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TERM LOAN CREDIT AGREEMENT
among
APARTMENT INVESTMENT AND MANAGEMENT COMPANY,
AIMCO PROPERTIES, L.P.,
AIMCO/BETHESDA HOLDINGS, INC., AND
NHP MANAGEMENT COMPANY
as Borrowers,
BANK OF AMERICA, N.A.,
as Administrative Agent,
and
THE OTHER FINANCIAL
INSTITUTIONS PARTY HERETO
Dated as of May 30, 2003
BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger
and
Sole Bookrunner
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS AND ACCOUNTING TERMS................................................................1
1.01 DEFINED TERMS.....................................................................................1
1.02 USE OF CERTAIN TERMS.............................................................................36
1.03 ACCOUNTING TERMS.................................................................................36
1.04 ROUNDING.........................................................................................37
1.05 EXHIBITS AND SCHEDULES...........................................................................37
1.06 REFERENCES TO AGREEMENTS, EXHIBITS AND LAWS......................................................37
SECTION 2. THE COMMITMENTS AND EXTENSIONS OF CREDIT.......................................................37
2.01 COMMITTED LOANS..................................................................................37
2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF COMMITTED LOANS.....................................38
2.03 PREPAYMENTS......................................................................................38
2.04 [INTENTIONALLY OMITTED]..........................................................................39
2.05 PRINCIPAL AND INTEREST; DEFAULT RATE.............................................................39
2.06 FEES.............................................................................................40
2.07 COMPUTATION OF INTEREST AND FEES.................................................................40
2.08 MAKING PAYMENTS..................................................................................40
2.09 FUNDING SOURCES..................................................................................41
2.10 COLLATERAL.......................................................................................41
SECTION 3. TAXES, YIELD PROTECTION AND ILLEGALITY.........................................................41
3.01 TAXES............................................................................................41
3.02 ILLEGALITY.......................................................................................44
3.03 INABILITY TO DETERMINE RATES.....................................................................44
3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY..............................................45
3.05 BREAKFUNDING COSTS...............................................................................45
3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION..............................................46
3.07 SURVIVAL.........................................................................................46
SECTION 4. CONDITIONS TO EFFECTIVENESS....................................................................46
4.01 CONDITIONS TO INITIAL EXTENSION OF CREDIT........................................................46
SECTION 5. REPRESENTATIONS AND WARRANTIES.................................................................49
5.01 EXISTENCE AND QUALIFICATION; POWER...............................................................49
5.02 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS....................................................49
5.03 NO LEGAL BAR.....................................................................................50
5.04 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.................................................50
5.05 LITIGATION.......................................................................................50
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5.06 NO DEFAULT.......................................................................................51
5.07 OWNERSHIP OF PROPERTY; LIENS.....................................................................51
5.08 TAXES............................................................................................51
5.09 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT; REIT AND TAX
STATUS; STOCK EXCHANGE LISTING...................................................................52
5.10 ERISA COMPLIANCE.................................................................................52
5.11 INTANGIBLE ASSETS................................................................................54
5.12 COMPLIANCE WITH LAWS.............................................................................54
5.13 ENVIRONMENTAL COMPLIANCE.........................................................................54
5.14 INSURANCE........................................................................................55
5.15 GP LOANS.........................................................................................55
5.16 SUBSIDIARIES; INTERESTS IN OTHER ENTITIES; CHANGES IN ORGANIZATIONAL STRUCTURE...................55
5.17 MATTERS RELATING TO PLEDGED COLLATERAL...........................................................55
5.18 DISCLOSURE.......................................................................................56
5.19 TAX SHELTER REGULATIONS..........................................................................57
SECTION 6. AFFIRMATIVE COVENANTS..........................................................................57
6.01 FINANCIAL STATEMENTS.............................................................................57
6.02 CERTIFICATES, NOTICES AND OTHER INFORMATION......................................................58
6.03 PAYMENT OBLIGATIONS..............................................................................61
6.04 PRESERVATION OF EXISTENCE........................................................................61
6.05 MAINTENANCE OF PROPERTIES........................................................................61
6.06 MAINTENANCE OF INSURANCE.........................................................................61
6.07 COMPLIANCE WITH LAWS.............................................................................62
6.08 INSPECTION RIGHTS................................................................................62
6.09 KEEPING OF RECORDS AND BOOKS OF ACCOUNT..........................................................62
6.10 COMPLIANCE WITH ERISA............................................................................63
6.11 COMPLIANCE WITH AGREEMENTS.......................................................................63
6.12 USE OF PROCEEDS..................................................................................63
6.13 COMMUNICATION WITH ACCOUNTANTS...................................................................63
6.14 MAINTENANCE OF REIT STATUS; STOCK EXCHANGE LISTING...............................................63
6.15 SOLVENCY.........................................................................................63
6.16 FURTHER ASSURANCES...............................................................................63
6.17 UNCONSOLIDATED PARTNERSHIP DISTRIBUTIONS.........................................................65
SECTION 7. NEGATIVE COVENANTS.............................................................................65
7.01 INDEBTEDNESS.....................................................................................65
7.02 LIENS AND NEGATIVE PLEDGES.......................................................................67
7.03 FUNDAMENTAL CHANGES..............................................................................68
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7.04 DISPOSITIONS.....................................................................................70
7.05 INVESTMENTS......................................................................................70
7.06 LEASE OBLIGATIONS................................................................................71
7.07 RESTRICTED PAYMENTS..............................................................................72
7.08 ERISA............................................................................................73
7.09 CHANGE IN NATURE OF BUSINESS.....................................................................73
7.10 TRANSACTIONS WITH AFFILIATES.....................................................................73
7.11 USE OF PROCEEDS..................................................................................74
7.12 INTENTIONALLY OMITTED............................................................................74
7.13 LIMITATIONS ON UPSTREAMING.......................................................................74
7.14 FINANCIAL COVENANTS..............................................................................74
7.15 CHANGE IN AUDITORS...............................................................................75
7.16 SPECIAL COVENANTS RELATING TO THE REIT...........................................................75
7.17 TAXATION OF BORROWERS............................................................................76
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.................................................................76
8.01 EVENTS OF DEFAULT................................................................................76
8.02 REMEDIES UPON EVENT OF DEFAULT...................................................................81
SECTION 9. ADMINISTRATIVE AGENT...........................................................................82
9.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT............................................82
9.02 DELEGATION OF DUTIES.............................................................................83
9.03 LIABILITY OF ADMINISTRATIVE AGENT................................................................83
9.04 RELIANCE BY ADMINISTRATIVE AGENT.................................................................83
9.05 NOTICE OF DEFAULT................................................................................84
9.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE AGENT...............................84
9.07 INDEMNIFICATION OF ADMINISTRATIVE AGENT..........................................................85
9.08 ADMINISTRATIVE AGENT IN INDIVIDUAL CAPACITY......................................................85
9.09 SUCCESSOR ADMINISTRATIVE AGENT...................................................................85
SECTION 10. MISCELLANEOUS.................................................................................86
10.01 AMENDMENTS; CONSENTS.............................................................................86
10.02 TRANSMISSION AND EFFECTIVENESS OF NOTICES AND SIGNATURES.........................................87
10.03 ATTORNEY COSTS, EXPENSES AND TAXES...............................................................88
10.04 BINDING EFFECT; ASSIGNMENT.......................................................................89
10.05 SET-OFF..........................................................................................92
10.06 SHARING OF PAYMENT...............................................................................92
10.07 NO WAIVER; CUMULATIVE REMEDIES...................................................................93
10.08 USURY............................................................................................93
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10.09 COUNTERPARTS.....................................................................................94
10.10 INTEGRATION; CONFLICTS WITH OTHER LOAN DOCUMENTS.................................................94
10.11 NATURE OF LENDERS' OBLIGATIONS...................................................................94
10.12 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.......................................................94
10.13 INDEMNITY BY BORROWERS...........................................................................95
10.14 NONLIABILITY OF LENDERS..........................................................................95
10.15 NO THIRD PARTIES BENEFITED.......................................................................96
10.16 SEVERABILITY.....................................................................................96
10.17 CONFIDENTIALITY..................................................................................97
10.18 HEADINGS.........................................................................................98
10.19 TIME OF THE ESSENCE..............................................................................98
10.20 [INTENTIONALLY OMITTED]..........................................................................98
10.21 GOVERNING LAW....................................................................................98
10.22 WAIVER OF RIGHT TO TRIAL BY JURY.................................................................98
10.23 NON-EXCLUSIVE JURISDICTION.......................................................................99
10.24 NOTICE OF CLAIMS; CLAIMS BAR.....................................................................99
10.25 BORROWERS' OBLIGATIONS...........................................................................99
10.26 LENDER COVENANT.................................................................................103
10.27 RELEASE OF COLLATERAL AND GUARANTEE OBLIGATIONS.................................................103
SECTION 11. COLLATERAL AGENT.............................................................................104
11.01 COLLATERAL AGENT................................................................................104
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TERM LOAN CREDIT AGREEMENT
This TERM LOAN CREDIT AGREEMENT ("AGREEMENT") is entered
into as of May 30, 2003, by and among APARTMENT INVESTMENT AND MANAGEMENT
COMPANY, a Maryland corporation (the "REIT"), AIMCO PROPERTIES, L.P., a
Delaware limited partnership ("AIMCO"), AIMCO/BETHESDA HOLDINGS, INC., a
Delaware corporation ("AIMCO/BETHESDA"), and NHP MANAGEMENT COMPANY, a
District of Columbia corporation ("NHP MANAGEMENT") (the REIT, AIMCO,
AIMCO/Bethesda and NHP Management, collectively referred to as "BORROWERS"),
each lender from time to time party hereto (collectively, "LENDERS" and
individually, a "LENDER"), and BANK OF AMERICA, N.A. ("BANK OF AMERICA"), as
Administrative Agent (in such capacity "ADMINISTRATIVE AGENT").
RECITALS
WHEREAS, the Lenders have agreed to provide a term loan
facility of up to $250,000,000 to the Borrowers.
NOW, THEREFORE, in consideration of the agreements,
provisions and covenants contained herein, the parties agree as follows:
SECTION 1.
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS.
As used in this Agreement, the following terms shall have
the meanings set forth below:
"ADJUSTED TOTAL CORPORATE EBITDA" means, for any period,
the Total Corporate EBITDA for such period minus the Capital Expenditure
Reserve as of the last day of such period.
"ADJUSTED TOTAL NOI" means, for any period, Borrowers', the
Guarantors' and their respective downstream Affiliates' pro-rata share of Net
Operating Income, including the Borrowers', Guarantors' and their respective
downstream Affiliates' pro-rata share of Net Operating Income from
unconsolidated Persons, LESS the Capital Expenditure Reserve as of the last
day of such period.
"ADJUSTED FIXED CHARGES" means, for any period, the sum of
(i) Total Interest Expense for such period, plus (ii) Total Scheduled
Amortization for such period (including Scheduled Amortization for Borrowers,
Guarantors and their respective Subsidiaries made pursuant to the Casden Loan
Documents for such period), plus (iii) dividends accrued (whether or not
declared or payable) on the preferred Stock and/or preferred Partnership
Units of the Borrowers or any of their Subsidiaries during such period. For
purposes of determining Scheduled Amortization under the Casden Loan
Documents for the calculation of Adjusted Fixed Charges for any period, that
certain $97,000,000 principal amortization installment
1
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required to be paid under the Casden Loan Documents on or before March 11,
2003 shall be deemed to have been paid in equal quarterly installments during
each of the fiscal quarters ending June 30, 2002, September 30, 2002,
December 31, 2002 and March 31, 2003, and that certain $97,000,000 principal
amortization installment required to be paid under the Casden Loan Documents
on or before March 11, 2004 shall be deemed to have been paid in equal
quarterly installments during each of the fiscal quarters ending June 30,
2003, September 30, 2003, December 31, 2003 and March 31, 2004.
"ADJUSTED FIXED CHARGES COVERAGE RATIO" means, as of any
date of determination, the ratio of (a) Adjusted Total Corporate EBITDA for
the four fiscal quarter period ending on such date to (b) Adjusted Fixed
Charges during such period.
"ADMINISTRATIVE AGENT" means Bank of America, in its
capacity as Administrative Agent under any of the Loan Documents, or any
successor administrative agent.
"ADMINISTRATIVE AGENT'S OFFICE" means Administrative
Agent's address and, as appropriate, account as set forth in Schedule 10.02,
or such other address or account as Administrative Agent hereafter may
designate by written notice to Borrowers and Lenders.
"ADMINISTRATIVE AGENT-RELATED PERSONS" means Administrative
Agent (including any successor agent), together with its Affiliates
(including, in the case of Administrative Agent, Banc of America Securities
LLC), and the officers, directors, employees, agents and attorneys-in-fact of
such Persons and Affiliates.
"AFFILIATE", as applied to any Person, means any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, that Person. A Person shall be deemed to be
"controlled by" any other Person if such other Person possesses, directly or
indirectly, power (a) to vote 10% or more of the securities (on a fully
diluted basis) having ordinary voting power for the election of directors or
managing general partners; or (b) to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
"AGREEMENT" means this Term Loan Credit Agreement, as
amended, restated, extended, supplemented or otherwise modified in writing
from time to time.
"ANCILLARY SERVICES" means real property asset management,
accounting, ordering and inventory services and other property related
services provided by AIMCO/NHP Holdings, Inc. and NHP A&R Services, Inc. and
any other entities so designated by Borrowers as a provider of Ancillary
Services and acceptable to Administrative Agent in its reasonable discretion.
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and
Acceptance substantially in the form of EXHIBIT D.
"ATTORNEY COSTS" means and includes all reasonable fees and
disbursements of any law firm or other external counsel and the allocated
cost of internal legal services and all disbursements of internal counsel.
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