1
EXHIBIT 10.39
$40,000,000
TERM LOAN CREDIT AGREEMENT
dated as of
November 20, 1996
among
GABLES REALTY LIMITED PARTNERSHIP
The Banks Listed Herein
and
WACHOVIA BANK OF GEORGIA, N.A.,
as Agent
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TABLE OF CONTENTS
TERM LOAN CREDIT AGREEMENT
ARTICLE I
DEFINITIONS................................. 1
SECTION 1.01. Definitions....................................................... 1
SECTION 1.02. Accounting Terms and Determinations...............................19
SECTION 1.03. References........................................................20
SECTION 1.04. Use of Defined Terms..............................................20
SECTION 1.05. Terminology.......................................................20
ARTICLE II
THE CREDITS................................. 20
SECTION 2.01. Commitments to Lend...............................................20
SECTION 2.02. Method of Borrowing...............................................20
SECTION 2.03. Term Loan Notes...................................................22
SECTION 2.04. Maturity of Loans.................................................23
SECTION 2.05. Interest Rates....................................................23
SECTION 2.06. Fees..............................................................27
SECTION 2.07. Optional Prepayments..............................................27
SECTION 2.08. Mandatory Prepayments.............................................28
SECTION 2.09. General Provisions as to Payments.................................29
(i)
3
SECTION 2.10. Computation of Interest and Fees..................................30
ARTICLE III
CONDITIONS TO FUNDING .......................30
SECTION 3.01. Conditions to Funding.............................................30
ARTICLE IV
REPRESENTATIONS AND WARRANTIES...............33
SECTION 4.01. Partnership or Corporate Existence and Power......................33
SECTION 4.02. Partnership or Corporate and Governmental
Authorization; No Contravention............................... 33
SECTION 4.03. Binding Effect....................................................33
SECTION 4.04. Financial and Property Information................................34
SECTION 4.05. No Litigation.....................................................34
SECTION 4.06. Compliance with ERISA.............................................34
SECTION 4.07. Compliance with Laws; Payment of Taxes............................35
SECTION 4.08. Subsidiaries......................................................35
SECTION 4.09. Investment Company Act............................................35
SECTION 4.10. Public Utility Holding Company Act................................35
SECTION 4.11. Ownership of Property.............................................36
SECTION 4.12. No Default........................................................36
SECTION 4.13. Full Disclosure...................................................36
SECTION 4.14. Environmental Matters.............................................36
(ii)
4
SECTION 4.15. Partner Interests and Capital Stock...............................37
SECTION 4.16. Margin Stock......................................................37
SECTION 4.17. Insolvency........................................................37
SECTION 4.18. Insurance.........................................................38
SECTION 4.19. Real Estate Investment Trust......................................38
SECTION 4.20. Debt of Initial Property Partnerships.............................38
ARTICLE V
COVENANTS.................................. 38
SECTION 5.01. Information.......................................................38
SECTION 5.02. Inspection of Property, Books and Records.........................40
SECTION 5.03. Total Secured Debt................................................41
SECTION 5.04. Ratio of Total Debt to Total Assets Value.........................41
SECTION 5.05. Interest Coverage.................................................41
SECTION 5.06. Restricted Payments...............................................41
SECTION 5.07. Loans or Advances.................................................41
SECTION 5.09. Investments.......................................................42
SECTION 5.10. Dissolution.......................................................42
SECTION 5.11. Consolidations, Mergers and Sales of Assets.......................43
SECTION 5.12. Use of Proceeds...................................................44
SECTION 5.13. Compliance with Laws; Payment of Taxes............................44
SECTION 5.14. Insurance.........................................................44
(iii)
5
SECTION 5.15. Change in Fiscal Year.............................................45
SECTION 5.16. Maintenance of Property; Principal Business;
Ownership of Certain Entities.................................. 45
SECTION 5.17. Environmental Notices.............................................45
SECTION 5.18. Environmental Matters.............................................45
SECTION 5.19. Environmental Release.............................................45
SECTION 5.20. Transactions with Affiliates......................................46
SECTION 5.21. Amendment of Other Agreements.....................................46
SECTION 5.22. Qualification as a Real Estate Investment
Trust; General Partner..........................................46
SECTION 5.24. Certain Provisions Regarding Escrowed
Mortgage Properties............................................47
SECTION 5.25. Minimum Payrate...................................................49
SECTION 5.26 Additional Guarantees; Debt of Certain
Entities........................................................49
SECTION 5.27 Maintenance of Existence..........................................49
SECTION 5.28 Ratio of Total Unencumbered Assets Value to
Unsecured Funded Debt...........................................49
ARTICLE VI
DEFAULTS.....................................49
SECTION 6.01. Events of Default.................................................50
SECTION 6.02. Notice of Default.................................................52
ARTICLE VII
(iv)
6
THE AGENT.....................................52
SECTION 7.01. Appointment; Powers and Immunities................................53
SECTION 7.02. Reliance by Agent.................................................53
SECTION 7.03. Defaults..........................................................54
SECTION 7.04. Rights of Agent and its Affiliates as a Bank......................54
SECTION 7.05. Indemnification...................................................54
SECTION 7.06 Consequential Damages.............................................55
SECTION 7.07. Payee of Term Loan Note Treated as Owner..........................55
SECTION 7.08. Nonreliance on Agent and Other Banks..............................55
SECTION 7.09. Failure to Act....................................................56
SECTION 7.10. Resignation or Removal of Agent...................................56
SECTION 7.11 Agent's Right to Replace Non-Qualifying Bank.......................57
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION.............................58
SECTION 8.01. Basis for Determining Interest Rate Inadequate
or Unfair......................................................58
SECTION 8.02. Illegality........................................................58
SECTION 8.03. Increased Cost and Reduced Return.................................59
SECTION 8.04. Base Rate Loans Substituted for Affected Euro-
Dollar Loans....................................................60
SECTION 8.05. Compensation......................................................60
(v)
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ARTICLE IX
MISCELLANEOUS................................ 61
SECTION 9.01. Notices...........................................................61
SECTION 9.02. No Waivers........................................................61
SECTION 9.03. Expenses; Documentary Taxes.......................................62
SECTION 9.04. Indemnification...................................................62
SECTION 9.05. Sharing of Setoffs................................................62
SECTION 9.06. Amendments and Waivers............................................63
SECTION 9.07. No Margin Stock Collateral........................................64
SECTION 9.08. Successors and Assigns............................................64
SECTION 9.09. Confidentiality...................................................66
SECTION 9.10. Representation by Banks...........................................67
SECTION 9.11. Obligations Several...............................................67
SECTION 9.12. Georgia Law.......................................................67
SECTION 9.13. Severability......................................................67
SECTION 9.14. Interest..........................................................68
SECTION 9.15. Interpretation....................................................69
SECTION 9.16. Waiver of Jury Trial; Consent to Jurisdiction.....................69
SECTION 9.17. Counterparts......................................................69
SECTION 9.18. Source of Funds -- ERISA..........................................69
SECTION 9.19. Entire Agreement..................................................69
(vi)
8
SECTION 9.20. More Restrictive Agreements.......................................70
EXHIBIT A Form of Term Loan 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 Form of Officer's Certificate
EXHIBIT I Form of Guaranty
EXHIBIT J Form of Contribution Agreement
EXHIBIT K Form of Non-Encumbrance Agreement
EXHIBIT L Form of Property Certificate
EXHIBIT M Form of Owner's Affidavit
EXHIBIT N Form of Agreement Regarding Environmental Activity
EXHIBIT O Form of Legal Opinion as to Initial/Substituted
Property
Schedule 4.08 Subsidiaries
(vii)
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TERM LOAN CREDIT AGREEMENT
TERM LOAN CREDIT AGREEMENT dated as of November 20, 1996 among
GABLES REALTY LIMITED PARTNERSHIP, the BANKS listed on the signature pages
hereof and WACHOVIA BANK OF GEORGIA, 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 of Georgia, N.A., a national
banking association organized under the laws of the United States of America, in
its capacity as agent for the Banks
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hereunder, and its successors and permitted assigns in such capacity.
"Agent's Letter Agreement" means that certain letter
agreement, dated as of October 11, 1996 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 Term Loan Credit Agreement, together
with all amendments and supplements hereto.
"Agreement Regarding Environmental Activity" means an
Agreement Regarding Environmental Activity in substantially the form of Exhibit
N, to be executed pursuant to Section 5.24(b) with respect to each Escrowed
Mortgage Property by the Borrower or any of the Guarantors which owns such
Escrowed Mortgage Property.
"Applicable Margin" has the meaning set forth in Section
2.05(a).
"Assignee" has the meaning set forth in Section 9.08(c).
"Assignment and Acceptance" means an Assignment and Acceptance
executed in accordance with Section 9.08(c) in the form attached hereto as
Exhibit D.
"Authority" has the meaning set forth in Section 8.02.
"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.
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"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 a Multi-Family
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 under the Syndicated Revolving Credit Agreement as credit
enhancement for such revenue bonds or similar instruments, (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 the
initial advance of the Term Loans or the making of or conversion to Euro-Dollar
Loans or Base Rate Loans with respect to portions of the Term Loans pursuant
hereto. A Borrowing is a "Euro-Dollar Borrowing" if such Loans are Euro-Dollar
Loans and a "Base Rate Borrowing" if such Loans are Base Rate Loans.
"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. ss. 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
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"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, except as
permitted under Section 5.11 of this Agreement; 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
8.02.
"Closing Certificate" has the meaning set forth in Section
3.01(e).
"Closing Date" means November 20, 1996.
"Code" means the Internal Revenue Code of 1986, as amended, or
any successor Federal tax code.
"Commitment" means, with respect to each Bank, the amount set
forth opposite the name of such Bank on the signature pages hereof.
"Compliance Certificate" has the meaning set forth in Section
5.01(c).
"Consolidated Debt" means at any date the Debt of the Borrowe
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
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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 under the Syndicated
Revolving Credit Agreement with respect to letters of credit issued thereunder),
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 J 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.
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"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)
(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
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"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.
"Designated Secured Loan Portfolios" means the portfolios
described below:
Portfolio Total Commitment
--------- ----------------
The Northwestern Mutual
Life Insurance Co. $ 53,000,000
Teachers Insurance
and Annuity
Association $130,689,000
Financial Security
Assurance Inc. $ 19,020,000
Providian Corporation $ 48,365,000
"Designated Secured Loan Portfolios Payrate" means the Payrate
determined by reference only to the Net Operating Income relating to Properties
included in one of the Designated Secured Loan Portfolios.
"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
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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:
(i) unless the Escrowed Mortgages have been released pursuant to
Section 5.24(b) following a Debt Rating of at least BBB or Baa2, the Agent shall
have received and reviewed each of the following, each in form and substance
satisfactory to the Agent, in its reasonable business judgment: (a) an
environmental report; (b) a boundary survey or as-built survey with a site-plan,
as applicable; (c) hazard and builder's risk and liability insurance; (d) an
owner's title insurance policy, without a general survey exception or any
non-customary exclusion, supplemented by a "date down" or "nothing further"
certificate, issued by an insurer acceptable to the Agent, in its reasonable
business judgment; (e) a termite clearance report; (f) a Property Certificate;
(g) a Non-Encumbrance Agreement; (h) an Escrowed Mortgage; (i) an Agreement
Regarding Environmental Activity; (j) UCC-1 financing statements (and UCC-2 real
estate notices for Georgia properties); (k) an Owner's Affidavit; and (l) a
current legal opinion as to the Eligible Properties pursuant to Section 5.24(b)
in form and substance satisfactory to the Agent in its reasonable discretion,
the form attached hereto as Exhibit O being one such satisfactory form; and
statements relating to the physical condition or legal status of such
Multi-Family Property contained in the documents listed above in this paragraph
(i) remain true and accurate in all material respects;
(ii) there is no Mortgage in existence encumbering such Property, other
than an Escrowed Mortgage, such Multi-Family Property is subject to no other
Liens or encumbrances, other than Permitted Encumbrances, and there is no
agreement with any other creditor which would restrict or limit the right of the
Borrower or the Guarantor which owns such Multi-Family Property to execute and
deposit with the Agent an Escrowed Mortgage, or the right of the Agent to record
such Escrowed Mortgage upon the occurrence of an Event of Default;
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(iii) each Multi-Family Property for which the Construction Period
Termination Date has occurred is at least 80% Economically Occupied; and
(iv) the Required Banks have approved such Property as an Eligible
Property.
"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.
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"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.
"Escrowed Mortgage" means a Mortgage in form and substance
satisfactory to the Agent, in its reasonable business judgment, which has been
deposited with the Agent pursuant to Section 5.24(b), and which, effective upon
the occurrence of an Event of Default, conveys to the Agent, for the benefit of
the Banks, a first priority Lien on an Escrowed Mortgage Property, subject to no
Lien or other encumbrance, other than Permitted Encumbrances.
"Escrowed Mortgage Property" means (i) each Initial Property,
unless such Initial Property is replaced by a Substituted Property, and (ii)
each Substituted Property, unless such Substituted Property is replaced by
another Substituted Property, and in either such event it means such replacement
Substituted Property.
"Escrowed Mortgage Property Value" means, as of the date of
determination, with respect to each Escrowed Mortgage Property, the quotient of
(i) the Net Operating Income of such Escrowed Mortgage Property for the 12 month
period ending prior
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to the date of determination divided by (ii) an amount equal to 0.09.
"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 6.01.
"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.
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"Fiscal Year" means any fiscal year of the Borrower.
"Fixed Rate Loan" means any Euro-Dollar Loan or, during the
Treasury Rate Period, all Term Loans outstanding.
"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.
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"Guaranty" means the Guaranty Agreement of even date herewith
in substantially the form of Exhibit I to be executed by the Guarantors,
unconditionally and jointly and severally Guaranteeing payment of the Term
Loans, the Term Loan 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, Pin Oak Green, a
Texas general partnership, Pin Oak Park Apartments, a Texas general partnership;
(ii) any Person which owns a Substituted Property; (iii) any Significant
Subsidiary which becomes a Guarantor pursuant to Section 5.23; and (iv) any
other Subsidiary which elects to become a Guarantor pursuant to Section 5.23; in
each case subject to the provisions of the last sentence of Section 5.11.
"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. ss. 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.
"Initial Properties" means, individually and collectively, as
the context shall require, the Multi-Family Properties owned by the Initial
Property Partnerships, located in Houston, Texas and known as "Pin Oak Green
Apartments" (which is
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owned by Pin Oak Green) and "Pin Oak Park Apartments" (which is owned by Pin Oak
Park Apartments), respectively.
"Initial Property Partnerships" means (i) Pin Oak Green, a
Texas general partnership, and (ii) Pin Oak Park Apartments, a Texas general
partnership.
"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, sixth or twelfth
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
Maturity Date and would otherwise end after the Maturity 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
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(b) no Interest Period which begins before the Maturity Date
and would otherwise end after the Maturity 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.
"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 Term Loan, Base Rate Loan or Euro-Dollar Loan,
and "Loans" means Term Loans, Base Rate Loans or Euro-Dollar Loans, or any or
all of them, as the context shall require.
"Loan Documents" means this Agreement, the Term Loan Notes,
the Guaranty, the Contribution Agreement, the Non-Encumbrance Agreements, the
Property Certificates, the Owner's
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Affidavits, the Escrowed Mortgages, any other document evidencing, relating to
or securing the Term Loans, and any other document or instrument delivered from
time to time in connection with this Agreement, the Term Loan Notes or the Term
Loans, as such documents and instruments may be amended or supplemented from
time to time.
"London Interbank Offered Rate" has the meaning set forth i
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.
"Maturity Date" means November 19, 2001; provided, that in the
event the Agent gives a notice requiring prepayment in full of the Term Loans
following a Change in Control pursuant to Section 2.08(a), the Maturity Date
shall be the date specified in such notice.
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"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).
"Non-Encumbrance Agreement" means a Non-Encumbrance Agreement
in substantially the form of Exhibit K, to be executed pursuant to Section
5.24(b) with respect to each Escrowed Mortgage Property by the Borrower or any
of the Guarantors which owns such Escrowed Mortgage Property.
"Notice of Borrowing" has the meaning set forth in Section
2.02.
"Officer's Certificate" has the meaning set forth in Section
3.01(f).
"Operative Documents" means the Loan Documents, but excluding
each Escrowed Mortgage, Agreement Regarding Environmental Activity, UCC-1
financing statement and UCC-1 real estate notice delivered to the Agent pursuant
to Section 5.24(b), unless and until an Event of Default occurs, whereupon they
shall become Operative Documents.
"Operative Mortgage" means any Escrowed Mortgage, but only
from and after the occurrence of an Event of Default.
"Owner's Affidavit" means an owner's affidavit in
substantially the form of Exhibit M, to be executed pursuant to Section 5.24(b)
with respect to each Escrowed Mortgage Property
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by the Borrower or any of the Guarantors which owns such Escrowed Mortgage
Property.
"Participant" has the meaning set forth in Section 9.08(b).
"Partner Interests" means any partner interests in the
Borrower, whether limited or general.
"Payrate" means the quotient (expressed as a percentage) of:
(i) the sum 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; provided, that if an Eligible
Property satisfies the criteria set forth in both this clause (x) and
in clause (y) below, it shall be included in the calculations only in
clause (y) below, plus (y) 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
(ii) the sum of (x) Funded Debt plus (y) the aggregate face
amount of all outstanding letters of credit (including, but not limited
to, the letters of credit issued pursuant to the Syndicated Revolving
Credit Facility).
"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 (i) Liens incidental to the conduct of its
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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, and (ii) 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.
"Prepayment Premium" has the meaning given it in Section
2.07(d).
"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.
"Property Certificate" means a Property Certificate in
substantially the form of Exhibit L, to be executed pursuant to
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Section 5.24(b) with respect to each Escrowed Mortgage Property by the Borrower
or any of the Guarantors which owns such Escrowed Mortgage Property.
"Rate Differential" has the meaning given it in Section
2.07(d).
"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.
"Redeployment Treasury Rate" has the meaning given in Section
2.07(d).
"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 Borrowing, to the extent that the proceeds thereof 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.
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"Repayment Period" has the meaning given it in Section
2.07(d).
"Required Banks" means at any time Banks having at least 66
2/3% of the aggregate outstanding principal amount of the sum of the Term 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.
"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
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Subsidiary, and (ii) any other entity (other than GBP or the Borrower) the
accounts of which are consolidated with the accounts of the Borrower.
"Substituted Property" means any Eligible Property which is
substituted for an Initial Property or another Substitute Property pursuant to
Section 5.24(b).
"Syndicated Revolving Credit Agreement" means the Credit
Agreement dated as of March 28, 1996 among the Borrower, the Banks parties
thereto and Wachovia, as Agent, as hereafter amended or supplemented from time
to time, pursuant to which the Banks thereunder made available to the Borrower a
revolving credit facility.
"Taxes" has the meaning set forth in Section 2.09(c).
"Term Loan Notes" means the promissory notes of the Borrower,
substantially in the form of Exhibit A, evidencing the obligation of the
Borrower to repay the Term Loans, together with all amendments, consolidations,
modifications, renewals and supplements thereto.
"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
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(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.
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"Transferee" has the meaning set forth in Section 9.08(d).
"Treasury Rate" has the meaning set forth in Section 2.05(d).
"Treasury Rate Election" has the meaning set forth in Section
2.05(d).
"Treasury Rate Period" has the meaning set forth in Section
2.05(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 of Georgia, 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
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33
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 5.01, shall mean the
financial statements referred to in Section 4.04).
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
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SECTION 2.01. Commitments to Lend. Each Bank severally agrees,
on the terms and conditions set forth herein, to make, ratably in proportion to
its respective Commitment, its share of the Term Loans to the Borrower. All of
the Term Loans shall be funded on the same day, and all Borrowings after the
initial advance of the Term Loans shall be Refunding Loans or shall constitute a
conversion of Base Rate Loans and Euro-Dollar Loans in connection with the
exercise of the Treasury Rate Election.
SECTION 2.02. Method of Borrowing. (a) With respect to the
initial advance of the Term Loans and thereafter until the Treasury Rate
Election, 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, 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 Loans comprising such Borrowing are to be
Base Rate Loans or Euro-Dollar Loans.
(iv) in the case of a Euro-Dollar Rate 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.
(c) Not later than 2:00 P.M. (Atlanta, Georgia time) on the
date of the initial advance of the Term Loans, each Bank shall (except as
provided in paragraph (d) of this Section) make
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35
available its ratable share of such advance, in Federal or other funds
immediately available in Atlanta, Georgia, to the Agent at its address
determined pursuant to Section 9.01. Unless the Agent determines that any
applicable condition specified in Article III has not been satisfied, the Agent
will make the funds so received from the Banks available to the Borrower at the
Agent's aforesaid address. Unless the Agent receives notice from a Bank, at the
Agent's address referred to in or specified pursuant to Section 9.01, no later
than 4:00 P.M. (local time at such address) on the Domestic Business Day before
the date of the initial advance of the Term Loans, stating that such Bank will
not make its ratable share of such advance, the Agent shall be entitled to
assume that such Bank will make its ratable share of such advance and, in
reliance on such assumption, the Agent may (but shall not be obligated to) make
available such Bank's ratable share of such advance to the Borrower for the
account of such Bank. If the Agent makes such Bank's ratable share available to
the Borrower as provided above and such Bank does not in fact make its ratable
share of such 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 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 advance together with
interest pursuant to the foregoing, it will have no interest in or rights with
respect to such advance for any purpose hereunder. If the Agent does not
exercise its option to advance funds for the account of such Bank, it shall
forthwith notify the Borrower of such decision.
(d) All Loans other than the initial advance of the Term Loans
shall be made as Refunding Loans.
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(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 Refunding 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. Term Loan Notes. (a) The Term Loans of each Bank
shall be evidenced by a single Term Loan 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 Term Loan Note pursuant to
Section 3.01, the Agent shall deliver such Term Loan Note to such Bank. Each
Bank shall record, and prior to any transfer of its Term Loan Note 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 Term Loan Note shall
constitute rebuttable presumptive evidence of the respective principal amounts
owing and unpaid on such Bank's Term Loan Note; provided
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37
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 Term Loan Notes or the ability of any Bank to assign its
Term Loan Note. Each Bank is hereby irrevocably authorized by the Borrower so to
endorse its Term Loan Note and to attach to and make a part of any Term Loan
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 Term Loan Note, the
Borrower will execute and deliver, in lieu thereof, a replacement Term Loan Note
identical in form and substance to such Term Loan Note and dated as of the date
of such Term Loan 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 Term Loans, together with all accrued but unpaid interest thereon,
if any, shall be due and payable on the Maturity Date.
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, 1.25%; and (ii) from and after the first
Performance Pricing Determination Date, (x) for any Base Rate Loan, (0.25)% (y)
for each Euro-Dollar Loan, the percentage determined on each Performance Pricing
Determination Date by reference to the applicable table set forth below as to
the Applicable Margin for Euro-Dollar Loans and the Debt Rating for the
quarterly or annual period ending immediately prior to such Performance Pricing
Determination Date, and (z) during the Treasury Rate Period, the percentage
determined on each Performance Pricing Determination Date by reference to the
applicable table set forth below as to the Applicable Margin during the Treasury
Rate Period and
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the Debt Rating for the quarterly or annual period ending immediately prior to
such Performance Pricing Determination Date; provided,
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39
that if there is no Debt Rating, the Applicable Margin for Euro-Dollar Loans and
during the Treasury Rate Period shall be based upon Level III of the applicable
table below.
=======================================================================
Level Level Level
I II III
=======================================================================
Debt Rating =>BBB+ BBB- or
=>Baa1 or <=Baa3
Baa3
-----------------------------------------------------------------------
Applicable
Margin for
Euro-Dollar
Loans 0.90 1.10 1.25
=======================================================================
=======================================================================
Level Level Level
I II III
=======================================================================
Debt Rating =>BBB+ BBB- or
=>Baa1 or Baa3
-----------------------------------------------------------------------
Applicable
Margin during
Treasury Rate
Period 1.15 1.15 1.25
=======================================================================
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In determining the amounts to be paid by the Borrower pursuant to
Sections 2.05(c) and (d), 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 as a result of a change in Debt Rating shall be
effective only for 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 3 months, at intervals of 3 months 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
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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) So long as no Default or Event of Default is in existence,
the Borrower shall have the right to elect (the "Treasury Rate Election"), on a
one-time basis, to have all
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interest accrue, from the effective date of the Treasury Rate Election to the
Maturity Date (the "Treasury Rate Period") (but not for any shorter period), on
all (but not less than all) of the aggregate principal amount outstanding from
time to time of the Term Loans at a rate equal to the Treasury Rate plus the
Applicable Margin. The Treasury Rate Election shall be made by written notice
sent by facsimile transmission to the Agent (with a copy to the Banks) 5
Domestic Business Days prior to the effective date of the Treasury Rate
Election. On the effective date of the Treasury Rate Election, all accrued and
unpaid interest on all outstanding Base Rate Loans and Euro-Dollar Loans shall
be paid in full plus, in the event that such effective date is not the last day
of the Interest Period with respect to any Euro-Dollar Loans, such amount as may
be payable with respect to such Euro-Dollar Loans pursuant to Section 8.05(a).
During the Treasury Rate Period, interest shall be payable on the principal
amount outstanding on the Term Loans monthly in arrears on the first Domestic
Business Day of each month, and the option to elect a Euro-Dollar Loan or a Base
Rate Loan shall be terminated. 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.
"Treasury Rate" means a rate per annum equal to the sum of:
(i) the prevailing U.S. Treasury Rate as defined on page 500 of the
Telerate Screen at 11:00 A.M., Atlanta time, on the date on which the Agent
receives the foregoing notice of the Treasury Rate Election, for a period
comparable to the Treasury Rate Period; plus
(ii) any positive or negative amount, as the case may be, obtained by
subtracting (x) the corresponding ask side of the 5 year swap spread as quoted
on page 19901 of the Telerate Screen at 11:00 A.M., Atlanta time, on the Closing
Date from (y) the sum of (1) the corresponding ask side of the swap spread as
quoted on page 19901 of the Telerate Screen at 11:00 A.M., Atlanta time, for the
Treasury Rate Period, on the date on which the Agent receives the foregoing
notice of the Treasury Rate Election, plus
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(2) any additional swap cost, not to exceed 0.005% per annum up to a maximum
additional swap cost of 0.02%, determined by the Agent on the date on which the
Agent receives the foregoing notice of the Treasury Rate Election and notified
to the Borrower, of obtaining an interest rate swap due to a change in
counterparty risk since the Closing Date; provided, however, that if the Agent
determines that a source for determining the Treasury Rate and related swap
spread other than the Telerate Screen would more accurately reflect the cost of
funds, the Agent will so notify the Borrower, or if the Borrower requests that
another source be used because of it has been notified of an additional swap
cost pursuant to clause (ii)(y)(2) above, in either case, the Agent will attempt
to identify a different source, and if a different source has been approved by
the Borrower and each of the Banks, then such different source shall instead be
used in determing the Treasury Rate pursuant to the foregoing.
(e) The Agent shall determine each interest rate applicable to
the Loans hereunder and the Treasury Rate. 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.
(f) 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. 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. 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
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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 8.05, 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 (but with no minimum amount as to the Swing
Loans), 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) During the Treasury Rate Period, the Borrower may, upon at
least 4 Domestic Business Days' notice to the Agent, prepay the Term Loans 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 the Prepayment Premium. Each such optional
prepayment shall be applied to prepay ratably the Term Loans of the several
Banks.
The "Prepayment Premium" shall be an amount determined
pursuant to the following formula:
1.0
PP = PA x RD x RP x ----------------
(RTR x RP) + 1.0
where: PP = Prepayment Premium
PA = Prepayment Amount
RD = Rate Differential
RP = Repayment Period
RTR = Redeployment Treasury Rate
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"Prepayment Amount" means the principal amount of the
prepayment.
"Rate Differential" means the excess, if any, of: (i) the
Treasury Rate; over (ii) the Redeployment Treasury Rate.
"Repayment Period means the quotient of (i) the number of
days remaining from the date of the prepayment to the Maturity Date, divided by
(ii) 365.
"Redeployment Treasury Rate" means the rate per annum equal to
the sum of (i) the prevailing U.S. Treasury Rate as defined on page 500 of the
Telerate Screen at 11:00 A.M., Atlanta time, on the effective date of the
prepayment, for a period comparable to the Repayment Period, plus (ii) the
difference, if any, between (x) the amount determined pursuant to clause (ii) of
the definition of Treasury Rate in connection with the determination of the
Treasury Rate, and (y) the corresponding ask side of the swap spread as quoted
on page 19901 of the Telerate Screen at 11:00 A.M., Atlanta time, for the
Treasury Rate Period, on the effective date of the prepayment; provided,
however, that if a source different than the Telerate Screen was used for
determining the Treasury Rate and the related swap spread in connection with the
Treasury Rate Election pursuant to the proviso at the end of the definition of
Treasury Rate, such different source shall be used in determining the
Redeployment Treasury Rate pursuant to the foregoing.
(e) Upon receipt of a notice of prepayment pursuant to this
Section 2.07, the Agent shall promptly notify each Ba nk 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 2.08. Mandatory Prepayments. (a) In the event of a
Change in Control, the Agent (acting at the direction of the Required Banks) may
require prepayment of the Term Loans (including all outstanding principal and
accrued and unpaid interest and fees) on a date specified in a notice to the
Borrower, which date must be at least 3 Domestic Business Days
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46
following the date of such notice, and (ii) shall constitute the Maturity Date
for all purposes hereunder.
(b) Each such payment or prepayment under paragraph (a) above
shall be applied ratably to the Loans of the Banks outstanding on the date of
prepayment.
SECTION 2.09. 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 9.01. 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, or interest on, the
Base Rate Loans or, during the Treasury Rate Period, the Term 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
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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 Term Loan 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 2.09(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
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Section 2.09(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
Term Loan Notes.
SECTION 2.10. Computation of Interest and Fees. Interest on
Base Rate Loans and interest during the Treasury Rate Period 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
CONDITIONS TO FUNDING
SECTION 3.01. Conditions to Funding. The obligation of each
Bank to make the Term Loans is subject to the satisfaction of the conditions set
forth in this Section 3.01 and receipt by the Agent of the documents described
in paragraphs (a) through (h) below, inclusive (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);
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(b) a duly executed Term Loan 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 form attached hereto as Exhibit B, and (ii) for each Initial
Property, in form and substance satisfactory to the Agent in its
reasonable discretion, the form attached hereto as Exhibit Q being one
such satisfactory form, and (iii) in each case, 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 IV 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 Term Loan Notes
and the Guaranty, and any other matters relevant hereto, all in form
and substance satisfactory to the Agent, including, without limitation,
(i) 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
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of Exhibit H (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 certifying, respectively, that there have been no
amendments since the date of the Syndicated Revolving Credit Agreement
to the Borrower's Certificate of Limited Partnership, the Borrower's
Partnership Agreement, the General Partner's Certificate of
Incorporation and Bylaws, GBP's Declaration of Trust and Bylaws, and
Gables - Tennessee Properties' Partnership Agreement, and certifying
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 Term Loan
Notes and the other Loan Documents to which the Borrower is a party,
(B) on behalf of each Guarantor, the execution, delivery and
performance of the Guaranty and (C) on behalf of the Initial Property
Partnerships, the execution, delivery and performance of each of the
Loan Documents to which it is a party, (ii) for the General Partner, a
certificate of the Secretary of State of Texas as to its valid
existence as a Texas corporation, (iii) certificates of good standing
or valid existence or other equivalent certificate of the Borrower,
the General Partner, GBP, Gables - Tennessee Properties and each of
the Initial Property Partnerships, 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;
(g) a Notice of Borrowing;
(h) the duly executed documents required by Section 5.24(b)
for the Initial Properties;
(i) receipt of the fees required to be paid on the Closing
Date pursuant to Section 2.06;
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(j) the fact that, immediately before and after such
funding, no Default shall have occurred and be continuing; and
(k) the fact that the representations and warranties of
the Borrower contained in Article IV of this Agreement shall be true
on and as of the date of such funding; and
In addition, if the Borrower desires funding of a Fixed Rate Loan on the Closing
Date, the Agent shall have received, the requisite number of days prior to the
Closing Date, a funding indemnification letter satisfactory to it, pursuant to
which (i) the Agent and the Borrower shall have agreed upon the interest rate,
amount of Borrowing and Interest Period for such Fixed Rate Loan, and (ii) the
Borrower shall indemnify the Banks from any loss or expense arising from the
failure to close on the anticipated Closing Date identified in such letter or
the failure to borrow such Fixed Rate Loan on such date.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower and (by incorporation by reference in the
Guaranty) the Guarantors, as expressly stated, each represent and warrant that:
SECTION 4.01. 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 Initial Property Partnerships is a general partnership duly created
and validly existing 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 4.02. Partnership or Corporate and Governmental
Authorization; No Contravention. The execution, delivery and performance by the
Borrower of this Agreement, the Term Loan 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
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53
creation or imposition of any Lien on any asset of the Borrower, any Guarantor
or any other Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a
valid and binding agreement of the Borrower enforceable in accordance with its
terms, and the Term Loan Notes, the Guaranty and the other Loan Documents, when
executed and delivered in accordance with this Agreement (which delivery shall
not be deemed to have occurred with respect to any Escrowed Mortgages unless and
until an Event of Default has occurred), 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 4.04. 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, 1995 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 [JUNE] [SEPTEMBER] 30, 1996, 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, 1995, 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.
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SECTION 4.05. 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 Term Loan Notes, the Guaranty or any of the other
Loan Documents.
SECTION 4.06. 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 4.07. 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
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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 4.08. Subsidiaries. The Borrower has no Subsidiaries
except for those Subsidiaries listed on Schedule 4.08, as supplemented from time
to time, which accurately sets forth each such Subsidiary's complete name and
jurisdiction of incorporation.
SECTION 4.09. 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 4.10. 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 4.11. 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. The Borrower owns 99%
and the General Partner owns 1% of the partnerships interests in each of the
Initial Property Partnerships, in each case free and clear of any Liens.
SECTION 4.12. No Default. Neither the Borrower, the Guarantors
nor any of the Subsidiaries is in default under or
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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 4.13. 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 4.14. 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. ss. 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
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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 4.15. Partner Interests and Capital Stock. All Partner
Interests and Capital Stock, debentures, bonds, 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 4.16. 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.
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SECTION 4.17. Insolvency. After giving effect to the execution
and delivery of the Loan Documents and the making of the Term 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. ss. 18-2-22 or as defined in
ss. 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 4.17, "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 4.18. 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 4.19. Real Estate Investment Trust. GBP is qualified
under the Code as a real estate investment trust.
SECTION 4.20. Debt of Initial Property Partnerships. Neither
of the Initial Property Partnerships has incurred or is obligated on or with
respect to any Debt.
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ARTICLE V
COVENANTS
The Borrower and (by incorporation by reference in the
Guaranty) the Guarantors agree that, so long as any Bank has any amount payable
hereunder or under any Term Loan Note remains unpaid:
SECTION 5.01. 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;
(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;
(c) simultaneously with the delivery of each set of financial
statements referred to in paragraphs (a) and (b)
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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 5.03
through 5.09, inclusive, and Sections 5.25, 5.26 and 5.28, 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 during such time as Wachovia is the only Bank hereunder, in lieu
of the foregoing, it may be furnished a comparable "Compliance
Certificate" pursuant to Section 6.01(c) of the Syndicated Revolving
Credit Agreement;
(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;
(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;
(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
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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) 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; and
(i) 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 5.02. 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
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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 5.03. Total Secured Debt. The amount of Total Secured
Debt will not at any time exceed 40% of Total Assets Value.
SECTION 5.04. Ratio of Total Debt to Total Assets Value. The
ratio of Total Debt to Total Assets Value will not at any time exceed 0.60 to
1.00.
SECTION 5.05. 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 5.06. 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
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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 5.06.
SECTION 5.07. 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 5.07 and minus Investments made
and permitted pursuant to Section 5.09(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 5.08. 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.
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SECTION 5.09. 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 $5,000,000; (B) Investments permitted by clauses (i),
(ii) and (iii) of Section 5.07 or by Section 5.08; (C) Investments in
Significant Subsidiaries; and (D) other Investments not exceeding an aggregate
amount outstanding at any time 8% 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
5.07.
SECTION 5.10. 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 5.11 and except for purchases by GBP of its own Capital
Stock to the extent permitted by Section 5.08, 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 5.11. 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
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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
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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 (A) it is not the owner of an Escrowed Mortgage
Property, and (B) it can demonstrate to the reasonable satisfaction of the Agent
that (1) it was not a Significant Subsidiary immediately prior to such transfer
of assets, and (2) 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 5.12. Use of Proceeds. The proceeds of the Loans may
be used to provide a line of credit for construction and acquisition financing
and for general corporate and partnership purposes of the Borrower and the
Guarantors. No portion of the proceeds of the Loans will be used by the Borrower
or any Guarantor (i) in connection with, whether directly or indirectly, any
tender offer for, or other acquisition of, stock of any corporation with a view
towards obtaining control of such other corporation, unless such tender offer or
other acquisition is to be made on a negotiated basis with the approval of the
Board of Directors of the Person to be acquired or (ii) for any purpose in
violation of any applicable law or regulation.
SECTION 5.13. 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
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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 5.14. 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 5.15. 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 5.16. Maintenance of Property; Principal Business;
Ownership of Certain Entities. 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. The Borrower and/or the General Partner shall own all
of the partnership interests in each of the Initial Property Partnerships, or
partnership interests or common stock in the owner of any Substituted Property
which is not owned by the Borrower or the General Partner, in each case free and
clear of any Liens, so long as such Initial Property or Substituted Property is
an Escrowed Mortgage Property and subject to the provisions of Section 5.24.
SECTION 5.17. Environmental Notices. Promptly upon any
Executive Officer's becoming aware thereof, the Borrower and the
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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 5.18. 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 5.19. 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 5.20. 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 5.21. Amendment of Other Agreements. Within 90 days
after the Closing Date, the Borrower shall amend all other
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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 5.22. Qualification as a Real Estate Investment Trust;
General Partner. 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 5.23. Significant Subsidiaries and Owners of
Substituted Properties to be Guarantors; Election to Become Guarantor. Any
Subsidiary or owner of a Substituted Property (whether existing on the Closing
Date or acquired or created thereafter) (i) must become a Guarantor promptly
upon becoming a Significant Subsidiary or upon substitution of the Substituted
Property, as the case may be, 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 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 3.01.
SECTION 5.24. Certain Provisions Regarding Escrowed Mortgage
Properties. (a) Neither the Borrower, nor any Consolidated Subsidiary, nor any
Initial Property Partnership nor any other owner of an Escrowed Mortgage
Property will create, assume or suffer to exist any Lien on any Escrowed
Mortgage Property, except Permitted Encumbrances.
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(b) Prior to the funding of the Term Loans, the Initial
Property Partnerships shall deliver to Agent the items listed as (a) through
(e), in paragraph (i) of the definition of Eligible Property and shall execute
and deliver to the Agent a Property Certificate, a Non-Encumbrance Agreement and
deposit with the Agent an executed Agreement Regarding Environmental Activity,
UCC-1 financing statement(s) (and UCC-2 real estate notice for Georgia
property), Owner's Affidavit and Escrowed Mortgage, and cause to be delivered to
the Agent a current legal opinion, all as described in the definition of
Eligible Property. Each such Non-Encumbrance Agreement shall be recorded in the
appropriate real estate filing offices. At any time, so long as no Default or
Event of Default has occurred and is continuing or would be caused thereby, and
so long as the Escrowed Mortgage related thereto has not previously been
recorded pursuant hereto, the Borrower may request to replace any Escrowed
Mortgage Property, in order to create a Lien thereon or to sell such Escrowed
Mortgage Property to be replaced, by a replacement Substituted Property,
provided, that, in order to be accepted as an Escrowed Mortgage Property: (i)
such replacement Substituted Property is an Eligible Property; (ii) the owners
of such replacement Substituted Property have become Guarantors pursuant to
Section 5.23 and have delivered to the Agent the items listed as (a) through
(e), in paragraph (i) of the definition of Eligible Property and have executed
and delivered to the Agent a Property Certificate, a Non-Encumbrance Agreement
and deposited with the Agent an executed Agreement Regarding Environmental
Activity, UCC-1 financing statement(s) (and UCC-2 real estate notice for Georgia
property), Owner's Affidavit and Escrowed Mortgage, and caused to be delivered
to the Agent a current legal opinion, all as described in the definition of
Eligible Property; and (iii) after giving effect thereto, the aggregate amount
of the Escrowed Mortgage Property Value of all Escrowed Mortgage Property is not
less than 153.85% of the then aggregate outstanding principal amount of the Term
Loans. In the event of a Debt Rating of at least BBB or Baa2, and provided that
no Default or Event of Default is in existence, then, at the request of the
Borrower, the Agent shall cause the Non-Encumbrance Agreements to be terminated
of record and shall release from escrow all Escrowed Mortgages delivered
pursuant to this Section 5.24(b); provided, that the provisions of paragraph (a)
of this
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Section 5.24 shall survive any such termination and shall continue in full force
and effect as to the Multi-Family Property which constituted Escrowed Mortgage
Property immediately prior to such termination. The Agent shall hold in escrow
each Escrowed Mortgage, Agreement Regarding Environmental Activity, UCC
financing statement and real estate notice, and such Escrowed Mortgage,
Agreement Regarding Environmental Activity, UCC financing statement and real
estate notice, shall not be effective, or deemed to have been delivered, unless
and until an Event of Default occurs, whereupon they shall become Operative
Documents. Upon the occurrence and at any time during the continuance of an
Event of Default, the Agent, acting at the direction of the Required Banks, (A)
may request from the Borrower and the Borrower shall promptly deliver or cause
to be delivered to the Agent an updated legal opinion as to the Eligible
Properties pursuant to Section 5.24(b), in form and substance satisfactory to
the Agent in its reasonable discretion, (the form attached hereto as Exhibit O
being one such satisfactory form), and an executed Owner's Affidavit and shall
also execute and deliver or cause to be executed and delivered any other
customary documents required by a title company in order to issue mortgagee
title insurance for an Escrowed Mortgage which is recorded by the Agent as
provided in the immediately succeeding clause (C), (B) may order mortgagee title
insurance, at the Borrower's sole cost and expense, on each Escrowed Mortgage
recorded by the Agent as provided in the immediately succeeding clause (C), (C)
without any notice, shall be entitled to record any one, or more, or all of the
Escrowed Mortgages in the appropriate real estate filing offices and UCC
financing statements and real estate notices in the appropriate filing offices
(but no such recording shall constitute a waiver of such Event of Default) at
the sole cost and expense of the Borrower, which costs and expenses shall
include, without limitation, recording costs and fees, and intangible taxes or
other documentary taxes, assessments or charges which are demanded by any
Authority by reason of the recordation of the Escrowed Mortgages, financing
statements and real estate notices, and (D) may deliver documents, including,
without limitation, owner's affidavits, to a title insurance company and may
employ such title insurance company at the expense of the Borrower to perform
such functions with respect to the recording of documents and
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issuance of mortgagee title insurance as is customarily performed by title
insurance companies in the state in which the Eligible Mortgage is being
recorded. On or within 10 days after each anniversary of the Closing Date, the
Borrower and each Guarantor which has deposited an Escrowed Mortgage shall
re-execute each such Escrowed Mortgage, Owner's Affidavit, Agreement Regarding
Environmental Activity, financing statement and real estate notice which it has
so deposited. The Borrower and each Guarantor which owns an Eligible Property
agrees that it will not enter into any agreement with any other creditor which
would restrict or limit the right of the Borrower or the Guarantor which owns
such Eligible Property to execute and deposit with the Agent the Escrowed
Mortgage, financing statement and real estate notice pertaining thereto, or the
right of the Agent to record such Escrowed Mortgage, financing statement and
real estate notice upon the occurrence of an Event of Default. In the event that
(1) title insurance premiums and expenses are incurred by the Agent or the Banks
pursuant to the terms of this Section and the Borrower has not promptly paid the
same, or (2) recording costs and fees, and payment of intangible taxes or other
documentary taxes, assessments or charges are demanded by any Authority by
reason of the Escrowed Mortgages, financing statements and real estate notices,
whether such Escrowed Mortgages, financing statements and real estate notices
are or are not recorded, then, the Banks may without further request or
authorization of the Borrower, make such loans to the Borrower as may be
necessary to pay (x) any such required recording costs and fees, intangible
taxes or other documentary taxes, assessments or charges demanded by any
Authority by reason of or as a requirement for the recordation of such Escrowed
Mortgages, financing statements and real estate notices, and (y) such title
insurance premiums and expenses, and such loans shall be secured by the Escrowed
Mortgages so recorded.
SECTION 5.25. Minimum Payrate. The Borrower
shall maintain, at all times, a Payrate of not less than (x) if the Borrower has
obtained at any time a Debt Rating of at least BBB- or Baa3, and thereafter
either such Debt Rating is lowered, then unless and until it again has obtained
a Debt Rating of at least BBB- or Baa3, 15.0% and (y) for any other period,
14.5%.
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SECTION 5.26 Additional Guarantees; Debt of Certain Entities.
Neither the Borrower nor any of the Guarantors shall incur or permit to exist
any Guarantees, other than (i) those in existence on the Closing Date, (ii)
Guarantees of unsecured, non-revolving Debt having a maturity later than the
Termination Date, (iii) Guarantees of the Debt to Teachers Insurance and Annuity
Association included as part of the Designated Secured Loan Portfolios, and (iv)
other Guarantees not exceeding an aggregate principal amount outstanding at any
time of $25,000,000 or more. Neither of the Initial Partnerships, nor any other
owner of any of the Escrowed Mortgage Property, other than the Borrower or the
General Partner, shall incur or be obligated on or with respect to any Debt.
SECTION 5.27 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 5.28 Ratio of Total Unencumbered Assets Value to
Unsecured Funded Debt. The ratio of Total Unencumbered Assets Value to Unsecured
Funded Debt will not at any time be less than 1.50 to 1.00.
ARTICLE VI
DEFAULTS
SECTION 6.01. 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 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
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(b) the Borrower or any Guarantor shall fail to observe or
perform any covenant contained in Sections 5.01(c), 5.02(ii), 5.03
through 5.12, inclusive, Sections 5.22 or Sections 5.24 through 5.28,
inclusive, or in Sections 2.03, 2.10 or 3.01 of any Operative Mortgage;
or
(c) the Borrower or any Guarantor shall fail to observe or
perform any covenant or agreement contained in this Agreement or any
other Operative 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 IV of this Agreement
or in any other Operative Document or in any certificate, financial
statement or other document delivered pursuant to this Agreement or any
other Operative 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 Debt outstanding (other than the Term Loan 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 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
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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, any Guarantor 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, any Guarantor 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, any
Guarantor 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
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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. any Guarantor 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, the Agent shall, if requested by the Required
Banks, by notice to the Borrower declare the Term Loan Notes (together with
accrued interest thereon), and all other amounts payable hereunder and under the
other Loan Documents, to be, and the Term Loan 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
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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 Term Loan 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. Notwithstanding the foregoing,
the Agent shall have available to it all other remedies at law or equity, and
under any of the other Operative Documents, and shall exercise any one or all of
them at the request of the Required Banks.
SECTION 6.02. Notice of Default. The Agent shall give notice
to the Borrower of any Default under Section 6.01(c) promptly upon being
requested to do so by any Bank and shall thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. 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
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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 wilful 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 7.02. 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
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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 7.03. 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 9.06) 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 7.04. 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
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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 7.05. 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
wilful 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 7.06. 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 7.07. Payee of Term Loan Note Treated as Owner. The
Agent may deem and treat the payee of any Term Loan 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 9.08(c)
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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 Term Loan Note shall be conclusive and binding on any subsequent holder,
transferee or assignee of that Term Loan Note or of any Term Loan Note issued in
exchange therefor or replacement thereof.
SECTION 7.08. Nonreliance on Agent and Other BanksNonreliance
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 and (iii) copies of any documents pertaining to an Eligible
Property requested by such Bank and held by the Agent pursuant to Section
5.24(b).
SECTION 7.09. 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
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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 7.05 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 7.10. 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 7.11 Agent's Right to Replace Non-Qualifying Bank. In
the event that any Bank (a "Non-Qualifying Bank")
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shall at the end of any quarter not qualify as a "well-capitalized" bank (within
the meaning provided therefor in 12 CFR ss. 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 Non-Qualifying
Bank and to purchase such Non-Qualifying Bank's outstanding Loans and Term Loan
Notes, 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 9.08(c))
in accordance with their respective percentage of the aggregate outstanding
principal amount of the Loans, 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 Loans, Term Loan Notes, by an Assignment and Acceptance in accordance with
Section 9.08(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
Term Loan Notes, plus all other fees and amounts (including, without limitation,
any compensation claimed by such Non-Qualifying Bank under Section 2.09(c) or
this Section 7.11) due such Non-Qualifying Bank hereunder calculated, in each
case, to the date such Loans, Term Loan Notes and interest are purchased. Upon
such sale or prepayment such Non-Qualifying Bank shall have no
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further obligation to the Borrower hereunder or under any Term Loan Note.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 8.01. Basis for Determining Interest Rate 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 8.02. 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
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(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 8.05(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 8.03. 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:
(x) 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
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(y) 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 Fixed Rate Loans,
its Term Loan Notes or its obligation to make Fixed Rate 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 Term Loan 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
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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 8.03 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 8.04. 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 8.02 or (ii) any Bank
has demanded compensation under Section 8.03, 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 8.05. 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 2.07, 2.08,
6.01, 8.02 or otherwise) of a Euro-Dollar Loan on a
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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 IX
MISCELLANEOUS
SECTION 9.01. 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
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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 VII shall not be effective
until received.
SECTION 9.02. No Waivers. No failure or delay by the Agent or
any Bank in exercising any right, power or privilege hereunder or under any Term
Loan 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 9.03. 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, and
(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 9.03 are in addition to and
not in limitation of any expense reimbursement or indemnification provision
contained in any other Operative Documents.
SECTION 9.04. 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,
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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 wilful misconduct of the Person to be indemnified. The
provisions of this Section 9.04 are in addition to and not in limitation of any
expense reimbursement or indemnification provision contained in any other
Operative Documents.
SECTION 9.05. 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 Term Loan 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
Term Loan Note held by such other Bank, the Bank receiving such proportionately
greater payment shall purchase such participations in the Term Loan 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 Term Loan 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
Term Loan Notes, and (ii) if all
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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 Term Loan 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 9.06. Amendments and Waivers. (a) Any provision of
this Agreement, the Term Loan 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
Term Loan 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 Term Loan 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
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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 9.06.
(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 9.07. 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 9.08. 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
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Loan owing to such Bank, any Term Loan Note held by such Bank 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 Term Loan
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,
Term Loan Note 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 VIII 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 Term Loan Notes and the other
Loan Documents, and such Assignee shall assume all such rights and obligations,
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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) if a
Bank is assigning only a portion of its Term Loans, then, the amount of the Term
Loans being assigned (determined as of the effective date of the assignment)
shall be in an amount not less than $5,000,000, (ii) 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 Agent, which consent shall not
be unreasonably withheld, and (iii) 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, 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
Term Loan Note is issued to each of such Assignee and such transferor Bank.
(d) Subject to the provisions of Section 9.09, 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.
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(e) No Transferee shall be entitled to receive any greater
payment under Section 8.03 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 8.02 or 8.03 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 9.08 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.
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SECTION 9.09. 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 9.09; 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 9.10. 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 9.08, the disposition of the Term Loan Note held by
that Bank shall at all times be within its exclusive control.
SECTION 9.11. 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.
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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 9.12. Georgia Law. This Agreement and each Term Loan
Note shall be construed in accordance with and governed by the law of the State
of Georgia.
SECTION 9.13. Severability. In case any one or more of the
provisions contained in this Agreement, the Term Loan 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 9.14. 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 Term Loan 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 "Excess") shall be credited as a payment of principal, unless
the Borrower shall notify such Bank in writing that it elects to have the 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
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hereunder or under any of the Term Loan 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 Excess shall constitute the acceptance by
the Borrower of such 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 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 Term Loan 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 Term Loan 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 Term Loan 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 9.15. 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.
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SECTION 9.16. 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 Term Loan 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 Term Loan Notes or the other Loan Documents, and (d) agrees that
service of process may be made upon it in the manner prescribed in Section 9.01
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 9.17. 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 9.18. 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 9.19. Entire Agreement. The Loan Documents and, as
between the Borrower and the Agent, the Agent's Letter
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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 9.20. More Restrictive Agreements. Should the Borrower
or any Guarantor, while this Agreement is in effect or any Term Loan 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 9.06) 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 7.06), into any
of the other Loan Documents, all at the election of the Agent.
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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 (SEAL)
By: Gables GP, Inc., its sole
general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Vice President
Gables Realty Limited Partnership
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Telecopier number: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation number: ▇▇▇-▇▇▇-▇▇▇▇
WACHOVIA BANK OF GEORGIA, N.A.,
as Agent and as a Bank (SEAL)
Commitment:
$40,000,000
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------------------
Title: Vice President
Commitment
Percentage: Lending Office
100.00% Wachovia Bank of Georgia, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Real Estate Finance Division
Telecopier number: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation number: ▇▇▇-▇▇▇-▇▇▇▇
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EXHIBIT I
GUARANTY
THIS GUARANTY (this "Guaranty") is made as of November 20, 1996, by GABLES
GP, INC., a Texas corporation, GABLES RESIDENTIAL TRUST, a Maryland Trust,
GABLES-TENNESSEE PROPERTIES, a Tennessee general partnership, PIN OAK GREEN, a
Texas general partnership and PIN OAK PARK APARTMENTS, a Texas general
partnership (each a "Guarantor", and collectively, the "Guarantors", which
terms shall include any subsidiary of Gables Realty Limited Partnership and any
owner of an Escrowed Mortgage Propertywhich becomes a Guarantor pursuant to
Section 15 hereof and Sections 5.23 or 5.24(b) of the Credit Agreement referred
to below) in favor of the Agent, for the ratable benefit of the Banks, under
the Credit 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
Term Loan Credit Agreement dated as of even date herewith (as it may be amended
or modified further from time to time, the "Credit 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 3.01(b) of the Credit 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 Credit Agreement,
the Term Loan 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,
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whether directly or indirectly, and in order to induce the Banks and the Agent
to enter into the Credit Agreement, the Guarantors are willing to guarantee the
obligations of the Borrower under the Credit Agreement, the Term Loan 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 Credit 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 IV of the
Credit Agreement (which representations and warranties shall be deemed to have
been renewed by the Guarantors upon each Borrowing under the Credit Agreement).
SECTION 3. Covenants. The Guarantors covenant that, so long as any Bank
has any Commitment outstanding under the Credit Agreement or any amount payable
under the Credit Agreement or any Term Loan Note shall remain unpaid, the
Guarantors will fully comply with those covenants set forth in Article V of the
Credit 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 Term Loan Note issued by the Borrower pursuant to the Credit
Agreement, and the full and punctual payment of all other amounts payable by
the Borrower under the Credit Agreement, including, without limitation, all
Loans and interest thereon, all compensation and indemnification amounts and
fees payable pursuant to the Credit Agreement and the Agent's Letter Agreement,
and (ii) the timely performance of all other obligations of the Borrower under
the Credit 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
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specified in the Credit Agreement, the relevant Term Loan 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 Credit 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. Section
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 Credit Agreement, any Term Loan 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
Credit Agreement, any Term Loan 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 Credit Agreement, any Term Loan Note, any
Loan Document, or any obligations of any other guarantor of any
of the Guaranteed Obligations;
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(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 Credit 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 Term Loan Note or any
other amount payable by the Borrower under the Credit Agreement, the Term
Loan 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.
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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 Credit Agreement shall have
terminated or expired. If at any time any payment of the principal of or
interest on any Term Loan Note or any other amount payable by the Borrower
under the Credit 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 Credit Agreement,
any Term Loan 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 Credit Agreement, any
Term Loan 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 Credit 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
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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 Credit Agreement, the Term Loan 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
Credit Agreement, the Term Loan 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.
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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 2.09(c) of the
Credit 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
5.23 of the Credit 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. Section 5.24(b)
of the Credit Agreement requires that any owner of an Escrowed Mortgage
Property must become a Guarantor by, among other things, executing and
delivering to the Agent a counterpart of this Guaranty. Any Subsidiary or
owner of an Escrowed Mortgage Propertywhich executes and delivers to the
Agent a counterpart of this Guaranty shall be a Guarantor for all purposes
hereunder.
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Under certain circumstances described in the last sentence of Section 5.11 of
the Credit 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.
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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. (SEAL)
By:
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Vice
President
Address:
c/o Gables Realty Limited
Partnership
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Telecopier number: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation number: ▇▇▇-▇▇▇-▇▇▇▇
GABLES RESIDENTIAL TRUST (SEAL)
By:
------------------------------
Title:
Address:
c/o Gables Realty Limited
Partnership
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Telecopier number: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation number: ▇▇▇-▇▇▇-▇▇▇▇
GABLES-TENNESSEE PROPERTIES (SEAL)
By: Gables Realty Limited
Partnership, a general partner
By: Gables GP, Inc., its
general partner (SEAL)
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PIN OAK PARTNERSHIP (SEAL)
By: Gables Realty Limited
Partnership, a general partner
By: Gables GP, Inc., its
general partner(SEAL)
By:
--------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.,
Vice President
Address:
c/o Gables Realty Limited
Partnership
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Telecopier number: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation number: ▇▇▇-▇▇▇-▇▇▇▇
PIN OAK PARK APARTMENTS (SEAL)
By: Gables Realty Limited
Partnership, a general partner
By: Gables GP, Inc., its
general partner (SEAL)
By:
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.,
Vice President
Address:
c/o Gables Realty Limited
Partnership
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Telecopier number: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation number: ▇▇▇-▇▇▇-▇▇▇▇
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EXHIBIT J
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "Agreement") is entered into as of
November 20, 1996 by and between GABLES REALTY LIMITED PARTNERSHIP, a
Delaware limited partnership (the "Principal"), GABLES GP, INC., a Texas
corporation, GABLES-TENNESSEE PROPERTIES, a Tennessee general partnership,
PIN OAK GREEN, a Texas general partnership and PIN OAK PARK APARTMENTS, a
Texas general partnership (collectively, the "Guarantors" and, together
with any subsidiary of the Principal and any owner of an Escrowed Mortgage
Propertywhich becomes a Guarantor pursuant to the last paragraph hereof,
Section 15 of the Guaranty referred to below and Sections 5.23 and 5.24(b)
of the Credit Agreement referred to below). The Principal and each of the
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 Term Loan Credit Agreement, dated
as of even date herewith among the Principal, the Banks party thereto and
Wachovia Bank of Georgia, 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 "Credit Agreement"; capitalized terms used
herein shall have the meanings ascribed thereto in the Credit 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 Credit Agreement, they have required
that each 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 Guarantors and GBP have jointly
and severally agreed to guarantee the "Guaranteed Obligations" (as defined
in the Guaranty); and
WHEREAS, each Guarantor is a direct or indirect subsidiary or
otherwise affiliated with of the Principal and is
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engaged in businesses related to those of the Principal and each other
Guarantor, and each of the Guarantors will derive direct or indirect economic
benefit from the effectiveness and existence of the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, and to induce each Guarantor to enter into the
Guaranty, it is agreed as follows:
To the extent that any Guarantor shall, under the Guaranty, make a
payment (a "Guarantor Payment") of a portion of the Guaranteed
Obligations, then, without limiting its rights of subrogation against the
principal, such 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 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 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 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.
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The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets in favor of each
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
Credit Agreement and financing arrangements evidenced and governed by the
Credit 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 Credit 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 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 5.23 of the Credit 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. Section 5.24(b) of the
Credit Agreement requires that any owner of an Escrowed Mortgage
Property must become a Guarantor by, among other things, executing and
delivering to the Agent a counterpart of this Guaranty. Any Subsidiary or
owner of an Escrowed Mortgage Property which executes and delivers to the
Agent a counterpart of the Guaranty and of this Contribution Agreement
shall be a Guarantor for all purposes hereunder. Under certain
circumstances described in the last sentence of Section 5.11 of the Credit
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 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 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.
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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 (SEAL)
By: Gables GP, Inc., its sole
general partner
By:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Vice President
Gables Realty Limited Partnership
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Telecopier number: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation number: ▇▇▇-▇▇▇-▇▇▇▇
GABLES GP, INC. (SEAL)
By:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Vice
President
Address:
Gables Realty Limited Partnership
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Telecopier number: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation number: ▇▇▇-▇▇▇-▇▇▇▇
155
116
GABLES-TENNESSEE PROPERTIES
By: Gables Realty Limited
Partnership, a general partner
By Gables GP, Inc., its general
partner (SEAL)
By:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Vice
President
Address:
Gables Realty Limited Partnership
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Telecopier number: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation number: ▇▇▇-▇▇▇-▇▇▇▇
PIN OAK PARTNERSHIP (SEAL)
By: Gables Realty Limited
Partnership, a general partner
By: Gables GP, Inc., its
general partner (SEAL)
By:
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.,
Vice President
Address:
c/o Gables Realty Limited
Partnership
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Telecopier number: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation number: ▇▇▇-▇▇▇-▇▇▇▇
156
117
PIN OAK PARK APARTMENTS (SEAL)
By: Gables Realty Limited
Partnership, a general partner
By: Gables GP, Inc., its
general partner(SEAL)
By:
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.,
Vice President
Address:
c/o Gables Realty Limited
Partnership
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Telecopier number: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation number: ▇▇▇-▇▇▇-▇▇▇▇
157