$45,820,180
REIMBURSEMENT AGREEMENT
dated as of
October 1, 1997
among
GABLES REALTY LIMITED PARTNERSHIP
The Banks Listed Herein
and
WACHOVIA BANK, N.A.,
as Agent
TABLE OF CONTENTS
REIMBURSEMENT AGREEMENT
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions......................................................1
SECTION 1.02. Accounting Terms and Determinations.............................17
SECTION 1.03. References......................................................17
SECTION 1.04. Use of Defined Terms............................................17
SECTION 1.05. Terminology.....................................................17
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend.............................................17
SECTION 2.02. Method of Borrowing.............................................18
SECTION 2.03. Reimbursement Notes.............................................19
SECTION 2.04. Maturity of Loans...............................................20
SECTION 2.05. Interest Rates..................................................21
SECTION 2.06. Agent's Fees....................................................23
SECTION 2.07. Payment of Fees Upon Termination of Letters of
Credit............................................23
SECTION 2.08. Mandatory Reduction and Termination of
Commitments........................................24
SECTION 2.09. Optional Prepayments............................................24
SECTION 2.10. Mandatory Prepayments...........................................24
SECTION 2.11. General Provisions as to Payments...............................25
SECTION 2.12. Computation of Interest and Fees................................26
ARTICLE III
LETTER OF CREDIT FACILITY
SECTION 3.01 Letters of Credit...........................................27
SECTION 3.02 No Extension or Amendment...................................28
SECTION 3.03 Reimbursement Obligations; Duties of the
Issuing Bank.......................................28
SECTION 3.04 Participations..............................................29
SECTION 3.05 Payment of Reimbursement Obligations........................31
SECTION 3.06 Compensation for Letters of Credit and Agent
Reporting Requirements............................32
SECTION 3.07 Indemnification; Exoneration................................32
SECTION 3.08 Credit Yield Protection; Capital Adequacy...................33
ARTICLE IV
CONDITIONS TO EFFECTIVENESS AND BORROWINGS ...................................36
SECTION 4.01. Conditions to Effectiveness and First
Borrowing..........................................36
SECTION 4.02. Conditions to All Borrowings....................................37
SECTION 4.03. Certain Conditions and Provisions Pertaining
to Guaranty Federal Bank, F.S.B....................38
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. Partnership or Corporate Existence and Power....................39
SECTION 5.02. Partnership or Corporate and Governmental
Authorization; No Contravention....................39
SECTION 5.03. Binding Effect..................................................40
SECTION 5.04. Financial and Property Information..............................40
SECTION 5.05. No Litigation...................................................40
SECTION 5.06. Compliance with ERISA...........................................41
SECTION 5.07. Compliance with Laws; Payment of Taxes..........................41
SECTION 5.08. Subsidiaries....................................................41
SECTION 5.09. Investment Company Act..........................................42
SECTION 5.10. Public Utility Holding Company Act..............................42
SECTION 5.11. Ownership of Property...........................................42
SECTION 5.12. No Default......................................................42
SECTION 5.13. Full Disclosure.................................................42
SECTION 5.14. Environmental Matters...........................................42
SECTION 5.15. Partner Interests and Capital Stock.............................43
SECTION 5.16. Margin Stock....................................................43
SECTION 5.17. Insolvency......................................................43
SECTION 5.18. Insurance.......................................................44
SECTION 5.19. Estate Investment Trust.........................................52
ARTICLE VI
COVENANTS
SECTION 6.01. Information.....................................................44
SECTION 6.02. Inspection of Property, Books and Records.......................47
SECTION 6.03. Total Secured Debt..............................................47
SECTION 6.04. Ratio of Total Debt to Total Assets Value.......................47
SECTION 6.05. Interest Coverage...............................................47
SECTION 6.06. Restricted Payments.............................................47
SECTION 6.07. Loans or Advances...............................................48
SECTION 6.08. Purchases of Stock by Guarantors................................55
SECTION 6.09. Investments.....................................................48
SECTION 6.10. Dissolution.....................................................49
SECTION 6.11. Consolidations, Mergers and Sales of Assets.....................49
SECTION 6.12. Use of Proceeds.................................................50
SECTION 6.13. Compliance with Laws; Payment of Taxes..........................50
SECTION 6.14. Insurance.......................................................51
SECTION 6.15. Change in Fiscal Year...........................................51
SECTION 6.16. Maintenance of Property; Principal Business.....................51
SECTION 6.17. Environmental Notices...........................................51
SECTION 6.18. Environmental Matters...........................................51
SECTION 6.19. Environmental Release...........................................52
SECTION 6.20. Transactions with Affiliates....................................52
SECTION 6.21. Amendment of Other Agreements...................................52
SECTION 6.22. Qualification as a Real Estate Investment Trust;
General Partner....................................52
SECTION 6.23. Significant Subsidiaries to be Guarantors; Election to
Become Guarantor...................................60
SECTION 6.24. Certain Provisions Regarding Eligible
Properties.........................................53
SECTION 6.25 Restrictions of Certain Additional Guarantees...................53
SECTION 6.26 Maintenance of Existence........................................53
SECTION 6.27 Ratio of Total Unencumbered Assets Value to
Unsecured Funded Debt..............................53
ARTICLE VII
DEFAULTS
SECTION 7.01. Events of Default...............................................53
SECTION 7.02. Notice of Default...............................................56
ARTICLE VIII
THE AGENT
SECTION 8.01. Appointment; Powers and Immunities..............................56
SECTION 8.02. Reliance by Agent...............................................57
SECTION 8.03. Defaults........................................................58
SECTION 8.04. Rights of Agent and its Affiliates as a Bank....................58
SECTION 8.05. Indemnification.................................................58
SECTION 8.06 Consequential Damages...........................................59
SECTION 8.07. Payee of Note Treated as Owner..................................59
SECTION 8.08. Nonreliance on Agent and Other Banks............................59
SECTION 8.09. Failure to Act..................................................60
SECTION 8.10. Resignation or Removal of Agent.................................60
SECTION 8.11. Agent's Right to Replace Non-Qualifying Bank...................60
ARTICLE IX
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 9.01. Basis for Determining Interest Rate Inadequate
or Unfair..........................................61
SECTION 9.02. Illegality......................................................62
SECTION 9.03. Increased Cost and Reduced Return...............................63
SECTION 9.04. Base Rate Loans Substituted for Affected Euro-
Dollar Loans.......................................64
SECTION 9.05. Compensation....................................................64
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices........................................................65
SECTION 10.02. No Waivers.....................................................65
SECTION 10.03. Expenses; Documentary Taxes....................................65
SECTION 10.04. Indemnification................................................66
SECTION 10.05. Sharing of Setoffs.............................................66
SECTION 10.06. Amendments and Waivers.........................................67
SECTION 10.07. No Margin Stock Collateral.....................................68
SECTION 10.08. Successors and Assigns.........................................68
SECTION 10.09. Confidentiality................................................70
SECTION 10.10. Representation by Banks........................................71
SECTION 10.11. Obligations Several............................................71
SECTION 10.12. Georgia Law....................................................71
SECTION 10.13. Severability...................................................71
SECTION 10.14. Interest.......................................................71
SECTION 10.15. Interpretation.................................................72
SECTION 10.16. Waiver of Jury Trial; Consent to Jurisdiction..................73
SECTION 10.17. Counterparts...................................................73
SECTION 10.18. Source of Funds -- ERISA.......................................73
SECTION 10.19. Entire Agreement...............................................73
SECTION 10.20. More Restrictive Agreements....................................73
EXHIBIT A Form of Reimbursement Note
EXHIBIT B Form of Opinion of Counsel for the Borrower
EXHIBIT C Form of Opinion of Special Counsel for the Agent
EXHIBIT D Form of Assignment and Acceptance
EXHIBIT E Form of Notice of Borrowing
EXHIBIT F Form of Compliance Certificate
EXHIBIT G Form of Closing Certificate
EXHIBIT H-1 Form of Officer's Certificate
EXHIBIT H-2 Form of Alternate Officer's Certificate
EXHIBIT I Form of Borrowing Base Certificate
EXHIBIT J Form of Guaranty
EXHIBIT K Form of Contribution Agreement
Schedule 5.08 Subsidiaries
REIMBURSEMENT AGREEMENT
REIMBURSEMENT AGREEMENT dated as of October 1, 1997 among GABLES REALTY LIMITED
PARTNERSHIP, the BANKS listed on the signature pages hereof and WACHOVIA BANK,
N.A., as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. The terms as defined in this Section 1.01 shall, for
all purposes of this Agreement and any amendment hereto (except as herein
otherwise expressly provided or unless the context otherwise requires), have the
meanings set forth herein:
"Adjusted London Interbank Offered Rate" has the meaning set forth in Section
2.05(c).
"Affiliate" of any relevant Person means (i) any Person that directly, or
indirectly through one or more intermediaries, controls the relevant Person (a
"Controlling Person"), (ii) any Person (other than the relevant Person or a
Subsidiary of the relevant Person) which is controlled by or is under common
control with a Controlling Person, or (iii) any Person (other than a Subsidiary
of the relevant Person) of which the relevant Person owns, directly or
indirectly, 20% or more of the common stock or equivalent equity interests. As
used herein, the term "control" 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.
"Agent" means Wachovia Bank, N.A., a national banking association organized
under the laws of the United States of America, in its capacity as agent for the
Banks hereunder, and its successors and permitted assigns in such capacity.
"Agent's Letter Agreement" means that certain letter agreement, dated as of
_________, 1997 between the Borrower and the Agent, but only as it relates to
certain fees from time to time payable by the Borrower to the Agent.
"Agreement" means this Reimbursement Agreement, together with all amendments and
supplements hereto.
"Applicable Margin" has the meaning set forth in Section 2.05(a).
"Assignment and Acceptance" means an Assignment and Acceptance executed in
accordance with Section 10.08(c) in the form attached as Exhibit D.
"Authority" has the meaning set forth in Section 9.02.
"Bank" means each bank listed on the signature pages hereof as having a
Commitment, and its successors and assigns.
"Base Rate" means for any Base Rate Loan for any day, the rate per annum equal
to the higher as of such day of (i) the Prime Rate, or (ii) three quarters of
one percent above the Federal Funds Rate. For purposes of determining the Base
Rate for any day, changes in the Prime Rate or the Federal Funds Rate shall be
effective on the date of each such change.
"Base Rate Loan" means a Loan which bears or is to bear interest at a rate based
upon the Base Rate, and is to be made as a Base Rate Loan pursuant to the
applicable Notice of Borrowing, Section 2.02(f), or Article VIII, as applicable.
"Bond Related Mortgage" means a Mortgage on Eligible Property which is granted
(i) to an institutional trustee with respect to revenue bonds or similar
instruments, to which trustee a standby letter of credit is issued as credit
enhancement for such revenue bonds or similar instruments and (ii) to secure
obligations which are payable with the proceeds of a draw under such letter of
credit.
"Borrower" means Gables Realty Limited Partnership, a Delaware limited
partnership, and its successors and
its permitted assigns.
"Borrowing" means a borrowing hereunder consisting of Loans.
"Borrowing Base" means the sum of each of the following, as determined by
reference to the most recent Borrowing Base Certificate furnished pursuant to
Section 4.01(h) or Section 6.01(h), as applicable:
(i) an amount equal to the product of: (x) 7.22222; times (y) the Net Operating
Income for the 12 month period ending on the last day of the month just
ended prior to the date of determination, from each Eligible Property which
either was on average at least 90% Economically Occupied during, or with
respect to which the Construction Period Termination Date occurred prior to
the commencement of, such 12 month period; provided, that if an Eligible
Property satisfies the criteria set forth in both this clause (i) and in
clause (ii) below, it shall be included in the calculations only in this
clause (i); plus
(ii) an amount equal to the product of: (▇) ▇▇.▇▇▇▇▇; times (y) the Net
Operating Income for the 3 month period ending on the last day of the month
just ended prior to the date of determination, from each Eligible Property
with respect to which the Construction Period Termination Date did not
occur prior to the commencement of the 12 month period ending on the last
day of the month just ended prior to the date of determination; plus
(iii)an amount equal to the lesser of: (x) 50% of the aggregate amount of cash
expenditures (including indirect costs internally allocated in accordance
with GAAP) as of the last day of the month just ended prior to the date of
determination on all Eligible Properties which consist of Properties as to
which the Construction Period Termination Date has not occurred as of such
last day of the month just ended (provided, that no more than an aggregate
of $5,000,000 for all Eligible Properties shall be included for land on
which construction has not commenced); and (y) $50,000,000; less
(iv) the aggregate amount of all outstanding unsecured Consolidated Debt
including standby letters of credit, other than the outstanding Letter of
Credit Obligations.
"Borrowing Base Certificate" means a certificate substantially in the form of
Exhibit I, duly executed by the chief financial officer of the General Partner,
setting forth in reasonable detail the calculations for each component of the
Borrowing Base, and certifying availability of funds sufficient to complete all
Eligible Properties then under construction.
"Capital Stock" means any nonredeemable capital stock or shares of beneficial
ownership of GBP or any Consolidated Subsidiary (to the extent issued to a
Person other than GBP), whether common or preferred.
"CERCLA" means the Comprehensive Environmental Response Compensation and
Liability Act, 42 U.S.C. 9601 et. seq. and its implementing regulations and
amendments.
"CERCLIS" means the Comprehensive Environmental Response Compensation and
Liability Inventory System established pursuant to CERCLA.
"Change in Control" shall mean the occurrence of any of the following: (i) more
than 50% of the outstanding voting common stock of GBP is owned, directly or
indirectly, by less than 6 "individuals" (as provided in Section 542(a)(2) of
the Code); or (ii) a majority of the Persons comprising the Board of Directors
of GBP shall during any 12 month period cease to serve on the Board of Directors
of GBP for any reason other than disability or death; or (iii) the Borrower or
any Guarantor shall fail to maintain their current partnership or corporate
status; or (iv) GBP shall fail to own at least 65% of the partnership interests
in the Borrower; or (v) the Borrower shall fail to own at least 99% of the
partnership interests in ▇▇▇▇▇-Tennessee Properties and Candlewood-Indian Creek,
L.P.
"Change of Law" shall have the meaning set forth in Section 9.02.
"Closing Certificate" has the meaning set forth in Section 4.01(e).
"Closing Date" means October 1, 1997.
"Code" means the Internal Revenue Code of 1986, as amended, or any successor
Federal tax code.
"Commitment" means, with respect to each Bank, (i) the amount set forth opposite
the name of such Bank on the signature pages hereof, and (ii) as to any Bank
which enters into any Assignment and Acceptance (whether as transferor Bank or
as Assignee thereunder), the amount of such Bank's Commitment after giving
effect to such Assignment and Acceptance, in each case as such amount may be
reduced from time to time pursuant to Sections 2.07 and 2.08.
"Commitment Percentage" for any Bank means the percentage which such Bank's
Commitment bears to the aggregate Commitment of all Banks.
"Compliance Certificate" has the meaning set forth in Section 6.01(c).
"Consolidated Debt" means at any date the Debt of the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis as of such date.
"Consolidated Income Available for Debt Service" shall mean, calculated on a
consolidated basis, the sum of the Borrower's and its Subsidiaries': (i) net
income before minority interests and extraordinary items in accordance with
GAAP, plus (ii)depreciation and amortization, plus (iii) losses from sales or
joint ventures, plus (iv) increases in deferred taxes and other non-cash items,
minus (v) gains from sales or joint ventures, minus (vi) decreases in deferred
taxes and other non-cash items, plus (vii) interest expense and letter of credit
fees on tax exempt bonds and plus (viii) taxes (excluding ad valorem taxes).
"Consolidated Income Available for Distribution" means, in any calendar year,
the sum of the following for such calendar year, calculated on a consolidated
basis for the Borrower and its Subsidiaries: (i) Consolidated Income Available
for Debt Service, less (ii) interest expense and letter of credit fees on tax
exempt bonds (including fees payable with respect to the Letters of Credit
pursuant to Section 3.06), and less (iii) taxes (excluding ad valorem taxes and
taxes on gains described in clause (v) of the definition of Consolidated Income
Available for Debt Service).
"Consolidated Interest Expense" for any period means interest in respect of Debt
(excluding capitalized interest) of the Borrower or any of its Consolidated
Subsidiaries outstanding during such period.
"Consolidated Subsidiary" means at any date any Subsidiary or other entity the
accounts of which, in accordance with GAAP, would be consolidated with those of
the Borrower in its consolidated financial statements as of such date.
"Consolidated Total Assets" means, at any time, the total assets of the Borrower
and its Consolidated Subsidiaries, determined on a consolidated basis, as set
forth or reflected on the most recent consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries, prepared in accordance with GAAP.
"Contribution Agreement" means the Contribution Agreement of even date herewith
in substantially the form of Exhibit K to be executed by the Borrower and the
Guarantors.
"Construction Period Termination Date" means, with respect to construction of
Multi-Family Properties for Eligible Properties, the date which is 3 months
after the issuance of a permanent certificate of occupancy for the last unit of
such Multi-Family Property which is an Eligible Property.
"Controlled Group" means all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower, are treated as a single employer under
Section 414 of the Code.
"Current Maturities of Long Term Debt" means all payments in respect of Long
Term Debt (other than Debt under this Agreement) that are required to be made
within one year from the date of determination, whether or not the obligation to
make such payments would constitute a current liability of the obligor under
GAAP, excluding, however, any such payment required to be made on the ultimate
maturity date of such Debt.
"Debt" of any Person means at any date, without duplication, (i) all obligations
of such Person for borrowed money, (ii) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments, (iii) all obligations
of such Person to pay the deferred purchase price of property or services,
except trade accounts payable arising in the ordinary course of business, (iv)
all obligations of such Person as lessee under capital leases, (v) all
obligations of such Person to reimburse any bank or other Person in respect of
amounts payable under a banker's acceptance, (vi) all Redeemable Preferred Stock
of such Person (in the event such Person is a corporation), (vii) all
obligations of such Person to reimburse any bank or other Person in respect of
amounts paid or to be paid or to be paid under a letter of credit or similar
instrument, (viii) all Debt of others secured by a Lien on any asset of such
Person, whether or not such Debt is assumed by such Person, and (ix) all Debt of
others Guaranteed by such Person.
"Debt Rating" means at any time whichever is the higher of the rating of the
Borrower's senior unsecured, unenhanced debt (or, if no such debt exists, its
issuer credit rating for debt of such type) by ▇▇▇▇▇'▇ Investor Service or
Standard and Poor's (as such rating may change from time to time, either
pursuant to Section 2.05(a) or otherwise) (provided, that in the event of a
double or greater split rating, the rating immediately above the lower rating
shall apply), or if only one of them rates the Borrower's senior unsecured,
unenhanced debt, such rating.
"Default" means any condition or event which constitutes an Event of Default or
which with the giving of notice or lapse of time or both would, unless cured or
waived, become an Event of Default.
"Default Rate" means, with respect to any Loan, on any day, the sum of 2% plus
the interest rate (including the Applicable Margin) which is applicable to such
Loan hereunder.
"Dollars" or "$" means dollars in lawful currency of the United States of
America.
"Domestic Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in Georgia are authorized by law to close (including,
without limitation, any day which is a federal banking holiday in the United
States of America).
"Economically Occupied" means, with respect to any Eligible Property or
Multi-Family Property and in reference to a specified percentage, that tenants
paying rental obligations are occupying at least the specified percentage of the
total number of units at such Eligible Property or Multi-Family Property, as the
case may be.
"Eligible Property" means a Multi-Family Property of the Borrower or any of the
Guarantors consisting of real estate as to which there is no Mortgage in
existence encumbering such Property, other than, if applicable, a Bond Related
Mortgage, and such Multi-Family Property is subject to no other Liens or
encumbrances, other than Permitted Encumbrances.
"Environmental Authority" means any foreign, federal, state, local or regional
government that exercises any form of jurisdiction or authority under any
Environmental Requirement. "Environmental Authorizations" means all licenses,
permits, orders, approvals, notices, registrations or other legal prerequisites
for conducting the business of the Borrower or any Subsidiary required by any
Environmental Requirement.
"Environmental Judgments and Orders" means all judgments, decrees or orders
arising from or in any way associated with any Environmental Requirements,
whether or not entered upon consent, or written agreements with an Environmental
Authority or other entity arising from or in any way associated with any
Environmental Requirement, whether or not incorporated in a judgment, decree or
order.
"Environmental Liabilities" means any liabilities, whether accrued, contingent
or otherwise, arising from and in any way associated with any Environmental
Requirements.
"Environmental Notices" means notice from any Environmental Authority or by any
other person or entity, of possible or alleged noncompliance with or liability
under any Environmental Requirement, including without limitation any
complaints, citations, demands or requests from any Environmental Authority or
from any other person or entity for correction of any violation of any
Environmental Requirement or any investigations concerning any violation of any
Environmental Requirement.
"Environmental Proceedings" means any judicial or administrative proceedings
arising from or in any way associated with any Environmental Requirement.
"Environmental Releases" means releases as defined in CERCLA or under any
applicable state or local environmental law or regulation.
"Environmental Requirements" means any legal requirement relating to health,
safety or the environment and applicable to the Borrower, any Subsidiary or the
Properties, including but not limited to any such requirement under CERCLA or
similar state legislation and all federal, state and local laws, ordinances,
regulations, orders, writs, decrees and common law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, or any successor law. Any reference to any provision of ERISA
shall also be deemed to be a reference to any successor provision or provisions
thereof.
"Euro-Dollar Business Day" means any Domestic Business Day on which dealings in
Dollar deposits are carried out in the London interbank market.
"Euro-Dollar Loan" means a Loan which bears or is to bear interest at a rate
based upon the Adjusted London Interbank Offered Rate, and to be made as a
Euro-Dollar Loan pursuant to the applicable Notice of Borrowing.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section 2.05(c).
"Event of Default" has the meaning set forth in Section 7.01.
"Excess" has the meaning set forth in Section 2.10(b).
"Executive Officer" means any of the following officers of the General Partner:
the chairman, the president, the chief financial officer, the chief accounting
officer, any senior vice president and the secretary.
"Federal Funds Rate" means, for any day, the rate per annum (rounded upward, if
necessary, to the next higher 1/100th of 1%) equal to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Domestic Business Day next
succeeding such day, provided that (i) if the day for which such rate is to be
determined is not a Domestic Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Domestic Business
Day as so published on the next succeeding Domestic Business Day, and (ii) if
such rate is not so published for any day, the Federal Funds Rate for such day
shall be the average rate charged to the Agent on such day on such transactions,
as determined by the Agent.
"Fiscal Quarter" means any fiscal quarter of the Borrower.
"Fiscal Year" means any fiscal year of the Borrower.
"Fronting Fee" has the meaning ascribed to it in Section 3.06.
"Funded Debt" means, without duplication, Long-Term Debt plus Current Maturities
of Long-Term Debt.
"GAAP" means generally accepted accounting principles applied on a basis
consistent with those which, in accordance with Section 1.02, are to be used in
making the calculations for purposes of determining compliance with the terms of
this Agreement.
"GBP" means Gables Residential Trust, a Maryland trust.
"General Partner" means the sole general partner of the Borrower (which, on the
Closing Date, is Gables GP, Inc.) or, if there is more than one such general
partner, the managing general partner of the Borrower.
"Guarantee" by any Person means any obligation, contingent or otherwise, of such
Person directly or indirectly guaranteeing any Debt or other obligation of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
secure, purchase or pay (or advance or supply funds for the purchase or payment
of) such Debt or other obligation (whether arising by virtue of partnership
arrangements, by agreement to keep-well, to purchase assets, goods, securities
or services, to provide collateral security, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guaranty" means the Guaranty Agreement of even date herewith in substantially
the form of Exhibit J to be executed by the Guarantors, unconditionally and
jointly and severally Guaranteeing payment of the Loans, the Reimbursement Notes
and all other obligations of the Borrower to the Agent and the Banks hereunder,
including without limitation all principal, interest, fees, costs, and
compensation and indemnification amounts.
"Guarantors" means any one or more or all of the following, as the context shall
require: (i) GBP, Gables GP, Inc., a Texas corporation, Gables-Tennessee
Properties, a Tennessee general partnership; and (ii) any Significant Subsidiary
which becomes a Guarantor pursuant to Section 6.23; and (iii) any other
Subsidiary which elects to become a Guarantor pursuant to Section 6.23; in each
case subject to the provisions of the last sentence of Section 6.11.
"Hazardous Materials" includes, without limitation, (a) solid or hazardous
waste, as defined in the Resource Conservation and Recovery Act of 1980, 42
U.S.C. 6901 et seq. and its implementing regulations and amendments, or in any
applicable state or local law or regulation, (b) "hazardous substance",
"pollutant", or "contaminant" as defined in CERCLA, or in any applicable state
or local law or regulation, (c) gasoline, or any other petroleum product or
by-product, including, crude oil or any fraction thereof, (d) toxic substances,
as defined in the Toxic Substances Control Act of 1976, or in any applicable
state or local law or regulation and (e) insecticides, fungicides, or
rodenticides, as defined in the Federal Insecticide, Fungicide, and Rodenticide
Act of 1975, or in any applicable state or local law or regulation, as each such
Act, statute or regulation may be amended from time to time. "Interest Period"
means: (1) with respect to each Euro-Dollar Borrowing, the period commencing on
the date of such Borrowing and ending on the numerically corresponding day in
the first, second, third or sixth month thereafter, as the Borrower may elect in
the applicable Notice of Borrowing; provided that:
(a) any Interest Period (subject to paragraph (c) below) which would
otherwise end on a day which is not a Euro-Dollar Business Day shall
be extended to the next succeeding Euro-Dollar Business Day unless
such Euro-Dollar Business Day falls in another calendar month, in
which case such Interest Period shall end on the next preceding
Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall,
subject to paragraph (c) below, end on the last Euro-Dollar Business
Day of the appropriate subsequent calendar month; and
(c) no Interest Period may be selected which begins before the Termination
Date and would otherwise end after the Termination Date.
(2) with respect to each Base Rate Borrowing, the period commencing on the date
of such Borrowing and ending 30 days thereafter; provided that:
(a) any Interest Period (subject to paragraph (b) below) which would
otherwise end on a day which is not a Domestic Business Day shall be
extended to the next succeeding Domestic Business Day; and
(b) no Interest Period which begins before the Termination Date and would
otherwise end after the Termination Date may be selected.
"Investment" means any investment in any Person, whether by means of purchase or
acquisition of obligations or securities of such Person, capital contribution to
such Person, loan or advance to such Person, making of a time deposit with such
Person, Guarantee or assumption of any obligation of such Person or otherwise.
"Lending Office" means, as to each Bank, its office located at its address set
forth on the signature pages hereof (or identified on the signature pages hereof
as its Lending Office) or such other office as such Bank may hereafter designate
as its Lending Office by notice to the Borrower and the Agent.
"Letters of Credit" has the meaning set forth in Section 3.01.
"Letter of Credit Fee" has the meaning ascribed to it in Section 3.06.
"Letter of Credit Obligations" means, at any particular time, the sum of (a) the
Reimbursement Obligations at such time and (b) the aggregate maximum amount
available for drawing under the Letters of Credit at such time.
"Lien" means, with respect to any asset, any mortgage, deed to secure debt, deed
of trust, lien, pledge, charge, security interest, security title, preferential
arrangement which has the practical effect of constituting a security interest
or encumbrance, or encumbrance or servitude of any kind in respect of such asset
to secure or assure payment of a Debt or a Guarantee, whether by consensual
agreement or by operation of statute or other law, or by any agreement,
contingent or otherwise, to provide any of the foregoing. For the purposes of
this Agreement, the Borrower or any Subsidiary shall be deemed to own subject to
a Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.
"Loan" means a Base Rate Loan or Euro-Dollar Loan, and "Loans" means Base Rate
Loans or Euro-Dollar Loans, or any or all of them, as the context shall require.
"Loan Documents" means this Agreement, the Reimbursement Notes, the Guaranty,
the Contribution Agreement, any other document evidencing, relating to or
securing the Loans or the Letters of Credit, and any other document or
instrument delivered from time to time in connection with this Agreement, the
Reimbursement Notes or the Loans or the Letters of Credit, as such documents and
instruments may be amended or supplemented from time to time.
"London Interbank Offered Rate" has the meaning set forth in Section 2.05(c).
"Long-Term Debt" means at any date any Consolidated Debt which matures (or the
maturity of which may at the option of the Borrower or any Consolidated
Subsidiary be extended such that it matures) more than one year after such date.
"Margin Stock" means "margin stock" as defined in Regulations G, T, U or X.
"Material Adverse Effect" means, with respect to any event, act, condition or
occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), whether
singly or in conjunction with any other event or events, act or acts, condition
or conditions, occurrence or occurrences, whether or not related, a material
adverse change in, or a material adverse effect upon, any of (a) the financial
condition, operations, business or properties of GBP, the General Partner, the
Borrower and its Consolidated Subsidiaries taken as a whole, (b) the rights and
remedies of the Agent or the Banks under the Loan Documents, or the ability of
the Borrower to perform its obligations under the Loan Documents to which it is
a party, as applicable, or (c) the legality, validity or enforceability of any
Loan Document.
"Mortgage" means a mortgage, deed to secure debt, deed of trust or similar
instrument.
"Multiemployer Plan" shall have the meaning set forth in Section 4001(a)(3) of
ERISA.
"Multi-Family Property" means residential apartment communities and undeveloped
land acquired for development thereof.
"Net Operating Income" means, for any Multi-Family Property, the portion of
Consolidated Income Available for Debt Service derived from such Multi-Family
Property (which calculation includes an assumed 4% for management services).
"Notice of Borrowing" has the meaning set forth in Section 2.02.
"Officer's Certificate" has the meaning set forth in Section 4.01(f).
"Participant" has the meaning set forth in Section 10.08(b).
"Partner Interests" means any partner interests in the Borrower, whether limited
or general.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
"Permitted Encumbrances" means, with respect to any Eligible Property included
in the Borrowing Base, (i) Liens incidental to the conduct of its business or
the ownership of its assets which (x) do not secure Debt and (y) do not in the
aggregate materially detract from the value of its assets or materially impair
the use thereof in the operation of its business, (ii) any Bond Related
Mortgage, and (iii) any other Liens and encumbrances expressly consented to by
the Agent.
"Performance Pricing Determination Date" has the meaning set forth in Section
2.05(a).
"Person" means an individual, a corporation, a partnership, an unincorporated
association, a trust or any other entity or organization, including, but not
limited to, a government or political subdivision or an agency or
instrumentality thereof.
"Plan" means at any time an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code and is either (i) maintained by a member of the Controlled Group for
employees of any member of the Controlled Group or (ii) maintained pursuant to a
collective bargaining agreement or any 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 5 plan years made contributions.
"Prime Rate" refers to that interest rate so denominated and set by Wachovia
from time to time as an interest rate basis for borrowings. The Prime Rate is
but one of several interest rate bases used by Wachovia. Wachovia lends at
interest rates above and below the Prime Rate.
"Properties" means all real property owned, leased or otherwise used or occupied
by the Borrower or any Subsidiary, wherever located.
"Redeemable Preferred Stock" of any Person means any preferred stock issued by
such Person which is at any time prior to the Termination Date either (i)
mandatorily redeemable for cash (by sinking fund or similar payments or
otherwise) or (ii) redeemable for cash at the option of the holder thereof.
"Refunding Loan" means a new Loan made on the day on which an outstanding Loan
is maturing or a Base Rate Borrowing is being converted to a Euro-Dollar Rate
Borrowing, the proceeds of which are used entirely for the purpose of paying
such maturing Loan or Loan being converted.
"Regulation G" means Regulation G of the Board of Governors of the Federal
Reserve System, as in effect from time to time, together with all official
rulings and interpretations issued thereunder.
"Regulation T" means Regulation T of the Board of Governors of the Federal
Reserve System, as in effect from time to time, together with all official
rulings and interpretations issued thereunder.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time, together with all official
rulings and interpretations issued thereunder.
"Regulation X" means Regulation X of the Board of Governors of the Federal
Reserve System, as in effect from time to time, together with all official
rulings and interpretations issued thereunder.
"Reimbursement Obligations" means the reimbursement or repayment obligations of
the Borrower to the Agent pursuant to Section 3.05 with respect to Letters of
Credit.
"Required Banks" means at any time Banks having at least 66 2/3% of the
aggregate amount of the Commitments or, if the Commitments are no longer in
effect, Banks holding at least 66 2/3% of the aggregate outstanding principal
amount of the Loans.
"Restricted Payment" means (i) any distribution on any Partner Interests (other
than distributions consisting solely of additional Partner Interests) or (ii)
any payment on account of the purchase, redemption, retirement or acquisition of
(a) any Partner Interests or (b) any option, warrant or other right to acquire
Partner Interests.
"Revolving Credit Agreement" means the Amended and Restated Credit Agreement
dated as of August 5, 1997 among the Borrower, Wachovia, as Agent, and the Banks
party thereto, as amended or supplemented from time to time.
"Significant Subsidiary" means any Subsidiary which either (x) has assets which
constitute more than 5% of Consolidated Total Assets at the end of the most
recent Fiscal Quarter, or (y) contributed more than 5% of Consolidated Income
Available for Debt Service during the most recent Fiscal Quarter and the 3
Fiscal Quarters immediately preceding such Fiscal Quarter (or, with respect to
any Subsidiary which existed during the entire 4 Fiscal Quarter period but was
acquired by the Borrower during such period, which would have contributed more
than 5% of Consolidated Income Available for Debt Service during such period had
it been a Subsidiary for the entire period).
"Subsidiary" means (i) any corporation or other entity the majority of the
shares of the non-voting capital stock or other equivalent ownership interests
of which (except directors' qualifying shares) are at the time directly or
indirectly owned by the Borrower and/or GBP, and the majority of the shares of
the voting capital stock or other equivalent ownership interests of which
(except directors' qualifying shares) are at the time directly or indirectly
owned by the Borrower, GBP, the General Partner, another Subsidiary, and/or one
or more of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., C. ▇▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (or, in the event of death or disability of any of
the foregoing individuals, his respective legal representative(s)), or such
individuals' successors in office as an officer of such Subsidiary or the
Secretary of such Subsidiary, and (ii) any other entity (other than GBP or the
Borrower) the accounts of which are consolidated with the accounts of the
Borrower.
"Reimbursement Notes" means the promissory notes of the Borrower, substantially
in the form of Exhibit A, evidencing the obligation of the Borrower to repay
Loans, together with all amendments, consolidations, modifications, renewals and
supplements thereto.
"Taxes" has the meaning set forth in Section 2.11(c).
"Tender Advance" means a Loan which is made for the sole purpose of paying
Reimbursement Obligations pursuant to Section 3.03(a)(iii).
"Termination Date" means October 1, 2002, provided, that if any of the following
events occur, the Termination Date shall be such earlier date or later date as
is applicable pursuant to the following: (i) such later date to which it is
extended by the Banks pursuant to Section 2.04(b), in their sole and absolute
discretion; (ii) such earlier date on which the Commitments are terminated
pursuant to Section 2.08 following the occurrence of a Change in Control; (iii)
such earlier date on which the Commitments are terminated pursuant to Section
7.01 following the occurrence of an Event of Default; or (iv) such earlier date
on which the Borrower terminates the Commitments entirely pursuant to Section
2.07.
"Third Parties" means all lessees, sublessees, licensees and other users of the
Properties, excluding those users of the Properties in the ordinary course of
the Borrower's business and on a temporary basis.
"Total Assets Value" means the sum of:
(i) the quotient of (x) the Net Operating Income for the 12 month period
ending on the last day of the month just ended prior to the date of
determination, from each Multi-Family Property which either was on
average at least 90% Economically Occupied during, or with respect to
which the Construction Period Termination Date occurred prior to the
commencement of, such 12 month period, divided by (y) 0.09; provided,
that if an Eligible Property satisfies the criteria set forth in both
this clause(i) and in clause (ii) below, it shall be included in the
calculations only in clause (ii) below; plus
(ii) an amount equal to the quotient of (x) 400% of the Net Operating
Income for the 3 month period ending on the last day of the month just
ended prior to the date of determination, from each Multi-Family
Property with respect to which the Construction Period Termination
Date did not occur prior to the commencement of the 12 month period
ending on the last day of the month just ended prior to the date of
determination, divided by (y) 0.09; plus
(iii)an amount equal to 50% of the aggregate amount of cash expenditures
(including indirect costs internally allocated in accordance with
GAAP) as of the last day of the month just ended prior to the date of
determination on all Multi-Family Properties as to which the
Construction Period Termination Date has not occurred as of such last
day of the month just ended.
"Total Debt" shall mean the sum of (i) total liabilities of the Borrower and the
Guarantors, on a consolidated basis, plus (ii) the aggregate amount of Debt
Guaranteed by the Borrower, the Guarantors and the other Subsidiaries (other
than Guarantees which have been fully cash collateralized), plus the face amount
of all letters of credit for which any of the Borrower or the Guarantors is the
account party, determined at the end of the Borrower's most recent Fiscal
Quarter.
"Total Secured Debt" shall mean, without duplication, all Debt of the Borrower
and the Guarantors consisting of: (i) capitalized leases; (ii) money borrowed or
the deferred purchase price of real property which is also secured by a Mortgage
on any real property owned by the Borrower or any Guarantor; or (iii)
reimbursement obligations pertaining to any letter of credit.
"Total Unencumbered Assets Value" means Total Assets Value, but determined with
reference only to Multi-Family Properties which are not subject to a Mortgage,
other than the Arbor Crest project, the Arbor ▇▇▇▇▇ project and the Wood Arbor
project.
"Transferee" has the meaning set forth in Section 10.08(d).
"Unsecured Funded Debt" means any Funded Debt which is not secured by a Mortgage
on any Property, other than a Bond Related Mortgage.
"Wachovia" means Wachovia Bank, N.A., a national banking association, and its
successors.
"Wholly Owned Subsidiary" means any Subsidiary all of the shares of the
non-voting capital stock or other equivalent ownership interests of which
(except directors' qualifying shares) are at the time directly or indirectly
owned by the Borrower and/or GBP, and all of the shares of the voting capital
stock or other equivalent ownership interests of which are at the time directly
or indirectly owned by the Borrower, GBP, another Wholly Owned Subsidiary,
and/or one or more of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.,
C. ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (or, in the event of death or disability
of any of the foregoing individuals, his respective legal representative(s)), or
such individuals' successors in office as an officer of such Subsidiary or the
Secretary of such Subsidiary.
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise specified
herein, all terms of an accounting character used herein shall be interpreted,
all accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared, in accordance
with GAAP, applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants or otherwise required by a change in
GAAP) with the most recent audited consolidated financial statements of the
Borrower and its Consolidated Subsidiaries delivered to the Banks unless with
respect to any such change concurred in by the Borrower's independent public
accountants or required by GAAP, in determining compliance with any of the
provisions of this Agreement or any of the other Loan Documents: (i) the
Borrower shall have objected to determining such compliance on such basis at the
time of delivery of such financial statements, or (ii) the Required Banks shall
so object in writing within 30 days after the delivery of such financial
statements, in either of which events such calculations shall be made on a basis
consistent with those used in the preparation of the latest financial statements
as to which such objection shall not have been made (which, if objection is made
in respect of the first financial statements delivered under Section 6.01
hereof, shall mean the financial statements referred to in Section 5.04).
SECTION 1.03. REFERENCES. Unless otherwise indicated, references in this
Agreement to "Articles", "Exhibits", "Schedules", "Sections" and other
Subdivisions are references to articles, exhibits, schedules, sections and other
subdivisions hereof.
SECTION 1.04. USE OF DEFINED TERMS. All terms defined in this Agreement shall
have the same defined meanings when used in any of the other Loan Documents,
unless otherwise defined therein or unless the context shall require otherwise.
SECTION 1.05. TERMINOLOGY. All personal pronouns used in this Agreement, whether
used in the masculine, feminine or neuter gender, shall include all other
genders; the singular shall include the plural, and the plural shall include the
singular. Titles of Articles and Sections in this Agreement are for convenience
only, and neither limit nor amplify the provisions of this Agreement.
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS TO LEND.
(a) Loans. Each Bank severally agrees, on the terms and conditions set forth
herein, to make Loans to the Borrower from time to time before the
Termination Date; provided that,
(i) immediately after each such Loan is made, the aggregate outstanding
principal amount of Loans by such Bank shall not exceed the amount of
its Commitment,
(ii) there shall be no Excess, and
(iii)all such Loans shall be either (x) Tender Advances or (y) Refunding
Loans.
Each Refunding Loan under this Section shall be in an aggregate principal amount
of $3,000,000 or any larger integral multiple of $500,000 and shall be made from
the several Banks ratably in proportion to their respective Commitments. Within
the foregoing limits, the Borrower may borrow under this Section, repay or, to
the extent permitted by Section 2.09, prepay Loans and reborrow under this
Section at any time before the Termination Date; provided, however, that once
repaid, a Loan which is a Tender Advance may not be reborrowed, except as a
Refunding Loan.
SECTION 2.02. METHOD OF BORROWING.
(a) The Borrower shall give the Agent notice (a "Notice of Borrowing"), which
shall be substantially in the form of Exhibit E, prior to 10:00 A.M.
(Atlanta, Georgia time) on the same Domestic Business Day for each Base
Rate Borrowing and at least 3 Euro-Dollar Business Days before each
Euro-Dollar Borrowing (except that, with respect to Tender Advances, if no
such Notice of Borrowing is so given, such Tender Advance shall be made as
a Base Rate Borrowing), specifying:
(i) the date of such Borrowing, which shall be a Domestic Business Day in
the case of a Base Rate Borrowing or a Euro-Dollar Business Day in the
case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii)whether the Borrowing is to be a Base Rate Borrowing or a Euro-Dollar
Borrowing,
(iv) in the case of a Euro-Dollar Borrowing, the duration of the Interest
Period applicable thereto, subject to the provisions of the definition
of Interest Period.
(b) Upon receipt of a Notice of Borrowing, the Agent shall promptly notify each
Bank of the contents thereof and of such Bank's ratable share of such
Borrowing and such Notice of Borrowing, once received by the Agent, shall
not thereafter be revocable by the Borrower. The Agent also shall notify
each Bank of a Tender Advance to be made automatically pursuant to Section
3.03(a)(iii).
(c) Not later than two (2) hours following the time such notice is given on the
date of each Tender Advance, each Bank shall (except as provided in
paragraph (d) of this Section) make available its ratable share of such
Tender Advance, in Federal or other funds immediately available in Atlanta,
Georgia, to the Agent at its address determined pursuant to Section 10.01.
The Agent will use the funds so received from the Banks for Tender Advances
to pay the related Reimbursement Obligations. If any Bank does not in fact
make its ratable share of such Tender Advance available on such date, the
Agent shall be entitled to recover such Bank's ratable share from such Bank
or the Borrower (and for such purpose shall be entitled to charge such
amount to any account of the Borrower maintained with the Agent), together
with interest thereon for each day during the period from the date of such
Tender Advance until such sum shall be paid in full at a rate per annum
equal to the rate at which the Agent determines that it obtained (or could
have obtained) overnight Federal funds to cover such amount for each such
day during such period, provided that (i) any such payment by the Borrower
of such Bank's ratable share and interest thereon shall be without
prejudice to any rights that the Borrower may have against such Bank and
(ii) until such Bank has paid its ratable share of such Tender Advance,
together with interest pursuant to the foregoing, it will have no interest
in or rights with respect to such Tender Advance for any purpose hereunder.
(d) With respect to the Refunding Loan of each Bank, such Bank shall apply the
proceeds of its Refunding Loan to pay the Loan maturing or being converted
on the date thereof, and no funds actually need be made available by such
Bank to the Agent.
(e) Notwithstanding anything to the contrary contained in this Agreement, no
Euro-Dollar Borrowing may be made if there shall have occurred a Default or
an Event of Default, which Default or Event of Default shall not have been
cured or waived, and all Loans shall be made as Base Rate Loans (but shall
bear interest at the Default Rate, if applicable).
(f) In the event that a Notice of Borrowing fails to specify whether the Loans
comprising such Borrowing are to be Base Rate Loans or Euro-Dollar Loans,
such Loans shall be made as Base Rate Loans. If the Borrower is otherwise
entitled under this Agreement to repay any Loans maturing at the end of an
Interest Period applicable thereto with the proceeds of a new Borrowing,
and the Borrower fails to repay such Loans using its own moneys and fails
to give a Notice of Borrowing in connection with such new Borrowing, a new
Borrowing shall be deemed to be made on the date such Loans mature in an
amount equal to the principal amount of the Loans so maturing, and the
Loans comprising such new Borrowing shall be Base Rate Loans.
(g) Notwithstanding anything to the contrary contained herein, there shall not
be more than 4 Euro-Dollar Borrowings outstanding at any given time.
SECTION 2.03. REIMBURSEMENT NOTES.
(a) The Loans of each Bank shall be evidenced by a single Reimbursement Note
payable to the order of such Bank for the account of its Lending Office in
an amount equal to the original principal amount of such Bank's Commitment.
(b) Upon receipt of each Bank's Reimbursement Notes pursuant to Section 4.01,
the Agent shall deliver such Reimbursement Notes to such Bank. Each Bank
shall record, and prior to any transfer of its Reimbursement Notes shall
endorse on the schedules forming a part thereof appropriate notations to
evidence, the date, amount and maturity of, and effective interest rate
for, each Loan made by it, the date and amount of each payment of principal
made by the Borrower with respect thereto, and such schedules of each such
Bank's Reimbursement Notes shall constitute rebuttable presumptive evidence
of the respective principal amounts owing and unpaid on such Bank's
Reimbursement Notes; provided that the failure of any Bank to make, or any
error in making, any such recordation or endorsement shall not affect the
obligation of the Borrower hereunder or under the Reimbursement Notes or
the ability of any Bank to assign its Reimbursement Notes. Each Bank is
hereby irrevocably authorized by the Borrower so to endorse its
Reimbursement Notes and to attach to and make a part of any Note a
continuation of any such schedule as and when required.
(c) In the event of loss, theft, destruction, total or partial obliteration,
mutilation or inappropriate cancellation of a Reimbursement Note, the
Borrower will execute and deliver, in lieu thereof, a replacement
Reimbursement Note identical in form and substance to such Reimbursement
Note and dated as of the date of such Reimbursement Note.
SECTION 2.04. MATURITY OF LOANS.
(a) Each Loan included in any Borrowing shall mature, and the principal amount
thereof and interest thereon shall be due and payable, on the last day of
the Interest Period applicable to such Borrowing.
(b) Notwithstanding the foregoing, the outstanding principal amount of the
Loans, if any, together with all accrued but unpaid interest thereon, if
any, shall be due and payable on October 1, 2002, unless the Termination
Date is otherwise extended by the Banks, in their sole and absolute
discretion. Upon the written request of the Borrower, which request shall
be delivered to the Agent at least 90 days prior to each Extension Date (as
such term is hereinafter defined), the Banks shall have the option (without
any obligation whatsoever so to do) of extending the then current
Termination Date for additional one-year periods from the then current
Termination Date on but not before each of October 1, 1998, October 1,
1999, October 1, 2000 and October 1, 2001 (each, an "Extension Date"), but
in no event shall the Commitment of any Bank or any Loan hereunder be
outstanding for a period greater than 5 years. Notwithstanding any request
by the Borrower as described in the foregoing sentence, in the event that a
Bank chooses, in its sole and absolute discretion, not to extend the
Termination Date for such an additional one-year period, notice shall be
given by such Bank to the Borrower and the Agent not more than 60 days but
not less than 45 days prior to the relevant Extension Date; provided, that
the Termination Date shall not be extended with respect to any of the Banks
unless the Required Banks are willing to extend the Termination Date and
either (x) the remaining Banks shall elect to purchase ratable assignments
(without any obligation so to do) from such terminating Bank (in the form
of an Assignment and Acceptance) in accordance with their respective
percentage of the remaining aggregate Commitments; provided, that, such
Banks shall be provided such opportunity (which opportunity shall allow
such Banks at least 30 days in which to make a decision) prior to the
Borrower finding another bank pursuant to the immediately succeeding clause
(y); and, provided, further, that, should any of the remaining Banks elect
not to purchase such an assignment, then, such other remaining Banks shall
be entitled to purchase an assignment from any terminating Bank which
includes the ratable interest that was otherwise available to such
non-purchasing remaining Bank or Banks, as the case may be, or (y) the
Borrower shall find another bank, acceptable to the Agent, willing to
accept an assignment from such terminating Bank (in the form of an
Assignment and Acceptance) or (z) the Borrower shall reduce the aggregate
Commitments in an amount equal to the Commitment of any such terminating
Bank. Notwithstanding the foregoing, if the Termination Date is not
extended for an additional one year period on each Extension Date, there
shall be no further Extension Dates or extensions of the Termination Date.
(c) Upon extension of the Termination Date in accordance with the terms of
Section 2.04(b) above, the expiration date of any of the Letters of Credit
may be extended by the Agent, subject to the conditions set forth in
Section 3.02.
SECTION 2.05. INTEREST RATES.
(a) "Applicable Margin" means (i) for the period commencing on the Closing Date
to and including the first Performance Pricing Determination Date, (x) for
any Base Rate Loan, 0.25%, and (y) for any Euro-Dollar Loan, 0.80%; and
(ii) from and after the first Performance Pricing Determination Date, (x)
for any Base Rate Loan, (0.25)% and (y) for each Euro-Dollar Loan, the
percentage determined on each Performance Pricing Determination Date by
reference to the table set forth below as to such type of Loan and the Debt
Rating for the quarterly or annual period ending immediately prior to such
Performance Pricing Determination Date; provided, that if there is no Debt
Rating, the Applicable Margin for Euro-Dollar Loans shall be based upon
Level IV of the table below.
▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇
------- -------- --------- --------
Debt Rating greater than
or equal to BBB+ BBB BBB- less than BBB-
or or or or
greater than
or equal to ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ less than Baa3
Applicable Margin 0.675 0.80 0.95 1.15
In determining the amounts to be paid by the Borrower pursuant to Sections
2.05(c), the Borrower and the Banks shall refer to the Borrower's Debt
Rating from time to time. For purposes hereof, "Performance Pricing
Determination Date" shall mean each date on which the Debt Rating changes.
Each change in interest and fees as a result of a change in Debt Rating
shall be effective only for Loans (including Refunding Loans) which are
made on or after the relevant Performance Pricing Determination Date. All
determinations hereunder shall be made by the Agent unless the Required
Banks or the Borrower shall object to any such determination. The Borrower
shall promptly notify the Agent of any change in the Debt Rating.
(b) Each Base Rate Loan shall bear interest on the outstanding principal amount
thereof, for each day from the date such Loan is made until it becomes due,
at a rate per annum equal to the Base Rate for such day less the Applicable
Margin. Such interest shall be payable for each Interest Period on the last
day thereof. Any overdue principal of and, to the extent permitted by
applicable law, overdue interest on any Base Rate Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the
Default Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period applicable thereto, at a rate per
annum equal to the sum of the Applicable Margin plus the applicable
Adjusted London Interbank Offered Rate for such Interest Period. Such
interest shall be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than 1 month, at intervals of 1
month after the first day thereof. Any overdue principal of and, to the
extent permitted by law, overdue interest on any Euro-Dollar Loan shall
bear interest, payable on demand, for each day until paid at a rate per
annum equal to the Default Rate.
The "Adjusted London Interbank Offered Rate" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded
upwards, if necessary, to the next higher 1/100th of 1%) by dividing (i)
the applicable London Interbank Offered Rate for such Interest Period by
(ii) 1.00 minus the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Euro-Dollar Loan
means for the Interest Period of such Euro-Dollar Loan, the rate per annum
determined on the basis of the offered rate for deposits in Dollars of
amounts equal or comparable to the principal amount of such Euro-Dollar
Loan offered for a term comparable to such Interest Period, which rates
appear on Telerate Page 3750 effective as of 11:00 A.M., London time, 2
Euro-Dollar Business Days prior to the first day of such Interest Period,
provided that if no such offered rates appear on such page, the "London
Interbank Offered Rate" for such Interest Period will be the arithmetic
average (rounded upward, if necessary, to the next higher 1/100th of 1%) of
rates quoted by not less than 2 major banks in New York City, selected by
the Agent, at approximately 10:00 A.M., New York City time, 2 Euro-Dollar
Business Days prior to the first day of such Interest Period, for deposits
in Dollars offered by leading European banks for a period comparable to
such Interest Period in an amount equal or comparable to the principal
amount of such Euro-Dollar Loan.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the
Federal Reserve System in respect of "Eurocurrency liabilities" (or in
respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Euro-Dollar Loans is determined or
any category of extensions of credit or other assets which includes loans
by a non-United States office of any Bank to United States residents). The
Adjusted London Interbank Offered Rate shall be adjusted automatically on
and as of the effective date of any change in the Euro-Dollar Reserve
Percentage.
(d) The Agent shall determine each interest rate applicable to the Loans
hereunder. The Agent shall give prompt notice to the Borrower and the Banks
by telecopier of each rate of interest so determined, and its determination
thereof shall be conclusive in the absence of manifest error.
(e) After the occurrence and during the continuance of an Event of Default, the
principal amount of the Loans (and, to the extent permitted by applicable
law, all accrued interest thereon) may, at the election of the Required
Banks, bear interest at the Default Rate.
SECTION 2.06. AGENT'S FEES. The Borrower shall pay to the Agent, for the account
and sole benefit of the Agent, such fees and other amounts at such times as set
forth in the Agent's Letter Agreement.
SECTION 2.07. PAYMENT OF FEES UPON TERMINATION OF LETTERS OF CREDIT. If any
Letter of Credit is terminated in its entirety, all accrued fees (as provided
under Section 3.06) with respect thereto shall be due and payable on the
effective date of such termination.
SECTION 2.08. MANDATORY REDUCTION AND TERMINATION OF COMMITMENTS. The
Commitments shall terminate on the Termination Date and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable on
such date. In the event of a Change in Control, the Agent (acting at the
direction of the Required Banks) may terminate the Commitments on a date
specified in a notice to the Borrower, which date (i) must be at least 3
Domestic Business Days following the date of such notice, and (ii) shall
constitute the Termination Date for all purposes hereunder, in which event (x)
no Tender Advances shall be made thereafter, and (y) to the extent of any
existing Letter of Credit Obligations, the Borrower shall immediately deposit
with the Agent the principal amount thereof and the amount so deposited shall be
set aside as a cash collateral reserve for payment of the Reimbursement
Obligations relating to Letters of Credit which are subsequently funded,
pursuant to Section 7.01.
SECTION 2.09. OPTIONAL PREPAYMENTS.
(a) The Borrower may, upon at least 2 Domestic Business Days' notice to the
Agent, prepay any Euro-Dollar Borrowing in whole at any time, or from time
to time in part in amounts aggregating at least $3,000,000 or any larger
integral multiple of $500,000, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment, plus the
amount of compensation determined to be due pursuant to Section 9.05, if
such prepayment is not made on the last of an Interest Period. Each such
optional prepayment shall be applied to prepay ratably the Euro-Dollar
Loans of the several Banks included in such Euro-Dollar Borrowing.
(b) The Borrower may, upon at least 1 Domestic Business Days' notice to the
Agent, prepay any Base Rate Borrowing in whole at any time, or from time to
time in part in amounts aggregating at least $3,000,000 or any larger
integral multiple of $500,000, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment. Each such
optional prepayment shall be applied to prepay ratably the Base Rate Loans
of the several Banks included in such Base Rate Borrowing.
(c) Upon receipt of a notice of prepayment pursuant to this Section 2.09, the
Agent shall promptly notify each Bank of the contents thereof and of such
Bank's ratable share of such prepayment and such notice, once received by
the Agent, shall not thereafter be revocable by the Borrower.
SECTION 2.10. MANDATORY PREPAYMENTS.
(a) On each date on which the Commitments are reduced pursuant to Section 2.07,
the Borrower shall repay or prepay such principal amount of the outstanding
Loans, if any (together with interest accrued thereon and any amount
required to be paid pursuant to Section 9.05(a)), as may be necessary so
that after such payment the aggregate unpaid principal amount of the Loans
does not exceed the aggregate amount of the Commitments as then reduced. On
the Termination Date, the Borrower shall make the payments required to be
made pursuant to Section 2.08.
(b) On each date on which the aggregate outstanding principal amount of all
Loans and the Letter of Credit Obligations exceeds the lesser of (A) the
aggregate amount of the Commitments and (B) the Borrowing Base (the
"Excess"), the Borrower shall repay or prepay such principal amount of the
outstanding Loans, if any (together with interest accrued thereon and any
amount due under Section 9.05(a)), by the amount of the Excess.
(c) Each such payment or prepayment shall be applied ratably to the Loans of
the Banks outstanding on the date of payment or prepayment in the following
order of priority:(i) first, to Base Rate Loans; and (ii) secondly, to
Euro-Dollar Loans.
SECTION 2.11. GENERAL PROVISIONS AS TO PAYMENTS.
(a) The Borrower shall make each payment of principal of, and interest on, the
Loans and of fees hereunder, not later than 1:00 P.M. (Atlanta, Georgia
time) on the date when due, in Federal or other funds immediately available
in Atlanta, Georgia, to the Agent at its address referred to in Section
10.01. The Agent will promptly distribute to each Bank its ratable share of
each such payment received by the Agent for the account of the Banks.
(b) Whenever any payment of principal of Base Rate Loans or of fees hereunder
shall be due on a day which is not a Domestic Business Day, the date for
payment thereof shall be extended to the next succeeding Domestic Business
Day. Whenever any payment of principal of or interest on, the Euro-Dollar
Loans shall be due on a day which is not a Euro-Dollar Business Day, the
date for payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case the date for payment thereof shall be
the next preceding Euro-Dollar Business Day.
(c) All payments of principal, interest and fees and all other amounts to be
made by the Borrower pursuant to this Agreement with respect to any Loan or
fee relating thereto shall be paid without deduction for, and free from,
any tax, imposts, levies, duties, deductions, or withholdings of any nature
now or at anytime hereafter imposed by any governmental authority or by any
taxing authority thereof or therein excluding in the case of each Bank,
taxes imposed on or measured by its net income, and franchise taxes imposed
on it, by the jurisdiction under the laws of which such Bank is organized
or any political subdivision thereof and, in the case of each Bank, taxes
imposed on its income, and franchise taxes imposed on it, by the
jurisdiction of such Bank's applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, imposts, levies, duties,
deductions or withholdings of any nature being "Taxes"). In the event that
the Borrower is required by applicable law to make any such withholding or
deduction of Taxes with respect to any Loan or fee or other amount, the
Borrower shall pay such deduction or withholding to the applicable taxing
authority, shall promptly furnish to any Bank in respect of which such
deduction or withholding is made all receipts and other documents
evidencing such payment and shall pay to such Bank additional amounts as
may be necessary in order that the amount received by such Bank after the
required withholding or other payment shall equal the amount such Bank
would have received had no such withholding or other payment been made.
Each Bank which is not organized under the laws of the United States or any
state thereof agrees, as soon as practicable after receipt by it of a
request by the Borrower to do so, to file all appropriate forms and take
other appropriate action to obtain a certificate or other appropriate
document from the appropriate governmental authority in the jurisdiction
imposing the relevant Taxes, establishing that it is entitled to receive
payments of principal and interest under this Agreement and the
Reimbursement Notes without deduction and free from withholding of any
Taxes imposed by such jurisdiction; provided that if it is unable, for any
reason, to establish such exemption, or to file such forms and, in any
event, during such period of time as such request for exemption is pending,
the Borrower shall nonetheless remain obligated under the terms of the
immediately preceding paragraph.
In the event any Bank receives a refund of any Taxes paid by the Borrower
pursuant to this Section 2.11(c), it will pay to the Borrower the amount of
such refund promptly upon receipt thereof; provided that if at any time
thereafter it is required to return such refund, the Borrower shall
promptly repay to it the amount of such refund.
Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower and the Banks
contained in this Section 2.11(c) shall be applicable with respect to any
Participant, Assignee or other Transferee, and any calculations required by
such provisions (i) shall be made based upon the circumstances of such
Participant, Assignee or other Transferee, and (ii) constitute a continuing
agreement and shall survive the termination of this Agreement and the
payment in full or cancellation of the Reimbursement Notes.
SECTION 2.12. COMPUTATION OF INTEREST AND FEES. Interest on Base Rate Loans
shall be computed on the basis of a year of 360 days and paid for the actual
number of days elapsed (including the first day but excluding the last day).
Interest on Euro-Dollar Loans shall be computed on the basis of a year of 360
days and paid for the actual number of days elapsed, calculated as to each
Interest Period from and including the first day thereof to but excluding the
last day thereof. Commitment fees and any other fees payable hereunder shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed (including the first day but excluding the last day).
ARTICLE III.
LETTER OF CREDIT FACILITY
SECTION 3.01. LETTERS OF CREDIT. In order to provide long-term credit
enhancement and short-term liquidity for tax-exempt bonds issued for projects of
the Borrower, the Agent has issued for the account of Borrower, the following
Letters of Credit (individually or collectively, as the context shall require,
the "Letters of Credit"), on the following dates, to enhance the following
revenue bonds:
Letter of
Issue Date Credit Amount Bonds
---------- ------------- -----
March 28, 1996 $7,305,809.00 Housing Authority of County of DeKalb,
Georgia Variable Rate Demand Multifamily
Housing Revenue Bonds (Wood Arbor
Project) Series 1985
March 28, 1996 $13,697,370.00 The Industrial Development Board of the
Metropolitan Government of Nashville and
Davidson County Multifamily Housing
Revenue Bonds (Arbor ▇▇▇▇▇ Project)
Series 1985
March 28, 1996 $13,032,946.00 The Industrial Development Board of the
Metropolitan Government of Nashville and
Davidson County Multifamily Housing
Revenue Bonds (Arbor Crest Project)
Series 1985
April 1, 1996 $11,784,054.80 Housing Authority of the City of Roswell
Variable Rate Demand Multifamily Housing
Revenue Refunding Bonds (Wood Crossing
Project)Series 1994
SECTION 3.02. NO EXTENSION OR AMENDMENT. The Agent shall not extend or amend any
Letter of Credit if: (i) the expiration date as so extended would be later than
2 Domestic Business Days before the Termination Date; or (ii) an Excess would be
created; or (iii) as of the date of amendment or extension, any order, judgment
or decree of any court, arbitrator or Authority shall purport by its terms to
enjoin or restrain the Agent from amending or extending the Letter of Credit or
issuing any other letter of credit generally or any law, rule or regulation
applicable to the Agent or any request or directive (whether or not having the
force of law) from any Authority with jurisdiction over the Agent shall prohibit
or request that the Agent refrain from the issuance of letters of credit
generally or the amendment or extension of that Letter of Credit.
SECTION 3.03 REIMBURSEMENT OBLIGATIONS; DUTIES OF THE ISSUING BANK
(a) Reimbursement. The Borrower agrees that:
(i) the Borrower shall reimburse the Agent for drawings under a Letter of
Credit issued by it no later than 1 Domestic Business Day after the
payment by the Agent;
(ii) in the event of any circumstances which prevent the Banks from making
Loans for the repayment of Reimbursement Obligations pursuant to
clause (iii) below, such Reimbursement Obligations shall bear interest
from the date of the relevant drawing under the pertinent Letter of
Credit until the date of payment in full thereof at a rate per annum
equal to (A) prior to the date that is 3 Domestic Business Days after
the date of the related payment by the Agent, the Base Rate and (B)
thereafter, the Default Rate; and
(iii)in order to implement the foregoing, upon the occurrence of a draw
under any Letter of Credit, unless the Agent is otherwise reimbursed
in accordance with subsection (i) above, the Borrower irrevocably
authorizes the Agent and the Banks to, and the Agent shall, treat such
nonpayment as a Notice of Borrowing in the amount of such
Reimbursement Obligation and the Banks shall make a Tender Advance to
the Borrower in such amount regardless of whether the conditions
precedent to the making of Loans hereunder have been met. The Borrower
further authorizes the Agent to, and the Agent shall, credit the
proceeds of such Tender Advance so as to immediately eliminate the
liability of the Borrower for Reimbursement Obligations under such
Letter of Credit. Any Tender Advance made under this Section 3.03(a)
shall be Base Rate Loans, unless the Borrower otherwise requests
pursuant to a Notice of Borrowing submitted in accordance with Section
2.02.
(b) Duties of the Agent. Any action taken or omitted to be taken by the Agent
in connection with any Letter of Credit, if taken or omitted in the absence
of willful misconduct or gross negligence, shall not put the Agent under
any resulting liability to any Bank, or relieve that Bank of its
obligations hereunder to the Agent. In determining whether to pay under any
Letter of Credit, the Agent shall have no obligation relative to the Banks
other than to confirm that any documents required to have been delivered
under such Letter of Credit appear to comply on their face, with the
requirements of such Letter of Credit.
SECTION 3.04 PARTICIPATIONS
(a) Purchase of Participations. Each Bank agrees that it has irrevocably and
unconditionally purchased and received from the Agent, without recourse or
warranty, an undivided interest and participation, to the extent of such
Bank's ratable share as set forth as the Commitment Percentage opposite its
name on the signature pages hereof, in such Letter of Credit (or guaranty
pertaining thereto).
(b) Sharing of Letter of Credit Payments. In the event that the Agent makes any
payment under any Letter of Credit for which the Borrower shall not have
repaid such amount to the Agent pursuant to Section 3.05 or which cannot be
paid by a Tender Advance, the Agent shall promptly notify each Bank of such
failure, and each Bank shall promptly and unconditionally pay to the Agent
such Bank's Commitment Percentage of the amount of such payment in Dollars
and in same day funds. If the Agent so notifies such Bank prior to 10:00
A.M. (Atlanta, Georgia time) on any Domestic Business Day, such Bank shall
make available to the Agent its Commitment Percentage of the amount of such
payment on such Domestic Business Day in same day funds. If and to the
extent such Bank shall not have so made its Commitment Percentage of the
amount of such payment available to the Agent, such Bank agrees to pay to
the Agent forthwith on demand such amount together with interest thereon,
for each day from the date such payment was first due until the date such
amount is paid to the Agent at the Base Rate for the first 3 days and
thereafter at the Default Rate. The failure of any Bank to make available
to the Agent its Commitment Percentage of any such payment shall neither
relieve nor increase the obligation of any other Bank hereunder to make
available to the Agent its Commitment Percentage of any payment on the date
such payment is to be made.
(c) Sharing of Reimbursement Obligation Payments. Whenever the Agent receives a
payment on account of a Reimbursement Obligation, including any interest
thereon, as to which the Agent has received any payments from the Banks
pursuant to this Section 3.04, it shall promptly pay to each Bank which has
funded its participating interest therein, in Dollars and in the kind of
funds so received, an amount equal to such Bank's Commitment Percentage
thereof. Each such payment shall be made by the Agent on the Domestic
Business Day on which the funds are paid to such Person, if received prior
to 10:00 am. (Atlanta, Georgia time) on such Domestic Business Day, and
otherwise on the next succeeding Domestic Business Day.
(d) Documentation. Upon the request of any Bank, the Agent shall furnish to
such Bank copies of any Letter of Credit and other documentation relating
to the Letters of Credit.
(e) Obligations Irrevocable. The obligations of the Banks to make payments to
the Agent with respect to a Letter of Credit shall be irrevocable, not
subject to any qualification or exception whatsoever and shall be made in
accordance with, but not subject to, the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of
the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any of the
other Loan Documents;
(ii) the existence of any claim, set-off, defense or other right which the
Borrower may have at any time against a beneficiary named in a Letter
of Credit or any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), the Agent, any Bank or any
other Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated
transactions;
(iii)any draft, certificate or any other document presented under the
Letter of Credit proves to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents;
(v) payment by the Agent under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(vi) payment by the Agent under any Letter of Credit against presentation
of any draft or certificate that does not comply with the terms of
such Letter of Credit, except payment resulting from the gross
negligence or willful misconduct of the Agent; or
(vii)any other circumstances or happenings whatsoever, whether or not
similar to any of the foregoing, except circumstances or happenings
resulting from the gross negligence or willful misconduct of the
Agent.
SECTION 3.05 PAYMENT OF REIMBURSEMENT OBLIGATIONS
(a) Payments to Issuing Bank. The Borrower agrees to pay to the Agent the
amount of all Reimbursement Obligations, interest and other amounts payable
to the Agent under or in connection with any Letter of Credit issued for
such Borrower's account immediately when due, provided that the Agent has
acted in good faith and with reasonable care, irrespective of:
(i) any lack of validity or enforceability of this Agreement or any of the
other Loan Documents;
(ii) the existence of any claim, set-off, defense or other right which the
Borrower may have at any time against a beneficiary named in a Letter
of Credit or any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), the Agent, any Bank or any
other Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated
transactions;
(iii)any draft, certificate or any other document presented under the
Letter of Credit proves to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents;
(v) payment by the Agent under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(vi) payment by the Agent under any Letter of Credit against presentation
of any draft or certificate that does not comply with the terms of
such Letter of Credit, except payment resulting from the gross
negligence or willful misconduct of the Agent; or
(vii)any other circumstances or happenings whatsoever, whether or not
similar to any of the foregoing, except circumstances or happenings
resulting from the gross negligence or willful misconduct of the
Agent.
(b) Recovery or Avoidance of Payments. In the event any payment by or on behalf
of the Borrower received by the Agent with respect to a Letter of Credit
and distributed by the Agent to the Banks on account of their
participations is thereafter set aside, avoided or recovered from the Agent
in connection with any receivership, liquidation or bankruptcy proceeding,
each Bank that received such distribution shall, upon demand by such Agent,
contribute such Bank's Commitment Percentage of the amount set aside,
avoided or recovered together with interest at the rate required to be paid
by the Agent upon the amount required to be repaid by it.
SECTION 3.06. COMPENSATION FOR LETTERS OF CREDIT AND AGENT REPORTING
REQUIREMENTS.
(a) Letter of Credit Fees; Fronting Fees. The Borrower shall pay to the Agent
with respect to each Letter of Credit issued hereunder a quarterly letter
of credit fee ("Letter of Credit Fee") equal to 0.85% per annum of the face
amount of such Letter of Credit, and a quarterly fronting fee equal to
0.10% per annum of the face amount of such Letter of Credit (the "Fronting
Fee"), in each case payable on the Closing Date and quarterly in advance.
Letter of Credit Fees and Fronting Fees payable hereunder shall be computed
on the basis of a year of 360 days and paid for the actual number of days
elapsed (including the first day but excluding the last day). The Agent
shall promptly remit such Letter of Credit Fees, when paid, to the Banks in
accordance with their Commitment Percentages thereof. The Fronting Fees
shall be solely for the account of the Agent.
(b) Agent Charges. The Borrower shall pay to the Agent, solely for its own
account, the standard charges assessed by the Agent in connection with the
issuance, administration, amendment and payment or cancellation of Letters
of Credit issued hereunder, which charges shall be those typically charged
by the Agent to its customers generally having credit and other
characteristics similar to the Borrower, as determined in good faith by the
Agent.
SECTION 3.07. INDEMNIFICATION; EXONERATION.
(a) Indemnification. In addition to amounts payable as elsewhere provided in
this Article III, the Borrower shall protect, indemnify, pay and save the
Agent and each Bank harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees, provided that, notwithstanding anything
contained in O.C.G.A. 13-1-11(9)(2) to the contrary, the Agent and the
Banks shall not be entitled to collect more than attorneys' fees actually
incurred) which the Agent, or any Bank may incur or be subject to as a
consequence of the issuance of any Letter of Credit for the Borrower's
account other than as a result of its gross negligence or willful
misconduct, or, as to the Agent, unless it has not has acted in good faith
and with reasonable care, in each case as determined by a court of
competent jurisdiction, and subject to the provisions of Section 3.07(c).
(b) Assumption of Risk by Borrower. Subject to the provisions of Section
3.07(c), as between the Borrower, the Agent (provided that it has acted in
good faith and with reasonable care) and the Banks, the Borrower assumes
all risks of the acts and omissions of, or misuse of the Letters of Credit
issued for such Borrower's account by, the respective beneficiaries of such
Letters of Credit. In furtherance and not in limitation of the foregoing,
the Agent and the Banks shall not be responsible for (i) 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 the Letters of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or
forged, (ii) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a 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) failure
of the beneficiary of a Letter of Credit to comply duly with conditions
required in order to draw upon such Letter of Credit, (iv) errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not
they be in cipher, for errors in interpretation of technical terms, (vi)
any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under any Letter of Credit or of the proceeds
thereof, (vii) the misapplication by the beneficiary of a Letter of Credit
of the proceeds of any drawing under such Letter of Credit; and (viii) any
consequences arising from causes beyond the control of the Agent and the
Banks.
(c) Exoneration. In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth (including but not limited to
Section 3.03(a)), any action taken or omitted by the Agent under or in
connection with the Letters of Credit or any related certificates if taken
or omitted in good faith and with reasonable care, shall not put the Agent
or any Bank under any resulting liability to the Borrower or relieve the
Borrower of any of its obligations hereunder to any such Person.
SECTION 3.08. CREDIT YIELD PROTECTION; CAPITAL ADEQUACY. If the adoption after
the date hereof of any applicable law, statute, rule, regulation, ordinance,
writ, injunction, decree, order, judgment, guideline or decision of any
Authority ("Governmental Rule"), any change after the date hereof in any
interpretation or administration of any applicable Governmental Rule by any
Person charged with its interpretation or administration or compliance by the
Agent or any Bank (or its Lending Office) with any request or directive (whether
or not having the force of law) of any such Person:
(a) shall subject the Agent or any Bank (or its Lending Office) to any tax
(other than overall net income, gross income, excise, franchise or similar
taxation), duty or other charge with respect to any amount drawn on any
Letter of Credit or its obligation to make any payment under the Letters of
Credit, or to maintain the Letters of Credit, or shall change the basis of
taxation (other than overall net income, gross income, excise, franchise or
similar taxation) of payments to the Agent or any Bank (or its Lending
Office) of any amounts due under this Agreement or any amount drawn on the
Letters of Credit; or
(b) shall impose, modify or deem applicable any reserve (including, without
limitation, any imposed by the Board of Governors of the Federal Reserve
System or any Person regulating banking activities or banking companies),
special deposit or similar requirements against assets of, deposits with or
for the account of, credit extended by, letters of credit issued or
maintained by, or collateral subject to a lien in favor of the Agent or any
Bank (or its Lending Office), or shall impose on the Agent or any Bank (or
its Lending Office) any other condition affecting any amount drawn on the
Letters of Credit, or its obligation to make any payment under the Letters
of Credit, as the case may be, or to maintain the Letters of Credit; then
the remaining provisions of this Section 3.08 shall apply. If the result of
any of the foregoing (without regard to whether the Agent or any Bank shall
have sold participations in its respective obligations under this
Agreement) is to increase the cost to or to impose a cost on the Agent or
any Bank (or its Lending Office) of making or maintaining any amounts
payable hereunder, of maintaining the Letters of Credit, or to reduce the
amount of any sum received or receivable by the Agent or any Bank (or its
Lending Office) under any Letter of Credit, then:
(i) the Agent or such Bank shall promptly deliver to the Borrower a
certificate stating the change which has occurred or the reserve
requirements or other conditions which have been imposed on the Agent
or such Bank (or its Lending Office) or the request, direction or
requirement with which it has complied, together with the effective
date thereof; and
(ii) the Borrower shall pay to the Agent or such Bank within 15 days of
written request (which request shall state the amount of increased
cost, reduction or payment and the way in which such amount has been
calculated), such amount or amounts as will compensate the Agent or
such Bank for the additional cost, reduction of return or payment
incurred by the Agent or such other Bank and, at the option of the
Borrower at any time while the Agent or such Bank is requesting such
additional amount or amounts, upon the giving of notice to the Bank
and payment to such Bank of all amounts owing to such Bank hereunder,
the Borrower may require such Bank to enter into an Assignment and
Assumption Agreement pursuant to which such Bank shall transfer all of
its rights and interests hereunder and under the other Loan Documents
to a third party selected by the Borrower and consented to by the
Agent. If such written request is given within 30 days after the event
which results in such increased cost, reduction of return or reduction
of payments, such amounts will be calculated from the date of such
event; otherwise, such amounts will be calculated as of the date on
which the Agent or such Bank makes the aforesaid written request. The
written request of the Agent or such Bank as to the additional amounts
payable pursuant to this paragraph delivered to the Borrower shall be
conclusive evidence of the amount thereof in the absence of manifest
error.
(c) If any Bank shall have determined that after the date hereof the adoption
of any applicable law, rule or regulation regarding capital adequacy, or
any change therein, or any change in the interpretation or administration
thereof, or compliance by any Bank (or its Lending Office) with any request
or directive regarding capital adequacy (whether or not having the force of
law) of any Authority, has or would have the effect of reducing the rate of
return on such Bank's capital as a consequence of its obligations hereunder
to a level below that which such Bank could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's
policies with respect to capital adequacy) by an amount deemed by such Bank
to be material, then from time to time, within 15 days after demand by such
Bank pursuant to a certificate described in paragraph (d) below, the
Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank for such reduction.
(d) Each Bank will promptly notify the Borrower and the Agent of any event of
which it has knowledge, occurring after the date hereof, which will entitle
such Bank to compensation pursuant to this Section and will designate a
different Lending Office if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the judgment of
such Bank, be otherwise disadvantageous to such Bank. A certificate of any
Bank claiming compensation under this Section and setting forth the
additional amount or amounts to be paid to it hereunder and including a
reasonable summary of the methods used in making the calculation, shall be
conclusive in the absence of manifest error. In determining such amount,
such Bank may use any reasonable averaging and attribution methods.
(e) The provisions of this Section 3.08 shall be applicable with respect to any
Participant, Assignee or other Transferee, and any calculations required by
such provisions shall be made based upon the circumstances of such
Participant, Assignee or other Transferee.
ARTICLE IV
CONDITIONS TO EFFECTIVENESS AND BORROWINGS
SECTION 4.01. CONDITIONS TO EFFECTIVENESS AND FIRST BORROWING. Subject to the
provisions of Section 4.03, the obligations of the Agent and each Bank hereunder
is subject to the satisfaction of the conditions set forth in Section 4.02 and
receipt by the Agent of the following (as to the documents described in
paragraphs (a), (c),(d) and (e) below, in sufficient number of counterparts for
delivery of a counterpart to each Bank and retention of one counterpart by the
Agent):
(a) from each of the parties hereto of either (i) a duly executed counterpart
of this Agreement signed by such party or (ii) a facsimile transmission of
such executed counterpart, with the original to be sent to the Agent by
overnight courier);
(b) a duly executed Reimbursement Note for the account of each Bank complying
with the provisions of Section 2.03 and a duly executed Guaranty and
Contribution Agreement;
(c) an opinion letter (i) (together with any opinions of local counsel relied
on therein) of Liddell, Sapp, Zivley, Hill & ▇▇▇▇▇▇, L.L.P., counsel for
the Borrower, dated as of the Closing Date, in form and substance
satisfactory to the Agent in its reasonable discretion, the forms attached
hereto as Exhibit B and covering such additional matters relating to the
transactions contemplated hereby as the Agent or any Bank may reasonably
request;
(d) an opinion of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, special counsel for the Agent,
dated as of the Closing Date, substantially in the form of Exhibit C and
covering such additional matters relating to the transactions contemplated
hereby as the Agent may reasonably request;
(e) a certificate (the "Closing Certificate") substantially in the form of
Exhibit G), dated as of the Closing Date, signed by an Executive Officer
(other than the Secretary), to the effect that (i) no Default has occurred
and is continuing on the date of the first Borrowing and (ii) the
representations and warranties of the Borrower contained in Article V are
true on and as of the date of the first Borrowing hereunder;
(f) all documents which the Agent or any Bank may reasonably request relating
to the existence of the Borrower, the corporate authority for and the
validity of this Agreement, the Reimbursement Notes and the Guaranty, and
any other matters relevant hereto, all in form and substance satisfactory
to the Agent, including, without limitation, certificates of incumbency of
the General Partner and of each Guarantor, signed by the Secretary or an
Assistant Secretary of the General Partner substantially in the form of
Exhibit H-1 (the "Officer's Certificate") and each Guarantor, certifying as
to the names, true signatures and incumbency of the officer or officers of
the General Partner and Guarantor authorized to execute and deliver the
Loan Documents on behalf of the Borrower or Guarantor, and certified copies
of the following items: (i) the Borrower's Certificate of Limited
Partnership; (ii) the Borrower's Partnership Agreement, (iii) for the
General Partner, its Certificate of Incorporation and its Bylaws, (v) for
GBP, its Declaration of Trust and Bylaws (vi) for the General Partner, a
certificate of the Secretary of State of Texas as to its valid existence as
a Texas corporation, (vii) for Gables - Tennessee Properties, its
Partnership Agreement; (viii) certificates of good standing or valid
existence or other equivalent certificate of the Borrower, the General
Partner, GBP and Gables - Tennessee Properties, as a foreign general or
limited partnership or foreign corporation, as the case may be, in each
other jurisdiction in which it is required to be qualified and (vii) the
action taken by the Board of Directors of the General Partner and each
Guarantor authorizing (A) on behalf of the Borrower, the execution,
delivery and performance of this Agreement, the Reimbursement Notes and the
other Loan Documents to which the Borrower is a party, and (B) on behalf of
each Guarantor, the execution, delivery and performance of the Guaranty;
provided, however, that for purposes of the Closing, in lieu of the
Officer's Certificate and the documents described in clauses (i) through
(v), inclusive, and (vii) the Borrower may elect to deliver an alternative
form of Officer's Certificate, executed on behalf of the General Partner,
GBP and Gables - Tennessee Properties, in the form of Exhibit H-2;
(g) execution and sending of the written notice by Wachovia pursuant to Section
3.11 of the Revolving Credit Agreement to the effect that the letter of
credit facility hereunder has been established and terminating the letter
of credit facility under the Revolving Credit Agreement;
(h) receipt of the initial Borrowing Base Certificate, showing the Borrowing
Base as of the Closing Date;
(i) receipt of the fees required to be paid on the Closing Date pursuant to
Section 3.06.
SECTION 4.02. CONDITIONS TO ALL BORROWINGS. Except as expressly provided in
Section 3.05(iii) as to Tender Advances, the obligation of each Bank to make a
Loan on the occasion of each Borrowing is subject to the satisfaction of the
following conditions except as expressly provided in the last sentence of this
Section 4.02:
(a) receipt by the Agent of a Notice of Borrowing.
(b) the fact that, immediately before and after such Borrowing, no Default
shall have occurred and be continuing;
(c) the fact that the representations and warranties of the Borrower contained
in Article V of this Agreement shall be true on and as of the date of such
Borrowing; and
(d) the fact that, immediately after such Borrowing, the conditions set forth
in clauses (i) and (ii) of Section 2.01 shall have been satisfied.
Each Borrowing hereunder, other than a Tender Advance, shall be deemed to be a
representation and warranty by the Borrower on the date of such Borrowing as to
the truth and accuracy of the facts specified in paragraphs (b), (c) and (d) of
this Section; provided that such Borrowing shall not be deemed to be such a
representation and warranty to the effect set forth in Section 5.04(b) as to any
event, act or condition having a Material Adverse Effect which has theretofore
been disclosed in writing by the Borrower to the Banks. In no event will the
failure of any condition set forth herein excuse or otherwise affect each Bank's
obligation to purchase participations under the Letters of Credit as set forth
in Section 3.04.
SECTION 4.03. CERTAIN CONDITIONS AND PROVISIONS PERTAINING TO GUARANTY FEDERAL
BANK, F.S.B. Notwithstanding anything in this Agreement to the contrary, it is
acknowledged that as of the Closing Date, approval for execution of this
Agreement by Guaranty Federal Bank, F.S.B. ("Guaranty Federal") has not been
obtained, and Guaranty Federal is not executing this Agreement.
Unless and until counterparts of this Agreement are executed by Guaranty
Federal: (i) Guaranty Federal shall not be a Bank hereunder or have any
Commitment or Commitment Percentage hereunder, notwithstanding the statement of
an amount therefor on the signature pages hereof; (ii) the amount of the
Commitment and Commitment Percentage of Guaranty Federal set forth on the
signature pages hereof shall be added to the Commitment and Commitment
Percentage of Wachovia, and a Reimbursement Note shall be executed and delivered
in favor of Wachovia in such aggregate amount (the "Initial Wachovia Note");
(iii) the Reimbursement Note in favor of Guaranty Federal shall be held in
escrow; (iv) an additional Reimbursement Note in favor of Wachovia in the amount
of its Commitment set forth on the signature pages hereto shall be held in
escrow (the "Wachovia Substitute Note".
If counterparts of this Agreement are executed and delivered by Guaranty Federal
by October 31, 1997, then: (1) the provisions of the foregoing sentence shall no
longer be in effect; (2) Guaranty Federal shall be a Bank hereunder, with a
Commitment and Commitment Percentage as set forth on the signature pages hereof;
(3) the Reimbursement Note in favor of Guaranty Federal shall be delivered to
it; (4) the Wachovia Substitute Note shall be delivered to Wachovia; and (5) the
Initial Wachovia Note shall be returned to the Borrower for cancellation.
If execution of counterparts of this Agreement by Guaranty Federal has not
occurred by October 31, 1997: (1) Guaranty Federal shall have not be a Bank
hereunder or have any Commitment or Commitment Percentage hereunder,
notwithstanding the statement of an amount therefor on the signature pages
hereof; (2) the amount of the Commitment and Commitment Percentage of Guaranty
Federal set forth on the signature pages hereof shall remain added to the
Commitment and Commitment Percentage of Wachovia; and (3) the Reimbursement Note
in favor of Guaranty Federal and the Wachovia Substitute Note shall be returned
to the Borrower for cancellation; provided, however, that in such event, nothing
in this sentence shall prevent Guaranty Federal's thereafter becoming a Bank
hereunder by assignment from any Bank hereunder, subject and pursuant to the
provisions of Section 10.08(c).
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower and (by incorporation by reference in the Guaranty) the Guarantors,
as expressly stated, each represent and warrant that:
SECTION 5.01. PARTNERSHIP OR CORPORATE EXISTENCE AND POWER. The Borrower is a
limited partnership duly created and validly existing under the laws of
Delaware, GBP is a trust duly created, validly existing and in good standing
under the laws of Maryland, the General Partner is a corporation duly organized,
validly existing and in good standing under the laws of Texas, and each of the
foregoing is duly qualified to transact business in every jurisdiction where, by
the nature of its business, such qualification is necessary, and has all
partnership powers and all governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted, except where any
such failure does not have and is not reasonably expected to cause a Material
Adverse Effect.
SECTION 5.02. PARTNERSHIP OR CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO
CONTRAVENTION. The execution, delivery and performance by the Borrower of this
Agreement, the Reimbursement Notes and the other Loan Documents and by the
Guarantors of the Guaranty (i) are within the Borrower's partnership powers and
the Guarantor's respective corporate powers, (ii) have been duly authorized by
all necessary partnership or corporate action, (iii) require no action by or in
respect of or filing with, any governmental body, agency or official, other than
filings required by federal or state securities laws with respect to this
Agreement (iv) do not contravene, or constitute a default under, any provision
of applicable law or regulation or of the certificate of limited partnership or
partnership agreement of the Borrower or the articles of incorporation or
by-laws of any Guarantor or of any material agreement, judgment, injunction,
order, decree or other instrument binding upon the Borrower, any Guarantor or
any other Subsidiaries, and (v) do not result in the creation or imposition of
any Lien on any asset of the Borrower, any Guarantor or any other Subsidiaries.
SECTION 5.03. BINDING EFFECT. This Agreement constitutes a valid and binding
agreement of the Borrower enforceable in accordance with its terms, and the
Reimbursement Notes, the Guaranty and the other Loan Documents, when executed
and delivered in accordance with this Agreement, will constitute valid and
binding obligations of the Borrower and the Guarantors parties thereto,
enforceable in accordance with their respective terms, provided that the
enforceability hereof and thereof is subject in each case to general principles
of equity and to bankruptcy, insolvency and similar laws affecting the
enforcement of creditors' rights generally.
SECTION 5.04. FINANCIAL AND PROPERTY INFORMATION.
(a) The balance sheet of GBP and the consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as of December 31, 1996 and the related
consolidated statements of income, shareholders' equity and cash flows for
the Fiscal Year then ended, in the case of GBP reported on by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, copies of which have been delivered to each of the Banks, and
the unaudited financial statement of GBP and consolidated financial
statements of the Borrower for the interim period ended March 31, 1997,
copies of which have been delivered to each of the Banks, fairly present,
in all material respects, in conformity with GAAP, subject in the case of
quarterly statements to normal year end audit adjustments, the consolidated
financial position of GBP and the Borrower and its Consolidated
Subsidiaries, respectively, as of such dates and their consolidated results
of operations and cash flows for such periods stated.
(b) Since December 31, 1996, there has been no event, act, condition or
occurrence having a Material Adverse Effect.
(c) All material information concerning the Properties which has been furnished
to the Banks by the Borrower is true and correct in all material respects.
SECTION 5.05. NO LITIGATION. There is no action, suit or proceeding pending, or
to the knowledge of the Executive Officers, threatened, against or affecting the
Borrower, any Guarantor or any other Subsidiaries before any court or arbitrator
or any governmental body, agency or official which has or is reasonably expected
to cause a Material Adverse Effect or which in any manner draws into question
the validity of or is reasonably expected to impair the ability of the Borrower
or any Guarantor to perform its obligations under, this Agreement, the
Reimbursement Notes, the Guaranty or any of the other Loan Documents.
SECTION 5.06. COMPLIANCE WITH ERISA.
(a) The Borrower and each member of the Controlled Group have fulfilled their
obligations under the minimum funding standards of ERISA and the Code with
respect to each Plan and are in compliance in all material respects with
the presently applicable provisions of ERISA and the Code, and have not
incurred any liability to the PBGC or a Plan under Title IV of ERISA,
except where any such failure does not involve an aggregate amount in
excess of $2,500,000.
(b) Neither the Borrower nor any member of the Controlled Group is or ever has
been obligated to contribute to any Multiemployer Plan.
SECTION 5.07. COMPLIANCE WITH LAWS; PAYMENT OF TAXES. The Borrower, the
Guarantors and the other Subsidiaries are in compliance with all applicable
laws, regulations and similar requirements of governmental authorities, except
where (i) such compliance is being contested in good faith through appropriate
proceedings or (ii) any failure to comply does not have and is not reasonably
expected to cause a Material Adverse Effect. There have been filed on behalf of
the Borrower, the Guarantors and the other Subsidiaries all Federal, state and
local income, excise, property and other tax returns which are required to be
filed by them and all taxes due pursuant to such returns or pursuant to any
assessment received by or on behalf of the Borrower, the Guarantors or any other
Subsidiary have been paid, except: (A) ad valorem taxes not due and payable; and
(B) other liabilities, if (1) they are being contested in good faith and against
which the Borrower, Guarantor or Subsidiary has set up reserves in accordance
with GAAP, or (2) the aggregate amount involved is not in excess of $2,500,000.
The charges, accruals and reserves on the books of the Borrower, the Guarantors
and the other Subsidiaries in respect of taxes or other governmental charges
are, in the opinion of the Borrower and the Guarantors, adequate. United States
income tax returns of GBP for the 1994 Fiscal Year have been timely filed. GBP
has received no written communication from the Internal Revenue Service
regarding such returns.
SECTION 5.08. SUBSIDIARIES. The Borrower has no Subsidiaries except for those
Subsidiaries listed on Schedule 5.08, as supplemented from time to time, which
accurately sets forth each such Subsidiary's complete name and jurisdiction of
incorporation.
SECTION 5.09. INVESTMENT COMPANY ACT. Neither the Borrower, the Guarantors nor
any other Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 5.10. PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower, any
Guarantor nor any Subsidiary is a "holding company", or a "subsidiary company"
of a "holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended.
SECTION 5.11. OWNERSHIP OF PROPERTY. Each of the Borrower, the Guarantors and
the Subsidiaries has title to its properties sufficient for the conduct of its
business, except where any such failure does not have and is not reasonably
expected to cause a Material Adverse Effect.
SECTION 5.12. NO DEFAULT. Neither the Borrower, the Guarantors nor any of the
Subsidiaries is in default under or with respect to any agreement, instrument or
undertaking to which it is a party or by which it or any of its property is
bound which has or is reasonably expected to cause a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
SECTION 5.13. FULL DISCLOSURE. All information heretofore furnished by the
Borrower or any Guarantor to the Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by the Borrower to the Agent or any
Bank will be, true, accurate and complete in all material respects or based on
reasonable estimates on the date as of which such information is stated or
certified. The Borrower and the Guarantors have disclosed to the Banks in
writing any and all facts which have had or are reasonably expected to cause a
Material Adverse Effect.
SECTION 5.14. ENVIRONMENTAL MATTERS.
(a) Neither the Borrower, the Guarantors nor any other Subsidiary is, to the
knowledge of the Executive Officers, subject to any Environmental Liability
which has had or is reasonably expected to cause a Material Adverse Effect
and neither the Borrower, the Guarantors nor any other Subsidiary has been
designated as a potentially responsible party under CERCLA or under any
state statute similar to CERCLA, except as disclosed in writing to the
Agent (and the Agent shall promptly furnish a copy of any such disclosure
to the Banks). None of the Properties has been identified on any current or
proposed (i) National Priorities List under 40 C.F.R. 300, (ii) CERCLIS
list or (iii) any list arising from a state statute similar to CERCLA,
except as disclosed in writing to the Agent.
(b) No Hazardous Materials have been permitted or are being permitted to be
used, produced, manufactured, processed, treated, recycled, generated,
stored, disposed of, managed or otherwise handled at, or shipped or
transported to or from the Properties or are otherwise present at, on, in
or under the Properties, or, to the best of the knowledge of the Executive
Officers, at or from any adjacent site or facility, except for Hazardous
Materials, such as cleaning solvents, pesticides and other materials used,
stored, disposed of, managed, or otherwise handled in all material respects
in compliance with all applicable Environmental Requirements and except as
disclosed in writing to the Agent.
(c) The Borrower, each Guarantor and each of the Subsidiaries, has procured all
Environmental Authorizations necessary for the conduct of its business, and
is in compliance with all Environmental Requirements (including, to the
best knowledge of the Executive Officers, with respect to any Environmental
Releases) in connection with the operation of the Properties and the
Borrower's, each Guarantor's and each other Subsidiary's respective
businesses, except where any such failure to comply does not have and is
not reasonably expected to cause a Material Adverse Effect.
SECTION 5.15. PARTNER INTERESTS AND CAPITAL STOCK. All Partner Interests and
Capital Stock, debentures, bonds, Reimbursement Notes and all other securities
of the Borrower, each Guarantor and each of the other Subsidiaries presently
issued and outstanding are validly and properly issued in accordance with all
applicable laws, including, but not limited to, the "Blue Sky" laws of all
applicable states and the federal securities laws, except where any such failure
to comply does not and is not reasonably expected to cause a Material Adverse
Effect. The issued shares of Capital Stock of the Borrower's Wholly Owned
Subsidiaries are owned by the Borrower free and clear of any Lien or adverse
claim. At least a majority of the issued shares of non-voting Capital Stock of
each of the Borrower's other Subsidiaries is owned by the Borrower free and
clear of any Lien or adverse claim.
SECTION 5.16. MARGIN STOCK. Neither the Borrower, any Guarantor nor any of the
Subsidiaries is engaged principally, or as one of its important activities, in
the business of purchasing or carrying any Margin Stock, and no part of the
proceeds of any Loan will be used to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any Margin
Stock, or be used for any purpose which violates, or which is inconsistent with,
the provisions of Regulation X.
SECTION 5.17. INSOLVENCY. After giving effect to the execution and delivery of
the Loan Documents and the making of the Loans under this Agreement: (i) neither
the Borrower nor any Guarantor will (x) be "insolvent," within the meaning of
such term as used in O.C.G.A. 18-2-22 or as defined in 101 of the "Bankruptcy
Code", or Section 2 of either the "UFTA" or the "UFCA", or as defined or used in
any "Other Applicable Law" (as those terms are defined below), or (y) be unable
to pay its debts generally as such debts become due within the meaning of
Section 548 of the Bankruptcy Code, Section 4 of the UFTA or Section 6 of the
UFCA, or (z) have an unreasonably small capital to engage in any business or
transaction, whether current or contemplated, within the meaning of Section 548
of the Bankruptcy Code, Section 4 of the UFTA or Section 5 of the UFCA; and (ii)
the obligations of the Borrower under the Loan Documents and with respect to the
Loans will not be rendered avoidable under any Other Applicable Law. For
purposes of this Section 5.17, "Bankruptcy Code" means Title 11 of the United
States Code, "UFTA" means the Uniform Fraudulent Transfer Act, "UFCA" means the
Uniform Fraudulent Conveyance Act, and "Other Applicable Law" means any other
applicable state law pertaining to fraudulent transfers or acts voidable by
creditors, in each case as such law may be amended from time to time.
SECTION 5.18. INSURANCE. The Borrower, each Guarantor and each of the
Subsidiaries has (either in the name of the Borrower, such Guarantor or in such
other Subsidiary's own name), with financially sound and reputable insurance
companies having an A.M. Best rating of B+ or better, insurance on all its
property in at least such amounts and against at least such risks as are usually
insured against in the same general area by companies of established repute
engaged in the same or similar business.
SECTION 5.19. REAL ESTATE INVESTMENT TRUST. GBP is qualified under the Code as a
real estate investment trust.
ARTICLE VI
COVENANTS
The Borrower and (by incorporation by reference in the Guaranty) the Guarantors
agree that, so long as any Bank has any Commitment hereunder or any amount
payable hereunder or under any Note remains unpaid:
SECTION 6.01. INFORMATION. GBP and the Borrower will deliver to each of the
Banks:
(a) as soon as available and in any event within 90 days after the end of each
Fiscal Year, a consolidated balance sheet of GBP and its Consolidated
Subsidiaries as of the end of its Fiscal Year and the related consolidated
statements of income, shareholders' equity and cash flows for such Fiscal
Year, setting forth in each case in comparative form the figures for the
previous Fiscal Year, all certified by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other
independent public accountants of nationally recognized standing, with such
certification to be free of exceptions and qualifications as to the scope
of the audit or as to the going concern nature of the business; provided,
that so long as the Revolving Credit Agreement is in effect, delivery of
the quarterly financial statements pursuant to and in compliance with
Section 6.01(a) thereof shall constitute compliance with the provisions of
this Section 6.01(a);
(b) as soon as available and in any event within 45 days after the end of each
of the first 3 Fiscal Quarters of each Fiscal Year, a consolidated balance
sheet of GBP and its Consolidated Subsidiaries as of the end of such Fiscal
Quarter and the related statement of income and statement of cash flows for
such Fiscal Quarter and for the portion of the Fiscal Year ended at the end
of such Fiscal Quarter, setting forth in each case in comparative form the
figures for the corresponding Fiscal Quarter and the corresponding portion
of the previous Fiscal Year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, GAAP and consistency by an
Executive Officer provided, that so long as the Revolving Credit Agreement
is in effect, delivery of the quarterly financial statements pursuant to
and in compliance with Section 6.01(b) thereof shall constitute compliance
with the provisions of this Section 6.01(b);
(c) simultaneously with the delivery of each set of financial statements
referred to in paragraphs (a) and (b) above, a certificate, substantially
in the form of Exhibit F (a "Compliance Certificate"), of an Executive
Officer (i) setting forth in reasonable detail the calculations required to
establish whether the Borrower was in compliance with the requirements of
Sections 6.03 through 6.09, inclusive, and Sections 6.25 and 6.27, on the
date of such financial statements and (ii) stating whether any Default
exists on the date of such certificate and, if any Default then exists,
setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto; provided, that so long as
the Revolving Credit Agreement is in effect, delivery of the "Compliance
Certificate" pursuant to and in compliance with Section 6.01(c) thereof
shall constitute compliance with the provisions of this Section 6.01(c);
(d) within 5 Domestic Business Days after any Executive Officer becomes aware
of the occurrence of any Default, a certificate of an Executive Officer
setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(e) promptly upon the mailing thereof to the holders of beneficial ownership in
GBP generally, copies of all financial statements, reports and proxy
statements so mailed; provided, that so long as the Revolving Credit
Agreement is in effect, delivery of copies of financial statements, reports
and proxy statements pursuant to and in compliance with Section 6.01(e)
thereof shall constitute compliance with the provisions of this Section
6.01(e)
(f) promptly upon the filing thereof, copies of all registration statements
(other than the exhibits thereto and any registration statements on Form
S-8 or its equivalent) and annual, quarterly or monthly reports (excluding
Form 4, Statement of Changes in Beneficial Ownership, or its equivalent,
unless they reflect a Change in Control), any filing on Form 8-K, and any
filing pursuant to the ▇▇▇▇▇▇▇▇ Act, which GBP shall have filed with the
Securities and Exchange Commission; provided, that so long as the Revolving
Credit Agreement is in effect, delivery of copies of all such pursuant to
and in compliance with Section 6.01(f) thereof shall constitute compliance
with the provisions of this Section 6.01(f);
(g) if and when any member of the Controlled Group (i) gives or is required to
give notice to the PBGC of any "reportable event" (as defined in Section
4043 of ERISA) with respect to any Plan which might constitute grounds for
a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any
such reportable event, a copy of the notice of such reportable event given
or required to be given to the PBGC; (ii) receives notice of complete or
partial withdrawal liability under Title IV of ERISA, a copy of such
notice; or (iii) receives notice from the PBGC under Title IV of ERISA of
an intent to terminate or appoint a trustee to administer any Plan, a copy
of such notice;
(h) within 45 Domestic Business Days after the end of each Fiscal Quarter, a
Borrowing Base Certificate as of the last day of the Fiscal Quarter just
ended; provided, however, that at the Borrower's election, Borrower may,
and or at the Agent's election on not less than 10 Domestic Business Days
notice, Borrower shall, submit a Borrowing Base Certificate to the Agent on
or before the twentieth Domestic Business Day after the end of the first or
second month in any Fiscal Quarter, as of the last day of such month;
(i) by April 1 of each year, a report as of the end of such Fiscal Year
containing the following information: (i) a schedule of all outstanding
Debt, showing for each component of Debt, the lender, the total commitment,
the total Debt outstanding, the interest rate, if fixed, or a statement
that the interest rate floats, the term, the required amortization (if any)
and the security (if any); (ii) a schedule of all interest rate protection
agreements, showing for each such agreement, the total dollar amount, the
type of agreement (i.e. cap, collar, swap, etc.) and the term thereof; and
(iii) a development schedule of the announced development pipeline,
including for each announced development project, the project name and
location, the number of units, the expected construction start date, the
expected date of delivery of the first units, the expected stabilization
date, and the total anticipated cost; provided, that so long as the
Revolving Credit Agreement is in effect, delivery of such schedules
pursuant to and in compliance with Section 6.01(i) thereof shall constitute
compliance with the provisions of this Section 6.01(i); and
(j) from time to time such additional information regarding the financial
position or business of the Borrower and its Subsidiaries as the Agent, at
the request of any Bank, may reasonably request.
SECTION 6.02. INSPECTION OF PROPERTY, BOOKS, AND RECORDS. The Borrower and the
Guarantors will (i) keep, and cause each other Consolidated Subsidiary to keep,
proper books of record and account in which full, true and correct entries in
conformity with GAAP shall be made of all dealings and transactions in relation
to its business and activities; and (ii) permit, and cause each other
Consolidated Subsidiary to permit, representatives of any Bank at such Bank's
expense prior to the occurrence of a Default and at the Borrower's or such
Guarantor's expense after the occurrence and during the continuance of a Default
to visit and inspect any of their respective properties, to examine and make
abstracts from any of their respective books and records and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants. The Borrower and the Guarantors
agree to cooperate and assist in such visits and inspections, in each case at
such reasonable times, upon reasonable prior notice to the Borrower or such
Guarantor and as often as may reasonably be desired.
SECTION 6.03. TOTAL SECURED DEBT. The amount of Total Secured Debt will not at
any time exceed 40% of Total Assets Value.
SECTION 6.04. RATIO OF TOTAL DEBT TO TOTAL ASSETS VALUE. The ratio of Total Debt
to Total Assets Value will not at any time exceed 0.55 to 1.00.
SECTION 6.05. INTEREST COVERAGE. The ratio of (x) Consolidated Income Available
for Debt Service to (y) Consolidated Interest Expense shall at all times exceed
2.00 to 1.0, calculated at the end of each Fiscal Quarter, based on the Fiscal
Quarter just ended and the immediately preceding three Fiscal Quarters.
SECTION 6.06. RESTRICTED PAYMENTS. The Borrower's Restricted Payments in any
calendar year shall not exceed 95% of Consolidated Income Available for
Distribution for such period, unless (i) the Borrower must pay out an amount in
excess of 95% of Consolidated Income Available for Distribution to permit GBP to
preserve its status as a real estate investment trust under the applicable
provision of the Code, or (ii) GBP declares one or more capital gains dividends
within such calendar year (in which event the amount of additional Restricted
Payments that may be made as a result of such declaration as provided in this
clause (ii) shall not exceed the greater of (A) the income tax liability of the
Borrower's partners with respect thereto and (B) $1,500,000). In the event that
the Borrower or GBP receives a public debt rating of BBB- or better from
Standard & Poors or Baa3 or better from Moody's Investor's Service and so long
as that rating is affirmed during each year, the Borrower's Restricted Payments
in any calendar year will be limited to 100% of Consolidated Income Available
for Distribution for such calendar year with the same exceptions contained in
clauses (i) and (ii) of this Section 6.06.
SECTION 6.07. LOANS OR ADVANCES. Neither the Borrower, the Guarantors nor any
other Subsidiary shall make loans or advances to any Person except: (i) deposits
required by government agencies or public utilities; (ii) loans and advances
made by Borrower or any Guarantor to any Guarantor or to Borrower; (iii) loans
or advances to directors, officers and employees in the ordinary course of
business in the aggregate outstanding at any time not exceeding $1,000,000; (iv)
loans or advances to employees in the ordinary course of business which are
secured by stock in GBP in the aggregate outstanding at any time not exceeding
$5,000,000; and (v) other loans or advances made in the ordinary course of
business in the aggregate outstanding at any time not exceeding 5% of the book
value of the total assets of the Borrower and its Consolidated Subsidiaries,
determined in accordance with GAAP minus all amounts outstanding under clause
(iii) of this Section 6.07 and minus Investments made and permitted pursuant to
Section 6.09(D); provided that after giving effect to the making of any loans,
advances or deposits permitted by clauses (i), (ii), (iii) or (iv), the Borrower
will be in full compliance with all the provisions of this Agreement.
SECTION 6.08. PURCHASES OF STOCK BY GUARANTORS. Except for purchases or
acquisitions of shares of GBP's Capital Stock made for purposes of having such
shares available for purchase by GBP shareholders pursuant to GBP's dividend
reinvestment and share purchase program known as "The Share Builder Plan", as
amended as of the Closing Date and, subject to the approval of the Required
Banks (not to be unreasonably withheld), as it may thereafter be amended, the
Guarantors shall not purchase or acquire any shares of GBP's Capital Stock
during any 12 month period in excess of 10% of all GBP's Capital Stock
outstanding on the first day of such period.
SECTION 6.09. INVESTMENTS. Neither the Borrower nor the Guarantors shall make
Investments in any Person except: (A) Investments in (i) direct obligations of
the United States Government, (ii) certificates of deposit issued by a
commercial bank whose credit is satisfactory to the Agent, (iii) commercial
paper rated A1 or the equivalent thereof by Standard & Poor's Corporation or P1
or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc. and in either case
maturing within 9 months after the date of acquisition, (iv) tender bonds the
payment of the principal of and interest on which is fully supported by a letter
of credit issued by a United States bank whose long-term certificates of deposit
are rated at least AA or the equivalent thereof by Standard & Poor's Corporation
and Aa or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc., (v) insured
money market Investments and/or (vi) Investments in debt or equity securities
rated at least BBB+ or the equivalent thereof by Standard & Poor's Corporation
or at least Baa1 or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service not
exceeding an aggregate amount outstanding at any time of $25,000,000; (B)
Investments permitted by clauses (i), (ii) and (iii) of Section 6.07 or by
Section 6.08; (C) Investments in Significant Subsidiaries; and (D) other
Investments not exceeding an aggregate amount outstanding at any time 10% of the
book value of the total assets of the Borrower and its Consolidated
Subsidiaries, determined in accordance with GAAP, less loans and advances
outstanding and permitted by clause (iv) of Section 6.07.
SECTION 6.10. DISSOLUTION. Neither the Borrower, the Guarantors nor any of the
other Subsidiaries shall suffer or permit dissolution or liquidation either in
whole or in part or redeem or retire any shares of its own stock or that of any
Subsidiary, except to the extent permitted by Section 6.11 and except for
purchases by GBP of its own Capital Stock to the extent permitted by Section
6.08, and subject to the rights of limited partners of the Borrower to convert
or exchange their Partner Interests in the Borrower to stock in GBP.
SECTION 6.11. CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. The Borrower and the
Guarantors will not, nor will the Borrower permit any other Subsidiary to,
consolidate or merge with or into, or sell, lease or otherwise transfer all or
any substantial part of its assets to, any other Person, or discontinue or
eliminate any business line or segment, provided that
(a) the Borrower, any Guarantor and any other Subsidiary may merge with another
Person if (i) such Person was organized under the laws of the United States
of America or one of its states, (ii) the Borrower or such Guarantor or
other Subsidiary is the corporation surviving such merger and (iii)
immediately after giving effect to such merger, no Default shall have
occurred and be continuing,
(b) any Guarantor may merge with or transfer assets to another Guarantor or the
Borrower (with the Borrower as the survivor of any such merger) and any
other Subsidiary may merge with or transfer assets to a Guarantor, another
Subsidiary, or the Borrower (with the Borrower as the survivor of any such
merger), and
(c) the foregoing limitation on the sale, lease or other transfer of assets and
on the discontinuation or elimination of a business line or segment shall
not prohibit, during any Fiscal Quarter, a transfer of assets or the
discontinuance or elimination of a business line or segment (in a single
transaction or in a series of related transactions) unless the aggregate
assets to be so transferred or utilized in a business line or segment to be
so discontinued, when combined with all other assets transferred, and all
other assets utilized in all other business lines or segments discontinued,
during such Fiscal Quarter and the immediately preceding 3 Fiscal Quarters,
either (x) constituted more than 5% of Consolidated Total Assets at the end
of the Fiscal Quarter immediately preceding such Fiscal Quarter, or (y)
contributed more than 5% of Consolidated Income Available for Debt Service
during the 4 Fiscal Quarters immediately preceding such Fiscal Quarter.
In the case of any Subsidiary which transfers substantially all of its
assets pursuant to clause (c) of the preceding sentence, and in the case of
any Subsidiary the stock of which is being sold and with respect to which
clause (c) would have been satisfied if the transaction had been a sale of
assets of such Subsidiary, such Subsidiary may dissolve and, if it is a
Guarantor, such Subsidiaries shall be entitled to obtain from the Agent a
written release from the Guaranty, provided that it can demonstrate to the
reasonable satisfaction of the Agent that (A) it was not a Significant
Subsidiary immediately prior to such transfer of assets, and (B) it has
repaid in full all Debt owed to the Borrower or any other Guarantor which
was incurred after the Closing Date (or such Debt has been assumed by the
Borrower or a Significant Subsidiary), and upon obtaining such written
release, it shall no longer be a Guarantor for any purpose hereunder.
SECTION 6.12. USE OF PROCEEDS. The proceeds of the Loans may be used only for
Tender Advances and Refunding Loans.
SECTION 6.13. COMPLIANCE WITH LAWS; PAYMENT OF TAXES. The Borrower and
Guarantors will, and will cause each of the other Subsidiaries and each member
of the Controlled Group to, comply with applicable laws (including but not
limited to ERISA), regulations and similar requirements of governmental
authorities (including but not limited to PBGC), except where (i) the necessity
of such compliance is being contested in good faith through appropriate
proceedings, or (ii) any failure to comply which does not have and is not
reasonably expected to cause a Material Adverse Effect. The Borrower and
Guarantors will, and will cause each of the other Subsidiaries to, pay promptly
when due all taxes, assessments, governmental charges, claims for labor,
supplies, rent and other obligations which, if unpaid, might become a Lien
against the Property of the Borrower, any Guarantor or any other Subsidiary,
except (A) liabilities being contested in good faith and against which, if
requested by the Agent, the Borrower, Guarantor or Subsidiary will set up
reserves in accordance with GAAP, and (B) liabilities in an aggregate amount for
all Properties not in excess of $1,000,000.
SECTION 6.14. INSURANCE. The Borrower and the Guarantors will maintain, and will
cause each of the other Subsidiaries to maintain (either in the name of the
Borrower or such Guarantor's or such other Subsidiary's own name), with
financially sound and reputable insurance companies having an A.M. Best rating
of B+ or better, insurance on all its property in at least such amounts and
against at least such risks as are usually insured against in the same general
area by companies of established repute engaged in the same or similar business.
SECTION 6.15. CHANGE IN FISCAL YEAR. The Borrower and the Guarantors will not,
and will cause the other Subsidiaries to not, change its Fiscal Year without the
consent of the Required Banks.
SECTION 6.16. MAINTENANCE OF PROPERTY; PRINCIPAL BUSINESS. The Borrower and the
Guarantors shall, and shall cause each other Subsidiary to, maintain all of its
properties and assets in good condition, repair and working order, ordinary wear
and tear excepted, and maintain all Multi-Family Property (other than Property
consisting of land acquired with existing improvements which are to be
substantially demolished) in a first class manner. The principal business
operations of the Borrower and the Subsidiaries, taken as a whole, will be
directly or indirectly related to Multi-Family Properties.
SECTION 6.17. ENVIRONMENTAL NOTICES. Promptly upon any Executive Officer's
becoming aware thereof, the Borrower and the Guarantors shall furnish to the
Banks and the Agent prompt written notice of all Environmental Liabilities,
pending, threatened or anticipated Environmental Proceedings, Environmental
Notices, Environmental Judgments and Orders, and Environmental Releases at, on,
in, under or in any way affecting the Properties or any adjacent property, which
has had or is reasonably expected to cause a Material Adverse Effect.
SECTION 6.18. ENVIRONMENTAL MATTERS. The Borrower and the Guarantors will not,
and will cause the other Subsidiaries to not, and will not permit any Third
Party to, use, produce, manufacture, process, treat, recycle, generate, store,
dispose of, manage at, or otherwise handle, or ship or transport to or from the
Properties any Hazardous Materials except for Hazardous Materials such as
cleaning solvents, pesticides and other materials used, produced, manufactured,
processed, treated, recycled, generated, stored, disposed, managed, or otherwise
handled in compliance in all material respects with all applicable Environmental
Requirements.
SECTION 6.19. ENVIRONMENTAL RELEASE. The Borrower and the Guarantors agree that
upon any Executive Officer's becoming aware of the occurrence of an
Environmental Release at or on any of the Properties the Borrower will act
promptly to investigate the extent of, and to take appropriate action to
remediate such Environmental Release, whether or not ordered or otherwise
directed to do so by any Environmental Authority.
SECTION 6.20. TRANSACTIONS WITH AFFILIATES. Neither the Borrower, the Guarantors
nor any of the other Subsidiaries shall enter into, or be a party to, any
transaction with any Affiliate of the Borrower, such Guarantor or such other
Subsidiary (which Affiliate is not GBP, the Borrower, a Guarantor or a Wholly
Owned Subsidiary), except as permitted by law and in the ordinary course of
business and pursuant to reasonable terms which are no less favorable to
Borrower or such Subsidiary than would be obtained in a comparable arm's length
transaction with a Person which is not an Affiliate.
SECTION 6.21. AMENDMENT OF OTHER AGREEMENTS. Within 90 days after the Closing
Date, the Borrower shall amend all other agreements pertaining to credit
facilities with any of the Banks so as to conform the financial covenants
contained therein to those contained in this Agreement.
SECTION 6.22. QUALIFICATIONS AS A REAL ESTATE INVESTMENT TRUST; GENERAL
PARTNERS. GBP shall at all times remain qualified under the Code as a real
estate investment trust and Gables GP, Inc. shall at all times be the General
Partner. The Borrower will not agree to amend or waive the requirements of
Section 3.2 of the limited partnership agreement of the Borrower, as in effect
on the date of this Agreement, as such requirements are applicable to the
General Partner, without the prior written consent of the Required Banks (which
consent the Banks hereby agree not to unreasonably withhold or delay).
SECTION 6.23. SIGNIFICANT SUBSIDIARIES TO BE GUARANTORS; ELECTION TO BECOME
GUARANTOR. Any Subsidiary (whether existing on the Closing Date or acquired or
created thereafter) (i) must become a Guarantor promptly upon becoming a
Significant Subsidiary, and (ii) may elect to become a Guarantor at any time if
it is not a Significant Subsidiary, in each case by (x) executing and delivering
to the Agent a counterpart of the Guaranty and a counterpart of the Contribution
Agreement, thereby becoming a party to each of them, (y) delivering to the Agent
an opinion of counsel to such Subsidiary, in form and substance satisfactory to
the Agent in its reasonable discretion, the form attached hereto as Exhibit B
(being one such satisfactory form, but limited to such Subsidiary, and making
appropriate modifications and excluding paragraph 2 thereof, and (z) delivering
to the Agent documents pertaining to the Subsidiary reasonably requested by the
Agent of the types described in paragraph (f) of Section 4.01 (but making
appropriate modifications, and excluding the proviso at the end thereof
pertaining to an alternate form of officer's certificate).
SECTION 6.24. CERTAIN PROVISIONS REGARDING ELIGIBLE PROPERTIES. Neither the
Borrower nor any Consolidated Subsidiary will create, assume or suffer to exist
any Lien on any Eligible Property included in the Borrowing Base, now owned or
hereafter acquired by it, except Permitted Encumbrances.
SECTION 6.25. RESTRICTIONS OF CERTAIN ADDITIONAL GUARANTEES. Neither the
Borrower nor any of the Guarantors shall incur or permit to exist any Guarantees
of unsecured revolving Debt, other than the Guaranty made hereunder, in an
aggregate principal amount outstanding at any time of $25,000,000 or more.
SECTION 6.26. MAINTENANCE OF EXISTENCE. The Borrower shall, and shall cause each
Subsidiary to, maintain its corporate existence and carry on its business in
substantially the same manner and in substantially the same fields as such
business is now carried on and maintained.
SECTION 6.27. RATIO OF TOTAL UNENCUMBERED ASSETS VALUE TO UNSECURED FUNDED DEBT
will not at any time be less than 1.75 to 1.00.
ARTICLE VII
DEFAULTS
SECTION 7.01. EVENTS OF DEFAULT. If one or more of the following events ("Events
of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any Loan or any
Reimbursement Obligations with respect to the Letter of Credit or shall
fail to pay any interest on any Loan within 5 Domestic Business Days after
such interest shall become due, or shall fail to pay any fee or other
amount payable hereunder within 5 Domestic Business Days after such fee or
other amount becomes due; or
(b) the Borrower or any Guarantor shall fail to observe or perform any covenant
contained in Sections 6.01(c), 6.02(ii), 6.03 through 6.12, inclusive,
Sections 6.22 or Sections 6.24 through 6.27; or
(c) the Borrower or any Guarantor shall fail to observe or perform any covenant
or agreement contained in this Agreement or any other Loan Document (other
than those covered by paragraph (a) or (b) above) and such failure shall
not have been cured within 30 days after the earlier to occur of (i)
written notice thereof has been given to the Borrower or such Guarantor by
the Agent at the request of any Bank or (ii) an Executive Officer or such
Guarantor otherwise becomes aware of any such failure; or
(d) any representation, warranty, certification or statement made by the
Borrower or any Guarantor in Article V of this Agreement or in any other
Loan Document or in any certificate, financial statement or other document
delivered pursuant to this Agreement or any other Loan Document shall prove
to have been incorrect or misleading in any material respect when made (or
deemed made); or
(e) the Borrower, GBP or any Subsidiary shall fail to make any payment in
respect of the Revolving Credit Agreement or any other Debt outstanding
(other than the Reimbursement Notes) when due or within any applicable
grace period, if the amount of any such Debt of the Borrower, GBP or any
Subsidiary individually is $5,000,000 or more or if the aggregate amount of
all such Debt of the Borrower, GBP and all Subsidiaries is $10,000,000 or
more; or
(f) any event or condition shall occur which results in the acceleration of the
maturity of Debt under the Revolving Credit Agreement or other Debt
outstanding of the Borrower, GBP or any Subsidiary (including, without
limitation, any required mandatory prepayment or "put" of such Debt to the
Borrower or any Subsidiary) or enables (or, with the giving of notice or
lapse of time or both, would enable) the holders of such Debt or commitment
or any Person acting on such holders' behalf to accelerate the maturity
thereof or terminate any such commitment (including, without limitation,
any required mandatory prepayment or "put" of such Debt to the Borrower or
any Subsidiary), if the amount of any such Debt of the Borrower, GBP or any
Subsidiary individually is $5,000,000 or more or if the aggregate amount of
all such Debt of the Borrower, GBP and all Subsidiaries is $10,000,000 or
more; or
(g) the Borrower, GBP or any Subsidiary shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, or shall consent to any such relief
or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or shall make a
general assignment for the benefit of creditors, or shall fail generally,
or shall admit in writing its inability, to pay its debts as they become
due, or shall take any corporate action to authorize any of the foregoing;
or
(h) an involuntary case or other proceeding shall be commenced against the
Borrower, GBP or any Subsidiary seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed
for a period of 60 days; or an order for relief shall be entered against
the Borrower, GBP or any Subsidiary under the federal bankruptcy laws as
now or hereafter in effect; or
(i) the Borrower or any member of the Controlled Group shall fail to pay when
due any material amount which it shall have become liable to pay to the
PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate
a Plan or Plans shall be filed under Title IV of ERISA by the Borrower, any
member of the Controlled Group, any plan administrator or any combination
of the foregoing; or the PBGC shall institute proceedings under Title IV of
ERISA to terminate or to cause a trustee to be appointed to administer any
such Plan or Plans or a proceeding shall be instituted by a fiduciary of
any such Plan or Plans to enforce Section 515 or 4219(c)(5) of ERISA and
such proceeding shall not have been dismissed within 30 days thereafter; or
a condition shall exist by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any such Plan or Plans must be
terminated; or the Borrower or any other member of the Controlled Group
shall enter into, contribute or be obligated to contribute to, terminate or
incur any withdrawal liability with respect to, a Multiemployer Plan; or
(j) one or more judgments or orders for the payment of money in an aggregate
amount in excess of $1,000,000 shall be rendered against the Borrower or
any Subsidiary and such judgment or order shall continue unsatisfied and
unstayed for a period of 30 days; or
(k) a federal tax lien shall be filed against the Borrower or any Subsidiary
under Section 6323 of the Code or a lien of the PBGC shall be filed against
the Borrower or any Subsidiary under Section 4068 of ERISA and in either
case such lien shall remain undischarged for a period of 25 days after the
date of filing.
then, and in every such event, (i) the Agent shall, if requested by the Required
Banks, by notice to the Borrower terminate the Commitments and they shall
thereupon terminate and (ii) the Agent shall, if requested by the Required
Banks, by notice to the Borrower declare the Reimbursement Notes (together with
accrued interest thereon), and all other amounts payable hereunder and under the
other Loan Documents, to be, and the Reimbursement Notes, together with accrued
interest thereon, and all other amounts payable hereunder and under the other
Loan Documents shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower together with interest at the Default Rate
accruing on the principal amount thereof from and after the date of such Event
of Default; provided that if any Event of Default specified in paragraph (g) or
(h) above occurs with respect to the Borrower, without any notice to the
Borrower or any other act by the Agent or the Banks, the Commitments shall
thereupon terminate and the Reimbursement Notes (together with accrued interest
thereon) and all other amounts payable hereunder and under the other Loan
Documents shall automatically and without notice become immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower together with interest thereon at the
Default Rate accruing on the principal amount thereof from and after the date of
such Event of Default. In addition, upon the occurrence of an Event of Default
(and in any event on the Termination Date, pursuant to Section 2.08), to the
extent of any existing Letter of Credit Obligations, the Borrower shall
immediately deposit with the Agent the principal amount thereof and the amount
so deposited shall be set aside as a cash collateral reserve for payment of the
Reimbursement Obligations relating to Letters of Credit which are subsequently
funded. The Agent will invest such cash collateral reserve in compliance with
instructions received from the Borrower to the extent necessary to preserve the
tax-exempt status of the bonds secured by the Letters of Credit. After all
Letters of Credit have been cancelled and all Reimbursement Obligations have
been satisfied, and the Agent has been reimbursed all amounts funded by it with
respect thereto, any balance remaining in said cash collateral reserve may be
applied to other amounts owed by the Borrower hereunder, and, if none, shall be
remitted to Borrower. Notwithstanding the foregoing, the Agent shall have
available to it all other remedies at law or equity, and under any of the other
Loan Documents, and shall exercise any one or all of them at the request of the
Required Banks.
SECTION 7.02. NOTICE OF DEFAULT. The Agent shall give notice to the Borrower of
any Default under Section 7.01(c) promptly upon being requested to do so by any
Bank and shall thereupon notify all the Banks thereof.
ARTICLE VIII
THE AGENT
SECTION 8.01. APPOINTMENT; POWERS AND IMMUNITIES. Each Bank hereby irrevocably
appoints and authorizes the Agent to act as its agent hereunder and under the
other Loan Documents with such powers as are specifically delegated to the Agent
by the terms hereof and thereof, together with such other powers as are
reasonably incidental thereto. The Agent: (a) shall have no duties or
responsibilities except as expressly set forth in this Agreement and the other
Loan Documents, and shall not by reason of this Agreement or any other Loan
Document be a trustee for any Bank; (b) shall not be responsible to the Banks
for any recitals, statements, representations or warranties contained in this
Agreement or any other Loan Document, or in any certificate or other document
referred to or provided for in, or received by any Bank under, this Agreement or
any other Loan Document, or for the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
any other document referred to or provided for herein or therein or for any
failure by the Borrower to perform any of its obligations hereunder or
thereunder; (c) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder or under any other Loan Document except to the
extent requested by the Required Banks, and then only on terms and conditions
satisfactory to the Agent, and (d) shall not be responsible for any action taken
or omitted to be taken by it hereunder or under any other Loan Document or any
other document or instrument referred to or provided for herein or therein or in
connection herewith or therewith, except for its own gross negligence or willful
misconduct. The Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The provisions of this
Article VII are solely for the benefit of the Agent and the Banks, and the
Borrower shall not have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement
and under the other Loan Documents, the Agent shall act solely as agent of the
Banks and does not assume and shall not be deemed to have assumed any obligation
towards or relationship of agency or trust with or for the Borrower. The duties
of the Agent shall be ministerial and administrative in nature, and the Agent
shall not have by reason of this Agreement or any other Loan Document a
fiduciary relationship in respect of any Bank. The Agent shall administer the
Loans and the Loan Documents with a degree of care at least equal to that
customarily employed by the Agent in the administration of similar credit
facilities for its own account.
SECTION 8.02. RELIANCE BY AGENT. The Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telecopier, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants or other experts selected by the Agent. As to any matters not
expressly provided for by this Agreement or any other Loan Document, the Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder and thereunder in accordance with instructions signed by the Required
Banks, and such instructions of the Required Banks in any action taken or
failure to act pursuant thereto shall be binding on all of the Banks.
SECTION 8.03. DEFAULTS. The Agent shall not be deemed to have knowledge of the
occurrence of a Default or an Event of Default (other than the nonpayment of
principal of or interest on the Loans) unless the Agent has received notice from
a Bank or the Borrower specifying such Default or Event of Default and stating
that such notice is a "Notice of Default". In the event that the Agent receives
such a notice of the occurrence of a Default or an Event of Default, the Agent
shall give prompt notice thereof to the Banks. The Agent shall give each Bank
prompt notice of each nonpayment of principal of or interest on the Loans
whether or not it has received any notice of the occurrence of such nonpayment.
The Agent shall (subject to Section 10.06) take such action hereunder with
respect to such Default or Event of Default as shall be directed by the Required
Banks, provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Banks.
SECTION 8.04. RIGHTS OF AGENT AND ITS AFFILIATES AS A BANK. With respect to the
Loans made by the Agent and any Affiliate of the Agent, Wachovia in its capacity
as a Bank hereunder and any Affiliate of the Agent or such Affiliate in its
capacity as a Bank hereunder shall have the same rights and powers hereunder as
any other Bank and may exercise the same as though Wachovia were not acting as
the Agent, and the term "Bank" or "Banks" shall, unless the context otherwise
indicates, include Wachovia in its individual capacity and any Affiliate of the
Agent in its individual capacity. The Agent and any Affiliate of the Agent may
(without having to account therefor to any Bank) accept deposits from, lend
money to and generally engage in any kind of banking, trust or other business
with the Borrower (and any of the Borrower's Affiliates) as if Wachovia were not
acting as the Agent, and the Agent and any Affiliate of the Agent may accept
fees and other consideration from the Borrower (in addition to any agency fees
and arrangement fees heretofore agreed to between the Borrower and the Agent)
for services in connection with this Agreement or any other Loan Document or
otherwise without having to account for the same to the Banks.
SECTION 8.05. INDEMNIFICATION. Each Bank severally agrees to indemnify the
Agent, to the extent the Agent shall not have been reimbursed by the Borrower,
ratably in accordance with its Commitment, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, counsel fees and disbursements) or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any other documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby (excluding, unless an Event of Default has occurred and is continuing,
the normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or any such other documents; provided that no Bank shall be liable for
any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the Agent. If any indemnity furnished to the Agent for any
purpose shall, in the opinion of the Agent, be insufficient or become impaired,
the Agent may call for additional indemnity and cease, or not commence, to do
the acts indemnified against until such additional indemnity is furnished.
SECTION 8.06. CONSEQUENTIAL DAMAGES. THE AGENT SHALL NOT BE RESPONSIBLE OR
LIABLE TO ANY BANK, THE BORROWER OR ANY OTHER PERSON OR ENTITY FOR ANY PUNITIVE,
EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
SECTION 8.07. PAYEE OF NOTE TREATED AS OWNER. The Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment or transfer thereof shall have been filed
with the Agent and the provisions of Section 10.08(c) have been satisfied. Any
requests, authority or consent of any Person who at the time of making such
request or giving such authority or consent is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of that
Note or of any Note or Reimbursement Notes issued in exchange therefor or
replacement thereof.
SECTION 8.08. NONRELIANCE ON AGENT AND OTHER BANKS. Each Bank agrees that it
has, independently and without reliance on the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Borrower and decision to enter into this Agreement
and that it will, independently and without reliance upon the Agent or any other
Bank, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under this Agreement or any of the other Loan Documents. The Agent
shall not be required to keep itself (or any Bank) informed as to the
performance or observance by the Borrower of this Agreement or any of the other
Loan Documents or any other document referred to or provided for herein or
therein or to inspect the properties or books of the Borrower or any other
Person. Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder or under
the other Loan Documents, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the affairs,
financial condition or business of the Borrower or any other Person (or any of
their Affiliates) which may come into the possession of the Agent; provided,
that the Agent shall make available to any Bank, upon its request, (i) copies of
the Agent's records with respect to all sums received or expended by the Agent
in connection with the Loans and the Loan Documents, (ii) information as to the
amount of the then outstanding Loans, Letters of Credit and Reimbursement
Obligations and (iii) copies of any documents pertaining to an Eligible Property
requested by such Bank and held by the Agent pursuant to Section 6.24(b).
SECTION 8.09. FAILURE TO ACT. Except for action expressly required of the Agent
hereunder or under the other Loan Documents, the Agent shall in all cases be
fully justified in failing or refusing to act hereunder and thereunder unless it
shall receive further assurances to its satisfaction by the Banks of their
indemnification obligations under Section 8.05 against any and all liability and
expense which may be incurred by the Agent by reason of taking, continuing to
take, or failing to take any such action.
SECTION 8.10. RESIGNATION OR REMOVAL OF AGENT. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Banks and the Borrower and the Agent may be
removed at any time with or without cause by the Required Banks. Upon any such
resignation or removal, the Required Banks shall have the right to appoint a
successor Agent, subject to the approval of the Borrower, which approval shall
not be unreasonably withheld or delayed; provided, however, that no such
approval of the Borrower shall be required if (i) the successor is a Bank or
(ii) a Default or Event of Default is in existence. If no successor Agent shall
have been so appointed by the Required Banks and shall have accepted such
appointment within 30 days after the retiring Agent's notice of resignation or
the Required Banks' removal of the retiring Agent, then the retiring Agent may,
on behalf of the Banks, appoint a successor Agent, subject to the approval of
the Borrower, which approval shall not be unreasonably withheld or delayed;
provided, however, that no such approval of the Borrower shall be required if
(i) the successor is a Bank or (ii) a Default or Event of Default is in
existence. Any successor Agent shall be a bank which has a combined capital and
surplus of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Article VII shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder.
SECTION 8.11. AGENT'S RIGHT TO REPLACE NON-QUALIFYING BANK. In the event that
any Bank (a "Non-Qualifying Bank") shall at the end of any quarter not qualify
as a "well-capitalized" bank (within the meaning provided therefor in 12 CFR 6,
as amended from time to time) under the regulations or policies of the
Comptroller of the Currency, or the sum of its non-performing assets and its
"Other Real Estate Owned" shall be equal to more than fifty percent (50%) of its
tangible equity, the Agent, in its sole discretion, may give notice to such
Non-Qualifying Bank and to the other Banks, with a copy to the Borrower (the
"Replacement Notice"), that it wishes to seek one or more assignees (which may
be one or more of the Banks) to assume the Commitment of such Non-Qualifying
Bank and to purchase its outstanding Loans and Reimbursement Notes,
participation in the Letters of Credit and interest in this Agreement, and in
such event: (i) the remaining Banks may elect to purchase ratable assignments
(without any obligation so to do) from the Non-Qualifying Bank (in the form of
an Assignment and Acceptance and in accordance with Section 10.08(c)) in
accordance with their respective percentage of the remaining aggregate
Commitments, by giving notice of such election to the Agent and the other Banks,
with a copy to the Borrower, no later than the date (the "Initial Option Date")
which is 15 days after the date of the Replacement Notice; (ii) should any of
the remaining Banks not elect on or before the Initial Option Date to purchase
such an assignment, then, such other remaining Banks shall be entitled to
purchase an assignment from Non-Qualifying Bank which includes the ratable
interest that was otherwise available to such non-purchasing remaining Bank or
Banks, by giving notice of such election to the Agent and the other Banks, with
a copy to the Borrower, within 15 days after the Initial Option Date; and (iii)
if and to the extent that the remaining Banks have not elected to purchase such
an assignment, the Agent may find another assignee to purchase such assignment.
Each Non-Qualifying Bank agrees to sell its Commitment, Loans, Reimbursement
Notes, participation in the Letters of Credit and interest in this Agreement by
an Assignment and Acceptance in accordance with Section 10.08(c) to any such
assignee or assignees for an amount equal to the sum of the outstanding unpaid
principal of and accrued interest on such Loans and Reimbursement Notes, plus
all other fees and amounts (including, without limitation, any compensation
claimed by such Non-Qualifying Bank under Section 2.11(c) or this Section 8.11)
due such Non-Qualifying Bank hereunder calculated, in each case, to the date
such Loans, Reimbursement Notes and interest are purchased. Upon such sale or
prepayment, and assumption by the assignee or assignees of the Non-Qualifying
Banks's Commitment and participation in the Letters of Credit, such
Non-Qualifying Bank shall have no further Commitment or other obligation to the
Borrower hereunder or under any Note.
ARTICLE IX
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 9.01. BASIS FOR DETERMINING INTEREST RATES INADEQUATE OR UNFAIR. If on
or prior to the first day of any Interest Period
(a) the Agent determines that deposits in Dollars (in the applicable amounts)
are not being offered in the relevant market for such Interest Period, or
(b) the Required Banks advise the Agent that the London Interbank Offered Rate,
as determined by the Agent will not adequately and fairly reflect the cost
to such Banks of funding the relevant Euro-Dollar Rate Loans for such
Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligations of the Banks to make
Euro-Dollar Loans specified in such notice shall be suspended. Unless the
Borrower notifies the Agent at least 2 Domestic Business Days before the date of
any Euro-Dollar Borrowing for which a Notice of Borrowing has previously been
given that it elects not to borrow on such date, such Borrowing shall instead be
made as a Base Rate Borrowing.
SECTION 9.02. ILLEGALITY. If, after the date hereof, the adoption of any
applicable law, rule or regulation, or any change therein or any existing or
future law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof (any such
agency being referred to as an "Authority" and any such event being referred to
as a "Change of Law"), or compliance by any Bank (or its Lending Office) with
any request or directive (whether or not having the force of law) of any
Authority shall make it unlawful or impossible for any Bank (or its Lending
Office) to make, maintain or fund its Euro-Dollar Loans and such Bank shall so
notify the Agent, the Agent shall forthwith give notice thereof to the other
Banks and the Borrower, whereupon until such Bank notifies the Borrower and the
Agent that the circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans shall be suspended. Before
giving any notice to the Agent pursuant to this Section, such Bank shall
designate a different Lending Office if such designation will avoid the need for
giving such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such Bank shall determine that it may not
lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans
to maturity and shall so specify in such notice, the Borrower shall immediately
prepay in full the then outstanding principal amount of each Euro-Dollar Loan of
such Bank, together with accrued interest thereon and any amount due such Bank
pursuant to Section 9.05(a). Concurrently with prepaying each such Euro-Dollar
Loan, the Borrower shall borrow a Base Rate Loan in an equal principal amount
from such Bank (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the other Banks), and
such Bank shall make such a Base Rate Loan.
SECTION 9.03. INCREASED COST AND REDUCED RETURN.
(a) If after the date hereof, a Change of Law or compliance by any Bank (or its
Lending Office) with any request or directive (whether or not having the
force of law) of any Authority:
(i) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the
Federal Reserve System, but excluding with respect to any
Euro-Dollar Loan any such requirement included in an applicable
Euro-Dollar Reserve Percentage) against assets of, deposits with
or for the account of, or credit extended by, any Bank (or its
Lending Office); or
(ii) shall impose on any Bank (or its Lending Office) or on the United
States market for certificates of deposit or the London interbank
market any other condition affecting its Euro-Dollar Loans, its
Reimbursement Notes or its obligation to make Euro-Dollar Loans;
and the result of any of the foregoing is to increase the cost to such Bank
(or its Lending Office) of making or maintaining any Loan, or to reduce the
amount of any sum received or receivable by such Bank (or its Lending
Office) under this Agreement or under its Reimbursement Notes with respect
thereto, by an amount deemed by such Bank to be material, then, within 15
days after demand by such Bank (with a copy to the Agent), the Borrower
shall pay to such Bank such additional amount or amounts as will compensate
such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that after the date hereof the adoption
of any applicable law, rule or regulation regarding capital adequacy, or
any change therein, or any change in the interpretation or administration
thereof, or compliance by any Bank (or its Lending Office) with any request
or directive regarding capital adequacy (whether or not having the force of
law) of any Authority, has or would have the effect of reducing the rate of
return on such Bank's capital as a consequence of its obligations hereunder
to a level below that which such Bank could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's
policies with respect to capital adequacy) by an amount deemed by such Bank
to be material, then from time to time, within 15 days after demand by such
Bank, the Borrower shall pay to such Bank such additional amount or amounts
as will compensate such Bank for such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent of any event of
which it has knowledge, occurring after the date hereof, which will entitle
such Bank to compensation pursuant to this Section and will designate a
different Lending Office if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the judgment of
such Bank, be otherwise disadvantageous to such Bank. A certificate of any
Bank claiming compensation under this Section and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive
in the absence of manifest error. In determining such amount, such Bank may
use any reasonable averaging and attribution methods.
(d) The provisions of this Section 9.03 shall be applicable with respect to any
Participant, Assignee or other Transferee, and any calculations required by
such provisions shall be made based upon the circumstances of such
Participant, Assignee or other Transferee.
SECTION 9.04. BASE RATE LOANS SUBSTITUTED FOR AFFECTED EURO-DOLLAR LOANS. If (i)
the obligation of any Bank to make or maintain any Euro-Dollar Loans has been
suspended pursuant to Section 9.02 or (ii) any Bank has demanded compensation
under Section 9.03, and the Borrower shall, by at least 5 Euro-Dollar Business
Days' prior notice to such Bank, through the Agent, have elected that the
provisions of this Section shall apply to such Bank, then, unless and until such
Bank notifies the Borrower that the circumstances giving rise to such suspension
or demand for compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank as Euro-Dollar Loans
shall be made instead as Base Rate Loans, and interest and principal on
such Loans shall be payable contemporaneously with the related Euro-Dollar
Loans of the other Banks, and
(b) after each of its Euro-Dollar Loans has been repaid, all payments of
principal which would otherwise be applied to repay such Euro-Dollar Loans
shall be applied to repay its Base Rate Loans instead.
SECTION 9.05. COMPENSATION. Upon the request of any Bank, delivered to the
Borrower and the Agent, the Borrower shall pay to such Bank such amount or
amounts as shall compensate such Bank for any loss, cost or expense incurred by
such Bank as a result of:
(a) any payment or prepayment (pursuant to Section 2.09, 2.10, 7.01, 9.02 or
otherwise) of a Euro-Dollar Loan on a date other than the last day of an
Interest Period for such Loan; or
(b) any failure by the Borrower to prepay a Euro-Dollar Loan on the date for
such prepayment specified in the relevant notice of prepayment hereunder;
or
(c) any failure by the Borrower to borrow a Euro-Dollar Loan on the date for
the Euro-Dollar Borrowing of which such Euro-Dollar Loan is a part
specified in the applicable Notice of Borrowing delivered pursuant to
Section 2.02; such compensation to include, without limitation, an amount
equal to the excess, if any, of (x) the amount of interest which would have
accrued on the amount so paid or prepaid or not prepaid or borrowed for the
period from the date of such payment, prepayment or failure to prepay or
borrow to the last day of the then current Interest Period for such
Euro-Dollar Loan (or, in the case of a failure to prepay or borrow, the
Interest Period for such Euro-Dollar Loan which would have commenced on the
date of such failure to prepay or borrow) at the applicable rate of
interest for such Euro-Dollar Loan provided for herein over (y) the amount
of interest (as reasonably determined by such Bank) such Bank would have
paid on deposits in Dollars of comparable amounts having terms comparable
to such period placed with it by leading banks in the London interbank
market.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. NOTICES. All notices, requests and other communications to any
party hereunder shall be in writing (including telecopier or similar writing)
and shall be given to such party at its address or telecopier number set forth
on the signature pages hereof or such other address or telecopier number as such
party may hereafter specify for the purpose by notice to each other party. Each
such notice, request or other communication shall be effective (i) if given by
telecopier, when such telecopy is transmitted to the telecopier number specified
in this Section and the confirmation is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other means,
when delivered at the address specified in this Section; provided that notices
to the Agent under Article II or Article IX shall not be effective until
received.
SECTION 10.02. NO WAIVERS. No failure or delay by the Agent or any Bank in
exercising any right, power or privilege hereunder or under any Note or other
Loan Document shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 10.03. EXPENSES; DOCUMENTARY TAXES. The Borrower shall pay (i) all
out-of-pocket expenses of the Agent, including fees and disbursements of ▇▇▇▇▇,
Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, special counsel for the Banks and the Agent, in connection
with the preparation of this Agreement and the other Loan Documents, any waiver
or consent hereunder or thereunder or any amendment hereof or thereof or any
Default or alleged Default hereunder or thereunder, (ii) if a Default occurs,
all out-of-pocket expenses incurred by the Agent and the Banks, including fees
and disbursements of counsel, in connection with such Default and collection and
other enforcement proceedings resulting therefrom, including out-of-pocket
expenses incurred in enforcing this Agreement and the other Loan Documents. The
Borrower shall indemnify the Agent and each Bank against any transfer taxes,
documentary taxes, assessments or charges made by any Authority by reason of the
execution and delivery of this Agreement or the other Loan Documents. The
provisions of this Section 10.03 are in addition to and not in limitation of any
expense reimbursement or indemnification provision contained in any other Loan
Documents.
SECTION 10.04. INDEMNIFICATION. The Borrower shall indemnify the Agent, the
Banks and each Affiliate thereof and their respective directors, officers,
employees and agents from, and hold each of them harmless against, any and all
losses, liabilities, claims or damages to which any of them may become subject,
insofar as such losses, liabilities, claims or damages arise out of or result
from any actual or proposed use by the Borrower of the proceeds of any extension
of credit by any Bank hereunder or breach by the Borrower of this Agreement or
any other Loan Document or from any investigation, litigation (including,
without limitation, any actions taken by the Agent or any of the Banks to
enforce this Agreement or any of the other Loan Documents) or other proceeding
(including, without limitation, any threatened investigation or proceeding)
relating to the foregoing, and the Borrower shall reimburse the Agent and each
Bank, and each Affiliate thereof and their respective directors, officers,
employees and agents, upon demand for any expenses (including, without
limitation, legal fees) incurred in connection with any such investigation or
proceeding; but excluding any such losses, liabilities, claims, damages or
expenses incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified. The provisions of this Section 10.04 are in addition
to and not in limitation of any expense reimbursement or indemnification
provision contained in any other Loan Documents.
SECTION 10.05. SHARING OF SETOFFS. Each Bank agrees that if it shall, by
exercising any right of setoff or counterclaim or resort to collateral security
or otherwise, receive payment of a proportion of the aggregate amount of
principal and interest owing with respect to the Note held by it which is
greater than the proportion received by any other Bank in respect of the
aggregate amount of all principal and interest owing with respect to the Note
held by such other Bank, the Bank receiving such proportionately greater payment
shall purchase such participations in the Reimbursement Notes held by the other
Banks owing to such other Banks, and such other adjustments shall be made, as
may be required so that all such payments of principal and interest with respect
to the Reimbursement Notes held by the Banks owing to such other Banks shall be
shared by the Banks pro rata; provided that (i) nothing in this Section shall
impair the right of any Bank to exercise any right of setoff or counterclaim it
may have and to apply the amount subject to such exercise to the payment of
indebtedness of the Borrower other than its indebtedness under the Reimbursement
Notes, and (ii) if all or any portion of such payment received by the purchasing
Bank is thereafter recovered from such purchasing Bank, such purchase from each
other Bank shall be rescinded and such other Bank shall repay to the purchasing
Bank the purchase price of such participation to the extent of such recovery
together with an amount equal to such other Bank's ratable share (according to
the proportion of (x) the amount of such other Bank's required repayment to (y)
the total amount so recovered from the purchasing Bank) of any interest or other
amount paid or payable by the purchasing Bank in respect of the total amount so
recovered. The Borrower agrees, to the fullest extent it may effectively do so
under applicable law, that any holder of a participation in a Note, whether or
not acquired pursuant to the foregoing arrangements, may exercise rights of
setoff or counterclaim and other rights with respect to such participation as
fully as if such holder of a participation were a direct creditor of the
Borrower in the amount of such participation.
SECTION 10.06. AMENDMENTS AND WAIVERS.
(a) Any provision of this Agreement, the Reimbursement Notes or any other Loan
Documents may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of the Agent are affected thereby, by the
Agent); provided that no such amendment or waiver shall, unless signed by
all Banks, (i) change the Commitment of any Bank or subject any Bank to any
additional obligation, (ii) change the principal of or rate of interest on
any Loan or any fees (other than fees payable to the Agent) hereunder,
(iii) change the date fixed for any payment of principal of or interest on
any Loan or any fees hereunder, (iv) change the amount of principal,
interest or fees due on any date fixed for the payment thereof, (v) change
the percentage of the Commitments or of the aggregate unpaid principal
amount of the Reimbursement Notes, or the percentage of Banks, which shall
be required for the Banks or any of them to take any action under this
Section or any other provision of this Agreement, (vi) change the manner of
application of any payments made under this Agreement or the Reimbursement
Notes, (vii) release or substitute all or any substantial part of the
collateral (if any) held as security for the Loans, except as expressly
authorized by this Agreement or any of the other Loan Documents, (viii)
release any Guarantee given to support payment of the Loans, (ix) change
the definition of Borrowing Base in a such a way as to make it less
restrictive, (x) change the definition of Required Banks or (xi) change
this Section 10.06.
(b) The Borrower will not solicit, request or negotiate for or with respect to
any proposed waiver or amendment of any of the provisions of this Agreement
unless each Bank shall be informed thereof by the Borrower and shall be
afforded an opportunity of considering the same and shall be supplied by
the Borrower with sufficient information to enable it to make an informed
decision with respect thereto. Executed or true and correct copies of any
waiver or consent effected pursuant to the provisions of this Agreement
shall be delivered by the Borrower to each Bank forthwith following the
date on which the same shall have been executed and delivered by the
requisite percentage of Banks. The Borrower will not, directly or
indirectly, pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, to any Bank (in its
capacity as such) as consideration for or as an inducement to the entering
into by such Bank of any waiver or amendment of any of the terms and
provisions of this Agreement unless such remuneration is concurrently paid,
on the same terms, ratably to all such Banks.
SECTION 10.07. NO MARGIN STOCK COLLATERAL. Each of the Banks represents to the
Agent and each of the other Banks that it in good faith is not, directly or
indirectly (by negative pledge or otherwise), relying upon any Margin Stock as
collateral in the extension or maintenance of the credit provided for in this
Agreement.
SECTION 10.08. SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns;
provided that the Borrower may not assign or otherwise transfer any of its
rights under this Agreement.
(b) Any Bank may at any time sell to one or more Persons (each a "Participant")
participating interests in any Loan owing to such Bank, any Reimbursement
Note held by such Bank, any Commitment hereunder or any other interest of
such Bank hereunder. In the event of any such sale by a Bank of a
participating interest to a Participant, such Bank's obligations under this
Agreement shall remain unchanged, such Bank shall remain solely responsible
for the performance thereof, such Bank shall remain the holder of any such
Reimbursement Note for all purposes under this Agreement, and the Borrower
and the Agent shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this Agreement. In
no event shall a Bank that sells a participation be obligated to the
Participant to take or refrain from taking any action hereunder except that
such Bank may agree that it will not (except as provided below), without
the consent of the Participant, agree to (i) the change of any date fixed
for the payment of principal of or interest on the related Loan or loans,
(ii) the change of the amount of any principal, interest or fees due on any
date fixed for the payment thereof with respect to the related Loan or
loans, (iii) the change of the principal of the related Loan or loans, (iv)
any change in the rate at which either interest is payable thereon or (if
the Participant is entitled to any part thereof) fee is payable hereunder
from the rate at which the Participant is entitled to receive interest or
fee (as the case may be) in respect of such participation, (v) the release
or substitution of all or any substantial part of the collateral (if any)
held as security for the Loans, or (vi) the release of any Guarantee given
to support payment of the Loans. Each Bank selling a participating interest
in any Loan, Reimbursement Note, Commitment or other interest under this
Agreement shall, within 10 Domestic Business Days of such sale, provide the
Borrower and the Agent with written notification stating that such sale has
occurred and identifying the Participant and the interest purchased by such
Participant. The Borrower agrees that each Participant shall be entitled to
the benefits of Article IX with respect to its participation in Loans
outstanding from time to time.
(c) Any Bank may at any time assign to one or more banks or financial
institutions (each an "Assignee") all or a proportionate part of its rights
and obligations under this Agreement, the Reimbursement Notes and the other
Loan Documents, and such Assignee shall assume all such rights and
obligations, pursuant to an Assignment and Acceptance, executed by such
Assignee, such transferor Bank and the Agent (and, in the case of an
Assignee that is not then a Bank, subject to clause (iii) below, by the
Borrower); provided that (i) no interest may be sold by a Bank pursuant to
this paragraph (c) unless the Assignee shall agree to assume ratably
equivalent portions of the transferor Bank's Commitment and risk
participations in the Letters of Credit, (ii) if a Bank is assigning only a
portion of its Commitment and risk participations in the Letters of Credit,
then, the amount of the Commitment being assigned (determined as of the
effective date of the assignment) shall be in an amount not less than
$5,000,000, (iii) no interest may be sold by a Bank pursuant to this
paragraph (c) to any Assignee that is not then a Bank (or an Affiliate of a
Bank) without the prior written consent of the Agent, (iv) except during
the continuance of a Default, no interest may be sold by a Bank pursuant to
this paragraph (c) to any Assignee that is not then a Bank (or an Affiliate
of a Bank) without the consent of the Borrower and the issuer of the
Letters of Credit, which consent shall not be unreasonably withheld, and
(v) a Bank may not have more than 2 Assignees that are not then Banks at
any one time. Upon (A) execution of the Assignment and Acceptance by such
transferor Bank, such Assignee, the Agent and (if applicable) the Borrower,
(B) delivery of an executed copy of the Assignment and Acceptance to the
Borrower and the Agent, (C) payment by such Assignee to such transferor
Bank of an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, and (D) payment of a processing and
recordation fee of $2,500 to the Agent, such Assignee shall for all
purposes be a Bank party to this Agreement and shall have all the rights
and obligations of a Bank under this Agreement to the same extent as if it
were an original party hereto with a Commitment as set forth in such
instrument of assumption, and the transferor Bank shall be released from
its obligations hereunder to a corresponding extent, and no further consent
or action by the Borrower, the Banks or the Agent shall be required. Upon
the consummation of any transfer to an Assignee pursuant to this paragraph
(c), the transferor Bank, the Agent and the Borrower shall make appropriate
arrangements so that, if required, a new Reimbursement Note is issued to
each of such Assignee and such transferor Bank.
(d) Subject to the provisions of Section 10.09, the Borrower authorizes each
Bank to disclose to any Participant, Assignee or other transferee (each a
"Transferee") and any prospective Transferee any and all financial
information in such Bank's possession concerning the Borrower which has
been delivered to such Bank by the Borrower pursuant to this Agreement or
which has been delivered to such Bank by the Borrower in connection with
such Bank's credit evaluation prior to entering into this Agreement.
(e) No Transferee shall be entitled to receive any greater payment under
Section 9.03 than the transferor Bank would have been entitled to receive
with respect to the rights transferred, unless such transfer is made with
the Borrower's prior written consent or by reason of the provisions of
Section 9.02 or 9.03 requiring such Bank to designate a different Lending
Office under certain circumstances or at a time when the circumstances
giving rise to such greater payment did not exist.
(f) Anything in this Section 10.08 to the contrary notwithstanding, any Bank
may assign and pledge all or any portion of the Loans and/or obligations
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of
the Federal Reserve System and any Operating Circular issued by such
Federal Reserve Bank, provided that any payment in respect of such assigned
Loans and/or obligations made by the Borrower to the assigning and/or
pledging Bank in accordance with the terms of this Agreement shall satisfy
the Borrower's obligations hereunder in respect of such assigned Loans
and/or obligations to the extent of such payment. No such assignment shall
release the assigning and/or pledging Bank from its obligations hereunder.
SECTION 10.09. CONFIDENTIALITY. Each Bank agrees to exercise commercially
reasonable efforts to keep any information delivered or made available by the
Borrower to it which is clearly indicated to be confidential information,
confidential from anyone other than persons employed or retained by such Bank
who are or are expected to become engaged in evaluating, approving, structuring
or administering the Loans; provided that nothing herein shall prevent any Bank
from disclosing such information (i) to any other Bank, (ii) upon the order of
any court or administrative agency, (iii) upon the request or demand of any
regulatory agency or authority having jurisdiction over such Bank, (iv) which
has been publicly disclosed, (v) to the extent reasonably required in connection
with any litigation to which the Agent, any Bank or their respective Affiliates
may be a party, (vi) to the extent reasonably required in connection with the
exercise of any remedy hereunder, (vii) to such Bank's legal counsel and
independent auditors and (viii) to any actual or proposed Participant, Assignee
or other Transferee of all or part of its rights hereunder which has agreed in
writing to be bound by the provisions of this Section 10.09; provided that
should disclosure of any such confidential information be required by virtue of
clause (ii) of the immediately preceding sentence, any relevant Bank shall, to
the extent permitted by law, promptly notify the Borrower of same so as to allow
the Borrower to seek a protective order or to take any other appropriate action;
provided, further, that, no Bank shall be required to delay compliance with any
directive to disclose any such information so as to allow the Borrower to effect
any such action.
SECTION 10.10. REPRESENTATION BY BANKS. Each Bank hereby represents that it is a
commercial lender or financial institution which makes loans in the ordinary
course of its business and that it will make its Loans hereunder for its own
account in the ordinary course of such business; provided that, subject to
Section 10.08, the disposition of the Reimbursement Notes held by that Bank
shall at all times be within its exclusive control.
SECTION 10.11. OBLIGATIONS SEVERAL. The obligations of each Bank hereunder are
several, and no Bank shall be responsible for the obligations or commitment of
any other Bank hereunder. Nothing contained in this Agreement and no action
taken by the Banks pursuant hereto shall be deemed to constitute the Banks to be
a partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Bank shall be a separate and
independent debt, and each Bank shall be entitled to protect and enforce its
rights arising out of this Agreement or any other Loan Document and it shall not
be necessary for any other Bank to be joined as an additional party in any
proceeding for such purpose.
SECTION 10.12. GEORGIA LAW. This Agreement and each Note shall be construed in
accordance with and governed by the law of the State of Georgia.
SECTION 10.13. SEVERABILITY. In case any one or more of the provisions contained
in this Agreement, the Reimbursement Notes or any of the other Loan Documents
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein and
therein shall not in any way be affected or impaired thereby and shall be
enforced to the greatest extent permitted by law.
SECTION 10.14. INTEREST. In no event shall the amount of interest, and all
charges, amounts or fees contracted for, charged or collected pursuant to this
Agreement, the Reimbursement Notes or the other Loan Documents and deemed to be
interest under applicable law (collectively, "Interest") exceed the highest rate
of interest allowed by applicable law (the "Maximum Rate"), and in the event any
such payment is inadvertently received by any Bank, then the excess sum (the
"Interest Excess") shall be credited as a payment of principal, unless the
Borrower shall notify such Bank in writing that it elects to have the Interest
Excess returned forthwith. It is the express intent hereof that the Borrower not
pay and the Banks not receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may legally be paid by the Borrower under
applicable law. The right to accelerate maturity of any of the Loans does not
include the right to accelerate any interest that has not otherwise accrued on
the date of such acceleration, and the Agent and the Banks do not intend to
collect any unearned interest in the event of any such acceleration. All monies
paid to the Agent or the Banks hereunder or under any of the Reimbursement Notes
or the other Loan Documents, whether at maturity or by prepayment, shall be
subject to rebate of unearned interest as and to the extent required by
applicable law. By the execution of this Agreement, the Borrower covenants, to
the fullest extent permitted by law, that (i) the credit or return of any
Interest Excess shall constitute the acceptance by the Borrower of such Interest
Excess, and (ii) the Borrower shall not seek or pursue any other remedy, legal
or equitable , against the Agent or any Bank, based in whole or in part upon
contracting for charging or receiving any Interest in excess of the Maximum
Rate. For the purpose of determining whether or not any Interest Excess has been
contracted for, charged or received by the Agent or any Bank, all interest at
any time contracted for, charged or received from the Borrower in connection
with this Agreement, the Reimbursement Notes or any of the other Loan Documents
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread in equal parts throughout the full term of the Commitments.
The Borrower, the Agent and each Bank shall, to the maximum extent permitted
under applicable law, (i) characterize any non-principal payment as an expense,
fee or premium rather than as Interest and (ii) exclude voluntary prepayments
and the effects thereof. The provisions of this Section shall be deemed to be
incorporated into each Note and each of the other Loan Documents (whether or not
any provision of this Section is referred to therein). All such Loan Documents
and communications relating to any Interest owed by the Borrower and all figures
set forth therein shall, for the sole purpose of computing the extent of
obligations hereunder and under the Reimbursement Notes and the other Loan
Documents be automatically recomputed by the Borrower, and by any court
considering the same, to give effect to the adjustments or credits required by
this Section.
SECTION 10.15. INTERPRETATION. No provision of this Agreement or any of the
other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
dictated such provision.
SECTION 10.16. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION. The Borrower (a)
and each of the Banks and the Agent irrevocably waives, to the fullest extent
permitted by law, any and all right to trial by jury in any legal proceeding
arising out of this Agreement, any of the other Loan Documents, or any of the
transactions contemplated hereby or thereby, (b) submits to the nonexclusive
personal jurisdiction in the State of Georgia, the courts thereof and the United
States District Courts sitting therein, for the enforcement of this Agreement,
the Reimbursement Notes and the other Loan Documents, (c) waives any and all
personal rights under the law of any jurisdiction to object on any basis
(including, without limitation, inconvenience of forum) to jurisdiction or venue
within the State of Georgia for the purpose of litigation to enforce this
Agreement, the Reimbursement Notes or the other Loan Documents, and (d) agrees
that service of process may be made upon it in the manner prescribed in Section
10.01 for the giving of notice to the Borrower. Nothing herein contained,
however, shall prevent the Agent from bringing any action or exercising any
rights against any security and against the Borrower personally, and against any
assets of the Borrower, within any other state or jurisdiction.
SECTION 10.17. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
SECTION 10.18. SOURCE OF FUNDS -- ERISA. Each of the Banks hereby severally (and
not jointly) represents to the Borrower that no part of the funds to be used by
such Bank to fund the Loans hereunder from time to time constitutes (i) assets
allocated to any separate account maintained by such Bank in which any employee
benefit plan (or its related trust) has any interest nor (ii) any other assets
of any employee benefit plan. As used in this Section, the terms "employee
benefit plan" and "separate account" shall have the respective meanings assigned
to such terms in Section 3 of ERISA.
SECTION 10.19. ENTIRE AGREEMENT. The Loan Documents and, as between the Borrower
and the Agent, the Agent's Letter Agreement, contain the entire agreement
between the Borrower, the Agent and the Banks relating to the credit
transactions contemplated hereby and supersede entirely any and all prior
written or oral agreements with respect thereto; and the Borrower acknowledges
and agrees that there are no contemporaneous oral agreements with respect to the
subject matter hereof.
SECTION 10.20. MORE RESTRICTIVE AGREEMENTS. Should the Borrower or any
Guarantor, while this Agreement is in effect or any Note remains unpaid, enter
into, refinance or modify the relevant documents pertaining to any existing or
future Debt for money borrowed which constitutes revolving credit, in an amount
exceeding $5,000,000 in aggregate amount to any lender or group of lenders
acting in concert with one another, pursuant to a Loan agreement, credit
agreement, note purchase agreement, indenture or other similar instrument, which
instrument includes covenants, warranties, representations, or defaults or
events of default (or any other type of restriction which would have the
practical effect of any of the foregoing, including, without limitation, any
"put" or mandatory prepayment of such debt) other than those set forth herein or
in any of the other Loan Documents, the Borrower shall promptly so notify the
Agent and, if the Agent, in the discretion of the Agent, shall so request by
written notice to the Borrower, the Borrower, the Agent and the Required Banks
(in their sole discretion and based on their respective independent credit
judgment, and subject to Section 10.06) shall promptly amend this Agreement to
incorporate some or all of such provisions, into this Agreement and, to the
extent necessary and reasonably desirable to the Agent and the Required Banks
(in their sole discretion and based on their respective independent credit
judgment, and subject to Section 8.06), into any of the other Loan Documents,
all at the election of the Agent; provided, however, that any such amendment
shall provide that, upon cancellation or termination of the Loan agreement,
credit agreement, note purchase agreement, indenture or other instrument
pertaining to such other revolving credit (other than by reason of an event of
default thereunder), so long as no Default or Event of Default is in existence,
such amendment also shall terminate and the provisions of the Reimbursement
Agreement affected by such amendment shall revert to the terms thereof as in
effect prior to giving effect to such amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, under seal, by their respective authorized officers as of the day
and year first above written.
GABLES REALTY LIMITED PARTNERSHIP
By: Gables GP, Inc., its sole
general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Vice President
Gables Realty Limited Partnership
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Telecopier number: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation number: ▇▇▇-▇▇▇-▇▇▇▇
WACHOVIA BANK, N.A.,
as Agent and as a Bank
Commitment:
$30,620,179.801
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Title: Vice President
------------------------------
Commitment
Percentage: Lending Office
66.8268%1 Wachovia Bank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Real Estate Finance Division
Telecopier number: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation number: ▇▇▇-▇▇▇-▇▇▇▇
GUARANTY FEDERAL BANK, F.S.B.
Commitment:
$10,000,0001 By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Title: Vice President
---------------------------
Commitment Lending Office
Percentage: Guaranty Federal Bank, F.S.B.
21.8245%1 ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telecopier number: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation number: ▇▇▇-▇▇▇-▇▇▇▇
with a copy of all notices to:
Guaranty Federal Bank, F.S.B.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Real Estate Lending
Division
Telecopier number: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation number: ▇▇▇-▇▇▇-▇▇▇▇
AMSOUTH BANK
Commitment:
$5,200,000 By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇
-------------------------------
Title: Vice President
-------------------------------
Commitment Lending Office
Percentage: AmSouth Bank
11.3487% ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier number: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation number: ▇▇▇-▇▇▇-▇▇▇▇
TOTAL COMMITMENTS:
$45,820,180
EXHIBIT J
GUARANTY
THIS GUARANTY (this "Guaranty") is made as of October 1, 1997, by GABLES GP,
INC., a Texas corporation, GABLES RESIDENTIAL TRUST, a Maryland Trust and
GABLES-TENNESSEE PROPERTIES, a Tennessee general partnership (each a
"Guarantor", and collectively, the "Guarantors", which terms shall include any
subsidiary of Gables Realty Limited Partnership which becomes a Guarantor
pursuant to Section 15 hereof and Section 6.23 of the Reimbursement Agreement
referred to below) in favor of the Agent, for the ratable benefit of the Banks,
under the Reimbursement Agreement referred to below;
W I T N E S S E T H
WHEREAS, GABLES REALTY LIMITED PARTNERSHIP, a Delaware limited partnership (the
"Borrower"), WACHOVIA BANK OF GEORGIA, N.A., as Agent (the "Agent"), and certain
other Banks from time to time party thereto have entered into a certain
Reimbursement Agreement dated as of even date herewith (as it may be amended or
modified further from time to time, the "Reimbursement Agreement"), providing,
subject to the terms and conditions thereof, for extensions of credit to be made
by the Banks to the Borrower which will the benefit the Guarantors;
WHEREAS, it is required by Section 4.01(b) of the Reimbursement Agreement, that
the Guarantors execute and deliver this Guaranty whereby the Guarantors shall
guarantee the payment when due of all principal, interest and other amounts that
shall be at any time payable by the Borrower under the Reimbursement Agreement,
the Reimbursement Notes and the other Loan Documents; and
WHEREAS, in consideration of the financial and other support that the Borrower
has provided, and such financial and other support as the Borrower may in the
future provide, to the Guarantors, whether directly or indirectly, and in order
to induce the Banks and the Agent to enter into the Reimbursement Agreement, the
Guarantors are willing to guarantee the obligations of the Borrower under the
Reimbursement Agreement, the Reimbursement Notes, and the other Loan Documents;
NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
SECTION 1. Definitions. Terms defined in the Reimbursement Agreement and not
otherwise defined herein have, as used herein, the respective meanings provided
for therein.
SECTION 2. Representations and Warranties. The Guarantors incorporate herein by
reference as fully as if set forth herein all of the representations and
warranties pertaining to the Guarantors contained in Article V of the
Reimbursement Agreement (which representations and warranties shall be deemed to
have been renewed by the Guarantors upon each Borrowing under the Reimbursement
Agreement).
SECTION 3. Covenants. The Guarantors covenant that, so long as any Bank has any
Commitment outstanding under the Reimbursement Agreement or any amount payable
under the Reimbursement Agreement or any Reimbursement Note shall remain unpaid,
the Guarantors will fully comply with those covenants set forth in Article VI of
the Reimbursement Agreement pertaining to the Guarantors, and the Guarantors
incorporate herein by reference as fully as if set forth herein all of such
covenants.
SECTION 4. The Guaranty. The Guarantors hereby unconditionally and jointly and
severally guarantee (i) the full and punctual payment (whether at stated
maturity, upon acceleration or otherwise) of the principal of and interest on
each Reimbursement Note issued by the Borrower pursuant to the Reimbursement
Agreement, and the full and punctual payment of all other amounts payable by the
Borrower under the Reimbursement Agreement, including, without limitation, all
Loans and interest thereon, all Letter of Credit Obligations, all compensation
and indemnification amounts and fees payable pursuant to the Reimbursement
Agreement and the Agent's Letter Agreement, and (ii) the timely performance of
all other obligations of the Borrower under the Reimbursement Agreement and the
other Loan Documents (all of the foregoing obligations being referred to
collectively as the "Guaranteed Obligations"). Upon failure by the Borrower to
pay punctually any such amount or perform such obligations, each of the
Guarantors agrees that it shall forthwith on demand pay the amount not so paid
at the place and in the manner specified in the Reimbursement Agreement, the
relevant Reimbursement Note or the relevant Loan Document, as the case may be,
or perform such obligation in accordance with the terms and conditions therefor
specified in the Reimbursement Agreement or the other Loan Documents, and pay
all costs of collection, including reasonable attorneys fees; provided that,
notwithstanding the provisions of O.C.G.A. 13-1-11(a)(2) to the contrary, the
Guarantor shall not be obligated to pay more than the attorneys fees actually
incurred in connection with such collection.
SECTION 5. Guaranty Unconditional. The obligations of the Guarantor hereunder
shall be unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise, waiver or release in
respect of any obligation of the Borrower under the Reimbursement
Agreement, any Reimbursement Note, or any other Loan Document, by
operation of law or otherwise or any obligation of any other guarantor
of any of the Guaranteed Obligations;
(ii) any modification or amendment of or supplement to the Reimbursement
Agreement, any Reimbursement Note, or any other Loan Document;
(iii)any release, nonperfection or invalidity of any direct or indirect
security, if any, for any obligation of the Borrower under the
Reimbursement Agreement, any Reimbursement Note, any Loan Document, or
any obligations of any other guarantor of any of the Guaranteed
Obligations;
(iv) any change in the partnership structure or ownership of the Borrower
or corporate structure or ownership of any other Guarantor or any
other guarantor of any of the Guaranteed Obligations, or any
insolvency, bankruptcy, reorganization or other similar proceeding
affecting the Borrower, or any other Guarantor or any other guarantor
of the Guaranteed Obligations, or its assets or any resulting release
or discharge of any obligation of the Borrower, or any other Guarantor
or any other guarantor of any of the Guaranteed Obligations;
(v) the existence of any claim, setoff or other rights which the
Guarantors may have at any time against the Borrower, any other
Guarantor or any other guarantor of any of the Guaranteed Obligations,
the Agent, any Bank or any other Person, whether in connection
herewith or any unrelated transactions, provided that nothing herein
shall prevent the assertion of any such claim by separate suit or
compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or against the
Borrower, or any other Guarantor or any other guarantor of any of the
Guaranteed Obligations, for any reason related to the Reimbursement
Agreement, any other Loan Document, or any other Guaranty, or any
provision of applicable law or regulation purporting to prohibit the
payment by the Borrower, or any other Guarantor or any other guarantor
of the Guaranteed Obligations, of the principal of or interest on any
Reimbursement Note or any other amount payable by the Borrower under
the Reimbursement Agreement, the Reimbursement Notes, or any other
Loan Document; or
(vii)any other act or omission to act or delay of any kind by the
Borrower, any other Guarantor or any other guarantor of the Guaranteed
Obligations, the Agent, any Bank or any other Person or any other
circumstance whatsoever which might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of the
Guarantor's obligations hereunder.
SECTION 6. Discharge Only Upon Payment In Full; Reinstatement In Certain
Circumstances. The Guarantors' obligations hereunder shall remain in full force
and effect until all Guaranteed Obligations shall have been paid in full and the
Commitments under the Reimbursement Agreement shall have terminated or expired.
If at any time any payment of the principal of or interest on any Reimbursement
Note or any other amount payable by the Borrower under the Reimbursement
Agreement or any other Loan Document is rescinded or must be otherwise restored
or returned upon the insolvency, bankruptcy or reorganization of the Borrower or
otherwise, the Guarantors' obligations hereunder with respect to such payment
shall be reinstated as though such payment had been due but not made at such
time.
SECTION 7. Waiver of Notice by the Guarantors. The Guarantors irrevocably waive
acceptance hereof, presentment, demand, protest and, to the fullest extent
permitted by law, any notice not provided for herein, as well as any requirement
that at any time any action be taken by any Person against the Borrower, any
other Guarantor or any other guarantor of the Guaranteed Obligations, or any
other Person.
SECTION 8. Stay of Acceleration. If acceleration of the time for payment of any
amount payable by the Borrower under the Reimbursement Agreement, any
Reimbursement Note or any other Loan Document is stayed upon the insolvency,
bankruptcy or reorganization of the Borrower, all such amounts otherwise subject
to acceleration under the terms of the Reimbursement Agreement, any
Reimbursement Note or any other Loan Document shall nonetheless be payable by
the Guarantors hereunder forthwith on demand by the Agent made at the request of
the Required Banks.
SECTION 9. Notices. All notices, requests and other communications to any party
hereunder shall be given or made by telecopier or other writing and telecopied
or mailed or delivered to the intended recipient at its address or telecopier
number set forth on the signature pages hereof or such other address or telecopy
number as such party may hereafter specify for such purpose by notice to the
Agent in accordance with the provisions of Section 9.01 of the Reimbursement
Agreement. Except as otherwise provided in this Guaranty, all such
communications shall be deemed to have been duly given when transmitted by
telecopier, or personally delivered or, in the case of a mailed notice, 3
Domestic Business Days after such communication is deposited in the mails with
first class postage prepaid, in each case given or addressed as aforesaid.
SECTION 10. No Waivers. No failure or delay by the Agent or any Banks in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies provided in this Guaranty, the Reimbursement Agreement,
the Reimbursement Notes, and the other Loan Documents shall be cumulative and
not exclusive of any rights or remedies provided by law.
SECTION 11. Successors and Assigns. This Guaranty is for the benefit of the
Agent and the Banks and their respective successors and assigns and in the event
of an assignment of any amounts payable under the Reimbursement Agreement, the
Reimbursement Notes, or the other Loan Documents, the rights hereunder, to the
extent applicable to the indebtedness so assigned, may be transferred with such
indebtedness. This Guaranty may not be assigned by the Guarantors without the
prior written consent of the Agent and the Required Banks, and shall be binding
upon the Guarantors and their respective successors and permitted assigns.
SECTION 12. Changes in Writing. Neither this Guaranty nor any provision hereof
may be changed, waived, discharged or terminated orally, but only in writing
signed by the Guarantors and the Agent, with the consent of the Required Banks.
SECTION 13. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF
THE STATE OF GEORGIA. EACH OF THE GUARANTOR AND THE AGENT HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF GEORGIA AND OF ANY GEORGIA STATE COURT SITTING IN ATLANTA, GEORGIA
AND FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE GUARANTORS IRREVOCABLY
WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH ANY OF THEM
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE GUARANTORS AND THE
Agent HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 14. Taxes, etc. All payments required to be made by the Guarantor
hereunder shall be made without setoff or counterclaim and free and clear of and
without deduction or withholding for or on account of, any present or future
taxes, levies, imposts, duties or other charges of whatsoever nature imposed by
any government or any political or taxing authority pursuant and subject to the
provisions of Section 2.11(c) of the Reimbursement Agreement, the terms of which
are incorporated herein by reference as to the Guarantors as fully as if set
forth herein, and for such purposes, the rights and obligations of the Borrower
under such Section shall devolve to the Guarantors as to payments required to be
made by the Guarantors hereunder.
SECTION 15. Additional Guarantors; Release of Guarantors. Section 6.23 of the
Reimbursement Agreement provides that Significant Subsidiaries must become
Guarantors, and Subsidiaries which are not Significant Subsidiaries may elect to
become Guarantors, by, among other things, executing and delivering to the Agent
a counterpart of this Guaranty. Any Subsidiary which executes and delivers to
the Agent a counterpart of this Guaranty shall be a Guarantor for all purposes
hereunder. Under certain circumstances described in the last sentence of Section
6.11 of the Reimbursement Agreement, Subsidiaries which are not Significant
Subsidiaries may obtain from the Agent a written release from this Guaranty
pursuant to the provisions of such sentence, and upon obtaining such written
release, any such Subsidiary shall no longer be a Guarantor hereunder. Each
other Guarantor consents and agrees to any such release and agrees that no such
release shall affect its obligations hereunder.
SECTION 16. Other Waivers by the Guarantors. The Guarantors hereby expressly
waive, renounce, and agree not to assert, any right, claim or cause of action,
including, without limitation, a claim for reimbursement, subrogation,
indemnification or otherwise, against the Borrower arising out of or by reason
of this Guaranty or the obligations of the Guarantors hereunder, including,
without limitation, the payment or securing or purchasing of any of the
Guaranteed Obligations by the Guarantors. The waiver, renunciation and agreement
contained in the immediately preceding sentence is for the benefit of the Agent
and the Banks and also for the benefit of the Borrower who may assert the
benefits thereof as a third-party beneficiary, and the Guarantors may be
released from such waiver, renunciation and agreement only by the execution and
delivery, by the Agent, the Required Banks and the Borrower, of an instrument
expressly releasing the Guarantors therefrom.
IN WITNESS WHEREOF, the Guarantors have caused this Guaranty to be duly
executed, under seal, by its authorized officer as of the date first above
written.
GABLES GP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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Vice President
Address:
c/o Gables Realty Limited
Partnership
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Confirmation number: ▇▇▇-▇▇▇-▇▇▇▇
GABLES RESIDENTIAL TRUST
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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Title:Vice President
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Address:
c/o Gables Realty Limited
Partnership
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Confirmation number: ▇▇▇-▇▇▇-▇▇▇▇
GABLES-TENNESSEE PROPERTIES
By: Gables Realty Limited
Partnership, a general partner
By: Gables GP, Inc., its
general partner
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Vice President
Address:
c/o Gables Realty Limited
Partnership
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EXHIBIT K
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "Agreement") is entered into as of October 1,
1997 by and between GABLES REALTY LIMITED PARTNERSHIP, a Delaware limited
partnership (the "Principal"), GABLES GP, INC., a Texas corporation and
GABLES-TENNESSEE PROPERTIES, a Tennessee general partnership (collectively, the
"Subsidiary Guarantors" and, together with any subsidiary of the Principal which
becomes a Guarantor pursuant to the last paragraph hereof, Section 15 of the
Guaranty referred to below and Section 6.23 of the Reimbursement Agreement
referred to below). The Principal and each of the Subsidiary Guarantors are
sometimes hereinafter referred to individually as a "Contributing Party" and
collectively as the "Contributing Parties").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Reimbursement Agreement, dated as of even date
herewith among the Principal, the Banks party thereto and Wachovia Bank, N.A.,
as Agent (such agreement, as the same may from time to time be amended,
modified, restated or extended, being hereinafter referred to as the
"Reimbursement Agreement"; capitalized terms used herein shall have the meanings
ascribed thereto in the Reimbursement Agreement), the Banks have agreed to
extend financial accommodations to the Principal;
WHEREAS, as a condition, among others, to the willingness of the Agent and the
Banks to enter into the Reimbursement Agreement, they have required that each
Subsidiary Guarantor, along with Gables Residential Trust ("GBP"), execute and
deliver that certain Guaranty, dated as of even date herewith (such agreement,
as the same may from time to time be amended, modified, restated or extended,
being hereinafter referred to as the "Guaranty"), pursuant to which, among other
things, the Subsidiary Guarantors and GBP have jointly and severally agreed to
guarantee the "Guaranteed Obligations" (as defined in the Guaranty); and
WHEREAS, each Subsidiary Guarantor is a direct or indirect subsidiary of the
Principal and is engaged in businesses related to those of the Principal and
each other Subsidiary Guarantor, and each of the Subsidiary Guarantors will
derive direct or indirect economic benefit from the effectiveness and existence
of the Reimbursement Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants hereinafter
contained, and to induce each Subsidiary Guarantor to enter into the Guaranty,
it is agreed as follows:
To the extent that any Subsidiary Guarantor shall, under the Guaranty, make a
payment (a "Subsidiary Guarantor Payment") of a portion of the Guaranteed
Obligations, then, without limiting its rights of subrogation against the
principal, such Subsidiary Guarantor shall be entitled to contribution and
indemnification from, and be reimbursed by, each of the other Contributing
Parties in an amount, for each such Contributing Party, equal to a fraction of
such Subsidiary Guarantor Payment, the numerator of which fraction is such
Contributing Party's Allocable Amount and the denominator of which is the sum of
the Allocable Amounts of all of the Contributing Parties.
As of any date of determination, the "Allocable Amount" of each Contributing
Party shall be equal to the maximum amount of liability which could be asserted
against such Contributing Party hereunder with respect to the applicable
Subsidiary Guarantor Payment without (i) rendering such Contributing Party
"insolvent" within the meaning of Section 101(31) of the Federal Bankruptcy Code
(the "Bankruptcy Code") or Section 2 of either the Uniform Fraudulent Transfer
Act (the "UFTA") or the Uniform Fraudulent Conveyance Act (the "UFCA"), (ii)
leaving such Contributing Party with unreasonably small capital, within the
meaning of Section 548 of the Bankruptcy Code or Section 4 of the UFTA or
Section 5 of the UFCA, or (iii) leaving such Contributing Party unable to pay
its debts as they become due within the meaning of Section 548 of the Bankruptcy
Code or Section 4 of the UFTA or Section 6 of the UFCA.
This Agreement is intended only to define the relative rights of the
Contributing Parties, and nothing set forth in this Agreement is intended to or
shall impair the obligations of the Subsidiary Guarantors, jointly and
severally, to pay any amounts, as and when the same shall become due and payable
in accordance with the terms of the Guaranty.
The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets in favor of each Subsidiary
Guarantor to which such contribution and indemnification is owing.
This Agreement shall become effective upon its execution by each of the
Contributing Parties and shall continue in full force and effect and may not be
terminated or otherwise revoked by any Contributing Party until all of the
Guaranteed Obligations shall have been indefeasibly paid in full (in lawful
money of the United States of America) and discharged and the Reimbursement
Agreement and financing arrangements evidenced and governed by the Reimbursement
Agreement shall have been terminated. Each Contributing Party agrees that if,
notwithstanding the foregoing, such Contributing Party shall have any right
under applicable law to terminate or revoke this Agreement, and such
Contributing Party shall attempt to exercise such right, then such termination
or revocation shall not be effective until a written notice of such revocation
or termination, specifically referring hereto and signed by such Contributing
Party, is actually received by each of the other Contributing Parties and by the
Agent at its notice address set forth in the Reimbursement Agreement. Such
notice shall not affect the right or power of any Contributing Party to enforce
rights arising prior to receipt of such written notice by each of the other
Contributing Parties and the Agent. If any Bank grants additional loans to the
Principal or takes other action giving rise to additional Guaranteed Obligations
after any Contributing Party has exercised any right to terminate or revoke this
Agreement but before the Agent receives such written notice, the rights of each
other Contributing Party to contribution and indemnification hereunder in
connection with any Subsidiary Guarantor Payments made with respect to such
loans or Guaranteed Obligations shall be the same as if such termination or
revocation had not occurred.
Section 6.23 of the Reimbursement Agreement provides that Significant
Subsidiaries must become Guarantors, and Subsidiaries which are not Significant
Subsidiaries may elect to become Guarantors, by, among other things, executing
and delivering to the Agent a counterpart of the Guaranty and of this
Contribution Agreement. Any Subsidiary which executes and delivers to the Agent
a counterpart of the Guaranty and of this Contribution Agreement shall be a
Subsidiary Guarantor for all purposes hereunder. Under certain circumstances
described in the last sentence of Section 6.11 of the Reimbursement Agreement,
Subsidiaries which are not Significant Subsidiaries may obtain from the Agent a
written release from the Guaranty pursuant to the provisions of such sentence,
and upon obtaining such written release, any such Subsidiary shall no longer be
a Subsidiary Guarantor or Contributing Party hereunder, and such release shall
automatically and without further action constitute a release by each other
Contributing Party of all obligations of such Subsidiary hereunder. Each other
Subsidiary Guarantor consents and agrees to any such release and agrees that no
such release shall affect its obligations hereunder, except as to the Subsidiary
so released.
IN WITNESS WHEREOF, each Contributing Party has executed and delivered this
Agreement, under seal, as of the date first above written.
GABLES REALTY LIMITED PARTNERSHIP
By: Gables GP, Inc., its sole general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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Vice President
Gables Realty Limited Partnership
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Telecopier number: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation number: ▇▇▇-▇▇▇-▇▇▇▇
GABLES GP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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Vice President
Address:
Gables Realty Limited Partnership
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GABLES-TENNESSEE PROPERTIES
By: Gables Realty Limited Partnership, a
general partner
By: Gables GP, Inc., its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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Vice President
Address:
Gables Realty Limited Partnership
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