EXHIBIT 10.4
MID-AMERICA APARTMENT COMMUNITIES, INC.
MID-AMERICA APARTMENTS, L.P.
REVOLVING CREDIT AGREEMENT
(AMENDED AND RESTATED)
AMSOUTH BANK
ADMINISTRATIVE AGENT
MARCH 16, 1998
CONTENTS
I. LOAN TERMS.................................................... 1
1.1. The Loans......................................... 1
1.2. Borrowings........................................ 2
1.3. Commitments....................................... 2
1.4. Notes............................................. 2
1.5. Maximum amounts of Loans and Borrowings........... 2
1.6. Minimum Borrowing size............................ 2
1.7. Swing Line Facility............................... 2
1.8. Letters of Credit................................. 4
1.9. Drafts under a Letter of Credit................... 5
1.10. Maturity of Loans................................. 5
1.11. Fees.............................................. 5
1.12. Interest Periods.................................. 7
1.13. Interest.......................................... 7
1.14. Maximum Eurodollar Borrowings..................... 8
1.15. Borrowers' termination of Borrowing Rights........ 8
1.16. Voluntary and Mandatory Prepayments............... 8
1.17. Payments generally................................ 10
1.18. Funding losses.................................... 11
1.19. Pro-rata treatment................................ 11
1.20. Whole dollars..................................... 12
II. BORROWINGS AND CONVERSION PROCEDURES.......................... 12
2.1. Borrowing Notices................................. 12
2.2. Funding of Loans.................................. 12
2.3. Lender's failure to fund.......................... 13
2.4. Conversions....................................... 13
2.5. Defective notices................................. 14
III. CONDITIONS.................................................... 15
3.1. Conditions to effectiveness of this Agreement..... 15
3.2. Conditions to Borrowings.......................... 16
3.3. Conditions to Maintaining Loans................... 17
3.4. Conditions to Release of Mortgaged Property....... 18
3.5. Conditions to Addition of Property................ 19
IV. REPRESENTATIONS AND WARRANTIES................................ 21
4.1. Corporate existence and power..................... 21
4.2. Corporate, partnership and governmental
authorization; non-contravention................ 22
4.3. Binding effect.................................... 22
4.4. Financial information............................. 22
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4.5. No material adverse change........................ 22
4.6. Litigation........................................ 22
4.7. Taxes............................................. 23
4.8. Compliance with ERISA............................. 23
4.9. Not an investment company or public
utility holding company......................... 23
4.10. Margin regulations................................ 23
4.11. Title to assets................................... 23
4.12. Contracts or restrictions affecting Borrowers..... 24
4.13. No default........................................ 24
4.14. Patents and Trademarks............................ 24
4.15. Hazardous Substances.............................. 24
4.16. Real Estate Investment Trust...................... 24
4.17. Subsidiaries...................................... 24
V. AFFIRMATIVE COVENANTS......................................... 25
5.1. Financial information............................. 25
5.2 Maintenance of property; insurance................ 26
5.3. Compliance with laws.............................. 27
5.4. Books and records; payment of Taxes............... 27
5.5. Notice of Defaults................................ 28
5.6. ERISA events...................................... 28
5.7. Use of proceeds................................... 28
5.8. Maintenance of existence; merger; sale of assets.. 28
5.9. Right of inspection............................... 29
5.10. Environmental laws................................ 29
5.11. Notice of adverse change in assets................ 29
5.12. Indemnification................................... 29
5.13. Qualification as a Real Estate Investment Trust... 31
5.14. Ownership of Subsidiaries......................... 31
VI. NEGATIVE COVENANTS OF BORROWERS............................... 31
6.1. Liens............................................. 31
6.2. Sale of Assets.................................... 32
6.3. Accounts Receivable from Related Persons.......... 32
6.4. Loans to Officers and Employees................... 32
6.5. Trademarks and Trade Names........................ 32
6.6. Net Operating Loss................................ 33
6.7. Dividend Payout................................... 33
6.8. Other Financial Covenants......................... 33
6.9. Control........................................... 34
6.10. Subsidiary Ownership.............................. 34
6.11. Subsidiary Debt................................... 34
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VII. DEFAULT....................................................... 34
7.1. Events of Default................................. 34
7.2. Action on Default................................. 39
7.3. Notice of Default................................. 39
VIII. THE ADMINISTRATIVE AGENT...................................... 40
8.1. Appointment and authorization..................... 40
8.2. Other conduct..................................... 40
8.3. Scope of obligations.............................. 40
8.4. Consultation with experts......................... 40
8.5. Liability of Administrative Agent................. 40
8.6. Indemnification................................... 41
8.7. Successor Administrative Agent.................... 41
8.8. Fees.............................................. 42
IX. CHANGE IN CIRCUMSTANCES....................................... 42
9.1. Eurocurrency Reserve Requirements................. 42
9.2. Increased cost or reduced return.................. 42
9.3. LIBOR unavailable or inadequate................... 44
9.4. Illegal Loans..................................... 45
9.5. Termination of suspension......................... 45
9.6. Taxes on payments................................. 45
9.7. Change of Office.................................. 47
9.8. Replacement of Lender............................. 47
X. MISCELLANEOUS................................................. 48
10.1. Notices........................................... 48
10.2. No waivers; remedies cumulative; integration;
survival........................................ 48
10.3. Expenses; documentary Taxes....................... 49
10.4. Indemnification................................... 49
10.5. Sharing of set-offs............................... 50
10.6. Amendments and waivers............................ 51
10.7. Successors and assigns............................ 51
10.8. Borrowers' liability.............................. 54
10.9. No reliance on Margin Stock collateral............ 54
10.10. Credit decision................................... 54
10.11. Alabama law....................................... 54
10.12. Waiver of jury trial.............................. 54
10.13. Venue of Actions.................................. 55
10.14. Execution......................................... 55
10.15. Survival.......................................... 55
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XI. DEFINITIONS AND USAGES........................................ 55
11.1. Definitions....................................... 55
11.2. Accounting terms and determinations............... 67
11.3. Miscellaneous usages.............................. 67
List of Schedules................................................... 68
LIST OF EXHIBITS.................................................... 69
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REVOLVING CREDIT AGREEMENT
This Revolving Credit Agreement is dated as of March 16, 1998
(this "Agreement") among
MID-AMERICA APARTMENT COMMUNITIES, INC. ("MAAC"),
MID-AMERICA APARTMENTS, L.P. ("MID-AMERICA"),
the financial institutions listed on SCHEDULE 1 as amended or
supplemented from time to time (the "LENDERS"), and
AMSOUTH BANK, an Alabama banking corporation, as Administrative Agent for
the Lenders, its successors and assigns (in such capacity, the
"ADMINISTRATIVE AGENT").
This Agreement is executed in amendment and restatement of that
certain Revolving Credit Agreement among the Borrowers, the Administrative Agent
and certain lenders, dated November 20, 1997.
The parties, intending to be legally bound, severally agree as
follows:
I. LOAN TERMS
1.1. The Loans
Each Lender shall make loans ("LOANS") to MAAC and Mid-America, jointly
and severally (each a "BORROWER" and together the "BORROWERS").
The agreements of the Lenders to make Loans, are several and not joint.
All Loans shall be made on the terms, and subject to the conditions, of
this Agreement. The Borrowers may borrow, repay, prepay and reborrow under
this Agreement from the Effective Date until the Termination Date of the
Loans, in an aggregate principal amount not to exceed, at any one time
outstanding, the lesser of:
o the sum of Two Hundred Million Dollars ($200,000,000.00), or
o the Borrowing Base reduced by (a) the amount of all outstanding
Letters of Credit and (b) the amount of outstanding Advances.
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1.2. Borrowings
All Loans to the Borrowers that have Interest Periods that begin on
the same day and end on the same day shall constitute a single
borrowing ("Borrowing").
1.3. Commitments
A Lender's Commitment as of the date of this Agreement is the amount
shown opposite its name on Schedule 1; a Lender's Commitment may be
subsequently reduced pursuant to this Agreement or increased
pursuant to a permitted assignment. As of the date of this
Agreement, the Aggregate Commitment is $200,000,000.00.
1.4. Notes
The Loans shall be evidenced by promissory notes of the Borrowers,
payable to the order of each Lender, in the principal amount of
their respective Proportionate Share of the Aggregate Commitment,
and in the form substantially the same as the copy of the Note
attached hereto as Exhibit A (the "NOTES"). The Notes, in addition
to evidencing new indebtedness, also amend, restate, renew and
consolidate certain notes related to the Mortgaged Property, as
explained on Exhibit I attached hereto.
1.5. Maximum amounts of Loans and Borrowings
(a) No Lender shall make Loans in an aggregate unpaid principal
amount that exceeds the Lender's Commitment. Each Borrowing
shall consist of Loans made by the Lenders in proportion to
their respective Commitments.
(b) No Loan shall be made to the Borrowers if, immediately
following the making of the Loan, the aggregate unpaid
principal amount of all Loans to the Borrowers would exceed
the lesser of the Aggregate Commitment or the Borrowing Base.
1.6. Minimum Borrowing size
Each Borrowing shall be in the principal amount of $2,000,000 or a
larger integral multiple of $500,000.
1.7. Swing Line Facility
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(a) The "SWING LINE FACILITY" is being extended under, and as a
component of, the Aggregate Commitment, and shall be advanced
and readvanced by the Administrative Agent to the Borrowers in
accordance with the provisions of this Agreement hereinafter
set forth, and shall be evidenced by, and payable, together
with interest thereon, in accordance with the provisions of,
the Swing Line Facility Note. The Borrowers expressly
acknowledge and agree that:
1. the Administrative Agent directly assumes the obligation
to fund, and shall have the sole obligation to fund,
100% of each Advance of the Swing Line Facility which is
made, or required to be made, in accordance with the
provisions of this Agreement, and
2. the Borrowers shall not have the right under any fact or
circumstance to look to any other party, including,
without limitation, any other Lender, for the funding of
all or any portion of the Swing Line Facility which is
required to be made in accordance with the provisions of
this Agreement if the Administrative Agent shall default
in doing so, all risk of such default being assumed in
all respects by the Borrowers.
(b) Subject to satisfaction of the applicable general terms
and conditions set forth in this Agreement, Advances
under the Swing Line Facility will be available on any
day the Administrative Agent is open for business and on
the same day notice is given by the Borrowers to the
Administrative Agent, provided that any such request by
the Borrowers for an Advance under the Swing Line
Facility is received by the Administrative Agent prior to
1:00 P.M., Birmingham time, on the date such Advance is
requested. The outstanding principal balance under the
Swing Line Facility may be prepaid, in whole or in part
and at any time, without prior notice to the
Administrative Agent and without payment of penalty or
premium. Notice of prepayments under the Swing Line
Facility must be received by the Administrative Agent
prior to 1:00 P.M., Birmingham time, and payment received
by the close of business on the day of notice for the
Borrowers to receive credit for such prepayment that day.
With respect to an Advance under the Swing Line Facility
in excess of $750,000, the Borrowers shall submit to the
Administrative Agent a detailed request for the Advance
in the form attached hereto as
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EXHIBIT B. For an Advance of $750,000 or less under the Swing
Line Facility, the Borrowers shall submit to the
Administrative Agent a written memo requesting such Advance.
Notwithstanding anything to the contrary contained herein, all
controlled advances and payments automatically generated by
the Administrative Agent's cash management system shall not
require any of the above notices from the Borrowers. The
Borrowers shall notify the Administrative Agent in writing of
the responsible officer, who shall be either the chief
financial officer, the chief executive officer, the chief
operating officer, or the treasurer (THE "RESPONSIBLE
OFFICER") authorized to request Advances under the Swing Line
Facility on behalf of the Borrowers.
(c) Upon request of the Administrative Agent, each of the
other Lenders shall within 24 hours of such request fund
their Proportionate Share in each Advance under the Swing
Line; however, the failure of any such Lender to fund
their Proportionate Share of each Advance under the Swing
Line Facility shall not relieve the Administrative Agent
from its obligation under subparagraph 1.7(a) above to
fund the entire Advance.
1.8. Letters of Credit
The Letter of Credit Facility is being extended under, and as a
component of, the Aggregate Commitment. The Borrowers shall have the
right, from time to time, to request the Administrative Agent to
issue one or more unconditional and irrevocable letters of credit
for its account or a Subsidiary's (each a "Letter of Credit"). The
Borrowers, the Lenders and the Administrative Agent acknowledge and
agree that the Existing Letters of Credit previously issued by the
Administrative Agent for the account of MAAC shall each constitute a
Letter of Credit hereunder for all purposes. Any request by the
Borrowers for a Letter of Credit shall be subject to the terms and
conditions of this paragraph hereinafter set forth:
(a) Each request for the issuance of a Letter of Credit shall be
in writing, shall state the requested date of issuance of the
Letter(s) of Credit (which shall be at least five (5) Business
Days after the request is received by the Administrative
Agent), shall state the requested amount of the Letter(s) of
Credit and the purposes for which the Letter(s) of Credit are
requested, shall indicate both the account party and the
beneficiary of the Letter(s) of Credit, and shall specify the
terms of the Letter(s) of Credit (which terms shall be
reasonably satisfactory to the Administrative Agent).
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(b) The aggregate amount of Letters of Credit outstanding at any
one time shall not exceed $60,000,000.
(c) At no time during the term of the Loans shall there be more
than twenty (20) Letters of Credit in the aggregate
outstanding, unless otherwise agreed to by Administrative
Agent in its sole discretion.
(d) No Letter of Credit shall have an expiration date beyond the
Maturity Date.
(e) The purpose of each Letter of Credit shall be to provide
credit enhancement for tax exempt bond financing of the
Borrowers or a Subsidiary or for such other purposes as may be
acceptable to the Administrative Agent, which approval shall
not be unreasonably withheld or delayed.
(f) The Administrative Agent shall have the sole obligation to
issue Letter(s) of Credit under this Agreement, and Borrower
shall not have the right under any fact or circumstance to
look to any other party, including, without limitation, any
other Lender, for the issuance of the Letter(s) of Credit if
the Administrative Agent defaults in doing so, all such risk
of default being assumed by the Borrowers.
(g) Upon written request of a Lender, the Administrative Agent
shall provide a copy of the Letter(s) of Credit to such
Lender.
1.9. Drafts under a Letter of Credit
Any draw honored by the Administrative Agent under a Letter of
Credit shall constitute an automatic Advance at the Base Rate and
shall be evidenced by and payable, together with interest thereon,
in accordance with the provisions of the Notes. Upon request of the
Administrative Agent, each of the other Lenders shall, not later
than 24 hours after such request, fund their respective
Proportionate Share in each such Advance which is made as a result
of a draw under a Letter of Credit.
1.10. Maturity of Loans
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Subject to SECTION 7.2, (Action on Default), and Section 1.15
(Borrowers' termination of Borrowing Rights), the unpaid principal
amount of each Loan shall be due and payable on the Maturity Date.
The Borrowing Rights of the Borrowers and the obligation of the
Lenders to extend Loans shall permanently terminate on the
Termination Date.
1.11. Fees
(a) Letter of Credit Fees
The annual fee for the issuance of a Letter of Credit shall be
equal to one and one-quarter percent (1.25%) per annum
multiplied by the face amount of such Letter of Credit; and
any such fee shall be paid annually in advance for the entire
period of time that such Letter of Credit is outstanding (the
"Letter of Credit Fee"). One- eighth of one percent (.125%) of
each Letter of Credit Fee shall be retained by the
Administrative Agent for its sole account, and the remaining
one and one-eighth percent (1.125%) shall be shared with the
Lenders in accordance with their respective Proportionate
Share. The Borrowers shall also pay to the Administrative
Agent an administrative fee at the customary rate charged by
the Administrative Agent for the issuance of letters of credit
generally.
(b) Commitment Fee
The Borrowers have agreed to pay to the Lenders a commitment
fee (the "Commitment Fee") pursuant to a separate letter
agreement among the Administrative Agent and the Borrowers.
Such payment is being made in consideration of the agreement
of the Lenders to make funds available to the Borrowers under
the terms and provisions hereof from the Effective Date until
the Termination Date. The Borrowers agree that this commitment
fee is fair and reasonable, considering the condition of the
money market, the creditworthiness of the Borrowers and the
interest rate to be paid for the Loan.
(c) Facility Fee
The Borrowers shall pay an annual fee, due on the closing of
the Loans and on November 24, 1998 (the "Facility Fee"). Such
payment shall be made in consideration of the Lenders'
agreement to make funds available to the Borrowers under the
terms and provisions hereof. The Facility Fee due on closing
shall be payable pursuant to a separate letter agreement
between the Administrative Agent and each Lender. The Facility
Fee due on November 24, 1998, shall be payable to the Lenders
in accordance with their respective Proportionate Share.
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(d) Collateral Fee
The Borrowers shall pay to the Administrative Agent, for the
sole benefit of the Administrative Agent, a fee of $3,500 for
each Apartment Community submitted to the Administrative Agent
for inclusion as a Mortgaged Property throughout the term of
the Loans.
(e) Other Fees
The Borrowers shall pay the Administrative Agent such other
fees as required by the Administrative Agent in a separate
letter agreement between the Administrative Agent and the
Borrowers.
1.12. Interest Periods
Each Eurodollar Loan shall have an Interest Period of thirty (30) or
sixty (60) days (the "Interest Period") as the Borrowers specify in
the applicable Borrowing or Conversion Notice, except that:
o an Interest Period that would otherwise end on a day that is
not a Business Day shall end on the following Business Day
unless the following Business Day falls in another calendar
month, in which case the Interest Period shall end on the
preceding Business Day, and
o an Interest Period that begins on the last 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 the
Interest Period) shall end on the last Business Day of a
calendar month.
1.13. Interest
For each Loan, the Borrowers may elect that such Loan accrue
interest at either the Base Rate or the Eurodollar Rate.
(a) Each Eurodollar Loan shall bear interest at the Eurodollar
Rate on its unpaid principal amount from the first to the last
day in its applicable Interest Period. Accrued interest shall
be payable on Eurodollar Loans on the last day of the
applicable Interest Period.
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(b) Each Base Rate Loan and each Loan evidenced by the Swing Line
Facility Note shall bear interest at the Base Rate on its
unpaid principal amount from the date such Loan is made until
repaid. Accrued interest shall be payable on Base Rate Loans
and Loans evidenced by the Swing Line Facility Note on the
first day of each month.
(c) The Borrowers shall pay on the Conversion Date accrued
interest on any Loan converted prior to the last day of its
Interest Period.
(d) Overdue principal of or interest on a Loan shall bear
interest, payable on demand, from the first day the principal
or interest is overdue until paid (after as well as before
judgment) at a rate per annum equal to the sum of 2% plus the
applicable interest rate on the particular Loan for each day.
(e) Upon the successful completion, reasonably satisfactory to all
of the Lenders, of MAAC's issuance or sale of common or
preferred stock that produces net proceeds of no less than
$90,000,000, the interest rates available hereunder shall be
modified as follows:
1. the Margin utilized in calculating the Eurodollar
Rate shall equal one and one-quarter percent
(1.25%); and
2. the Base Rate shall equal the Prime Rate minus .75%. The
Borrowers may submit to the Lenders a written request
for such continuation of, or reduction in, the Margin
and the Base Rate, and shall deliver to the Lenders such
information, reports and opinions with such request that
the Lenders deem desirable or necessary.
(f) The Administrative Agent shall determine the interest rates
for all Loans and shall promptly notify the Borrowers and the
Lenders of such interest rates. Such determinations shall be
conclusive in the absence of manifest error.
1.14. Maximum Eurodollar Borrowings
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Notwithstanding anything to the contrary contained herein, there
shall not be more than nine (9) Eurodollar Borrowings outstanding at
any given time.
1.15. Borrowers' termination of Borrowing Rights
The Borrowers may, upon at least three Business Days' notice to the
Administrative Agent, permanently terminate their Borrowing Rights.
If the Borrowers so terminate their Borrowing Rights, the unpaid
principal amount of all Loans to the Borrowers with all accrued
interest, and all fees, and funding losses, and other amounts owing
by the Borrowers under this Agreement, shall be payable on the
effective date of the termination. Additionally, the Borrowers shall
cause all outstanding Letters of Credit to be surrendered to the
Administrative Agent on such date of termination. The Administrative
Agent shall promptly notify the Lenders of such termination of the
Borrowers' Borrowing Rights.
1.16. Voluntary and Mandatory Prepayments
(a) The Borrowers may prepay on any Business Day the unpaid
principal amount of the Loans in a Borrowing in whole or in a
part that is $2,000,000 or a larger integral multiple of
$500,000.
(b) In the event the aggregate outstanding balance of the Loans
shall at any time exceed the Borrowing Base, the Borrowers
shall immediately make a principal payment which will reduce
the outstanding aggregate principal balance of the Loans to an
amount not exceeding the Borrowing Base.
(c) (i) If a Development Project for which Advances have been made
in accordance with the Borrowing Base has not become a
Stabilized Property within one (1) year from the date
Certificates of Occupancy have been issued for all buildings
within the Development Project, the Advance Rate of such
Development Project shall be reduced from 50% to 25%; (ii) if
such Development Project has not become a Stabilized Property
within 18 months of the date Certificates of Occupancy have
been issued for all buildings within the Development Project,
the Advance Rate shall be reduced to $0.00; and (iii) if
Certificates of Occupancy for all buildings within the
Development Project have not been issued within 24 months from
the commencement of construction of such Development Project,
the Advance Rate shall be reduced to $0.00; and then, in all
such instances, a payment of principal shall immediately be
due and payable in an amount sufficient to reduce the
outstanding principal balance of the Loans to an amount not
exceeding the Borrowing Base. Nothing in this subsection shall
preclude the Borrowers from subsequently resubmitting a
Development Project described in this subsection in accordance
with SECTION 3.5 hereof.
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(d) A prepayment of principal must be accompanied by payment of
accrued interest on the principal amount prepaid. Prepayments
of Loans accruing interest at the Eurodollar Rate shall be
subject to Section 1.18 (Funding losses).
(e) In the event a Curative Measure is not substantially completed
within ninety (90) days of the date the subject Mortgaged
Property was added to the Borrowing Base, the Borrowers shall,
within ten (10) days after notice from the Administrative
Agent to Borrowers, make a prepayment of principal equal to
the cost of such Curative Measure as set forth in the
applicable Inspection Report, unless such Curative Measure is
completed within such ten (10) day period.
(f) If a Stabilized Property has been injured or damaged by fire
or other casualty to the extent that twenty-five percent (25%)
of the apartment units included in such Stabilized Property
has been rendered uninhabitable, the Borrowing Base shall be
immediately reduced, and the Loans repaid by the corresponding
amount, in an amount equal to 60% of the Fair Market Value of
such Stabilized Property immediately prior to such damage or
injury; provided, however, that if the damaged Stabilized
Property is insured in an amount sufficient to rebuild or
restore such damage and if rental insurance is payable for the
repair and reconstruction period, no reduction in the
Borrowing Base will result hereunder. It is agreed that after
such damaged Stabilized Property has been repaired to the
Administrative Agent's satisfaction, the Borrowing Base shall
be recalculated as of the date the Administrative Agent
approved such repair, based on the then Fair Market Value.
PREPAYMENT NOTICES
The Borrowers shall notify the Administrative Agent of a prepayment,
specifying the date of the prepayment and the amount of the
Borrowings to be prepaid, at least two (2) Business Days before the
date of prepayment.
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Upon receipt of a notice of prepayment, the Administrative Agent
shall promptly notify each Lender of its contents and of the
Lender's Proportionate Share of the prepayment.
1.17. Payments generally
(a) The Borrowers shall make each payment of principal of and
interest on its Borrowings and of fees hereunder by 11:00 a.m.
on the date due, in immediately available funds in Birmingham,
Alabama, to the Administrative Agent at its Notice Address.
The Administrative Agent shall promptly distribute to each
Lender its Proportionate Share of each such payment.
(b) If a payment of principal, interest or fees is due on a day
that is not a Business Day, the date for the payment shall be
extended to the following Business Day, except that if the
following Business Day falls in another calendar month, the
date for the payment of a Loan shall be the preceding Business
Day. If the date for a payment of principal is so extended, or
is extended by operation of law or otherwise, interest on the
payment shall be payable for the extended time.
(c) 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.
(d) Entries in records maintained by a Lender in accordance with
its usual practice evidencing the Borrowers' indebtedness to
the Lender under this Agreement and under the Notes, including
the amounts of Loans, applicable Interest Periods and payments
of principal and interest, shall be prima facie evidence of
the existence and amounts of the obligations of the Borrowers
to which the entries relate. A Lender's failure to maintain
such records, or any error therein, shall not affect the
Borrowers' obligations to repay the Loans in accordance with
this Agreement.
1.18. Funding losses
IF
o the Borrowers make a payment of principal of a Loan before the
last day of the Interest Period for such Loan (including
prepayment of Loans pursuant to SECTION 9.4 (Illegal Loans),
or
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o the Borrowers fail to borrow or prepay or to convert a Loan
after the Administrative Agent has notified any other Lender
of the Borrowing, prepayment or Conversion, then the Borrowers
shall reimburse each Lender on demand for any resulting loss
or expense incurred by it, including any loss incurred in
obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after
such payment or Conversion or failure to borrow, prepay or
convert, provided that the Lender has delivered to the
Borrowers a certificate reasonably detailing the amount of the
loss or expense, which certificate shall be conclusive in the
absence of manifest error.
1.19. Pro-rata treatment
Except as otherwise expressly provided in this Agreement, or to the
extent otherwise required due to a Lender's failure to fund,
o each payment of a Fee shall be allocated among the Lenders in
their Proportionate Share for the relevant period,
o each payment of principal of a Borrowing shall be allocated
among the Lenders in their respective Proportionate Share of
the unpaid principal amounts of their Loans included in the
Borrowing, and
o each payment of interest on a Borrowing shall be allocated
among the Lenders in their respective Proportionate Share of
the amounts of accrued and unpaid interest on their Loans
included in the Borrowing.
1.20. Whole dollars
In computing the amounts of the Lenders' Loans to be included in a
Borrowing, the Administrative Agent may round each Lender's Loan to
the next higher or lower whole dollar amount.
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II. BORROWINGS AND CONVERSION PROCEDURES
2.1. Borrowing Notices
(a) The Borrowers shall notify the Administrative Agent (a
"BORROWING NOTICE") by 1:00 p.m., Birmingham time, on the
third Business Day immediately preceding a Eurodollar
Borrowing and by 1:00 p.m., Birmingham time, on the Business
Day immediately preceding a Base Rate Borrowing.
(b) A Borrowing Notice shall be in substantially the form of
Exhibit C and shall specify:
1. the aggregate principal amount of the Borrowing,
2. whether the Borrowing is a Eurodollar Loan or a Base
Rate Loan,
3. the Interest Period for a Eurodollar Borrowing (which
shall not extend beyond the Maturity Date),
4. the Borrowers' account at the Administrative Agent to
which the proceeds of the Borrowing are to be deposited,
and
5. whether the Borrowing is to be utilized for a particular
Development Project subject to a Mortgage.
2.2. Funding of Loans
The Administrative Agent shall promptly notify each Lender of the
contents of each Borrowing Notice and of the principal amount of the
Lender's Loan to be included in the Borrowing.
Not later than 12 p.m. on the day of a Borrowing, each Lender shall
make available the full amount of its Loan to be included in the
Borrowing, in immediately available funds in Birmingham, to the
Administrative Agent at its Notice Address.
Unless the Administrative Agent determines that an applicable
condition specified in Section 3 has not been satisfied, the
Administrative Agent shall make the funds received from the Lenders
pursuant to this Section 2.2 available to the Borrowers at the
Administrative Agent's Notice Address by 2 p.m. on such day for a
Borrowing.
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2.3. Lender's failure to fund
Unless a Lender notifies the Administrative Agent before the date of
a Borrowing (whether for a Eurodollar Borrowing, a draw under a
Letter of Credit or any other Borrowing available hereunder) that
the Lender will not make available to the Administrative Agent the
full amount of its Loan to be included in the Borrowing, the
Administrative Agent may assume that the Lender's Loan will be made
available to the Administrative Agent on the day of the Borrowing
and may, in reliance on that assumption, make the full amount of the
Loan available to the Borrowers.
If the Administrative Agent makes the full amount of a Lender's Loan
available to the Borrowers, and the Lender does not make available
to the Administrative Agent some or all of the Loan (the "UNFUNDED
AMOUNT") by the date of the Borrowing, then the Lender shall pay the
Administrative Agent on demand interest at the Federal Funds Rate on
the Unfunded Amount from the date of the Borrowing until the Lender
makes the Unfunded Amount available to the Administrative Agent or
the Borrowers repay the Loan.
If a Lender does not make the full amount of its Loan included in a
Borrowing available to the Administrative Agent by the third
Business Day after the date of the Borrowing, the Borrowers shall,
promptly on the Administrative Agent's demand, repay the full amount
of such Loan to the Administrative Agent, together with accrued
interest at the interest rate for the Loans comprising the
Borrowing.
Nothing in this SECTION 2.3 shall relieve a Lender of the obligation
to make the full amount of its Loans available to the Administrative
Agent.
2.4. Conversions
The Borrowers may at any time at the end of an Interest Period, if
they are not in Default, convert the Loans bearing interest at the
Eurodollar Rate into new Loans for an additional Interest Period (a
"CONVERSION"). A Conversion shall convert each Loan in a Borrowing
in the same proportion. Since each Loan in a Borrowing shall be
converted in the same proportions, Conversion shall refer equally to
Conversion of Loans and Conversion of Borrowings.
A Borrower may initiate a Conversion by notifying the Administrative
Agent (a "CONVERSION NOTICE") not later than 1:00 p.m. on the third
Business Day before the Conversion Date.
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The Administrative Agent shall promptly notify each Lender of the
contents of each Conversion Notice and of the Lender's Loans that
will result from the Conversion.
A Conversion Notice shall be in substantially the form of EXHIBIT D
and shall:
o state the Conversion Date,
o identify each then outstanding Borrowing that is to be
converted,
o state the aggregate unpaid principal amount of the Loans in
such outstanding Borrowings, and
o state the principal amount and Interest Period (which shall
not extend beyond the Maturity Date) of each Borrowing into
which such outstanding Borrowings are to be converted.
Each Borrowing resulting from a Conversion must, as to amount and
Interest Period, conform to the requirements for a Borrowing
comprised of Loans made on such date (as if the Loans to be
converted had been prepaid, and the new Loans made, on the
Conversion Date), and a Conversion Notice shall be effective solely
as to the resulting Borrowings that do so conform. If a Conversion
Notice purports to or is effective to convert only part of the
Borrowings specified in the Conversion Notice, the remaining parts
of such Borrowings shall on the Conversion date automatically be
converted into a single Base Rate Borrowing. The Borrowers shall be
liable to the Lenders for any funding losses in accordance with
SECTION 1.18 on any portion of a Borrowing not converted.
A Conversion of a Loan must satisfy the conditions in Section 3.2
for the making of a Loan.
If part or all of a Loan is not otherwise converted by the last day
of its Interest Period, it shall automatically be converted on the
last day of its Interest Period into a Base Rate Loan.
2.5. Defective notices
The Administrative Agent shall promptly notify a Lender or the
Borrowers if the Administrative Agent believes that a notice or
other document given to the Administrative Agent by a party under
SECTION 1 or this SECTION 2 fails to conform to the requirements of
such Section.
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III. CONDITIONS
3.1. Conditions to effectiveness of this Agreement
This Agreement shall become effective when the Administrative Agent
has received the following documents:
o for each party to the Agreement, an original or telecopied
counterpart of this Agreement signed by all parties;
o an original Note executed to the order of each Lender, in the
principal amount of such Lender's Commitment and evidencing
such Lender's Loans;
o the original Mortgages upon the Initial Properties identified
in Schedule 2;
o a Subsidiary Guaranty executed by each Subsidiary executing a
Mortgage on the Initial Properties;
o title insurance policies, appraisals, evidence of appropriate
zoning, environmental reports, surveys, evidence of insurance
and such other information as the Administrative Agent may
request for each and all of the Initial Properties;
o opinions of counsel satisfactory to the Administrative Agent
to each of the Borrowers, substantially in the form of Exhibit
E;
o a certificate of a senior officer of each Borrower that (i) no
Default has occurred and is continuing and (ii) the
representations and warranties of the Borrowers contained in
this Agreement are true on the date of this Agreement,
substantially in the form of Exhibit J; and
o such other documents as the Administrative Agent reasonably
requests and deems satisfactory relating to each Borrower's
and Subsidiary's existence, the corporate authority for and
validity of this Agreement, the Mortgages, each Subsidiary
Guaranty and any other relevant matter.
The Administrative Agent shall promptly notify the Borrowers and the
Lenders when this Agreement becomes effective, and such notice shall
be conclusive and binding on all parties.
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3.2. Conditions to Borrowings
The obligation of a Lender to make a Loan to the Borrowers as part
of a Borrowing is subject to the satisfaction of the following
conditions:
o this Agreement is effective;
o the Administrative Agent receives a Borrowing Notice
conforming to the requirements of this Agreement;
o immediately after the Borrowing, the aggregate unpaid
principal amount of the Loans will not exceed the lesser of
the Aggregate Commitment or the Borrowing Base;
o each Borrower represents that no material adverse change in
its financial condition or results of operations has occurred;
o immediately before and after the Borrowing, no Default will
have occurred and be continuing;
o the representations and warranties of the Borrowers contained
in this Agreement are true on and as of the date of the
Borrowing with the same effect as if made on and as of such
date (except to the extent such representations and warranties
expressly relate to an earlier date); the Administrative Agent
receives, with the Borrowing Notice, an update to the title
policy for each Borrowing on a Development Project;
o no mechanic's lien claim shall have been filed or asserted
against any Mortgaged Property, which has not been "bonded
off" such Mortgaged Property in accordance with applicable
law;
o all licenses, permits and approvals of governmental
authorities required for the operation of the respective
Mortgaged Properties shall have been obtained and are in full
force and effect;
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o each request for a Borrowing for a Development Project shall
be subject to the approval of the Administrative Agent and the
Administrative Agent's construction consultant, which approval
shall not be unreasonably withheld or delayed;
o there shall have occurred no material violation of any
applicable laws, ordinances, rules or regulations; it being
understood that a single violation shall be deemed material if
it involves by way of fees, fines, costs, expenses, curative
work or other potential loss or expense to the Borrowers
exceeding the sum of $100,000.00 or $500,000 in the aggregate
for multiple violations;
o there shall be no action, suits or proceedings pending, or to
the Borrowers' knowledge, threatened against or affecting
either Borrower, any Subsidiary or any Mortgaged Property, at
law or in equity, or before any governmental agencies, which,
if adversely determined, would substantially impair the
ability of the Borrowers to pay their obligations as set forth
herein or adversely affect the priority or security of a
Mortgage; and
o there shall have occurred no material adverse change in the
financial condition of either Borrower or any Mortgaged
Property.
Each Borrowing shall constitute a representation and warranty by the
Borrowers that, on the date of the Borrowing, the conditions set
forth in this Section 3.2 are satisfied.
3.3. Conditions to Maintaining Loans
(a) The Administrative Agent shall have the right, at any time and
from time to time, to require the Borrowers to furnish to the
Administrative Agent current financial information, Inspection
Reports, and/or environmental studies of any one or more of
the Mortgaged Properties if, in the unrestricted discretion of
the Administrative Agent, such Mortgaged Properties shall have
declined in value in any material amount or may be in
violation of any applicable Environmental Laws. The Borrowers
shall have the right to require the Administrative Agent to
commission updated appraisals, and the Administrative Agent
shall also have the right to require updated appraisals if
required by law or banking regulations. Any such appraisals
and
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environmental studies must be in form, content and conclusion
satisfactory to the Administrative Agent, subject to the
Administrative Agent's approval in all respects, and must be
made by a qualified, licensed professional selected and
commissioned by the Administrative Agent. If any such current
financial information, updated appraisal or environmental
study should reflect a decline in value, the Borrowing Base
shall be reduced accordingly; and, if the then outstanding
Loans should exceed the reduced Borrowing Base, the Borrowers
shall be obligated immediately to reduce the Loans to an
amount not exceeding the applicable reduced Borrowing Base. If
any such appraisal or current financial information should
reflect an increase in value, the applicable Borrowing Base
shall be increased accordingly to the extent appropriate.
(b) For each Development Project, the Borrower shall provide to
the Administrative Agent a quarterly statement of occupancy,
no later than the 15th day after the end of each quarter for
the immediately preceding calendar quarter.
(c) If any environmental study should reflect the necessity or
desirability for action to be taken to prevent or cure the
violation or prospective violation of applicable Environmental
Laws, the Borrowers shall, at their sole cost and expense,
immediately undertake such action and diligently prosecute
same to conclusion.
(d) Although the Administrative Agent shall have the right to
require as many appraisals and environmental surveys as it
shall elect with respect to each Mortgaged Property, the
Borrowers shall be obligated to pay for only one (1) appraisal
and one (1) environmental survey, with respect to each
Mortgaged Property during any one (1) consecutive twelve (12)
month period. Any appraisals requested by the Borrowers
pursuant to SECTION 3.3(A) shall be at Borrowers' sole expense
and shall be excluded from consideration in determining
whether the Borrowers are obligated to pay the costs of
additional appraisals required by the Administrative Agent.
Any initial appraisals and environmental studies furnished to
the Administrative Agent in connection with each Mortgaged
Property shall also be excluded from consideration in
determining whether Borrowers are obligated to pay the cost of
additional appraisals or environmental studies for any such
Property.
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3.4. Conditions to Release of Mortgaged Property
(a) The privilege is given and reserved so that the Borrowers may
obtain the release of a Mortgaged Property from the lien of a
Mortgage upon payment to the Administrative Agent, for
application upon the Loan, a principal amount equal to the
amount of the applicable Advance Rate for such Mortgaged
Property, together with all interest accrued upon such amount,
and all out-of-pocket expenses and advances then due and owing
to the Administrative Agent in connection with the Loans.
(b) The release privilege herein granted is conditioned upon (1)
there being no Default existing (a) at the time any such
release is requested, or (b) on the date the release is to be
delivered, (2) the release not causing a Default, and (3)
continued compliance with the Borrowing Base upon the release
of the subject Mortgaged Property.
(c) Any Apartment Community remaining subject to a Mortgage shall
not be dependent on the Mortgaged Property being released for
access, utilities, amenities or any other matter.
(d) Any such requested release shall be made at the sole cost and
expense of the Borrowers.
3.5. Conditions to Addition of Property
The Borrowers shall be entitled to offer Apartment Communities
which, if approved by Two-Thirds of the Lenders, shall, upon
satisfaction of the following conditions, then be deemed to
constitute Mortgaged Properties and available for use in determining
the Borrowing Base:
(a) For Apartment Communities to be added to the Borrowing Base as
either a Stabilized Property or a Development Project, the
Borrower shall deliver to the Administrative Agent the
following, all in form and content satisfactory to the
Administrative Agent:
1. Evidence that the entity holding title to the
Apartment Community is either a Borrower or a
Subsidiary;
2. an environmental report or reports evidencing that the
Apartment Community is in material compliance with all
Environmental Laws, using the standard generally applied
by sophisticated commercial lenders experienced in real
estate financing;
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3. evidence of hazard and liability insurance as required
herein;
4. evidence of compliance with current zoning regulations;
5. a current appraisal meeting the guidelines of the
Federal Institutions Reform, Recovery and Enforcement
Act;
6. a Mortgage granting to the Administrative Agent, for the
benefit of the Lenders, a first lien on the subject
Apartment Community or Development Project, together
with a Subsidiary Guaranty if the owner of the
applicable Apartment Community or Development Project is
not a Borrower;
7. an opinion of local counsel, opining that the owner of
the Apartment Community or Development Project is
qualified to do business in the state where the
Apartment Community or Development Project is located
and that the Mortgage is a valid and binding obligation
of the owner, enforceable in accordance with its terms;
8. a title insurance policy in the amount of the Advance
Rate of a Stabilized Property and in the amount of sixty
percent (60%) of the Project Budget for a Development
Project, issued by a title insurance company acceptable
to the Administrative Agent, insuring the priority lien
of the Mortgage, subject only to exceptions approved by
Two-Thirds of the Lenders;
9. a current survey, certified to the Administrative Agent,
which requirement shall be waived if the insuring title
insurance company deletes the standard survey exception;
10. an Inspection Report;
11. for Florida Apartment Communities only, evidence that
the Fair Market Value of the proposed Apartment
Community, when added to the Fair Market Value of all
the Florida Mortgaged Properties, does not exceed
$110,000,000 in the aggregate; and
21
12. additionally, for Development Projects only:
i) the Project Budget;
ii) plans and specifications;
iii) copies of all design and construction contracts;
iv) copies of all building permits;
v) a written statement from the Borrower that
construction has either commenced or will commence
within thirty (30) days;
vi) if construction has commenced, evidence
satisfactory to the Administrative Agent of the
Work Completed; and
vii) evidence of availability of all necessary
utilities.
(b) For a Development Project to be converted to a Stabilized
Property, the Borrower shall deliver to the Administrative
Agent:
1. All of the items described in (a) above to the extent
not already submitted, and, if previously submitted,
up-dated if deemed necessary by the Administrative
Agent;
2. A copy of the Certificate of Occupancy for all buildings
included in the Development Project;
3. Evidence that the Development Project has achieved and
maintained an occupancy rate of at least 80% for at
least the two immediately preceding calendar months;
4. A current, as-built survey, showing all improvements,
and such other detail as shall be required by the
Administrative Agent; and
5. A certificate of the architect, certifying that the
Development Project has been completed in substantial
accordance with the plans and specifications which had
previously been delivered to, and approved by, the
Administrative Agent.
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IV. REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants that:
4.1. Corporate existence and power
Mid-America is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of
Tennessee; it has the power and authority to own its properties and
assets and is in good standing and duly qualified to carry on its
business in every jurisdiction wherein such qualification is
necessary, including, without limitation, every jurisdiction in
which an Apartment Community is offered to the Lenders as a
Mortgaged Property.
MAAC is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Tennessee; it has the power
and authority to own its properties and assets and is in good
standing and duly qualified to carry on its business in every
jurisdiction wherein such qualification is necessary, including,
without limitation, every jurisdiction in which an Apartment
Community is offered to the Lenders as a Mortgaged Property.
4.2. Corporate, partnership and governmental authorization; non-
contravention
The execution, delivery and performance by the Borrower of this
Agreement are within the Borrower's corporate or partnership, as the
case may be, powers, have been duly authorized by all necessary
corporate or partnership, as the case may be, action, require no
action by or in respect of, or filing with, any governmental body,
agency or official and do not contravene, or constitute a default
under, any provision of applicable law or regulation or of the
articles of incorporation or by-laws or partnership agreement of the
Borrower or of any material agreement, judgment, injunction, order,
decree or other instrument binding upon the Borrower or result in
the creation or imposition of any Lien on any asset of the Borrower.
4.3. Binding effect
This Agreement is a valid and binding agreement of the Borrower,
enforceable in accordance with its terms, except as enforceability
may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and (ii) general principles of
equity.
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4.4. Financial information
The consolidated balance sheet of MAAC prepared as of the 30th day
of September, 1997, together with any explanatory notes therein
referred to and attached thereto, is correct and complete and fairly
presents the financial condition of the Borrowers as of the date of
said balance sheet. A copy of such balance sheet has been delivered
to each Lender.
4.5. No material adverse change
Since September 30, 1997, there has been no material adverse change
in the financial position or results of operations of the Borrowers,
considered as a whole.
4.6. Litigation
There is no action, suit or proceeding pending against, or, to the
knowledge of the Borrower, threatened against or affecting, the
Borrower before any court or arbitrator or any governmental body,
agency or official in which there is a reasonable probability of an
adverse decision that would materially adversely affect the
business, financial position or results of operations of the
Borrower or that in any manner draws into question the validity or
enforceability of this Agreement.
4.7. Taxes
The Borrower has filed all United States federal income tax returns
and all other material tax returns that are required to be filed by
it and has paid all Taxes then due pursuant to such returns or
pursuant to any assessment received by the Borrower, except for
Taxes contested in good faith by appropriate proceedings and as to
which appropriate reserves in accordance with generally accepted
accounting principles have been established. The charges, accruals
and reserves on the books of the Borrower for Taxes are, in the
Borrower's opinion, adequate.
4.8. Compliance with ERISA
Each member of the Controlled Group has fulfilled its obligations
under the minimum funding standards of ERISA and the Code for each
Pension Plan and is in compliance in all material respects with
ERISA and the Code, and has not incurred any liability to the PBGC
or a Pension Plan under Title IV of ERISA other than a liability to
the PBGC for premiums under Section 4007 of ERISA.
24
4.9. Not an investment company or public utility holding company
The Borrower is not an 'investment company' within the meaning of
the Investment Company Act of 1940 or a 'holding company' within the
meaning of the Public Utility Holding Company Act of 1935.
4.10. Margin regulations
At no time will Margin Stock comprise more than 5% of the value of
the assets of a Borrower.
4.11. Title to assets
Each Borrower has good and marketable title to all its properties
and assets reflected on the consolidated balance sheet referred to
herein, except for (a) such assets shown on said balance sheet that
have been disposed of since said date as no longer used or useful in
the conduct of business, (b) inventory sold in the ordinary course
of business and thereafter accounted for as accounts receivable or
cash, (c) accounts receivable collected and property accounted for,
and (d) items which have been amortized in accordance with GAAP
applied on a consistent basis; and all such properties and assets
are free and clear of Liens except as otherwise expressly permitted
by the provisions hereof.
4.12. Contracts or restrictions affecting Borrowers
Neither Borrower is a party to, nor subject to, any agreement or
instrument, including, without limitation, any partnership
agreement, partnership restrictions, voting trust or shareholders'
agreement, materially and adversely affecting its business,
Apartment Communities, or other assets, operations or condition
(financial or otherwise).
4.13. No default
Neither Borrower is in default in the performance, observance or
fulfillment of any of the obligations, covenants, or conditions
contained in any agreement or instrument to which it is a party,
which default (if not cured) would materially and adversely and
substantially affect the financial condition, property or operations
of such Borrower.
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4.14. Patents and Trademarks
Each Borrower possesses all necessary patents, service marks,
trademarks, trade names, copyrights, and licenses necessary to the
conduct of its business.
4.15. Hazardous Substances
To the best of the Borrower's knowledge, (a) except strictly in
compliance with all applicable Environmental Laws, no Hazardous
Substances are located upon or have been stored, processed or
disposed of on or released or discharged (including ground water
contamination) from any Apartment Community owned or leased by
either Borrower, and (b) no aboveground or underground storage tanks
exist on any of the Apartment Communities. No private or
governmental lien or judicial or administrative notice or action
related to Hazardous Substances or other environmental matters has
been filed against any Apartment Community.
4.16. Real Estate Investment Trust
MAAC is qualified under the Code as a real estate investment trust.
4.17. Subsidiaries
The Subsidiaries granting Mortgages on the Initial Properties are
correctly identified on Schedule 4 attached hereto, and all are 100%
owned, directly or indirectly, by either or both of the Borrowers.
V. AFFIRMATIVE COVENANTS
Each Borrower agrees that:
5.1. Financial information
(a) The Borrower shall deliver to the Administrative Agent for
distribution to each Lender:
As soon as available, and in any event within one hundred five
(105) days after the end of each fiscal year of MAAC, a
consolidated unqualified audit as of the close of such fiscal
year of MAAC, together with a consolidated unqualified audit
report and opinion of an independent certified public
accountant acceptable to the Administrative Agent, prepared in
accordance with
26
GAAP, showing the financial condition of MAAC as of the close
of such year, which audit shall include, inter alia,
consolidated financial results of both Borrowers and all
Subsidiaries of each of them; and the results of operations
during such year; and within fifty (50) days after the end of
each fiscal quarter, consolidated financial statements similar
to those mentioned above, not audited but certified by the
Certifying Officer, such balance sheets to be as of the end of
such fiscal quarter, and such statements of income and surplus
to be for the period from the beginning of the fiscal year to
the end of such fiscal quarter, in each case subject only to
audit and year-end adjustment. The certificate of the
Certifying Officer shall state that:
1. the attached financial statement, together with any
explanatory notes referred to and attached thereto, is
correct and complete and fairly represents the financial
condition of MAAC as of the date of the financial
statement, and the results of its operations for the
period ending on the date reflected in said financial
statement,
2. that such financial statement has been prepared in
accordance with GAAP applied on a consistent basis
maintained throughout the period involved, and
3. to the best of such Certifying Officer's knowledge, the
Borrowers are not in Default under any of the terms and
provisions of this Agreement, or, if the Borrowers are
in Default, identifying with particularity each such
Default;
(b) Contemporaneously with the distribution thereof to the
Borrower's shareholders or the filing thereof with the
Securities and Exchange Commission, copies of all statements,
notices and reports, specifically including reports on SEC
Forms 10-K and 10-Q;
(c) In no event later than the 22nd day of each calendar quarter,
but as of the last day of the immediately preceding calendar
quarter, a Borrowing Base Certificate in the form attached
hereto as Exhibit F together with a compliance certificate in
substantially the form attached hereto as Exhibit J; and
(d) promptly, such other financial information as may be
reasonably requested by the Administrative Agent or a Lender.
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5.2. MAINTENANCE OF PROPERTY; INSURANCE
(a) The Borrower shall keep all its property useful and
necessary in its business and all the Mortgaged
Property, whether owned by a Borrower or a Subsidiary,
in good working order and condition, ordinary wear and
tear excepted.
(b) The Borrower at all times shall maintain (or cause to be
maintained) with respect to each Mortgaged Property in
some company or companies (having a Best's rating of
A:VIII or better, except for liability insurance
maintained with respect to Properties located in Texas,
which shall be maintained with a company or companies
having a Best's rating of at least A-:VII) approved by
the Administrative Agent:
o Comprehensive public liability insurance covering claims
for bodily injury, death, and property damage, with
minimum limits satisfactory to the Administrative Agent,
but in any event not less than those amounts customarily
maintained by companies in the same or substantially
similar business;
o Business interruption insurance and/or loss of rents
insurance in a minimum amount specified by the
Administrative Agent for each Mortgaged Property, and in
any such event covering loss of rents for a minimum
period of one (1) year;
o Hazard insurance insuring each Mortgaged Property
against loss by fire (with extended coverage) and
against such other hazards and perils (including but not
limited to loss by earthquake, windstorm, hail, flood,
explosion, riot, aircraft, smoke, vandalism, malicious
mischief and vehicle damage) as the Administrative
Agent, in its sole discretion, shall from time to time
require, all such insurance to be issued in such form,
with such deductible provision, and for such amount as
shall be satisfactory to the Administrative Agent; and
o Such other insurance as the Administrative Agent may,
from time to time, reasonably require by notice in
writing to the Borrowers.
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(c) The Borrower shall not, nor permit any other Person to,
cancel, terminate, or materially amend any of the
insurance policies required by this SECTION 5 without
giving at least thirty (30) days' prior written notice
to the Administrative Agent. The Borrower will deliver
(or cause to be delivered) to the Administrative Agent
original or certified copies of the insurance policies,
or satisfactory certificates of insurance, and, as often
as the Administrative Agent may reasonably request, a
report of a reputable insurance broker with respect to
such insurance. At the option of the Borrower, the
Borrower may maintain the insurance coverages required
by this SECTION 5, pursuant to so-called "blanket
insurance policies", in which event the Borrower shall,
from time to time, upon the Administrative Agent's
request, furnish to the Administrative Agent
certificates from the respective insurance companies (or
their authorized agents) setting forth the types and
amounts of insurance being maintained, any applicable
deductible provisions, and such other information as the
Administrative Agent may require (including, without
limitation, the effective dates of any such insurance),
together with copies of all such blanket insurance
policies.
5.3. Compliance with laws
The Borrower shall, and shall cause each Subsidiary to, comply in
all material respects with all applicable laws, ordinances, rules,
regulations and requirements of governmental authorities, except
where the necessity of compliance is contested in good faith by
appropriate proceedings.
5.4. Books and records; payment of Taxes
The Borrower shall keep proper books and records in which full and
correct entries are made of all dealings and transactions in
relation to its business and activities. While a Default is
continuing, representatives of any Lender may inspect the Borrower's
relevant books and records at any reasonable time.
The Borrower shall pay and discharge, at or before maturity, all
their respective material Tax liabilities, except for liabilities
contested in good faith by appropriate proceedings and as to which
appropriate reserves in accordance with generally accepted
accounting principles have been established.
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5.5. Notice of Defaults
The Borrower shall, within five Business Days of a senior officer of
the Borrower obtaining knowledge of a continuing Default, deliver to
the Administrative Agent a certificate of the Certifying Officer
setting forth the details of the Default and the action the Borrower
is taking or proposes to take with respect to the Default.
5.6. ERISA events
If a member of the Controlled Group
o gives or is required to give notice to the PBGC of a
'reportable event' or knows that the plan administrator of a
Pension Plan has given or is required to give notice of such
reportable event,
o receives notice of complete or partial Withdrawal Liability
under Title IV of ERISA,
o receives notice from the PBGC under Title IV of ERISA of an
intent to terminate or appoint a trustee to administer a
Pension Plan, or
o knows that a Pension Plan is terminated or in reorganization,
then the Borrower shall within five Business Days deliver a
copy of the notice to the Administrative Agent.
5.7. Use of proceeds
The Borrower shall use Loan proceeds only for its general corporate
purposes. The Borrower shall not use any Loan proceeds for any
purpose that violates Regulations G, T, U or X of the Federal
Reserve Board.
5.8. Maintenance of existence; merger; sale of assets
The Borrower shall keep in full force and effect its corporate or
partnership existence, as the case may be, and its rights,
privileges and franchises necessary or desirable in the normal
conduct of business, provided that a Subsidiary of a Borrower may
merge or consolidate with or into the Borrower (but only if the
Borrower is the surviving entity) or a Subsidiary of
30
the Borrower. A Borrower shall not (i) consolidate or merge with or
into another Person unless the Borrower is the surviving entity and
no Default by the Borrower exists immediately thereafter, or (ii)
sell, lease or otherwise transfer all or substantially all of its
assets to any other Person, except for the distribution of ordinary
dividends to shareholders and distributions to partners. As used
herein "substantially all" shall mean more than thirty percent (30%)
of the total assets.
5.9. Right of inspection
The Borrower shall permit any Person designated by the
Administrative Agent to visit and inspect any of the properties,
corporate books and financial reports of each Borrower and all
Subsidiaries and to discuss its affairs, finances and accounts with
its principal officers, at all such reasonable times during normal
business hours and as often as the Administrative Agent may
reasonably request.
5.10. Environmental laws
The Borrower shall maintain at all times all Apartment Communities
in compliance with all Environmental Laws, and immediately notify
the Administrative Agent of any notice, action, lien or similar
action alleging either the location of any Hazardous Substances or
the violation of any Environmental Laws or any release of Hazardous
Substances with respect to any Apartment Communities or operations.
5.11. Notice of adverse change in assets
At the time of either Borrower's first knowledge or notice, such
Borrower shall immediately notify the Administrative Agent of any
information that may adversely affect in any material manner the
assets of either Borrower, including, but not limited to, the value
or marketability of any Mortgaged Properties.
5.12. Indemnification
(a) General. The Borrower shall defend, indemnify and hold the
Administrative Agent and the other Lenders harmless from and against
any and all loss, costs, damage or expense, of every kind and
nature, including, without limitation, reasonable attorneys' fees
and costs, which the Administrative Agent and the other Lenders
could or might incur by reason of any violation of any Environmental
Laws by either Borrower, any Subsidiary or by any predecessors or
successors to title to any Mortgaged Property. The indemnification
granted herein shall run only to the benefit of the Administrative
Agent and the Lenders and shall not give any rights of
indemnification
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to any successors in title. Notwithstanding the foregoing, the
Borrowers shall have no obligation to indemnify the Administrative
Agent and the other Lenders for liability resulting solely from the
gross negligence or willful misconduct of the Administrative Agent,
or any of the other Lenders, as determined in a final non-appealable
order by a court of competent jurisdiction.
(b) LETTER OF CREDIT. The Borrowers hereby agree to protect,
indemnify, pay and save the Administrative Agent and the Lenders
harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees and disbursements) which the Administrative Agent
and/or the Lenders may incur or be subject to as a result of (i) the
issuance of the Letters of Credit, other than to the extent of the
bad faith, gross negligence or wilful misconduct of the
Administrative Agent and/or the Lenders or (ii) the failure of the
Administrative Agent to honor a drawing under any Letter of Credit
as a result of any act or omission, whether rightful or wrongful, of
any present or future de jure or de facto government or governmental
authority (collectively, "Governmental Acts"), other than to the
extent of the bad faith, gross negligence or wilful misconduct of
the Administrative Agent. As between the Borrowers and the
Administrative Agent and the Lenders, the Borrowers assume all risks
of the acts and omissions of any beneficiary with respect to its
use, or misuse of, the Letters of Credit issued by the
Administrative Agent. In furtherance and not in limitation of the
foregoing, the Administrative Agent and the Lenders shall not be
responsible (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party
in connection with the application for and issuance of such Letters
of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged;
(ii) for the validity or insufficiency of any instrument
transferring or assigning or purporting to transfer or assign any
such Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid
or ineffective for any reason; (iii) for failure of the beneficiary
of any such Letter of Credit to comply fully with conditions
required in order to draw upon such Letter of Credit, other than as
a result of the bad faith, gross negligence or wilful misconduct of
the Administrative Agent; (iv) for errors, omissions, interruptions
or delays in transmission or delivery of any message, by mail,
cable, telegraph, telex, facsimile transmission, or otherwise,
unless the result of the bad faith, gross negligence or wilful
misconduct of the Administrative Agent; (v) for errors in
interpretation of any technical terms, unless the result of the bad
faith, gross negligence or wilful misconduct of the Administrative
Agent;
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(vi) for any loss or delay in the transmission or otherwise of any
documents required in order to make a drawing under any such Letter
of Credit or of the proceeds thereof; (vii) for the misapplication
by the beneficiary of any such Letter of Credit of the proceeds of
such Letter of Credit; and (viii) for any consequence arising from
causes beyond the control of the Administrative Agent, including any
Government Acts, in each case other than to the extent of the bad
faith, gross negligence or wilful misconduct of the Administrative
Agent. None of the above shall affect, impair or prevent the vesting
of the Administrative Agent's rights and powers hereunder. In
furtherance and not in limitation of the specific provisions
hereinabove set forth, any action taken or omitted by the
Administrative Agent under or in connection with the Letters of
Credit issued by it or the related certificates, if taken or omitted
in good faith, shall not put the Administrative Agent under any
resulting liability to the Borrowers provided that, notwithstanding
anything in the foregoing to the contrary, the Administrative Agent
will be liable to the Borrowers for any damages suffered by the
Borrowers as a result of the Administrative Agent's grossly
negligent or wilful failure to pay under any Letter of Credit after
the presentation to it of a sight draft and certificates strictly in
compliance with the terms and conditions of the Letter of Credit.
5.13. Qualification as a Real Estate Investment Trust
MAAC shall at all times remain (a) qualified under the Code as a
real estate investment trust and (b) the general partner of
Mid-America.
5.14. Ownership of Subsidiaries
MAAC or Mid-America shall at all times remain a direct or indirect
owner of 100% of the ownership interest of each Subsidiary that is
the owner of a Mortgaged Property.
VI. NEGATIVE COVENANTS OF BORROWERS
Each Borrower covenants and agrees that, at all times from and after
the Effective Date, unless Two-Thirds of Lenders shall otherwise
consent in writing, it will not, nor shall it permit a Subsidiary
that is the owner of a Mortgaged Property to, either directly or
indirectly:
6.1. Liens
Incur, create, assume or suffer to exist any mortgage, pledge, lien,
charge or other encumbrance of any nature whatsoever on any of the
Mortgaged Properties other than:
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(a) Deposits under workmen's compensation, unemployment insurance
and Social Security laws, or to secure the performance of
bids, tenders, contracts (other than for the repayment of
borrowed money) or leases or to secure statutory obligations
or surety or appeal bonds, or to secure indemnity, performance
or other similar bonds in the ordinary course of business;
(b) Liens imposed by law (other than tax liens), such as
carriers', warehousemen's or mechanics' liens, incurred in
good faith in the ordinary course of business and in an amount
of less than $100,000;
(c) Liens in favor of the Lenders;
(d) Purchase money security interests arising in the ordinary
course of the apartment leasing business; and
(e) Liens for real property and personal property taxes, but not
yet delinquent.
6.2. Sale of Assets
Sell, lease, transfer or dispose (other than in the normal course of
business) of all or a substantial part of its assets.
6.3. Accounts Receivable from Related Persons
Permit or allow the aggregate of accounts receivable and other loans
and indebtedness owed by Related Persons to the Borrowers to exceed
the sum of Five Hundred Thousand Dollars ($500,000.00) in the
aggregate as to both Borrowers.
6.4. Loans to Officers and Employees
Permit or allow loans to directors, officers, partners, shareholders
and employees of both Borrowers to exceed, in the aggregate, the sum
of One Million Dollars ($1,000,000.00).
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6.5. Trademarks and Trade Names
Sell, transfer, convey, grant any security interest in, or otherwise
encumber any existing or hereafter acquired trademarks, service
marks or trade names owned by the Borrower.
6.6. Net Operating Loss
Permit or allow a Net Operating Loss of more than One Million
Dollars ($1,000,000.00) in any quarterly period or in any amount for
any two (2) consecutive quarterly periods in any one (1) fiscal
year.
6.7. Dividend Payout
Make a dividend payment (including both common stock dividends and
preferred stock dividends) which is greater than ninety percent
(90%) of Funds from Operations or that would otherwise violate the
United States federal tax laws governing the qualifications of real
estate investment trusts. As used herein, "Funds from Operations"
shall mean consolidated net income of MAAC (computed in accordance
with GAAP), excluding gains (or losses) from debt restructuring or
sales of property, plus depreciation of real property. Upon written
pre-approval of the Administrative Agent, exceptions may be made
where the Board of Directors of MAAC determines, in good faith, that
a special dividend must be paid to avoid taxes due to excess gains
from the sale of Property.
6.8. Other Financial Covenants
(a) Permit Total Liabilities to exceed sixty percent (60%) of the
Total Market Value of Assets.
(b) Permit Total Development and Joint Venture Investment to
exceed (i) eleven percent (11%) of the Total Market Value of
Assets from the date hereof through December 31, 1998, and
(ii) ten percent (10%) of the Total Market Value of Assets,
commencing on January 1, 1999, until the termination of this
Agreement.
(c) Fail to maintain as of the end of each fiscal quarter a ratio
of Annualized EBITDA for trailing six (6) months to Total
Annualized Fixed Charges for the same period of at least 1.75
to 1.0.
(d) Fail to maintain as of the end of each fiscal quarter a ratio
of Annualized EBITDA for trailing six (6) months to Total
Annualized Debt Service on Indebtedness for the same period of
at least 2.0 to 1.0.
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(e) Fail to maintain at all times beginning on the Effective Date
a consolidated Tangible Net Worth which is not less than Four
Hundred Seventy Million Dollars ($470,000,000) plus seventy
percent (70%) of net proceeds of new equity offerings.
(f) Permit the ratio of Adjusted NOI for all Mortgaged Properties
(based on the prior three (3) months, annualized) to Assumed
Debt Service to be less than 1.0 to 1.0.
6.9. Control
Permit any Person, or group of Persons, acting in concert for the
purpose of influencing the affairs of MAAC to control more than
twenty percent (20%) of the outstanding voting shares of MAAC.
6.10. Subsidiary Ownership
Sell, transfer or otherwise dispose of any shares of stock or
partnership interests or other ownership interest in any Subsidiary
that is the owner of a Mortgaged Property, or permit any such shares
of stock or partnership interests or other ownership interest to be
disposed of, sold, or otherwise transferred.
6.11. Subsidiary Debt
Permit any Subsidiary that is the owner of a Mortgaged Property to
incur, create, or permit to exist any indebtedness to any Person
other than the Lenders with the exception of purchase money security
interests and contractual obligations, incurred in the ordinary
course of the apartment leasing business.
VII. DEFAULT
7.1. Events of Default
Each of the following events shall be a Default by the Borrowers:
(a) the Borrowers fail to pay
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o any principal of a Loan when due,
o any interest on a Loan within five (5) Business Days
after the Administrative Agent provides the Borrower
with written notice of such failure (except interest due
and payable on the Termination Date which must be paid
on the Termination Date), or
o a fee or other amount payable under this Agreement
within five (5) Business Days after the Administrative
Agent provides the Borrower with written notice of such
failure; or
(b) a representation, warranty, certification or statement made by
either Borrower in this Agreement or in a certificate,
financial statement or other document delivered pursuant to
this Agreement is materially incorrect when made (or deemed
made); or
(c) either Borrower fails to observe or perform
o a covenant applicable to it regarding use of Loan
proceeds, notice of Defaults or maintenance of
existence, merger, or sales of assets; or
o a financial covenant applicable to it contained in
Section 5 or Section 6; or
(d) either Borrower fails to observe or perform a covenant or
agreement made by it in this Agreement (other than those
referred to in Section 7.1(a), 7.1(b) or 7.1(c) above) for 30
days after the Administrative Agent notifies the Borrower of
such failure; or
(e) either Borrower defaults with respect to any other agreement
to which either Borrower is a party or with respect to any
other indebtedness when due or the performance of any other
obligation incurred in connection with any indebtedness for
borrowed money, if the Borrower's obligations or exposure
exceeds $500,000, and if the effect of such default is to
accelerate the maturity of such indebtedness, or if the effect
of such default is to permit the holder thereof to cause such
indebtedness to become due prior to its stated maturity;
provided, however, if the amount in default is less than
$1,000,000 and no other default exists under any other
agreement described in this subparagraph, and the Borrower is
diligently and in good faith contesting any default under this
paragraph to the reasonable satisfaction of the Administrative
Agent, it shall not be a Default hereunder; or
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(f) either Borrower or any Subsidiary that is at the time the
owner of a Mortgaged Property
o commences a voluntary case or other proceeding seeking
liquidation, reorganization or other relief for itself
or its debts under a bankruptcy, insolvency,
receivership or similar law or seeking the appointment
of a trustee, receiver, liquidator, custodian or similar
official of it or a substantial part of its property,
o consents 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,
o makes a general assignment for the benefit of creditors,
o fails generally to pay its debts as they become due, or
o takes the appropriate action to authorize any of the
foregoing; or
(g) an involuntary case or other proceeding is commenced against
either Borrower or any Subsidiary that is at the time the
owner of a Mortgaged Property seeking liquidation,
reorganization or other relief with respect to it or its debts
under a bankruptcy, insolvency, receivership or other similar
law or seeking the appointment of a trustee, receiver,
liquidator, custodian or similar official of the Borrower or
such Subsidiary or a substantial part of its property, and
such case or proceeding (i) results in an order for relief or
such adjudication or appointment, or (ii) remains undismissed
and unstayed for 60 days; or
(h)
o a member of the Controlled Group fails to pay when due
an aggregate amount in excess of $5,000,000 that it is
liable to pay to the PBGC or to a Pension Plan under
Title IV of ERISA,
38
o a member of the Controlled Group and/or a plan
administrator files a notice of intent under Title IV of
ERISA to terminate a Pension Plan or Pension Plans
having aggregate Unfunded Vested Liabilities in excess
of $35,000,000 (collectively, a MATERIAL PENSION PLAN),
o the PBGC institutes proceedings under Title IV of ERISA
to terminate or to cause a trustee to be appointed to
administer a Material Pension Plan,
o a fiduciary of a Material Pension Plan institutes a
proceeding against a member of the Controlled Group to
enforce Section 515 or 4219(c)(5) of ERISA and such
proceeding is not dismissed within 60 days thereafter,
o a condition exists that entitles the PBGC to obtain a
decree adjudicating that a Material Pension Plan must be
terminated, or
o either Borrower is notified by the plan administrator of
a Pension Plan that the Pension Plan is in
reorganization or is being terminated, within the
meaning of Title IV of ERISA, and solely as a result of
such reorganization or termination the aggregate annual
contributions of the Borrower to all Pension Plans that
are then in reorganization or have been or are being
terminated is increased over the amounts required to be
contributed to such Pensions Plans for their most
recently completed plan years by an amount exceeding
$15,000,000; or
(i) a judgment or order against either Borrower or any Subsidiary
that is at the time the owner of a Mortgaged Property for the
payment of more than $1,000,000 continues unsatisfied and
unstayed for 60 days or a judgment creditor takes legal action
to levy on such judgment; or
(j) either Borrower or any Subsidiary that is at the time an
owner of a Mortgaged Property shall have concealed,
removed, or permitted to be concealed or removed, any
part of its property, with intent to hinder, delay or
defraud its creditors or any of them, or made or suffered
a transfer of any of its property which may be fraudulent
under any bankruptcy, fraudulent conveyance or similar
law; or shall have made any transfer of its property to
or for the benefit of a creditor at a time when other
creditors similarly situated have not been paid; or shall
have suffered or permitted, while insolvent, any creditor
to obtain a lien upon any of its property through legal
proceedings or distraint which is not vacated within
thirty (30) days from the date thereof; or
39
(k) there shall occur, whether in a single transaction or
successive transactions, a change or changes in the ownership
of more than five percent (5%) of the partnership interests of
Mid-America, or Mid-America shall grant or convey or permit to
be granted or conveyed, voluntarily or involuntarily, directly
or indirectly, any security interest in, pledge of or other
lien or encumbrance upon any owner's partnership interests in
Mid-America; or MAAC shall cease to be the sole general
partner of Mid-America; or any single Person or related group
of Persons shall control more than twenty percent (20%) of
MAAC's voting shares. Exchanges by existing limited partners
of Mid-America of their respective limited partnership
interests for capital stock of MAAC, not exceeding, in the
aggregate, as to all such exchanges, transfers of not more
than thirty-five percent (35%) of the partnership interests of
Mid- America, shall not constitute an Event of Default; or
(l) any officer of MAAC who, in the reasonable judgment of the
Administrative Agent, occupies a position of substantial and
material management, responsibility ("Material Officer"),
shall, by reason of death, permanent disability, or departure
from the employ of MAAC, cease to be active in the management
of MAAC, and MAAC does not, within a period of five (5)
Business Days from such permanent disability, death or
departure, deliver written notice of such event to the
Administrative Agent and, within a period of thirty (30) days
from such permanent disability, death or departure, secure a
replacement for such officer, such replacement to be, by
reason of his or her experience and credentials, reasonably
satisfactory to and approved by the Administrative Agent. For
the purposes of this Section (l), permanent disability means
any disability that prevents such Material Officer from
rendering, in any one calendar year, full-time services for a
period of thirty (30) consecutive days, or in the aggregate,
for forty-five (45) days, and (ii) at the present time, the
Persons whom the Administrative Agent deems to be Material
Officers are ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇▇, and H.
▇▇▇▇ ▇▇▇▇▇▇, ▇▇. Further, the Administrative Agent shall have
the right to review and approve the credentials of any
individual proposed for the office of President or Executive
Vice President of MAAC; or
40
(m) Except as expressly permitted in SECTION 3.4, or except with
the consent of Two-Thirds of the Lenders, which consent shall
not be unreasonably withheld, Mid-America or any Subsidiary
granting to the Administrative Agent a Mortgage shall sell,
assign, transfer, convey, lease with an option to purchase,
enter into a contract of sale, grant an option to purchase, or
encumber all or any part of its interest in any Mortgaged
Property or any portion thereof, or permit the same to be
sold, assigned, transferred, conveyed, contracted for or
encumbered; provided, however, the entering of either a
contract of sale or option to purchase shall not be a default
hereunder so long as such contract of sale or option to
purchase requires the fulfillment of the conditions set forth
in SECTION 3.4 above; and provided further, however, that the
encumbrance of any Mortgaged Property by any mechanic's lien
claim shall not be deemed to constitute an Event of Default so
long as a Borrower shall promptly notify the Administrative
Agent of such mechanic's lien claim, and shall diligently and
in good faith contest (or cause to be contested) the same by
appropriate proceedings and shall establish such reserves with
respect thereto as the Administrative Agent shall specify; or
(n) MAAC fails to maintain its qualification as a real estate
investment trust under the Code.
7.2. Action on Default
During the continuance of a Default, the Administrative Agent shall,
if requested by Two-Thirds of the Lenders, notify the Borrowers that
o the Borrowers' Rights are terminated, whereupon such Borrowing
Rights shall terminate, or
o all the Borrowers' Loans, with accrued interest, and all other
amounts payable by the Borrowers under this Agreement, are
immediately due and payable, whereupon all such Loans, accrued
interest and other amounts payable under this Agreement shall
be immediately due
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and payable by the Borrowers without presentment, demand,
protest or other notice of any kind, all of which the
Borrowers waive, provided that if the Default is one described
in SECTION 7.1(F) or 7.1(G), then without notice to the
Borrowers or other act by the Administrative Agent or
Two-Thirds of the Lenders, the Borrowers' Borrowing Rights
shall immediately terminate, and the Loans, with accrued
interest, and other amounts payable under this Agreement,
shall become immediately due and payable by the Borrowers
without presentment, demand, protest or other notice of any
kind, all of which the Borrowers waive, and the Administrative
Agent may and shall, at the request of Two-Thirds of the
Lenders, exercise all rights and remedies available to it
hereunder and under applicable law or in equity.
7.3. Notice of Default
On the request of a Lender, the Administrative Agent shall promptly
give the notice referred to in Section 7.1(d) and shall promptly
notify all the Lenders that such notice has been given.
VIII. THE ADMINISTRATIVE AGENT
8.1. Appointment and authorization
Each Lender irrevocably authorizes the Administrative Agent to take
such action as agent on the Lender's behalf and to exercise such
powers as are given to the Administrative Agent under this
Agreement, together with all powers reasonably incidental thereto.
8.2. Other conduct
The Administrative Agent and its Affiliates
o shall have the same rights and powers under this Agreement as
any other Lender and may exercise or refrain from exercising
such rights and powers as though it were not the
Administrative Agent and
o may accept deposits from, lend money to and generally engage
in any kind of business with the Borrowers or their Affiliates
as if it were not the Administrative Agent.
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8.3. Scope of obligations
The obligations of the Administrative Agent under this Agreement 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 a Default except as
expressly provided in Section 7. The Administrative Agent shall
administer the Loans and perform its duties hereunder using the same
degree of care it uses in the administration of its own loans of
similar amount and structure.
8.4. Consultation with experts
The Administrative Agent may consult with legal counsel, independent
public accountants and other experts selected by the Administrative
Agent 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.
8.5. Liability of Administrative Agent
Neither the Administrative Agent nor any of its directors, officers,
agents, or employees shall be
o liable for any action it takes or does not take in connection
with this Agreement (i) with the consent or at the request of
Two-Thirds of the Lenders, unless the consent or request of
all of the Lenders is expressly required by this Agreement, or
(ii) in the absence of its own gross negligence or willful
misconduct, or
o responsible for or have a duty to ascertain, inquire into or
verify (i) any statement, warranty or representation made in
connection with this Agreement or a Borrowing, (ii) a
Borrower's performance or observance of any covenant or
agreement, (iii) the satisfaction of any condition in SECTION
3 (except for the receipt of items required to be delivered to
the Administrative Agent), or (iv) the validity, effectiveness
or genuineness of this Agreement or any other instrument or
writing furnished in connection herewith.
43
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, telecopy or similar
writing) it believes is genuine or signed by the proper parties.
8.6. Indemnification
Each Lender shall, ratably in accordance with its Commitment,
indemnify the Administrative Agent (to the extent not reimbursed by
the Borrowers) against any cost, expense, claim, demand, action,
loss or liability (except such as result from the Administrative
Agent's gross negligence or willful misconduct) that the
Administrative Agent may suffer or incur in connection with this
Agreement or any action the Administrative Agent takes or omits
hereunder.
8.7. Successor Administrative Agent
The Administrative Agent may resign by giving notice thereof to the
Lenders and the Borrowers. So long as no Default exists, the
Administrative Agent may be removed upon the request of the
Borrowers. Upon such resignation or removal, the Borrowers may
appoint a successor Administrative Agent with the consent of
Two-Thirds of the Lenders. If the Borrowers are in Default,
Two-Thirds of the Lenders may appoint a successor Administrative
Agent. If the Administrative Agent resigns or is removed and no
successor Administrative Agent is so appointed and accepts such
appointment within 30 days after the resigning Administrative
Agent's notice of resignation or its removal, then the resigning or
removed Administrative Agent may, on behalf of the Lenders, shall
appoint a successor Administrative Agent that is a commercial bank
organized or licensed under the laws of the United States of America
or of any State thereof and having a combined capital and surplus of
at least $100,000,000. Upon a successor Administrative Agent's
written acceptance of its appointment as Administrative Agent, the
successor Administrative Agent shall succeed to and become vested
with all the rights and duties of the resigning or removed
Administrative Agent, and the resigning or removed Administrative
Agent shall be discharged from its duties and obligations as
Administrative Agent. After the Administrative Agent's resignation
or removal, the provisions of this Section 8 shall continue to inure
to its benefit as to any action it took or omitted to take while it
was Administrative Agent.
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8.8. Fees
The Borrowers shall pay the Administrative Agent for its account
such fees for its services under this Agreement as the Borrowers and
the Administrative Agent may agree.
IX. CHANGE IN CIRCUMSTANCES
9.1. Eurocurrency Reserve Requirements
If a Lender notifies the Administrative Agent and the Borrowers that
the Lender is or will be generally subject to Eurocurrency Reserve
Requirements as a result of which the Lender will incur additional
costs on its Loans, then the Lender shall, to the extent such costs
are actually incurred, for each day from the later of the date of
such notice and the date on which the Lender becomes subject to the
Eurocurrency Reserve Requirements, be entitled to additional
interest on each Loan made by the Lender at a rate per annum
(rounded upward to the nearest .01%) equal to the remainder obtained
by subtracting (i) LIBOR for the Eurodollar Loan from (ii) the rate
obtained by dividing such LIBOR by the excess of 100% over the
Eurocurrency Reserve Requirements.
Such additional interest shall be payable in arrears to the
Administrative Agent, for the account of the Lender, on each date
interest is payable on the Loan.
A Lender that gives a notice under this Section 9.1 shall promptly
withdraw such notice by notifying the Administrative Agent and the
Borrowers if Eurocurrency Reserve Requirements cease to apply to it
or the circumstances giving rise to such
notice otherwise cease to exist.
9.2. Increased cost or reduced return
If any Regulatory Action (other than the imposition of Eurocurrency
Reserve Requirement) taken after the date hereof
o imposes, modifies or deems applicable any reserve, special
deposit or similar requirement against assets of, deposits
with or for the account of or credit extended by a Lender or
its Office,
o imposes on a Lender or its Office or the London interbank
market any other condition affecting the Lender's
Eurodollar Loans, or
o imposes, modifies or deems applicable any standards of capital
adequacy, and such Regulatory Action will, in the Lender's
judgment,
45
o increase the cost to the Lender or Office of making or
maintaining any Eurodollar Loan,
o reduce the amount receivable by the Lender or Office under
this Agreement with respect to any such Eurodollar Loan, or
o reduce the rate of return on the Lender's capital as a
consequence of its obligations under this Agreement (taking
into consideration the Lender's policies on capital adequacy)
by an amount the Lender deems material, then the Lender shall
promptly notify the Borrowers and the Administrative Agent
thereof, enclosing (i) a certificate of an officer of the
Lender describing the Regulatory Action leading to the
increased costs or reduction with, if possible, a copy of the
relevant law, regulation, interpretation or guideline and (ii)
the Lender's calculation setting forth in reasonable detail
the dollar amount of the increased costs or reduction.
DETERMINATION OF AMOUNT
In calculating any amount payable under this Section 9.2, a Lender
may use reasonable averaging and attribution methods. A Lender's
determination of the amount shall be conclusive in the absence of
manifest error.
PAYMENT OF COMPENSATION
Subject to the following sentence, the Borrowers shall pay a Lender
within 30 days after receipt of a notice from the Lender under this
Section 9.2 such amounts as will compensate the Lender for the
increased costs or reduction. The Borrowers will not, however, be
required to pay the Lender any amount set forth in the notice that
relates to any period prior to the 30th day before the date the
Lender gives the notice. Each Lender agrees that it shall notify the
Borrowers immediately upon becoming aware of such increased costs.
BASE RATE ELECTION BY BORROWER
If a Lender demands compensation under this SECTION 9.2 with respect
to a Eurodollar Loan, then the Borrowers may, on at least five
Business Days' prior notice to the Lender and the Administrative
Agent, elect that, until the Lender or the Administrative Agent
notifies the Borrowers that the circumstances giving rise to the
demand for compensation no longer apply, all Loans to the Borrowers
that would otherwise be made by the Lender as Eurodollar Loans,
shall be made instead as Loans at the Base Rate (on which interest
and principal shall be payable contemporaneously with the related
Loans of the other Lenders).
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9.3. LIBOR unavailable or inadequate
If on or before the second Business Day before an Interest Period
for a Borrowing
o dollar deposits in the applicable amounts are not being
offered to the Administrative Agent in the relevant market for
the Interest Period, or
SUSPENSION OF OBLIGATION TO MAKE LOANS
o Two-Thirds of the Lenders advise the Administrative Agent that
the LIBOR will not adequately and fairly reflect the cost to
such Lenders of funding their Loans for the Interest Period,
then the Administrative Agent shall promptly notify the
Borrowers and the Lenders thereof, whereupon the obligations
of the Lenders to make, or permit Conversion of Loans into,
Eurodollar Loans shall be suspended, and any subsequent
request by the Borrowers for a Eurodollar Loan or for
Conversion into a Eurodollar Loan shall be deemed to be a
request for, or for Conversion into, a Loan bearing interest
at the Base Rate.
SUSPENSION AFTER BORROWING NOTICE GIVEN
If the Lenders' obligations to make Loans is suspended
pursuant to this Section 9.3 after the Borrowers give the
Borrowing Notice for the Borrowing that includes such Loans,
then unless the Borrowers notify the Administrative Agent at
least one Business Day before the date of such Borrowing that
the Borrowers elect not to borrow on such date, the Borrowing
shall instead accrue interest at the Base Rate.
9.4. Illegal Loans
If, after the date of this Agreement, any Regulatory Action makes it
unlawful or impossible for a Lender or its Office to make, maintain
or fund its Eurodollar Loans, and the Lender so notifies the
Administrative Agent, then the Administrative Agent shall promptly
notify the other Lenders and the Borrowers, whereupon the obligation
of the Lender to make or permit Conversions into Eurodollar Loans
shall be suspended.
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PREPAYMENT OF ILLEGAL LOANS
If a Lender determines that it may not lawfully continue to maintain
an outstanding Eurodollar Loan to the Borrowers to the end of the
Eurodollar Loan's applicable Interest Period and so specifies in the
notice it gives pursuant to this SECTION 9.4, the Administrative
Agent shall so notify the Borrowers, and the Borrowers shall
immediately prepay in full the unpaid principal amount of the
Eurodollar Loan with accrued interest. As each such Loan is prepaid,
the Lender shall make a Loan bearing interest at the Base Rate to
the Borrower in an equal principal amount with interest and
principal payable contemporaneously with the related Loans of the
other Lenders.
NEW LOANS MADE AS BASE RATE LOANS
If the obligation of a Lender to make Eurodollar Loans is suspended
pursuant to this SECTION 9.4, then until the Lender or the
Administrative Agent notifies the Borrowers that the circumstances
giving rise to the suspension no longer apply, all Loans that would
otherwise be made by the Lender as Eurodollar Loans shall be made
instead as Loans accruing interest at the Base Rate (on which
interest and principal shall be payable contemporaneously with the
related Loans of the other Lenders).
9.5. Termination of suspension
When the circumstances giving rise to a suspension of the obligation
to make Eurodollar Loans under SECTION 9.3 or SECTION 9.4 no longer
exist, the Administrative Agent shall so notify the Borrowers and
the Lenders, whereupon the suspension shall terminate.
9.6. Taxes on payments
(a) Each Lender shall deliver to each of the Borrowers and to the
Administrative Agent:
o no more than 30 days after the date it becomes a Lender,
either a statement that it is incorporated in the United
States of America or, if it is not so incorporated, two duly
completed copies of, as applicable, a United States Internal
Revenue Service Form 1001 or Form 4224 (including a Form W-9
or equivalent) promulgated under the Internal Revenue Code
(each, as applicable to any Person and together with any
successor form, a "Tax Form") indicating that the Lender is
entitled to receive payments under this Agreement without
deduction or withholding of United States federal income Taxes
as permitted by the Internal Revenue Code,
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o such extensions or renewals of the Tax Form as applicable
because of expiration of the Tax Form or as the Borrowers
reasonably request (but only to the extent the Lender
determines that it may properly effect such extensions or
renewals under applicable Tax treaties, laws, regulations and
directives), and
o if a Loan is transferred to an Affiliate of the Lender, a new
Tax Form for the Affiliate.
The Borrowers and the Administrative Agent may each rely on a
Tax Form in its possession until the earlier of the expiration
date of the Tax Form or receipt of any revised or successor
form pursuant to this SECTION 9.6.
(b) If a Tax imposed by the United States of America, or any
political subdivision or taxing authority thereof, subjects a
Lender or its Office to any deduction or withholding on a
payment (including fees) on its Loans to the Borrowers, the
Lender shall promptly notify the Borrowers of the Tax,
enclosing a copy of the relevant statute, regulation or
interpretation requiring the deduction or withholding and
setting forth in reasonable detail the Lender's calculation of
the dollar amount of the Tax. Within 30 days after it receives
the notice (or a longer period that complies with the law
relating to the Tax without subjecting the Lender to
additional payments with respect to the Tax), the Borrowers
shall, as requested by the Lender in the notice,
o increase the amount of the payment so that the Lender will
receive a net amount (after deduction of the Tax) equal to the
amount due hereunder,
o pay the Tax to the appropriate taxing authority for the
Lender's account, and
o as promptly as possible, send the Lender evidence showing
payment of the Tax, together with any additional documentary
evidence the Lender reasonably requests.
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The Borrowers shall indemnify a Lender for any incremental Taxes,
interest or penalties that may become payable as a result of the
Borrowers' failure to comply with this Section 9.6.
(c) Notwithstanding anything to the contrary in this Section 9.6,
the Borrowers shall not be required to make any payment to a
Lender or taxing authority under this Section 9.6 as a result
of any deduction or withholding or incremental Tax, interest
or penalty
o that is caused by the Lender's failure or inability to furnish
the Borrowers with a Tax Form, or an extension or renewal
thereof, pursuant to this Section 9.6 unless such failure or
inability is the result of a change in an applicable law,
regulation or Tax treaty or in the interpretation thereof by a
regulatory authority that becomes effective after the date of
this Agreement, or
o for any period for which the Lender or its applicable Office
has furnished a Tax Form to the Borrowers that incorrectly
indicates that the Lender or its applicable Office is not
subject to such deduction or withholding.
9.7. Change of Office
A Lender shall designate a different Office for its Loans if such
designation will avoid the need for giving a notice pursuant to
SECTION 9.4 with respect to suspension of Loans, or reduce the
amount of compensation under SECTION 9.2 (Increased cost or reduced
return), or SECTION 9.6, (Taxes on payments), and will not, in the
Lender's judgment, be disadvantageous to the Lender.
9.8. Replacement of Lender
If
o the obligation of a Lender to make Eurodollar Loans is
suspended under Section 9.4 (Illegal Loans),
o a Lender demands compensation or payment under SECTION 9.2
(Increased cost or reduced return), or SECTION 9.6 (Taxes on
payments), or
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o a Lender's senior unsecured debt is rated lower than BBB- by
S&P, then the Borrowers may, on five Business Days' notice to
the Administrative Agent and the Lender, select a replacement
bank or banks (which may be one or more of the other Lenders)
to purchase the Lender's Loans and assume its Commitment. The
purchase price for the Lender's Loans shall be the sum of the
unpaid principal amount of the Loans, with accrued interest,
the Lender's share of accrued but unpaid Fees and other
amounts due to the Lender under this Agreement (including any
amounts due under Section 1.20 (Funding losses) for each Loan
so purchased on a date other than the last day of the Interest
Period for the Loan) less the prorated portion of the Fees
previously received by such Lender, from the date of such
purchase through the last day of the applicable period for
which the Fees had been paid. Upon the execution and delivery
of an assignment and assumption agreement substantially in the
form of Exhibit G by such Lender and each replacement bank
(and, if the replacement bank is not a Lender, with the
subscribed consent of the Borrowers and the Administrative
Agent), each such replacement bank shall be deemed to be, a
'Lender' for all purposes of this Agreement, and the
Administrative Agent shall notify the other Lenders
accordingly.
X. MISCELLANEOUS
10.1. Notices
Except as otherwise stated, all notices, requests, consents and
other communications to any party to this Agreement shall be in
writing. For purposes of this Section 10.1 (writing) shall include
writings in any form that provides the recipient, using the systems
routinely used by the recipient for communication, with a permanent
record and a human- readable text. All notices to a party shall be
given at the addresses, telecopy number or other electronic
addresses or by other methods set forth on Schedule 3 or at such
other addresses, numbers or by such other reasonable methods as such
party may specify for the purpose by notice to the Administrative
Agent and the Borrowers (each a "NOTICE ADDRESS").
Each notice, request, consent or other communication given under
this Agreement shall be effective when received at the number or
address or by the method specified pursuant to this SECTION 10.1.
Any requirement in this Agreement that a notice or other
communication be 'prompt' or be given 'promptly' shall mean that
such notice or other communication shall promptly be transmitted by
telephone (if oral notice is permitted), bank wire, telex, telecopy,
computer link or other means that normally provides nearly
instantaneous transmission.
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10.2. No waivers; remedies cumulative; integration; survival
No failure or delay by the Administrative Agent or a Lender in
exercising a right, power or privilege under this Agreement shall
operate as a waiver thereof, nor shall a 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 provided in this Agreement shall be cumulative and not
exclusive of other rights or remedies provided by law. This
Agreement constitutes the entire agreement and understanding among
the parties and supersedes all prior agreements and understandings,
oral or written, relating to its subject matter.
All covenants, agreements, representations and warranties of the
Borrowers in this Agreement or in certificates or other documents
delivered pursuant to this Agreement shall be considered to have
been relied on by the Lenders and shall survive the making of any
Loans, regardless of any investigation made by or on behalf of the
Lenders, and shall continue in full force and effect as long as any
obligation of the Borrowers under this Agreement is unpaid or the
Borrowers' Borrowing Rights have not terminated.
10.3. Expenses; documentary Taxes
The Borrowers shall pay, and shall be jointly and severally liable
for, the reasonable Expenses of the Administrative Agent in
connection with (i) its drafting and negotiation of this Agreement,
any waiver or consent hereunder or any amendment hereof (all of
which documents shall be prepared by counsel for the Administrative
Agent) and (ii) the effectiveness of this Agreement under SECTION
3.1.
If a Default by the Borrowers occurs, the Borrowers shall pay the
reasonable Expenses incurred by the Administrative Agent in
connection with such Default. In addition, if there is a Default by
the Borrowers, the Borrowers shall pay the reasonable Expenses
incurred by any Lender, including collection and other enforcement
proceedings, resulting therefrom.
The Borrowers shall, jointly and severally, indemnify the
Administrative Agent and the Lenders against all transfer,
documentary or similar Taxes payable by reason of the execution and
delivery of the Notes and this Agreement, and the execution,
delivery and recordation of the Mortgages.
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10.4. Indemnification
Each Borrower shall indemnify the Administrative Agent and each
Lender and shall hold the Administrative Agent and each Lender
jointly and severally harmless from and against any and all
liabilities, damages, costs and Expenses of any kind in connection
with an actual or threatened investigative, administrative or
judicial proceeding (whether or not the Administrative Agent or
Lender is a party thereto) (collectively, "CLAIMS") incurred by the
Administrative Agent or Lender to the extent arising out of
o a Borrower's breach of, or any Default under, this Agreement,
o any claim by a Person not a party to this Agreement that
either Borrower's, the Administrative Agent's or a Lender's
conduct in connection with this Agreement is unlawful by a
court of competent jurisdiction or has or will violate such
Person's legal rights, but only to the extent that the
Lender's or Administrative Agent's conduct is deemed unlawful
or violative due to some action or inaction of the Borrowers
or either of them,
o an actual or proposed use of Loan proceeds by the Borrowers,
or
o an action initiated by either or both Borrowers against the
Administrative Agent or a Lender relating to this Agreement,
unless a court of competent jurisdiction enters a final
non-appealable order on the entire merits of the controversy
in such action in favor of the Borrowers.
Notwithstanding anything to the contrary in this SECTION 10.4,
neither the Administrative Agent nor a Lender shall be indemnified
for any Claim to the extent such Claim
o is caused by the Administrative Agent's or Lender's gross
negligence or willful misconduct, as determined in a final
non-appealable order by a court of competent jurisdiction, or
o results from a Lender's claims against other Lenders not
attributable to a Borrower's actions and for which the
Borrowers otherwise have no liability.
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10.5. Sharing of set-offs
If a Lender exercises a right of set-off or counterclaim or
otherwise receives payment of a portion of the aggregate amount of
principal and interest due on its Loans to the Borrowers, and such
payment is greater than the proportion received by any other Lender
of the aggregate amount of principal and interest due on such other
Lender's Loans to the Borrowers, the Lender receiving the
proportionately greater payment shall purchase participations in the
Loans made to the Borrowers by the other Lenders, and other
adjustments shall be made as required so that all payments of
principal and interest on the Loans to the Borrowers shall be shared
by the Lenders pro-rata, provided that this SECTION 10.5 shall not
impair a Lender's right to exercise, to the extent permitted by
applicable law, a right of set-off or counterclaim and to apply the
amount subject to such exercise to the payment of indebtedness of
the Borrowers other than indebtedness on Loans. A Participant in a
Loan, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim and
other rights with respect to its participation as fully as if the
Participant were a direct creditor of the Borrowers in the amount of
such participation.
10.6. Amendments and waivers
An amendment to or waiver of a provision of this Agreement must be
in writing and signed by the Borrowers and Two-Thirds of the Lenders
(and, if the rights or duties of the Administrative Agent are
affected thereby, by the Administrative Agent), provided that each
affected Lender must sign an amendment, waiver or consent that
(a) increases or decreases the Commitment of such Lender or
subjects such Lender to additional obligations, except as
contemplated in SECTION 9.8 (Replacement of Lender),
(b) reduces the principal of or rate of interest on any Loan or
any fees hereunder,
(c) postpones the Maturity Date or other date fixed for payment of
principal or interest on a Loan or of any fees hereunder or
for the termination of the Borrowers' Borrowing Rights,
(d) changes the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans, or the Borrowing Base,
or the number of Lenders required for the Lenders to take any
action under this Agreement,
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(e) amends SECTION 1.19 (Pro-rata treatment),
(f) amends this Section 10.6, or
(g) releases substantially all of the Mortgaged Property.
10.7. Successors and assigns
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties and their respective
successors and assigns, except that neither Borrower may
assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement.
(b) A Lender may grant a bank or other institution (a
"PARTICIPANT") a participating interest in its Commitment or
some or all of its Loans. If a Lender grants a participating
interest to a Participant, the Lender shall remain responsible
for the performance of its obligations under this Agreement,
and the Borrowers and the Administrative Agent shall continue
to deal solely with the Lender in connection with this
Agreement, regardless of whether the Lender has notified the
Borrowers and the Administrative Agent of the grant. An
agreement granting such a participating interest shall provide
that the Lender shall retain the sole right and responsibility
to enforce the obligations of the Borrowers under this
Agreement, including the right to approve any amendment,
modification or waiver of any provision of this Agreement.
Subject to SECTION 10.7(E) (funding losses and changed
circumstances), a Participant shall, to the extent provided in
its participation agreement, be entitled to the benefits of
SECTION 9 (Change in circumstances), with respect to its
participating interest. An assignment or other transfer that
is not permitted by SECTION 10.7(C) (assignments), or 10.7(D)
(assignment to Federal Reserve Bank), shall be given effect
only to the extent that it is a participating interest granted
in accordance with this SECTION 10.7(B).
55
(c) A Lender may assign to one or more banks or other
institutions (each an "ASSIGNEE") all or a proportionate
part of its rights and obligations under this Agreement,
and each Assignee shall assume such rights and
obligations, pursuant to an assignment and assumption
agreement in substantially the form of EXHIBIT G. The
assignment and assumption agreement shall be signed by
the Assignee and the transferor Lender, with (and subject
to) the subscribed acknowledgment and consent of the
Administrative Agent and the subscribed consent, which
shall not be unreasonably withheld, of the Borrowers,
provided that such consents shall not be required if the
Assignee is a Lender or a Federal Reserve Bank, and
provided further that the consent of the Borrowers shall
not be required after and during the continuance of a
Default.
(d) Upon the later of (i) the effective date stated in the
assignment and assumption agreement (which shall not be
earlier than the fifth Business Day after execution of such
agreement) or (ii) payment by the Assignee to the transferor
Lender of the purchase price agreed between them, and payment
by the transferor Lender or the Assignee to the Administrative
Agent of a registration and processing fee of $2,500,
(i) the Assignee shall be a Lender party to this Agreement
and shall have all the rights and obligations of a
Lender with the Commitment set forth in the assignment
and assumption agreement,
(ii) the transferor Lender shall be released from its
obligations under this Agreement to a corresponding
extent so long as the Assignee at the time of transfer
has a net worth at least equal to the net worth of the
transferor Lender,
(iii) The Borrower shall execute and deliver replacement Notes
to the order of the Assignee and, if necessary, the
assigning Lender; and
(iv) no further consent or action by any party shall be
required.
(e) A Lender may assign all or a proportionate part of its rights
under this Agreement to a Federal Reserve Bank, and the
Borrowers, if requested by the Lender, shall issue a
promissory note to be pledged to the Federal Reserve Bank
evidencing the Borrowers' obligations on the Lender's Loans to
the Borrowers. Such assignment shall not release the
transferor Lender from its obligations under this Agreement.
56
(f) No Assignee, Participant or other transferee of any Lender's
rights may receive any greater payment under SECTION 1.20
(Funding losses), and SECTION 9.2 (Increased cost and reduced
return), than the transferor Lender would have received with
respect to the rights transferred, unless such transfer was
made with the Borrowers' prior consent.
(g) The Administrative Agent shall maintain at one of its offices
in Birmingham, Alabama, a copy of each assignment and
assumption agreement delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the
Commitment of, and principal amount of the Loans owing to,
each Lender (the "REGISTER"). The entries in the Register
shall be conclusive in the absence of manifest error, and the
Borrowers, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender
for all purposes of this Agreement. The Register shall be
available for inspection by the Borrowers or Lender at any
reasonable time upon reasonable notice.
(h) If an Assignee is not already a Lender, it shall deliver to
the Administrative Agent a completed administrative
questionnaire in the form required by the Administrative
Agent. Upon its receipt of (i) an assignment and assumption
agreement executed by an assigning Lender and an Assignee
(and, if required, by the Borrowers), (ii) the completed
administrative questionnaire (unless the Assignee is already a
Lender) and (iii) the registration and processing fee referred
to in SECTION 10.7(C), the Administrative Agent shall record
the information contained in the assignment and assumption
agreement in the Register and give prompt notice thereof to
the Lenders.
10.8. Borrowers' liability
The parties acknowledge that the rights and obligations (including
the representations, warranties, agreements, breaches, liabilities,
indemnities and Defaults) of the Borrowers under this Agreement are
joint and several.
10.9. No reliance on Margin Stock collateral
Each Lender represents to the Administrative Agent and the other
Lenders that it is not relying upon any Margin Stock as collateral
in the extension or maintenance of the credit provided for in this
Agreement.
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10.10. Credit decision
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender, and
based on such documents and information as it deemed appropriate,
made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it deems
appropriate at the time, continue to make its own credit decisions
in taking or not taking any action under this Agreement.
10.11. Alabama law
This Agreement shall be governed by and construed in accordance with
the laws of the State of Alabama.
10.12. Waiver of jury trial
The Borrowers, the Lenders and the Administrative Agent hereby
irrevocably and unconditionally waive trial by jury in any legal
action or proceeding relating to this Agreement and for any
counterclaim therein.
10.13. Venue of Actions
As an integral part of the consideration for making of the Loans, it
is expressly understood and agreed that no suit or action shall be
commenced by either Borrower, or by any successor, personal
representative or assignee thereof, with respect to the Loans
contemplated hereby, or with respect to this Agreement or any other
document or instrument which now or hereafter evidences or secures
all or any part of the Loans, other than in a state court of
competent jurisdiction in and for the County of the State in which
the principal place of business of the Administrative Agent is
situated, or in the United States District Court for the District in
which the principal place of business of the Administrative Agent is
situated, and not elsewhere. Nothing in this paragraph contained
shall prohibit the Administrative Agent from instituting suit in any
court of competent jurisdiction for the enforcement of its rights
hereunder or in any other document or instrument which evidences or
secures the loan indebtedness.
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10.14. Execution
This Agreement may be executed in counterparts. Delivery of an
executed counterpart signature page to this Agreement, including
delivery by telecopier, shall be effective as delivery of a manually
executed counterpart of this Agreement.
10.15. Survival
SECTION 9 (Change in circumstances), SECTION 10.3 (Expenses), and
SECTION 10.4 (Indemnification) shall survive termination of this
Agreement or the Borrowers' Borrowing Rights.
XI. DEFINITIONS AND USAGES
11.1. Definitions
In this Agreement, the following terms shall have the following
meanings:
ADJUSTED NOI shall mean, as to any Mortgaged Property, for any
period, the actual Net Operating Income of such Mortgaged Property
for such period; provided that (i) all annual expenses, including,
but not limited to, taxes and insurance, shall be accounted for on
an accrual basis; and (ii) expenses shall include an assumed
management fee of five percent (5%) and capital expenditures of Two
Hundred Dollars ($200.00) per rental unit on average per year.
ADMINISTRATIVE AGENT shall mean AmSouth Bank, its successors or
assigns.
ADVANCE RATE shall mean for Mortgaged Properties: (a) the amount
shown as the Advance Rate on SCHEDULE 2 for the Initial Properties
from the date hereof until the first quarterly determination of Fair
Market Value, which shall occur on March 22, 1998, except for
Paddock Park Ocala II, which shall occur on June 22, 1998; (b)
subject to subclauses (d) and (e) herein, 60% of Fair Market Value
for a Stabilized Property (including the Initial Properties after
the first quarterly determination of Fair Market Value); (c) subject
to adjustment as provided in SECTION 1.16(C), 50% of the Project
Budget to the extent of Work Completed for a Development Project;
(d) for the period commencing on the date a Development Project is
converted to a Stabilized Property in accordance with SECTION
3.5(B), until the next succeeding quarterly determination of Fair
Market Value, 60% of the appraised value of the subject Development
Project, as reflected in the appraisal ordered and approved by the
Administrative Agent; and (e) for the period commencing on the date
a Stabilized Property is added to the Borrowing Base and continuing
thereafter through a full calendar quarter, 60% of the appraised
value of the subject Stabilized Property, as reflected in the
appraisal ordered and approved by the Administrative Agent.
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ADVANCES or LOAN ADVANCES shall mean advances of principal upon the
Loans by the Lenders to either or both of the Borrowers under the
terms of this Agreement, specifically including, without limitation,
advances under the Swing Line Facility, the Notes and draws under
the Letters of Credit.
AFFILIATE of a specified Person means another Person that directly,
or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with the specified Person.
In the foregoing definition, control of a Person means possession,
directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
AGGREGATE COMMITMENT means the sum of the Commitments of the Lenders
at any time available to the Borrower under the Loans.
ANNUALIZED ADJUSTED NOI shall mean, for the most recent two calendar
quarters, the Adjusted NOI for such calendar quarters, multiplied by
the integer two (2).
ANNUALIZED EBITDA shall mean EBITDA for the most recent two calendar
quarters, multiplied by the integer two (2).
APARTMENT COMMUNITY shall mean an apartment community owned by
either Borrower or Subsidiary, whether or not it is subject to a
Mortgage.
ASSIGNEE shall have the meaning assigned to such term in SECTION
10.7(C).
ASSUMED DEBT SERVICE shall mean the assumed amortization of the
outstanding Loans, calculated on the basis of a 25-year amortization
and an 8.5% interest rate.
BASE RATE shall mean (a) from the date hereof through June 30, 1998,
a rate per annum equal to the Prime Rate minus .75%, and (b)
commencing July 1, 1998, but subject to Section 1.13(e), continuing
thereafter until the Loans are paid in full, a rate equal to the
Prime Rate. Any change in the Base Rate due to a change in the Prime
Rate shall be effective on the effective date of such change in the
Prime Rate.
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BASE RATE LOAN means a Loan bearing interest at the Base Rate.
Borrowers mean MAAC and Mid-America, jointly, and, individually, a
"BORROWER".
BORROWING shall have the meaning assigned to that term in SECTION
1.2.
BORROWING BASE is the limitation on the amount of the Loan which may
be outstanding at any time and from time to time during the term of
this Agreement. The Borrowing Base shall equal (a) the Advance Rate
for Stabilized Properties which at the time of determination are
subject to the Mortgages plus (b) the Advance Rate for Development
Projects which at the time of determination are subject to
Mortgages; provided, however, the amount available under (b) above
shall in no event exceed $50,000,000 in the aggregate at any one
time outstanding.
BORROWING BASE CERTIFICATE shall mean a certificate substantially in
the form of EXHIBIT F, duly executed by the Certifying Officer,
setting forth in reasonable detail the calculations for each
component of the Borrowing Base.
BORROWING NOTICE shall have the meaning assigned to that such term
in SECTION 2.1.
BORROWING RIGHTS of the Borrowers means the rights of the Borrowers
under this Agreement to require the Lenders to make Loans.
BUSINESS DAY means a day other than a Saturday, Sunday or other day
on which commercial banks in Birmingham, Alabama and New York, New
York are authorized or required by law to close.
CERTIFICATE OF OCCUPANCY shall mean a certificate of occupancy
issued by the governmental authority in whose jurisdiction the
subject Mortgaged Property lies, or such other comparable
governmental approval if a certificate of occupancy is not utilized
by the applicable governmental authority.
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CERTIFYING OFFICER shall mean MAAC's chief financial officer.
CLAIMS shall have the meaning assigned to that term in SECTION 10.4.
CODE shall mean the Internal Revenue Code of 1986, as amended, or
any successor Federal tax code.
COMMITMENT shall mean the portion of the Loans to be made available
by a Lender.
CONTROLLED GROUP means, for a Borrower, all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control that, together with the Borrower,
are treated as a single employer under Section 414 of the Internal
Revenue Code.
CONVERSION means shall have the meaning assigned to that term in
SECTION 2.4.
CONVERSION DATE shall mean the date on which a Conversion occurs.
CONVERSION NOTICE shall have the meaning assigned to that term in
SECTION 2.4.
CURATIVE MEASURE shall mean the repairs, renovations and
replacements recommended for immediate action for an Apartment
Community in an Inspection Report.
DEBT of a Person at a date means, without duplication,
o all obligations of the Person for borrowed money, including
all obligations of the Person evidenced by bonds, debentures,
notes or other similar instruments,
o all obligations of the Person to pay the deferred purchase
price of property or services, except trade accounts payable
and deferred compensation arising in the ordinary course of
business,
o all obligations of the Person as lessee under capital leases,
o all Debt of others secured by a Lien on assets of the Person,
whether or not the Debt is assumed by the Person,
o all Debt of others Guaranteed by the Person,
62
o all letters of credit, banker's acceptances, swap transactions
and similar hedge agreements, and
o all Debt of any partnership for which such Person is a general
partner.
DEFAULT means a condition or event that constitutes an event of
default hereunder or that with the giving of notice or lapse of time
or both would, unless cured or waived, become a Default, as more
specifically set forth in Section 7.
DEVELOPMENT PROJECT is a real property which is being developed
into, or upon which improvements are being constructed to enable it
to become, an Apartment Community.
EBITDA shall mean, on a consolidated basis, earnings before
interest, taxes, depreciation and amortization, calculated in
accordance with GAAP.
ENVIRONMENTAL LAWS means all applicable local, state or federal
laws, rules or regulations pertaining to environmental regulation,
contamination or cleanup, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act
of 1980, the Resource Conservation and Recovery Act of 1976 or any
state lien or superlien or environmental cleanup statutes.
ERISA means the Employee Retirement Income Security Act of 1974.
EUROCURRENCY RESERVE REQUIREMENTS for any day means the aggregate of
the maximum reserve percentage (including any marginal, special,
emergency or supplemental reserves) established by the Federal
Reserve Board and any other banking authority to which a Lender is
subject and applicable to 'eurocurrency liabilities', as such term
is defined in Regulation D of the Federal Reserve Board, or any
similar category of assets of liabilities relating to eurocurrency
fundings. Eurocurrency Reserve Requirements shall be adjusted
automatically on and as of the effective date of any change in such
reserve percentage.
EURODOLLAR BORROWING means a Borrowing bearing interest at the
Eurodollar Rate.
EURODOLLAR LOAN means a Loan bearing interest at the Eurodollar
Rate.
63
EURODOLLAR RATE shall mean the LIBOR Rate, plus the applicable
Margin.
EXISTING LETTERS OF CREDIT means (a) that certain letter of credit
issued by AmSouth Bank, dated July 7, 1997, in an amount not to
exceed in the aggregate $7,230,903.00, bearing Letter of Credit No.
S314065; (b) that certain letter of credit issued by AmSouth Bank,
dated May 6, 1996, in an amount not to exceed in the aggregate
$168,000, bearing Letter of Credit No. S312398; (c) that certain
letter of credit issued by AmSouth Bank, dated January 29, 1997, in
an amount not to exceed in the aggregate $455,778.21, bearing Letter
of Credit No. S312294; (d) that certain letter of credit issued by
AmSouth Bank, dated December 19, 1997, in an amount not to exceed in
the aggregate $6,057,206, bearing Letter of Credit No. S314660; (e)
that certain letter of credit issued by AmSouth Bank, dated January
15, 1998, in an amount not to exceed in the aggregate $11,005,940,
bearing Letter of Credit No. S314760; and (f) any and all
replacements and substitutions of any of the letters of credit
discussed in (a), (b), (c), (d) and (e).
EXPENSES of a Person means the Person's reasonable out of pocket
expenses (including reasonable fees and expenses of the Person's
outside counsel) and reasonably allocable expenses of counsel who
are employees of the Person.
FAIR MARKET VALUE shall be determined quarterly, on a "Net Operating
Income" basis, not later than the twenty-second (22nd) day of each
calendar quarter, but as of the last day of the immediately
preceding calendar quarter, from the Effective Date until the
Termination Date of the Loans, by dividing the prior calendar
quarter's annualized Adjusted NOI of Stabilized Properties subject
to Mortgages by 9.5%.
FEDERAL FUNDS RATE for a day means the rate per annum (rounded
upwards, if necessary, to the nearest 0.01%) 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 the day, as published by the Federal Reserve Bank of New
York on the Business Day following that day, provided that:
o if the day is not a Business Day, the Federal Funds Rate for
the day shall be the rate on such transactions on the
preceding Business Day as so published on the following
Business Day, and
64
o if no such rate is so published on the following Business Day,
the Federal Funds Rate for the day shall be the average rate
on such transaction quoted to the Administrative Agent on the
day by three federal funds brokers of recognized standing
selected by the Administrative Agent.
FEDERAL RESERVE BOARD means the Board of Governors of the Federal
Reserve System.
FEES shall mean, collectively, the fees described in Section 1.11(a)
through (e), both inclusive.
FUNDS FROM OPERATIONS has the meaning assigned in SECTION 6.7.
GAAP means generally accepted accounting principles in the United
States of America in effect from time to time, consistently applied.
HAZARDOUS SUBSTANCES shall mean and include all hazardous and toxic
substances, wastes or materials, any pollutants or contaminants
(including, without limitation, asbestos and raw materials which
include hazardous constituents), or any other similar substances or
materials which are included under or regulated by any applicable
Environmental Laws.
INITIAL PROPERTIES shall mean the Properties listed on SCHEDULE 2.
INSPECTION REPORT shall mean the written report commissioned by the
Administrative Agent as part of the due diligence process for
determining whether an Apartment Complex may become a Mortgaged
Property.
INTEREST PERIOD shall have the meaning assigned to that term in
SECTION 1.12.
LENDERS shall have the meaning assigned to such term in the
introductory paragraph of this Agreement.
LETTER(S) OF CREDIT shall have the meaning assigned to that term in
SECTION 1.8.
LETTER OF CREDIT FACILITY shall mean the portion of the Aggregate
Commitment that may be utilized for the issuance of Letters of
Credit, not to exceed $60,000,000 at any one time.
65
LIBOR for an Interest Period means
o the interest rate per annum for deposits in U.S. dollars for a
maturity most nearly comparable to the Interest Period that
appears on page 3750 (or a successor page) of the Dow ▇▇▇▇▇
Telerate Screen as of 11 a.m., London time, on the second
Business Day before the first day of the Interest Period, or
o if such rate does not so appear on the Dow ▇▇▇▇▇ Telerate
Screen, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the rate at which
U.S. dollar deposits approximately equal in principal amount
to the Administrative Agent's portion of such Borrowing and
for a maturity comparable to the Interest Period, are offered
to the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at
approximately 11 a.m., London time, on the second Business Day
before the first day of the Interest Period.
LIEN means, for an asset, a mortgage, lien (including without
limitation statutory liens), pledge, charge, security interest or
encumbrance of any kind in respect of the asset, including the
interest of a vendor or lessor under a conditional sales agreement,
capital lease or other title retention agreement, or any
preferential arrangement of any kind.
LOAN DOCUMENTS shall mean this Agreement, the Notes, the Mortgages,
any other instrument or document at any time evidencing or securing
the Loans, and any other instrument or document executed by the
Borrowers or any Subsidiary with or in favor of the Administrative
Agent or the Lenders in connection with the Loans.
LOANS shall have the meaning assigned to such term in Section 1.1,
and, individually, a Loan.
MAAC shall have the meaning given to such term in the introductory
paragraph of this Agreement.
MANAGEMENT FEES means, with respect to each Apartment Community for
any period, an amount equal to five percent (5%) of the aggregate
rent due and payable for such period under leases with tenants at
such Apartment Community.
66
MARGIN shall mean (a) from the date hereof through June 30, 1998,
one and one-quarter percent (1.25%) and (b) commencing July 1, 1998,
but, subject to SECTION 1.13(E), continuing thereafter until the
Loans are paid in full, two percent (2%).
MARGIN STOCK means 'margin stock' as defined in Regulation U of the
Federal Reserve Board.
MATERIAL OFFICER shall have the meaning assigned to such term in
SECTION 7.1(L).
MATURITY DATE means November 24, 1999.
MID-AMERICA shall have the meaning given to such term in the
introductory paragraph of this Agreement.
MOODY'S shall mean ▇▇▇▇▇'▇ Investors Service, Inc. Mortgage shall
mean any deed of trust, mortgage, deed to secure debt, or other
similar lien instrument, executed by the Borrowers or a Subsidiary
for the purpose of securing the Loans, and constituting a valid
first lien upon or security title in an Apartment Community.
MORTGAGED PROPERTY shall mean the Stabilized Properties and
Development Projects subject to the lien of a Mortgage.
NET OPERATING INCOME or NOI means, with respect to any Apartment
Community for the most recent two calendar quarters, "actual
property rental and other income" (as determined by GAAP)
attributable to such Apartment Community accruing for such period,
minus the amount of all expenses (as determined in accordance with
GAAP) incurred in connection with and directly attributable to the
ownership and operations of such Apartment Community for such
period, including, without limitation, Management Fees and amounts
accrued for the payment of real estate taxes and insurance premiums,
but excluding interest expense or other debt service charges and any
non-cash charges such as depreciation or amortization of financing
costs. In calculating NOI attributable to any Apartment Community
first acquired or opened by either Borrower during a quarter,
"actual property rental and other income" and expenses shall be
adjusted for the purposes of this definition to reflect the full
amount of "actual property rental and other income" and expenses
that would have been attributable to such Apartment Community if it
had been owned or opened for the full quarter.
67
NET OPERATING LOSS for any period shall mean the amount by which
expenses exceed income, all determined in accordance with GAAP.
NET WORTH or TANGIBLE NET WORTH means the sum of consolidated
shareholders' equity and minority interests in MAAC, determined in
accordance with GAAP, reduced by the amount of any intangible assets
of MAAC, determined in accordance with GAAP.
NOTES shall have the meaning assigned to such term in SECTION 1.4.
NOTICE ADDRESSES shall have the meaning assigned in SECTION 10.1.
OBLIGOR SHALL mean either Borrower or any Subsidiary granting a
Mortgage to secure the Loans.
OFFICE of a Lender means the Lender's office designated as its
office and located at the address set forth on Schedule 3, or such
other office as the Lender designates as its office by notice to the
Borrowers and the Administrative Agent.
PARTICIPANT shall have the meaning assigned to such term in Section
10.7(b).
PBGC means the Pension Benefit Guaranty Corporation.
PENSION PLAN at a time means an employee pension benefit plan that
is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Internal Revenue Code and is
either (a) maintained by a member of the Controlled Group for
employees of a member of the Controlled Group or (b) maintained
pursuant to a collective bargaining agreement or other arrangement
under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an
obligation to make contributions or has within the preceding five
plan years made contributions.
PERSON means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including
a government or political subdivision or an agency or
instrumentality thereof.
68
PRIME RATE means the per annum rate of interest publicly announced
by the Administrative Agent as its Prime Rate at its principal
office in Birmingham, Alabama. Each change in the Prime Rate shall
be effective on the date such change is publicly announced as
effective.
PROJECT BUDGET means the total cost of a particular phase of a
Development Project, not to exceed $20,000,000 for any one such
phase of a Development Project.
PROPORTIONATE SHARE means the respective pro rata interests of the
Lenders in the Aggregate Commitment and in the Loans.
REGISTER shall have the meaning assigned to such term in SECTION
10.7(F).
REGULATORY ACTION means the adoption of an applicable law, rule or
regulation, or a change therein, or a change in the interpretation
or administration thereof by a governmental authority, central bank
or comparable agency charged with the interpretation or
administration thereof, or compliance by a Lender (or its Office)
with a request or directive (whether or not having the force of law)
of the authority, central bank or comparable agency.
RELATED PERSON shall mean any Person (i) which now or hereafter
directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with either
Borrower, or (ii) which now or hereafter beneficially owns or holds
ten percent (10%) or more of the partnership interests of
Mid-America, or ten percent (10%) or more of the capital stock of
MAAC, or (iii) ten percent (10%) or more of the capital stock,
partnership interest or other form of ownership interest of which is
beneficially owned or held by either Borrower. For the purposes
hereof, "control" shall mean possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting stock
or interests, by contract or otherwise.
RESPONSIBLE OFFICER shall have the meaning ascribed to that term in
SECTION 1.7 hereof.
S&P means Standard & Poor's Corporation or a successor.
69
STABILIZED PROPERTY shall mean an Apartment Community (a) for which
a Certificate of Occupancy has been issued for the entire Apartment
Community, or the Borrowers shall furnish satisfactory proof to the
effect that the improvements for the entire Apartment Community have
been completed and that the local government having jurisdiction
does not issue a Certificate of Occupancy; and (b) which has
achieved an occupancy rate of at least eighty percent (80%) for at
least the immediately preceding two (2) consecutive months.
SUBSIDIARY means a corporation, partnership or other legal entity,
the voting interest of which is one hundred percent (100%) directly
or indirectly owned by either MAAC and/or Mid- America.
SUBSIDIARY GUARANTY means the guaranty agreement executed or to be
executed by each Subsidiary executing a Mortgage, in the form
attached hereto as EXHIBIT H.
SWING LINE FACILITY shall have the meaning assigned to such term in
SECTION 1.7.
SWING LINE FACILITY NOTE shall mean that certain promissory note
executed by the Borrowers in the principal amount of $6,000,000,
evidencing the Swing Line Facility.
TAX includes any present or future tax, assessment or governmental
charge or levy.
TAX FORM shall have the meaning assigned to that term in SECTION
9.6.
TERMINATION DATE shall mean the earlier of (a) the Maturity Date or
(b) the date as of which the Borrowers shall have terminated the
Lenders' commitment under the provisions of SECTION 1.15 hereof, or
(c) the Lenders have terminated this Agreement under the provisions
of Section 7 hereof.
TOTAL ANNUALIZED DEBT SERVICE ON INDEBTEDNESS shall mean for any
period the aggregate amount of principal and interest payments
including capitalized interest for construction purposes due for
such period upon Debt, but excluding balloon payments.
TOTAL ANNUALIZED FIXED CHARGES shall mean for any period the
aggregate amount of preferred stock distributions, principal, and
interest (including capitalized interest for Development Projects)
due for such period upon Debt, but excluding balloon payments.
70
TOTAL DEVELOPMENT AND JOINT VENTURE INVESTMENT shall mean the
aggregate from time to time of (i) a Borrower's expenditures with
respect to any Apartment Community for land acquisition, development
and construction costs until a Certificate of Occupancy is received
for such entire Apartment Community (or, if no Certificate of
Occupancy is available from the local governmental authority having
jurisdiction until all construction of the entire Apartment
Community has been completed), plus (ii) the amount of funds or
other assets invested by a Borrower in any joint venture arrangement
with any Person, whether or not a Related Person.
TOTAL LIABILITIES shall mean the aggregate amount of all liabilities
of both Borrowers, from time to time outstanding, calculated on a
consolidated basis, in accordance with GAAP, applied on a consistent
basis. (For the purposes hereof, with respect to indebtednesses of
any joint venture in which a Borrower is a party, such Borrower's
pro rata share of the joint venture's liabilities shall be
considered a liability of such Borrower, if such joint venture
liability is non-recourse; but if such joint venture liability is a
recourse obligation, the total amount of such joint venture
liability shall be considered a liability of the Borrower.)
TOTAL MARKET VALUE OF ASSETS shall mean, for any calendar quarter,
the EBITDA for the most recent two (2) calendar quarters, multiplied
by the integer two (2) (thereby converting the calendar quarter's
EBITDA to an annualized amount), and then multiplying the result so
obtained by the integer ten (10).
TWO-THIRDS OF THE LENDERS means Lenders having Commitments
aggregating at least two-thirds of the Aggregate Commitment except
that if the Borrowers' Borrowing Rights have terminated or for
purposes of SECTION 7.2 (Action on Event of Default), Two-Thirds of
the Lenders means Lenders having two-thirds of the aggregate unpaid
principal amount of all Loans to the Borrowers.
UNFUNDED AMOUNT shall have the meaning assigned to such term in
SECTION 2.3.
UNFUNDED VESTED LIABILITIES for a Pension Plan at a time means the
amount (if any) by which (i) the present value of all vested
nonforfeitable benefits under the Pension Plan exceeds (ii) the fair
market value of all Pension Plan assets allocable to such benefits,
all determined as of the then most recent valuation date for the
Pension Plan, but only to the extent that such excess represents a
potential liability of a member of the Controlled Group to the PBGC
or the Pension Plan under Title IV of ERISA.
71
WITHDRAWAL LIABILITY means liability to a multiemployer plan as a
result of a complete or partial withdrawal from the multiemployer
plan, as such terms are defined in Part I of Subtitle E of ERISA.
WORK COMPLETED means the extent to which construction has been
completed on a Development Project at the point of determination.
11.2. Accounting terms and determinations
Unless otherwise stated, all accounting terms used in this Agreement
shall be interpreted, all accounting determinations under this
Agreement shall be made and all financial statements of a Borrower
required to be delivered under this Agreement shall be prepared in
accordance with GAAP.
11.3. Miscellaneous usages
In this Agreement, unless otherwise stated or the context otherwise
clearly requires, the following usages apply:
TIME PERIODS
In computing periods from a specified date to a later specified
date, the words 'from' and 'commencing on' (and the like) mean 'from
and including,' and the words 'to,' 'until' and 'ending on'( and the
like) mean 'to but excluding.'
WHEN ACTION MAY BE TAKEN
Any action permitted to be taken under this Agreement may be taken
at any time and from time to time.
BIRMINGHAM, ALABAMA TIME
All indications of time of day shall mean the time then in effect in
Birmingham, Alabama.
'INCLUDING'; 'OR'
'Including' means 'including, but not limited to.' 'A or B' means 'A
or B or both.'
72
STATUTES AND REGULATIONS
References to a statute include all regulations promulgated under or
implementing the statute, as in effect at the relevant time.
AGREEMENTS
References to an agreement (including this Agreement) shall refer to
the agreement as amended at the relevant time.
GOVERNMENTAL AGENCIES
References to any governmental or quasi-governmental agency or
authority shall include any successor agency or authority.
SECTION REFERENCES
References to numbered sections in this Agreement shall refer to all
included sections. For example, references to Section 6 shall also
refer to Sections 6.1, 6.1(a), etc.
OTHER DEFINED TERMS
Other defined terms are contained within the body of this Agreement.
LIST OF SCHEDULES
Schedule 1 List of Lenders and Commitments
Schedule 2 Initial Properties
Schedule 3 Notice Addresses
Schedule 4 Subsidiaries and Ownership
LIST OF EXHIBITS
Exhibit A Notes (1.4)
Exhibit B Swingline Request (1.7)
Exhibit C Borrowing Notice (2.1)
Exhibit D Conversion Notice (2.4)
Exhibit E Attorney Opinion (3.1)
73
Exhibit F Borrowing Base Certificate (5.1)
Exhibit G Assignment (9.8)
Exhibit H Subsidiary Guaranty
Exhibit I Florida Restated Notes
Exhibit J Compliance Certificate
74
Signature page to
Revolving Credit Agreement
MID-AMERICA APARTMENT COMMUNITIES, INC.
By______________________________
Name__________________________
Title_________________________
MID-AMERICA APARTMENTS, L.P.
By Mid-America Apartments Communities, Inc.
Its Sole General Partner
By______________________________
Name__________________________
Title_________________________
Revolving Credit Agreement
AMSOUTH BANK,
IN ITS INDIVIDUAL CAPACITY AS LENDER
AND AS ADMINISTRATIVE AGENT
By__________________________________
Name________________________________
Title_______________________________
SIGNATURE PAGE TO
REVOLVING CREDIT AGREEMENT
HIBERNIA NATIONAL BANK
By______________________________
Name__________________________
Title_________________________
Signature page to
Revolving Credit Agreement
COLUMBUS BANK & TRUST COMPANY
By_______________________________
Name_____________________________
Title____________________________
Signature page to
Revolving Credit Agreement
COMMERZBANK AKTIENGESELLSCHAFT, ATLANTA
AGENCY
By_______________________________
Name_____________________________
Title____________________________
By_______________________________
Name_____________________________
Title____________________________
Signature page to
Revolving Credit Agreement
PNC BANK, NATIONAL ASSOCIATION
By_______________________________
Name_____________________________
Title____________________________
Signature page to
Revolving Credit Agreement
FIRST TENNESSEE BANK, N.A.
By_______________________________
Name_____________________________
Title____________________________
Signature page to
Revolving Credit Agreement
NATIONAL BANK OF COMMERCE
By_______________________________
Name_____________________________
Title____________________________
Signature page to
Revolving Credit Agreement
MELLON BANK, N.A.
By___________________________
Name_________________________
Title________________________
SCHEDULE 1
LIST OF LENDERS COMMITMENTS: PERCENTAGE:
---------------- ------------ -----------
AmSouth Bank $37,000,000 18.5%
Hibernia National Bank 28,000,000 14.0%
Columbus Bank & Trust Company 15,000,000 7.5%
First Tennessee Bank, N.A. 20,000,000 10.0%
Commerzbank 24,000,000 12.0%
Aktiengesellschaft,
Atlanta Agency
PNC Bank, National Association 28,000,000 14.0%
National Bank of Commerce 20,000,000 10.0%
Mellon Bank, N.A. 28,000,000 14.0%
------------- ------
TOTAL $200,000,000 100.0%
SCHEDULE 2
[LIST OF INITIAL PROPERTIES]
AVAILABILITY
PROPERTY ADVANCE RATE AS OF 3/20/98
-------- ---------------- -----------------
I. STABILIZED PROPERTIES:
1. Paddock Club Huntsville (AL) 60% 4,980,000.00
2. Anatole (FL) 60% 5,106,000.00
3. Whisperwood (GA) 60% 13,980,000.00
4. Whisperwood Spa I (GA) 60% 9,060,000.00
5. ▇▇▇▇▇ (TX) 60% 6,960,000.00
6. Township (VA) 60% 6,210,000.00
7. Paddock Club ▇▇▇▇▇▇▇ I (FL) 60% 12,600,000.00
8. Paddock Club Greenville (SC) 60% 7,680,000.00
▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ I (SC) 60% 6,240,000.00
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ II (SC) 60% 4,800,000.00
11. Paddock Club Tallahassee (FL) 60% 5,700,000.00
12. Reflection Pointe (MS) 60% 7,830,000.00
13. Paddock Park Ocala II (FL) 54.5% 7,957,000.00
14. Colony at Southpark (SC) 60% 4,500,000.00
15. ▇▇▇▇▇▇ Run (GA) 60% 8,259,000.00
16. Lane at Towne Crossing (TX) 60% 6,840,000.00
II. DEVELOPMENT PROJECTS:
1. Paddock Club 50% of cost 2,553,832.00
Huntsville II (AL)
2. Whisperwood Spa II (GA) 50% of cost 3,153,809.00
3. Paddock Club Gainesville (FL) 50% of cost 96,492.00
4. Paddock Club ▇▇▇▇▇▇▇ ▇▇ (FL) 50% of cost 0.00
5. Paddock Club Mandarin (FL) 50% of cost 6,306,681.00
---------------
TOTAL
BORROWING BASE $130,812,814.00
SCHEDULE 3
[Notice Addresses]
AmSouth Bank
Real Estate Department
9th Floor
AmSouth/Sonat Building
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Hibernia National Bank
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ "Skip" ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Bank & Trust Company
Real Estate Lending/Main Office
4th Floor
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇. ▇▇▇▇▇
First Tennessee Bank, N.A.
1st Floor-Real Estate
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Ms. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Commerzbank Aktiengesellschaft, Atlanta Agency
Promenade Two, Suite 3500
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
PNC Bank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇. ▇▇▇▇▇▇
National Bank of Commerce
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ Bank, N.A.
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Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Mid-America Apartment Communities, Inc.
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Attention: ▇▇. ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇▇
Mid-America Apartments, L.P.
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SCHEDULE 4
[SUBSIDIARIES AND OWNERSHIP]
Paddock Club Huntsville, A Limited Partnership, a Georgia limited partnership
Paddock Club Tallahassee, A Limited Partnership, a Georgia limited partnership
Paddock Club Brandon, A Limited Partnership, a Georgia limited partnership
Paddock Park Ocala II, A Limited Partnership, a Georgia limited partnership
Whisperwood Associates, A Limited Partnership, a Georgia limited partnership
Whisperwood Spa & Club, A Limited Partnership, a Georgia limited partnership
Paddock Club Greenville, A Limited Partnership, a Georgia limited partnership
Paddock Club Wildewood, A Limited Partnership, a Georgia limited partnership
Paddock Club Columbia Phase II, A Limited Partnership, a Georgia limited
partnership
Mid-America Apartments of Texas, L.P., a Texas limited partnership
EXHIBIT A
[Form of Notes]
EXHIBIT B
[Swingline Request]
EXHIBIT C
[Borrowing Notice]
EXHIBIT D
[Conversion Notice]
EXHIBIT E
[Form of Attorney Opinion]
EXHIBIT F
[Borrowing Base Certificate]
EXHIBIT G
[Assignment and Assumption]
EXHIBIT H
[Subsidiary Guaranty]
EXHIBIT I
In order to derive the benefit of Florida law providing exemption from
certain documentary stamp taxes and intangible taxes, the parties have agreed
that the Notes (a) amend and restate in their entirety and renew those certain
notes secured, inter alia, by Florida real property, issued by various borrowers
to other lenders who have assigned their interest thereunder to the
Administrative Agent (unless previously held by Mortgagee) for the benefit of
the Lenders (the "Assigned Notes"), being more particularly described below, and
(b) consolidate said Assigned Notes with the new and additional indebtedness
represented by this Agreement.
See page 2 of this Exhibit I for a description of the Assigned Notes.
