or regulation shall be delivered as soon as practicable to the
Borrower and shall be prima facie evidence thereof. The Borrower shall pay the
Agent or such Lender the amount shown as due on any such certificate within
fourteen (14) Business Days after the Agent or such Lender delivers such
certificate. In preparing such certificate, the Agent or such Lender may employ
such assumptions and allocations of costs and expenses as it shall in good ▇▇▇▇▇
▇▇▇▇ reasonable and may use any reasonable averaging and attribution method.
5.15 Property Pool. The Borrower will at all times own fee simple title
-------------
to real estate properties that are not mortgaged, pledged, hypothecated, or
encumbered in any manner other than Permitted Encumbrances (the "Pool") with an
----
aggregate Historical Value (plus all cash balances held by the Borrower if and
whenever the unpaid balance of the Loans is zero) of at least one hundred
seventy-five percent (175%) of the Borrower's unsecured Indebtedness outstanding
from time to time, with the following characteristics: (a) the Pool must
include income producing operating properties (the "Operating Sub-Pool") with an
------------------
aggregate Operating Sub-Pool Value of at least one hundred fifty percent (150%)
of the Borrower's unsecured Indebtedness outstanding from time to time, (b) each
individual property in the Operating Sub-Pool must have an occupancy level of at
least eighty percent (80%), where such occupancy level is the average of the
actual occupancy level for each of the immediately preceding three (3) months,
(c) any properties added to the Operating Sub-Pool after the date of this
Agreement must be multifamily properties, and (d) the Borrower must have
received from third party independent environmental consultants, written
assessments for each property in, or to be added to, the Operating Sub-Pool that
do not disclose any material environmental conditions or risks related to such
properties. If requested by the Agent and\or the Co-Agent, the Borrower will
provide to the Agent and the Co-Agent
-35-
written assessments from third party independent environmental consultants for
all real estate properties acquired after the date of this Agreement. If the
Agent determines that there are material environmental conditions existing on or
risks to such properties, the properties will be excluded from the Pool.
6. Negative Covenants.
------------------
The Borrower covenants and agrees with the Agent and the Lenders that prior
to the termination of this Agreement it will not do any of the following:
6.1 Indebtedness. Create, incur, suffer or permit to exist, or assume
------------
or guarantee, directly or indirectly, contingently or otherwise, or become or
remain liable with respect to any Indebtedness with a final maturity of five (5)
years or less (not including any renewal or extension options) in excess of
$400,000,000.00 in the aggregate, in all cases whether direct, indirect,
absolute, contingent or otherwise; except (a) Indebtedness incurred by Borrower
which has an S&P Rating of BBB- or better and a ▇▇▇▇▇'▇ Rating of Baa3 or better
at the time of issuance, (b) Non-recourse Debt, (c) Indebtedness in the final
five (5) years or less of a full payment amortization schedule providing for
periodic payments over the remaining life where no more than fifty percent (50%)
of the original loan amount is amortized in said final five (5) year or less
period, (d) credit enhancement provided by or on behalf of the Borrower for tax
exempt bonds if said credit enhancement has an expiration date or a maturity
date of one (1) year or more, and (e) Indebtedness secured by multifamily real
estate properties and assumed by Borrower in connection with the purchase of
said properties by Borrower (but not incurred or assumed in anticipation of such
purchase) not to exceed $50,000,000.00 in the aggregate. For the purposes of the
foregoing calculation under (c) above, simultaneously issued tranches of
---
Indebtedness under the same indenture shall be combined and treated as a single
debt issuance.
6.2 Mergers, Consolidations and Acquisitions of Assets. In any single
--------------------------------------------------
transaction or series of related transactions, directly or indirectly: (a)
liquidate or dissolve; (b) other than a merger or consolidation in which the
Borrower is the surviving entity and the value of the assets of the other party
to such merger or consolidation is less than twenty percent (20%) of the value
of the assets of the Borrower on a consolidated basis (in accordance with
Generally Accepted Accounting Principles) after such merger or consolidation, be
a party to any merger or consolidation; (c) other than an acquisition in which
the Borrower acquires all or substantially all of the assets of another Person
and the value of the assets acquired is less than twenty percent (20%) of the
value of the assets of the Borrower on a consolidated basis (in accordance with
Generally Accepted Accounting Principles) after such acquisition, acquire all or
substantially all of the assets of any Person; or (d) except for periodic sales
not exceeding twenty-five percent
-36-
(25%) of the Borrower's total assets on a consolidated basis (in accordance with
Generally Accepted Accounting Principles) in any calendar year, or sales or
leases executed in the ordinary course of business, sell, convey or lease all or
any substantial part of its assets.
6.3 Redemption. At any time redeem, retire or otherwise acquire,
----------
directly or indirectly, any shares of its capital stock if such action would
cause the Borrower to not be in compliance with this Agreement.
6.4 Nature of Business; Management. Change the nature of its business
------------------------------
or enter into any business which is substantially different from the business in
which it is presently engaged; amend the Borrower's agreements with Borrower's
REIT Manager if such amendments would materially increase amounts payable
thereunder to Borrower's REIT Manager or which would violate any provision of
the Credit Documents; or terminate or allow the termination (whether voluntary
or involuntary) of the Borrower's agreements with Borrower's REIT Manager unless
within thirty (30) days thereafter Borrower's REIT Manager is replaced by an
advisor or management team pursuant to an agreement which is in compliance with
the requirements of the North American Security Administrators Association's
Statement of Policy for Real Estate Investment Trusts and which is otherwise
satisfactory to the Agent and the Majority Lenders.
6.5 Transactions with Related Parties. Enter into any transaction or
---------------------------------
agreement with any officer, director, or holder of more than five percent (5%)
(based on voting rights) of the issued and outstanding capital stock of the
Borrower (or any Affiliate of the Borrower), unless the same is upon terms
substantially similar to those obtainable from qualified wholly unrelated
sources, or complies with the requirements of the Statement of Policy for Real
Estate Investment Trusts promulgated by the North American Security
Administrators Association, as amended from time to time. Agent and each Lender
hereby consent to (a) the contribution to Homestead Village Properties
Incorporated of all of the Homestead Village assets owned by the Borrower in
exchange for common stock and warrants to be transferred to the Borrower's
shareholders promptly after receipt by the Borrower, and (b) the retention by
Borrower of mortgages convertible into common stock of Homestead Village
Properties Incorporated securing amounts funded by the Borrower (irrespective of
the face amount of the convertible mortgages) which do not exceed
$230,000,000.00, in each case to the extent not on terms substantially similar
to those obtainable from unrelated sources.
6.6 Loans and Investments. Make any loan, advance, extension of credit
---------------------
or capital contribution to, or make or have any investment in, any Person, or
make any commitment to make any such extension of credit or investment, except
(a) travel advances in the ordinary course of business to officers, employees
and agents; (b) readily marketable securities issued or fully
-37-
guaranteed by the United States of America (or investments or money market
accounts consisting of the same); (c) commercial paper rated "Prime 1" by
▇▇▇▇▇'▇ Investors Service, Inc. or A-1 by Standard and Poor's Corporation (or
investments or money market accounts consisting of the same); (d) certificates
of deposit or repurchase certificates issued by financial institutions
acceptable to the Agent (or investments or money market accounts consisting of
the same), all of the foregoing b, c and d not having a maturity of more than
- - -
one (1) year from the date of issuance thereof; (e) securities received in
settlement of liabilities created in the ordinary course of business, or
securities in Persons engaged primarily in the business of investment in and
operation of commercial real estate properties received in exchange for Property
sold to such Persons so long as the market value of such securities does not
exceed ten percent (10%) of the value of the assets of the Borrower on a
consolidated basis (in accordance with Generally Accepted Accounting Principles)
prior to such investment; (f) investments in Subsidiaries through which the
Borrower invests in real estate assets and acquisition and/or construction loans
encumbered by Property of or to be acquired by the Borrower; (g) the Borrower's
existing forty percent (40%) joint venture interest investment in KP/M PTA Joint
Venture I and investments in Unconsolidated Affiliates that are engaged
primarily in the business of investment in and operation of multifamily real
estate properties, so long as the aggregate amount of such investments described
in this (g) does not exceed fifteen percent (15%) of the value of the assets of
the Borrower on a consolidated basis (in accordance with Generally Accepted
Accounting Principles) after giving effect to such investments; (h) equity
investments or capital contributions in, and loans, advances, and extensions of
credit to, PTR Development Services, so long as (1) the equity investments or
capital contributions do not exceed $10,000,000.00, (2) the loans, advances and
extensions of credit are secured by valid and enforceable first priority liens
on real estate, (3) the Borrower shall at all times beneficially own at least
ninety percent (90%) of the economic interest in PTR Development Services, and
(4) the financial condition and results of operations of PTR Development
Services shall be consolidated with those of the Borrower for purposes of the
Borrower's financial statements; (i) loans, advances, and extensions of credit
to Persons (who are not Affiliates of the Borrower) secured by valid and
enforceable first priority liens on real estate for the purpose of acquiring and
developing multifamily properties for eventual ownership by, or to be acquired
by, the Borrower prior to, or within a reasonable period of time consistent with
a business purpose after, the completion of construction or development of such
multifamily property; (j) investments permitted under Section 6.2 of this
-----------
Agreement, and (k) loans, advances and extensions of credit to Homestead Village
Properties Incorporated secured by mortgages convertible into common stock
ownership of Homestead Village Properties Incorporated, so long as the aggregate
amount which is funded by the Borrower (irrespective of the face amount of the
convertible mortgages) does not exceed the lesser of $230,000,000.00 or 20% of
the value of the assets of the Borrower on a consolidated basis (in accordance
with Generally Accepted Accounting
-38-
Principles). The Borrower will not mortgage, pledge, hypothecate or encumber in
any manner the loans, advances or extensions of credit made pursuant to
Sections 6.6(h), (i) or (k).
--------------- --- ---
6.7 Limiting Agreements. Without affecting the provisions of Section
------------------- -------
5.15 of this Agreement, but cumulative of and in addition thereto:
-----
(a) Except for the Indenture dated February 1, 1994 between the Borrower
and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Trustee, neither Borrower nor
any of its Subsidiaries has entered into, and after the date hereof, neither
Borrower nor any of its Subsidiaries shall enter into, any agreement, instrument
or transaction which has or may have the effect of prohibiting or limiting
Borrower's ability to pledge to Agent as security for the Loans assets now or
hereafter owned by Borrower up to the value described in this Section 6.7.
-----------
Borrower shall take, and shall cause its Subsidiaries to take, such actions as
are necessary (including, without limitation, otherwise limiting the amount of
secured indebtedness of the Borrower and its Subsidiaries) to preserve the right
and ability of Borrower to pledge assets up to the value described in this
Section 6.7 as security for the Loans without any such pledge after the date
-----------
hereof causing or permitting the acceleration (after the giving of notice or the
passage of time, or otherwise) of any other indebtedness of Borrower or any of
its Subsidiaries. For the purpose of this paragraph, the Historical Value of
the assets to be kept available by Borrower to be pledged as security for the
Loans shall be assets having an aggregate Historical Value of not less than one
hundred thirty-three percent (133%) of the Commitment; provided however that the
-------- -------
foregoing shall not be construed as a maximum amount of collateral which could
be required or accepted by the Lenders under any other agreement or in any
proceeding.
(b) Borrower shall, upon demand, provide to the Lenders such evidence as
the Lenders may reasonably require to evidence Borrower's compliance with this
covenant, which evidence shall include, without limitation (i) copies of any
agreements or instruments which would in any way restrict or limit Borrower's
ability to pledge assets as security for indebtedness, or which provide for the
occurrence of a default (after the giving of notice or the passage of time, or
otherwise) if assets are pledged in the future as security for indebtedness of
the Borrower or any of its Subsidiaries, (ii) a summary of the total debt of
Borrower and its Subsidiaries, and (iii) a summary of any of such debt which is
secured by any mortgage, pledge, lien, charge, encumbrance or other security
interest.
(c) Nothing in this covenant shall be construed as an obligation of
Borrower to, or request by the Lenders that Borrower, grant any mortgage, pledge
or security interest in any of its properties.
-39-
6.8 Nature of Assets. (a) In its own name or the name of any of its
----------------
Subsidiaries, own or lease, directly or indirectly, land not improved for
multifamily use, other than land that is either under development or planned for
commencement of development within one (1) year from the date it was acquired,
with an aggregate Historical Value in excess of ten percent (10%) of the value
of the assets of the Borrower on a consolidated basis (in accordance with
Generally Accepted Accounting Principles), or (b) allow the Historical Value of
the income producing properties owned or leased, directly or indirectly, by the
Borrower and its Subsidiaries which are not multifamily properties and not
corporate affordable or extended stay lodging properties (such as Homestead
Village or the related convertible mortgages), to exceed five percent (5%) of
the value of the assets of the Borrower on a consolidated basis (in accordance
with Generally Accepted Accounting Principles).
7. Events of Default and Remedies.
------------------------------
7.1. Events of Default. If any of the following events shall occur,
-----------------
then, as to the events described in Sections 7.1(b), (c), and (d), if the event
--------------- --- ---
has not been waived, cured or remedied within twenty (20) days after the Agent
gives the Borrower notice of such event, at any time thereafter, and as to all
of the other events described herein, at any time, the Agent may do any or all
of the following: (1) without notice to the Borrower, declare the Notes to be,
and thereupon the Notes shall forthwith become, immediately due and payable,
together with all accrued interest thereon, without notice of any kind, notice
of acceleration or of intention to accelerate, presentment and demand or
protest, all of which are hereby expressly waived; (2) without notice to the
Borrower, terminate the Commitment; (3) exercise, as may any other Lender, its
rights of offset against each account and all other Property of the Borrower in
the possession of the Agent or any such Lender, which right is hereby granted by
the Borrower to the Agent and each Lender; and (4) exercise any and all other
rights pursuant to the Credit Documents:
(a) The Borrower shall fail to pay or prepay any principal of or
interest on the Notes or any fee or any other obligation hereunder within
five (5) days after it was due; or
(b) The Borrower shall (i) fail to pay when due, or within any
applicable period of grace, any principal of or interest on any other
Indebtedness other than Non-recourse Debt or Disqualified Stock in excess
of $10,000,000.00 in principal amount, or Non-recourse Debt in excess of
$25,000,000.00 in principal amount; or (ii) fail to comply with Section
1004 of the Indenture dated February 1, 1994 between the Borrower and
▇▇▇▇▇▇
-40-
Guaranty Trust Company of New York, as Trustee, as said Section 1004 may be
amended with the consent of the Majority Lenders; or
(c) Any written representation or warranty made in any Credit
Document by or on behalf of the Borrower, when taken as a whole shall prove
to have been incorrect, false or misleading in any material respect; or
(d) Default shall occur in the punctual and complete performance of
any covenant of the Borrower or any other Person other than the Agent or
the Lenders contained in any Credit Document not specifically set forth in
this Section; or
(e) A final judgment or judgments in the aggregate for the payment
of money in excess of $5,000,000.00 shall be rendered against the Borrower
and the same shall remain undischarged for a period of thirty (30) days
during which execution shall not be effectively stayed; or
(f) Any court shall finally determine, that the Agent or any Lender
does not have a valid Lien as provided for herein on any security which may
have been provided to the Agent or any Lender by the Borrower under the
Credit Documents, or such other Person; or
(g) Any order shall be entered in any proceeding against the
Borrower decreeing the dissolution, liquidation or split-up thereof, and
such order shall remain in effect for more than thirty (30) days; or
(h) The Borrower shall make a general assignment for the benefit of
creditors or shall petition or apply to any tribunal for the appointment of
a trustee, custodian, receiver or liquidator of all or any substantial part
of its business, estate or assets or shall commence any proceeding under
any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation law of any jurisdiction, whether now or
hereafter in effect; or
(i) Any such petition or application shall be filed or any such
proceeding shall be commenced against the Borrower and the Borrower by any
act or omission shall indicate approval thereof, consent thereto or
acquiescence therein, or an order shall be entered appointing a trustee,
custodian, receiver or liquidator of all or any substantial part of the
assets of the Borrower or granting relief to the Borrower or approving the
petition
-41-
in any such proceeding, and such order shall remain in effect for more than
ninety (90) days; or
(j) The Borrower shall fail generally to pay its debts as they become
due or suffer any writ of attachment or execution or any similar process to
be issued or levied against it or any substantial part of its Property
which is not released, stayed, bonded or vacated within thirty (30) days
after its issue or levy; or
(k) The Borrower shall have concealed, removed, or permitted to be
concealed or removed, any part of its Property, with intent to hinder,
delay or defraud its creditors or any of them, or made or suffered a
transfer of any of its Property which may be fraudulent under any
bankruptcy, fraudulent conveyance or similar law; or shall have made any
transfer of its Property to or for the benefit of a creditor at a time when
other creditors similarly situated have not been paid.
7.2 Remedies Cumulative. No remedy, right or power conferred upon the
-------------------
Agent or the Lenders is intended to be exclusive of any other remedy, right or
power given hereunder or now or hereafter existing at law, in equity, or
otherwise, and all such remedies, rights and powers shall be cumulative.
8. The Agent.
---------
8.1 Appointment, Powers and Immunities. (a) Each Lender hereby
----------------------------------
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Credit Documents with such powers as are specifically delegated
to the Agent by the terms hereof and thereof, together with such other powers as
are reasonably incidental thereto. The Agent (i) shall not have any duties or
responsibilities except those expressly set forth in this Agreement and the
other Credit Documents, and shall not by reason of this Agreement or any other
Credit Document be a trustee for any Lender; (ii) shall not be responsible to
any Lender for any recitals, statements, representations or warranties contained
in this Agreement or any other Credit Document, or in any certificate or other
document referred to or provided for in, or received by any of them under, this
Agreement or any other Credit Document, or for the value, validity,
effectiveness, genuineness, enforceability, execution, filing, registration,
collectibility, recording, perfection, existence or sufficiency of this
Agreement or any other Credit Document or any other document referred to or
provided for herein or therein or any property covered thereby or for any
failure by any Party or any other Person to perform any of its obligations
hereunder or thereunder, and shall not have any duty to inquire into or pass
upon any of the foregoing matters; (iii) shall not be required to initiate or
conduct any litigation or collection proceedings hereunder or any other
-42-
Credit Document except to the extent requested by the Majority Lenders; (iv)
SHALL NOT BE RESPONSIBLE FOR ANY MISTAKE OF LAW OR FACT OR ANY ACTION TAKEN OR
OMITTED TO BE TAKEN BY IT HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT OR ANY
OTHER DOCUMENT OR INSTRUMENT REFERRED TO OR PROVIDED FOR HEREIN OR THEREIN OR IN
CONNECTION HEREWITH OR THEREWITH, INCLUDING, WITHOUT LIMITATION, PURSUANT TO ITS
OWN NEGLIGENCE, BUT NOT INCLUDING AND EXCEPT FOR THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE AGENT; (v) shall not be bound by or obliged to recognize any
agreement among or between the Borrower, the Agent, and any Lender other than
this Agreement and the other Credit Documents, regardless of whether the Agent
has knowledge of the existence of any such agreement or the terms and provisions
thereof; (vi) shall not be charged with notice or knowledge of any fact or
information not herein set out or provided to the Agent in accordance with the
terms of this Agreement or any other Credit Document; (vii) shall not be
responsible for any delay, error, omission or default of any mail, telegraph,
cable or wireless agency or operator, and (viii) shall not be responsible for
the acts or edicts of any Governmental Authority. The Agent may employ agents
and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care.
(b) Without the prior written consent of Agent and all of the Lenders,
Agent shall not (i) modify or amend in any respect whatsoever the interest rate
provisions of the Credit Documents, (ii) increase the Commitment above
$350,000,000.00, (iii) extend the Maturity Date other than in accordance with
the express provisions of the Credit Documents, (iv) extend or reduce the due
date for or the amount of the scheduled payments of principal or interest on the
Loans or the Fee, (v) amend the definition of Majority Lenders or any
requirement that certain actions be taken only with the consent of a certain
number of the Lenders, or (vi) amend Section 5.15 of this Agreement. From time
------------
to time upon Agent's request, each Lender shall execute and deliver such
documents and instruments as may be reasonably necessary to enable Agent to
effectively administer and service the Loan in its capacity as lead lender and
servicer and in the manner contemplated by the provisions of this Agreement.
(c) All information provided to the Agent under or pursuant to the Credit
Documents, and all rights of the Agent to receive or request information, or to
inspect information or Property, shall be by the Agent on behalf of the Lenders.
If any Lender requests that it be able to receive or request such information,
or make such inspections, in its own right rather than through the Agent, the
Borrower will cooperate with the Agent and such Lender in order to obtain such
information or make such inspection as such Lender may reasonably require.
-43-
(d) The Borrower shall be entitled to rely upon a written notice or a
written response from the Agent as being pursuant to concurrence or consent of
the Majority Lenders unless otherwise expressly stated in the Agent's notice or
response.
8.2 Reliance. The Agent shall be entitled to rely upon any certification,
--------
notice or other communication (including any thereof by telephone, telex,
telecopy, telegram or cable) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel (which may be counsel for the
Borrower), independent accountants and other experts selected by the Agent. The
Agent shall not be required in any way to determine the identity or authority of
any Person delivering or executing the same. As to any matters not expressly
provided for by this Agreement or any other Credit Document, the Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
and thereunder in accordance with instructions of the Majority Lenders, and any
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders. If any order, writ, judgment or decree shall be made or entered by any
court affecting the rights, duties and obligations of the Agent under this
Agreement or any other Credit Document, then and in any of such events the Agent
is authorized, in its sole discretion, to rely upon and comply with such order,
writ, judgment or decree which it is advised by legal counsel of its own
choosing is binding upon it under the terms of this Agreement, the relevant
Credit Document or otherwise; and if the Agent complies with any such order,
writ, judgment or decree, then it shall not be liable to any Lender or to any
other Person by reason of such compliance even though such order, writ, judgment
or decree may be subsequently reversed, modified, annulled, set aside or
vacated.
8.3 Defaults. The Agent shall not be deemed to have constructive
--------
knowledge of the occurrence of a Default (other than the non-payment of
principal of or interest on Loans) unless it has received notice from a Lender
or the Borrower specifying such Default and stating that such notice is a
"Notice of Default". In the event that the Agent receives such a notice of the
occurrence of a Default, or whenever the Agent has actual knowledge of the
occurrence of a Default, the Agent shall give prompt written notice thereof to
the Lenders (and shall give each Lender prompt notice of each such non-payment).
The Agent shall (subject to Section 8.7 hereof) take such action with respect to
-----------
such Default as shall be directed by the Majority Lenders and within its rights
under the Credit Documents and at law or in equity, provided that, unless and
--------
until the Agent shall have received such directions, the Agent may (but shall
not be obligated to) take such action, or refrain from taking such action,
permitted hereby with respect to such Default as it shall deem advisable in the
best interests of the Lenders and within its rights under the Credit Documents
in order to preserve, protect or enhance the collectibility of the Loans, at law
or in equity. Provided, however, that if there is an occurrence of an Event of
--------
Default, then in no event or under any circumstances shall any of the actions
described in Section 8.1(b)(i) through (vi) of
----------------- ----
-44-
this Agreement be taken, without in each instance the written consent of Agent
and all of the Lenders.
8.4 Rights as a Lender. With respect to the Commitment and the Loans
------------------
made, Agent, in its capacity as a Lender hereunder shall have the same rights
and powers hereunder as any other Lender and may exercise the same as though it
were not acting in its agency capacity, and the term "Lender" or "Lenders"
shall, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent may (without having to account therefor to any
other Lender) as a Lender, and to the same extent as any other Lender, accept
deposits from, lend money to and generally engage in any kind of banking, trust,
letter of credit, agency or other business with the Borrower (and any of its
Affiliates) as if it were not acting as the Agent but solely as a Lender. The
Agent may accept fees and other consideration from the Borrower (in addition to
the fees heretofore agreed to between the Borrower and the Agent) for services
in connection with this Agreement or otherwise without having to account for the
same to the Lenders.
8.5 Indemnification. The Lenders agree to indemnify the Agent, its
---------------
officers, directors, agents and Affiliates, ratably in accordance with each
Lender's respective Percentage, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever (INCLUDING BUT NOT LIMITED TO,
THE CONSEQUENCES OF THE NEGLIGENCE OF THE AGENT) which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Credit Document or any other documents
contemplated by or referred to herein or therein, or the transactions
contemplated hereby or thereby (including, without limitation, interest,
penalties, reasonable attorneys' fees and amounts paid in settlement in
accordance with the terms of this Section 8, but excluding, unless a Default has
---------
occurred and is continuing, normal administrative costs and expenses incident to
the performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents, INCLUDING BUT NOT
LIMITED TO THE NEGLIGENCE OF THE AGENT, provided that no Lender shall be liable
--------
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified, or from the Agent's default
in the express obligations of the Agent to the Lenders provided for in this
Agreement. The obligations of the Lenders under this Section 8.5 shall survive
-----------
the termination of this Agreement and the repayment of the Obligations.
8.6 Non-Reliance on Agent and Other Lenders. Each Lender agrees that it
---------------------------------------
has received current financial information with respect to the Borrower and that
it has, independently and without reliance on the Agent or any other Lender and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Borrower and decision to enter
-45-
into this Agreement and that it will, independently and without reliance upon
the Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any of the
other Credit Documents. The Agent shall not be required to keep itself informed
as to the performance or observance by any Party of this Agreement or any of the
other Credit Documents or any other document referred to or provided for herein
or therein or to inspect the properties or books of the Borrower or any Party
except as specifically required by the Credit Documents. Except for notices,
reports and other documents and information expressly required to be furnished
to the Lenders by the Agent hereunder or the other Credit Documents, the Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the affairs, financial condition or business of
the Borrower or any other Party (or any of their affiliates) which may come into
the possession of the Agent. Each Lender assumes all risk of loss in connection
with its Percentage in the Loans to the full extent of its Percentage therein.
The Agent assumes all risk of loss in connection with its Percentage in the
Loans to the full extent of its Percentage therein.
8.7 Failure to Act. Except for action expressly required of the Agent, as
--------------
the case may be, hereunder, or under the other Credit Documents, the Agent shall
in all cases be fully justified in failing or refusing to act hereunder and
thereunder unless it shall receive further assurances to its satisfaction by the
Lenders of their indemnification obligations under Section 8.5 hereof against
-----------
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action.
8.8 Resignation of Agent. Subject to the appointment and acceptance of a
--------------------
successor Agent as provided below, the Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. Upon any such resignation, (i)
the Majority Lenders without the consent of the Borrower shall have the right to
appoint a successor Agent so long as such successor Agent is also a Lender at
the time of such appointment and (ii) the Majority Lenders shall have the right
to appoint a successor Agent that is not a Lender at the time of such
appointment so long as the Borrower consents to such appointment (which consent
shall not be unreasonably withheld). If no successor Agent shall have been so
appointed by the Majority Lenders and accepted such appointment within 30 days
after the retiring Agent's giving of notice of resignation, then the retiring
Agent may, on behalf of the Lenders, and with the consent of the Borrower which
shall not be unreasonably withheld, appoint a successor Agent. Any successor
Agent shall be a bank which has an office in the United States and a combined
capital and surplus of at least $250,000,000.00. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be
-46-
discharged from its duties and obligations as Agent thereafter arising hereunder
and under any other Credit Documents, but shall not be discharged from any
liabilities for its actions as Agent prior to the date of discharge. Such
successor Agent shall promptly specify by notice to the Borrower its principal
office referred to in Section 2.1 and Section 2.3 hereof. After any retiring
----------- -----------
Agent's resignation hereunder as Agent, the provisions of this Section 8 shall
---------
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Agent.
8.9 No Partnership. Neither the execution and delivery of this Agreement
--------------
nor any of the other Credit Documents nor any interest the Lenders, the Agent or
any of them may now or hereafter have in all or any part of the Obligations
shall create or be construed as creating a partnership, joint venture or other
joint enterprise between the Lenders or among the Lenders and the Agent. The
relationship between the Lenders, on the one hand, and the Agent, on the other,
is and shall be that of principals and agent only, and nothing in this Agreement
or any of the other Credit Documents shall be construed to constitute the Agent
as trustee or other fiduciary for any Lender or to impose on the Agent any duty,
responsibility or obligation other than those expressly provided for herein and
therein.
9. Renewal and Extension.
---------------------
Neither the Agent nor any Lenders have any agreement or obligation to
extend or renew the Revolving Credit Termination Date. But in the event such an
extension is requested by the Borrower and any Lender decides to consider such
renewal and extension request, such request and consideration will be governed
by the following terms and conditions:
9.1 Procedure for Consideration of Renewal and Extension Requests.
-------------------------------------------------------------
(a) The Borrower may request the Agent and the Lenders to extend the
current Revolving Credit Termination Date by successive one (1) year intervals
by executing and delivering to the Agent a written request for extension (the
"Extension Request") at least seventy-five (75) days (but not more than ninety
------------------
(90) days) prior to the Determination Date. If all of the Lenders shall have
notified the Agent on or prior to the date which is forty-five (45) days prior
to the Determination Date that they accept such Extension Request, the Revolving
Credit Termination Date shall be extended for one (1) year. If any Lender shall
not have notified Agent on or prior to the date which is forty-five (45) days
prior to the Determination Date that it accepts such Extension Request, the
Revolving Credit Termination Date shall not be extended. The Agent shall
promptly notify the Borrower whether the Extension Request has been accepted or
rejected
-47-
as well as which Lender or Lenders rejected the Borrower's Extension Request
(each such Lender a "Rejecting Lender").
----------------
(b) Notwithstanding the preceding subsection (a), within thirty (30) days
after notification from the Agent that the Extension Request has been rejected
(a "Notice of Rejection"), and provided that the aggregate amount of Lender
-------------------
Commitments of the Rejecting Lenders does not exceed twenty percent (20%) of the
Commitment, the Borrower may either (i) demand that the Rejecting Lender, and
upon such demand the Rejecting Lender shall promptly, assign its Lender
Commitment to another financial institution subject to and in accordance with
the provisions of Section 10.5 of this Agreement for a purchase price equal to
------------
the unpaid balance of principal, accrued interest, the unpaid balance of the Fee
and expenses owing to the Rejecting Lender pursuant to this Agreement, or (ii)
pay to the Rejecting Lender the unpaid balance of principal, accrued interest,
the unpaid balance of the Fee and expenses owing to the Rejecting Lender
pursuant to this Agreement, whereupon the Rejecting Lender shall no longer be a
party to this Agreement or have any rights or obligations hereunder or under any
other Credit Documents, and the Commitment shall immediately and permanently be
reduced by an amount equal to the Lender Commitment of the Rejecting Lender. If
all Rejecting Lenders have either assigned their Lender Commitments to other
financial institutions as contemplated by the preceding clause (i) or have been
paid the amounts specified in the preceding clause (ii), then the Borrower's
Extension Request which was initially rejected shall be deemed to have been
granted and accordingly the Revolving Credit Termination Date shall be extended
by one (1) year, otherwise the Revolving Credit Termination Date shall not be
extended. If the aggregate of Lender Commitments of the Rejecting Lenders
exceeds twenty percent (20%) of the Commitment, the Revolving Credit Termination
Date shall not be extended.
9.2 Conditions to Renewal and Extension. Any agreement of the Lenders to
-----------------------------------
extend the Revolving Credit Termination Date under Section 9.1 of this Agreement
-----------
shall be conditioned upon, among other things, the following terms and
conditions (which shall be in addition to those required by Sections 2.7, 3 and
------------ -
9.1 of this Agreement):
---
(a) Execution by the Borrower of a renewal and extension agreement
for each Note in Proper Form.
(b) Such other documents, instruments and items as Agent or any
Lender shall require in its sole discretion.
9.3 No Obligation to Renew and Extend. Notwithstanding the procedures and
---------------------------------
terms and conditions for any renewal and extension of the Revolving Credit
Termination Date, neither
-48-
the Agent nor any Lender has any obligation, commitment or present intent to
extend the Revolving Credit Termination Date, and the Revolving Credit
Termination Date may not be extended except in accordance with a written
agreement signed by the Agent, the Lenders, the Borrower and any other Person to
be charged with compliance therewith.
10. Miscellaneous.
-------------
10.1 No Waiver, Amendments. No waiver of any Default shall be deemed to
---------------------
be a waiver of any other Default. No failure to exercise or delay in exercising
any right or power under any Credit Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power preclude any
further or other exercise thereof or the exercise of any other right or power.
Except as may be prohibited by Section 8.1 hereof, no amendment, modification or
-----------
waiver of any Credit Document shall be effective unless the same is in writing
and signed by the Borrower, the Agent and the Majority Lenders. No notice to or
demand on the Borrower or any other Person shall entitle the Borrower or any
other Person to any other or further notice or demand in similar or other
circumstances.
10.2 Notices. All notices under the Credit Documents shall be in writing
-------
and either (i) delivered against receipt therefor, or (ii) mailed by registered
or certified mail, return receipt requested, in each case addressed as set forth
herein, or to such other address as a party may designate. Notices shall be
deemed to have been given (whether actually received or not) when delivered (or,
if mailed, on the next Business Day). Provided, however, that as between the
-------- -------
Agent and the Lenders and among the Lenders, notice may be given by telecopy or
facsimile effective upon the earlier of actual receipt or confirmation of
receipt by telephone.
10.3 Venue. ▇▇▇▇▇▇ COUNTY, TEXAS SHALL BE A PROPER PLACE OF VENUE TO
-----
ENFORCE PAYMENT OR PERFORMANCE OF THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS,
UNLESS THE AGENT SHALL GIVE ITS PRIOR WRITTEN CONSENT TO A DIFFERENT VENUE. THE
BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE
STATE AND FEDERAL COURTS IN THE STATE OF TEXAS AND AGREES AND CONSENTS THAT
SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY PROCEEDING ARISING OUT OF ANY OF
THE CREDIT DOCUMENTS BY SERVICE OF PROCESS AS PROVIDED BY TEXAS LAW. THE
BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY OF THE CREDIT DOCUMENTS
IN THE DISTRICT COURTS OF ▇▇▇▇▇▇ COUNTY, TEXAS,
-49-
OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS,
HOUSTON DIVISION, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIMS THAT ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. THE BORROWER (A) AGREES TO DESIGNATE AND MAINTAIN AN AGENT
FOR SERVICE OF PROCESS IN THE STATE OF TEXAS IN CONNECTION WITH ANY SUCH SUIT,
ACTION OR PROCEEDING AND TO DELIVER TO THE AGENT EVIDENCE THEREOF AND (B)
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY NOTICE GIVEN AS PROVIDED FOR IN
THIS AGREEMENT. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR THE
LENDERS TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER
IN ANY JURISDICTION OR TO SERVE PROCESS IN ANY MANNER PERMITTED BY APPLICABLE
LAW. THE BORROWER HEREBY IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR PROCEEDING
AGAINST THE AGENT OR ANY LENDER ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR THE OTHER CREDIT DOCUMENTS SHALL BE BROUGHT AND MAINTAINED IN THE
DISTRICT COURTS OF ▇▇▇▇▇▇ COUNTY, TEXAS, OR THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF TEXAS, HOUSTON DIVISION.
10.4 Choice of Law. THIS AGREEMENT, THE NOTES AND THE OTHER CREDIT
-------------
DOCUMENTS HAVE BEEN NEGOTIATED, EXECUTED AND DELIVERED IN THE STATE OF TEXAS AND
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF TEXAS, INCLUDING ALL APPLICABLE FEDERAL LAW, FROM TIME TO TIME
IN FORCE IN THE STATE OF TEXAS.
10.5 Survival; Parties Bound; Successors and Assigns. (a) All
-----------------------------------------------
representations, warranties, covenants and agreements made by or on behalf of
the Borrower in connection herewith shall survive the execution and delivery of
the Credit Documents, shall not be affected by any investigation made by any
Person, and shall bind the Borrower and its successors, trustees, receivers and
assigns and inure to the benefit of the successors and assigns of the Agent and
the Lenders; provided, however, that the Borrower may not assign or transfer any
of its rights or obligations hereunder without the prior written consent of the
Agent and all of the Lenders, and any such assignment or transfer without such
consent shall be null and void.
-50-
(b) Subject to Sections 10.5(d) and (e) of this Agreement, a Lender
---------------- ---
may assign part of its Lender Commitment to an Eligible Institution so long as
such assignment shall (1) include the voting rights and all other rights and
obligations attributable thereto, and include a written assumption by the
assignee of the assigning Lender's obligations under the Credit Documents, (2)
require the written consent of the Borrower and the Agent, such consent not to
be unreasonably withheld, (3) be in a minimum amount of $15,000,000.00 if
assigned to a Person not already a Lender, (4) not reduce the Lender's Lender
Commitment to an amount less than $15,000,000.00, and (5) include payment to the
Agent by the Lender of a service fee for each assignment equal to $3,000.00.
(c) Subject to Section 10.5(d) and (e) of this Agreement, a Lender
--------------- ---
may sell participating interests in any of its Loans to an Eligible Institution
so long as such participation shall (1) limit the voting rights of the
participant, if any, to the ability to vote for changes in the amount of the
Commitment, the interest rate on the Loans, and the Maturity Date, (2) if the
participant is not an Affiliate of the participating Lender, require the written
consent of the Borrower and the Agent, such consent not to be unreasonably
withheld and, if the participant is an Affiliate of the participating Lender,
require written notice to the Agent and the Borrower but not any consent of the
Agent, the Borrower or any other Lender, (3) be in a minimum principal amount of
at least $10,000,000.00 if participated to a Person not already a Lender, and
(4) not reduce the Lender's Lender Commitment which has not been participated to
less than $10,000,000.00. In connection with any sale of a participating
interest made in compliance with this Agreement, (i) the participating Lender
shall continue to be liable for its Lender Commitment and its other obligations
under the Credit Documents, (ii) the Agent, the Borrower and the other Lenders
shall continue to deal solely and directly with the participating Lender in
connection with such Lender's rights and obligations under the Credit Documents,
and (iii) the participant may not require the participating Lender to take or
refrain from taking any action under the Credit Documents that is in conflict
with the terms and provisions of the Credit Documents.
(d) A Lender may assign all or any part of its Loans or its Lender
Commitment to an Affiliate of the Lender with written consent of the Agent and
the Borrower, such consent not to be unreasonably withheld.
(e) Notwithstanding any provision hereof to the contrary, (i) any
Lender may assign and pledge all or any portion of its Lender Commitment and
Loans to a Federal Reserve Bank; provided, however, that any such assignment or
pledge shall not relieve such Lender from its obligations under the Credit
Documents; (ii) the Agent may not assign or participate $30,000,000.00 of its
Lender Commitment to any Person other than an Affiliate of the Agent without the
prior written consent of all of the Lenders and the Borrower; and (iii) TCB may
-51-
assign, sell or participate all or any portion of the Swing Loan without the
consent of the Agent, the Borrower or any other Lender.
(f) The term of this Agreement shall be until the final maturity of
the Notes and the payment of all amounts due under the Credit Documents.
10.6 Counterparts. This Agreement may be executed in several identical
------------
counterparts, and by the parties hereto on separate counterparts, and each
counterpart, when so executed and delivered, shall constitute an original
instrument, and all such separate counterparts shall constitute but one and the
same instrument.
10.7 Usury Not Intended; Refund of Any Excess Payments. It is the intent
-------------------------------------------------
of the parties in the execution and performance of this Agreement to contract in
strict compliance with the usury laws of the State of Texas and the United
States of America from time to time in effect. In furtherance thereof, the
Agent, the Lenders and the Borrower stipulate and agree that none of the terms
and provisions contained in this Agreement or the other Credit Documents shall
ever be construed to create a contract to pay for the use, forbearance or
detention of money with interest at a rate in excess of the Ceiling Rate and
that for purposes hereof "interest" shall include the aggregate of all charges
which constitute interest under such laws that are contracted for, reserved,
taken, charged or received under this Agreement. In determining whether or not
the interest paid or payable, under any specific contingency, exceeds the
Ceiling Rate, the Borrower, the Agent and the Lenders shall, to the maximum
extent permitted under applicable law, (a) characterize any nonprincipal payment
as an expense, fee or premium rather than as interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) "spread" the total amount of
interest throughout the entire contemplated term of the Loans. The provisions
of this paragraph shall control over all other provisions of the Credit
Documents which may be in apparent conflict herewith.
10.8 Captions. The headings and captions appearing in the Credit Documents
--------
have been included solely for convenience and shall not be considered in
construing the Credit Documents.
10.9 Severability. If any provision of any Credit Documents shall be
------------
invalid, illegal or unenforceable in any respect under any applicable law, the
validity, legality and enforceability of the remaining provisions shall not be
affected or impaired thereby.
10.10 Disclosures. Every reference in the Credit Documents to disclosures
-----------
of the Borrower to the Agent and the Lenders in writing, to the extent that such
references refer to
-52-
disclosures at or prior to the execution of this Agreement, shall be deemed
strictly to refer only to written disclosures delivered to the Agent and the
Lenders in an orderly manner concurrently with the execution hereof.
10.11 NO NOVATION. THE PARTIES HERETO HAVE ENTERED INTO THIS AGREEMENT AND
-----------
THE OTHER CREDIT DOCUMENTS SOLELY TO AMEND, RESTATE AND RESTRUCTURE THE TERMS
OF, AND THE OBLIGATIONS TO THE EXISTING LENDERS OWING UNDER AND IN CONNECTION
WITH, THE ORIGINAL CREDIT AGREEMENT. THE PARTIES DO NOT INTEND THIS AGREEMENT
NOR THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE, A NOVATION OF ANY
OF THE OBLIGATIONS OWING BY THE BORROWER UNDER OR IN CONNECTION WITH THE
ORIGINAL CREDIT AGREEMENT.
10.12 LIMITATION OF LIABILITY. NO OBLIGATION OR LIABILITY WHATSOEVER OF
-----------------------
THE BORROWER WHICH MAY ARISE AT ANY TIME UNDER THIS AGREEMENT OR ANY OBLIGATION
OR LIABILITY WHICH MAY BE INCURRED BY IT PURSUANT TO ANY OTHER CREDIT DOCUMENT
SHALL BE PERSONALLY BINDING UPON, NOR SHALL RESORT FOR THE ENFORCEMENT THEREOF
BE HAD TO THE PRIVATE PROPERTY OF, ANY OF THE BORROWER'S TRUSTEES OR
SHAREHOLDERS REGARDLESS OF WHETHER SUCH OBLIGATION OR LIABILITY IS IN THE NATURE
OF CONTRACT, TORT OR OTHERWISE.
10.13 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS
----------------
TOGETHER CONSTITUTE A WRITTEN AGREEMENT AND REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
-53-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
SECURITY CAPITAL PACIFIC TRUST
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Title: VP
Address:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
-54-
Lender Commitment: $55,000,000.00 TEXAS COMMERCE BANK
Percentage: 15.714285714% NATIONAL ASSOCIATION,
as Agent and as a Lender
By:/s/▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name:▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Vice President
---------------------------------
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Manager, Real Estate Group
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
-55-
Lender Commitment: $55,000,000.00 ▇▇▇▇▇ FARGO REALTY ADVISORS
Percentage: 15.714285714% FUNDING, INCORPORATED, as
Co-Agent and as a Lender
By:/s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
----------------------------------
Title: VICE PRESIDENT
---------------------------------
By:/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Title: Assistant Secretary
---------------------------------
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Telecopy No: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No. ▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
-56-
Lender Commitment: $30,000,000.00 GUARANTY FEDERAL BANK, F.S.B.
Percentage: 8.571428571%
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Title: VICE PRESIDENT
--------------
Address:
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
-57-
Lender Commitment: $20,000,000.00 NORWEST BANK NEW MEXICO,
Percentage: 5.714285714% NATIONAL ASSOCIATION
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Title: President & Managing Officer
---------------------------------
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: 505-983-6232
Telephone No.: ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
-58-
Lender Commitment: $25,000,000.00 COMMERZBANK
Percentage: 7.142857143% AKTIENGESELLSCHAFT, LOS ANGELES
BRANCH
By: /s/ Christian Jagenberg
------------------------------------
Name: Christian Jagenberg
----------------------------------
Title: SVP and Manager
---------------------------------
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Title: Vice President
---------------------------------
Address:
▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
-59-
Lender Commitment: $30,000,000.00 BANK OF AMERICA NATIONAL TRUST
Percentage: 8.571428571% AND SAVINGS ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Title: Vice President
---------------------------------
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
-60-
Lender Commitment: $30,000,000.00 FLEET NATIONAL BANK
Percentage: 8.571428571%
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Title: VICE PRESIDENT
------------------------------
Address:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telecopy No: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
-61-
Lender Commitment: $20,000,000.00 THE NIPPON CREDIT BANK, LTD.
Percentage: 5.714285714%
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Title: VP
------------------------------
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy No: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No. ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
-62-
Lender Commitment: $22,500,000.00 BANK HAPOALIM, B.M.,
Percentage: 6.428571429% Los Angeles Branch
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Title: FIRST VICE PRESIDENT
-----------------------------
By: /s/ ▇▇▇▇ ▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇
------------------------------
Title: ASSISTANT VICE PRESIDENT
-----------------------------
Address:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇ or
▇▇▇▇ ▇▇▇▇
Telecopy No: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No. ▇▇▇▇▇▇ ▇▇▇▇▇▇ or
▇▇▇▇ ▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
-63-
Lender Commitment: $25,000,000.00 CORESTATES BANK, N.A.
Percentage: 7.142857143%
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: R. ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Title: Vice President
-----------------------------
Address:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Real Estate Department
Philadelphia, Pennsylvania 19107
Attention: R. ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy No: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No. R. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
-64-
Lender Commitment: $20,000,000.00 BANK ONE, ARIZONA, NA
Percentage: 5.714285714%
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Title: VICE PRESIDENT
------------------------------
Address:
Real Estate Banking Group
▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy No: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
-65-
Lender Commitment: $17,500,000.00 UNION BANK OF CALIFORNIA
Percentage: 5.000000000%
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------
Title: VICE PRESIDENT
-------------------------------
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
-------------------------------
Address:
Capital Markets Division
▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telecopy No: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
-66-
OFFICER'S CERTIFICATE
---------------------
Security Capital Pacific Trust (the "Borrower"), Texas Commerce Bank
National Association, as Agent (the "Agent") and certain other Lenders (the
"Lenders") entered into that certain Amended and Restated Credit Agreement (as
amended, supplemented and restated from time to time, the "Agreement") dated as
of AUGUST , 1996. Any term used herein and no otherwise defined shall have the
-----------------
meaning ascribed to it in the Agreement.
The undersigned hereby certifies that.
I. I am a Vice President of the Borrower.
--------------
II. The attached financial statements were prepared in conformity with
generally accepted accounting principles consistently applied (except for the
omission of footnote disclosures and appropriately disclosed consistency
exceptions) and present fairly the financial position of the Borrower as of the
date thereof and the results of its operations for the period covered thereby
subject to normal year-end adjustments.
III. As of the end of the period covered by the attached financial
statements dated _________. 19 :
----
1. Tangible Net Worth Calculation (Section 5.3 (d))
------------------------------
(a) Assets, as defined $ _________
(b) Liabilities $ _________
(c) Tangible Net Worth ((a) - (b)) $ _________
$ 1 Billion
Required:
2. Ratio of Debt to Tangible Net Worth Ratio
-----------------------------------------
Calculation (Section 5.3 (a))
-----------
(a) Indebtedness $ _________
(b) Tangible Net Worth $ _________
(c) Debt to Tangible Net Worth Ratio ___ : 1.0
(Ratio of (a) to (b))
Required: Maximum of 1.0 to 1.0
EXHIBIT A
Page 1 of 5
3. Coverage Ratio Calculation (Section 5.3 (b))
--------------------------
(a) Borrower's Funds from Operations $ ______
(b) Borrower's Interest Incurred $ ______
(c) Construction Interest $ ______
(d) Interest Expense $ ______
(e) FFO plus Interest Expense $ ______
(f) Payments and Payables on Disqualified Stock $ ______
(g) Interest Expense $ ______
(h) Payments and Payables on Disqualified Stock
plus Interest Expense $ ______
(i) Coverage Ratio (Ratio of (e) to (h)) ___ : 1.0
Required: Minimum of 2.0 to 1.0
4. Fixed Charge Coverage Ratio Calculation
---------------------------------------
(Section 5.3 (c))
(a) Borrower's Funds from Operations $ ______
(b) Borrower's Interest Expense $ ______
(c) Unit Capital Expenditures $ ______
(d) FFO plus Interest Expense minus
Unit Capital Expenditures $ ______
(e) Payments and Payables on Disqualified Stock $ ______
(f) Regularly Scheduled Principal Paid and Payable $ ______
(g) Payments and Payables on Disqualified Stock
Plus Interest Expense plus Regularly Scheduled
Principal Paid and Payable $ ______
(h) Fixed Charge Coverage Ratio
(Ratio of (d) to (g)) ___ : 1.0
Required: Minimum of 1.4 to 1.0
5. Maximum Recourse Indebtedness Calculation
-----------------------------------------
(Section 6.1)
(a) Indebtedness with a Final Maturity of Five
Years or less $ ______
(b) Investment Grade Debt included in 5 (a) $ ______
-----
(c) Non-recourse Debt included in 5 (a)
-----
excluded from 5 (b) $ ______
-----
EXHIBIT A
Page 2 of 5
(d) Amortizing Debt included in 5 (a),
-----
excluded from 5 (b) or 5 (c) $ ______
----- -----
(e) Credit Enhancement included in 5 (a),
-----
excluded from 5 (b) or 5 (c) or 5 (d) $ ______
----- ----- --------
(f) Acquisition Indebtedness included in 5 (a),
-----
excluded from 5 (b) or 5 (c) or 5 (d) or 5 (e) $ ______
----- ----- ----- -----
(g) Recourse Indebtedness as Calculated using (a)
through (f) (may not exceed $400,000,000) $ ______
6. Asset Maintenance Calculation as of Quarter-End
-----------------------------------------------
(a) Historical Value of Pool
(attached list of each Property)
(must equal at least 6 (c))
--------------------------- $ ______
(b) Outstanding Unsecured Indebtedness $ ______
x1.75
(c) Minimum Historical Value of Pool $ ______
(d) Historical Value of Operating Sub-Pool $ ______
(e) Net Operating Income of Operating Sub-Pool
Properties Owned Through at least one complete
calendar quarter from the Stabilization Date/1/ $ ______
Divided by .0925
(f) Value of (e) $ ______
(g) Historical Value of Operating Sub-Pool
Properties Owned less than at least one complete
calendar quarter from the Stabilization Date $ ______
(h) (f) + (g) $ ______
(i) Operating Sub-Pool Value (lesser of (d) and
(h) must equal at least 6 (k) $ ______
(j) Outstanding Unsecured Indebtedness $ ______
(k) Minimum Operating Sub-Pool Value $ ______
7. Debt to Total Asset Value Ratio Conversion
(only required after the Conversion Date)
(a) Indebtedness $ ______
(b) Net Operating Income for Properties Owned
During the Preceding Quarter divided by 8.75% $ ______
EXHIBIT A
Page 3 of 5
____________________________
/1/NOI may be annualized in this calculation.
(c) Value of (b) $ ______
(d) Book Value of Properties Acquired During
the Preceding Quarter $ ______
(e) Book Value of Undeveloped Land $ ______
(f) Book Value of Land Under Development for $ ______
up to 6 Months after Completion $ ______
(d) Book Value of Properties Acquired During
the Preceding Quarter $ ______
(e) Book Value of Undeveloped Land $ ______
(f) Book Value of Land Under Development for
up to 6 Months after Completion $ ______
(g) Cash and Cash Equivalents Excluding
Restricted Deposits $ ______
(h) Book Value of All Others Assets Not
Included in (b) through (g) above,
Excluding Intangibles and Equity
Investments in Unconsolidated Affiliates $ ______
(i) Book Value of Equity Investments in
Unconsolidated Affiliates Multiplied by
the Equity Percentage $ ______
(j) Total Asset Value ((c)+(d)+(e)+(f)+(g)+(h)+(i)) $ ______
(k) Debt to Total Asset Value Ratio
(as a percentage, (a) divided by (j)) $ ______
IV. Attached hereto is a statement of Funds from Operations for the
Borrower as of the most recent date required by the Agreement.
V. A review of the activities of the Borrower during the period covered
by the attached financial statements has been made under my supervision and with
a view to determining whether during such period the Borrower has kept,
observed, performed and fulfilled all of its obligations under the Agreement.
VI. (Check either (a) or (b))
[X] (a) The Borrower has kept, observed, performed and fulfilled each and
every one of its obligations under the Agreement during the period covered by
the attached financial statements.
[_] (b) The Borrower has kept, observed, performed and fulfilled each and
every one of its obligations under the Agreement during the period covered by
the attached financial statements except for the following matters: [Describe
all such defaults, specifying the nature, duration and status thereof and what
action the Borrower has taken or proposes to take with respect thereto:]
EXHIBIT A
Page 4 of 5
VII. With regard to Section 1004 of the Indenture dated as of February 1,
1994 between the Borrower and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
Trustee (and using the terms defined therein), a certificate required thereunder
showing compliance with Section 1004 is attached (only required for the fourth
quarter Officer's Certificate), and as at the end of the period covered by the
attached financial statements:
1. (a) Sum of Total Assets, Aggregate Purchase
Price of Real Estate Assets, or Mortgages
Receivable Acquired, and Securities
Offering Proceeds Received to Purchase
said Assets $ ______
x.60
(b) Maximum Amount of Debt $ ______
(c) Debt $ ______
2. (a) Consolidated Income Available for
Debt Service $ ______
(b) Annual Service Charge $ ______
(c) Ratio of Consolidated Income Available
for Debt Service to Annual Service Charge
(must be equal to or greater than 1.5:1.0 ___ : 1.0
3. (a) Total Assets $ ______
x.40
(b) Maximum Secured Debt $ ______
(c) Secured Debt $ ______
Date:_________________, 1996 ______________________________
Name:_________________________
EXHIBIT A
Page 5 of 5
POOL PROPERTY LIST
List each property separately showing the Historical Value and the
components, the city, the state, the occupancy level for the past 3 months, the
number of units, the age of the property and net operating income.
REQUEST FOR LOAN
----------------
Date: _________________, 199__
Texas Commerce Bank
National Association, as Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
("Lender")
RE: Request for Loan Under Amended and Restated Credit Agreement (as
amended from time to time, the "Credit Agreement") dated as of August
----------------
13, 1996, among Security Capital Pacific Trust (the "Borrower"), the
Agent and the Lenders as signatory to the Credit Agreement
Gentlemen:
Borrower hereby requests [check as applicable] [_] a conversion of an
existing Loan as provided below, and/or [_] an advance under the Credit
Agreement, which is allowed pursuant to Section 5.9 of the Credit Agreement, in
the amount of $___________ [minimum of $1,000,000.00 and in multiples of
$250,000.00].
Maximum Principal Amount $350,000,000.00
Less the amount outstanding under the
Credit Agreement (including Swing Loans) ($_________.__)
Available amount $_________.__
Less amount requested ($_________.__)
Amount remaining to be advanced $_________.__
EXHIBIT B
---------
Page 1 of 3 Pages
The advance or conversion is to be made as follows:
A. Base Rate Borrowing.
-------------------
1. Amount of Base Rate Borrowing: $___________.__
2. Date of Base Rate Borrowing ________, 199_
B. Eurodollar Rate Borrowing:
-------------------------
1. Amount of Eurodollar Rate
Borrowing: $___________.__
2. Amount of conversion of existing
Loan to Eurodollar Rate Borrowing: $___________.__
3. Number of Eurodollar Rate
Borrowing(s) now in effect: ______________
[cannot exceed 12]
4. Date of Eurodollar Rate Borrowing
or conversion: ________, 199_
5. Interest Period: ______________
6. Expiration date of current Interest
Period as to this conversion: ________, 199_
C. Swing Loan.
----------
1. Amount of Swing Loan: $___________.__
[minimum of $1,000,000.00 and in
multiples of $250,000.00]
2. Date of Swing Loan: ________, 199_
Borrower hereby represents and warrants that the amounts set forth above
are true and correct, that the amount above requested has actually been
incurred, that the representations and warranties contained in the Credit
Agreement are true and correct as if made
EXHIBIT B
---------
Page 2 of 3 Pages
as of this date, and that Borrower has kept, observed, performed and fulfilled
each and every one of its obligations under the Credit Agreement as of the date
hereof [except as follows:]
Very truly yours,
SECURITY CAPITAL PACIFIC TRUST
By:______________________________
Name:____________________________
Title:___________________________
EXHIBIT B
---------
Page 3 of 3 Pages
$[___________________] [__________________], 1996
FOR VALUE RECEIVED SECURITY CAPITAL PACIFIC TRUST, a Maryland real estate
investment trust (herein called "Maker") promises to pay to the order of
-----
[_____________________________________________________________________________],
a [___________________________________] ("Payee"), at the offices of Texas
-----
Commerce Bank National Association, a national banking association, as "Agent"
-----
under the Credit Agreement, at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or at such
other place as the holder (the "Holder", whether or not Payee is such holder) of
------
this note may hereafter designate in writing, in immediately available funds and
in lawful money of the United States of America, the principal sum of
[_________________________________] Dollars ($[___________________________] (or
the unpaid balance of all principal advanced against this note, if that amount
is less), together with interest on the unpaid principal balance of this note
from time to time outstanding at the Stated Rate and interest on all past due
amounts, both principal and accrued interest, at the Past Due Rate; provided,
--------
that for the full term of this note the interest rate produced by the aggregate
of all sums paid or agreed to be paid to the Holder of this note for the use,
forbearance or detention of the debt evidenced hereby (including, but not
limited to, all interest on this note at the Stated Rate) shall not exceed the
Ceiling Rate.
1. Definitions. Any terms not defined herein shall have the meaning
-----------
given to them in the Amended and Restated Credit Agreement dated of even date
herewith among the Maker, the Payee, the Agent and certain other Lenders (as the
same may be amended or modified the "Credit Agreement").
----------------
2. Rates Change Automatically and Without Notice. Without notice to
---------------------------------------------
Maker or any other person or entity and to the full extent allowed by applicable
law from time to time in effect, the Prime Rate and the Ceiling Rate shall each
automatically fluctuate upward and downward as and in the amount by which
Agent's said prime rate, and such maximum nonusurious rate of interest permitted
by applicable law, respectively, fluctuate.
3. Calculation of Interest. Interest shall be computed for the actual
-----------------------
number of days elapsed in a year (up to 365, or 366 in a leap year) deemed to
consist of 360 days, unless the Ceiling Rate would thereby be exceeded, in which
event, to the extent necessary to avoid exceeding the Ceiling Rate, interest
INITIALLED FOR
IDENTIFICATION:_______
Page 1 of 6 Pages
EXHIBIT C
---------
shall be computed on the basis of the actual number of days elapsed in the
applicable calendar year in which it accrued.
4. Excess Interest Will be Refunded or Credited. If, for any reason
--------------------------------------------
whatever, the interest paid or received on this note during its full term
produces a rate which exceeds the Ceiling Rate, the Holder of this note shall
refund to the payor or, at the Holder's option, credit against the principal of
this note such portion of that interest as shall be necessary to cause the
interest paid on this note to produce a rate equal to the Ceiling Rate.
5. Interest Will be Spread. All sums paid or agreed to be paid to the
-----------------------
Holder of this note for the use, forbearance or detention of the indebtedness
evidenced hereby, to the extent permitted by applicable law and to the extent
necessary to avoid violating applicable usury laws, shall be amortized,
prorated, allocated and spread in equal parts throughout the full term of this
note, so that the interest rate is uniform throughout the full term of this
note.
6. Payment Schedule. The principal of this note shall be due and payable
----------------
on the Maturity Date. Accrued and unpaid interest shall be due and payable on
each Interest Payment Date. All payments shall be applied first to accrued
interest, the balance to principal.
7. Prepayment. Maker may prepay this note only as provided in the Credit
----------
Agreement.
8. Revolving Credit. Upon and subject to the terms and conditions of the
----------------
Credit Agreement and the other provisions of this note, Maker may borrow, repay
and reborrow against this note at any time unless and until a default (however
designated) or event (an "Event of Potential Default") which, if not cured after
--------------------------
notice or before the lapse of time (or both) would develop into a default under
this note, the Credit Agreement or any other Credit Documents has occurred which
the Holder has not declared to have been fully cured or waived, and (except as
the Credit Agreement or any of the other Credit Documents may otherwise provide)
there is no limit on the number of advances against this note so long as the
total unpaid principal of this note at any time outstanding does not exceed the
Payee's Lender Commitment. Interest on the amount of each advance against this
note shall be computed on the amount of the unpaid balance of that advance from
the date it is made until the date it is repaid. If Maker's right (if any) to
borrow against this note shall ever lapse because of the occurrence of any
default, it shall not be reinstated (or
INITIALLED FOR
IDENTIFICATION:_____
Page 2 of 6 Pages
EXHIBIT C
---------
construed from any course of conduct or otherwise to have been reinstated)
unless and until the Holder shall declare in a signed writing that it has been
cured or waived. The unpaid principal balance of this note at any time shall be
the total of all principal lent against this note to Maker or for Maker's
account less the sum of all principal payments and permitted prepayments on this
note received by the Holder. Absent manifest error, the Holder's computer
records shall on any day conclusively evidence the unpaid balance of this note
and its advances and payments history posted up to that day. All loans and
advances and all payments and permitted prepayments made on this note may be
(but are not required to be) endorsed by the Holder on the schedule attached
hereto (which is hereby made a part hereof for all purposes) or otherwise
recorded in the Holder's computer or manual records; provided; that any Holder's
--------
failure to make notation of (a) any principal advance or accrual of interest
shall not cancel, limit or otherwise affect Maker's obligations or any Holder's
rights with respect to that advance or accrual, or (b) any payment or permitted
prepayment of principal or interest shall not cancel, limit or otherwise affect
Maker's entitlement to credit for that payment as of the date of its receipt by
the Holder. Maker and Payee expressly agree, as expressly allowed by Article
15.10(b) of Chapter 15 ("Chapter 15") of the Texas Credit Code, that Chapter 15
----------
(which relates to open-end line of credit revolving loan accounts) shall not
apply to this note or to any loan evidenced by this note and that neither this
note nor any such loan shall be governed by Chapter 15 or subject to its
provisions in any manner whatsoever.
9. Credit Agreement. This note has been issued pursuant to the terms of
----------------
the Credit Agreement, to which reference is made for all purposes. Advances
against this note by Payee or other Holder hereof shall be governed by the
Credit Agreement. Payee is entitled to the benefits of the Credit Agreement. As
additional security for this note, Maker hereby grants to Payee and all other
present and future Holders an express lien against, security interest in and
contractual right of setoff in and to, all property and any and all deposits
(general or special, time or demand, provisional or final) at any time held by
the Payee or other Holder for any Maker's credit or account.
INITIALLED FOR
IDENTIFICATION:______
Page 3 of 6 pages
EXHIBIT C
---------
10. Defaults and Remedies. Time is of the essence. Maker's failure to pay
---------------------
any principal or accrued interest owing on this note when due and after
expiration of any applicable period for notice and right to cure such a default
which is specifically provided for in the Credit Agreement or any other
provision of this note, or the occurrence of any default under the Credit
Agreement or any other Credit Documents shall constitute default under this
note, whereupon the Holder may elect to exercise any or all rights, powers and
remedies afforded (a) under the Credit Agreement and all other papers related to
this note and (b) by law, including the right to accelerate the maturity of this
entire note.
In addition to and cumulative of such rights, the Holder is hereby
authorized at any time and from time to time after any such default, at Holder's
option, without notice to Maker or any other person or entity (all rights to any
such notice being hereby waived), to set off and apply any and all of any
Maker's deposits at any time held by the Holder, and any other debt at any time
owing by the Holder to or for the credit or account of any Maker, against the
outstanding balance of this note, in such order and manner as Holder may elect
in its sole discretion.
The Holder's right to accelerate this note on account of any late payment
or other default shall not be waived or deemed waived by the Holder by reason of
the Holder's having previously accepted one or more late payments or by reason
of any Holder's otherwise not accelerating this note or exercising other
remedies for any default, and no Holder shall ever be obligated or deemed
obligated to notify Maker or any other person that Holder is requiring strict
compliance with this note or any papers securing or otherwise relating to it
before such Holder may accelerate this note or exercise any other remedy.
Nothing in this Section or elsewhere shall be construed as diminishing
Holder's absolute right to demand payment of all or any part of this note at any
time.
11. Legal Costs. If any Holder of this note retains an attorney in
-----------
connection with any such default or to collect, enforce or defend this note or
any papers intended to secure or guarantee it in any lawsuit or in any probate,
reorganization, bankruptcy or other proceeding, or if Maker sues any Holder in
connection with this note or any such papers and does not prevail, then Maker
agrees to pay to each such Holder, in addition to principal and interest, all
reasonable costs and expenses incurred by such Holder in trying to collect this
note
INITIALLED FOR
IDENTIFICATION:_____
Page 4 of 6 Pages
EXHIBIT C
---------
or in any such suit or proceeding, including reasonable attorneys' fees.
12. Waivers. Except only for any notices which are specifically required
-------
by the Credit Agreement, Maker and any and all co-makers, endorsers, guarantors
and sureties severally waive notice (including, but not limited to, notice of
intent to accelerate and notice of acceleration, notice of protest and notice of
dishonor), demand, presentment for payment, protest, diligence in collecting and
the filing of suit for the purpose of fixing liability and consent that the time
of payment hereof may be extended and re-extended from time to time without
notice to any of them. Each such person agrees that his, her or its liability on
or with respect to this note shall not be affected by any release of or change
in any guaranty or security at any time existing or by any failure to perfect or
maintain perfection of any lien against or security interest in any such
security or the partial or complete unenforceability of any guaranty or other
surety obligation, in each case in whole or in part, with or without notice and
before or after maturity.
13. Rate of Return Maintenance Covenant. If at any time after the date of
-----------------------------------
this note, any Holder determines that (a) any applicable law, rule or regulation
regarding capital adequacy of general applicability has been adopted or changed,
or (b) its interpretation or administration by any governmental authority,
central bank or comparable agency has changed, and determines that such change
or the Holder's compliance with any request or directive regarding capital
adequacy of general applicability (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the Holder's capital as a consequence
of its obligations under this note or any related papers to a level below that
which the Holder could have achieved but for such adoption, change or compliance
(taking into consideration the Holder's own capital adequacy policies) by an
amount the Holder deems to be material, then Maker promises to pay from time to
time to the order of the Holder such additional amount or amounts as will
compensate the Holder for such reduction. A certificate of any Holder setting
forth the amount or amounts necessary to compensate the Holder as specified
above shall be given to Maker as soon as practicable after the Holder has made
such determination and shall be conclusive and binding, absent manifest error.
Maker shall pay the Holder the amount shown as due on any such certificate
within 15 days after the Holder gives it. In preparing such certificate, the
Holder may employ such assumptions and make such allocations of costs and
expenses as
INITIALLED FOR
IDENTIFICATION:_____
Page 5 of 6 Pages
EXHIBIT C
---------
the Holder in good ▇▇▇▇▇ ▇▇▇▇▇ reasonable and may use any reasonable averaging
and attribution method.
14. Governing Law, Jurisdiction and Venue. This note shall be governed by
-------------------------------------
and construed in accordance with the laws of the State of Texas and the United
States of America from time to time in effect.
15. General Purpose of Loan. Maker warrants and represents to Payee and
-----------------------
all other Holders that all loans evidenced by this note are and will be for
business, commercial, investment or other similar purpose and not primarily for
personal, family, household or agricultural use, as such terms are used in
Chapter One.
16. Participations and Assignments. Payee and each other Holder reserves
------------------------------
the right, exercisable in such Holder's discretion and without notice to Maker
or any other person, to sell participations, assign interests or both, in all or
any part of this note or the debt evidenced by this note, in accordance with the
Credit Agreement.
17. Limitation of Liability. No obligation or liability whatsoever of
-----------------------
Maker which may arise at any time under this promissory note or any obligation
or liability which may be incurred by it pursuant to any other instrument,
transaction or undertaking contemplated hereby shall be personally binding upon,
nor shall resort for the enforcement thereof be had to the private property of,
any of Maker's trustees or shareholders regardless of whether such obligation or
liability is in the nature of contract, tort or otherwise.
SECURITY CAPITAL PACIFIC TRUST
By:___________________________
Name:_________________________
Title:________________________
Page 6 of 6 Pages
EXHIBIT C
---------
SWING LOAN NOTE
---------------
$75,000,000.00 _______________, 1996
FOR VALUE RECEIVED SECURITY CAPITAL PACIFIC TRUST, a Maryland real estate
investment trust (herein called "Maker") promises to pay to the order of TEXAS
-----
COMMERCE BANK NATIONAL ASSOCIATION, a national banking association, at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or at such other place as the holder (the
"Holder", whether or not Payee is such holder) of this note may hereafter
------
designate in writing, in immediately available funds and in lawful money of the
United States of America, the principal sum of Seventy-Five Million Dollars
($75,000,000.00) (or the unpaid balance of all principal advanced against this
note, if that amount is less), together with interest on the unpaid principal
balance of this note from time to time outstanding at the Stated Rate and
interest on all past due amounts, both principal and accrued interest, at the
Past Due Rate; provided, that for the full term of this note the interest rate
--------
produced by the aggregate of all sums paid or agreed to be paid to the Holder of
this note for the use, forbearance or detention of the debt evidenced hereby
(including, but not limited to, all interest on this note at the Stated Rate)
shall not exceed the Ceiling Rate.
1. Definitions. Any terms not defined herein shall have the meaning
-----------
given to them in the Amended and Restated Credit Agreement dated of even date
herewith among the Maker, the Payee and certain other Lenders (as the same may
be amended or modified the "Credit Agreement").
----------------
2. Rates Change Automatically and Without Notice. Without notice to
---------------------------------------------
Maker or any other person or entity and to the full extent allowed by applicable
law from time to time in effect, the Prime Rate and the Ceiling Rate shall each
automatically fluctuate upward and downward as and in the amount by which
Holder's said prime rate, and such maximum nonusurious rate of interest
permitted by applicable law, respectively, fluctuate.
3. Calculation of Interest. Interest shall be computed for the actual
-----------------------
number of days elapsed in a year (up to 365, or 366 in a leap year) deemed to
consist of 360 days, unless the Ceiling Rate would thereby be exceeded, in which
event, to the extent necessary to avoid exceeding the Ceiling Rate, interest
shall be computed on the basis of the actual number of days elapsed in the
applicable calender year in which it accrued.
INITIALLED FOR
EXHIBIT C-1 IDENTIFICATION:_________
-----------
Page 1 of 6 Pages
4. Excess Interest Will be Refunded or Credited. If for any reason
--------------------------------------------
whatever, the interest paid or received on this note during its full term
produces a rate which exceeds the Ceiling Rate, the Holder of this note shall
refund to the payor or, at the Holder's option, credit against the principal of
this note such portion of that interest as shall be necessary to cause the
interest paid on this note to produce a rate equal to the Ceiling Rate.
5. Interest Will be Spread. All sums paid or agreed to be paid to the
-----------------------
Holder of this note for the use, forbearance or detention of the indebtedness
evidenced hereby, to the extent permitted by applicable law and to the extent
necessary to avoid violating applicable usury laws, shall be amortized,
prorated, allocated and spread in equal parts throughout the full term of this
note, so that the interest rate is uniform throughout the full term of this
note.
6. Payment Schedule. The principal of this note shall be due and payable
----------------
on the Revolving Credit Termination Date. Accrued and unpaid interest shall be
due and payable on each Interest Payment Date. All payments shall be applied
first to accrued interest, the balance to principal.
7. Prepayment. Maker may prepay this note only as provided in the Credit
----------
Agreement.
8. Revolving Credit. Upon and subject to the terms and conditions of the
----------------
Credit Agreement and the other provisions of this note, Maker may borrow, repay
and reborrow against this note at any time unless and until a default (however
designated) or event (an "Event of Potential Default") which, if not cured after
--------------------------
notice or before the lapse of time (or both) would develop into a default under
this note, the Credit Agreement or any other Credit Documents has occurred which
the Holder has not declared to have been fully cured or waived, and (except as
the Credit Agreement or any of the other Credit Documents may otherwise provide)
there is no limit on the number of advances against this note so long as the
total unpaid principal of this note at any time outstanding does not exceed
$75,000,000.00. Interest on the amount of each advance against this note shall
be computed on the amount of the unpaid balance of that advances from the date
it is made until the date it is repaid. If Maker's right (if any) to borrow
against this note shall ever lapse because of the occurrence of any default, it
shall not be reinstated (or construed from any course of conduct or otherwise to
have been reinstated) unless and until the Holder shall declare in a signed
writing that it has been cured or waived. The unpaid principal balance of this
note at
INITIALLED FOR
EXHIBIT C-1 IDENTIFICATION:________
-----------
Page 2 of 6 Pages
any time shall be the total of all principal lent against this note to Maker or
for Maker's account less the sum of all principal payments and permitted
prepayments on this note received by the Holder. Absent manifest error, the
Holder's computer records shall on any day conclusively evidence the unpaid
balance of this note and its advances and payments history posted up to that
day. All loans and advances and all payments and permitted prepayments made on
this note may be (but are not required to be) endorsed by the Holder on the
schedule attached hereto (which is hereby made a part hereof for all purposes)
or otherwise recorded in the Holder's computer or manual records; provided,
--------
that any Holder's failure to make notation of (a) any principal advance or
accrual of interest shall not cancel, limit or otherwise affect Maker's
obligations or any Holder's rights with respect to that advance or accrual, or
(b) any payment or permitted prepayment of principal or interest shall not
cancel, limit or otherwise affect Maker's entitlement to credit for that payment
as of the date of its receipt by the Holder. Maker and Payee expressly agree, as
expressly allowed by Article 15.10(b) of Chapter 15 ("Chapter 15") of the Texas
----------
Credit Code, that Chapter 15 (which relates to open-end line of credit revolving
loan accounts) shall not apply to this note or to any loan evidenced by this
note and that neither this note nor any such loan shall be governed by Chapter
15 or subject to its provisions in any manner whatsoever.
9. Credit Agreement. This note has been issued pursuant to the terms of
----------------
the Credit Agreement, to which reference is made for all purposes. Advances
against this note by Payee or other Holder hereof shall be governed by the
Credit Agreement. Payee is entitled to the benefits of the Credit Agreement.
As additional security for this note, Maker hereby grants to Payee and all other
present and future Holders an express lien against, security interest in and
contractual right of setoff in and to, all property and any and all deposits
(general or special, time or demand, provisional or final) at any time held by
the Payee or other Holder for any Maker's credit or account.
INITIALLED FOR
EXHIBIT C-1 IDENTIFICATION:________
-----------
Page 3 of 6 Pages
10. Defaults and Remedies. Time is of the essence. Maker's failure to pay
---------------------
any principal or accrued interest owing on this note when due and after
expiration of any applicable period for notice and right to cure such a default
which is specifically provided for in the Credit Agreement or any other
provision of this note, or the occurrence of any default under the Credit
Agreement or any other Credit Documents shall constitute default under this
note, whereupon the Holder may elect to exercise any or all rights, powers and
remedies afforded (a) under the Credit Agreement and all other papers related to
this note and (b) by law, including the right to accelerate the maturity of this
entire note.
In addition to and cumulative of such rights, the Holder is hereby
authorized at any time and from time to time after any such default, at Holder's
option, without notice to Maker or any other person or entity (all rights to any
such notice being hereby waived), to set off and apply any and all of any
Maker's deposits at any time held by the Holder, and any other debt at any time
owing by the Holder to or for the credit or account of any Maker, against the
outstanding balance of this note, in such order and manner as Holder may elect
in its sole discretion.
The Holder's right to accelerate this note on account of any late payment
or other default shall not be waived or deemed waived by the Holder by reason of
the Holder's having previously accepted one or more late payments or by reason
of any Holder's otherwise not accelerating this note or exercising other
remedies for any default, and no Holder shall ever be obligated or deemed
obligated to notify Maker or any other person that Holder is requiring strict
compliance with this note or any papers securing or otherwise relating to it
before such Holder may accelerate this note or exercise any other remedy.
Nothing in this Section or elsewhere shall be construed as diminishing
Holder's absolute right to demand payment of all or any part of this note at any
time.
11. Legal Costs. If any Holder of this note retains an attorney in
-----------
connection with any such default or to collect, enforce or defend this note or
any papers intended to secure or guarantee it in any lawsuit or in any probate,
reorganization, bankruptcy or other proceeding, or if Maker sues any Holder in
connection with this note or any such papers and does not prevail, then Maker
agrees to pay to each such Holder, in addition to principal and interest, all
reasonable costs and expenses incurred by such Holder in trying to collect this
note
INITIALLED FOR
EXHIBIT C-1 IDENTIFICATION_____
-----------
Page 4 of 6 Pages
or in any such suit or proceeding, including reasonable attorneys' fees.
12. Waivers. Except only for any notices which are specifically required
-------
by the Credit Agreement, Maker and any and all co-makers, endorsers, guarantors
and sureties severally waive notice (including, but not limited to, notice of
intent to accelerate and notice of acceleration, notice of protest and notice of
dishonor), demand, presentment for payment, protest, diligence in collecting and
the filing of suit for the purpose of fixing liability and consent that the time
of payment hereof may be extended and re-extended from time to time without
notice to any of them. Each such person agrees that his, her or its liability on
or with respect to this note shall not be affected by any release of or change
in any guaranty or security at any time existing or by any failure to perfect or
maintain perfection of any lien against or security interest in any such
security or the partial or complete unenforceability of any guaranty or other
surety obligation, in each case in whole or in part, with or without notice and
before or after maturity.
13. Rate of Return Maintenance Covenant. If at any time after the date of
-----------------------------------
this note, any Holder determines that (a) any applicable law, rule or regulation
regarding capital adequacy of general applicability has been adopted or changed,
or (b) its interpretation or administration by any governmental authority,
central bank or comparable agency has changed, and determines that such change
or the Holder's compliance with any request or directive regarding capital
adequacy of general applicability (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the Holder's capital as a consequence
of its obligations under this note or any related papers to a level below that
which the Holder could have achieved but for such adoption, change or compliance
(taking into consideration the Holder's own capital adequacy policies) by an
amount the Holder deems to be material, then Maker promises to pay from time to
time to the order of the Holder such additional amount or amounts as will
compensate the Holder for such reduction. A certificate of any Holder setting
forth the amount or amounts necessary to compensate the Holder as specified
above shall be given to Maker as soon as practicable after the Holder has made
such determination and shall be conclusive and binding, absent manifest error.
Maker shall pay the Holder the amount shown as due on any such certificate
within 15 days after the Holder gives it. In preparing such certificate, the
Holder may employ such assumptions and make such allocations of costs and
expenses as
INITIALLED FOR
IDENTIFICATION:_______
EXHIBIT C-1
-----------
Page 5 of 6 Pages
the Holder in good ▇▇▇▇▇ ▇▇▇▇▇ reasonable and may use any reasonable averaging
and attribution method.
14. Governing Law, Jurisdiction and Venue. This note shall be governed by
-------------------------------------
and construed in accordance with the laws of the State of Texas and the United
States of America from time to time in effect.
15. General Purpose of Loan. Maker warrants and represents to Payee and
-----------------------
all other Holders that all loans evidenced by this note are and will be for
business, commercial, investment or other similar purpose and not primarily for
personal, family, household or agricultural use, as such terms are used in
Chapter One.
16. Participations and Assignments. Payee and each other Holder reserves
------------------------------
the right, exercisable in such Holder's discretion and without notice to Maker
or any other person, to sell participations, assign interests or both, in all or
any part of this note or the debt evidenced by this note.
17. Limitation of Liability. No obligation or liability whatsoever of
-----------------------
Maker which may arise at any time under this promissory note or any obligation
or liability which may be incurred by it pursuant to any other instrument,
transaction or undertaking contemplated hereby shall be personally binding upon,
nor shall resort for the enforcement thereof be had to the private property of,
any of Maker's trustees or shareholders regardless of whether such obligation
or liability is in the nature of contract, tort or otherwise.
SECURITY CAPITAL PACIFIC TRUST
By:___________________________
Name:_________________________
Title:________________________
EXHIBIT C-1
-----------
Page 6 of 6 Pages
OPINION OF COUNSEL
------------------
1. The Borrower (a) is duly organized, validly existing and in good
standing under the laws of the states of Maryland and Texas; (b) has all
requisite power and authority and all material governmental licenses,
authorizations, permits and approvals to own its Property and to carry on its
business as, and in the places where, such Property is owned or such business is
now conducted and (c) is duly qualified to do business and is in good standing
in every jurisdiction in which such qualification is necessary or desirable.
2. The execution, delivery and performance of the Credit Agreement and
the other Credit Documents (a) have all been duly authorized by all necessary
action by the Borrower; (b) are within the power and authority of the Borrower;
(c) will not contravene or violate any Legal Requirement or the Organizational
Documents of the Borrower; (d) to the best of our knowledge, will not result in
the breach of, or constitute a default under, any agreement, instrument,
judgment, license, order or permit to which the Borrower is a party or by which
the Borrower or any of its Property may be bound or affected, and (e) to the
best of our knowledge, do not result in the creation of any Lien upon any
Property of the Borrower except as expressly contemplated by the Credit
Documents.
3. All authorizations, consents, approvals, licenses, permissions and
registrations, if any, of or with any Governmental Authority, or to the best of
our knowledge, any other Person, required in connection with the execution,
delivery and performance of the Credit Agreement, the Note and the Other Credit
Documents have been obtained.
4. The Credit Documents are legal, valid and binding obligations of the
Borrower, enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, moratorium and other
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles.
5. To the best of our knowledge and except as heretofore disclosed to the
Agent, there is no litigation or administrative proceeding pending or threatened
against, or any outstanding judgment, order decree or award affecting, the
Borrower before or by any Governmental Authority or arbitral body which in the
aggregate have, or if adversely determined could have, any material adverse
effect on the condition, business or prospects, financial or otherwise, of the
Borrower.
6. The Borrower is not an "investment company", or a copy "controlled" by
an "investment company", within the meaning of the Investment Company Act of
1940, as amended.
EXHIBIT D
---------
Page 1 of 1 Page