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EXHIBIT 10.2
AMENDED AND RESTATED
UNSECURED LOAN AGREEMENT
dated as of June 7, 1999
by and among
IRVINE APARTMENT COMMUNITIES, L.P.,
THE BANKS LISTED HEREIN,
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Co-Arranger and Administrative Agent
and
U.S. BANK NATIONAL ASSOCIATION,
as Co-Arranger
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TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS........................................................ 1
SECTION 1.1 Definitions............................................. 1
SECTION 1.2 Accounting Terms and Determinations..................... 18
SECTION 1.3 Borrowings.............................................. 18
ARTICLE 2 THE CREDITS........................................................ 19
SECTION 2.1 Loans................................................... 19
SECTION 2.2 Funding of Loans........................................ 19
SECTION 2.3 Notes................................................... 19
SECTION 2.4 Interest Rates.......................................... 20
SECTION 2.5 Fees.................................................... 20
SECTION 2.6 Maturity Date........................................... 21
SECTION 2.7 First Option To Extend.................................. 21
SECTION 2.8 Second Option To Extend................................. 21
SECTION 2.9 Lockout; Optional Prepayments........................... 22
SECTION 2.10 General Provisions as to Payments...................... 22
SECTION 2.11 Funding Losses......................................... 23
SECTION 2.12 Computation of Interest and Fees....................... 23
SECTION 2.13 Use of Proceeds........................................ 23
SECTION 2.14 Method of Electing Interest Rates...................... 24
ARTICLE 3 CONDITIONS......................................................... 25
SECTION 3.1 Closing................................................. 25
SECTION 3.2 Borrowings.............................................. 26
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TABLE OF CONTENTS (Continued)
Page
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ARTICLE 4 REPRESENTATIONS AND WARRANTIES..................................... 26
SECTION 4.1 Existence and Power..................................... 27
SECTION 4.2 Power and Authority..................................... 27
SECTION 4.3 No Violation............................................ 27
SECTION 4.4 Financial Information................................... 28
SECTION 4.5 Litigation.............................................. 28
SECTION 4.6 Compliance with ERISA................................... 28
SECTION 4.7 Environmental Matters................................... 28
SECTION 4.8 Taxes................................................... 29
SECTION 4.9 Full Disclosure......................................... 29
SECTION 4.10 Solvency............................................... 29
SECTION 4.11 Use of Proceeds, Margin Regulations.................... 29
SECTION 4.12 Governmental Approvals................................. 29
SECTION 4.13 Investment Company Act, Public Utility Holding
Company Act............................................ 30
SECTION 4.14 Principal Offices...................................... 30
SECTION 4.15 Patents, Trademarks, etc............................... 30
SECTION 4.16 Qualifying Unencumbered Properties..................... 30
SECTION 4.17 No Default............................................. 30
SECTION 4.18 Licenses, etc.......................................... 30
SECTION 4.19 Compliance With Law.................................... 31
SECTION 4.20 No Burdensome Restrictions............................. 31
SECTION 4.21 Brokers' Fees.......................................... 31
SECTION 4.22 Labor Matters.......................................... 31
SECTION 4.23 Insurance.............................................. 31
SECTION 4.24 Organizational Documents............................... 31
SECTION 4.25 Year 2000 Compliance................................... 31
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TABLE OF CONTENTS (Continued)
Page
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ARTICLE 5 AFFIRMATIVE AND NEGATIVE COVENANTS................................. 32
SECTION 5.1 Financial Information................................... 32
SECTION 5.2 Other Information....................................... 33
SECTION 5.3 Payment of Obligations.................................. 34
SECTION 5.4 Maintenance of Property; Insurance, Leases.............. 35
SECTION 5.5 Conduct of Business and Maintenance of Existence........ 35
SECTION 5.6 Compliance with Laws.................................... 35
SECTION 5.7 Inspection of Property, Books and Records............... 35
SECTION 5.8 Existence............................................... 36
SECTION 5.9 Financial Covenants..................................... 36
SECTION 5.10 Restriction on Fundamental Changes..................... 37
SECTION 5.11 Changes in Business.................................... 37
SECTION 5.12 General Partner Status................................. 38
SECTION 5.13 Environmental Matters.................................. 38
SECTION 5.14 Cooperation............................................ 39
SECTION 5.15 Distributions.......................................... 39
ARTICLE 6 DEFAULTS........................................................... 39
SECTION 6.1 Events of Default....................................... 39
SECTION 6.2 Rights and Remedies..................................... 41
SECTION 6.3 Notice of Default....................................... 42
SECTION 6.4 Distribution of Proceeds after Default.................. 42
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TABLE OF CONTENTS (Continued)
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ARTICLE 7 THE AGENTS......................................................... 43
SECTION 7.1 Appointment and Authorization........................... 43
SECTION 7.2 Agency and Affiliates................................... 43
SECTION 7.3 Action by Administrative Agent.......................... 43
SECTION 7.4 Consultation with Experts............................... 43
SECTION 7.5 Liability of Administrative Agent....................... 44
SECTION 7.6 Indemnification......................................... 44
SECTION 7.7 Credit Decision......................................... 44
SECTION 7.8 Successor Administrative Agent.......................... 44
SECTION 7.9 Consents and Approvals.................................. 45
ARTICLE 8 CHANGE IN CIRCUMSTANCES............................................ 45
SECTION 8.1 Basis for Determining, Interest Rate Inadequate
or Unfair............................................... 46
SECTION 8.2 Illegality.............................................. 46
SECTION 8.3 Increased Cost and Reduced Return....................... 47
SECTION 8.4 Taxes................................................... 48
SECTION 8.5 Base Rate Loans Substituted for Affected LIBOR Loans.... 50
ARTICLE 9 MISCELLANEOUS...................................................... 51
SECTION 9.1 Notices................................................. 51
SECTION 9.2 No Waivers.............................................. 51
SECTION 9.3 Expenses; Indemnification............................... 51
SECTION 9.4 Sharing of Set-Offs..................................... 53
SECTION 9.5 Amendments and Waivers.................................. 54
SECTION 9.6 Successors and Assigns.................................. 54
SECTION 9.7 Collateral.............................................. 56
SECTION 9.8 Governing Law; Submission to Jurisdiction............... 56
SECTION 9.9 Counterparts', Integration, Effectiveness............... 56
SECTION 9.10 WAIVER OF JURY TRIAL................................... 57
SECTION 9.11 Survival............................................... 57
SECTION 9.12 Domicile of Loans...................................... 57
SECTION 9.13 Limitation of Liability................................ 57
SECTION 9.14 Recourse Obligation.................................... 57
SECTION 9.15 Bank's Failure to Fund................................. 57
SECTION 9.16 Dispute Resolution..................................... 62
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Schedule 1 - Commitments
Schedule 4.6 - Borrower ERISA Plans
Schedule 4.17 - Initial Qualifying Unencumbered Properties
Schedule 5.14(c)(i) - General Partner Investments Schedule
5.14(c)(ii) - General Partner Property
Exhibit A - Reserved
Exhibit B - Transfer Supplement (Section 9.6(c))
Exhibit C - Form of Notice of Interest Period Election (Section 2.14(a))
Exhibit D - Form of Compliance Certificate (Section 5. 1 (c))
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AMENDED AND RESTATED
UNSECURED LOAN AGREEMENT
THIS AMENDED AND RESTATED UNSECURED LOAN AGREEMENT (this "Agreement")
dated as of June 7, 1999 is made by and among IRVINE APARTMENT COMMUNITIES,
L.P., a Delaware limited partnership (the "Borrower"), the BANKS listed on the
signature pages hereof, ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, as Co-Arranger
and Administrative Agent, and U.S. BANK NATIONAL ASSOCIATION, as Co-Arranger.
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions. The following terms, as used herein, have the
following meanings:
"Acquired Asset" means a Qualifying Unencumbered Property which has
been acquired by Borrower (directly or indirectly) after June 27, 1997.
"Acquired Stabilized Asset" means a Qualifying Unencumbered Property
which had an Occupancy Rate greater than or equal to 85% on the date acquired by
Borrower.
"Adjusted London Interbank Offered Rate" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upward, if
necessary, to the next higher 1/100 of 1%) by dividing (i) the London Interbank
Offered Rate applicable during such Interest Period by (ii) 1.00 minus the LIBOR
Reserve Percentage.
"Administrative Agent" shall mean ▇▇▇▇▇ Fargo Bank, National
Association in its capacity as Administrative Agent hereunder, and its permitted
successors in such capacity in accordance with the terms of this Agreement.
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrower) duly
completed by such Bank.
"Aggregate Commitments" shall mean the aggregate of all of the
Commitments hereunder, for a total of $ 100,000,000 unless and until such time
as the Commitments are reduced pursuant hereto.
"Agreement" shall mean this Amended and Restated Unsecured Loan
Agreement as the same may from time to time hereafter be modified, supplemented
or amended.
"Applicable Interest Rate" means (i) with respect to any Fixed Rate
Indebtedness, the fixed interest rate applicable to such Fixed Rate Indebtedness
at the time in question, and (ii) with respect to any Floating Rate
Indebtedness, either (x) the rate at which the interest rate applicable to such
Floating Rate Indebtedness is actually capped (or fixed pursuant to an interest
rate hedging device), at the time of calculation, if Borrower has entered into
an interest rate cap
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agreement or other interest rate hedging device with respect thereto or (y) if
Borrower has not entered into an interest rate cap agreement or other interest
rate hedging device with respect to such Floating Rate Indebtedness, the greater
of (A) the rate at which the interest rate applicable to such Floating Rate
Indebtedness could be fixed for the remaining term of such Floating Rate
Indebtedness, at the time of calculation, by Borrower's entering into any
unsecured interest rate hedging device either not requiring an upfront payment
or if requiring an upfront payment, such upfront payment shall be amortized over
the term of such device and included in the calculation of the interest rate
(or, if such rate is incapable of being fixed by entering into an unsecured
interest rate hedging device at the time of calculation, a fixed rate equivalent
reasonably determined by Administrative Agent) or (B) the floating rate
applicable to such Floating Rate Indebtedness at the time in question.
"Applicable Lending Office" means, with respect to any Bank, (i) in the
case of a Base Rate Loan, its Domestic Lending Office, and (ii) in the case of a
LIBOR Loan, its LIBOR Lending Office.
"Applicable Margin" means, with respect to each Loan, the respective
percentages per annum determined, at any time, in accordance with the table set
forth below.
APPLICABLE MARGIN
FOR LOANS
TIME PERIOD (M PER ANNUM)
----------- -----------------
From the Closing Date until the
Original Maturity Date 1.50
From the Original Maturity Date until 1.50
the First Extended Maturity Date
From the First Extended Maturity Date until 1.525
the Second Extended Maturity Date
"Approved Financial Institutions" shall mean financial institutions
which have (i)(a) a minimum net worth of $500,000,000 or (b) total assets of
$10,000,000,000, and (ii) a minimum long term debt rating of (a) BBB+ or higher
by S&P, and (b) Baa1 or higher by ▇▇▇▇▇'▇.
"Assignee" has the meaning set forth in Section 9.6(c).
"Bank" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 9.6(c), and their respective
successors and assigns.
"Bankruptcy Code" shall mean Title II of the United States Code,
entitled "Bankruptcy", as amended from time to time, and any successor statute
or statutes.
"Base Rate" means, for any day, a rate per annum equal to the greater
of (i) the rate of interest most recently publicly announced by the
Administrative Agent in San Francisco, California from time to time as its rate
for domestic commercial loans for such day and (ii) the sum of 0.5% plus the
Federal Funds Rate for such day.
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"Base Rate Loan" means a Loan made by a Bank which accrues interest at
an interest rate based on the Base Rate.
"Benefit Arrangement" means at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan
and which is maintained or otherwise contributed to by any member of the ERISA
Group.
"Borrower" means Irvine Apartment Communities, L.P., a Delaware limited
partnership.
"Borrower Party" means the Borrower and any Subsidiary of the Borrower.
"Borrower Parties" shall mean each of the foregoing Persons individually, and
all of the foregoing Persons collectively.
"Borrower's Share" means Borrower's share of the liabilities of an
Investment Affiliate based upon Borrower's percentage ownership of such
Investment Affiliate.
"Borrowing" has the meaning set forth in Section 1.3.
"Capital Leases" as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"Cap Rate" means the Treasury Rate plus 2.8%.
"Capital Reserve" shall mean, for any period, $50.00 for each Fiscal
Quarter to occur during such period.
"Capital Stock" means, with respect to any Person, all (i) shares,
interests, participations or other equivalents (however designated) of capital
stock and other equity interests of such Person and (ii) rights (other than debt
securities convertible into capital stock or other equity interests), warrants
or options to acquire any such capital stock or other equity interests.
"Cash and Cash Equivalents" shall mean (i) cash, (ii) direct
obligations of the United States Government, including without limitation,
treasury bills, notes and bonds, (iii) interest bearing or discounted
obligations of Federal agencies and Government sponsored entities or pools of
such instruments offered by Approved Financial Institutions and dealers,
including without limitation, Federal Home Loan Mortgage Corporation
participation sale certificates, Government National Mortgage Association
modified pass through certificates, Federal National Mortgage Association bonds
and notes, and Federal Farm Credit System securities, (iv) time deposits,
Domestic and Eurodollar certificates of deposit, bankers acceptances, commercial
paper rated at least A- I by S&P and P- I by ▇▇▇▇▇'▇ and/or guaranteed by an Aa
rating by ▇▇▇▇▇'▇, a AA rating by S&P or better rated credit, floating rate
notes, other money market instruments and letters of credit each issued by
Approved Financial Institutions (and in the case
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of a letter of credit, an Approved Financial Institution which is a bank)
(provided that the same shall cease to be a "Cash or Cash Equivalent" if at any
time any such bank shall cease to be an Approved Financial Institution), (v)
obligations of domestic corporations, including, without limitation, commercial
paper, bonds, debentures and loan participations, each of which is rated at
least AA by S&P and/or Aa2 by ▇▇▇▇▇'▇ and/or guaranteed by an Aa rating by
▇▇▇▇▇'▇, a AA rating by S&P or better rated credit, (vi) obligations issued by
states and local governments or their agencies, rated at least MIG- I by ▇▇▇▇▇'▇
and/or SP- I by S&P and/or guaranteed by an irrevocable letter of credit of an
Approved Financial Institution, which is a bank (provided that the same shall
cease to be a "Cash or Cash Equivalent" if at any time any such financial
institution shall cease to be an Approved Financial Institution), (vii)
repurchase agreements with major financial institutions and primary government
security dealers fully secured by the U.S. Government or agency collateral equal
to or exceeding the principal amount on a daily basis and held in safekeeping,
and (viii) real estate loan pool participations, guaranteed by an AA rating
given by S&P or Aa2 rating given by ▇▇▇▇▇'▇ or better rated credit.
"Certifying Officer" has the meaning set forth in Section 5. 1 (c).
"Closing Date" means the date on or after the Effective Date on which
the conditions set forth in Section 2.1 shall have been satisfied to the
satisfaction of Administrative Agent.
"Co-Arranger" shall mean each of ▇▇▇▇▇ Fargo Bank, National Association
and U.S. Bank National Association.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and as
it may be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
"Commitment" means, with respect to each Bank, the amount set forth in
Schedule I attached hereto and incorporated herein by this reference (and, for
each Bank which is an Assignee, the amount set forth in the Transfer Supplement
entered into pursuant to Section 9.6(c) as the Assignee's Commitment), as such
amount may be reduced from time to time in connection with an assignment to an
Assignee.
"Consolidated Subsidiary" means at any date any Subsidiary which is
consolidated with Borrower in accordance with GAAP.
"Consolidated Tangible Net Worth" means at any date the consolidated
partners' capital (determined on a book basis and without duplication), less
77their consolidated Intangible Assets and loans to officers and directors of
Borrower or its Consolidated Subsidiaries, all determined as of such date. For
purposes of this definition "Intangible Assets" means the amount (to the extent
reflected in determining such consolidated partners' capital) of (i) unamortized
deferred charges and debt discount; (ii) all write-ups (other than write-ups
resulting from foreign currency translations and write-ups of assets of a going
concern business made within twelve months after the acquisition of such
business) subsequent to December 31, 199__ in the book value of any asset owned
by the Borrower or a Consolidated Subsidiary and (iii) goodwill, patents,
trademarks, service marks, trade names, anticipated future benefit of tax loss
carry forwards, copyrights, organization or developmental expenses and other
intangible assets.
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"Contingent Obligation" means, as to any Person, without duplication,
any obligation, direct or indirect, contingent or otherwise, of such Person (i)
with respect to any Indebtedness or other obligation of another Person,
including any direct or indirect guarantee of such Indebtedness (other than any
endorsement for collection in the ordinary course of business) or any other
direct or indirect obligation, by agreement or otherwise, to purchase or
repurchase any such Indebtedness or obligation or any security therefor, or to
provide funds for the payment or discharge of any such Indebtedness or
obligation (whether in the form of loans, advances, stock purchases, capital.
contributions or otherwise), (ii) to provide funds to maintain the financial
condition of any other Person, (iii) otherwise to assure or hold harmless the
holders of Indebtedness or other obligations of another Person against loss in
respect thereof, or (iv) under Hedging Contracts. The amount of any Contingent
Obligation under clause (i) or (ii) shall be the lesser of (a) the amount of
such Indebtedness or obligation guaranteed or otherwise supported thereby, or
(b) the maximum amount so guaranteed or supported. The amount of any obligation
under a Hedging Contract shall be determined in accordance with standard methods
of calculating credit exposure under similar arrangements as prescribed by the
Administrative Agent from time to time, taking into account potential movements
in interest rates, exchange rates or other relevant indices and the notional
principal amount, term and termination provisions of the arrangement. For the
purposes of this definition only, "Indebtedness" shall be deemed not to include
subclause (c) of the definition of "Indebtedness" set forth in this Agreement.
"Contractual Obligation" as applied to any Person, means any provision
of any Securities issued by that Person or any indenture, mortgage, deed of
trust, lease, contract, undertaking, document or instrument to which that Person
is a party or by which it or any of its properties is bound, or to which it or
any of its properties is subject (including without limitation any restrictive
covenant affecting such Person or any of its properties).
"Convertible Securities" means evidences of shares of stock, limited or
general partnership interests or other ownership interests, warrants, options,
or other rights or securities which are convertible into or exchangeable for,
with or without payment of additional consideration, partnership interests of
Borrower, either immediately or upon the arrival of a specified date or the
happening of a specified event.
"Credit Rating" means the rating(s) assigned by the Rating Agencies to
Borrower's senior unsecured long term indebtedness.
"Debt Restructuring" means a restatement of, or material change in, the
amortization or other financial terms of any Indebtedness of the Borrower or any
Investment Affiliate.
"Debt Service" means, for any period, Interest Expense for such period
plus scheduled principal amortization (excluding an individual scheduled
principal payment which exceeds 25% of the original principal amount of an
issuance of Indebtedness) for such period on all Indebtedness of General Partner
(calculated as provided in Section 1.2), on a consolidated basis, plus
Borrower's Share of scheduled principal amortization for such period on all
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Indebtedness of Investment Affiliates for which there is no recourse to General
Partner or Borrower (or any Property thereof), plus without duplication, General
Partner's and Borrower's actual or potential liability for principal
amortization for such period on all Indebtedness of Investment Affiliates that
is recourse to General Partner or Borrower (or any Property thereof). "Default"
means any condition or event which with the giving of notice or lapse of time-or
both would, unless cured or waived, become an Event of Default.
"Default Rate" shall mean a rate per annum equal to the sum of four
percent (4%) plus the Base Rate.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in San Francisco, California are authorized
by law to close.
"Domestic Lending Office" means, as to each Bank, its office located at
its address in the United States set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Domestic Lending
office) or such other office as such Bank may hereafter designate as its
Domestic Lending Office by notice to the Borrower and the Administrative Agent.
"EBITDA" means, for any period, (i) Net Income for such period, plus
(ii) depreciation and amortization expense and other non-cash items deducted in
the calculation of Net Income for such period, plus (iii) Interest Expense
deducted in the calculation of Net Income for such period, plus (iv) Taxes
deducted in the calculation of Net Income for such period, plus (v) Borrower's
Share of distributed earnings of Investment Affiliates for such period, minus
(vi) the gains (and plus the losses) from extraordinary items or asset sales or
write-ups or forgiveness of indebtedness included in the calculation of Net
Income, for such period, minus (vii) Borrower's Share of accrued income and
losses of Investment Affiliates for such period minus (viii) earnings of
Subsidiaries for such period distributed to third parties, all of the foregoing
without duplication.
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 9.9.
"Environmental Affiliate" means any partnership, joint venture, trust
or corporation for which Borrower or General Partner is liable contractually or
under applicable law for Environmental Claims against such entity.
"Environmental Approvals" means any permit, license, approval, ruling,
variance, exemption or other authorization required under applicable
Environmental Laws.
"Environmental Claim" means, with respect to any Person, any notice,
claim, demand or similar communication (written or oral) by any other Person
alleging potential liability of such Person for investigatory costs, cleanup
costs, governmental response costs, natural resources damage, property damages,
personal injuries, fines or penalties arising out of, based on or resulting from
(i) the presence, or release into the environment, of any Materials of
Environmental Concern at any location, whether or not owned by such Person or
(ii) circumstances forming the basis of any violation, or alleged violation, of
any Environmental Law.
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"Environmental Laws" means any and all federal, state, and local
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, licenses,
agreements and other governmental restrictions relating to the environment, or
to emissions, discharges or releases of Materials of Environmental Concern into
the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Materials of Environmental Concern or the clean up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Code.
"Estimated Environmental Cost" shall have the meaning set forth in
Section 5.15 hereof.
"Event of Default" has the meaning set forth in Section 6. 1.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to the Administrative Agent on such day on
such transactions as determined by the Administrative Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System as constituted from time to time.
"First Extended Maturity Date" means May 19, 2000.
"First Option To Extend" means the Borrower's option, subject to the
terms and conditions of Section 2.7 hereof, to extend the term of the Loans from
the Original Maturity Date to the First Extended Maturity Date.
"Fiscal Quarter" means a fiscal quarter of a Fiscal Year.
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"Fiscal Year" means the fiscal year of Borrower and its Consolidated
Subsidiaries which shall be the twelve (12) month period ending on the last day
of December in each year.
"Fitch" means Fitch Investors Service, or any successor thereto.
"Fixed Charges" for any Fiscal Quarter period means the sum of (i) Debt
Service for such period, plus (ii) the greater of (a) the product of the number
of apartment units owned (directly or beneficially) by Borrower at the beginning
of the applicable period and the Capital Reserve for such period or (b) the
average quarterly amount of recurring capital expenditures of the Borrower based
upon the actual recurring capital expenditures of Borrower and Consolidated
Subsidiaries over the immediately preceding four calendar quarters, plus (iii)
Borrower's Share of the aggregate sum of the product of the number of apartment
units owned (directly or beneficially) by each Investment Affiliate at the
beginning of the applicable period and the Capital Reserve for such period, plus
(iv) dividends on preferred units payable by Borrower for such period.
"Fixed Rate Indebtedness" means all Indebtedness which accrues interest
at a fixed rate.
"Floating Rate Indebtedness" means all Indebtedness which is not Fixed
Rate Indebtedness and which is not a Contingent Obligation or an Unused
Commitment.
"FMV Cap Rate" means 8.0%.
"GAAP" means generally accepted accounting principles recognized as
such in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of the date of determination.
"General Partner" means TICALLC.
"Gross Asset Value" means, with respect to any Person or Property, (i)
the product of four (4) and a fraction, the numerator of which is EBITDA for
such Fiscal Quarter (exclusive of EBITDA from any Property which has been
acquired or been disposed of by the Borrower in the Fiscal Quarter most recently
ended) and the denominator of which is the FMV Cap Rate, plus (ii) for any
Property which has been acquired by the Borrower in the Fiscal Quarter most
recently ended, the Net Price of the Property paid by Borrower for such
Property, plus (iii) in the case of any Person, the value of any Cash or Cash
Equivalents owned by such Person and not subject to any Lien, plus (iv) the
value of all construction in process (including, without limitation, the value
of the land owned by the Borrower or any Subsidiary upon which construction has
commenced, at the lower of cost or fair market value determined in accordance
with GAAP) plus (v) the value of all land owned by the Borrower or any
Subsidiary for which construction has not commenced, as of the end of the most
recently concluded Fiscal Quarter, calculated at the lower of cost or fair
market value (in each case determined in accordance with GAAP).
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"Guaranty" means the First Amended and Restated General Continuing
Repayment Guaranty, dated as of the Closing Date, executed by General Partner in
favor of Administrative Agent and the Banks.
"Hedging Contract" means, for any Person, any interest rate, commodity,
foreign exchange or other hedging agreement (including swaps, collars, caps and
forward contracts) between such Person and one or more counterparties providing
for the transfer or mitigation of fluctuations of interest rates, exchange rates
or other prices either generally or under specific contingencies.
"IAC" means Irvine Apartment Communities, Inc., a Maryland corporation.
"Indebtedness" as applied to any Person (and without duplication),
means (a) all indebtedness, obligations or other liabilities of such Person for
borrowed money, (b) all indebtedness, obligations or other liabilities of such
Person evidenced by Securities or other similar instruments, (c) all Contingent
Obligations of such Person exclusive of all indebtedness, obligations and other
liabilities in respect of Hedging Contracts purchased to hedge Indebtedness, (d)
all reimbursement obligations and other liabilities of such Person with respect
to letters of credit or banker's acceptances issued for such Person's account or
other similar instruments for which a contingent liability exists, (e) all
obligations of such Person to pay the deferred purchase price of Property or
services, (f) all obligations in respect of Capital Leases (including ground
leases) of such Person, (g) all indebtedness obligations or other liabilities of
such Person or others secured by a Lien on any asset of such Person, whether or
not such indebtedness, obligations or liabilities are assumed by, or are a
personal liability of such Person, (h) all indebtedness, obligations or other
liabilities (other than interest expense liability) in respect of Interest Rate
Contracts and foreign currency exchange agreements (other than Interest Rate
Contracts purchased to hedge Indebtedness), (i) ERISA obligations currently due
and payable, and (j) all trade payables for construction in progress. As used
herein, "Indebtedness" shall not include assessment district or community
facilities district indebtedness not shown on the Borrower's balance sheet.
"Indemnitee" has the meaning set forth in Section 9.3(b).
"Initial Closing Date" means November 20, 1998.
"Initial Term" means the period commencing as of the Closing Date and
ending as of the Original Maturity Date
"Interest Expense" means, for any period, the sum (without duplication)
for such period of (i) total interest expense, whether paid or accrued, of the
Borrower and the Consolidated Subsidiaries, including without limitation the
portion of any obligations under any Capital Lease allocable to interest
expense, and the Borrower's Share of interest expenses in Unconsolidated Joint
Ventures but excluding amortization or write-off of debt discount and expense,
(ii) capitalized interest, (iii) to the extent not included in clauses (i) and
(ii) the Borrower's pro rata share of interest expense and other amounts of the
type referred to in such clauses of the Unconsolidated Joint Ventures, and (iv)
interest incurred on any liability or obligation that constitutes a contingent
Obligation of Borrower or any Consolidated Subsidiary,
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and in each case taking into account the benefit of any Hedging Contract and the
amortized cost therefor for the applicable period. For purposes of clause (iii),
Borrower's pro rata share of interest expense or other amount of any
Unconsolidated Joint Venture shall be deemed equal to the product of (a) the
interest expense or other relevant amount of such Unconsolidated Joint Venture,
multiplied by (b) the percentage of the total outstanding Capital Stock of such
Person held by Borrower or any Consolidated Subsidiary, expressed as a decimal.
"Interest Period" means, with respect to each LIBOR Borrowing the
period commencing on the date of such Borrowing as specified in the applicable
Notice of Interest Period Election and ending 1, 2, 3, or 6 months thereafter,
as the Borrower may elect in the applicable Notice of Interest Period Election;
provided that:
(a) any Interest Period which would otherwise end on a day
which is not a LIBOR Business Day shall be extended to the next
succeeding LIBOR Business Day unless such LIBOR Business Day falls in
another calendar month, in which case such Interest Period shall end on
the next preceding LIBOR Business Day;
(b) any Interest Period which begins on the last LIBOR
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
LIBOR Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Maturity Date shall end on the Maturity Date.
"Interest Rate Contracts" means, collectively, interest rate swap,
collar, cap or similar agreements providing interest rate protection.
"Interest Rate ▇▇▇▇▇▇" has the meaning set forth in Section 5.13.
"Investment" means, with respect to any Person, (i) any direct or
indirect purchase or other acquisition by that Person of stock or securities, or
any beneficial interest in stock or other securities, of any other Person, any
partnership interest (whether general or limited) in any other Person, or all or
any substantial part of the business or assets of any other Person, (ii) any
direct or indirect loan, advance or capital contribution by that Person to any
other Person, including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business. The amount of any Investment shall be
the original cost of such Investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.
"Investment Affiliate" means any Person in whom Borrower holds an
equity interest, directly or indirectly, whose financial results are not
consolidated under GAAP with the financial results of Borrower on the
consolidated financial statements of Borrower.
"Joint Venture" means a joint venture, partnership or similar
arrangement, whether in corporate, partnership or other legal form.
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"LIBOR Borrowing" has the meaning set forth in Section 1.3.
"LIBOR Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"LIBOR Lending Office" means, as to each Bank, its office, branch or
affiliate located at its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its LIBOR Lending Office)
or such other office, branch or affiliate of such Bank as it may hereafter
designate as its LIBOR Lending Office by notice to the Borrower and the
Administrative Agent.
"LIBOR Loan" means a Loan made by a Bank which accrues interest at an
interest rate based on the Adjusted London Interbank Offered Rate.
"LIBOR Reserve Percentage" means for any day that percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) under Regulation D,
as Regulation D may be amended, modified or supplemented, for determining the
maximum reserve requirement for a member bank of the Federal Reserve System in
New York City with deposits exceeding five billion dollars in respect of
"Eurocurrency liabilities" (or in respect of any other category of liabilities
which includes deposits by reference to which the interest rate on LIBOR Loans
is determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of any Bank to United States
residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the LIBOR Reserve
Percentage.
"Lien" means with respect to any Property, any mortgage, pledge,
negative pledge, charge, security interest or encumbrance of any kind, or any
other type of preferential arrangement, in each case that has the effect of
creating a security interest, in respect of such Property, including without
limitation, all assessment district and community facility district debt shown
on the balance sheet of the owner of such Property. For the purposes of this
Agreement, the Borrower or any Consolidated Subsidiary shall be deemed to own
subject to a Lien any Property which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such Property.
"Loan" means, with respect to any Bank, the principal sum in the amount
of such Bank's Commitment that such Bank agrees to lend and Borrower agrees to
borrow pursuant to Section 2.1 hereof, and "Loans" means, collectively, the
Loans made by all Banks.
"Loan Documents" means this Agreement, the Guaranty and the Notes as
each of them may from time to time hereafter be modified, supplemented or
amended.
"London Interbank Offered Rate" or "LIBOR" applicable to any Interest
Period means the rate of interest (rounded upward, if necessary, to the next
highest 1/100 of 1%) quoted by the Administrative Agent as the London Inter-Bank
Offered Rate for deposits in U.S. Dollars at approximately 11:00 a.m. (London
time) two (2) LIBOR Business Days before the first day of such Interest Period
in an amount approximately equal to the principal amount of the Loans or portion
thereof to which such Interest Period is to apply and for a period of time
comparable to such Interest Period.
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"Margin Stock" shall have the meaning provided such term in Regulation
U and Regulation G of the Federal Reserve Board.
"Material Adverse Effect" means an effect resulting from any
circumstance or event or series of circumstances or events, of whatever nature
(but excluding general economic conditions), which does or could reasonably be
expected to, materially and adversely (i) effect the business, operations,
properties, assets or financial condition of the Borrower and its Consolidated
Subsidiaries taken as a whole, or (ii) impair the ability of the Borrower and
its Consolidated Subsidiaries, taken as a whole, to perform their respective
obligations under the Loan Documents.
"Materials of Environmental Concern" means any chemical substance (i)
the presence of which requires investigation or remediation under any
Environmental Laws; or (ii) that is or becomes defined as a "hazardous waste" or
"hazardous substance" under any Environmental Laws, including the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601
et seq.) or the Resource Conservation and Recovery Act (42 U.S.C. Section 6901
et seq.); or (iii) that is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic, or otherwise hazardous and is or becomes
regulated by any governmental authority; or (iv) the presence of which on any
Real Property Asset causes a nuisance upon the Real Property Asset or to
adjacent properties or poses a hazard to any Real Property Asset or to the
health or safety of Persons on or about any Real Property Asset; or (v) without
limitation, which contains gasoline, diesel fuel or other petroleum
hydrocarbons; or (vi) without limitation which contains polychlorinated
biphenyls (PCBs) or asbestos.
"Maturity Date" shall mean the date when all of the Obligations
hereunder shall be due and payable which shall be: (i) the Original Maturity
Date, unless accelerated pursuant to the terms hereof or extended in accordance
with the terms of Section 2.7 hereof, (ii) the First Extended Maturity Date, if
extended in accordance with the terms of Section 2.7 hereof, unless accelerated
pursuant to the terms hereof or extended in accordance with the terms of Section
2.8 hereof, or (iii) the Second Extended Maturity Date, if extended in
accordance with the terms of Section 2.8 hereof, unless accelerated pursuant to
the terms hereof.
"Merger" means the merger of IAC into TICALLC.
"Merger Date" means the date upon which the Merger is legally
effective.
"▇▇▇▇▇'▇" means ▇▇▇▇▇'▇ Investors Services, Inc. or any successor
thereto.
"Multiemployer Plan" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
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"Multiple Employer Plan" means a Plan to which Section 413(c) of the
Code applies.
"Net Income" means, for any period, the net earnings (or loss) after
Taxes of the Borrower, on a consolidated basis for such period, calculated in
conformity with GAAP.
"Net Offering Proceeds" means all cash or other assets received by
Borrower as a result of the sale or issuance of common shares of beneficial
interest, preferred shares of beneficial interest, partnership interests,
limited liability company interests, Convertible Securities or other ownership
or equity interests in Borrower less customary costs and discounts of issuance
paid by Borrower, as the case may be.
"Net Operating Income" means, for any period with respect to any
Property owned (directly or beneficially) by Borrower, the net operating income
of such Property for such period (i) determined in accordance with GAAP, (ii)
determined in a manner which is consistent with the past practices of Borrower,
and (iii) inclusive of an allocation of reasonable management fees and
administrative costs to each Property, consistent with the past practices of
Borrower, except that, for purposes of determining Net Operating Income, income
shall not (a) include any items reasonably deemed by Administrative Agent to be
of a non-recurring nature or (b) be reduced by depreciation or amortization.
"Net Price" means, with respect to the purchase and sale of any
Property, without duplication, (i) Cash and Cash Equivalents paid as
consideration for such purchase or sale (after adjusting for the proration of
taxes, assessments, utility and security deposits and other items prorated or
adjusted) plus (ii) the principal amount of any note received or other deferred
payment to be made in connection with such purchase or sale (except as described
in clause (iv) below), plus (iii) the value of any other considerations
delivered in connection with such purchase or sale (as reasonably determined by
Administrative Agent), minus (only in the case of a sale) (iv) until actually
received, the value of any consideration deposited into escrow or subject to
disbursement or claim upon the occurrence of any event, minus (only in the case
of a sale), (v) the value of any consideration required to be paid to any Person
other than the Borrower and its Subsidiaries owning a beneficial interest in
such Property, minus (vi) reasonable costs of sale and taxes paid or payable in
connection with such purchase or sale.
"Net Present Value" shall mean, as to a specified or ascertainable
dollar amount, the present value, as of the date of calculation of any such
amount using a discount rate equal to the Base Rate in effect as of the date of
such calculation.
"Non-Recourse Indebtedness" means Indebtedness with respect to which
recourse is limited to (i) specific assets related to a particular Property or
group of Properties encumbered by a Lien securing such Indebtedness or (ii) any
Subsidiary (provided that if a Subsidiary is a partnership, there is no recourse
to Borrower or General Partner); provided, however, that personal recourse of
Borrower or General Partner for any such Indebtedness for fraud,
misrepresentation, misapplication of cash, waste, environmental claims and
liabilities and other circumstances customarily excluded by institutional
lenders from exculpation provisions and/or included in separate indemnification
agreements in non-recourse financing of real estate shall not, by itself,
prevent such Indebtedness from being characterized as Non-Recourse Indebtedness.
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"Notes" means the "Notes" as defined in the Original Loan Agreement,
and "Note" means any one of the "Notes."
"Notice of Interest Period Election" has the meaning set forth in
Section 2.14.
"Obligations" means all obligations, liabilities, indemnity obligations
and Indebtedness of every nature of the Borrower, from time to time owing to
Administrative Agent or any Bank under or in connection with this Agreement or
any other Loan Document.
"Occupancy Rate" with respect to any Real Property Asset, shall mean
the ratio of (a) apartment units in such Real Property Asset which are
physically occupied by tenants paying rent pursuant to a lease to (b) the number
of apartment units in such Real Property Asset, expressed as a percentage.
"Original Guarantor" means the Guarantor under the Original Guaranty.
"Original Guaranty" means the "Guaranty" as defined in the Original
Loan Agreement.
"Original Loan Agreement" has the meaning set forth in Section 2.1.
"Original Maturity Date" means November 19,1999.
"Other Indebtedness" means all Indebtedness other than the Obligations.
"Parent" means, with respect to any Bank, any Person controlling such
Bank.
"Participant" has the meaning set forth in Section 9.6(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ---- ERISA.
"Permitted Liens" means:
a. liens for Taxes, assessments or other governmental charges
not yet due and payable or which are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted in
accordance with the terms hereof;
b. statutory liens of carriers, warehousemen, mechanics,
materialmen and other similar liens imposed by law, which are incurred
in the ordinary course of business for sums not more than sixty (60)
days delinquent or which are being contested in good faith in
accordance with the terms hereof;
c. deposits made in the ordinary course of business to secure
liabilities to insurance carriers;
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d. liens for purchase money obligations for equipment;
provided that (i) the Indebtedness secured by any such Lien does not
exceed the purchase price of such equipment, and (ii) any such Lien
encumbers only the asset so purchased and the proceeds upon sale,
disposition, loss or destruction thereof;
e. easements, rights-of-way, zoning restrictions, other
similar charges or encumbrances and all other items listed on Schedule
B to Borrower's owner's title insurance policies, except in connection
with any Indebtedness, for any of Borrower's Real Property Assets, so
long as the foregoing do not interfere in any material respect with the
use or ordinary conduct of the business of Borrower and do not diminish
in any material respect the value of the Property to which it is
attached or for which it is listed;
f. liens and judgments which have been or will be bonded or
released of record within thirty (30) days after the date such Lien or
judgment is entered or filed against General Partner, Borrower, or any
Subsidiary;
g. liens on Property of the Borrower or its Subsidiaries
(other than Qualifying Unencumbered Property) securing Indebtedness
which may be incurred or remain outstanding without resulting in an
Event of Default hereunder; and
h. assessment or community facilities district indebtedness,
in each case not then in default, building restrictions, zoning laws
and the like, and residential leases entered into in the ordinary
course of business.
"Person" means an individual, a corporation, a partnership, joint
venture, limited liability company, an association, a trust or any other entity
or organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and either (i) is
maintained, or contributed to, by any member of the ERISA Group for employees of
any member of the ERISA Group or (ii) has at any time within the preceding five
years been maintained, or contributed to, by any Person which was at such time a
member of the ERISA Group for employees of any Person which was at such time a
member of the ERISA Group.
"Property" means, with respect to any Person, any real or personal
property, building, facility, structure, equipment or unit, or other asset owned
by such Person.
"Qualifying Unencumbered Property" means, as of the Initial Closing
Date, the Real Property Assets set forth on Schedule 4.17 hereto (the "Initial
Qualifying Unencumbered Properties") and thereafter any other Real Property
Assets (without duplication) as designated by Borrower from time to time;
provided, however that each such Real Property Asset, including the Initial
Qualifying Unencumbered Property, must: (v) be a Real Property Asset upon which
an apartment project and related improvements has been, or is being,
constructed; (w) be wholly-owned (directly or beneficially) by Borrower; (x) not
be subject (nor may any equity interests in such Property be subject) to a Lien
(other than Permitted Liens) which secures Indebtedness of any Person; (y) not
be subject (nor may any equity interests in such Property be
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subject) to any covenant, condition, or other restriction which prohibits the
creation or assumption of any Lien upon such Real Property Asset; and (z) to the
best knowledge of Borrower, not have Materials of Environmental Concern located
on, under or above such Real Property Asset, which are reasonably expected,
pursuant to Section 5.15, to involve an expenditure of Significant Environmental
Cost. The Borrower may designate, in its sole discretion and at any time, the
Real Property Assets which satisfy the requirements set forth herein and are
thus Qualifying Unencumbered Properties. If, at any time, a Real Property Asset
does not satisfy the requirements of subclauses (v) through (z) above, then it
shall not be a Qualifying Unencumbered Property.
"Rating Agencies" means, collectively, S&P, ▇▇▇▇▇'▇ and Fitch; other
nationally recognized rating agencies shall be "Rating Agencies" following
approval thereof by the Administrative Agent.
"Real Property Asset(s)" means as of any time, the real property
asset(s) owned directly or indirectly by the Borrower and the Consolidated
Subsidiaries at such time.
"Recourse Debt" shall mean Indebtedness that is not Non-Recourse
Indebtedness.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having at least sixty-six and
two thirds percent (66 2/3%) of the Aggregate Commitments, but in no event less
than two (2) Banks. "Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any Capital Stock of any
Borrower Party now or hereafter outstanding, except (a) a dividend or other
distribution payable solely in shares or equivalents of the same class of
Capital Stock and (b) the issuance of equity interests upon the exercise of
outstanding warrants, options or other rights, or (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any Capital Stock of any Borrower Party now or
hereafter outstanding.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor thereto.
"Second Extended Maturity Date" means November 17, 2000.
"Secured Debt" means Indebtedness, the payment of which is secured by a
Lien on any Property owned or leased by General Partner, Borrower, or any
Subsidiary.
"Securities" means any stock, partnership interests, shares, shares of
beneficial interest, voting trust certificates, bonds, debentures, notes or
other evidences of indebtedness, secured or unsecured, convertible, subordinated
or otherwise, or in general any instruments commonly known as "securities," or
any certificates of interest, shares, or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire any of the foregoing, but shall not include any evidence of
the obligations.
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"Series A Preferred Securities" means the 8 1/4% Series A REIT Trust
Originated Preferred Securities sold by IAC Capital Trust, a Delaware business
trust.
"Series B Preferred Securities" means the Series B Preferred Limited
Partner Units issued by Borrower pursuant to the Designation Instrument for such
Series B Preferred Limited Partner Units.
"Significant Environmental Costs" means, as to any Real Property Asset,
Estimated Environmental Costs determined pursuant to Section 5.15 hereof, to
exceed one and one-half percent (1.5%) of (i) the Gross Asset Value of such Real
Property Asset in the case of a Real Property Asset that has been fully
constructed, or (ii) the sum of land cost (at the lower of cost or fair market
value) plus Borrower's estimated construction cost in the case of any other Real
Property Asset.
"Stabilized Asset" means any Qualifying Unencumbered Property which,
while owned by Borrower achieved (i) an average Occupancy Rate greater than or
equal to 85% during a calendar month and (ii) an Occupancy Rate of at least 85%
on the last day of such month. As used herein, "Stabilized Asset" means any
Qualifying Unencumbered Property which, while owned by Borrower, at one time
satisfied the foregoing requirements, regardless of whether such Property
subsequently fails to maintain such Occupancy Rates.
"Solvent" means, with respect to any Person, that the fair saleable
value of such Person's assets exceeds the Indebtedness of such Person.
"Subsidiary" means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by the Borrower.
"Taxes" means all federal, state, local and foreign income and gross
receipts taxes.
"Termination Event" shall mean (i) a "reportable event", as such term
is described in Section 4043 of ERISA (other than a "reportable event" not
subject to the provision for 30-day notice to the PBGC), or an event described
in Section 4062(e) of ERISA, (ii) the withdrawal by any member of the ERISA
Group from a Multiple Employer Plan during a plan year in which it is a
"substantial employer" (as defined in Section 4001 (a)(2) of ERISA), or the
incurrence of liability by any member of the ERISA Group under Section 4064 of
ERISA upon the termination of a Multiple Employer Plan, (iii) the filing of a
notice of intent to terminate any Plan under Section 4041 of ERISA, other than
in a standard termination within the meaning of Section 4041 of ERISA, or the
treatment of a Plan amendment as a distress termination under Section 4041 of
ERISA, (iv) the institution by the PBGC of proceedings to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or cause a trustee to be appointed to administer, any Plan or (v) any other
event or condition that might reasonably constitute grounds for the termination
of, or the appointment of a trustee to administer, any Plan or the imposition of
any liability or encumbrance or Lien on the Real Property Assets or any member
of the ERISA Group under ERISA.
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"TIC" means The Irvine Company, a Delaware corporation.
"TICALLC" means TIC Acquisition LLC, a Delaware limited liability
company.
"Total Liabilities" means, as of the date of determination and without
duplication, all Indebtedness of General Partner (calculated as provided in
Section 1.2), on a consolidated basis, plus Borrower's Share of all Indebtedness
of Investment Affiliates for which there is no recourse to General Partner or
Borrower (or any Property thereof) plus the actual or potential liability of
General Partner, Borrower or any Subsidiary for any Indebtedness of Investment
Affiliates that is recourse to General Partner or Borrower (or Property thereof)
plus accounts payable incurred in the ordinary course of business, plus all
other items which, in accordance with GAAP, would be included as liabilities on
the liability side of the balance sheet of such Person.
"Treasury Rate" means, as of any date, a rate equal to the annual yield
to maturity on the U.S. Treasury Constant Maturity Series with a ten year
maturity, as such yield is reported in Federal Reserve Statistical Release H. 15
-- Selected Interest Rates, published most recently prior to the date the
applicable Treasury Rate is being determined. Such yield shall be determined by
straight line linear interpolation between the yields reported in Release H. 15,
if necessary. In the event Release H. 15 is no longer published, the
Administrative Agent shall select, in its reasonable discretion, an alternate
basis for the determination of Treasury yield for U.S. Treasury Constant
Maturity Series with ten year maturities.
"Unconsolidated Joint Venture" means (i) any Joint Venture of Borrower
or any Consolidated Subsidiary in which Borrower or such Consolidated Subsidiary
holds any Capital Stock but which would not be combined with Borrower or such
Consolidated Subsidiary in the consolidated financial statements of Borrower in
accordance with GAAP, and (ii) any Investment of Borrower or any Consolidated
Subsidiary in any Person that is not a Joint Venture.
"Unencumbered Asset Pool Value" means, without duplication, the sum of
the following with respect to Qualifying Unencumbered Properties:
(i) the Net Price of any Acquired Asset that was acquired
(directly or indirectly) by the Borrower during the most recent Fiscal
Quarter; plus
(ii) the aggregate Unencumbered Net Operating Income for the
three (3) calendar months most recently ended multiplied by four (4)
and divided by the FMV Cap Rate with respect to (v) any Acquired
Stabilized Asset that was acquired (directly or indirectly) by the
Borrower during one of the four (4) consecutive Fiscal Quarters most
recently ended (other than the most recent Fiscal Quarter), (w) any
Acquired Asset which was not an Acquired Stabilized Asset and which has
not become a Stabilized Asset during one of the four (4) consecutive
Fiscal Quarters most recently ended, (x) any Acquired Asset which was
not an Acquired Stabilized Asset but which has become a Stabilized
Asset during one of the four (4) consecutive Fiscal Quarters most
recently ended, (y) any Qualifying Unencumbered Property which became a
Stabilized Asset during the four (4) consecutive Fiscal Quarters most
recently ended, and (z) any Qualifying Unencumbered Property which is
not a Stabilized Asset (provided, however, that the Unencumbered Asset
Pool Value attributable to the Qualifying Unencumbered Properties
included in subclauses (w) and (z) above, together with Acquired Assets
in (i) above which were not Acquired Stabilized Assets, may not exceed
twenty-five percent (25%) of the aggregate Unencumbered Asset Pool
Value); and
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(iii) the aggregate Unencumbered Net Operating Income for the
four (4) consecutive Fiscal Quarters most recently ended divided by the
FMV Cap Rate with respect to (x) any Acquired Stabilized Asset which
has been owned (directly or beneficially) by the Borrower for more than
four (4) consecutive Fiscal Quarters and which is a Qualifying
Unencumbered Property, and (y) any Qualifying Unencumbered Property
which became a Stabilized Asset prior to the beginning of the four (4)
consecutive Fiscal Quarters most recently ended and which has been
owned (directly or indirectly) by the Borrower for more than four (4)
consecutive Fiscal Quarters. Notwithstanding the foregoing, in the
event that Borrower or Administrative Agent has determined that there
is a Significant Environmental Cost with respect to any Real Property
Asset referred to in this definition (and only for so long as Borrower
or Administrative Agent has made such determination), then the value
attributed to such asset shall be reduced, but not below zero, by the
amount of such Significant Environmental Cost.
"Unencumbered Net Operating Income" means for any period for all
Qualifying Unencumbered Properties owned (directly or beneficially) by the
Borrower during the applicable period, Net Operating Income from each such
Qualifying Unencumbered Property.
"United States" means the United States of America, including the fifty
states and the District of Columbia.
"Unsecured Debt" means Indebtedness of Borrower which is not Secured
Debt, including without limitation the aggregate amount of all Loans outstanding
hereunder.
"Unsecured Interest Expense" means Interest Expense other than Interest
Expense payable in respect of Secured Debt.
"Unused Commitments" shall mean an amount equal to all unadvanced funds
(other than unadvanced funds in connection with any construction loan) which any
third party is obligated to advance to Borrower or another Person or otherwise
pursuant to any loan document, written instrument or otherwise.
"▇▇▇▇▇ Fargo" means ▇▇▇▇▇ Fargo Bank, National Association, in its
individual capacity.
SECTION 1.2 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP
applied on a basis consistent (except for changes concurred in by Ernst & Young
LLP) with the most recent audited consolidated financial statements of the
Borrower and its Consolidated Subsidiaries delivered to the Administrative
Agent; provided that for purposes of references to the financial results and
information of "General Partner, on a consolidated basis," General Partner shall
be deemed to own one hundred percent (100%) of the partnership interests in
Borrower; and provided further that, if the Borrower notifies the Administrative
Agent that the Borrower wishes to amend any
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covenant in Article V to eliminate the effect of any change in GAAP on the
operation of such covenant (or if the Administrative Agent notifies the Borrower
that the Required Banks wish to amend Article V for such purpose), then the
Borrower's compliance with such covenant shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became effective,
until either such notice is withdrawn or such covenant is amended in a manner
reasonably satisfactory to the Borrower and the Required Banks.
SECTION 1.3 Borrowings. The term "Borrowing" denotes the aggregation of
Loans of one or more Banks made to the Borrower pursuant to Article 2 on the
same date. In the event that the First Option To Extend and/or the Second Option
To Extend are exercised in accordance with the terms of Sections 2.7 and/or 2.8
hereof, respectively, the continuation of the Loans into the applicable
extension term shall be deemed to constitute a new Borrowing as of the first day
of the Interest Period applicable to such extension term (notwithstanding the
fact that no new Loans are actually being funded). The term "LIBOR Borrowing"
shall mean a Borrowing comprised of LIBOR Loans. The term "Base Rate Borrowing"
shall mean a Borrowing comprised of Base Rate Loans.
ARTICLE 2
THE CREDITS
SECTION 2.1 Loans. By and subject to the terms and conditions set forth
in this Agreement, each Bank severally agrees to lend to the Borrower and
Borrower agrees to borrow from each Bank on the Closing Date an amount equal to
such Bank's Commitment. Notwithstanding anything to the contrary herein, no
Bank, subsequent to funding its Loan in the amount of its Commitment, shall have
any further commitment or obligation to fund any Loans under this Agreement and
in no event shall any Bank be obligated to lend an amount exceeding such Bank's
Commitment. Effective as of the Closing Date, the outstanding principal balance
of that certain term loan made by the Banks to Borrower pursuant to that certain
Unsecured Loan Agreement dated November 20, 1998, by and among Borrower and the
Banks (the "Original Loan Agreement") shall be deemed to be the outstanding
principal balance of the Loan and all accrued but unpaid interest under the
Original Loan Agreement, if any, shall be deemed to be accrued interest
hereunder.
SECTION 2.2 Funding of Loans.
(a) Not later than 12:00 Noon (San Francisco time) on the Closing Date,
each Bank shall make available an amount equal to its Commitment in Federal
funds immediately available in San Francisco, to the Administrative Agent at its
address referred to in Section 9. 1.
(b) Unless the Administrative Agent shall have received notice from a
Bank prior to the Closing Date that such Bank will not make available to the
Administrative Agent such Bank's share of the initial Borrowing, the
Administrative Agent may assume that such Bank has made such share available to
the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) of this Section 2.2 and the Administrative Agent may, in reliance
upon such assumption, but shall not be obligated to, make available to the
Borrower on such date a corresponding amount on behalf of such Bank. If and to
the extent that such Bank
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shall not have so made such share available to the Administrative Agent, such
Bank and the Borrower severally agree to repay to the Administrative Agent
forthwith on demand, and in the case of the Borrower two (2) Domestic Business
Days after demand, such corresponding amount together with interest thereon, for
each day from the date such amount is made available to the Borrower until the
date such amount is repaid to the Administrative Agent, at (i) in the case of
the Borrower, a rate per annum. equal to the interest rate applicable thereto
pursuant to Section 2.4 and (ii) in the case of such Bank, the Federal Funds
Rate. If such Bank shall repay to the Administrative Agent such corresponding
amount, such amount so repaid shall constitute such Bank's Loan included in such
Borrowing for purposes of this Agreement.
SECTION 2.3 Notes.
(a) The Loan of each Bank shall be evidenced by such Bank's Note.
(b) Reserved.
(c) The Loans shall mature, and the principal amount thereof shall be
due and payable, on the Maturity Date.
SECTION 2.4 Interest Rates.
(a) Each Base Rate Loan shall bear interest on the outstanding
principal amount hereof, or each day from the date such Loan is made until the
date it is repaid or converted into a LIBOR Loan pursuant to Section 2.14 or at
the Maturity Date, at a rate per annum, equal to the Base Rate plus the
Applicable Margin for Base Rate Loans for such day. Such interest shall be
payable for each Interest Period on the first day of each calendar month.
(b) Each LIBOR Loan shall bear interest on the outstanding principal
amount thereof, for each day during the Interest Period applicable thereto, at a
rate per annum equal to the sum of the Applicable Margin for LIBOR Loans for
such day plus the Adjusted London Interbank Offered Rate applicable to such
Interest Period. Such interest shall be payable for each Interest Period on the
first day of each calendar month.
(c) In the event that, and for so long as, any Event of Default shall
have occurred and be continuing, the outstanding principal amount of the Loans,
and, to the extent permitted by applicable law, overdue interest in respect of
all Loans, shall bear interest at the Default Rate.
(d) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give prompt
notice to the Borrower and the Banks of each rate of interest so determined, and
its determination thereof shall be conclusive in the absence of demonstrable
error.
SECTION 2.5 Intentionally Omitted.
SECTION 2.6 Maturity Date. The entire principal balance of the Loans
(together with accrued and unpaid interest thereon) and all other Obligations
hereunder shall be due and payable on the Maturity Date. All payments due to the
Administrative Agent under this Agreement, whether at the Maturity Date or
otherwise, shall be paid in immediately available funds.
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SECTION 2.7 First Option To Extend.
The Borrower shall have the option to extend the term of the Loans from
the Maturity Date (for purposes of this Section, "Original Maturity Date"), to
the First Extended Maturity Date, upon satisfaction of each of the following
conditions precedent:
(a) The Borrower shall provide the Administrative Agent with written
notice of the Borrower's request to exercise the First Option to Extend not more
than ninety (90) days but not less than thirty (30) days prior to the Original
Maturity Date;
(b) As of the date of the Borrower's delivery of notice of request to
exercise the First Option to Extend, and as of the Original Maturity Date, no
Event of Default shall have occurred and be continuing, and the Borrower shall
so certify in writing; and
(c) On or before the Original Maturity Date, the Borrower shall pay to
the Administrative Agent on behalf of the Banks an extension fee in the amount
of One Hundred Fifty Thousand Dollars ($150,000.00).
SECTION 2.8 Second Option To Extend.
The Borrower shall have the option to extend the term of the Loans from
the Maturity Date (for purposes of this Section, "First Extended Maturity
Date"), to the Second Extended Maturity Date, upon satisfaction of each of the
following conditions precedent:
(a) The Borrower shall provide the Administrative Agent with written
notice of the Borrower's request to exercise the Second Option to Extend not
more than ninety (90) days but not less than thirty (30) days prior to the First
Extended Maturity Date;
(b) As of the date of the Borrower's delivery of notice of request to
exercise the Second Option to Extend, and as of the First Extended Maturity
Date, no Event of Default shall have occurred and be continuing, and the
Borrower shall so certify in writing;
(c) On or before the First Extended Maturity Date, the Borrower shall
pay to the Administrative Agent on behalf of the Banks an extension fee in the
amount of One Hundred Fifty Thousand Dollars ($150,000.00); and
(d) The Borrower shall have previously exercised the First Option to
Extend in accordance with the terms of Section 2.7 hereof.
SECTION 2.9 Lockout; Optional Prepayments.
(a) During the Initial Term, the Borrower shall have no right to prepay
all or any portion of the principal amount of any Loan (excluding payment in
full on the Maturity Date). After the Initial Term, if the Maturity Date is
extended as herein provided, the Borrower may prepay the Loans in accordance
with Sections 2.9(b) and (c) below.
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(b) The Borrower may, upon at least one (1) Domestic Business Day's
notice to the Administrative Agent, prepay any Base Rate Loans, in whole or in
part at any time, or from time to time in part in amounts aggregating Five
Hundred Thousand Dollars ($500,000) or any larger multiple of One Hundred
Thousand Dollars ($100,000), by paying the principal amount thereof. Each such
optional prepayment shall be applied to prepay ratably the Loans of the several
Banks included in such Borrowing.
(c) Except as provided in Article VIII and except with respect to any
LIBOR Loan which has been converted to a Base Rate Loan pursuant to Sections
8.1, 8.2 or 8.5 hereof, the Borrower may not prepay all or any portion of the
principal amount of any LIBOR Loan prior to the end of the Interest Period
applicable thereto unless the Borrower shall also pay any applicable expenses
pursuant to Section 2.11. The Borrower shall provide at least three (3) LIBOR
Business Days' notice to the Administrative Agent prior to any such optional
prepayment. Each such optional prepayment shall be in the amounts set forth in
Section 2.9(b) above, except that any LIBOR Loan which has been converted to a
Base Rate Loan pursuant to Sections 8.1, 8.2 or 8.5 hereof may be prepaid
without ratable payment of other Loans which have not been so converted.
(d) In no event shall any amounts prepaid be reborrowed.
SECTION 2.10 General Provisions as to Payments.
(a) The Borrower shall make each payment of interest and principal on
the Loans and of fees hereunder, not later than 10:00 A.M. (San Francisco time)
on the date when due, in Federal or other funds immediately available in San
Francisco, to the Administrative Agent at its address referred to in Section 9.
1. The Administrative Agent will promptly (and in any event within one (1)
Domestic Business Day after receipt thereof) distribute to each Bank its ratable
share of each such payment received by the Administrative Agent for the account
of the Banks. If and to the extent that the Administrative Agent shall receive
any such payment for the account of the Banks on or before 10:00 A.M. (San
Francisco time) on any Domestic Business Day, and Administrative Agent shall not
have distributed to any Bank its applicable share of such payment on such
Domestic Business Day, Administrative Agent shall distribute such amount to such
Bank together with interest thereon, for each day from the date such amount
should have been distributed to such Bank until the date Administrative Agent
distributes such amount to such Bank, at the Federal Funds Rate. Whenever any
payment of principal of, or interest on the Base Rate Loans or of fees shall be
due on a day which is not a Domestic Business Day, the date for payment thereof
shall be extended to the next succeeding Domestic Business Day. Whenever any
payment of principal of, or interest on, the LIBOR Loans shall be due on a day
which is not a LIBOR Business Day, the date for payment thereof shall be
extended to the next succeeding LIBOR Business Day unless such LIBOR Business
Day falls in another calendar month, in which case the date for payment thereof
shall be the next preceding LIBOR Business Day. If the date for any payment of
principal is extended by operation of law or otherwise, interest thereon shall
be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the
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Borrower has made such payment in full to the Administrative Agent on such date
and the Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to the amount then due
such Bank. If and to the extent that the Borrower shall not have so made such
payment, each Bank shall repay to the Administrative Agent forthwith on demand
such amount distributed to such Bank together with interest thereon, for each
day from the date such amount is distributed to such Bank until the date such
Bank repays such amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.11 Funding Losses. If the Borrower makes any payment of
principal with respect to any LIBOR Loan (pursuant to Articles 2, 6 or 8 or
otherwise) on any day other than the last day of the Interest Period applicable
thereto, or if the Borrower shall deliver a Notice of Interest Period Election
specifying that a LIBOR Loan shall be converted on a date other than the last
day of the then current Interest Period applicable thereto, the Borrower shall
reimburse each Bank within fifteen (15) days after certification of such Bank of
such loss or expense (which shall be delivered by each such Bank to
Administrative Agent for delivery to Borrower) for any resulting loss or expense
incurred by it (or by an existing Participant in the related Loan), including
(without limitation) any loss incurred in obtaining, liquidating or employing
deposits from third parties, but excluding loss of margin for the period after
any such payment, provided that such Bank shall have delivered to Administrative
Agent and Administrative Agent shall have delivered to the Borrower a
certification as to the amount of such loss or expense, which certification
shall set forth in reasonable detail the basis for and calculation of such loss
or expense and shall be conclusive in the absence of demonstrable error.
SECTION 2.12 Computation of Interest and Fees. All interest and fees
shall be computed on the basis of a year of 360 days and paid for the actual
number of days elapsed (including the first day but excluding the last day).
SECTION 2.13 Use of Proceeds. The Borrower shall use the proceeds of
the Loans for general corporate purposes, including, without limitation, the
acquisition of multifamily apartment projects and real property to be used in
connection with construction, management, development, acquisition and operation
of multifamily apartment projects and for general working capital needs of the
Borrower.
SECTION 2.14 Method of Electing Interest Rates. (a) The Loans included
in the initial Borrowing shall bear interest initially at the interest rate(s)
applicable thereto pursuant to Section 2.4 hereof during the Interest Period(s)
specified by the Borrower in the initial Notice of Interest Period Election.
Thereafter, the Borrower may from time to time elect to change or continue the
Interest Period(s) applicable to the LIBOR Loans, or the applicable portions
thereof (subject in each case to the provisions of Article VIII), as follows:
(i) if such Loans are LIBOR Loans, the Borrower may elect to continue,
all or any portion of such Loans as LIBOR Loans for an additional Interest
Period or additional Interest Periods, in each case effective on the last day of
the then current Interest Period applicable to such Loans, or on such other date
designated by Borrower in the Notice of Interest Period Election provided
Borrower shall pay any losses pursuant to Section 2.11.
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Each such election shall be made by delivering a notice in the form of
Exhibit "C" (a "Notice of Interest Period Election") to the Administrative Agent
by 11:00 A.M. (San Francisco time) at least three (3) LIBOR Business Days before
the continuation is to be effective. A Notice of Interest Period Election may,
if it so specifies, apply to only a portion of the aggregate principal amount of
the LIBOR Loans; provided that (i) such portion is allocated ratably among all
LIBOR Loans, (ii) there shall be no more than five (5) LIBOR fixings outstanding
at any time, and (iii) no Interest Period shall extend beyond the Maturity Date.
(b) Each Notice of Interest Period Election shall specify:
(i) the portion of the LIBOR Loans to which such notice
applies;
(ii) the date on which the continuation is to be effective,
which shall comply with the terms of subsection (a) above; and
(iii) if such Loans are to be continued as LIBOR Loans for an
additional Interest Period, the duration of such additional Interest Period,
which shall comply with the terms of subsection (a) above.
Each Interest Period specified in a Notice of Interest Period Election shall
comply with the provisions of the definition of Interest Period; provided that
the Borrower may request an additional Interest Period of less than one (1)
month if and only if all of the Banks, in their sole and absolute discretion,
approve of such request.
(c) Upon receipt of a Notice of Interest Period Election from the
Borrower pursuant to subsection (a) above, the Administrative Agent shall notify
each Bank the same day as it receives such Notice of Interest Period Election of
the contents thereof and the Interest Periods (if different from those requested
by the Borrower) and such notice shall not thereafter be revocable by the
Borrower. If the Borrower fails to deliver a timely Notice of Interest Period
Election to the Administrative Agent for the LIBOR Loans (or the relevant
portions thereof), such Loans (or the relevant portions thereof) shall be
continued as LIBOR Loans on the last day of the then current Interest Period
applicable thereto for an additional Interest Period of one (1) month; provided,
however, that if such additional Interest Period would extend beyond the
Maturity Date, then such Loans (or the relevant portions thereof) shall be
converted into Base Rate Loans on the last day of the then current Interest
Period applicable thereto. Within one LIBOR Business Day after receipt of a
Notice of Interest Period Election from the Borrower pursuant to subsection (a)
above, the Administrative Agent shall notify each Bank of the interest rates
determined pursuant thereto.
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ARTICLE 3
CONDITIONS
SECTION 3.1 Closing. The closing hereunder shall occur on the date when
each of the following conditions is satisfied (or waived by the Administrative
Agent and the Banks) (provided that if not all of the conditions are satisfied
or waived until after 9:00 A.M. P.S.T. on a particular date, then the closing
hereunder shall occur on the LIBOR Business Day next succeeding such date) (the
"Closing Date"):
(a) the Merger Date shall have occurred and the Administrative
Agent shall have received such evidence of the occurrence of the Merger Date as
Administrative Agent may reasonably require;
(b) the Borrower, the Administrative Agent and each of the
Banks shall have executed and delivered to the Borrower and the Administrative
Agent a duly executed original of this Agreement;
(c) the General Partner shall have executed and delivered to
the Administrative Agent a duly executed original of the Guaranty;
(d) the Administrative Agent shall have received an opinion of
O'Melveny & ▇▇▇▇▇, LLP, counsel for the Borrower and the General Partner,
acceptable to the Administrative Agent, and its counsel;
(e) the Administrative Agent shall have received all documents
the Administrative Agent may reasonably request relating to the existence of the
Borrower and General Partner, the authority for and the validity of this
Agreement and the other Loan Documents, and any other matters relevant hereto,
all in form and substance satisfactory to the Administrative Agent. Such
documentation shall include, without limitation, the agreement of limited
partnership of the Borrower, as well as the certificate of limited partnership
of the Borrower, both as amended, modified or supplemented to the Closing Date,
certified to be true, correct and complete by a senior officer of the Borrower
as of a date not more than ten (10) days prior to the Closing Date, together
with a long-form certificate of good standing as to the Borrower from the
Secretary of State (or the equivalent thereof) of Delaware, a good standing
certificate issued by the Secretary of State of the State of California, each to
be dated not more than thirty (30) days prior to the Closing Date, as well as
the certificate of formation and limited liability company agreement of General
Partner, as amended, modified or supplemented prior to the closing date,
certified to be true, correct and complete by the managing member of General
Partner as of a date not more than ten (10) days prior to the Closing Date,
together with a good standing certificate as to General Partner from the
Secretary of State (or equivalent thereof) of Delaware, to be dated not more
than thirty (30) days prior to the Closing Date;
(f) the Administrative Agent shall have received all
certificates, agreements and other documents and papers referred to in this
Section 3. 1, unless otherwise specified, in sufficient counterparts,
satisfactory in form and substance to the Administrative Agent in its sole
discretion;
(g) the Borrower shall have taken all actions required to
authorize the execution and delivery of this Agreement and the other Loan
Documents and the performance thereof by the Borrower;
(h) the Administrative Agent shall be satisfied in its
reasonable discretion that none of the Borrower, General Partner nor any
Consolidated Subsidiary is subject to any present or contingent environmental
liability which could have a Material Adverse Effect;
(i) intentionally omitted.
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(j) the Administrative Agent shall have received copies of all
consents, licenses and approvals, if any, required in connection with the
execution, delivery and performance by the Borrower, General Partner and the
applicable Consolidated Subsidiaries, and the validity and enforceability, of
the Loan Documents, or in connection with any of the transactions contemplated
thereby, and such consents, licenses and approvals shall be in full force and
effect;
(k) the Administrative Agent shall have received the audited
financial statements of the Borrower, its Consolidated Subsidiaries and IAC for
the Fiscal Year ending December 31, 1998; and
(l) no Default or Event of Default shall have occurred.
SECTION 3.2 Borrowings. The obligation of any Bank to make a Loan on
the Closing Date in the amount of its Commitment is subject to the satisfaction
of each of the following conditions:
(a) each of the conditions in Section 3.1 shall have been
satisfied (or waived by the Administrative Agent and the Banks) on or before
9:00 A.M. P.S.T. on the Closing Date;
(b) the representations and warranties of the Borrower
contained in this Agreement (other than representations and warranties that
expressly speak as of a different date) shall be true and correct in all
material respects on and as of the Closing Date both before and after giving
effect to the making of such Loans;
(c) no law or regulation shall have been adopted, no order,
judgment or decree of any governmental authority shall have been issued, and no
litigation shall be pending, which does or seeks to enjoin, prohibit or
restrain, the making or repayment of the Loans or the consummation of the
transactions contemplated by this Agreement;
(d) immediately before and after such Borrowing, no Default or
Event of Default shall have occurred and be continuing both before and after
giving effect to the making of such Loans; and
(e) the Borrower shall have delivered to the Administrative
Agent the initial Notice of Interest Period Election at least two (2) LIBOR
Business Days prior to the Closing Date.
Each Borrowing hereunder (including, without limitation, any deemed Borrowing
upon an extension of the term hereof) shall be deemed to be a representation and
warranty by the Borrower on the date of such Borrowing as to the facts specified
in clauses (a), (b) and (c) of this section, except as otherwise disclosed in
writing by Borrower to the Banks.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and each of the other Banks
which is or may become a party to this Agreement to make the Loans, the Borrower
makes the following representations and warranties as of the Closing Date. Such
representations and warranties shall survive the effectiveness of this
Agreement, the execution and delivery of the other Loan Documents and the making
of the Loans.
SECTION 4.1 Existence and Power. The Borrower is a limited partnership,
duly formed and validly existing as a limited partnership under the laws of the
State of Delaware and has all powers and all material governmental licenses,
authorizations, consents and approvals required to own its property and assets
and carry on its business as now conducted or as it presently proposes to
conduct and has been duly qualified and is in good standing in the State of
California and in every other jurisdiction in which the failure to be so
qualified and/or in good standing is likely to have a Material Adverse Effect.
General Partner is a limited liability company, duly formed, validly existing
and in good standing as a limited liability company under the laws of the State
of Delaware and has all powers and all material governmental licenses,
authorizations, consents and approvals required to own its property and assets
and carry on its business as now conducted or as it presently proposes to
conduct and has been duly qualified and is in good standing in every
jurisdiction in which the failure to be so qualified and/or in good standing is
reasonably expected to have a Material Adverse Effect.
SECTION 4.2 Power and Authority. The Borrower has the partnership power
and authority to execute, deliver and carry out the terms and provisions of each
of the Loan Documents to which it is a party and has taken all necessary
partnership action, if any, to authorize the execution and delivery on behalf of
the Borrower and the performance by the Borrower of such Loan Documents. The
Borrower has duly executed and delivered each Loan Document to which it is a
party in accordance with the terms of this Agreement, and each such Loan
Document constitutes the legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable insolvency, bankruptcy or other laws affecting creditors
rights generally, or general principles of equity, whether such enforceability
is considered in a proceeding in equity or at law. General Partner has the power
and authority to execute, deliver and carry out the terms and provisions of each
of the Loan Documents on behalf of the Borrower to which the Borrower is a party
and has taken all necessary action to authorize the execution and delivery on
behalf of the Borrower and the performance by the Borrower of such Loan
Documents.
SECTION 4.3 No Violation. Neither the execution, delivery or
performance by or on behalf of the Borrower of the Loan Documents to which it is
a party, nor compliance by the Borrower with the terms and provisions thereof
nor the consummation of the transactions contemplated by the Loan Documents, (i)
will contravene any applicable provision of any law, statute, rule, regulation,
order, writ, injunction or decree of any court or governmental instrumentality,
(ii) will conflict with or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien upon
any of the property or assets of the Borrower or any of its Consolidated
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, or
other agreement or other instrument to which the Borrower (or of any partnership
of which the Borrower is a partner) or any of its Consolidated Subsidiaries is a
party or by which it or any of its property or assets is bound or to which it is
subject, or (iii) will cause
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a default by the Borrower under any organizational document of any Person in
which the Borrower has an interest, or cause a default under the Borrower's
agreement or certificate of limited partnership, the consequences of any such
contravention, conflict, breach or default described in clauses (i), (ii) or
(iii) is reasonably expected to have a Material Adverse Effect, or result in or
require the creation or imposition of any Lien whatsoever upon any Property
(except as contemplated herein).
SECTION 4.4 Financial Information.
(a) The consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries, dated as of December 31, 1998, and the related consolidated
statements of Borrower's financial position for the Fiscal Year then ended,
reported on by Ernst & Young LLP, a copy of which has been delivered to each of
the Banks, fairly present, in conformity with GAAP, the consolidated financial
position of the Borrower and its Consolidated Subsidiaries as of such date and
their consolidated results of operations and cash flows for such Fiscal Year.
(b) Since December 31, 1998, (i) except as may have been disclosed in
writing to the Banks, nothing has occurred having a Material Adverse Effect, and
(ii) except as previously disclosed to the Banks, neither the Borrower nor
General Partner has incurred any material indebtedness or guaranty on or before
the Closing Date.
SECTION 4.5 Litigation. Except as previously disclosed by the Borrower
in writing to the Banks, there is no action, suit or proceeding pending against,
or to the knowledge of the Borrower threatened against or affecting, (i) the
Borrower, General Partner or any of their Consolidated Subsidiaries, (ii) the
Loan Documents or any of the transactions contemplated by the Loan Documents or
(iii) any of their assets, before any court or arbitrator or any governmental
body, agency or official in which there is a reasonable possibility of an
adverse decision which actions, suits or proceedings described in clauses (i),
(ii) or (iii) would, individually, or in the aggregate have a Material Adverse
Effect or which in any manner draws into question the validity of this Agreement
or the other Loan Documents.
SECTION 4.6 Compliance with ERISA.
(a) Except as set forth on Schedule 4.6 attached hereto, neither
Borrower nor General Partner is a member of any Plan or Multiemployer Plan or
any other Benefit Arrangement.
(b) The transactions contemplated by the Loan Documents will not
constitute a nonexempt prohibited transaction (as such term is defined in
Section 4975 of the Code or Section 406 of ERISA) which would, individually or
in the aggregate, have a Material Adverse Effect on Borrower or that could
subject the Administrative Agent or the Banks to any tax or penalty or
prohibited transactions imposed under Section 4975 of the Code or Section 502(i)
of ERISA.
SECTION 4.7 Environmental Matters. The Borrower conducts reviews of the
effect of Environmental Laws on the business, operations and properties of the
Borrower and its Consolidated Subsidiaries when necessary in the course of which
it identifies and evaluates associated liabilities and costs (including, without
limitation, any capital or operating expenditures required for clean-up or
closure of properties presently owned, any capital or operating
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expenditures required to achieve or maintain compliance with environmental
protection standards imposed by law or as a condition of any license, permit or
contract, any related constraints on operating activities, and any actual or
potential liabilities to third parties, including employees, and any related
costs and expenses). On the basis of this review, the Borrower has reasonably
concluded that no such associated liabilities and costs, including the costs of
compliance with Environmental Laws, (i) are, as of the date hereof, Significant
Environmental Costs, or (ii) would have a Material Adverse Effect on the
Borrower, General Partner and their Consolidated Subsidiaries.
SECTION 4.8 Taxes. United States Federal income tax returns of the
Borrower, General Partner and their Consolidated Subsidiaries have been prepared
and filed through the Fiscal Year ended December 31, 1997, and an extension has
been filed for the Fiscal Year ended December 31, 1998. The Borrower, General
Partner and their Consolidated Subsidiaries have filed all United States Federal
income tax returns and all other material tax returns which are required to be
filed by them and have paid all taxes due pursuant to such returns or pursuant
to any assessment received by the Borrower, General Partner or any Consolidated
Subsidiary, except such taxes, if any, as are reserved against in accordance
with GAAP, such taxes as are being contested in good faith by appropriate
proceedings or such taxes, the failure to make payment of which when due and
payable will not have, in the aggregate, a Material Adverse Effect. The charges,
accruals and reserves on the books of the Borrower, General Partner and their
Consolidated Subsidiaries in respect of taxes or other governmental charges are,
in the opinion of the Borrower, adequate.
SECTION 4.9 Full Disclosure. All factual information heretofore
prepared by the Borrower and furnished by the Borrower to the Administrative
Agent or any Bank for purposes of or in connection with this Agreement or any
transaction contemplated hereby or thereby is true and accurate in all material
respects as of the date as of which such information is stated or certified.
There is no fact known to the Borrower (other than matters of a general economic
nature) that has had or could reasonably be expected to have a Material Adverse
Effect and that has not been disclosed herein or in such other documents,
certificates or statements executed or delivered in connection herewith.
SECTION 4.10 Solvency. On the Closing Date and after giving effect to
the transactions contemplated by the Loan Documents occurring on the Closing
Date, the Borrower will be Solvent.
SECTION 4.11 Use of Proceeds, Margin Regulations. All proceeds of the
Loans will be used by the Borrower only in accordance with the provisions
hereof. No part of the proceeds of any Loan will be used by the Borrower to
purchase or carry any Margin Stock or to extend credit to others for the purpose
of purchasing or carrying any Margin Stock. Neither the making of any Loan nor
the use of the proceeds thereof will violate or be inconsistent with the
provisions of Regulations T, U or X of the Federal Reserve Board.
SECTION 4.12 Governmental Approvals. No order, consent, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to
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authorize, or is required in connection with the execution, delivery and
performance of any Loan Document or the consummation of any of the transactions
contemplated thereby other than those that have already been duly made or
obtained and remain in full force and effect or those which, if not made or
obtained, would not have a Material Adverse Effect.
SECTION 4.13 Investment Company Act, Public Utility Holding Company
Act. Neither the Borrower, General Partner nor any Consolidated Subsidiary is
(x) an "investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended,
(y) a "holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of either a "holding company" or a "subsidiary company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended, or (z)
subject to any other federal or state law or regulation which purports to
restrict or regulate its ability to borrow money.
SECTION 4.14 Principal Offices. As of the Closing Date, the principal
office, chief executive office and principal place of business of the Borrower
is ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 4.15 Intentionally Omitted
SECTION 4.16 Patents, Trademarks, etc. The Borrower has obtained and
holds in full force and effect all patents, trademarks, servicemarks, trade
names, copyrights and other such rights, free from burdensome restrictions,
which are necessary for the operation of its business as presently conducted,
the impairment of which is reasonably expected to have a Material Adverse
Effect.
SECTION 4.17 Qualifying Unencumbered Properties. Schedule 4.17 attached
hereto and made a part hereof sets forth all the Qualifying Unencumbered
Property owned by the Borrower, directly or indirectly, as of the Closing Date.
As of the Closing Date, all of the Properties set forth in Schedule 4.17 are
Qualifying Unencumbered Properties.
Borrower represents and warrants that, as of the Closing Date, the
Borrower has good and insurable fee title to the Qualifying Unencumbered
Property, free of all Liens other than Permitted Liens and that to its best
knowledge, except as disclosed in writing to the Administrative Agent in
connection with the extension of credit contemplated hereby or hereafter
disclosed in writing to the Administrative Agent from time to time, no Materials
of Environmental Concern are located on, under, over or about such real
property.
SECTION 4.18 No Default. As of the date hereof, no Event of Default or
Default exists under or with respect to any Indebtedness of the Borrower and the
Borrower is not in default in any material respect beyond any applicable grace
period under or with respect to any other material agreement, instrument or
undertaking to which it is a party or by which it or any of its property is
bound in any respect in any such case, the existence of which default is
reasonably expected to result in a Material Adverse Effect.
SECTION 4.19 Licenses, etc. The Borrower has obtained and does hold in
full force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditation, easements, rights of way and
other consents and approvals which are necessary for the operation of its
businesses as presently conducted, the absence of which is reasonably expected
to have a Material Adverse Effect.
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SECTION 4.20 Compliance With Law. The Borrower and each of the Real
Property Assets are in compliance with all laws, rules, regulations, orders,
judgments, writs and decrees, including, without limitation, all building and
zoning ordinances and codes, the failure to comply with which is reasonably
expected to have a Material Adverse Effect.
SECTION 4.21 No Burdensome Restrictions. Except as may have been
disclosed by the Borrower in writing to the Banks, Borrower is not a party to
any agreement or instrument or subject to any other obligation or any charter or
corporate or partnership restriction, as the case may be, which, individually or
in the aggregate, is reasonably expected to have a Material Adverse Effect.
SECTION 4.22 Brokers' Fees. The Borrower has not dealt with any broker
or finder with respect to the transactions contemplated by this Agreement or
otherwise in connection with this Agreement, and the Borrower has not done any
act, had any negotiations or conversation, or made any agreements or promises
which will in any way create or give rise to any obligation or liability for the
payment by the Borrower of any brokerage fee, charge, commission or other
compensation to any party with respect to the transactions contemplated by the
Loan Documents, other than the fees payable to the Administrative Agent and the
Banks, and certain other Persons as previously disclosed in writing to the
Administrative Agent.
SECTION 4.23 Labor Matters. As of the date hereof, there are no
collective bargaining agreements or Multiemployer Plans covering the employees
of the Borrower. As of the date hereof, the Borrower is not suffering any
strikes, walkouts, work stoppages or other material labor difficulty which are
reasonably expected to result in a Material Adverse Effect.
SECTION 4.24 Insurance. The Borrower currently maintains 100%
replacement cost insurance coverage (subject to customary deductibles) in
respect of each of the Real Property Assets, as well as commercial general
liability insurance (including "builders' risk" where applicable) against claims
for personal, and bodily injury and/or death, to one or more persons, or
property damage, as well as workers' compensation insurance, in each case with
respect to liability and casualty insurance with insurers having an A.M. Best
policyholders, rating of not less than A-VII (or such lesser rating satisfactory
to Administrative Agent in its reasonable discretion) in amounts that prudent
owner of assets such as the Real Property Assets would maintain.
SECTION 4.25 Organizational Documents. The documents delivered pursuant
to Section 3. 1 (e) constitute, as of the Closing Date, all of the material
organizational documents (together with all amendments and modifications
thereof) of the Borrower. The Borrower represents that it has delivered to the
Administrative Agent true, correct and complete copies of each of the documents
set forth in Section 3. 1 (e).
SECTION 4.26 Year 2000 Compliance. The Borrower and General Partner
have each conducted a comprehensive review and assessment of the Borrower's and
General Partner's computer applications and made inquiry of the Borrower's and
General Partner's key
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suppliers, vendors and customers with respect to the "year 2000 problem" (that
is the risk that computer applications may not be able to properly perform
date-sensitive functions after December 31, 1999) and, based on that review and
inquiry, neither the Borrower nor General Partner believes the year 2000 problem
will result in a material adverse change in the Borrower's or General Partner's
ability to repay the Loans.
ARTICLE 5
AFFIRMATIVE AND NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as any Obligations
remain unpaid:
SECTION 5.1 Financial Information. The Borrower will deliver to
Administrative Agent (with sufficient copies to distribute to all of the Banks):
(a) as soon as available, but in no event later than ninety-five (95)
days after the end of each Fiscal Year of the Borrower, an audited consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of
such Fiscal Year and the related consolidated statements of Borrower's
operations and consolidated statements of Borrower's cash flow for such Fiscal
Year setting forth in each case in comparative form the figure for the previous
Fiscal Year, all reported on by Ernst & Young LLP or other independent public
accountants of nationally recognized standing;
(b) as soon as available, but in no event later than sixty (60) days
after the end of each of the first three Fiscal Quarters of the Borrower, (i) a
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of the end of such quarter and the related consolidated statements of Borrower's
operations and consolidated statements of Borrower's cash flow for such Fiscal
Quarter and for the portion of the Borrower's Fiscal Year ended at the end of
such Fiscal Quarter, all reported on by Ernst & Young LLP or their independent
public accountants of nationally recognized standing, and (ii) such other
information reasonably requested by the Administrative Agent or any Bank;
(c) within forty-five (45) days after the end of each Fiscal Quarter, a
certificate in the form of Exhibit D attached hereto of the chief financial
officer or the chief accounting officer of the Borrower or its general partner
(the "Certifying Officer") (i) setting forth in reasonable detail the
calculations required to establish whether the Borrower was in compliance with
the requirements of Section 5.9 on the date of such financial statements; (ii)
certifying (x) that such financial statements fairly present the financial
condition and the results of operations of the Borrower on the dates and for the
periods indicated, on the basis of GAAP, with respect to the Borrower subject,
in the case of interim financial statements, to normally recurring year-end
adjustments, and (y) that such officer has reviewed the terms of the Loan
Documents and has made, or caused to be made under his or her supervision, a
review in reasonable detail of the business and condition of the Borrower during
the period beginning on the date through which the last such review was made
pursuant to this Section 5. 1 (c) (or, in the case of the first certification
pursuant to this Section 5. 1 (c), the Closing Date) and ending on a date not
more than ten (10) Domestic Business Days prior to the date of such delivery and
that
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(1) on the basis of such financial statements and such review of the Loan
Documents, no Event of Default existed under Section 6. 1 (b) with respect to
Sections 5.9 and 5. 10 at or as of the date of said financial statements, and
(2) on the basis of such review of the Loan Documents and the business and
condition of the Borrower, to the best knowledge of such officer, as of the last
day of the period covered by such certificate no Default or Event of Default
under any other provision of Section 6.1 occurred and is continuing or, if any
such Default or Event of Default has occurred and is continuing, specifying the
nature and extent thereof and, the action the Borrower proposes to take in
respect thereof. Such certificate shall set forth the calculations required to
establish the matters described in clause (1) above and shall attach as exhibits
thereto the following: escrow closing statements, certified by the Certifying
Officer, for each Qualifying Unencumbered Property which was acquired during the
preceding Fiscal Quarter; an occupancy report setting forth the average
Occupancy Rate for each Qualifying Unencumbered Property during the preceding
Fiscal Quarter; and a report stating the Net Operating Income for each
Qualifying Unencumbered Property during the preceding Fiscal Quarter with
reasonable detail as to all property expenses and capital expenditures.
(d) not less frequently than annually, and in any event within fifteen
(15) days after adoption by Borrower's Board of Directors, the Borrower's
business plan, any subsequent material revisions thereto, and a statement of
projected cash flow of the Borrower and its Consolidated Subsidiaries for the
twelve (12) month period following the date of such Business Plan.
SECTION 5.2 Other Information. The Borrower will deliver to the
Administrative Agent (with sufficient copies to distribute to all of the Banks):
(a) (i) within five (5) Domestic Business Days after any executive
officer of the Borrower or its general partner obtains knowledge of any Default,
if such Default is then continuing, a certificate of a Certifying Officer, or
other executive officer of the Borrower or its general partner setting forth the
details thereof and the action which the Borrower is taking or proposes to take
with respect thereto; and (ii) promptly and in. any event within five (5)
Domestic Business Days after an executive officer of the Borrower or its general
partner obtains knowledge thereof, notice of (y) any litigation or governmental
proceeding pending or threatened against the Borrower or the Real Property
Assets as to which there is a reasonable possibility of an adverse determination
and which, if adversely determined, would individually or in the aggregate,
result in a Material Adverse Effect and (z) any other event, act or condition
which is reasonably expected to result in a Material Adverse Effect;
(b) intentionally omitted;
(c) intentionally omitted;
(d) promptly and in any event within thirty (30) days after any member
of the ERISA Group (i) gives or is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA) with respect to any
Plan which might constitute grounds for a termination of such Plan under Title
IV of ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the notice of
such reportable event given or required to be given to the PBGC; (ii) receives
notice of complete
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or partial withdrawal liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been terminated, a
copy of such notice; (iii) receives notice from the PBGC under Title IV of ERISA
of an intent to terminate, impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or appoint a trustee to administer any
Plan, a copy of such notice; (iv) applies for a waiver of the minimum funding
standard under Section 412 of the Code, a copy of such application; (v) gives
notice of intent to terminate any Plan under Section 4041 (c) of ERISA, a copy
of such notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security, and in
the case of clauses (i) through (vii) above, which event could result in a
Material Adverse Effect, a certificate of the chief financial officer or the
chief accounting officer of the Borrower setting forth details as to such
occurrence and action, if any, which the Borrower or applicable member of the
ERISA Group is required or proposes to take;
(e) promptly and in any event within ten (10) days after an executive
officer of the Borrower or its general partner obtains actual knowledge of any
of the following events, a certificate of the Borrower, executed by a Certifying
Officer of the Borrower or its general partner, specifying the nature of such
condition, and the Borrower's or, if the Borrower has actual knowledge thereof,
the Environmental Affiliate's proposed initial response thereto: (i) the receipt
by an executive officer of the Borrower or its general partner, or, if the
Borrower has actual knowledge thereof, any of the Environmental Affiliates of
any communication (written or oral), whether from a governmental authority,
citizens group, employee or otherwise, that alleges that the Borrower, or, if
the Borrower has actual knowledge thereof, any of the Environmental Affiliates,
is not in compliance with applicable Environmental Laws, and such noncompliance
is reasonably expected to have a Material Adverse Effect, (ii) the Borrower
shall obtain actual knowledge that there exists any Environmental Claim pending
against the Borrower or any Environmental Affiliate and such Environmental Claim
is reasonably expected to have a Material Adverse Effect or is reasonably
expected to involve an expenditure of Significant Environmental Cost or (iii)
the Borrower obtains actual knowledge of any release, emission, discharge or
disposal of any Material of Environmental Concern that is likely to form the
basis of any Environmental Claim against the Borrower or any Environmental
Affiliate which in any such event is likely to have a Material Adverse Effect or
is reasonably expected to involve an expenditure of Significant Environmental
Cost;
(f) promptly and in any event within five (5) Domestic Business Days
after receipt of any material notices or correspondence from any company or
agent for any company providing insurance coverage to the Borrower relating to
any loss which is reasonably expected to result in a Material Adverse Effect,
copies of such notices and correspondence;
(g) promptly and in any event within five (5) days after an executive
officer of the Borrower or its general partner obtains actual knowledge of a
change in the Credit Rating, a certificate of the Borrower, executed by a
Certifying Officer of the Borrower or its general partner, specifying the new
Credit Rating, and
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(h) from time to time such additional information regarding the
financial position or business of the Borrower, General Partner and their
Subsidiaries as the Administrative Agent, at the request of any Bank, may
reasonably request in writing.
SECTION 5.3 Payment of Obligations. The Borrower, General Partner and
their Consolidated Subsidiaries will pay and discharge, at or before maturity,
all its respective material obligations and liabilities including, without
limitation, Taxes and any obligation pursuant to any agreement by which it or
any of its properties is bound, in each case where the failure to so pay or
discharge such obligations or liabilities is reasonably expected to result in a
Material Adverse Effect, and will maintain in accordance with GAAP, appropriate
reserves for the accrual of any of the same.
SECTION 5.4 Maintenance of Property; Insurance, Leases
(a) The Borrower will keep, and will cause each Consolidated Subsidiary
to keep, all property useful and necessary in its business, including without
limitation the Real Property Assets (for so long as it constitutes Real Property
Assets), in good repair, working order and condition, ordinary wear and tear
excepted, in each case where the failure to so maintain and repair will have a
Material Adverse Effect.
(b) The Borrower shall maintain, or cause to be maintained, insurance
comparable to that described in Section 4.24 hereof with insurers meeting the
qualifications described therein, which insurance shall in any event not provide
for less coverage than insurance customarily carried by owners of properties
similar to, and in the same locations as, the Real Property Assets. The Borrower
will deliver to the Administrative Agent (i) upon the reasonable request of the
Administrative Agent from time to time full information as to the insurance
carried, and (ii) forthwith, notice of any cancellation or nonrenewal of
coverage by any insurer of the Borrower (other than any cancellation or
non-renewal due to Borrower's placement of replacement coverage with new
insurers meeting the requirements of this Section 5.4(b)).
SECTION 5.5 Conduct of Business and Maintenance of Existence. The
Borrower and General Partner will continue to engage in business of the same
general type as now conducted by the Borrower and General Partner, and each will
preserve, renew and keep in full force and effect, its partnership and limited
liability company existence and its respective rights, privileges and franchises
necessary for the normal conduct of business unless the failure to maintain such
rights and franchises does not have a Material Adverse Effect.
SECTION 5.6 Compliance with Laws. The Borrower will and will cause its
Subsidiaries to comply in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws, and all zoning and building
codes with respect to the Real Property Assets and ERISA and the rules and
regulations thereunder and all federal securities laws) except where the
necessity of compliance therewith is contested in good faith by appropriate
proceedings or where the failure to do so will not have a Material Adverse
Effect or expose Administrative Agent or Banks to any material liability
therefor.
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SECTION 5.7 Inspection of Property, Books and Records. The Borrower (i)
will keep proper books of record and account in which full, true and correct
entries shall be made of all dealings and transactions in relation to its
business and activities in conformity with GAAP, modified as required by this
Agreement and applicable law; (ii) will permit representatives of any Bank at
such Bank's expense to visit any of its properties, including without limitation
the Real Property Assets, without notice; provided that the Bank shall not
unreasonably interfere with the operation of such properties or any tenants
thereon and such visitation shall occur within normal business hours; (iii) will
permit the representatives of any Bank, at such Bank's expense, to inspect its
properties, examine and make abstracts from any of its books and records and to
discuss its affairs, finances and accounts with its executive officers, property
managers and independent public accountants, in each such case under this
subclause (iii) all at such reasonable times during normal business hours, upon
reasonable prior notice and as often as may reasonably be desired.
Administrative Agent shall coordinate any such visit or inspection to arrange
for review by any Bank requesting any such visit or inspection.
SECTION 5.8 Existence. The Borrower shall do or cause to be done, all
things necessary to preserve and keep in full force and effect its, General
Partner's and their Consolidated Subsidiaries' existence and its patents,
trademarks, servicemarks, tradenames, copyrights, franchises, licenses, permits,
certificates, authorizations, qualifications, accreditation, easements, rights
of way and other rights, consents and approvals the nonexistence of which is
reasonably expected to have a Material Adverse Effect.
SECTION 5.9 Financial Covenants.
(a) Total Liabilities to Gross Asset Value. Borrower shall not permit
the ratio of Total Liabilities to Gross Asset Value of Borrower and its
Subsidiaries to exceed 0.55:1 at any time.
(b) Secured Debt to Gross Asset Value. Borrower shall not permit the
ratio of Secured Debt to Gross Asset Value of Borrower and its Subsidiaries to
exceed 0.45:1 at any time.
(c) Unencumbered Pool. Borrower shall not permit the ratio of the
Unencumbered Asset Pool Value to outstanding Unsecured Debt to be less than
1.75:1 at any time.
(d) EBITDA to Fixed Charges Ratio. Borrower shall not permit the ratio
of EBITDA for the then most recently completed Fiscal Quarter to Fixed Charges
for the then most recently completed Fiscal Quarter to be less than 1.75: 1.
(e) Interest Coverage Ratio. Borrower shall not permit the ratio of
EBITDA for the then most recently completed Fiscal Quarter to Interest Expense
for the then most recently completed Fiscal Quarter to be less than 2.25:1.
(f) intentionally omitted;
(g) Minimum Consolidated Tangible Net Worth. The Consolidated Tangible
Net Worth of the Borrower and its Consolidated Subsidiaries will at no time be
less than $200,000,000 plus ninety percent (90%) of all Net Offering Proceeds
received by General Partner (or General Partner's predecessor in interest) or
Borrower after December 31, 1996.
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SECTION 5.10 Restriction on Fundamental Changes.
(a) Neither the Borrower, General Partner, nor any Consolidated
Subsidiary shall directly or indirectly enter into any merger or consolidation
without the prior written consent of the Required Banks which consent may be
withheld in its respective sole and absolute discretion unless (A) the entity
with which or into which the Borrower or General Partner is merged is TIC or a
wholly owned (directly or indirectly) subsidiary of TIC or (B)(i) the Borrower
or General Partner is the surviving entity, (ii) the entity which is merged into
the Borrower or General Partner is not engaged in any substantial business other
than the management, development, ownership or operation of multifamily
residential apartment communities, and (iii) the gross fair market value of the
assets of the entity which is merged into the Borrower or General Partner is not
in excess of ten percent (10%) of Borrower's aggregate Gross Asset Value
immediately prior to such merger or consolidation. Neither the Borrower, General
Partner nor any Consolidated Subsidiary shall directly or indirectly enter into
any reorganization or recapitalization, reclassify its Capital Stock, liquidate,
wind up or dissolve or sell, lease, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or substantially all of its or
their business or assets, whether now owned or hereafter acquired. Nothing in
this Section shall be deemed to prohibit the sale or leasing of portions of the
Real Property Assets in the ordinary course of business.
(b) The Borrower shall not amend its agreement of limited partnership
or other organizational documents in any manner that would have a Material
Adverse Effect.
(c) The Borrower shall deliver to Administrative Agent copies of all
amendments to its agreement of limited partnership or to General Partner's
certificate of formation, limited liability company agreement, or to other
organizational documents (other than amendments solely reflecting changes in
ownership interests occurring in the ordinary course of business) no less than
ten (10) Domestic Business Days after the effective date of any such amendment.
(d) The Banks hereby approve the Merger and the replacement of IAC by
TICALLC as the general partner of Borrower.
SECTION 5.11 Changes in Business.
(a) The Borrower shall carry on its business operations through the
Borrower and its Subsidiaries.
(b) All or substantially all of Borrower's assets shall be multifamily
residential properties, unimproved land held for the development of multifamily
residential property, or equity interests in companies whose primary business is
the ownership, operation, development or management of multifamily residential
property. Borrower shall not engage in any line of business other than
ownership, operation and development of multifamily residential property and the
provision of services incidental thereto, whether directly or through its
Subsidiaries and Investment Affiliates.
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(c) Margin Stock. None of the proceeds of the Loan will be used,
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of buying or carrying any Margin Stock.
(d) Hedging Requirements. Within five (5) Domestic Business Days after
the last day of each calendar quarter, commencing December 31, 1998, the
Borrower shall have in effect "Interest Rate ▇▇▇▇▇▇" on Borrower's Indebtedness
so that such Indebtedness, together with all Fixed Rate Indebtedness of
Borrower, shall constitute at least fifty percent (50%) of the then aggregate
Indebtedness of the Borrower. "Interest Rate ▇▇▇▇▇▇" shall mean, interest rate
exchange, collar, cap, swap, adjustable strike cap, adjustable strike corridor
or similar agreements, each of which (A) shall have a minimum term of two (2)
years, or, in the case of loans pursuant to which interest shall accrue at a
rate other than a fixed rate, a term equal to the term of such floating rate
loan (to the extent the term of such floating rate loan is less than two (2)
years), (B) shall have the effect of capping the interest rates covered thereby
at a rate equal to or lower than the Cap Rate at the time of purchase or
execution, and (C) shall be with an Approved Financial Institution as the
counterparty. It is acknowledged and agreed that the Borrower shall have no
obligation to replace any Interest Rate Hedge even if the counterparty thereto
shall cease to be an Approved Financial Institution. The Borrower shall certify
its compliance with Interest Rate ▇▇▇▇▇▇ to the Administrative Agent in the
certificate required to be delivered by the Borrower pursuant to Section 5. 1
(c), which certificate shall be in the form of Exhibit D attached hereto.
SECTION 5.12 General Partner Status.
(a) Status. TICALLC shall at all times (i) maintain its status as a
wholly owned (directly or through one or more subsidiaries) subsidiary of TIC,
and (ii) engage in no business other than functioning as the general partner of
Borrower.
(b) Indebtedness. General Partner shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, create, incur, assume or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness, except: (i) the Obligations; and (ii) Indebtedness which, after
giving effect thereto, may be incurred or may remain outstanding without giving
rise to an Event of Default or Default under any provision of this Article V.
(c) Restriction on Fundamental Changes. General Partner shall not (i)
have an Investment in any Person other than Borrower and the interests
identified on Schedule 5.14(c)(i).as being owned by General Partner, or (ii)
General Partner shall not acquire an interest in any Property other than
Securities issued by Borrower and the interests identified on Schedule
5.14(c)(ii).
(d) Disposal of Partnership Interests: General Partner will not
directly or indirectly convey, sell, transfer, assign, pledge or otherwise
encumber or dispose of any of its partnership interests in Borrower.
(e) General Partner shall have the right to change its name provided
that it shall give Administrative Agent not less than 15 days prior written
notice before any such name change becomes effective.
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SECTION 5.13 Environmental Matters.
(1) Promptly upon the discovery of any Environmental Claim or of any
violation or alleged violation of Environmental Laws with respect to any
Qualifying Unencumbered Asset, the Borrower shall attempt in good faith, as soon
as practicable, to determine all costs it reasonably expects any party to expend
in connection with the investigation and resolution of such Environmental Claim
or of such violation or alleged violation of Environmental Laws. The Borrower
shall thereupon notify the Administrative Agent in writing of the Borrower's
reasonable, good faith estimate of the cost to investigate and resolve such
Environmental Claim or such violation or alleged violation if such cost is equal
to or greater than $250,000. Such good faith estimate of such costs, as revised
from time to time pursuant hereto, shall be deemed to be the "Estimated
Environmental Cost" of such Environmental Claim or such violation or alleged
violation of Environmental Laws. After the end of each Fiscal Quarter, the
Borrower shall review and update all Estimated Environmental Costs and shall
deliver, with the Borrower's quarterly reports delivered in accordance with
Section 5.1 hereof, a written report to the Administrative Agent, setting forth,
in reasonable detail, each Estimated Environmental Cost which is in excess of
$250,000, the basis for the determination of such Estimated Environmental Cost,
and the Borrower's plans with respect to such Environmental Claim or such
violation or alleged violation of Environmental Laws. If the Borrower at any
time is not diligently and in good faith pursuing a determination of or an
update of a Estimated Environmental Cost which exceeds $250,000, the
Administrative Agent may, in reliance upon the opinions and judgments of
environmental consultants (either independent or employed by the Administrative
Agent), estimate or update, in good faith, the cost to investigate and resolve
an Environmental Claim or alleged or actual violation of Environmental Laws. In
the event that the Administrative Agent makes any such determination, the
Estimated Environmental Cost of investigating and resolving such Environmental
Claim or such alleged or actual violation of Environmental Laws shall be the
Administrative Agent's estimate, until such time as Borrower again diligently
pursues in good faith the determination or update of Estimated Environmental
Cost, and upon Borrower's determination of a Estimated Environmental Cost in
compliance herewith the Estimated Environmental Cost shall thereafter be
Borrower's estimate thereof, as set forth herein.
(b) The Borrower shall, at all times, diligently and in good faith
pursue resolution of all Environmental Claims, and all violations or alleged
violations of Environmental Laws, with respect to its Properties.
SECTION 5.14 Cooperation. The Borrower shall take any action reasonably
requested by the Administrative Agent to carry out the intent of the Loan
Documents.
SECTION 5.15 Distributions. Unless waived by the Required Banks, no
Borrower Party shall make any Restricted Payments after the occurrence of and
during the continuation of an Event of Default under Section 6. 1 (a) other than
Restricted Payments with respect to the Series A Preferred Securities and the
Series B Preferred Securities.
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ARTICLE 6
DEFAULTS
SECTION 6.1 Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) (i) the Borrower shall fail to pay when due any principal of any
Loan; or (ii) the Borrower shall fail to pay when due interest on any Loan or
any fees or any other amount payable hereunder and the same shall continue for a
period of ten (10) calendar days after the same becomes due;
(b) the Borrower shall fail to observe or perform any covenant
contained in Section 5.9, Section 5. 1 0(a) or (b), or Sections 5.11, 5.12, and
5.14;
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause (a),
(b), (e), (f), (g), (h), (l), (m) or (n) of this Section 6. 1) for 30 days after
written notice thereof has been given to the Borrower by the Administrative
Agent, or if such default is of such a nature that it cannot with reasonable
effort be completely remedied within said period of thirty (30) days such
additional period of time as may be reasonably necessary to cure same, provided
Borrower commences such cure within said thirty (30) day period and diligently
prosecutes same, until completion, but in no event shall such extended period
exceed ninety (90) days;
(d) any representation, warranty, certification or statement made by
the Borrower in this Agreement or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made) and the defect
causing such representation or warranty to be incorrect when made (or deemed
made) is not removed within thirty (30) days after written notice thereof from
Administrative Agent to Borrower, or if such default is of such a nature that it
cannot with reasonable effort be completely removed within said period of thirty
(30) days such additional period of time as may be reasonably necessary to
remove same, provided Borrower commences such removal within said thirty (30)
day period and diligently prosecutes same, until completion, but in no event
shall such extended period exceed ninety (90) days;
(e) the Borrower, General Partner, any Subsidiary or any Investment
Affiliate shall default in the payment when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) of any amount owing in
respect of any Recourse Debt (other than the Obligations) for which the
aggregate outstanding principal amount exceeds Ten Million Dollars ($10,000,000)
and such default shall continue beyond the giving of any required notice and the
expiration of any applicable grace period and such default has not been waived,
in writing, by the holder of any such Debt; or the Borrower, General Partner,
any Subsidiary or any Investment Affiliate shall default in the performance or
observance of any other obligation or condition with respect to any such
Recourse Debt or any other event shall occur or condition exist beyond the
giving of any required notice and the expiration of any applicable grace period,
if the effect of such other default, event or condition is to accelerate the
maturity of any such indebtedness or to permit (without any further requirement
of notice or lapse of time) the holder or holders thereof, or any trustee or
agent for such holders, to accelerate the maturity of any such indebtedness;
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(f) the Borrower or General Partner shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any action to authorize any of the foregoing;
(g) an involuntary case or other proceeding shall be commenced against
the Borrower or General Partner seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 90 days; or an order for
relief shall be entered against the Borrower or General Partner under the
federal bankruptcy laws as now or hereafter in effect;
(h) one or more final, non-appealable judgments or decrees in an
aggregate amount of Ten Million Dollars ($ 10,000,000) or more shall be entered
by a court or courts of competent jurisdiction against the Borrower, General
Partner or its Consolidated Subsidiaries (other than any judgment as to which,
and only to the extent, a reputable insurance company has acknowledged coverage
of such claim in writing) and (i) any such judgments or decrees shall not be
stayed, discharged, paid, bonded or vacated within thirty (30) days or (ii)
enforcement proceedings shall be commenced by any creditor on any such judgments
or decrees and such enforcement proceedings shall not immediately be stayed;
(i) TIC shall cease to be the managing member of General Partner;
(j) if any Termination Event with respect to a Plan shall occur as a
result of which Termination Event or Events any member of the ERISA Group has
incurred or may incur any liability to the PBGC or any other Person and the sum
(determined as of the date of occurrence of such Termination Event) of the
insufficiency of such Plan and the insufficiency of any and all other Plans with
respect to which such a Termination Event shall occur and be continuing (or, in
the case of a Multiple Employer Plan with respect to which a Termination Event
described in clause (ii) of the definition of Termination Event shall occur and
be continuing, the liability of the Borrower) is equal to or greater than $
10,000,000 and which the Administrative Agent reasonably determines will have a
Material Adverse Effect;
(k) if, any member of the ERISA Group shall commit a failure described
in Section 302(f)(1) of ERISA or Section 412(n)(1) of the Code and the amount of
the lien determined under Section 302(f)(3) of ERISA or Section 412(n)(3) of the
Code that could reasonably be expected to be imposed on any member of the ERISA
Group or their assets in respect of such failure shall be equal to or greater
than $ 10,000,000 and which the Administrative Agent reasonably determines will
have a Material Adverse Effect;
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(l) at any time, for any reason the Borrower seeks to repudiate its
obligations under any Loan Document;
(m) a default beyond any applicable notice and grace period under any
of the other Loan Documents; or
(n) a default beyond any applicable notice and grace period shall have
occurred under that certain Revolving Credit Agreement dated as of June 27, 1997
among the Borrower, the banks listed therein, Bank of America NT&SA, as
Administrative Agent, and ▇▇▇▇▇ Fargo Bank, National Association, as
Documentation Agent, with ▇.▇. ▇▇▇▇▇▇ Securities, Inc., as Syndication Agent, as
amended by that certain First Amendment To Revolving Credit Agreement dated as
of July 10, 1998, as further amended by that certain Second Amendment To
Revolving Credit Agreement dated as of August 4, 1998, and as further amended
and restated by that certain First Amended and Restated Revolving Credit
Agreement dated as of June ___, 1999, as it may be amended hereafter from time
to time.
SECTION 6.2 Rights and Remedies.
(a) Upon the occurrence of any Event of Default described in Sections
6. 1 (f) or (g), the Commitment shall immediately terminate and the unpaid
principal amount of, and any and all accrued interest on, the Loans and any and
all accrued fees and other Obligations hereunder shall automatically become
immediately due and payable, with all additional interest from time to time
accrued thereon and without presentation, demand, or protest or other
requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and notice of acceleration), all of which are hereby expressly waived by the
Borrower; and upon the occurrence and during the continuance of any other Event
of Default, the Administrative Agent upon the demand of the Required Banks
shall, by written notice to the Borrower, in addition to the exercise of all of
the rights and remedies permitted the Administrative Agent and the Banks at law
or equity or under any of the other Loan Documents, declare the unpaid principal
amount of and any and all accrued and unpaid interest on the Loans and any and
all accrued fees and other obligations hereunder to be, and the same shall
thereupon be, immediately due and payable with all additional interest from time
to time accrued thereon and (except as otherwise as provided in the Loan
Documents) without presentation, demand, or protest or other requirements of any
kind (including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by the Borrower.
(b) Notwithstanding anything to the contrary contained in this
Agreement or in any other Loan Document, the Administrative Agent, and the Banks
each agree that any exercise or enforcement of the rights and remedies granted
to the Administrative Agent or the Banks under this Agreement or at law or in
equity with respect to this Agreement or any other Loan Documents shall be
commenced and maintained by the Administrative Agent on behalf of the
Administrative Agent and/or the Banks. The Administrative Agent shall act at the
direction of the Required Banks in connection with the exercise of any and all
remedies at law, in equity or under any of the Loan Documents or, if the
Required Banks are unable to reach agreement on the exercise of remedies, then,
from and after Administrative Agent shall have declared the Loan immediately due
and payable, the Administrative Agent may pursue such rights and remedies as it
may determine.
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SECTION 6.3 Notice of Default. The Administrative Agent shall give
notice to the Borrower under Section 6. 1 (c) promptly upon being requested to
do so by the Required Banks and shall thereupon notify all the Banks thereof.
The Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default (other than nonpayment of
principal of or interest on the Loans) unless the Administrative Agent has
received notice in writing from a Bank or Borrower referring to this Agreement
or the other Loan Documents, describing such event or condition. Should
Administrative Agent receive notice of the occurrence of a Default or Event of
Default expressly stating that such notice is a notice of a Default or Event of
Default, or should Administrative Agent send Borrower a notice of Default or
Event of Default, Administrative Agent, shall promptly give notice thereof to
each Bank.
SECTION 6.4 Distribution of Proceeds after Default. Subject to Section
7.6, from and after an Event of Default, to the extent proceeds are received by
Administrative Agent, such proceeds will be distributed to the Banks pro rata in
accordance with the unpaid principal amount of the Loans. Regardless of how each
Bank may treat payments received by it pursuant to this Agreement and the Notes
delivered to evidence debt hereunder for the purpose of its own accounting, for
the purpose of computing the Borrower's and the General Partner's obligations
under this Agreement and under such Notes, the payments shall be applied fully,
to the costs and expenses (including attorneys' fees and disbursements and the
allocated costs and expenses of in-house legal and other professional services)
of the Administrative Agent, acting as Administrative Agent, and of the Banks as
set forth herein, second to the payment of accrued and unpaid interest on all
Notes to and including the date of such application (ratably according to the
accrued and unpaid interest on the Notes), third, to the ratable payment of the
unpaid principal of all the Notes, and fourth to the payment of all other
amounts (including fees) then owing to the Administrative Agents or the Banks
under the Loan Documents. No application of the payments will cure any Event of
Default or prevent acceleration, or continued acceleration, of amounts payable
under the Loan Documents or prevent the exercise, or continued exercise, of
rights or remedies of the Banks under this Agreement or under law.
ARTICLE 7
THE AGENTS
SECTION 7.1 Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Administrative Agent by the terms hereof or
thereof, together with all such powers as are reasonably incidental thereto.
Except as set forth in Sections 7.8 and 7.9 hereof, the provisions of this
Article VII are solely for the benefit of Administrative Agent and the Banks,
and Borrower shall not have any rights to rely on or enforce any of the
provisions hereof. In performing its functions and duties under this Agreement,
the Administrative Agent shall act solely as an agent of the Banks and shall not
assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for the Borrower.
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SECTION 7.2 Agency and Affiliates. ▇▇▇▇▇ Fargo shall have the same
rights and powers under this Agreement as any other Bank and may exercise or
refrain from exercising the same as though it were not the Administrative Agent.
▇▇▇▇▇ Fargo (and its affiliates) may accept deposits from, lend money to, and
generally engage in any kind of business with the Borrower, General Partner or
any Subsidiary or affiliate of the Borrower as if it were not the Administrative
Agent hereunder, and the term "Bank" and "Banks" shall include ▇▇▇▇▇ Fargo in
its individual capacity.
SECTION 7.3 Action by Administrative Agent. The obligations of the
Administrative Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, the Administrative Agent shall
not be required to take any action with respect to any Default or Event of
Default, except as expressly provided in Article VI. The duties of
Administrative Agent shall be administrative in nature. Subject to the
provisions of Sections 7.1, 7.5 and 7.6, Administrative Agent shall administer
the Loans in the same manner as it administers its own loans.
SECTION 7.4 Consultation with Experts. As between Administrative Agent
and the Banks, the Administrative Agent may consult with legal counsel (who may
be counsel for the Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
SECTION 7.5 Liability of Administrative Agent. As between
Administrative Agent and the Banks, none of the Administrative Agent nor any of
its affiliates nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or not taken by it in connection
herewith (i) with the consent or at the request of the Required Banks or (ii) in
the absence of its own gross negligence or willful misconduct. As between
Administrative Agent and the Banks, none of the Administrative Agent nor any of
its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with this Agreement or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of the Borrower; (iii) the satisfaction of any condition specified in
Article 111, except receipt of items required to be delivered to the
Administrative Agent; or (iv) the validity, effectiveness or genuineness of this
Agreement, the other Loan Documents or any other instrument or writing furnished
in connection herewith. As between Administrative Agent and the Banks, the
Administrative Agent shall not incur any liability by acting in reliance upon
any notice, consent, certificate, statement, or other writing (which may be a
bank wire, telex or similar writing) believed by it to be genuine or to be
signed by the proper party or parties.
SECTION 7.6 Indemnification. Each Bank shall, ratably in accordance
with its Commitment, indemnify the Administrative Agent and its affiliates and
its respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitee's gross negligence or willful misconduct) that such
indemnitee may suffer or incur in connection with its duties as Administrative
Agent under this Agreement, the other Loan Documents or any action taken or
omitted by such indemnitee hereunder. In the event that the Administrative Agent
shall, subsequent to its receipt
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of indemnification payment(s) from Banks in accordance with this Section, recoup
any amount from the Borrower, or any other party liable therefor in connection
with such indemnification, the Administrative Agent shall reimburse the Banks
which previously made the payment(s) pro rata based upon the actual amounts
which were theretofore paid by each Bank. The Administrative Agent shall
reimburse such Banks so entitled to reimbursement within two (2) Domestic
Business Days of its receipt of such funds from the Borrower or such other party
liable therefor.
SECTION 7.7 Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Bank, and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each
Bank also acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking any action under this Agreement.
SECTION 7.8 Successor Administrative Agent. The Administrative Agent
may resign at any time by giving notice thereof to the Banks and the Borrower
and the Administrative Agent shall resign in the event its Commitment is reduced
to below five percent (5%) of the Aggregate Commitments. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Administrative Agent, which successor Administrative Agent shall, provided no
Event of Default has occurred and is then continuing, be subject to Borrower's
approval, which approval shall not be unreasonably withheld or delayed. If no
successor Administrative Agent shall have been so appointed by the Required
Banks and approved by the Borrower, and shall have accepted such appointment,
within 30 days after the retiring Administrative Agent gives notice of
resignation, then the retiring Administrative Agent may, on behalf of the Banks,
appoint a successor Administrative Agent, who shall act until the Required Banks
shall appoint a Administrative Agent. Upon the acceptance of its appointment as
the Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation hereunder, the
provisions of this Article shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Administrative Agent. For gross
negligence or willful misconduct, as determined by the Required Banks (excluding
for such determination Administrative Agent in its capacity as a Bank, but in no
event shall such determination be made by less than two (2) Banks),
Administrative Agent may be removed at any time by giving at least thirty (30)
Domestic Business Days prior written notice to Administrative Agent and
Borrower. Such resignation or removal shall take effect upon the acceptance of
appointment by a successor Administrative Agent, in accordance with the
provisions of this Section 7.8.
SECTION 7.9 Consents and Approvals. All communications from
Administrative Agent to the Banks requesting the Banks' determination, consent,
approval or disapproval (i) shall be given in the form of a written notice to
each Bank (ii) shall be accompanied by a description of the matter or item as to
which such determination, approval, consent or disapproval is requested, or
shall advise each Bank where such matter or item may be inspected, or shall
otherwise describe the matter or issue to be resolved, (iii) shall include, if
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reasonably requested by a Bank and to the extent not previously provided to such
Bank, written materials and a summary of all oral information provided to
Administrative Agent by Borrower in respect of the matter or issue to be
resolved, and (iv) shall include Administrative Agent's recommended course of
action or determination in respect thereof. Each Bank shall reply promptly, but
in any event within ten (10) Domestic Business Days after receipt of the request
therefor from Administrative Agent (the "Bank Reply Period"). Unless a Bank
shall give written notice to Administrative Agent that it objects to the
recommendation or determination of Administrative Agent (together with a written
explanation of the reasons behind such objection) within the Bank Reply Period,
such Bank shall be deemed to have approved of or consented to such
recommendation or determination. With respect to decisions requiring the
approval of the Required Banks or all the Banks, Administrative Agent shall
submit its recommendation or determination for approval of or consent to such
recommendation or determination to all Banks and upon receiving the required
approval or consent shall follow the course of action or determination of the
Required Banks (and each non-responding Bank shall be deemed to have concurred
with such recommended course of action) or all the Banks, as the case may be.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.1 Basis for Determining, Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Interest Period for any LIBOR Borrowing
or any continuation of the LIBOR Loans (or portions thereof) comprising such
Borrowing:
(a) the Administrative Agent has determined in good faith that deposits
in dollars (in the applicable amounts) are not being offered in the relevant
market for such Interest Period, or
(b) Banks having 50% or more of the Aggregate Commitments advise the
Administrative Agent that the Adjusted London Interbank Offered Rate, as
determined by the Administrative Agent, will not adequately and fairly reflect
the cost to such Banks of continuing their Loans as LIBOR Loans for such
Interest Period, the Administrative Agent shall forthwith give notice thereof to
the Borrower and the Banks, whereupon until the Administrative Agent notifies
the Borrower that the circumstances giving rise to such suspension no longer
exist, the obligations of the Banks to continue their Loans as LIBOR Loans for
such Interest Period shall be suspended. With respect to any Borrowing to be
made upon the commencement of an extension term, unless the Borrower notifies
the Administrative Agent at least two Domestic Business Days before the date of
such Borrowing that it elects not to exercise the First Option To Extend or the
Second Option To Extend, as applicable, the Borrowing shall instead be made as a
Base Rate Borrowing and the Loans comprising such Borrowing shall bear interest
for each day from and including the first day to but excluding the last day of
the Interest Period applicable thereto at the Base Rate for such day. For
purposes of this Section 8. 1 (b), in determining whether the Adjusted London
Interbank Offered Rate, as determined by Administrative Agent, will not
adequately and fairly reflect the cost to any Bank of continuing its Loans as
LIBOR Loans for such Interest Period, such determination will be based solely on
the ability of such Bank to obtain matching funds in the London interbank market
at a reasonably equivalent rate.
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SECTION 8.2 Illegality. If, on or after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its LIBOR Lending Office) with any request or directive (whether
or not having the force of law) made after the Closing Date of any such
authority, central bank or comparable agency shall make it unlawful for any Bank
(or its LIBOR Lending Office) to make, maintain or fund its LIBOR Loans, the
Administrative Agent shall forthwith give notice thereof to the other Banks and
the Borrower, whereupon until such Bank notifies the Borrower and the
Administrative Agent that the circumstances giving rise to such suspension no
longer exist, the obligation of such Bank, if any, to continue its Loan as a
LIBOR Loan for any subsequent Interest Period shall be suspended and, to the
extent such Bank has an obligation to continue its Loan after the expiration of
the then current Interest Period, such Loan shall be continued as a Base Rate
Loan as set forth below. With respect to any such LIBOR Loan, before giving any
notice to the Administrative Agent pursuant to this Section, such Bank shall
designate a different LIBOR Lending Office if such designation will avoid the
need for giving such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. Notwithstanding anything in the
foregoing to the contrary, if such Bank shall determine that it may not lawfully
continue to maintain any of its outstanding LIBOR Loans to maturity and shall so
specify in such notice, such LIBOR Loan shall be converted as of such date to a
Base Rate Loan (without payment of any amounts that Borrower would otherwise be
obligated to pay pursuant to Section 2.11 hereof with respect to Loans converted
pursuant to this Section 8.2) in an equal principal amount from such Bank (on
which interest and principal shall be payable contemporaneously with the related
LIBOR Loans of the other Banks), and such Bank shall make such a Base Rate Loan.
If at any time, it shall be unlawful for any Bank to make, maintain or
continue its LIBOR Loan, the Borrower shall have the right, upon five (5)
Domestic Business Day's notice to the Administrative Agent, to either (x) cause
a bank, reasonably acceptable to the Administrative Agent, to offer to purchase
the Commitments of such Bank for an amount equal to such Bank's outstanding
Loan, and to become a Bank hereunder, or obtain the agreement of one or more
existing Banks to offer to purchase the Commitments of such Bank for such
amount, which offer such Bank is hereby required to accept, or (y) to repay in
full all Loans then outstanding of such Bank, together with interest and all
other amounts due thereon, upon which event, the Aggregate Commitments shall be
reduced by the amount of such Bank's Commitment and such Bank shall cease to be
a Bank hereunder.
SECTION 8.3 Increased Cost and Reduced Return.
(a) If, on or after the date hereof, the adoption of any applicable
law, rule or regulation, or any change in any applicable law, rule or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Applicable Lending Office) with any request or directive (whether or not having
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the force of law) made at the Closing Date of any such authority, central bank
or comparable agency shall impose, modify or deem applicable any reserve
(including, without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System (but excluding with respect to any LIBOR
Loan any such requirement reflected in an applicable LIBOR Reserve Percentage)),
special deposit, insurance assessment or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Bank (or its
Applicable Lending Office) or shall impose on any Bank (or its Applicable
Lending Office) or on the London interbank market any other condition materially
more burdensome in nature, extent or consequence than those in existence as of
the Closing Date affecting such Bank's LIBOR Loan, its Note, or its obligation
to make LIBOR Loans, and the result of any of the foregoing is to increase the
cost to such Bank (or its Applicable Lending Office) of making or maintaining
any LIBOR Loan, or to reduce the amount of any sum received or receivable by
such Bank (or its Applicable Lending Office) under this Agreement or under its
Note with respect to such LIBOR Loan, by an amount deemed by such Bank to be
material, then, within fifteen (15) days after demand by such Bank (with a copy
to the Administrative Agent), the Borrower shall pay to such Bank such
additional amount or amounts (based upon a reasonable allocation thereof by such
Bank to the LIBOR Loan made by such Bank hereunder) as will compensate such Bank
for such increased cost or reduction to the extent such Bank generally imposes
such additional amounts on other borrowers of such Bank in similar
circumstances.
(b) If any Bank shall have reasonably determined that, after the date
hereof, the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) made after the Closing Date of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on capital of such Bank (or its Parent) as a
consequence of such Bank's obligations hereunder to a level below that which
such Bank (or its Parent) could have achieved but for such adoption, change,
request or directive (taking into consideration its policies with respect to
capital adequacy) by an amount reasonably deemed by such Bank to be material,
then from time to time, within fifteen (15) days after demand by such Bank (with
a copy to the Administrative Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank (or its Parent) for
such reduction to the extent such Bank generally imposes such additional amounts
on other borrowers of such Bank in similar circumstances.
(c) Each Bank will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable Lending office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
reasonable judgment of such Bank, be otherwise disadvantageous to such Bank. If
such Bank shall fail to notify Borrower of any such event within ninety (90)
days following the end of the month during which such event occurred, then
Borrower's liability for any amounts described in this Section incurred by such
Bank as a result of such event shall be limited to those attributable to the
period occurring subsequent to the ninetieth (90th) day prior to the date upon
which such Bank actually notified Borrower of the occurrence of such event. A
certificate of any Bank claiming compensation under this Section
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and setting forth a reasonably detailed calculation of the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
demonstrable error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
(d) If at any time, any Bank shall be owed amounts pursuant to this
Section 8.3, the Borrower shall have the right, upon five (5) Domestic Business
Day's notice to the Administrative Agent to either (x) cause a bank, reasonably
acceptable to the Administrative Agent, to offer to purchase the Commitment of
such Bank for an amount equal to such Bank's outstanding Loan, and to become a
Bank hereunder, or to obtain the agreement of one or more existing Banks to
offer to purchase the Commitment of such Bank for such amount, which offer such
Bank is hereby required to accept, or (y) to repay in full all Loans then
outstanding of such Bank, together with interest and all other amounts due
thereon, upon which event, the Aggregate Commitments shall be reduced by the
amount of such Bank's Commitment and such Bank shall cease to be a Bank
hereunder.
SECTION 8.4 Taxes.
(a) Any and all payments by the Borrower to or for the account of any
Bank or the Administrative Agent hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding in the case of each Bank and the
Administrative Agent, taxes imposed on its income, and franchise taxes imposed
on it, by the jurisdiction under the laws of which such Bank or the
Administrative Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Bank, taxes imposed on its income,
and franchise or similar taxes imposed on it, by the jurisdiction of such Bank's
Applicable Lending Office or any political subdivision thereof or by any other
jurisdiction (or any political subdivision thereof) as a result of a present or
former connection between such Bank or Administrative Agent and such other
jurisdiction or by the United States (all such non-excluded taxes, duties,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Non-Excluded Taxes"). If the Borrower shall be
required by law to deduct any Non-Excluded Taxes from or in respect of any sum
payable hereunder or under any Note, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 8.4) such Bank or the
Administrative Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions, (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
law and (iv) the Borrower shall furnish to the Administrative Agent, at its
address referred to in Section 9. 1, the original or a certified copy of a
receipt evidencing payment thereof
(b) In addition, the Borrower agrees to pay any present or future stamp
or documentary taxes and any other excise or property taxes, or charges or
similar levies which arise from any payment made hereunder or under any Note or
from the execution or delivery of, or otherwise with respect to, this Agreement
or any Note (hereinafter referred to as "Other Taxes").
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(c) The Borrower agrees to indemnify each Bank and the Administrative
Agent for the full amount of Non-Excluded Taxes or Other Taxes (including,
without limitation, any Non-Excluded Taxes or Other Taxes imposed or asserted by
any jurisdiction on amounts payable under this Section 8.4) paid by such Bank or
the Administrative Agent (as the case may be) and, so long as such Bank or
Administrative Agent has promptly paid any such Non-Excluded Taxes or Other
Taxes, any liability for penalties and interest arising therefrom or with
respect thereto. This indemnification shall be made within fifteen (15) days
from the date such Bank or the Administrative Agent (as the case may be) makes
demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other Bank,
shall provide the Borrower with (a) two duly completed copies of Internal
Revenue Service form 1001 or 4224, as appropriate, or any successor form
prescribed by the Internal Revenue Service, and (b) an Internal Revenue Service
Form W-8 or W-9, or any successor form prescribed by the Internal Revenue
Service, and shall provide Borrower with two further copies of any such form or
certification on or before the date that any such form or certification expires
or becomes obsolete and after the occurrence of any event requiring a change in
the most recent form previously delivered by it to Borrower, certifying (i) in
the case of a Form 1001 or 4224, that such Bank is entitled to benefits under an
income tax treaty to which the United States is a party which reduces the rate
of withholding tax on payments of interest or certifying that the income
receivable pursuant to this Agreement is effectively connected with the conduct
of a trade or business in the United States, and (ii) in the case of a Form W-8
or W-9, that it is entitled to an exemption from United States backup
withholding tax. If the form provided by a Bank at the time such Bank first
becomes a party to this Agreement indicates a United States interest withholding
tax rate in excess of zero, withholding tax at such rate shall be considered
excluded from "Non-Excluded Taxes" as defined in Section 8.4(a).
(e) For any period with respect to which a Bank has failed to provide
the Borrower with the appropriate form pursuant to Section 8.4(d) (unless such
failure is due to a change in treaty, law or regulation occurring subsequent to
the date on which a form originally was required to be provided), such Bank
shall not be entitled to indemnification under Section 8.4(c) with respect to
Non-Excluded Taxes imposed by the United States, provided, however that should a
Bank, which is otherwise exempt from or subject to a reduced rate of withholding
tax, become subject to Non-Excluded Taxes because of its failure to deliver a
form required hereunder, the Borrower shall take such steps as such Bank shall
reasonably request to assist such Bank to recover such Taxes so long as Borrower
shall incur no cost or liability as a result thereof
(f) If the Borrower is required to pay additional amounts to or for the
account of any Bank pursuant to this Section 8.4, then such Bank will change the
jurisdiction of its Applicable Lending Office so as to eliminate or reduce any
such additional payment which may thereafter accrue if such change, in the
judgment of such Bank, is not otherwise disadvantageous to such Bank.
(g) If at any time, any Bank shall be owed amounts pursuant to this
Section 8.4, the Borrower shall have the right, upon five (5) Domestic Business
Day's notice to the
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Administrative Agent to either (x) cause a bank, reasonably acceptable to the
Administrative Agent, to offer to purchase the Commitment of such Bank for an
amount equal to such Bank's outstanding Loan, and to become a Bank hereunder, or
to obtain the agreement of one or more existing Banks to offer to purchase the
Commitment of such Bank for such amount, which offer such Bank is hereby
required to accept, or (y) to repay in full all Loans then outstanding of such
Bank, together with interest and all other amounts due thereon, upon which
event, the Aggregate Commitments shall be reduced by the amount of such Bank's
Commitment and such Bank shall cease to be a Bank hereunder.
SECTION 8.5 Base Rate Loans Substituted for Affected LIBOR Loans. If
(i) the obligation of any Bank to continue its Loan as a LIBOR Loan has been
suspended pursuant to Section 8.2 or (ii) any Bank has demanded compensation
under Section 8.3 or 8.4 with respect to its LIBOR Loan and the Borrower shall,
by at least five LIBOR Business Days' prior notice to such Bank through the
Administrative Agent, have elected that the provisions of this Section 8.5 shall
apply to such Bank, then, unless and until such Bank notifies the Borrower that
the circumstances giving rise to such suspension or demand for compensation no
longer exist:'
(a) any Loan which would otherwise be continued by such Bank as a LIBOR
Loan shall be continued instead as a Base Rate Loan (on which interest and
principal shall be payable contemporaneously with the related LIBOR Loans of the
other Banks), and
(b) all payments of principal which would otherwise be applied to repay
such LIBOR Loan shall be applied to repay its Base Rate Loan instead, and
(c) Borrower will not be required to make any payment which would
otherwise be required by Section 2. 11 with respect to such LIBOR Loan converted
to a Base Rate Loan pursuant to clause (a) above.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex, facsimile
transmission followed by telephonic confirmation or similar writing) and shall
be given to such party: (x) in the case of the Borrower or the Administrative
Agent, at its address, telex number or facsimile number set forth on the
signature pages hereof with a duplicate copy thereof, in the case of the
Borrower, to the Borrower, at Irvine Apartment Communities, L.P. c/o TIC
Acquisition LLC, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attn: Vice President, Corporate Finance and Controller, and to O'Melveny &
▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq., (y) in the case of any Bank, at its address,
telex number or facsimile number set forth on the signature pages hereof or (z)
in the case of any party, such other address, telex number or facsimile number
as such party may hereafter specify for the purpose by notice to the
Administrative Agent and the Borrower. Each such notice, request or other
communication shall be effective (i) if given by telex or facsimile
transmission, when such telex or facsimile is transmitted to the telex number or
facsimile number specified in this Section and the appropriate answerback or
facsimile confirmation is received
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(provided, however, if the date of such transmission and confirmation is not a
Domestic Business Day, then the next succeeding Domestic Business Day), (ii) if
given by certified registered mail, return receipt requested, with first class
postage prepaid, addressed as aforesaid, upon receipt or refusal to accept
delivery, (iii) if given by a nationally recognized overnight carrier, 24 hours
after such communication is deposited with such carrier with postage prepaid for
next day delivery, or (iv) if given by any other means, when delivered at the
address specified in this Section; provided that notices to the Administrative
Agent under Article II or Article VIII shall not be effective until received.
SECTION 9.2 No Waivers. No failure or delay by the Administrative Agent
or any Bank in exercising any right, power or privilege hereunder or under any
Note shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.3 Expenses; Indemnification.
(a) The Borrower shall pay within thirty (30) days after written notice
from the Administrative Agent all reasonable out-of-pocket costs and expenses of
the Administrative Agent (including the fees and disbursements of outside
counsel as well as the allocated cost of Administrative Agent's internal legal
services), in connection with the preparation of this Agreement, the Loan
Documents and the documents and instruments referred to therein, and any waiver,
consent hereunder and any amendment hereof, the administration hereof and any
Default or alleged Default hereunder, (ii) in connection with the syndication of
the Loans and (iii) if an Event of Default occurs, all reasonable out-of-pocket
expenses incurred by the Administrative Agent and the Banks as a group,
including fees and disbursements of counsel for the Administrative Agent and
each of the Banks, in connection with the enforcement of the Loan Documents and
the instruments referred to therein and such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings resulting therefrom;
provided, however, that the attorneys' fees and disbursements for which Borrower
is obligated under this subsection (a)(iii) shall be limited to the reasonable
non-duplicative fees and disbursements of (a) counsel for Administrative Agent
and (b) counsel for all of the Banks as a group. For purposes of this Section
9.3(a)(iii), (1) counsel for Administrative Agent shall mean a single outside
law firm representing Administrative Agent together with the allocated cost of
Administrative Agent's internal legal services, and (2) counsel for all of the
Banks as a group shall mean a single outside law firm representing such Banks as
a group (which law firm may or may not be the same law firm representing
Administrative Agent).
(b) The Borrower agrees to indemnify the Administrative Agent, each
Bank and their respective affiliates and the respective directors, officers,
agents and employees of the foregoing (each an "Indemnitee") and hold each
Indemnitee harmless from and against any and all liabilities, losses, damages,
costs and expenses of any kind, including, without limitation, the reasonable
fees and disbursements of counsel, which may be incurred by such Indemnitee in
connection with any investigative, administrative or judicial proceeding that
may at any time (including, without limitation, at any time following the
payment of the Obligations) be asserted against any Indemnitee, as a result of,
or arising out of, or related to or by reason of, (i) any of
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the transactions contemplated by the Loan Documents or the execution, delivery
or performance of any Loan Document, (ii) any violation by the Borrower or the
Environmental Affiliates of any applicable Environmental Law, (iii) any
Environmental Claim arising out of the management, use, control, ownership or
operation of property or assets by the Borrower or any of the Environmental
Affiliates, including, without limitation, all on-site and off-site activities
of Borrower or any Environmental Affiliate involving Materials of Environmental
Concern, (iv) the breach of any environmental representation or warranty set
forth herein, but in all cases excluding those liabilities, losses, damages,
costs and expenses (a) for which such Indemnitee has been compensated pursuant
to the terms of this Agreement, (b) incurred solely by reason of the gross
negligence, willful misconduct, bad faith or fraud of any Indemnitee as finally
determined by a court of competent jurisdiction, (c) violations of Environmental
Laws relating to a Property which are caused by the act or omission of such
Indemnitee after such Indemnitee takes possession or control (but in no event
shall appointment of a receiver or a trustee be deemed control) of such Property
or (d) any liability of such Indemnitee to any third party based upon
Contractual Obligations of such Indemnitee owing to such third party which are
not expressly set forth in the Loan Documents. In addition, the indemnification
set forth in this Section 9.3(b) in favor of any director, officer, agent or
employee of Administrative Agent or any Bank shall be solely in their respective
capacities as such director, officer, agent or employee. The Borrower's
obligations under this Section shall survive the termination of this Agreement
and the payment of the Obligations.
(c) Each Indemnitee will promptly notify the Borrower of each event of
which it has knowledge that may give rise to a claim under clause (b) of Section
9.3, provided that the failure to so notify the Borrower shall in no way impair
the Borrower's obligations under this Section 9.3 (except to the extent that
such failure to so notify arises from the gross negligence or willful misconduct
of such Indemnitee and has an adverse effect on the Borrower). If any
investigative, judicial or administrative proceeding is brought against any
Indemnitee indemnified or intended to be indemnified pursuant to this Section
9.3, the Borrower, to the extent and in the manner directed by the Indemnitee,
will resist and defend such proceeding with counsel designated by the Borrower
(which counsel shall be reasonably satisfactory to the Indemnitee). Each
Indemnitee will use its best efforts to cooperate in the defense of any such
action, writ, or proceeding. The Borrower shall keep such Indemnitee advised of
the status of such defense and consult with such Indemnitee prior to taking any
material position with respect thereto. Such Indemnitee shall, however, be
entitled to employ counsel separate from counsel for the Borrower and from any
other party in such proceeding if such Indemnitee shall reasonably determine
that a conflict of interest or other circumstance exists that makes
representation by counsel chosen by the Borrower not advisable. The fees and
disbursements of such separate counsel shall be paid by the Borrower. Such
Indemnitee shall not agree to the settlement of any such claim without the
consent of the Borrower, unless the Borrower shall have been given notice of the
commencement of an action and shall have failed to provide the defense thereof
as herein provided or an Event of Default shall have occurred.
SECTION 9.4 Sharing of Set-Offs. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, and after acceleration of the Obligations, each
Bank is hereby authorized at any time or from time to time, without presentment,
demand, protest or other notice of any kind to the Borrower or to any other
Person, any such notice being hereby expressly waived, but subject to the prior
consent of
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the Administrative Agent, to set off and to appropriate and apply any and all
deposits (general or special, time or demand, provisional or final) and any
other indebtedness at any time held or owing by such Bank (including, without
limitation, by branches and agencies of such Bank wherever located) to or for
the credit or the account of the Borrower against and on account of the
Obligations of the Borrower then due and payable to such Bank under this
Agreement or under any of the other Loan Documents, including, without
limitation, all interests in Obligations purchased by such Bank. Each Bank shall
notify the Borrower in writing promptly after any such set-off and the
application thereof made by such Bank; provided however that the failure to give
such notice shall not affect the validity of such set-off and application. Each
Bank agrees that if it shall by exercising any right of set-off or counterclaim
or otherwise, receive payment of a proportion of the aggregate amount of
principal and interest due with respect to any Note held by it which is greater
than the proportion received by any other Bank, the Bank receiving such
proportionately greater payment shall purchase such participations in the Notes
held by the other Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest with respect to the
Notes held by the Banks shall be shared by the Banks pro rata; provided that
nothing in this Section shall impair the right of any Bank to exercise any right
of setoff or counterclaim it may have to any deposits not received in connection
with the Loans and to apply the amount subject to such exercise to the payment
of indebtedness of the Borrower other than its indebtedness under the Notes. The
Borrower agrees, to the fullest extent it may effectively do so under applicable
law, that any holder of a participation in a Note, whether or not acquired
pursuant to the foregoing arrangements, may exercise rights of set-off or
counterclaim and other rights with respect to such participation as fully as if
such holder of a participation were a direct creditor of the Borrower in the
amount of such participation. Notwithstanding anything to the contrary contained
herein, any Bank may, by separate agreement with the Borrower, waive its right
to set off contained herein or granted by law and any such written waiver shall
be effective against such Bank under this Section 9.4.
SECTION 9.5 Amendments and Waivers. Any provision of this Agreement,
the Notes or any other Loan Documents may be amended or waived if, but only if,
such amendment or waiver is in writing and is signed by the Borrower and the
Required Banks; provided that no such amendment or waiver with respect to this
Agreement, the Notes or any other Loan Documents shall, unless signed by all the
Banks, (i) subject any Bank to any additional obligation, (ii) reduce the
principal of or rate of interest on any Loan or any fees hereunder, (iii)
postpone the date fixed for any payment of principal of or interest on any Loan
or any fees hereunder, (iv) except as contemplated by this Agreement, change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Notes, or the number of Banks, which shall be required for the Banks or any of
them to take any action under this Section or any other provision of this
Agreement, (v) release the Guaranty or (vi) modify the provisions of this
Section 9.5. No amendment or waiver shall be binding against the Administrative
Agent until it shall have been notified thereof in writing.
SECTION 9.6 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
except that the Borrower may not assign or otherwise transfer any of its rights
under this Agreement or the other Loan Documents without the prior written
consent of all Banks and the Administrative Agent and a Bank may not assign or
otherwise transfer any of its interest under this Agreement except as permitted
in subsection (b) and (c) of this Section 9.6.
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(b) Any Bank may at any time grant to any Person in any amount,
participating interests in any Loans made pursuant to this Agreement. In
addition, any Bank may at any time grant to any existing Bank or one or more
banks, finance companies, insurance or other financial institutions which (A)
has (or, in the case of a bank which is a subsidiary, such bank's parent has) a
rating of its senior debt obligations of not less than Baa-1 by ▇▇▇▇▇'▇, BBB by
S&P or a comparable rating by a rating agency acceptable to Administrative Agent
and (B) has total assets in excess of Ten Billion Dollars ($ 10,000,000,000),
(C) as a result of such grant, has participating interests in its Commitment, in
an amount not less than $10,000,000; provided that such Bank retains at least
one-half of its interest in its Commitment free and clear of any participation
interest. If any Bank sells or grants an interest to a Person described above
(in each case, a "Participant"), (i) such Bank shall make and receive all
payments for the account of its Participant, (ii) such Bank's obligations under
this Agreement shall remain unchanged, (iii) such Bank shall continue to be the
sole holder of its Notes and other Loan Documents subject to the participation
and shall have the sole right to enforce its rights and remedies under the Loan
Documents, (iv) the Borrower, the Administrative Agent and the Banks shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under the Loan Documents, and (v) the
participation agreement shall not restrict such Bank's ability to agree to any
amendment of the terms of the Loan Documents, or to exercise or refrain from
exercising any powers or rights that such Bank may have under or in respect of
the Loan Documents, except that the Participant may be granted the right to
consent to any (A) reduction of the rate or amount, or any extension of the
stated maturity or due date (except as to any extension of the Maturity Date
provided for in this Agreement), of any principal, interest or fees payable by
the Borrower and subject to the participation, or (B) release of the Guaranty,
except to the extent otherwise provided in the Loan Documents. The Borrower
agrees that each Participant shall, to the extent provided in its participation
agreement, be entitled to the benefits of Article VIII with respect to its
participating interest.
(c) Subject to the requirement that each Bank continues to hold a
minimum of five percent (5%) of the Aggregate Commitments for so long as it is a
Bank hereunder, any Bank may at any time assign, prior to the occurrence of an
Event of Default, to an existing Bank or one or more banks, finance companies,
insurance or other financial institutions which (A) has (or, in the case of a
bank which is a subsidiary, such bank's parent has) a rating of its senior debt
obligations of not less than Baa-1 by ▇▇▇▇▇'▇, BBB by S&P or a comparable rating
by a rating agency acceptable to Administrative Agent and (B) has total assets
in excess of Ten Billion Dollars ($10,000,000,000), in minimum amounts of not
less than five percent (5%) of the Aggregate Commitments and integral multiples
of One Million Dollars ($1,000,000) thereafter (or any lesser amount in the case
of assignments to an existing Bank) so long as such assignment is made with (and
subject to) the consent of the Administrative Agent, which shall not be
unreasonably withheld or delayed; provided that if an Assignee is an affiliate
of such transferor Bank or was a Bank immediately prior to such assignment, no
such consent shall be required. After the occurrence and during the continuance
of an Event of Default, any Bank may at any time assign to any Person in any
amount, all or a proportionate part of all, of its rights and obligations under
this Agreement, the Notes and the other Loan Documents. In either case, such
Person (in each case, an "Assignee") shall assume such rights and obligations,
pursuant to a
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Transfer Supplement in substantially the form of Exhibit "B" attached hereto
executed by such Assignee and such transferor Bank, and a copy thereof shall be
promptly furnished to the Administrative Agent. Upon execution and delivery of a
Transfer Supplement and payment by such Assignee to such transferor Bank of an
amount equal to the purchase price agreed between such transferor Bank and such
Assignee, such Assignee shall be a Bank party to this Agreement and shall have
all the rights and obligations of a Bank with a Commitment as set forth in such
Transfer Supplement, and no further consent or action by any party shall be
required and the transferor Bank shall be released from its obligations
hereunder to a corresponding extent. Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Bank, the Administrative Agent
and the Borrower shall make appropriate arrangements so that, if required, new
Notes are issued to the Assignee and to the transferor Bank in replacement of
its old Note. In connection with any such assignment, the transferor Bank shall
pay to the Administrative Agent an administrative fee for processing such
assignment in the amount of $2,500. If the Assignee is not incorporated under
the laws of the United States of America or a state thereof, it shall deliver to
the Borrower and the Administrative Agent certification as to exemption from
deduction or withholding of any United States federal, income taxes in
accordance with Section 8.4. Any assignment, made during the continuation of an
Event of Default shall not be affected by any subsequent cure of such Event of
Default.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note to a Federal Reserve Bank. No such assignment
shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 8.3 or 8.4 than
such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 8.2, 8.3 or 8.4 requiring such
Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
SECTION 9.7 Collateral. Each of the Banks represents to the
Administrative Agent and each of the other Banks that it in good faith is not
relying upon any "margin stock" (as defined in Regulation U) as collateral in
the extension or maintenance of the credit provided for in this Agreement.
SECTION 9.8 Governing Law; Submission to Jurisdiction. (a) THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA EXCEPT TO THE EXTENT PREEMPTED
BY FEDERAL LAW (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO
CONFLICTS OF LAW).
(b) any legal action or proceeding with respect to this Agreement or
any other Loan Document and any action for enforcement of any judgment in
respect thereof may be brought in the courts of the State of California or of
the United States of America located in
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Orange County, California, and, by execution and delivery of this Agreement, the
Banks and the Borrower each hereby accepts for itself and in respect of its
property, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts and appellate courts from any thereof. The Banks and the
Borrower irrevocably consent to the service of process out of any of the
aforementioned courts in any such action or proceeding by the hand delivery, or
mailing of copies thereof by registered or certified mail, postage prepaid, to
the Banks and the Borrower at their respective addresses set forth below. The
Banks and the Borrower hereby irrevocably waive any objection which it may now
or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Loan Document brought in the courts referred to above and hereby further
irrevocably waive and agree not to plead or claim in any such court that any
such action or proceeding brought in any such court has been brought in an
inconvenient forum. Nothing herein shall affect the right of the Borrower or
Administrative Agent to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against any other party in any
other jurisdiction.
SECTION 9.9 Counterparts', Integration, Effectiveness. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof. This
Agreement shall become effective upon receipt by the Administrative Agent and
the Borrower of counterparts hereof signed by each of the parties hereto (or, in
the case of any party as to which an executed counterpart shall not have been
received, receipt by the Administrative Agent in form satisfactory to it of
telegraphic, telex or other written confirmation from such party of execution of
a counterpart hereof by such party), and the date on which such receipt occurs
shall be the "Effective Date."
SECTION 9.10 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 9.11 Survival. All indemnities set forth herein shall survive
the execution and delivery of this Agreement and the other Loan Documents and
the making and repayment of the Loans hereunder.
SECTION 9.12 Domicile of Loans. Each Bank may transfer and carry its
Loans at, to or for the account of any domestic or foreign branch office,
subsidiary or affiliate of such Bank.
SECTION 9.13 Limitation of Liability. No claim may be made by the
Borrower or any other Person acting by or through Borrower against the
Administrative Agent or any Bank or the affiliates, directors, officers,
employees, attorneys or agent of any of them for any consequential or punitive
damages in respect of any claim for breach of contract or any other theory of
liability arising out of or related to the transactions contemplated by this
Agreement or
58
65
by the other Loan Documents, or any act, omission or event occurring in
connection therewith; and the Borrower hereby waives, releases and agrees not to
▇▇▇ upon any claim for any such damages, whether or not accrued and whether or
not known or suspected to exist in its favor.
SECTION 9.14 Recourse Obligation. This Agreement and the Obligations
hereunder are fully recourse to the Borrower. Notwithstanding the foregoing, no
recourse under or upon any obligation, covenant, or agreement contained in this
Agreement shall be had against any limited partner of Borrower or any of their
or Borrower's or General Partner's respective officers, directors, or employees
except in the event of fraud or misappropriation of funds on the part of such
officer, director, shareholder or employee.
SECTION 9.15 Bank's Failure to Fund.
(a) Unless the Administrative Agent shall have received notice from a
Bank prior to the Closing Date that such Bank will not make available to the
Administrative Agent such Bank's share of the initial Borrowing, the
Administrative Agent may assume that such Bank has made such share available to
the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) of Section 2.2 hereof, and the Administrative Agent may, in
reliance upon such assumption, make available to Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Administrative Agent, such Bank and Borrower
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, in accordance with the
provisions of Section 2.2(b) hereof. If such Bank shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for purposes of this
Agreement. Nothing contained in this Section or Section 2.2(b) shall be deemed
to reduce the Commitment of any Bank or in any way affect the rights of Borrower
with respect to any defaulting Bank or Administrative Agent. `Me failure of any
Bank to make available to the Administrative Agent such Bank's share of the
initial Borrowing in accordance with Section 2.2(a) hereof shall not relieve any
other Bank of its obligations to fund its Commitment, in accordance with the
provisions hereof.
(b) If a Bank does not advance to Administrative Agent such Bank's pro
rata share of the initial Borrowing in accordance herewith, then neither
Administrative Agent nor the other Banks shall be required or obligated to fund
such Bank's pro rata share of such initial Borrowing.
(c) As used herein, the following terms shall have the meanings set
forth below:
(i) "Defaulting Bank" shall mean any Bank which (x) does not
advance to the Administrative Agent such Bank's pro rata share of the initial
Borrowing in accordance herewith for a period of five (5) Domestic Business Days
after notice of such failure from Administrative Agent, (y) shall otherwise fail
to perform such Bank's obligations under the Loan Documents for a period of five
(5) Domestic Business Days after notice of such failure from Administrative
Agent, or (z) shall fail to pay the Administrative Agent or any other Bank, as
the case may be, upon demand, such Bank's pro rata share of any costs, expenses
or disbursements incurred or made by the Administrative Agent pursuant to the
terms of the Loan
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66
Documents for a period of five (5) Domestic Business Days after notice of such
failure from Administrative Agent, and in all cases, such failure is not as a
result of a good faith dispute as to whether such advance is properly required
to be made pursuant to the provisions of this Agreement, or as to whether such
other performance or payment is properly required pursuant to the provisions of
this Agreement.
(ii) "Junior Creditor" means any Defaulting Bank which has not (x)
fully cured each and every default on its part under the Loan Documents and (y)
unconditionally tendered to the Administrative Agent such Defaulting Bank's pro
rata share of all costs, expenses and disbursements required to be paid or
reimbursed pursuant to the terms of the Loan Documents.
(iii) "Payment in Full" means, as of any date, the receipt by the
Banks who are not Junior Creditors of an amount of cash, in lawful currency of
the United States, sufficient to indefeasibly pay in full all Senior Debt.
(iv) "Senior Debt" means (x) collectively, any and all
indebtedness, obligations and liabilities of the Borrower to the Banks who are
not Junior Creditors from time to time, whether fixed or contingent, direct or
indirect, joint or several, due or not due, liquidated or unliquidated,
determined or undetermined, arising by contract, operation of law or otherwise,
whether on open account or evidenced by one or more instruments, and whether for
principal, premium, interest (including, without limitation, interest accruing
after the filing of a petition initiating any proceeding referred to in Section
6. 1 (f) or (g)), reimbursement for fees, indemnities, costs, expenses or
otherwise, which arise under, in connection with or in respect of the Loans or
the Loan Documents, and (y) any and all deferrals, renewals, extensions and
refundings of, or amendments, restatements, rearrangements, modifications or
supplements to, any such indebtedness, obligation or liability.
(v) "Subordinated Debt" means (x) any and all indebtedness,
obligations and liabilities of Borrower to one or more Junior Creditors from
time to time, whether fixed or contingent, direct or indirect, joint or several,
due or not due, liquidated or unliquidated, determined or undetermined, arising
by contract, operation of law or otherwise, whether on open account or evidenced
by one or more instruments, and whether for principal, premium, interest
(including, without limitation, interest accruing after the filing of a petition
initiating any proceeding referred to in Section 6. 1 (f) or (g)), reimbursement
for fees, indemnities, costs, expenses or otherwise, which arise under, in
connection with or in respect of the Loans or the Loan Documents, and (y) any
and all deferrals, renewals, extensions and refundings of, or amendments,
restatements, rearrangements, modifications or supplements to, any such
indebtedness, obligation or liability.
(d) No Junior Creditor shall, prior to Payment in Full of all
Senior Debt:
(i) accelerate, demand payment of, ▇▇▇ upon, collect, or
receive any payment upon, in any manner, or satisfy or otherwise discharge, any
Subordinated Debt, whether for principal, interest and otherwise;
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67
(ii) take or enforce any Liens to secure Subordinated Debt or
attach or levy upon any assets of Borrower, to enforce any Subordinated Debt;
(iii) enforce or apply any security for any Subordinated Debt;
or
(iv) incur any debt or liability, or the like, to, or receive
any loan, return of capital, advance, gift or any other property, from, the
Borrower.
(e) In the event of:
(i) any insolvency, bankruptcy, receivership, liquidation,
dissolution, reorganization, readjustment, composition or other similar
proceeding relating to Borrower;
(ii) any liquidation, dissolution or other winding-up of the
Borrower, voluntary or involuntary, whether or not involving insolvency,
reorganization or bankruptcy proceedings;
(iii) any assignment by the Borrower for the benefit of
creditors;
(iv) any sale or other transfer of all or substantially all
assets of the Borrower; or
(v) any other marshaling of the assets of. the Borrower;
each of the Banks shall first have received Payment in Full of all Senior Debt
before any payment or distribution, whether in cash, securities or other
property, shall be made in respect of or upon any Subordinated Debt. Any payment
or distribution, whether in cash, securities or other property that would
otherwise be payable or deliverable in respect of Subordinated Debt to any
Junior Creditor but for this Agreement shall be paid or delivered directly to
the Administrative Agent for distribution to the Banks in accordance with this
Agreement until Payment in Full of all Senior Debt. If any Junior Creditor
receives any such payment or distribution, it shall promptly pay over or deliver
the same to the Administrative Agent for application in accordance with the
preceding sentence.
(f) Each Junior Creditor shall file in any bankruptcy or other
proceeding of Borrower in which the filing of claims is required by law, all
claims relating to Subordinated Debt that such Junior Creditor may have against
Borrower and assign to the Banks who are not Junior Creditors all rights of such
Junior Creditor thereunder. If such Junior Creditor does not file any such claim
prior to forty-five (45) days before the expiration of the time to file such
claim, Administrative Agent, as attorney-in-fact for such Junior Creditor, is
hereby irrevocably authorized to do so in the name of such Junior Creditor or,
in Administrative Agent's sole discretion, to assign the claim to a nominee and
to cause proof of claim to be filed in the name of such nominee. The foregoing
power of attorney is coupled with an interest and cannot be revoked. The
Administrative Agent shall, to the exclusion of each Junior Creditor, have the
sole right, subject to Section 9.5 hereof, to accept or reject any plan proposed
in any such proceeding and to take any other action that a party filing a claim
is entitled to take. In all such cases, whether in administration, bankruptcy or
otherwise, the Person or Persons authorized to pay such claim shall pay to
Administrative Agent the amount payable on such claim and, to the full extent
necessary for that purpose, each Junior Creditor hereby transfers and assigns to
the Administrative Agent all of the Junior Creditor's rights to any such
payments or distributions to which Junior Creditor would otherwise be entitled.
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(g) (i) If any payment or distribution of any character or any
security, whether in cash, securities or other property, shall be received by
any Junior Creditor in contravention of any of the terms hereof, such payment or
distribution or security shall be received in trust for the benefit of, and
shall promptly be paid over or delivered and transferred to, Administrative
Agent for application to the payment of all Senior Debt, to the extent necessary
to achieve Payment in Full. In the event of the failure of any Junior Creditor
to endorse or assign any such payment, distribution or security, Administrative
Agent is hereby irrevocably authorized to endorse or assign the same as
attorney-in-fact for such Junior Creditor.
(ii) Each Junior Creditor shall take such action (including,
without limitation, the execution and filing of a financing statement with
respect to this Agreement and the execution, verification, delivery and filing
of proofs of claim, consents, assignments or other instructions that
Administrative Agent may require from time to time in order to prove or realize
upon any rights or claims pertaining to Subordinated Debt or to effectuate the
full benefit of the subordination contained herein) as may, in Administrative
Agent's sole and absolute discretion, be necessary or desirable to assure the
effectiveness of the subordination effected by this Agreement.
(h) (i) Each Bank that becomes a Junior Creditor understands and
acknowledges by its execution hereof that each other Bank is entering into this
Agreement and the Loan Documents in reliance upon the absolute subordination in
right of payment and in time of payment of Subordinated Debt to Senior Debt as
set forth herein.
(ii) Only upon the Payment in Full of all Senior Debt shall any
Junior Creditor be subrogated to any remaining rights of the Banks which are not
Defaulting Banks to receive payments or distributions of assets of the Borrower
made on or applicable to any Senior Debt.
(iii) Each Junior Creditor agrees that it will deliver all
instruments or other writings evidencing any Subordinated Debt held by it to
Administrative Agent, promptly after request therefor by the Administrative
Agent.
(iv) No Junior Creditor may at any time sell, assign or
otherwise transfer any Subordinated Debt, or any portion thereof, including,
without limitation, the granting of any Lien thereon, unless and until
satisfaction of the requirements of Section 9.6 above and the proposed
transferee shall have assumed in writing the obligation of the Junior Creditor
to the Banks under this Agreement, in a form acceptable to the Administrative
Agent.
(v) If any of the Senior Debt, should be invalidated, avoided
or set aside, the subordination provided for herein nevertheless shall continue
in full force and effect and, as between the Banks which are not Defaulting
Banks and all Junior Creditors, shall be and be deemed to remain in full force
and effect.
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(vi) Each Junior Creditor hereby irrevocably waives, in respect
of Subordinated Debt, all rights (x) under Sections 361 through 365, 502(e) and
509 of the Bankruptcy Code (or any similar sections hereafter in effect under
any other Federal or state laws or legal or equitable principles relating to
bankruptcy, insolvency, reorganizations, liquidations or otherwise for the
relief of debtors or protection of creditors), and (y) to seek or obtain
conversion to a different type of proceeding or to seek or obtain dismissal of a
proceeding, in each case in relation to a bankruptcy, reorganization, insolvency
or other proceeding under similar laws with respect to the Borrower. Without
limiting the generality of the foregoing, each Junior Creditor hereby
specifically waives (A) the right to seek to give credit (secured or otherwise)
to the Borrower in any way under Section 364 of the Bankruptcy Code unless the
same is subordinated in all respects to Senior Debt in a manner acceptable to
Administrative Agent in its sole and absolute discretion and (B) the right to
receive any collateral security (including any "super priority" or equal or
"priming" or replacement Lien) for any Subordinated Debt unless the Banks which
are not Defaulting Banks have received a senior position acceptable to the Banks
in their sole and absolute discretion to secure all Senior Debt (in the same
collateral to the extent collateral is involved).
(i) (i) In addition to and not in limitation of the subordination
effected by this Section 9.15, the Administrative Agent and each of the Banks
which are not Defaulting Banks may in their respective sole and absolute
discretion, also exercise any and all other rights and remedies available at law
or in equity in respect of a Defaulting Bank; and
(ii) The Administrative Agent shall give each of the Banks
notice of the occurrence of a default under this Section 9.15 by a Defaulting
Bank and if the Administrative Agent and/or one or more of the other Banks
shall, at their option, fund any amounts required to be paid or advanced by a
Defaulting Bank, the other Banks who have elected not to fund any portion of
such amounts shall not be liable for any reimbursements to the Administrative
Agent and/or to such other funding Banks.
(j) Notwithstanding anything to the contrary contained or implied
herein, a Defaulting Bank shall not be entitled to vote on any matter as to
which a vote by the Banks is required hereunder, including, without limitation,
any actions or consents on the part of the Administrative Agent as to which the
approval or consent of all the Banks or the Required Banks is required under
Article VIII, Section 9.5 or elsewhere, so long as such Bank is a Defaulting
Bank; provided, however, that in the case of any vote requiring the unanimous
consent of the Banks, if all the Banks other than the Defaulting Bank shall have
voted in accordance with each other, then the Defaulting Bank shall be deemed to
have voted in accordance with such Banks.
(k) Each of the Administrative Agent and any one or more of the
Banks which are not Defaulting Banks may, at their respective option, (i)
advance to the Borrower such Bank's pro rata share of the portion of the initial
Borrowing not advanced by a Defaulting Bank in accordance with the Loan
Documents, or (ii) pay to the Administrative Agent such Bank's pro rata share of
any costs, expenses or disbursements incurred or made by the Administrative
Agent pursuant to the terms of this Agreement not theretofore paid by a
Defaulting Bank. Immediately upon the making of any such advance by the
Administrative Agent or any one of the Banks, such Bank's pro rata share and the
pro rata share of the Defaulting Bank shall be recalculated to reflect such
advance. All payments, repayments and other disbursements of funds by the
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Administrative Agent to Banks shall thereupon and, at all times thereafter be
made in accordance with such Bank's recalculated pro rata share unless and until
a Defaulting Bank shall fully cure all defaults on the part of such Defaulting
Bank under the Loan Documents or otherwise existing in respect of the Loans or
this Agreement, at which time the pro rata share of the Bank(s) which advanced
sums on behalf of the Defaulting Bank and of the Defaulting Bank shall be
restored to their original percentages.
SECTION 9.16 Dispute Resolution.
(a) Mandatory Arbitration.
(i) If requested by any party thereto, any controversy or claim
between the parties hereto arising out of or relating to this Agreement or any
of the other Loan Documents (including any controversy or claim regarding the
arbitrability of such controversy or claim or based on or arising out of an
alleged tort) shall be determined by arbitration to be held in Orange County,
California in accordance with Title 9 of the U.S. Code and the Commercial
Arbitration Rules of the American Arbitration Association (the "AAA") and the
AAA's Supplementary Procedures for Large, Complex Disputes.
(ii) Any arbitration hereunder shall be held before a single
arbitrator mutually agreed to by the parties thereto, except that, if the
parties shall fail to agree to such an arbitrator within ten (10) days from the
date on which the claimant's request for arbitration is delivered to the other
party to the arbitration, such arbitration shall be held before a panel of three
arbitrators and each party shall appoint one arbitrator. The arbitrator(s) must
be either a retired judge from the California Superior or Appellate Courts or
the United States District Courts located in California or a member of the AAA
panel for hearing large, complex cases in Orange County, California. If a party
fails to nominate an arbitrator within 10 days from the date on which the
claimant's request for arbitration has been communicated to the other party, the
appointment shall be made by the AAA. The two arbitrators so appointed shall
attempt to agree upon the third arbitrator to act as chairman. If the two
arbitrators fail to nominate the chairman within 10 days from the date of
appointment of the later appointed arbitrator, the chairman shall be selected by
the AAA.
(iii) Discovery may be taken in the arbitration proceedings
pursuant to the provisions of California Code of Civil Procedure Section
1283.05, which are incorporated herein by reference and made applicable to any
arbitration held pursuant to this Section.
(iv) The award of the arbitrator(s) shall be final, and the parties
agree to waive their right to any form of appeal, to the greatest extent allowed
by law, and to share equally the fees and expenses of the arbitrators. Judgment
upon any award of the arbitrators may be entered in any court having
jurisdiction or application may be made to such court for the judicial
acceptance of the award and for order of enforcement. All statutes of limitation
and waivers that would otherwise be applicable shall apply to any arbitration
proceeding under this Section 9-16(a).
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(b) Judicial Reference.
If any such controversy or claim is not submitted to arbitration as
provided in subsection (a), but becomes the subject of a judicial action, it
shall be resolved solely and exclusively pursuant to the provisions for
reference and trial by referee set forth in California Code of Civil Procedure
Section 638 et seq., or any statute containing reasonably similar provisions
that replaces such sections, except as expressly modified by the provisions
hereof. The referee shall be a retired or former Superior Court judge practicing
in Orange County, California, who is either (i) agreed to by the parties within
ten (10) days of the notice by any party to the other of the intention to invoke
this Section to resolve the dispute, or (ii) failing such agreement, is
appointed pursuant to California Code of Civil Procedure Section 638.1 (or any
statute containing reasonably similar provisions that replaces such section) in
an action filed in the Superior Court of Orange County, California. The parties
agree that any party may file (and, if necessary, the other party shall join in
such filing) with the Clerk of the Orange County Superior Court, or with the
appropriate judge of such Court, any and all petitions, motions, applications or
other documents necessary to obtain the appointment of such a referee
immediately upon the commencement of any action or proceeding to resolve any
such dispute and to conduct all necessary discovery and to proceed to a trial as
expeditiously as possible. All proceedings, including trial, before the referee
shall be conducted at a neutral location (unless otherwise stipulated by the
parties) within five miles of the Orange County Superior Court. The parties
agree that the referee shall be a judge for all purposes (including (i) ruling
on any and all discovery matters and motions and any and all pretrial or trial
motions, (ii) setting a schedule of pretrial proceedings, and (iii) making any
other orders or rulings a sitting judge of the Superior Court would be empowered
to make in any action or proceeding in the Superior Court). Any matter before
the referee shall be governed by the California Code of Civil Procedure, the
California Rules of Court, the California Evidence Code and the Local Rules of
the Orange County Superior Court. Any decision of the referee shall be
appealable to the same extent and in the same manner that such decisions would
be appealable if rendered by a judge of the Orange County Superior Court. The
Referee shall in his or her statement of decision set forth his or her findings
of fact and conclusions of law. The parties intend this reference agreement to
be specifically enforceable in accordance with Section 638.1 of the California
Code of Civil Procedure.
(c) Provisional Remedies, Self-Help
Subject to Section 9.4, nothing herein shall limit the right of any
party to exercise self-help remedies such as setoff or to obtain provisional or
ancillary remedies, including an order of attachment, a temporary restraining
order, preliminary injunction or other interim relief from any court of
competent jurisdiction if such is necessary to preserve that party's rights
before, during or after the pendency of any arbitration, reference or bankruptcy
proceeding.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
IRVINE APARTMENT COMMUNITIES, L.P.,
a Delaware limited partnership
By: TIC ACQUISITION LLC,
a Delaware limited liability company,
its general partner
By: THE IRVINE COMPANY,
a Delaware corporation,
its managing member
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President and Treasurer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President, Corporate Finance
Address:
c/o The Irvine Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Vice President, Corporate Finance
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Signature Page
73
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as a Bank
By: ___________________________________
Name: _________________________________
Title: ________________________________
Commitment Amount:
$66,000,000
LIBOR Lending Office:
▇▇▇▇▇ Fargo Bank, National Association
Disbursement and Operations Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ________________________
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Domestic Lending Office:
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Office Manager
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Signature Page
74
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Co-Arranger and Administrative Agent
By: ___________________________________
Name:__________________________________
Title: ________________________________
Address:
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Office Manager
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Signature Page
75
U.S. BANK NATIONAL ASSOCIATION,
as a Bank
By: ___________________________________
Name:__________________________________
Title: ________________________________
Commitment Amount:
$34,000,000
LIBOR Lending Office:
U.S. Bank National Association
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:_____________
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Domestic Lending Office:
U.S. Bank National Association
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:_____________
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Signature Page
76
U.S. BANK NATIONAL ASSOCIATION,
as Co-Arranger
By: ___________________________________
Name:__________________________________
Title: ________________________________
Address:
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:_____________
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
77
SCHEDULE 1
Bank Commitments
Share of Aggregate
Bank Commitment Commitments
---- ------------ ------------------
▇▇▇▇▇ Fargo Bank, N.A. $ 66,000,000 66.00%
U.S. Bank National Association $ 34,000,000 34.00%
------------ -------
Total $100,000,000 100.00%
============ =======
Schedule 1 -- Page 1
78
SCHEDULE 4.6
BORROWER AND GENERAL PARTNER ERISA PLANS
Irvine Apartment Communities, Inc. Savings Plan
Customary health, life and disability plans for active employees
Schedule 4.6 -- Page 1
79
SCHEDULE 4.17
INITIAL QUALIFYING UNENCUMBERED PROPERTIES
Amherst Court San Carlo
Arcadia at Stonecrest San ▇▇▇▇
Baypointe San Marco
Berkeley Court San ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ San Mateo
Cedar Creek San ▇▇▇▇
▇▇▇▇▇▇▇▇▇ Towers (1221 Ocean Avenue) Santa ▇▇▇▇▇
Columbia Court Santa ▇▇▇▇▇
▇▇▇▇▇▇▇ Court Santa ▇▇▇▇
▇▇▇▇▇ Creek Santa ▇▇▇▇ ▇▇
Dartmouth Court Sierra Vista
Deerfield II Sonoma
Harvard Court Stanford Court
▇▇▇▇▇▇▇▇ The Colony
Newport North The Colony at Aventine
Newport Ridge The Hamptons
Northwood Park The Villas at ▇▇▇▇ Island Marina
Northwood Place Turtle Rock Canyon
Orchard Park Villa Coronado
Park Place (land) Villas of Renaissance
Rancho Alisal ▇▇▇▇▇▇▇▇ ▇▇▇▇
Rancho Maderas Windwood ▇▇▇▇▇
Rancho Monterey Woodbridge Oaks
Rancho Santa Fe Woodbridge Villas
Rancho Tierra Woodbridge Willows
Schedule 4.17 - Page 1
80
SCHEDULE 5.14(c)(i)
San ▇▇▇▇▇▇ Limited Partnership, L.P.
IAC Management, Inc.
IAC Capital Trust
IAC Park Place, LLC
Schedule 5.14(c)(1) - Page 1
81
SCHEDULE 5.14(c)(ii)
None
Schedule 5.14(c)(ii) - Page 2
82
EXHIBIT A
RESERVED
Exhibit A-1
83
EXHIBIT B
TRANSFER SUPPLEMENT
TRANSFER SUPPLEMENT (this ("Transfer Supplement") dated as of ________,
199___ between ________________ (the "Assignor") and _________________________
having an address at __________________________________ (the "Purchasing Bank").
W I T N E S S E T H
WHEREAS, the Assignor has made a loan to Irvine Apartment Communities,
L.P., a Delaware limited partnership (the "Borrower), pursuant to the Amended
and Restated Unsecured Loan Agreement, dated as of June ___, 1999 (as the same
may be amended, supplemented, replaced, renewed or otherwise modified from time
to time through the date hereof, the "Loan Agreement"), by and among the
Borrower, the banks listed on the signature pages thereof, ▇▇▇▇▇ Fargo Bank,
N.A., as Co-Arranger and Administrative Agent, and U.S. Bank National
Association as Co-Arranger. All capitalized terms used and not otherwise defined
herein shall have the respective meanings set forth in the Loan Agreement;
WHEREAS, the Purchasing Bank desires to purchase and assume from the
Assignor, and the Assignor desires to sell and assign to the Purchasing Bank,
certain rights, title, interests and obligations under the Loan Agreement.
NOW, THEREFORE, IT IS AGREED:
1. In consideration of the amount set forth in the receipt (the
"Receipt") given by the Assignor to the Purchasing Bank of even date herewith,
and transferred by wire to the Assignor, the Assignor hereby assigns and sells,
without recourse, representation or warranty except as specifically set forth
herein, to the Purchasing Bank, and the Purchasing Bank hereby purchases and
assumes from the Assignor, a ___% interest (the "Purchased Interest") of the
Loan owing to the Assignor and constituting a portion of the Assignor's rights
and obligations under the Loan Agreement as of the Effective Date (as defined
below) including, without limitation, such percentage interest of the Assignor
in any Loan owing to the Assignor, and Note held by the Assignor, any Commitment
of the Assignor and any other interest of the Assignor under any of the Loan
Documents.
2. The Assignor (i) represents and warrants that as of the date hereof
the aggregate outstanding principal amount of its share of the Loan owing to it
(without giving effect to assignments thereof which have not yet become
effective) is $___________; (ii) represents and warrants that it is the legal
and beneficial owner of the interests being assigned by it hereunder and that
such interests are free and clear of any adverse claim; (iii) represents and
warrants that it has not received any notice of Default or Event of Default from
the Borrower; (iv) represents and warrants that it has full power and authority
to execute and deliver, and perform under, this Transfer Supplement, and all
necessary corporate and/or partnership action has been taken to authorize, and
all approvals and consents have been obtained for, the execution, delivery and
performance thereof; (v) represents and warrants that
Exhibit B-1
84
this Transfer Supplement constitutes its legal, valid and binding obligation
enforceable in accordance with its terms; (vi) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations (or the truthfulness or accuracy thereof) made in
or in connection with the Loan Agreement, or the other Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Loan Agreement, or the other Loan Documents or any other instrument or
document furnished pursuant thereto; and (vii) makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or the performance or observance by the Borrower of any of its
obligations under the Loan Agreement or the other Loan Documents or any other
instrument or document furnished pursuant thereto. Except as specifically set
forth in this Paragraph 2, this assignment shall be without recourse to
Assignor.
3. The Purchasing Bank (i) confirms that it has received a copy of the
Loan Agreement, and the other Loan Documents, together with such financial
statements and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Transfer
Supplement and to become a party to the Loan Agreement, and has not relied on
any statements made by Assignor or O'Melveny & ▇▇▇▇▇ LLP; (ii) agrees that it
will, independently and without reliance upon any of the Administrative Agent,
the Assignor or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own appraisal of and
investigation into the business, operations, property, prospects, financial and
other conditions and creditworthiness of the Borrower and will make its own
credit analysis, appraisals and decisions in taking or not taking action under
the Loan Agreement, and the other Loan Documents; (iii) appoints and authorizes
the Administrative Agent to take such action as agent on its behalf and to
exercise such powers under the Loan Agreement, and the other Loan Documents, as
are delegated to the Agent by the terms thereof, together with such powers as
are incidental thereto; (iv) agrees that it will be bound and perform in
accordance with their terms all of the obligations which by the terms of the
Loan Agreement are required to be performed by it as a Bank; (v) specifies as
its address for notices and lending office, the office set forth beneath its
name on the signature page hereof; (vi) it has full power and authority to
execute and deliver, and perform under, this Transfer Supplement, and all
necessary corporate and/or partnership action has been taken to authorize, and
all approvals and consents have been obtained for, the execution, delivery and
performance thereof; (vii) this Transfer Supplement constitutes its legal, valid
and binding obligation enforceable in accordance with its terms; and (viii) the
interest being assigned hereunder is being acquired by it for its own account,
for investment purposes only and not with a view to the public distribution
thereof and without any present intention of its resale in either case that
would be in violation of the applicable securities laws.
4. This Transfer Supplement shall be effective on the date (the
"Effective Date") on which all of the following have occurred (i) it shall have
been executed and delivered by the parties hereto, (ii) copies hereof shall have
been delivered to the Administrative Agent and the Borrower, (iii) the
Purchasing Bank shall have received an original Note and (iv) the Purchasing
Bank shall have paid to the Assignor the agreed purchase price as set forth in
the Receipt.
5. On and after the Effective Date, (i) the Purchasing Bank shall be a
party to the Loan Agreement and, to the extent provided in this Transfer
Supplement, have the rights and obligations of a Bank thereunder and be entitled
to the benefits and rights of the Banks thereunder and (ii) the
Exhibit B-2
85
Assignor shall, to the extent provided in this Transfer Supplement as to the
Purchased Interest, relinquish its rights and be released from its obligations
under the Loan Agreement.
6. From and after the Effective Date, the Assignor shall cause the
Administrative Agent to make all payments under the Loan Agreement, and the
Notes in respect of the Purchased Interest assigned hereby (including, without
limitation, all payments of principal, fees and interest with respect thereto
and any amounts accrued but not paid prior to such date) to the Purchasing Bank.
7. This Transfer Supplement may be executed in any number of
counterparts which, when taken together, shall be deemed to constitute one and
the same instrument.
8. The Assignor hereby represents and warrants to the Purchasing Bank
that it has made all payments demanded to date by the Administrative Agent in
connection with the Assignor's pro rata share of the obligation to reimburse the
Administrative Agent for its expenses and made all Loans required. In the event
that the Administrative Agent shall demand reimbursement for fees and expenses
from the Purchasing Bank for any period prior to the Effective Date, Assignor
hereby agrees to promptly pay the Administrative Agent such sums directly,
subject, however, to Paragraph 12 hereof.
9. The Assignor will, at the cost of the Assignor, and without expense
to the Purchasing Bank, do, execute, acknowledge and deliver all and every such
further acts, deeds, conveyances, assignments, notices of assignments, transfers
and assurances as the Purchasing Bank shall, from time to time, reasonably
require, for the better assuring conveying, assigning, transferring and
confirming unto the Purchasing Bank the property and rights hereby given,
granted, bargained, sold, aliened, enfeoffed, conveyed, confirmed, assigned
and/or intended nor or hereafter so to be, on which the Assignor may be or may
hereafter become bound to convey or assign to the Purchasing Bank, or for
carrying out the intention or facilitating the performance of the terms of this
Agreement or for filing, registering or recording this Agreement.
10. The parties agree that no broker or finder was instrumental in
bringing about this transaction. Each party shall indemnify, defend the other
and hold the other free and harmless from and against any damages, costs or
expenses (including, but not limited to, reasonable attorneys' fees and
disbursements) suffered by such party arising from claims by any broker or
finder that such broker or finder has dealt with said party in connection with
this transaction.
11. Subject to the provisions of Paragraph 12 hereof, if, with respect
to the Purchased Interest only, the Assignor shall on or after the Effective
Date receive (a) any cash, note, securities, property, obligations or other
consideration in respect of or relating to the Loan or the Loan Documents or
issued in substitution or replacement of the Loan or the Loan Documents, (b) any
cash or non-cash consideration in any form whatsoever distributed, paid or
issued in any bankruptcy proceeding in connection with the Loan or the Loan
Documents or (c) any other distribution (whether by means of repayment,
redemption, realization of security or otherwise), the Assignor shall accept the
same as the Purchasing Bank's agent and hold the same in trust on behalf of and
for the benefit of the Purchasing Bank, and shall deliver the same forthwith to
the Purchasing Bank in the same form received, with the endorsement (without
recourse) of the Assignor when necessary or appropriate. If the Assignor shall
fail to deliver any funds received by it within the same business day of
receipt, unless such funds are
Exhibit B-3
86
received by the Assignor after 4:00 p.m., Pacific Standard Time, then the
following business day after receipt, said funds shall accrue interest at the
Federal Funds Rate and in addition to promptly remitting said amount, the
Assignor shall remit such interest from the date received to the date such
amount is remitted to the Purchasing Bank.
12. The Assignor and the Purchasing Bank each hereby agree to indemnify
and hold harmless the other, each of its directors and each of its officers in
connection with any claim or cause of action based on any matter or claim based
on the acts of either while acting as a Bank under the Loan Agreement. Promptly
after receipt by the indemnified party under this Section of notice of the
commencement of any action, such indemnified party shall notify the indemnifying
party in writing of the commencement thereof. In any such action is brought
against any indemnified party and that party notifies the indemnifying party of
the commencement thereof, the indemnifying party shall be entitled to
participate therein, and to the extent that it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after receipt of notice from the
indemnifying party to such indemnifying party of its election to so assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof. In no event
shall the indemnified party settle or consent to a settlement of such cause of
action or claim without the consent of the indemnifying party.
13. THIS TRANSFER SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAWS OF THE STATE OF CALIFORNIA.
Wire Transfer Instructions:
_______________________________
_______________________________
_______________________________
_______________________________
By: __________________________________
Name: ____________________________
Title: ___________________________
By: __________________________________
Name: ____________________________
Title: ___________________________
Exhibit B-4
87
Receipt and Consent acknowledged this
________ day of _____________, 199____:
▇▇▇▇▇ FARGO BANK, N.A.,
as Administrative Agent
By: __________________________________
Name: ____________________________
Title: ___________________________
[IF REQUIRED ADD THE FOLLOWING:]
IRVINE APARTMENT COMMUNITIES, L.P.,
By: TIC Acquisition LLC,
its general partner
By: The Irvine Company,
its managing member
By: [Certifying Officer]
Name: _________________________
Title:_________________________
Exhibit B-5
88
EXHIBIT C
[FORM OF NOTICE OF INTEREST PERIOD ELECTION]
NOTICE OF INTEREST PERIOD ELECTION
Pursuant to that certain Amended and Restated Unsecured Loan Agreement
dated as of June____, 1999 by and among Irvine Apartment Communities, L.P., a
Delaware limited partnership (the "Borrower"), the banks listed on the signature
pages thereof, ▇▇▇▇▇ Fargo Bank, N.A., as Co-Arranger and Administrative Agent,
and U.S. Bank National Association, as Co-Arranger (as the same may be amended,
supplemented, replaced, renewed or otherwise modified from time to time, the
"Loan Agreement"), this represents Borrower's request to continue as LIBOR Loans
$__________ in principal amount of presently outstanding Loans having an
Interest Period that expires on __________, _____. The Interest Period for such
LIBOR Loans commencing on __________, ______ is requested to be a __________
[Select a 1, 2, 3 or 6 month period] month period. Terms with initial capital
letters used but not defined herein have the meanings assigned to them in the
Loan Agreement.
The undersigned Certifying Officer, to the bets of his or her
knowledge, and Borrower certify that no Event of Default or Default has occurred
and is continuing under the Loan Agreement.
IRVINE APARTMENT COMMUNITIES, L.P.,
a Delaware limited partnership
By: TIC Acquisition LLC,
a Delaware limited liability company,
its general partner
The Irvine Company,
a Delaware corporation,
its managing member
By: [Certifying Officer]
Name: ________________________________
Title: _______________________________
Exhibit C-1
89
EXHIBIT D
[FORM OF COMPLIANCE CERTIFICATE]
COMPLIANCE CERTIFICATE
TO: ▇▇▇▇▇ Fargo Bank, N.A.
Reference is hereby made to the Amended and Restated Unsecured Loan Agreement,
dated as of June ___, 1999 (as the same may be amended, supplemented, replaced,
renewed or otherwise from time to time, the "Loan Agreement"), by and among
IRVINE APARTMENT COMMUNITIES, L.P., a Delaware limited partnership (the
"Borrower"), the Banks listed therein, ▇▇▇▇▇ FARGO BANK, N.A., as Co-Arranger
and Administrative Agent, and U.S. BANK NATIONAL ASSOCIATION, as Co-Arranger.
Terms with initial capital letters used but not defined herein have the meanings
assigned to them in the Loan Agreement.
This Compliance Certificate is being delivered by the Borrower pursuant to
Section 5.1(c) of the Loan Agreement and relates to certain financial statements
of the Borrower (the "Financial Statements") as of and or periods ended
________________, _________ (the "Financial Statement Date"). The undersigned is
the ______________________[insert title of Certifying Officer] of the managing
member of the sole general partner of the Borrower, and hereby further certifies
as of the date hereof, in his capacity as an officer of the general partner of
the Borrower, as follows:
1. I have reviewed the terms of the Loan Documents and have made, or
have caused to be made under my supervisions, a review in
reasonable detail of the transactions and condition of the Borrower
Parties during the accounting period covered by the Financial
Statements.
2. Such review has not disclosed the existence of any Default or Event
of Default during such accounting period or as of the Financial
Statement Date and I do not have knowledge of the existence, as at
the date of this certificate, of any Default or Event of Default.
3. Attached as Appendix A hereto are calculations by which I have
determined that the Borrower is in compliance with the requirements
of Section 5.9 of the Loan Agreement as of the Financial Statement
Date.
4. The Financial Statements fairly present the financial condition and
the results of operations of the Borrower on the dates and for the
periods indicated, on the basis of GAAP.
Exhibit D-1
90
5. The Borrower is in compliance with the Interest Rate Hedge
requirements set forth in Section 5.13 of the Loan Agreement.
DATE: ___________________ IRVINE APARTMENT COMMUNITIES, L.P.,
a Delaware limited partnership
By: TIC Acquisition LLC,
a Delaware limited liability
company,
By: The Irvine Company,
a Delaware corporation
By: ________________________
Name: __________________
Title: _________________
Exhibit D-2