SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): June 30, 1995
Merry Land & Investment Company, Inc.
(Exact name of registrant as specified in its charter)
Georgia 001-11081
(State or other jurisdiction of incorporation) (Commission File Number)
58-0961876
(I.R.S. Employer I.D. Number)
624 Ellis Street, Augusta, Georgia 30901
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 706/722-6756
____________________________________________________________
(Former name or former address, if changed since last report)
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Filed: July 14, 1995
<PAGE>
ITEM 5. OTHER EVENTS. Merry Land & Investment Company, Inc. (the
"Company") has completed the acquisition of one of the limited partnerships
described in its Form 8-K filed on June 19, 1995 as amended by its Form
8-K/A filed on June 21, 1995.
The partnership acquired and the related apartment property is
described as follows:
<TABLE>
<CAPTION>
Acquisition
Name of Cost Debt Assumed
Name of Partnership Sellers Market Date Acquired (In Thousands) (In Occupancy
Apartments <F1> <F1> Location in 1995 Units <F2> Thousands) <F3>
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jefferson at Jefferson at Cedar Carmil Capital Dallas, June 30 380 $24,000 None 94%
Cedar Springs Springs, L.P. Corporation Texas
JPI Investment
Company, L.P.
- ---------------------------------------------------------------------------------------------------------------------------------
<FN>
<F1> Neither seller nor the partnership are related to or affiliated with the Company.
<F2> Includes acquisition costs incurred to date.
<F3> Physical occupancy at July 6, 1995.
</TABLE>
The acquisition was paid for with cash. The sellers were a Texas
corporation and a Texas limited partnership unrelated to the Company. The
Company formed two wholly owned subsidiary corporations which acquired the
partnership interests of the sellers and will continue to operate the
property through the partnership.
The acquisition was funded with a portion of the proceeds of the
Company's recent $120 million senior note offering made pursuant to
Registration Statement filed on Form S-3, Registration Number 33-57453. No
encumbrances were placed against the acquired property in connection with
its acquisition.
The acquisition was made only after a detailed review of the
property's physical condition, anticipated capital expenditures, occupancy
rates, expenses including utility rates, maintenance, grounds, property
taxes and insurance all of which were compared to competitive properties.
The Company is not aware of any factors which would cause the reported
financial information not to be necessarily indicative of future operating
results.
The Company has also entered into a $160 million unsecured, revolving,
syndicated credit agreement (the "Credit Agreement") with a group of
lenders led by the Company's primary commercial bank with an effective date
of June 30, 1995. The Credit Agreement provides the Company with two credit
tranches, one of $100 million ("Facility A") and the other of $60 million
("Facility B") for its general corporate purposes. Facility A loans will
bear interest (at the Company's option) at either the Prime Rate or LIBOR
plus 65 basis points. Facility B loans will bear interest (at the Company's
option) at either the Prime Rate or LIBOR plus 165 basis points. The Credit
Agreement contains certain covenants consistent with the Company's other
credit agreements, is for a term of 364 days and no amounts are currently
outstanding thereunder.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. Audited financial statements
and pro forma financial statements for the apartment property acquired have
previously been filed on Form 8-K/A filed on June 21, 1995. The Credit
Agreement between the Company and the Lenders for the $160 million credit
facility is attached hereto as Exhibit 10.
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Signature Blocks on Following Page
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
MERRY LAND & INVESTMENT COMPANY,
INC.
(Registrant)
By: /S/
- --------------------------------
Ronald J. Benton
As Its Vice President
<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of the 30th day of June, 1995
by and among MERRY LAND & INVESTMENT COMPANY, INC., a Georgia
corporation (the "Borrower"), the Lenders who are or may become a
party to this Agreement (each, a "Lender" and collectively, the
"Lenders") and FIRST UNION NATIONAL BANK OF GEORGIA, a national
banking association, in its capacity as agent for the Lenders.
Statement of Purpose
--------------------
The Borrower has requested and the Lenders have agreed to
extend a revolving credit facility to the Borrower on the terms
and conditions of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the
parties hereto, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
-----------
SECTION 1.1. Definitions. The following terms when used in
this Agreement shall have the meanings assigned to them below:
"Affiliate" of any Person means any other Person that,
directly or indirectly, controls, is controlled by or is under
common control with such Person (excluding any trustee under, or
any committee with responsibility for administering, any Plan).
A Person shall be deemed to be "controlled by" any other Person
if such other Person possesses, directly or indirectly, power (a)
to vote 5% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or
managing general partners or (b) to direct or cause the direction
of the management and policies of such Person whether by contract
or otherwise.
"Agent" means First Union National Bank of Georgia, in its
capacity as agent for the Lenders hereunder and any successor
agent appointed pursuant to Section 10.9 hereof.
"Agent's Office" means the office of the Agent specified in
or determined in accordance with the provisions of Section
11.1(c).
"Agreement" means this Credit Agreement, as amended or
supplemented from time to time.
"Applicable Margin" means (a) zero percent (0%) in the case
of Prime Rate Loans, (b) sixty-five one hundredths percent (.65%)
in the case of LIBOR Rate Loans under the Facility A Commitment
and (c) one and sixty-five one hundredths percent (1.65%) in the
case of LIBOR Rate Loans under the Facility B Commitment.
"Asset Backed Security" means any security that entitles the
holder thereof to receive all or a specified portion of, or to
receive payments based upon payments received on, the proceeds of
financial assets (including without limitation mortgage loans),
either fixed or revolving, that by their terms convert into cash
within a finite time period.
"Assignment and Acceptance" shall have the meaning assigned
thereto in Section 11.11.
"Borrowed Money" means any Indebtedness for or in respect of
money borrowed or raised (other than through the issuance of
shares of capital stock) (whether or not for cash consideration),
by whatever means (including acceptances, deposits and financial
leases), or for the deferred purchase price of assets or services
(other than for assets or services supplied to any Person in the
ordinary course of business).
"Borrower" means Merry Land & Investment Company, Inc., a
Georgia corporation, and its permitted successors and assigns.
"Borrower Earnings" means the net earnings of the Borrower,
determined in accordance with generally accepted accounting
principles, and in any event (a) after Interest Expense and taxes
but before depreciation or amortization and (b) including any
gains and subtracting any losses arising from any sale, exchange
or other disposition of capital assets, or from the acquisition
or retirement or sale of securities of the Borrower, and measured
over the period of time from September 30, 1993 through the most
recent full fiscal quarter of the Borrower as of the date the
amount of Borrower Earnings is being determined.
"Borrower Total Assets" means the total amount of assets
which would be included on a consolidated balance sheet of the
Borrower and its Subsidiaries under generally accepted
accounting principles (less applicable reserves and other
properly deductible items), adjusted to exclude the effect of any
write-up in the book value of any asset since December 31, 1994,
after deducting therefrom: (a) all short-term liabilities and
liability items, except for indebtedness payable by its terms
more than one year from the date of incurrence thereof (or
renewable or extendible at the option of the obligor for a period
ending more than one year after such date of incurrence), (b)
goodwill, (c) licenses, patents, trademarks, trade names,
copyrights, leasehold improvements not recoverable at the
expiration of a lease, and deferred charges (including, but not
limited to, unamortized debt discount and expense, organization
expenses, experimental and development expenses) and (d) all
other items which are properly classified as intangibles under
generally accepted accounting principles. In determining
Borrower Total Assets, inventories and securities shall be taken
into account on the basis of cost or current market value,
whichever is lower.
"Business Day" means (a) for all purposes other than as set
forth in clause (b) below, any day, other than a Saturday, Sunday
or legal holiday, on which banks in Georgia, North Carolina and
New York are open for the conduct of their commercial banking
business, and (b) with respect to all notices and determinations
in connection with, and payments of principal and interest on,
any LIBOR Rate Loan, any day that is a Business Day described in
clause (a) and that is also a day for trading by and between
banks in U.S. Dollar deposits in the London interbank market.
"Capital Lease" means any leasing or similar arrangement
that would be classified as a capital lease under generally
accepted accounting principles, including without limitation any
Sale-Leaseback Transaction.
"Capital Lease Obligation" means the total amounts payable
under any Capital Lease.
"Change in Control" means (a) the individuals who are
currently directors and executive officers of the Borrower cease
to own, in the aggregate, the lesser of (I) 10% or (ii) 3,000,000
shares of the common stock of the Borrower, (b) any one Person,
together with such Person's Affiliates, beneficially owns shares
of the Borrower's common stock which amount to 10% or more of
Borrower's common stock on a fully diluted basis (assuming the
full exercise or conversion of all convertible securities,
warrants and all other options or agreements providing for the
purchase or subscription of the Borrower's common stock) (other
than Persons currently owning such common stock) or (c) the
membership of the Board of Directors of the Borrower changes
(whether by addition of new members or replacement of existing
members) by more than two people, in the aggregate, in any three
consecutive years.
"Closing Date" means the date of this Agreement or such
later date on which the Agent shall have determined that all
conditions precedent set forth in Article IV of this Agreement
have been satisfied in full or waived.
"Code" means the Internal Revenue Code of 1986, and the
rules and regulations thereunder, each as amended or supplemented
from time to time.
"Commission" means the Securities and Exchange Commission as
from time to time constituted, created under the Exchange Act,
or, if at any time after the execution of this Agreement such
Commission is not existing and performing the duties now assigned
to it under the Exchange Act, then the Person performing such
duties at such time.
"Commitment Percentage" means, with respect to any Lender,
the Commitment Percentage of Facility A Loans or Facility B
Loans, as applicable, as set forth on Schedule I hereto as such
Percentages may be modified from time to time pursuant to Section
11.11.
"Contingent Liability" means any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise
becomes or is contingently liable (by direct or indirect
agreement, contingent or otherwise, or by operation of law
(including without limitation by means of joint venture or
partnership arrangements), to provide funds for payment, to
supply funds to, or otherwise to invest in, a debtor, or
otherwise to assure a creditor against loss) upon or for (a) the
indebtedness, obligation or any other liability of any other
Person (other than by endorsements of instruments in the ordinary
course of collection), (b) the payment of dividends or other
distributions upon the shares or other securities of any other
Person or (c) any undertaking of any other Person (whether by
agreement to purchase any obligations, stocks, assets, goods or
services, or to supply or advance any funds, assets, goods or
services, or otherwise). For the purposes of all computations
made under this Agreement, a Contingent Liability with respect to
any Indebtedness shall be deemed to be Indebtedness equal to the
principal amount of such Indebtedness, and a Contingent Liability
in respect of any other obligation or liability or any dividend
shall be deemed to be Indebtedness equal to the maximum aggregate
amount of such obligation, liability or dividend.
"Default" means any of the events specified in Section 9.1
which with the passage of time, the giving of notice or any other
condition, would constitute an Event of Default.
"Development Activity" means (a) the development and
construction of multiple apartment complexes by the Borrower or
any of its Subsidiaries, (b) the financing by the Borrower or any
of its Subsidiaries of any such development or construction or
(c) the incurrence by the Borrower or any of its Subsidiaries of
any Contingent Liabilities in connection with such development or
construction.
"Development Phase" means the time period, commencing with
the date on which the development and construction of any
multiple apartment complex on any real property owned by the
Borrower and its Subsidiaries (the "Project") commences and
continuing through and including the date upon which the Agent
receives the following items: (a) copies of all certificates of
occupancy and permits necessary or desirable to operate the
Project, (b) copies of certificates of final completion of the
Project from the Project architects and engineers and the
inspecting architects and engineers certifying that the Project
has been substantially completed in accordance with the contracts
and specifications, (c) a copy of the final certified as-built
survey of the Project, (d) a copy of the original permanent
hazard (flood) insurance policy for the Project, (e) verification
of physical occupancy of not less than 90% of the Project units
by residents qualified by the Borrower, (f) copies of the final
contractors' and developers' affidavits certifying complete and
final payment of all persons having provided any labor, materials
or services to the Project, (g) a copy of the endorsement to the
title insurance policy insuring the Project free of any Liens and
(h) a copy of the notice and certification from the developer
that the Project has been completed to its satisfaction.
"Dollars" or "$" means the lawful currency of the United
States of America.
"Eligible Assignee" means, with respect to any assignment of
the rights, interest and obligations of a Lender hereunder, a
Person that is at the time of such assignment (a) a commercial
bank organized under the laws of the United States, or any State
thereof, having total capital and surplus in excess of
$500,000,000, (b) a finance company, insurance company or other
financial institution acceptable to the Agent which in the
ordinary course of business extends credit of the type extended
hereunder and that has total assets in excess of $200,000,000,
(c) already a Lender hereunder (whether as an original party to
this Agreement or as the assignee of another Lender), (d) the
successor (whether by transfer of assets, merger or otherwise) to
all or substantially all of the commercial lending business of
the assigning Lender, or (e) any other Person that has been
approved in writing as an Eligible Assignee by the Agent and the
Borrower.
"Encumbrance" means any mortgage, charge, lien, pledge,
hypothecation, assignment, deposit arrangement (excluding normal
banking transactions), security interest, sale pursuant to any
repurchase agreement, any Capital Lease (as to the lessee
thereunder) or other encumbrance of any nature whatsoever.
"Environment" means any ambient air, workplace air, indoor
air, surface water, drinking water, groundwater, land surface
strata, river sediment, plant or animal life, natural resources,
workplace, and real property and the physical buildings,
structures and fixtures thereon, including without limitation
sewer, septic and waste treatment, storage or disposal systems.
"Environmental Condition" means the release, spilling,
leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping or disposing into the
Environment of any Hazardous Material or the presence of any
Hazardous Material at, in or on the Environment (whether or not
upon the real property which is owned or leased by the Borrower
or its Subsidiaries or other property of the Borrower or its
Subsidiaries and whether or not such pollution constituted at the
time thereof a violation of any Environmental Laws) as a result
of which the Borrower may become liable to any Person, may become
subject to a requirement for investigation or remediation or by
reason of which the real property which is owned or leased by the
Borrower or any of its assets reasonably may suffer or be
subjected to any lien.
"Environmental Laws" means all applicable federal, state,
local and foreign laws, statutes, ordinances, regulations,
standards, requirements, interpretations, judgments, rulings,
orders, permits, authorizations, licenses, variances or waivers
relating to health, safety, industrial hygiene, Hazardous
Material or the Environment or imposing liability or standards of
conduct concerning any Hazardous Material.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor statute, and
the regulations promulgated and the rulings issued thereunder.
"ERISA Affiliate" means each trade or business (whether or
not incorporated) which, together with the Borrower, is treated
as a single employer under Title IV of ERISA or Section 414 of
the Code.
"Event of Default" means any of the events specified in
Section 9.1; PROVIDED, that any requirement for passage of time,
giving of notice or any other condition has been satisfied.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor statute, and the
regulations promulgated and the rulings issued thereunder.
"Executive Officer" means the chief executive officer, chief
financial officer, secretary or any director of the Borrower.
"Facility A Commitment" means the obligation of the Facility
A Lenders to make Facility A Loans in an aggregate principal
amount not to exceed One Hundred Million Dollars ($100,000,000),
as such amount may be reduced from time to time pursuant to
Section 2.4.
"Facility A Lender" means each Facility A Lender shown on
Schedule I to this Agreement and each Person that hereafter
becomes a party to this Agreement as a Facility A Lender pursuant
to Section 11.11.
"Facility A Loans" means the Loans made by the Facility A
Lenders under the Facility A Commitment.
"Facility A Notes" means the separate Facility A Notes made
by the Borrower payable to the order of each of the Facility A
Lenders, substantially in the form of Exhibit A hereto,
evidencing the Facility A Loans, and any amendments,
modifications and supplements thereto, any substitutes therefor,
and any replacements, restatements, renewals or extensions
thereof, in whole or in part.
"Facility B Commitment" means the obligation of the Facility
B Lenders to make Facility B Loans in an aggregate principal
amount not to exceed Sixty Million Dollars ($60,000,000), as such
amount may be reduced from time to time pursuant to Section 2.4.
"Facility B Lender" means each Facility B Lender shown on
Schedule I to this Agreement and each Person that hereafter
becomes a party to this Agreement as a Facility B Lender pursuant
to Section 11.11.
"Facility B Loans" means the Loans made by the Facility B
Lenders under the Facility B Commitment.
"Facility B Notes" means the separate Facility B Notes made
by the Borrower payable to the order of each of the Facility B
Lenders, substantially in the form of Exhibit B hereto,
evidencing the Facility B Loans, and any amendments,
modifications and supplements thereto, any substitutes therefor,
and any replacements, restatements, renewals or extensions
thereof, in whole or in part.
"Hazardous Material" means any flammable, explosive or
radioactive material, hazardous or toxic waste, hazardous, toxic
or deleterious substance or other such material and any other
substance or material defined or identified as a hazardous, toxic
or deleterious substance, material or waste pursuant to any
Environmental Law, including without limitation:
(I) Those substances included within the
definition of "hazardous substances," "hazardous materials,"
"toxic substances" or "solid waste" in the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as
amended, the Resource Conservation and Recovery Act of 1976, as
amended, and the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801 et seq., as amended, and in the regulations
promulgated thereunder;
(ii) Those substances listed in the United States
Department of Transportation Table (49 CFR 172.101 and all
amendments thereto) or by the Environmental Protection Agency (or
any successor agency) as hazardous substances (40 CFR Part 302
and all amendments thereto);
(iii) Such other substances, materials and wastes
which are or become regulated under applicable local, state or
federal law or regulations; and
(iv) Any material, waste or substance which is (A)
petroleum or any fraction thereof, (B) asbestos, (c)
polychlorinated biphenyls or (D) designated as a "hazardous
substance" pursuant to Section 311 of the Clean Water Act, 33
U.S.C. Sections 1251 et seq. (33 U.S.C. Section 1321 (A) (14)) or
listed pursuant to Section 307 of the Clean Water Act (33 U.S.C.
Section 1317), all as amended.
"Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under interest rate swap agreements,
interest rate cap, interest rate floor and interest rate collar
agreements, and all other agreements or arrangements entered into
by such Person to protect such Person against fluctuations in
interest rates or currency exchange rates.
"Indebtedness" means, with respect to any Person and without
duplication, (a) all obligations of such Person for borrowed
money and all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (b) all
obligations, contingent or otherwise, relative to the face amount
of all letters of credit, whether or not drawn, and banker's
acceptances issued for the account of such Person; (c) Capital
Lease Obligations; (d) whether or not so included as liabilities
in accordance with generally accepted accounting principles, net
liabilities of such Person under all Hedging Obligations; (e)
whether or not so included as liabilities in accordance with
generally accepted accounting principles, all obligations of such
Person to pay the deferred purchase price of property or
services, and indebtedness (excluding prepaid interest thereon)
secured by an Encumbrance on property owned or being purchased by
such Person (including indebtedness arising under conditional
sales or other title retention agreements), whether or not such
indebtedness shall have been assumed by such Person or is limited
in recourse; (f) the amount of the repurchase price in any
repurchase transaction in which the Borrower acts as seller; (g)
all Underfunded Pension Obligations; (h) all Contingent
Liabilities of such Person in respect of any of the foregoing;
and (I) amendments, renewals, extensions, modifications and
refundings of any of clauses (a) through (h). For all purposes
of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which
such Person is a general partner or a joint venturer.
"Insufficiency" means, at any time with respect to any Plan,
the amount, if any, by which (a) the present value of all
benefits under such Plan (determined as of such date on the basis
of assumptions prescribed by the PBGC for purposes of Section
4044 of ERISA), exceeds (b) the fair market value (as of such
date) of all assets of such Plan allocable to such benefits
(excluding any accrued but unpaid contributions).
"Interest Expense" means, with respect to the period for
which Interest Expense is being determined, the total amounts
payable by the Borrower and its Subsidiaries for obligations in
respect of interest (or payments equivalent thereto) on
Indebtedness (including interest on the Notes), as determined in
accordance with generally accepted accounting principles, and in
any event including the interest component of rental payments
under any Capital Lease.
"Interest Period" shall have the meaning assigned thereto in
Section 3.1(b).
"Lender" means each Facility A Lender and Facility B Lender.
"LIBOR Rate" means (a) LIBOR divided by (b) one (1) minus
the Reserve Percentage. For purposes of this definition:
"LIBOR" means the rate for deposits in Dollars which appears on
the Telerate Page 3750 at approximately 11:00 a.m. (London time)
on the second Business Day next preceding the first day of any
Interest Period for a term equal to such Interest Period;
provided, that if, for any reason, such rate is not available,
such rate shall be the rate per annum at which, in the opinion of
Agent, Dollars in the amount of $5,000,000 are being offered to
leading reference banks for settlement in the London interbank
market at approximately 11:00 a.m. (London time), on the second
Business Day next preceding the first day of any Interest Period
for a term equal to such Interest Period; and "Reserve
Percentage" means the daily arithmetic reserve requirement
imposed by the Board of Governors of the Federal Reserve System
(or any successor) under Regulation D on eurocurrency liabilities
(as defined in Regulation D) for the applicable Interest Period
as of the first day of such Interest Period, but subject only to
any changes in such reserve requirement becoming effective during
the Interest Period. For purposes of calculating the Reserve
Percentage, the reserve requirement shall be as set forth in
Regulation D without benefit of credit for prorations, exemptions
or offsets under Regulation D, and further without regard to
whether or not any Lender elects to actually fund any Loan or
portion thereof with eurocurrency liabilities.
"LIBOR Rate Loan" means any Loan bearing interest at a rate
determined with reference to the LIBOR Rate as provided in
Section 3.1(a) hereof.
"Loan" means any Facility A Loan or Facility B Loan, and all
such Loans collectively as the context requires.
"Loan Documents" means, collectively, this Agreement, the
Notes, the Waiver Agreement and each other document, instrument
and agreement executed and delivered by the Borrower in
connection with this Agreement or otherwise referred to herein or
contemplated hereby, all as amended or supplemented from time to
time.
"Maximum Rate" shall have the meaning assigned thereto in
Section 3.1(e).
"Multiemployer Plan" means, at any time, a "multiemployer
plan" as defined in Section 4001(a) (3) of ERISA to which the
Borrower or any ERISA Affiliate is then making or accruing an
obligation to make contributions or has within any of the
preceding five plan years made or accrued an obligation to make
contributions, including for these purposes any Person which
ceased to be an ERISA Affiliate during such five-year period.
"Multiple Employer Plan" means, at any time, an employee
benefit plan, other than a Multiemployer Plan, subject to Title
IV of ERISA to which the Borrower or any ERISA Affiliate and more
than one employer other than the Borrower or any ERISA Affiliate
is then making or accruing an obligation to make contributions,
has within any of the preceding five plan years made or accrued
an obligation to make contributions or, in the event that any
such plan has been terminated, to which the Borrower or any ERISA
Affiliate made or accrued an obligation to make contributions
during any of the five plan years preceding the date of
termination of such plan, including for these purposes any Person
which ceased to be an ERISA Affiliate during such five-year
period.
"Notes" means, collectively, the Facility A Notes and the
Facility B Notes.
"Notice of Borrowing" shall have the meaning assigned
thereto in Section 2.2(a) hereof and shall be in the form
attached as Exhibit C.
"Notice of Conversion/Continuation" shall have the meaning
assigned thereto in Section 3.2 hereof and shall be in the form
attached as Exhibit D.
"Obligations" means, in each case, whether now in existence
or hereafter arising: (a) the principal of the Loans, (b) the
interest on (including interest accruing after the filing of any
bankruptcy or similar petition) the principal of the Loans, and
(c) all other fees (including attorney's fees), charges,
indebtedness, loans, liabilities, financial accommodations,
obligations, covenants and duties owing by the Borrower to the
Lenders or to the Agent, of every kind, nature and description,
direct or indirect, absolute or contingent, due or to become due,
contractual or tortious, liquidated or unliquidated, and whether
or not evidenced by any note, and whether or not for the payment
of money under or in respect of this Agreement, any Note, or any
of the other Loan Documents.
"Operating Cash Flow" for any period shall mean the
consolidated net earnings of the Borrower and its Subsidiaries
before Interest Expense, income taxes and depreciation or
amortization, determined in accordance with generally accepted
accounting principles (consistently applied); provided, that in
any event in determining such net earnings there shall not be
included in gross revenues of the Borrower and its Subsidiaries
any gain arising from any sale, exchange or other disposition of
capital assets, or from the acquisition or retirement or sale of
securities of the Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation and
any successor thereto, or, if at any time such corporation or
successor is not existing and performing the function now
assigned to it, then the Person performing such function at such
time.
"Person" means an individual, partnership, corporation,
trust or unincorporated organization, and a government or agency
or political subdivision thereof.
"Plan" means, at any time, an employee benefit plan, other
than a Multiemployer Plan, which is subject to Title IV of ERISA
or subject to the minimum funding standards under Section 412 of
the Code or Section 302 of ERISA, and either (a) is maintained
for employees of the Borrower or any ERISA Affiliate or in which
any such employees participate or to which contributions are made
by the Borrower or any ERISA Affiliate, or (b) has at any time
within the preceding five years been maintained for employees of
the Borrower or of any ERISA Affiliate or any Person which was at
such time an ERISA Affiliate or in which any such employees
participated at such time, or (iii) with respect to which the
Borrower or any ERISA Affiliate could be subjected to any
liability under Title IV of ERISA (including without limitation
Section 4069 of ERISA) in the event that such plan has been or
were to be terminated.
"Prime Rate" means, at any time, the rate of interest per
annum publicly announced from time to time by the Agent as its
prime rate. Each change in the Prime Rate shall be effective as
of the opening of business on the day such change in the Prime
Rate occurs. The parties hereto acknowledge that the rate
announced publicly by the Agent as its Prime Rate is an index or
base rate and shall not necessarily be its lowest rate charged to
its customers.
"Prime Rate Loan" means any Loan bearing interest at a rate
determined with reference to the Prime Rate as provided in
Section 3.1(a) hereof.
"Property Investment" means any fee interest, leasehold
interest, easement, profit, license or other interest in real
property, Encumbrance in favor of the Borrower or any of its
Subsidiaries, or option to purchase or acquire any of the
foregoing.
"Register" shall have the meaning assigned thereto in
Section 11.11(d).
"Related Person" of any Person means (a) a director, nominee
for election as a director, or officer of such Person, (b) if
such Person is a natural person, a member of the immediate family
of such Person or of a Related Person of such Person, (c) one who
is a director or executive officer of, or has an equity interest
of greater than 10% in, any business or professional entity that,
during any of the three years prior to the date on which the
status of "Related Person" is being determined, (I) has made
payments for property or services to such Person in excess of 5%
of (A) such Person's consolidated gross revenues for any such
year or (B) the other entity's consolidated gross revenues for
any such year, (ii) has received from such Person payments for
property or services in excess of 5% of (A) such Person's
consolidated gross revenues for any such year or (B) the other
entity's consolidated gross revenues for any such year, or (iii)
was the obligee of indebtedness of such Person in excess of 5% of
such Person's consolidated gross revenues for any such year.
"Required Lenders" means, at any date, any combination of
Lenders whose Total Commitment Percentages aggregate at least 66-2/3%;
provided, that with respect to the exercise of any remedies
hereunder after a Default or Event of Default (including without
limitation any actions taken pursuant to Section 9.2), Required
Lenders means any combination of Lenders holding at least 66-2/3%
of the aggregate outstanding principal amount of the Loans.
"Restricted Payment" means (a) the payment of any dividend
or distribution on any class of share capital, other than a
dividend or distribution payable solely in shares of any class of
share capital whose rights would be in all respects junior to
those of the Lenders, (b) the repurchase, redemption or reduction
of shares of any class of share capital or any warrants, rights
or options to purchase or acquire any shares of any class of
share capital, other than in exchange for or out of proceeds from
the substantially concurrent sale of other shares of any class of
share capital, (c) the prepayment, purchase or redemption of any
indebtedness subordinated to the Notes or any non-mandatory
prepayment of any Indebtedness ranking pari passu with the Notes
(including the Senior Notes), (d) the payment of any amounts in
respect of any partnership or similar interest or in respect of
any joint venture or other interest or in respect of any
contractual or other claim (whether arising by joint venture
agreement or otherwise) if the rights of the holder of such
interest or claim are junior to those of general creditors (other
than payments to the Borrower) or (e) the setting aside of funds
for any of the foregoing purposes.
"Sale-Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a
party, providing for the leasing to the Borrower or any
Subsidiary of any part of property which has been or is to be
sold or transferred by the Borrower or any Subsidiary to such
Person (or to any other Person to whom funds have been or are to
be advanced by such Person on the security of such property).
"Secured Debt" means all Indebtedness which is secured by,
contingent upon, or associated with, any Encumbrance.
"Securities Act" means the Securities Act of 1933, as
amended from time to time, or any successor statute, and the
regulations promulgated and the rulings issued thereunder.
"Security" shall have the meaning assigned thereto in
Section 2(l) of the Securities Act.
"Senior Notes" means the 6.625% Senior Notes issued pursuant
to the Senior Note Agreements.
"Senior Note Agreements" means the separate Note Purchase
Agreements dated as of September 30, 1993 between the Borrower
and the financial institutions named on the signature pages
thereto (the "Noteholders"), as modified by the Waiver Letter
dated June 30, 1995 from each of the Noteholders to the Borrower.
"Subsidiary" means any corporation, partnership, joint
venture, association, company, business trust or other entity in
which the Borrower directly or indirectly (a) beneficially owns
or controls, directly or indirectly, a majority of the
outstanding voting securities having by the terms thereof
ordinary voting power to elect a majority of the board of
directors (or other body fulfilling a substantially similar
function) of such entity (irrespective of whether or not at the
time any class or classes of such voting securities shall have or
might have voting power by reason of the happening of any
contingency) or (b) in the case of an entity which does not have
a board of directors (or other body fulfilling a substantially
similar function) has the authority to control the policies of
such entity (including any partnership or joint venture of or in
which the Borrower or a Subsidiary is a general partner or joint
venture participant or owns or has the right to obtain a majority
of limited partnership interests).
"Subsidiary Debt" means all Indebtedness of any Subsidiary
of the Borrower which is owed to any Person other than the
Borrower.
"Tangible Net Worth" means, as of the date Tangible Net
Worth is determined, the sum of the amounts set forth on the
consolidated balance sheet of the Borrower and its Subsidiaries,
prepared in accordance with generally accepted accounting
principles, as (a) the sum of (I) the par or stated value of all
outstanding capital stock and (ii) capital surplus and cumulative
undistributed net earnings, less (b) (I) any surplus or earnings
resulting from any write-up of assets subsequent to December 31,
1994, (ii) goodwill, (iii) licenses, patents, trademarks, trade
names, copyrights, leasehold improvements not recoverable at the
expiration of a lease, and deferred charges (including, but not
limited to, unamortized debt discount and expense, organization
expenses, experimental and development expenses) and (iv) all
other items which are properly classified as intangibles under
generally accepted accounting principles.
"Temporary Investments" means funds temporarily awaiting
investment by the Borrower and its Subsidiaries which are
invested in one or more of the following:
(a) obligations of, or guaranteed as to both full and
timely payment of principal and interest by, the United
States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the
United States;
(b) Federal funds, certificates of deposit, time
deposits and bankers' acceptances, each of which shall not
have an original maturity of more than 90 days, of any
depository institution or trust company incorporated under
the laws of the United States or any state; provided, that
the short-term obligations of such depository institution or
trust company shall be rated at least A-l+/P-l by a
"nationally recognized statistical rating organization," as
such term is applied in Rule 15c3-1 under the Exchange Act
(a "Rating Agency");
(c) commercial paper (having original maturities of
not more than 270 days) of any corporation incorporated
under the laws of the United States or any state thereof;
provided, that such commercial paper shall be rated at least
A-l+/P-l by a Rating Agency; and
(d) any money market fund rated AAAm/Aaa or AAAm-G/Aaa
by a Rating Agency;
provided, that none of clauses (a) through (d) shall include any
instrument which evidences a right to receive only interest
payments with respect to the obligations underlying such
instrument.
"Termination Date" means June 29, 1996 or such extended date
as may be provided in Section 2.5 hereof.
"Termination Event" means (a) a "reportable event," as such
term is described in Section 4043 of ERISA (other than a
"reportable event" not subject to the provision for 30-day notice
to the PBGC), or an event described in Section 4062(e) of ERISA,
(b) the withdrawal of the Borrower or any ERISA Affiliate from a
Multiple Employer Plan during a plan year in which it was a
"substantial employer" (as such term is defined in Section
4001(a) (2) of ERISA) or the incurrence of liability by the
Borrower or any ERISA Affiliate under Section 4064 of ERISA upon
the termination of a Multiple Employer Plan, (c) the filing of a
notice of intent to terminate any Plan under Section 4041 of
ERISA, other than in a standard termination within the meaning of
Section 4041 of ERISA, or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, (d) the institution by
the PBGC of proceedings to terminate, impose liability (other
than for premiums under Section 4007 of ERISA) in respect of, or
cause a trustee to be appointed to administer, any Plan or (e)
the occurrence of any other event or the existence of any other
condition which could reasonably be expected to give rise to a
liability under Title IV of ERISA.
"Total Capitalization" means the sum of all Indebtedness for
Borrowed Money, capital stock, surplus and premium on capital
stock of the Borrower and its Subsidiaries, all as shown on a
consolidated balance sheet of the Borrower and its Subsidiaries
prepared in accordance with generally accepted accounting
principles applied on a consistent basis.
"Total Commitment" means the total Facility A Commitment and
Facility B Commitment in the aggregate principal amount of One
Hundred Sixty Million Dollars ($160,000,000) as such amount may
be reduced from time to time pursuant to Section 2.4.
"Total Commitment Percentage" means, with respect to any
Lender, the Total Commitment Percentage set forth on Schedule I
hereto as such Percentage may be modified from time to time
pursuant to Section 11.11.
"Total Debt" means the aggregate amount of the Indebtedness
of the Borrower (including Indebtedness in respect of the Notes)
plus any Subsidiary Debt, as measured at the time Total Debt is
determined.
"Underfunded Pension Obligations" means the sum of (a) the
excess of all "projected benefit obligations" of the Borrower and
any Subsidiaries, within the meaning of Financial Accounting
Standard 87, over the fair market value of assets held under the
Borrower's defined benefit pension plans and (b) the excess of
the "accumulated postretirement benefit obligations" of the
Borrower and any Subsidiaries, within the meaning of Financial
Accounting Standard 106, over the fair market value of assets set
aside to provide for such obligations, all determined using the
actuarial assumptions for purposes of valuing such obligations
used in the Borrower's most recent financial statement, or, if no
such assumptions are specified, reasonable actuarial assumptions.
"Waiver Agreement" means the Waiver Agreement of even date
herewith executed by the Agent and Lenders in favor of the
holders of the Senior Notes.
"Withdrawal Liability" shall have the meaning given to such
term under Part I of Subtitle E of Title IV of ERISA.
SECTION 1.2. General. All terms of an accounting nature
not specifically defined herein shall have the meaning assigned
thereto by generally accepted accounting principles. Unless
otherwise specified, a reference in this Agreement to a particu-
lar section, subsection, Schedule or Exhibit is a reference to
that section, subsection, Schedule or Exhibit of this Agreement.
Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the
singular and plural, and pronouns stated in the masculine,
feminine or neuter gender shall include the masculine, the
feminine and the neuter.
SECTION 1.3. Other Definitions and Provisions.
(a) Use of Capitalized Terms. Unless otherwise defined
therein, all terms defined in this Agreement shall have the
defined meanings when used in the Notes and the other Loan
Documents or any certificate, report or other document made or
delivered pursuant to this Agreement.
(b) Miscellaneous. The words "hereof", "herein" and "here-
under" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.
ARTICLE II
REVOLVING CREDIT FACILITY
-------------------------
SECTION 2.1. Revolving Credit Loans.
(a) Facility A Loans. Subject to the terms and conditions
of this Agreement, each Facility A Lender severally agrees to
make Facility A Loans to the Borrower from time to time from the
Closing Date through the Termination Date as requested by the
Borrower in accordance with the terms of Section 2.2; provided,
that (I) the aggregate principal amount of all outstanding
Facility A Loans (after giving effect to any amount requested)
shall not exceed the Facility A Commitment and (ii) the principal
amount of outstanding Facility A Loans from any Facility A Lender
to the Borrower shall not exceed such Lender's Commitment
Percentage of the Facility A Commitment. Each Facility A Loan by
a Facility A Lender shall be in a principal amount equal to such
Lender's Commitment Percentage of the aggregate principal amount
of Facility A Loans requested on each occasion. Subject to the
terms and conditions hereof, the Borrower may borrow, repay and
reborrow Facility A Loans hereunder until the Termination Date,
upon which date the entire outstanding principal balance of the
Facility A Loans, together with all accrued but unpaid interest
thereon, shall be due and payable in full.
(b) Facility B Loans. Subject to the terms and conditions
of this Agreement, each Facility B Lender severally agrees to
make Facility B Loans to the Borrower from time to time from the
Closing Date through the Termination Date as requested by the
Borrower in accordance with the terms of Section 2.2; provided,
that (I) the aggregate principal amount of all outstanding
Facility B Loans (after giving effect to any amount requested)
shall not exceed the Facility B Commitment, and (b) the princi-
pal amount of outstanding Facility B Loans from any Lender to the
Borrower shall not at any time exceed an amount equal to such
Lender's Commitment Percentage of the Facility B Commitment.
Each Facility B Loan by a Facility B Lender shall be in a prin-
cipal amount equal to such Lender's Commitment Percentage of the
aggregate principal amount of Facility B Loans requested on each
occasion. Subject to the terms and conditions hereof, the
Borrower may borrow, repay and reborrow Facility B Loans
hereunder until the Termination Date, upon which date the entire
outstanding principal balance of the Facility B Loans, together
with all accrued but unpaid interest thereon, shall be due and
payable in full.
SECTION 2.2. Procedure for Advances of Loans.
(a) Request for Borrowing. The Borrower shall give the
Agent irrevocable prior written notice in the form attached
hereto as Exhibit C (a "Notice of Borrowing") not later than
10:00 a.m. (Eastern Standard Time) at least (I) one Business Day
before each Prime Rate Loan, and (ii) three Business Days before
each LIBOR Rate Loan, of its intention to borrow, specifying (A)
the date of such borrowing, which shall be a Business Day, (B)
the amount of such borrowing, which shall be (1) with respect to
any Prime Rate Loan, an aggregate principal amount of at least
$250,000 and (2) with respect to any LIBOR Rate Loan, an
aggregate principal amount of $1,000,000 or any integral multiple
of $50,000 in excess thereof, (c) whether the Loans are to be
LIBOR Rate Loans or Prime Rate Loans, and (D) in the case of a
LIBOR Rate Loan, the duration of the Interest Period applicable
thereto. The Agent shall promptly notify the Lenders of the
Notice of Borrowing.
(b) Disbursement of Loans. The Loans shall be disbursed
first under the Facility A Commitment until the aggregate
principal amount of all outstanding Facility A Loans (after
giving effect to any amount requested) is equal to the Facility A
Commitment and then under the Facility B Commitment. Not later
than 2:00 p.m. (Eastern Standard Time) on the proposed borrowing
date, each Lender will make available to the Agent, for the
account of the Borrower, at the office of the Agent in funds
immediately available to the Agent, such Lender's Commitment
Percentage of the Facility A Loans or Facility B Loans, as
applicable, to be made on such borrowing date. The Borrower
hereby irrevocably authorizes the Agent to disburse the proceeds
of each borrowing requested pursuant to this Section 2.2 in
immediately available funds by crediting such proceeds to a
deposit account of the Borrower maintained with the Agent or by
wire transfer to such account as may be agreed upon by the
Borrower and the Agent from time to time. Subject to Section 3.5
hereof, the Agent shall not be obligated to disburse the proceeds
of any Loan requested pursuant to this Section 2.2 until each
Lender shall have made available to the Agent its Commitment
Percentage of such Loan.
SECTION 2.3. Notes.
(a) Facility A Notes. Each Facility A Loan and the
obligation of the Borrower to repay such Loan shall be evidenced
by a Facility A Note in the form attached hereto as Exhibit A
payable to the order of each Facility A Lender representing the
Borrower's obligation to pay such Lender's Commitment Percentage
of the aggregate unpaid principal amount of all Facility A Loans
made and to be made by such Lender to the Borrower hereunder,
plus interest and all other fees, charges and other amounts due
thereon. Each Facility A Note shall be dated the Closing Date
and shall be payable as to interest and fees as specified in
Article III hereof.
(b) Facility B Notes. Each Facility B Loan and the
obligation of the Borrower to repay such Loan shall be evidenced
by a Facility B Note in the form attached hereto as Exhibit B
payable to the order of each Facility B Lender representing the
Borrower's obligation to pay such Lender's Commitment Percentage
of the aggregate unpaid principal amount of all Facility B Loans
made and to be made by such Lender to the Borrower hereunder,
plus interest and all other fees, charges and other amounts due
thereon. Each Facility B Note shall be dated the Closing Date
and shall be payable as to interest and fees as specified in
Article III hereof.
SECTION 2.4. Optional Permanent Reduction of Total
Commitment. The Borrower shall have the right at any time and
from time to time, upon at least five (5) Business Days prior
written notice to the Agent, to permanently reduce, in whole at
any time or in part from time to time, without premium or
penalty, the Total Commitment in an aggregate principal amount
not less than $5,000,000 or any integral multiple of $1,000,000
in excess thereof; provided, that each such permanent reduction
shall be (a) applied first to the Facility B Commitment until the
Facility B Commitment is reduced to zero and then to the Facility
A Commitment, and (b) accompanied by a prepayment of principal
sufficient to reduce the outstanding principal amount of the
Facility B Loans or Facility A Loans, as applicable, after such
reduction to the Total Commitment as so reduced and by accrued
interest on the amount so paid. If the reduction of the Total
Commitment requires the repayment of any LIBOR Rate Loan, such
reduction may be made only on the last day of the then current
Interest Period applicable thereto.
SECTION 2.5. Termination and Extension of Total Commitment.
The Total Commitment shall terminate on the earliest of (a) the
Termination Date, (b) the date of permanent reduction in whole by
the Borrower pursuant to Section 2.4, and (c) the date of
termination by the Agent on behalf of the Lenders pursuant to
Section 9.2(a); provided, that on or before the sixtieth (60th)
day, but not earlier than the ninetieth (90th) day, prior to the
Termination Date then in effect, the Borrower may, by written
notice (an "Extension Request") given to the Agent, request that
the Termination Date then in effect be extended to a date that is
364 days after the date of issuance of the Extension Confirmation
Notice (defined below). The Agent shall promptly advise each
Lender of its receipt of any Extension Request. Each Lender may,
in its sole discretion, consent to a requested extension by
giving written notice thereof to the Agent not later than the
Business Day (the "Extension Confirmation Date") immediately
preceding the date which is thirty-one (31) days after the date
of the Extension Request. No Lender shall be under any
obligation or commitment to extend the Termination Date beyond
June 29, 1996 or any subsequently specified Termination Date, and
no such obligation or commitment on the part of any Lender shall
be inferred from the provisions of this Section 2.5. Failure on
the part of any Lender to respond to an Extension Request by the
applicable Extension Confirmation Date shall be deemed to be a
denial of such request by such Lender. The requested extension
shall not be granted if any Lender shall fail to consent in
writing to such request. Promptly following the applicable
Extension Confirmation Date, the Agent shall provide notice to
the Borrower in writing as to whether the requested extension has
been granted (an "Extension Confirmation Notice") and, if
granted, such extension shall become effective upon the date of
issuance of such Extension Confirmation Notice. The Agent shall
promptly thereafter provide a copy of such Extension Confirmation
Notice to each Lender. In no event shall the term of this Agree-
ment, after giving effect to any extension of the Termination
Date hereunder, exceed a period of 364 days.
SECTION 2.6. Use of Proceeds. The Borrower shall use the
proceeds of the Loans solely (a) to finance the acquisition of
apartment properties (b) to finance Development Activity as
permitted hereunder and (c) for working capital and general
corporate purposes; provided, that the proceeds used for working
capital and general corporate purposes shall not exceed
$10,000,000 at any time.
ARTICLE III
GENERAL LOAN PROVISIONS
-----------------------
SECTION 3.1. Interest.
(a) Interest Rate Options. Subject to the provisions of
this Section 3.1, at the election of the Borrower, the aggregate
principal balance of the Notes or any portion thereof shall bear
interest at the Prime Rate or the LIBOR Rate plus, in each case,
the Applicable Margin. The Borrower shall select the rate of
interest and Interest Period, if any, applicable to any Loan at
the time a Notice of Borrowing is given pursuant to Sections 2.2
or at the time a Notice of Conversion/Continuation is given
pursuant to Section 3.2. Each Loan or portion thereof bearing
interest based on the Prime Rate shall be a "Prime Rate Loan",
and each Loan or portion thereof bearing interest based on the
LIBOR Rate shall be a "LIBOR Rate Loan". Any Loan or portion
thereof as to which the Borrower has not duly specified an
interest rate as provided herein shall be deemed a Prime Rate
Loan.
On the date hereof, the Prime Rate is 9% and therefore the
rate of interest in effect hereunder for Prime Rate Loans
outstanding on the date hereof, expressed in simple interest
terms, is 9% per annum. On the date hereof, the LIBOR Rate (for
an Interest Period equal to one month) is 6.125% and therefore
the rate of interest in effect hereunder for LIBOR Rate Loans
outstanding on the date hereof, expressed in simple interest
terms, is 6.775% per annum under Facility A and 7.775% per annum
under Facility B.
(b) Interest Periods. In connection with each LIBOR Rate
Loan, the Borrower, by giving notice at the times described in
Section 3.1(a), shall elect an interest period (each, an
"Interest Period") to be applicable to such Loan, which Interest
Period shall be a period of one, two or three months; provided,
that:
(I) each Interest Period shall commence on the date of
advance or conversion of any LIBOR Rate Loan and, in the case of
immediately successive Interest Periods, each successive Interest
Period shall commence on the date on which the next preceding
Interest Period expires;
(ii) if any Interest Period would otherwise expire on a
day that is not a Business Day, such Interest Period shall expire
on the next succeeding Business Day; provided, that if any
Interest Period would otherwise expire on a day that is not a
Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day;
(iii) any Interest Period that begins on the last Busi-
ness Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period; and
(iv) no Interest Period shall extend beyond the
Termination Date then in effect and there shall be no more than
five (5) Interest Periods in effect at any time.
(c) Default Rate. Upon the occurrence and during the con-
tinuance of an Event of Default, (I) the Borrower shall no longer
have the option to request LIBOR Rate Loans, (ii) all outstanding
LIBOR Rate Loans shall bear interest at a rate per annum two
percent (2%) in excess of the then applicable rate until the end
of the applicable Interest Period and thereafter at the Prime
Rate plus two percent (2%), and (iii) all outstanding Prime Rate
Loans shall bear interest at the Prime Rate plus two percent
(2%); provided, that in no event shall the default rate be less
than the default rate on the Senior Notes. Interest shall
continue to accrue on the Notes after the filing by or against
the Borrower of any petition seeking any relief in bankruptcy or
under any act or law pertaining to insolvency or debtor relief,
whether state, federal or foreign.
(d) Interest Payment and Computation. Interest on each
Prime Rate Loan shall be payable in arrears on the last Business
Day of each calendar quarter commencing June 30, 1995. Interest
on each LIBOR Rate Loan shall be payable in arrears on the last
day of each Interest Period applicable thereto. All interest
rates and fees provided hereunder shall be computed on the basis
of a 360 day year and assessed for the actual number of days
elapsed (unless reference to a 365 or 366-day year is necessary
in order not to exceed the maximum rate set forth in subsection
(e) below).
(e) Maximum Rate. In no contingency or event whatsoever
shall the aggregate of all amounts deemed interest hereunder or
under any of the Notes charged or collected pursuant to the terms
of this Agreement or pursuant to any of the Notes exceed the
highest rate permissible under any applicable law which a court
of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines
that the Lenders have charged or received interest hereunder in
excess of the highest applicable rate, the rate in effect
hereunder shall automatically be reduced to the maximum rate
permitted by applicable law and the Lenders shall promptly refund
to the Borrower on a pro rata basis any interest received by
Lenders in excess of the maximum lawful rate or, if so requested
by Borrower, shall apply such excess to the principal balance of
the Obligations. It is the intent hereof that the Borrower not
pay or contract to pay, and that neither Agent nor any Lender
receive or contract to receive, directly or indirectly in any
manner whatsoever, interest in excess of that which may be paid
by the Borrower under applicable law. For the purpose of
determining whether or not interest in excess of the highest rate
permissible under any applicable law has been charged or
collected, all interest at any time contracted for, charged or
received from the Borrower in connection with any of the 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 Obligations.
SECTION 3.2. Notice and Manner of Conversion or Continua-
tion of Loans. Provided that no Default or Event of Default has
occurred and is then continuing, the Borrower shall have the
option to (a) convert at any time all or any portion of its
outstanding Prime Rate Loans in a principal amount equal to
$1,000,000 or any integral multiple of $50,000 in excess thereof
into one or more LIBOR Rate Loans, and (b) upon the expiration of
any Interest Period, convert all or any part of its outstanding
LIBOR Rate Loans in a principal amount equal to at least $250,000
into Prime Rate Loans or to continue such LIBOR Rate Loans as
LIBOR Rate Loans. Whenever the Borrower desires to convert or
continue Loans as provided above, the Borrower shall give the
Agent irrevocable prior written notice in the form attached as
Exhibit D (a "Notice of Conversion/Continuation") not later than
11:00 a.m. (Eastern Standard Time) three (3) Business Days before
the day on which a proposed conversion or continuation of such
Loan is to be effective specifying (I) the Loans to be converted
or continued, and, in the case of a LIBOR Rate Loan to be
converted or continued, the last day of the Interest Period
therefor, (ii) the effective date of such conversion or
continuation (which shall be a Business Day), (iii) the principal
amount of such Loans to be converted or continued, and (iv) the
Interest Period to be applicable to such converted or continued
LIBOR Rate Loan. The Agent shall promptly notify the Facility A
Lenders of such Notice of Conversion/Continuation regarding any
Facility A Loans and the Facility B Lenders of such Notice of
Conversion/Continuation regarding any Facility B Loans.
SECTION 3.3. Commitment and Agent's Fees.
(a) Commitment Fee. The Borrower shall pay to the Agent,
for the account of each Facility A Lender, a non-refundable
commitment fee at a rate per annum equal to one-quarter percent
(1/4%) on the average daily unused portion of the Facility A
Commitment, and shall pay to the Agent, for the account of each
Facility B Lender, a non-refundable commitment fee at a rate per
annum equal to one-quarter percent (1/4%) on the average daily
unused portion of the Facility B Commitment. The commitment fees
due hereunder shall be payable in arrears on the last Business
Day of each calendar quarter during the term of this Agreement
commencing June 30, 1995, and on the Termination Date. Such
commitment fees shall be distributed by the Agent to the Facility
A Lenders and Facility B Lenders, as applicable, in accordance
with the their respective Commitment Percentages of the Facility
A Commitment and Facility B Commitment, as applicable.
(b) Agent's Fees. The Borrower shall pay to the Agent, for
the account of the Agent and not for the account of the Lenders,
certain fees and other compensation established in a separate
letter agreement dated September 8, 1994 between the Agent and
the Borrower.
SECTION 3.4. Manner and Application of Payments. Each
payment (including prepayments) by the Borrower on account of the
principal of or interest on the Loans or of any fee or other
amounts payable to the Agent or the Lenders under this Agreement
or any Note shall be made not later than 1:00 p.m. (Eastern
Standard Time) on the date specified for payment under this
Agreement to the Agent, at the Agent's Office, in Dollars, in
immediately available funds and shall be made without any set-off,
counterclaim or deduction whatsoever. Any payment received
after such time but before 5:00 p.m. (Eastern Standard Time) on
such day shall be deemed a payment on such date for the purposes
of Section 9.1, but for all other purposes shall be deemed to
have been made on the next succeeding Business Day. If any
payment under this Agreement or any Note shall be specified to be
made upon a day which is not a Business Day, it shall be made on
the next succeeding day which is a Business Day and such exten-
sion of time shall in such case be included in computing
interest, if any, in accordance with such payment. Each payment
by the Borrower shall be applied (I) first to any fees and
expenses then due the Agent hereunder, (ii) second pro-rata to
any commitment fees then due and payable under the Facility A
Commitment and the Facility B Commitment, (iii) third pro-rata to
any interest then due and payable on the Facility A Loans and the
Facility B Loans, (iv) fourth to the principal of the Facility B
Loans and (v) fifth to the principal of the Facility A Loans;
provided, that upon the occurrence and during the continuance of
a Default or Event of Default, each payment otherwise applicable
to the principal of the Facility B Loans and Facility A Loans
shall be applied to the Loans pro rata in accordance with the
aggregate principal balance of the Loans then outstanding.
SECTION 3.5. Nature of Obligations of Lenders to Make
Loans; Assumption by Agent. The obligations of the Lenders under
this Agreement to make the Loans are several and are not joint or
joint and several. Unless the Agent shall have received notice
from a Lender prior to a proposed borrowing date that such Lender
will not make available to the Agent such Lender's ratable
portion of the amount to be borrowed on such date, the Agent may
assume that such Lender has made such portion available to the
Agent on the proposed borrowing date in accordance with Section
2.2(b) and the Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount.
If and to the extent such Lender shall not have so made such
ratable portion available to the Agent, such Lender and the
Borrower severally agree to repay to the Agent forthwith on
demand such corresponding amount together with interest thereon
at the rate then applicable to such amount, for each day from the
date such amount is made available to the Borrower until the date
such amount is repaid to the Agent. If such Lender shall repay
to the Agent such corresponding amount, the amount so repaid
shall constitute such Lender's Commitment Percentage of the Loan
made on such borrowing date for purposes of this Agreement. The
failure of any Lender to make its Commitment Percentage of any
Loan available shall not relieve it or any other Lender of its
obligation, if any, hereunder to make its Commitment Percentage
of such Loan available on such borrowing date, but no Lender
shall be responsible for the failure of any other Lender to make
its Commitment Percentage of such Loan available on the borrowing
date.
SECTION 3.6. Changed Circumstances.
(a) Circumstances Affecting LIBOR Rate Availability. If,
with respect to any Interest Period, the Agent or the Lenders
(after consultation with the Agent) shall determine that, by
reason of circumstances affecting the foreign exchange and
interbank markets generally, deposits in eurodollars in the
applicable amounts are not being offered to the Agent or any
Lender for such Interest Period, then the Agent shall forthwith
give notice thereof to the Borrower. Thereafter, until the Agent
notifies the Borrower that such circumstances no longer exist,
the obligation of the Lenders to make LIBOR Rate Loans, and the
right of the Borrower to convert any Loan to or continue any Loan
as a LIBOR Rate Loan, shall be suspended, and the Borrower shall
repay in full (or cause to be repaid in full) the then
outstanding principal amount of each such LIBOR Rate Loan,
together with accrued interest thereon, on the last day of the
then current Interest Period applicable to such LIBOR Rate Loan
or convert the then outstanding principal amount of each such
LIBOR Rate Loan to a Prime Rate Loan as of the last day of such
Interest Period.
(b) Laws Affecting LIBOR Rate Availability. If, after the
date hereof, the introduction of, or any change in, any
applicable law or in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or
compliance by any of the Lenders (or any of their respective
lending offices) with any request or directive (whether or not
having the force of law) of any such governmental authority,
central bank or comparable agency, shall make it unlawful or
impossible for any Lender (or any of its lending offices) to
honor its obligations hereunder to make or maintain any LIBOR
Rate Loan, such Lender shall forthwith give notice thereof to the
Agent. Thereafter, until the Agent notifies the Borrower that
such circumstances no longer exist, (I) the obligations of the
Lenders to make LIBOR Rate Loans and the right of the Borrower to
convert any Loan or continue any Loan as a LIBOR Rate Loan shall
be suspended and thereafter the Borrower may select only Prime
Rate Loans hereunder, and (ii) if any of the Lenders may not
lawfully continue to maintain a LIBOR Rate Loan to the end of the
then current Interest Period applicable thereto, the applicable
LIBOR Rate Loan shall immediately be converted to a Prime Rate
Loan for the remainder of such Interest Period. For purposes of
this Section 3.6(b), a change in law, rule, regulation,
interpretation or administration shall include, without
limitation, any change made or which becomes effective on the
basis of a law, rule, regulation, interpretation or
administration presently in force, the effective date of which
change is delayed by the terms of such law, rule, regulation,
interpretation or administration.
(c) Increased Cost of LIBOR Rate Loans. If, after the date
hereof, the introduction of, or any change in, any applicable law
or in the interpretation or administration thereof by any govern-
mental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by
any of the Lenders (or any of their respective lending offices)
with any request or directive (whether or not having the force of
law) of such governmental authority, central bank or comparable
agency:
(i) shall subject any of the Lenders (or any of their
respective lending offices) to any tax, duty or other charge
with respect to any LIBOR Rate Loan or any Note or shall
change the basis of taxation of payments to any of the
Lenders (or any of their respective lending offices) of the
principal of or interest on any LIBOR Rate Loan or any Note
or any other amounts due under this Agreement in respect
thereof (except for changes in the rate of tax on the
overall net income of any of the Lenders or any of their
respective lending offices imposed by the jurisdiction in
which such Lender's principal executive office or lending
office is located); or
(ii) shall impose, modify or deem applicable any
reserve (including, without limitation, any imposed by the
Board of Governors of the Federal Reserve System),
special deposit or similar requirement against assets
of, deposits with or for the account of, or credit
extended by any of the Lenders (or any of their
respective lending offices) or shall impose on any of
the Lenders (or any of their respective lending
offices) or the foreign exchange and interbank markets
any other condition affecting any LIBOR Rate Loan or
any of the Notes;
and the result of any of the foregoing is to increase the cost to
any of the Lenders of maintaining any LIBOR Rate Loan or to
reduce the amount of any sum received or receivable by any of the
Lenders under this Agreement or under the Notes in respect of a
LIBOR Rate Loan, then such Lender shall promptly notify the
Agent, and the Agent shall promptly notify the Borrower of such
fact and demand compensation therefor and, within fifteen (15)
Business Days after such notice by Agent, the Borrower agrees to
pay to such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduction. The
Agent will promptly notify the Borrower of any event of which it
has knowledge which will entitle any Lender to compensation
pursuant to this Section 3.6(c); provided, that the Agent shall
incur no liability whatsoever to the Lenders or the Borrower in
the event it fails to do so. A certificate of Agent setting
forth the basis for determining such additional amount or amounts
necessary to compensate any such Lender or Lenders shall be con-
clusively presumed to be correct save for manifest error. For
purposes of this Section, a change in applicable law, interpreta-
tion, administration, request or directive shall include, without
limitation, any change made or which becomes effective on the
basis of a law, rule, regulation, interpretation, administration,
request or directive presently in force, the effective date of
which change is delayed by the terms of such law, rule, regula-
tion, interpretation, administration, request or directive.
SECTION 3.7. Indemnity. The Borrower hereby indemnifies
each of the Lenders against any loss or expense which may arise
or be attributable to each Lender's obtaining, liquidating or
employing deposits or other funds acquired to effect, fund or
maintain the Loans (a) as a consequence of any failure by the
Borrower to make any payment when due of any amount due hereunder
in connection with a LIBOR Rate Loan, (b) due to any failure of
the Borrower to borrow on a date specified therefor in a Notice
of Borrowing or (c) due to any payment, prepayment or conversion
of any LIBOR Rate Loan on a date other than the last day of the
Interest Period therefor. Such loss or expense shall be
calculated based upon the present value of payments due from the
Borrower with respect to a deposit obtained by any of the Lenders
in order to fund such LIBOR Rate Loan to the Borrower. Each
Lender shall notify the Borrower of, and provide the Borrower
with calculations of, any such loss or expense and, within
fifteen (15) Business Days after such notice, the Borrower agrees
to pay to such Lender such additional amount or amounts as will
compensate such Lender for such loss or expense.
SECTION 3.8. Capital Requirements. If either (a) the
introduction of, or any change in, or in the interpretation of,
any applicable law or (b) compliance with any guideline or
request from any central bank or comparable agency or other
governmental authority (whether or not having the force of law),
has or would have the effect of reducing the rate of return on
the capital of, or has affected or would affect the amount of
capital required to be maintained by, any Lender or any
corporation controlling such Lender as a consequence of, or with
reference to such Lender's commitments hereunder and other
commitments of this type, below the rate which the Lender or such
other corporation could have achieved but for such introduction,
change or compliance, then within fifteen (15) Business Days
after written demand by any such Lender, the Borrower shall pay
to such Lender from time to time as specified by such Lender
additional amounts sufficient to compensate such Lender or other
corporation for such reduction.
SECTION 3.9. Taxes.
(a) Payments Free and Clear. Any and all payments by the
Borrower hereunder or under the Notes shall be made free and
clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholding, and
all liabilities with respect thereto excluding (I) in the case of
each Lender and the Agent, taxes imposed upon its income and
franchise taxes imposed upon it by the jurisdiction under the
laws of which such Lender or the Agent (as the case may be) is
organized or is or should be qualified to do business or any
political subdivision thereof, and (ii) in the case of each
Lender, taxes imposed upon its income and franchise taxes imposed
upon it by the jurisdiction of such Lender's lending office or
any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the
Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder or under any Note to any
Lender or the Agent, (I) the sum payable shall be increased as
may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under
this Section 3.9), such Lender or the Agent (as the case may be)
receives an amount equal to the amount such party would have
received had no such deductions been made, (ii) the Borrower
shall make such deductions, (iii) the Borrower shall pay the full
amount deducted to the relevant taxing authority or other
authority in accordance with applicable law, and (iv) the
Borrower shall deliver to the Agent evidence of such payment to
the relevant taxing authority or other authority in the manner
provided in Section 3.9(d).
(b) Stamp and Other Taxes. In addition, the Borrower shall
pay any present or future stamp, registration, recordation or
documentary taxes or any other similar fees or charges or excise
or property taxes (other than excise and property taxes to which
the Agent or any Lender would have been subject in the absence of
this Agreement) and any levies of the United States or any state
or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from
the execution, delivery or registration of, or otherwise with
respect to, this Agreement, the Loans, the Loan Documents, or the
perfection of any rights or security interest in respect thereto
(hereinafter referred to as "Other Taxes").
(c) Indemnity. The Borrower shall indemnify each Lender
and the Agent for the full amount of Taxes and Other Taxes
(including, without limitation, any Taxes and Other Taxes imposed
by any jurisdiction on amounts payable under this Section 3.9)
paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or
Other Taxes were correctly or legally asserted. Such
indemnification shall be made within fifteen (15) Business Days
from the date the Lender or the Agent (as the case may be) makes
written demand therefor.
(d) Evidence of Payment. Within thirty (30) days after the
date of any payment of Taxes or Other Taxes, the Borrower shall
furnish to the Agent, at its address referred to in Section 11.1,
the original or a certified copy of a receipt evidencing payment
thereof or other evidence of payment satisfactory to the Agent.
(e) Delivery of Tax Forms. Each Lender organized under the
laws of a jurisdiction other than the United States or any state
thereof shall deliver to the Borrower, with a copy to the Agent,
on the Closing Date or concurrently with the delivery of the
relevant Assignment and Acceptance, as applicable, (I) two United
States Internal Revenue Service Forms 4224 or Forms 1001, as
applicable, (or successor forms) properly completed and
certifying in each case that such Lender is entitled to a
complete exemption from withholding or deduction for or on
account of any United States federal income taxes, and (ii) an
Internal Revenue Service Form W-8 or W-9 or successor applicable
form, as the case may be, to establish an exemption from United
States backup withholding taxes. Each such Lender further agrees
to deliver to the Borrower, with a copy to the Agent, a Form 1001
or 4224 and Form W-8 or W-9, or successor applicable forms or
manner of certification, as the case may be, on or before the
date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent
form previously delivered by it to the Borrower, certifying in
the case of a Form 1001 or 4224 that such Lender is entitled to
receive payments under this Agreement without deduction or with-
holding of any United States federal income taxes (unless in any
such case an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on
which any such delivery would otherwise be required which renders
such forms inapplicable or the exemption to which such forms
relate unavailable and such Lender notifies the Borrower and the
Agent that it is not entitled to receive payments without
deduction or withholding of United States federal income taxes)
and, in the case of a Form W-8 or W-9, establishing an exemption
from United States backup withholding tax.
(f) Survival. Without prejudice to the survival of any
other agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section 3.9 shall
survive the payment in full of the Obligations.
ARTICLE IV
CLOSING; CONDITIONS OF CLOSING AND BORROWING
--------------------------------------------
SECTION 4.1. Closing. The closing shall take place at the
offices of Kennedy, Covington, Lobdell & Hickman L.L.P., on June
30, 1995, or on such other date as the parties hereto shall
mutually agree.
SECTION 4.2. Conditions of Initial Loans and Advances. The
obligation of the Lenders to make the Loans on the Closing Date
is subject to the satisfaction of each of the following
conditions:
(a) Executed Loan Documents. Each Loan Document shall have
been duly authorized, executed and delivered to the Agent by the
Borrower and each other party thereto, as applicable, shall be in
full force and effect and no default shall exist thereunder.
(b) Closing Certificates; etc.
(I) Certificate of the Borrower. The Agent shall have
received a certificate dated as of the Closing Date from the
chief executive officer and chief financial officer of the
Borrower, in form and substance satisfactory to the Agent, to the
effect that all representations and warranties of the Borrower
contained in this Agreement and the other Loan Documents are
true, correct and complete in all material respects; that the
Borrower is not in violation of any of the covenants contained in
this Agreement and the other Loan Documents; that, after giving
effect to the transactions contemplated by this Agreement, no
Default or Event of Default has occurred and is continuing; and
that the Borrower has satisfied each of the closing conditions.
(ii) Certificate of the Secretary of the Borrower. The
Agent shall have received a certificate dated as of the Closing
Date of the secretary or assistant secretary of the Borrower
certifying that attached thereto is a true and complete copy of
the articles of incorporation of the Borrower and all amendments
thereto, certified as of a recent date by the appropriate
governmental authority in its jurisdiction of incorporation; that
attached thereto is a true and complete copy of the bylaws of the
Borrower as in effect on the date of such certification; that
attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of the Borrower authorizing the
borrowings contemplated hereunder and the execution, delivery and
performance of this Agreement and the other Loan Documents; and
as to the incumbency and genuineness of the signature of each
officer of the Borrower executing this Agreement and the other
Loan Documents.
(iii) Certificates of Good Standing. The Agent shall
have received certificates as of a recent date of the good
standing of the Borrower under the laws of its jurisdiction of
incorporation and each state where the Borrower is transacting
business.
(iv) Opinions of Counsel. The Agent shall have re-
ceived the favorable opinion of the law firm of Hull, Towill,
Norman and Barrett, counsel to the Borrower, dated as of the
Closing Date and addressed to the Lenders, in form and substance
satisfactory to the Agent.
(v) Insurance. The Agent shall have received certifi-
cates of insurance evidencing the insurance required under
Section 7.5 and otherwise satisfactory to the Agent.
(c) Consents; No Adverse Change.
(I) Governmental and Third Party Approvals. All
necessary approvals, authorizations and consents, if any be
required, of any Person and of all governmental authorities and
courts having jurisdiction with respect to the transactions
contemplated by this Agreement shall have been obtained.
(ii) No Injunction, Etc. No action, proceeding,
investigation, regulation or legislation shall have been insti-
tuted, threatened or proposed before any governmental authority
to enjoin, restrain, or prohibit, or to obtain substantial
damages in respect of, or which is related to or arises out of
this Agreement or the consummation of the transactions
contemplated hereby or which, in any Lender's discretion, would
make it inadvisable to consummate the transactions contemplated
by this Agreement.
(iii) No Material Adverse Change. In the reasonable
judgment of the Lenders, there shall not have occurred any
material adverse change in the business, business prospects,
financial condition or results of operations of the Borrower or
any event, condition or state of facts that would be expected
materially and adversely to affect the business, business
prospects, financial condition or results of operations of the
Borrower.
(iv) No Event of Default. No Default or Event of
Default shall have occurred and be continuing.
(d) Financial Matters.
(I) Financial Statements. The Lenders shall have
received (A) audited financial statements for the fiscal year of
the Borrower ended December 31, 1994 certified by Arthur Andersen
& Co., certified public accountants to the Borrower, and in form
and substance satisfactory to the Lenders, and (B) such other
financial information including the interim financial statements
described in Section 5.1(c) as may be reasonably requested by the
Lenders.
(ii) Payment at Closing. There shall have been paid by
the Borrower to the Agent and the Lenders any accrued and unpaid
fees due hereunder (including, without limitation, legal fees and
expenses), and to any other Person such amount as may be due,
including all taxes, fees and other charges in connection with
the execution, delivery, recording, filing and registration of
any of the Loan Documents.
(e) Miscellaneous.
(I) Notice of Borrowing; Disbursement Instructions.
The Agent shall have received written instructions from the
Borrower to the Agent directing the payment of any proceeds of
Loans made under this Agreement that are to be paid on the
Closing Date.
(ii) Senior Note Agreements. The Agent shall have
received a copy of each Senior Note Agreement certified to be a
true and complete copy by an Executive Officer of the Borrower.
(iii) Proceedings and Documents. All opinions, certifi-
cates and other instruments and all proceedings in connection
with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Lenders. The Lenders
shall have received copies of all other instruments and other
evidence as the Lenders may reasonably request, in form and
substance satisfactory to the Lenders, with respect to the
transactions contemplated by this Agreement and the taking of all
actions in connection therewith.
SECTION 4.3. Conditions to All Loans and Advances. The
obligations of the Lenders to make any Loan to be made hereunder
(including the initial Loan) is subject to the satisfaction of
the following conditions precedent on the relevant borrowing
date:
(a) Continuation of Representations and Warranties. The
representations and warranties made by the Borrower contained in
Article V and in the other Loan Documents shall be true and
correct on and as of such borrowing date with the same effect as
if made on and as of such borrowing date.
(b) No Existing Default. No Default or Event of Default
shall have occurred and be continuing hereunder on the borrowing
date with respect to such Loan or after giving effect to the
Loans to be made on such borrowing date.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BORROWER
------------------------------------------
SECTION 5.1. General Representations and Warranties. In
order to induce the Lenders to enter into this Agreement and to
make the Loans, the Borrower hereby represents and warrants to
the Lenders that:
(a) Organization; Power; Qualification. The Borrower and
each of its Subsidiaries (I) has been duly incorporated and
continues to be validly existing under the laws of its state of
organization, (ii) is not in liquidation, (iii) has all corporate
powers and governmental licenses, authorizations, consents and
approvals required to own or lease or operate its properties and
to carry on its business as now conducted and as presently
proposed to be conducted and (iv) has been duly qualified as a
foreign corporation in each jurisdiction where required by the
conduct of its business or its ownership of properties.
(b) Authorization and Binding Effect. The execution,
delivery and performance of this Agreement and the Notes and the
consummation of the transactions contemplated hereby are within
the corporate powers of the Borrower and have been duly
authorized by all necessary corporate action on the part of the
Borrower. On the Closing Date, this Agreement and the Notes will
be valid and legally binding obligations of the Borrower
enforceable against the Borrower in accordance with their
respective terms, subject as to enforcement only to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights generally and to general principles of equity.
(c) Financial Condition. The audited financial statements
for the three fiscal years ended December 31, 1992, 1993 and 1994
of the Borrower have been prepared in accordance with generally
accepted accounting principles and practices applied on a
consistent basis and fairly present the financial condition and
the results of operations of the Borrower for the periods ended
on each such date. The unaudited consolidated financial
statements for the three month period ended March 31, 1995 of the
Borrower fairly present the financial condition and the results
of operations of the Borrower for the period ended on such date.
Since December 31, 1994, there has not been any material adverse
change in the business, condition (financial or otherwise),
operations, liabilities, assets or prospects of the Borrower
except to the extent disclosed on Schedule 5.1(c) hereto.
(d) Taxes. The Borrower and each of its Subsidiaries has
filed all tax returns or extensions and all information or
similar reports required by law to have been filed by it and has
paid all taxes and other governmental charges which it is
required to have paid, except for taxes and governmental charges
the amount of which is being contested in good faith and by
appropriate proceedings and for which appropriate reserves have
been taken in accordance with generally accepted accounting
principles.
(e) No Conflict. Neither the execution and delivery of the
Notes, the execution, delivery or performance of this Agreement
by the Borrower, nor the consummation by the Borrower of the
transactions contemplated hereby or thereby (I) requires any
consent, approval, authorization or other order of or
registration or filing with, any court, regulatory body, adminis-
trative agency or other governmental body, agency or official or
conflicts or will conflict with or constitutes or will constitute
a breach of, or a default under, the articles of incorporation or
by-laws, or other organizational documents, of the Borrower, or
(ii) conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, any agreement,
indenture, lease or other instrument to which the Borrower is a
party or by which the Borrower or any of its properties may be
bound, or violates or will violate any statute, law, regulation
or filing or judgment, injunction, order or decree applicable to
the Borrower or any of its properties, or will result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Borrower pursuant to the terms of
any agreement or instrument to which the Borrower is a party or
by which the Borrower may be bound or to which any of its
property or assets is subject.
(f) Indebtedness. As of the Closing Date, the Borrower has
no Indebtedness for Borrowed Money or Secured Debt except as
listed on Schedule 5.1(f) hereto.
(g) No Violation; Litigation. Neither the Borrower nor any
of its Subsidiaries is in violation of its articles of incorpora-
tion or by-laws or other organizational documents, or in
violation in any material respect of any law, ordinance,
administrative or governmental rule or regulation applicable to
it or of any decree of any court or governmental agency or body
having jurisdiction over it. As of the Closing Date, except as
described on Schedule 5.1(g) hereto, there are no legal or
governmental proceedings pending or, to the knowledge of the
Borrower, threatened, against the Borrower or any officer
thereof, or to which the Borrower or any of its properties is
subject, that if adversely determined, would have a material
adverse effect on the business, condition (financial or
otherwise), operations, liabilities, assets or prospects of the
Borrower.
(h) Margin Stock. None of the proceeds of the Notes will
be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any
"margin stock" as defined in Regulation G (12 CFR Part 207) of
the Board of Governors of the Federal Reserve System (herein
called "margin stock") or for the purpose of maintaining,
reducing or retiring any indebtedness which was originally
incurred to purchase or carry any stock that is currently margin
stock or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of such
Regulation G. Neither the Borrower nor any agent acting on its
behalf has taken or will take any action which might cause this
Agreement or the Notes to violate Regulation G, Regulation T,
Regulation U or Regulation X of the Board of Governors of the
Federal Reserve System or to violate Section 7 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), in each
case as in effect now or as the same may hereafter be in effect.
(I) Investment Company. Neither the Borrower nor any of
its Subsidiaries is, nor is directly or indirectly controlled by
or acting on behalf of any Person which is, required to register
as an "investment company" under the Investment Company Act of
1940, as amended.
(j) Contingent Liabilities. As of the Closing Date, the
Borrower has no contingent liabilities, including without
limitation any Contingent Liabilities as defined in Section 1.1
and liabilities under contracts of the type referred to in
Section 5.1(n), that would be material to the Borrower that are
not provided for or disclosed in the financial statements
referred to in Section 5.1(c) or disclosed on Schedule 5.1(j)
hereto.
(k) Environmental Laws. The Borrower and each of its
Subsidiaries is and has been in compliance in all material
respects with all applicable Environmental Laws, and there is no
Environmental Condition in respect of the Borrower or any of its
Subsidiaries, except in either case where the absence of such
compliance or the existence of an Environmental Condition, in any
case or in the aggregate, could not reasonably be expected to
have a material adverse effect on the business, condition
(financial or otherwise), operations, liabilities, assets or
prospects of the Borrower or any of its Subsidiaries.
(l) ERISA.
(I) Each Plan complies in all material respects with the
currently applicable provisions of the Code and ERISA. No
termination of any Plan has occurred, is planned or is reasonably
expected to occur as a result of which the Borrower or any ERISA
Affiliate has incurred or may incur any liability to the PBGC or
to any other Person, which has not heretofore been satisfied. If
any Plan were to be terminated as of the last day of the most
recent plan year, the Borrower would not incur any liability
under Title IV of ERISA, and since the last day of each Plan's
most recent plan year there has been no material adverse change
in the financial condition of such Plan. No Plan has incurred
any "accumulated funding deficiency" (as such term is defined in
Section 412 of the Code or Section 302 of ERISA), whether or not
waived. No amendment with respect to which security is required
under Section 307 of ERISA or Section 401(a) (29) of the Code has
been made or is reasonably expected to be made to any Plan. The
Borrower and each ERISA Affiliate have made all contributions
required to be made by such Person to each Plan and each
Multiemployer Plan as and when such contributions have become
due, and no event requiring notice to the PBGC under Section
302(f)(4)(A) of ERISA or Section 412(n)(4)(A) of the Code has
occurred and is continuing or is reasonably expected to occur
with respect to any Plan. No Plan provides benefits which are
contingent upon or directly affected by the closing or shutdown
of any facility or plant.
(ii) Neither the Borrower nor any ERISA Affiliate has
incurred, or is reasonably expected to incur, any Withdrawal
Liability to any Multiemployer Plan which has not heretofore been
satisfied. Neither the Borrower nor any ERISA Affiliate has
received any notification that any Multiemployer Plan is
insolvent, in reorganization or has been terminated, within the
meaning of Title IV of ERISA, and, to the best of the Borrower's
knowledge, no Multiemployer Plan is reasonably expected to be
insolvent, in reorganization or terminated within the meaning of
Title IV of ERISA.
(iii) Neither the Borrower nor any employee benefit plan
maintained by it provides post-retirement medical or life
insurance benefits that are not accrued as liabilities on the
books of the Borrower, except in respect of which the annual cost
to the Borrower of providing such benefits currently does not
exceed, and is not reasonably expected by the Borrower to exceed,
$100,000.
(iv) No Person, Plan or, to the best of the Borrower's
knowledge, Multiemployer Plan, has engaged in a transaction that
could, directly or indirectly, result in any material liability
of the Borrower under ERISA (including without limitation
Sections 409, 502(I) and 502(1) thereof) or the Code (including
without limitation Section 4975 thereof) or pursuant to any
statute or agreement under which the Borrower has agreed to
indemnify or is required to indemnify any Person against
liability incurred under, or for a violation or failure to
satisfy the requirements of, any such statute or agreement, as
the case may be.
(v) The Borrower and its ERISA Affiliates have
complied with the health care continuation requirements of Part 6
of Title I of ERISA and Section 4980B of the Code.
(m) Subsidiaries. As of the Closing Date, the Borrower has
no corporate Subsidiaries and does not own any interest in any
partnership, joint venture or other entity, except as listed on
Schedule 5.1(m) hereto.
(n) Contracts. Except as described on Schedule 5.1(n)
hereto, neither the Borrower nor any of its Subsidiaries has
entered into, is a party to, or has any obligations under, any
material contract for the purchase of materials, supplies or
other property or services, if such contract requires that
payment be made by it regardless of whether or not delivery is
ever made of such materials, supplies or other property or
services.
(o) Affiliate Transactions. As of the Closing Date, except
as described on Schedule 5.1(o) hereto, all of the Borrower's
transactions and relationships with Affiliates, Related Persons
and Related Persons of Affiliates are on fair and reasonable
terms comparable to those that would be obtained in an arm's-length
transaction between unrelated third parties.
(p) Labor Relations. From the date of corporate formation
through the Closing Date, there have been no strikes or other
labor disputes or grievances pending against the Borrower which
have been, either in any case or in the aggregate, materially
adverse to the business, condition (financial or otherwise),
operations, liabilities, assets or prospects of the Borrower.
All payments due from the Borrower or any Subsidiary pursuant to
the provisions of any collective bargaining agreement have been
paid or accrued as a liability on the books of the Borrower and
its Subsidiaries, to the extent required by generally accepted
accounting principles, consistently applied.
(q) No Default. No Default or Event of Default has
occurred and is continuing on the date hereof. Neither the
Borrower nor any of its Subsidiaries is in default in the payment
of principal or interest on any Indebtedness or is in default
under any instrument or instruments or agreements under and
subject to which any Indebtedness has been incurred. No event
has occurred and is continuing under the provisions of any such
instrument or agreement that with the passage of time or the
giving of notice, or both, would constitute an event of default
thereunder.
(r) Status as REIT. The Borrower is and has been for each
of the Borrower's tax years from and including 1987, a "real
estate investment trust" within the meaning of Section 856 of the
Code.
SECTION 5.2. Representations and Warranties as to Real
Properties. With respect to each real property owned or operated
by it or its Subsidiaries and in order to induce the Lenders to
enter into this Agreement and to make the Loans, the Borrower
hereby represents and warrants, without limitation of any
representations contained in Section 5.1 hereof, as follows:
(a) Title. The Borrower and each of its Subsidiaries has
good and marketable title in fee simple to such real property,
and, as of the Closing Date, such real property is free and clear
of all Encumbrances, subject only to (I) Encumbrances listed on
Schedule 5.2(a) hereto, (ii) the lien of current real property
taxes and assessments not yet due and payable, (iii) covenants,
conditions and restrictions, rights of way, easements and other
matters of public record, (iv) any exceptions and exclusions
specifically referred to in the title insurance policies
described in Section 5.2(b) below and (v) other matters to which
like properties are commonly subject and which do not materially
interfere with the operation, enjoyment or value of such real
property.
(b) Title Insurance. Except as to undeveloped land
acquired by the Borrower prior to January 1, 1984, (I) on the
date of purchase of each such property, either (A) a title
insurance policy was issued to the Borrower or one of its
Subsidiaries in an amount not less than the purchase price paid
by the Borrower or such Subsidiary, or (B) the Borrower or one of
its Subsidiaries had obtained a commitment from a title insurance
company to issue such title insurance policy following such
purchase date, had complied as of such purchase date with each
other condition precedent to the issuance of such title policy
and had paid the premium in respect of such policy, and in each
case neither the Borrower nor any of its Subsidiaries has taken
any action that would cause such title insurance policy not to be
valid and in full force and effect or (ii) with respect to such
real property, there exists an attorney's opinion of title
favorable to the Borrower or one of its Subsidiaries, given by an
attorney licensed to practice law in the jurisdiction where such
real property is located.
(c) Taxes, etc. Current. All material taxes, governmental
assessments, insurance premiums, and water, sewer and municipal
charges which previously became due and owing in respect of such
real property have been paid, or an escrow of funds in an amount
sufficient to cover such payments has been established.
(d) Hazard Insurance. Such real property is covered by
hazard insurance (and, if applicable, federal flood insurance,
except as described on Schedule 5.2(d)) in an amount at least
equal to the greater of (I) 80% of the replacement cost of the
improvements on such real property, and (ii) an amount sufficient
to avoid the application of any coinsurance clause contained in
the related insurance policy; such insurance requires prior
notice to the Borrower of termination or cancellation, and no
such notice has been received.
(e) Mechanics' Liens. Such real property is free and clear
of any material mechanics' and materialmen's liens or liens in
the nature thereof, and no rights are outstanding that under law
could give rise to any such liens, except those which are insured
against by the title insurance policies referred to in Section
5.2(b) above, or for work conducted by the Borrower or any of its
Subsidiaries for which payment is not yet due (or is being
contested in good faith).
(f) Improvements. None of the improvements in respect of
such real property lies outside of the boundaries and building
restriction lines of such property in such a manner as to
materially affect the value of such improvements, no improvements
on adjoining properties materially encroach upon such real
property, and no improvement located on or forming part of such
real property is in material violation of any applicable zoning
laws or ordinances.
(g) Inspections and Physical Condition. As of the Closing
Date, such real property and any improvement or fixtures thereon
are free of structural defects or damage materially affecting
their value, and all building systems necessary for normal use of
the property are in good working order subject to ordinary wear
and tear, except as described on Schedule 5.2(g).
(h) Licenses and Permits. The Borrower and its
Subsidiaries are in possession of all material certificates of
occupancy or other similar licenses, permits and other
authorizations necessary and required by applicable law for the
use of such real property; and all such certificates of occupancy
or other similar licenses, permits and authorizations are valid
and in full force and effect.
(I) Condemnation Proceedings. As of the Closing Date,
there is no material proceeding pending or threatened for the
total or partial condemnation of such real property, or for the
relocation of roadways providing access to such real property,
except as described on Schedule 5.2(I) hereto.
(j) Purchase Options. There are no outstanding options or
rights of first refusal materially affecting such real property.
(k) Separate Lots. Such real property is a separate tax
parcel, assessed for real estate tax purposes separately from
property owned by any other Person, with such exceptions as are
not material.
(l) Ground Leases. Where the interest of the Borrower or
any of its Subsidiaries in such real property exists under a
ground lease, such ground lease is in full force and effect and
no material default has occurred under such ground lease, nor is
there any existing condition which, but for the passage of time
or the giving of notice (other than rent, or other payments due
but not yet delinquent), would result in a material default under
the terms of such ground lease.
ARTICLE VI
FINANCIAL INFORMATION AND NOTICES
---------------------------------
Until all the Obligations have been finally and indefeasibly
paid and satisfied in full, unless consent has been obtained in
the manner set forth in Section 11.12 hereof, the Borrower will
furnish to the Agent at the Agent's Office and each Lender at the
address set forth in Section 11.1 hereof, or such other office as
may be designated by such Lender from time to time:
SECTION 6.1. Financial Statements and Information.
(a) Securities Filings and Other Information. Promptly
upon any other transmission thereof, copies of each periodic
report (including Form 8-K, 10-K and 10-Q), proxy statement or
prospectus relating to the Borrower, any of its Subsidiaries or
any of their respective securities as shall be delivered to
shareholders, any securities exchange or the Commission, and the
following reports, certificates and opinions to the extent not
included in the reports referred to above:
(I) as soon as available and in any event within
ninety (90) days after the end of each fiscal year of
the Borrower, a consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such
fiscal year and the related consolidated statements of
operations, cash flows and shareholders' equity for
such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal
year, all in reasonable detail and satisfactory in
scope to the Required Lenders and accompanied by an
opinion thereon by Arthur Andersen & Co. or other
nationally recognized independent public accountants
reasonably satisfactory to the Required Lenders, and
which shall state that such statements have been
prepared in accordance with generally accepted
accounting principles (applied consistently with the
statements for the previous fiscal year), except for
changes disclosed by and concurred in by such
accountants, all certified as complete and correct and
prepared in accordance with generally accepted
accounting principles, by the chief financial officer
or chief accounting officer of the Borrower;
(ii) as soon as available and in any event within
sixty (60) days after the end of each of the first
three quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its
Subsidiaries and the related consolidated statements of
operations, cash flows and shareholders' equity for
such quarter, setting forth in each case in comparative
form the figures for the corresponding quarter and the
corresponding portion of the Borrower's previous fiscal
year, all certified (subject to normal year-end audit
adjustments) as complete and correct and as having been
prepared in accordance with generally accepted
accounting principles, consistently applied, by the
chief financial officer or chief accounting officer of
the Borrower;
(iii) simultaneously with the delivery of each set
of financial statements referred to in clauses (I) and
(ii) above, a certificate of an Executive Officer of
the Borrower (A) setting forth in detail the amounts
assigned to Borrower Total Assets, Operating Cash Flow,
Interest Expense, Secured Debt, Tangible Net Worth,
Borrower Earnings, Total Capitalization and Total Debt,
as of the date of such financial statements and showing
calculations demonstrating that the Borrower's
obligations pursuant to Sections 7.10, 7.11, 8.1, 8.2,
8.3, 8.8 and 8.9 were met as of the date of such
financial statements, (B) stating whether there exists
on the date of such certificate any Default or Event of
Default and, if any Default or Event of Default then
exists, setting forth the details thereof and the
action which the Borrower is taking or proposes to take
with respect thereto, and (c) stating whether, since
the date of the most recent previous delivery of
financial statements pursuant to clause (I) or (ii) of
this Section 6.1(a), there has been any material
adverse change in the business, financial position,
results of operations or prospects of the Borrower and
its Subsidiaries, and, if so, the nature of such
material adverse change;
(iv) simultaneously with the delivery of each set
of financial statements referred to in clause (I)
above, a statement of the firm of independent public
accountants that reported on such statements stating
(A) that their audit examination has included a review
of this Agreement as it relates to financial or
accounting matters, (B) whether anything has come to
their attention to cause them to believe that there
existed on the date of such statements any Default or
Event of Default, and (c) confirming the mathematical
accuracy of the calculations set forth in the officer's
certificate delivered simultaneously therewith pursuant
to clause (iii) above;
(v) as soon as available and in any event within
thirty (30) days after the end of each quarter of each
fiscal year of the Borrower, a statement demonstrating
a comparison between the cost budget of each project of
the Borrower and its Subsidiaries in Development Phase
to the actual disbursements made, together with a
description of each such project setting forth the
ownership, scope and status of completion of each such
project, certified as complete and correct and as
having been prepared in accordance with generally
accepted accounting principles, consistently applied,
by the chief financial officer or chief accounting
officer of the Borrower;
(vi) promptly upon transmission thereof, copies of
all press releases and other statements made available
generally by the Borrower or any of its Subsidiaries to
the public concerning material developments in the
results of operations, financial condition, business or
prospects of the Borrower or any of its Subsidiaries;
(vii) promptly upon receipt thereof, copies of each
report submitted to the Borrower or any of its
Subsidiaries by independent public accountants in
connection with any annual, interim or special audit
made by them of the books of the Borrower or any of its
Subsidiaries including, without limitation, each report
submitted to the Borrower or any of its Subsidiaries
concerning its accounting practices and systems and any
final comment letter submitted by such accountants to
management in connection with the annual audit of the
Borrower and its Subsidiaries;
(viii) promptly after receipt thereof, any written
communication from the Internal Revenue Service which
challenges the Borrower's status as a "real estate
investment trust" within the meaning of Section 856 of
the Code; and
(ix) with reasonable promptness, such other data and
information as any Lender may reasonably request.
The Borrower shall file with the Commission, and transmit to
holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Exchange
Act at the times and in the manner provided pursuant to such Act.
In the event that the Borrower shall cease to be required to file
such information, documents or reports with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act, as amended,
the Borrower shall prepare and transmit to the holders
information, documents or reports substantially similar to those
that would have been required by Section 13 or 15(d) of the
Exchange Act, as amended, had the Borrower remained subject to
such requirement. The Borrower shall transmit to the holders
copies of each communication from the Borrower to shareholders
generally at the same time as the Borrower makes such communica-
tion.
(b) Notices. Upon the Borrower's obtaining knowledge of
(I) a Default or an Event of Default or (ii) the existence of any
pending or threatened actions, suits, investigations,
litigations, or other judicial or administrative proceedings
which, if adversely determined, could reasonably be expected to
have an adverse effect on the condition (financial or otherwise),
operations, assets, businesses, properties or prospects of the
Borrower, deliver promptly (and in any event in the case of
clause (I) within three and in the case of clause (ii) within ten
Business Days after obtaining such knowledge) to each Lender a
certificate of an Executive Officer of the Borrower specifying
the nature and period of existence thereof and what action the
Borrower proposes to take with respect thereto.
(c) ERISA.
(I) As soon as possible and in any event (A)
within 20 days after the Borrower, any Subsidiary or
any ERISA Affiliate knows or has reason to know that
any Termination Event described in clause (I) of the
definition of Termination Event with respect to any
Plan has occurred and (B) within 10 days after the
Borrower, any Subsidiary or any ERISA Affiliate knows
or has reason to know that any other Termination Event
with respect to any Plan has occurred, a statement of
the chief financial officer of the Borrower describing
such Termination Event and the action, if any, that the
Borrower, such Subsidiary or such ERISA Affiliate
proposes to take with respect thereto;
(ii) promptly and in any event within two Business
Days after application therefor by the Borrower, any
Subsidiary or any ERISA Affiliate, copies of any
application for a waiver of the minimum funding
standard under Section 412 of the Code or Section 302
of ERISA;
(iii) promptly and in any event within two Business
Days after receipt thereof by the Borrower, any
Subsidiary or any ERISA Affiliate, copies of each
notice received by the Borrower, any Subsidiary or any
ERISA Affiliate from the PBGC stating its intention to
administer any Plan or to have a trustee appointed to
administer any Plan or to impose any liability (other
than for premiums under Section 4007 of ERISA) in
respect of any Plan;
(iv) promptly and in any event within 30 days
after the filing thereof with the Internal Revenue
Service, copies of each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series)
with respect to each Plan;
(v) at the time notice is given or required to be
given to the PBGC under Section 302(f) (4) (A) of ERISA
or Section 412 (n) (4) (A) of the Code of the failure
to make timely payments to a Plan, a copy of any such
notice filed and a statement of the chief financial
officer of the Borrower setting forth (A) sufficient
information necessary to determine the amount of the
lien under Section 302 (f) (3) of ERISA or Section
412(n) (3) of the Code, (B) the reason for the failure
to make the required payments and (c) the action, if
any, which the Borrower, the Subsidiary or its ERISA
Affiliate proposes to take with respect thereto; and
(vi) promptly and in any event within five
Business Days after receipt thereof by the Borrower,
any Subsidiary or any ERISA Affiliate from the sponsor
of a Multiemployer Plan, a copy of each notice received
by the Borrower, any Subsidiary or any ERISA Affiliate
concerning (A) the imposition of Withdrawal Liability
by a Multiemployer Plan, (B) the determination that a
Multiemployer Plan is, or is expected to be, insolvent
or in reorganization within the meaning of Title IV of
ERISA, (c) the termination of a Multiemployer Plan
within the meaning of Title IV of ERISA or (D) the
amount of liability incurred, or expected to be
incurred, by the Borrower, any Subsidiary or any ERISA
Affiliate in connection with any event described in
clause (A), (B) or (c) above.
SECTION 6.2. Accuracy of Information. All written infor-
mation, reports, statements and other papers and data furnished
by or on behalf of the Borrower or any of its Subsidiaries to the
Agent or any Lender (other than financial forecasts) whether
pursuant to this Article VI or any other provision of this
Agreement shall be at the time the same is so furnished, complete
and correct in all material respects to the extent necessary to
give the Agent and the Lenders complete, true and accurate
knowledge of the subject matter based on the Borrower's knowledge
thereof.
ARTICLE VII
AFFIRMATIVE COVENANTS
---------------------
Until all of the Obligations have been finally and
indefeasibly paid and satisfied in full, unless consent has been
obtained in the manner provided for in Section 11.12, the
Borrower will duly and punctually perform, and cause its
Subsidiaries to duly and punctually perform, the following
covenants:
SECTION 7.1. Books and Records. The Borrower and each
Subsidiary will keep proper accounting records in accordance with
generally accepted accounting principles. Each Lender shall have
the right, subject to reasonable notice and during regular
business hours, to visit the headquarters of the Borrower or any
of its Subsidiaries or arrange a telephone conference call or
video conference in order to discuss the affairs, finances and
accounts of the Borrower or any of its Subsidiaries with the
appropriate officers of the Borrower or such Subsidiary and with
their present or former auditors. All expenses incurred by any
Lender in connection with the foregoing shall be solely for the
account of such Lender; provided, that if any Default shall have
occurred and be continuing, all such expenses shall be for the
account of the Borrower in accordance with Section 11.2 hereof.
Each Lender by its acceptance hereof agrees that any
information obtained by it pursuant to this Section 7.1 and
designated in writing by the Borrower as confidential will be
treated as confidential in accordance with such Lender's
established policies respecting confidential information;
provided, that nothing herein contained shall limit or impair the
right or obligation of any Lender to disclose such information:
(a) to its auditors, attorneys, employees or agents, (b) when
required by any law, ordinance or governmental order, regulation,
rule, policy, investigation or any regulatory authority request,
(c) as may be required in any report, statement or testimony
submitted to any municipal, state, provincial or federal
regulatory body having or claiming to have jurisdiction over such
Lender, (d) which is publicly available or which is received by
any Lender from a Person which is under no duty to keep the same
confidential, (e) in connection with any proceeding, case or
matter pending before any court, tribunal, arbitration board or
any governmental agency, commission, authority, board or similar
entity or (f) to the extent necessary in connection with any
contemplated assignment by any Lender pursuant to Section 11.11
(it being understood and agreed that any such prospective
assignee shall itself be deemed to have agreed to be bound by the
terms and provisions hereof upon any assignment to such
transferee).
SECTION 7.2. Payments. The Borrower will duly and
punctually pay the principal of and interest on and any other
amounts payable in respect of, the Notes in accordance with their
terms and this Agreement.
SECTION 7.3. Corporate Existence, Etc. The Borrower and
each of its Subsidiaries will do, or cause to be done, all things
necessary to preserve and keep in full force and effect its
corporate existence. Without limitation of the foregoing, the
Borrower and its Subsidiaries will do, or cause to be done, all
things necessary to maintain all licenses, franchises and permits
necessary to the conduct of their business and the ownership of
their properties, and shall not conduct their business and
activities other than in the ordinary course of business and in
accordance with past practice.
SECTION 7.4. Payment of Taxes. The Borrower and its
Subsidiaries will timely file all tax returns or extensions and
all information or similar reports required by law to be filed by
them, and will pay all applicable taxes and other governmental
charges required to be paid, and the Borrower will not (a) revoke
its election to be a "real estate investment trust" within the
meaning of Section 856 of the Code, (b) take or fail to take any
action that will cause such election to be terminated or to cease
to be valid at any time, (c) incur liability for any excise tax
under Section 4981 of the Code or (d) incur liability for any
prohibited transaction under Section 857(b) (6) of the Code.
SECTION 7.5. Insurance. The Borrower and its Subsidiaries
will carry and maintain in full force and effect at all times
with financially sound and reputable institutions insurance in
such forms and amounts and against such risks as may be
reasonable and prudent in the circumstances for a company or
group of companies of established reputation engaged in the same
or a similar business and owning and operating properties similar
to those of the Borrower and its Subsidiaries (including without
limitation property, casualty and liability insurance), and in
any event as may be required by applicable laws, statutes,
regulations, rules or orders. Without limitation of the
foregoing, the Borrower shall promptly, and in any event within
60 days of the Closing Date, obtain a policy of flood insurance
consistent with Section 5.2(d), for each property listed on
Schedule 5.2(d).
SECTION 7.6. Continuance of Business. The Borrower and its
Subsidiaries will limit themselves to, and continue to conduct,
the business in which the Borrower is currently engaged, consist-
ing essentially of owning and operating real estate in the United
States, and the Borrower and its Subsidiaries shall not purchase
or continue to hold any property other than multi-family residen-
tial apartment complexes or Temporary Investments ("Other Proper-
ties") to the extent that the book value of all such Other
Properties, taken singly or in the aggregate, exceeds 10% of the
aggregate book value of all the real property assets of the
Borrower and its Subsidiaries.
SECTION 7.7. Continuance of Management. Peter S. Knox III,
if not incapacitated, will continue to serve as Chairman of the
Board of Directors of the Borrower, and continue to perform his
current functions with respect to the management and operations
of the Borrower.
SECTION 7.8. Environmental Covenant. The Borrower and its
Subsidiaries and all properties (including leased facilities)
operated by them shall comply with all applicable Environmental
Laws. Without limitation of Section 8.5, the Borrower and its
Subsidiaries shall use their best efforts to avoid the occurrence
of any Environmental Condition either on the properties
(including leased facilities) operated by them or otherwise
related in any way to the Borrower and its Subsidiaries or their
respective activities, except where the existence of an
Environmental Condition, in any case or in the aggregate, could
not reasonably be expected to have a material adverse effect on
the business, condition (financial or otherwise), operations,
liabilities, assets or prospects of the Borrower or any of its
Subsidiaries. In the event any such Environmental Condition
occurs, the Borrower shall (a) take prompt action to respond to
and rectify such Environmental Condition and (b) deliver promptly
(and in any event within ten Business days after obtaining
knowledge of such Environmental Condition) to each Lender a
certificate of an Executive Officer of the Borrower specifying
the nature of such Environmental Condition and what action the
Borrower proposes to take with respect thereto. The Borrower and
its Subsidiaries shall treat, dispose of, or arrange for
treatment or disposal of Hazardous Materials only at third-party
treatment and disposal facilities which to the best of the
Borrower's knowledge, after reasonably diligent inquiry, maintain
valid permits and are operating in compliance with all applicable
Environmental Laws and permits. The Borrower and its
Subsidiaries shall defend, indemnify and hold harmless the Agent,
the Lenders, and their respective parents, Subsidiaries,
affiliates, employees, agents, officers and directors, from and
against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of,
or in any way relating to the violation of, noncompliance with or
liability under any Environmental Laws applicable to the
operations of the Borrower or its Subsidiaries, or any orders,
requirements or demands of any governmental authority related
thereto, including, without limitation, attorney's and
consultant's fees, investigation and laboratory fees, response
costs, court costs and litigation expenses, except to the extent
that any of the foregoing arise out of the gross negligence or
willful misconduct of the party seeking indemnification therefor.
(This indemnity shall continue in full force and effect
regardless of the termination of this Agreement.)
SECTION 7.9. Maintenance, Etc. The Borrower will, in all
material respects, maintain, preserve and keep, and will cause
each Subsidiary to maintain, preserve and keep, its properties
which are used or useful in the conduct of its business (whether
owned in fee or a leasehold interest) in good repair and working
order and from time to time will make all necessary repairs,
replacements, renewals and additions so that at all times the
economic efficiency thereof shall be maintained. The Borrower
and its Subsidiaries shall obtain and maintain in full force and
effect at all times all permits, licenses, and government
approvals necessary to the lawful conduct of its business and the
operation of its properties.
SECTION 7.10. Interest Expense. The Borrower will
maintain, as measured at the end of each fiscal quarter for the
immediately preceding four fiscal quarters, a ratio of Operating
Cash Flow to Interest Expense of at least 2.5 to 1.0.
SECTION 7.11. Tangible Net Worth. The Borrower will
maintain at all times a Tangible Net Worth of at least
$400,000,000.
SECTION 7.12. Further Assurances. The Borrower shall
promptly execute and deliver all further instruments and
documents, and take all further action that may be necessary or
that the Agent may reasonably request in order more fully to give
effect to the provisions of this Agreement.
ARTICLE VIII
NEGATIVE COVENANTS
------------------
Until all of the Obligations have been finally and
indefeasibly paid and satisfied in full, unless consent has been
obtained in the manner set forth in Section 11.12 hereof, the
Borrower will duly and punctually perform, and cause its
Subsidiaries to duly and punctually perform, the following
covenants:
SECTION 8.1. Indebtedness. The Borrower will not permit to
exist at any time any Indebtedness on behalf of itself or its
Subsidiaries other than:
(a) the Notes and the Senior Notes;
(b) Secured Debt and Subsidiary Debt, whether now existing
or hereafter incurred, provided, that in accordance with Section
8.2 the aggregate of all Secured Debt and Subsidiary Debt may at
no time exceed 10% of Total Capitalization;
(c) Indebtedness subordinate in all respects to the Notes;
and
(d) Indebtedness ranking pari passu to the Notes;
provided, that the Borrower shall at no time permit its ratio of
Total Debt (including Secured Debt and Subsidiary Debt) to Total
Capitalization to exceed .4 to 1.0.
SECTION 8.2. Encumbrances. The Borrower will not permit to
exist at any time any Encumbrance on any property or asset of any
kind, now owned or hereafter acquired by the Borrower or any of
its Subsidiaries other than:
(a) Encumbrances existing on the Closing Date and described
on Schedule 8.2;
(b) Encumbrances created after the Closing Date, on
property or assets acquired by the Borrower or any of its
Subsidiaries to secure a portion of the purchase price thereof;
provided, that such Encumbrance does not exceed 75% of the lesser
of the (I) cost or (ii) fair market value of such property or
asset;
(c) Encumbrances created after the Closing Date other than
to secure the purchase price of property or assets acquired by
the Borrower or any of its Subsidiaries;
(d) workmen's and other statutory liens in respect of
obligations arising after the Closing Date not due or being
contested;
(e) liens for taxes not yet delinquent or being contested
in good faith; and
(f) judgment liens arising in connection with legal
proceedings so long as such proceedings are being contested and
execution is stayed;
provided, that the aggregate of all Secured Debt and Subsidiary
Debt may at no time exceed 10% of Total Capitalization; and
provided, further, that such Secured Debt and Subsidiary Debt
shall be included in, and not permitted independently of, the
limit on Total Debt contained in Section 8.1. For all purposes
of this Agreement, a Capital Lease shall be deemed to give rise
to an Encumbrance on property owned by the Borrower or any of its
Subsidiaries and to create Secured Debt in the amount of the
Capital Lease Obligation.
SECTION 8.3. Sale of Assets. The Borrower will not, nor
will it permit any of its Subsidiaries to, sell, lease or
otherwise dispose (a) in any one fiscal year, of any of its
property or assets other than property or assets which neither
constituted in the aggregate more than 15% of Borrower Total
Assets nor contributed more than 15% of Operating Cash Flow in
any one of the three preceding fiscal years or (b) in any three-fiscal
year period, of any of its property or assets other than
property or assets which neither constituted in the aggregate
more than 30% of Borrower Total Assets as measured in each of
such three fiscal years nor in the aggregate contributed more
than 30% of Operating Cash Flow measured in each of such three
fiscal years; provided, that the foregoing limitation will not
apply to Temporary Investments.
SECTION 8.4. Merger. The Borrower will not merge or
consolidate with any Person unless thereafter:
(a) the Borrower would be the surviving entity;
(b) the Borrower would not be in breach of any covenant
hereunder and no Default would exist;
(c) without limitation of clause (b), no Change in Control
or violation of Section 7.7 would result from the merger;
and
(d) the assets acquired by the Borrower as a result of such
transaction, or any series of related transactions, would be
less than 25% of Borrower Total Assets as measured
immediately prior to such transaction(s).
SECTION 8.5. Property Acquisition Policy. The Borrower and
its Subsidiaries will not acquire any Property Investment unless
the representations contained in Section 5.2 hereof, if given as
of the date of such acquisition, would be true and correct with
respect to all real properties of the Borrower and its
Subsidiaries. In addition, neither the Borrower nor any
Subsidiary will purchase any new Property Investment unless for
each such Property Investment it shall first:
(a) conduct and document in writing the results of (I) a
building inspection (including without limitation tests for radon
and asbestos), (ii) an engineering analysis, (iii) a property
investigation and (iv) all other investigations and examinations
as are customarily made by other purchasers of properties similar
to the property which is the subject of the Property Investment;
and
(b) conduct and document in writing the results of a Phase
I environmental review (a "Phase I") of such property and the
surrounding area and perform and document in writing all further
investigation necessary or appropriate in light of the findings
of such Phase I and determine that no Environmental Condition
exists in such area that has the potential to result in any
material adverse effect on the condition (financial or
otherwise), operations, assets, businesses, properties or
prospects of the Borrower; provided, that if a Phase I cannot
feasibly be conducted due to time constraints dictated by the
terms of the proposed Property Investment, the Borrower shall
perform computer database searches to confirm the absence of any
Environmental Condition, and shall perform as much of the
investigation and analysis which would be part of a Phase I as is
possible prior to the closing of the Property Investment
transaction, and will obtain a full Phase I within 60 days after
the purchase of the Property Investment has been effected. Each
Phase I will be available for inspection by the Agent or any
Lender. At no time shall the aggregate book value of all
properties with respect to which there existed at the time of
purchase an Environmental Condition as described above exceed 5%
of the aggregate book value of all the real properties owned by
the Borrower and its Subsidiaries.
SECTION 8.6. Certain Investments Prohibited. The Borrower
and its Subsidiaries shall not purchase any Asset Backed Security
unless (a) such security is fully guaranteed by the United States
or an agency or instrumentality thereof (including mortgage
backed securities issued by the Federal National Mortgage
Association, the Federal Home Loan Mortgage Corporation or
similar government-sponsored entities) and (b) the security is
not classified as a "high-risk mortgage security" under the
January 28, 1992 statement of policy of the Federal Financial
Institutions Examination Council, or any subsequent amendment
thereto or regulatory pronouncement substituting therefor.
SECTION 8.7. Transactions With Affiliates and Related
Persons.
(a) The Borrower and its Subsidiaries will not (I) enter
into or be a party to any transaction with any Affiliate or
Related Person of the Borrower, or Related Person of any
Affiliate of the Borrower (including without limitation, the
purchase from, sale to or exchange of property with, or the
rendering of any service by or for, any such parties), except in
the ordinary course of and pursuant to the reasonable
requirements of the Borrower's business and upon fair and
reasonable terms no less favorable to the Borrower than would be
obtained in a comparable arm's-length transaction between
unrelated third parties or (ii) without limitation of clause (I),
increase the salary, fee, bonus or other compensation (cash or
otherwise) or amount payable to any director, officer, employee,
consultant, agent or contractor, except for increases given in
the ordinary course of business and, in respect of amounts and
timing, in accordance with past practice.
(b) Without limitation of subsection (a) above, the
Borrower and its Subsidiaries shall not make any payment under a
contract or arrangement with any Affiliate, Related Person, or
Related Person of an Affiliate, other than compensation for
services as an officer, director or employee of the Borrower to
the extent permitted by subsection (a) above (such payments,
"Insider Payments"), except to the extent that the aggregate
amount of all Insider Payments otherwise prohibited by this
subsection (b) in the fiscal year in which such payment is made
is less than $100,000; provided, that Insider Payments shall not
be deemed to include payments, made in compensation for legal
services, which are consistent with subsection (a) above.
In determining whether the Borrower has complied with the
covenants contained in Sections 7.10, 7.11, 8.1, 8.2, 8.3 and
8.4, amounts receivable by the Borrower and its Subsidiaries from
their Related Persons, Affiliates and Related Persons of such
Affiliates shall be disregarded.
SECTION 8.8. Restricted Payments. The Borrower and its
Subsidiaries will not make any Restricted Payment other than (a)
payments required to maintain the Borrower's status as a "real
estate investment trust" within the meaning of the Code for the
1994 tax year and (b) additional Restricted Payments; provided,
that the aggregate amount of all Restricted Payments made after
the September 30, 1993 does not exceed the amount of Borrower
Earnings; and provided, further, that in no event shall a
Restricted Payment be permitted to be made (I) when an Event of
Default has occurred and is continuing or (ii) if after the
making of such payment, the Borrower would be in breach of any of
the covenants contained in Articles VI, VII or VIII hereof.
SECTION 8.9. Development Activity. The Borrower and its
Subsidiaries will not engage in any Development Activity other
than Development Activity in which the Borrower and its
Subsidiaries do not have a total aggregate investment at any time
exceeding an amount equal to ten percent (10%) of the aggregate
book value of the real property owned by the Borrower and its
Subsidiaries not currently in Development Phase.
SECTION 8.10. Amendments to Senior Note Agreement. The
Borrower will not amend or otherwise modify the Senior Note
Agreements or the Senior Notes to effect any of the following:
(a) increase the rate of interest, (b) alter the time and manner
of payments, (c) alter the maturity date, (d) make the covenants
more restrictive, (e) make the events of default more restrictive
to the Borrower, (f) restrict the Borrower's ability to perform
its obligations hereunder or (g) make any other changes which
would increase the obligations of the Borrower thereunder or
confer additional rights on the holders of the Senior Notes.
ARTICLE IX
DEFAULT AND REMEDIES
---------------------
SECTION 9.1. Events of Default. Each of the following
shall constitute an Event of Default, whatever the reason for
such event and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment or order
of any court or any order, rule or regulation of any governmental
authority or otherwise:
(a) default shall occur in the payment of interest on any
Note and such default shall continue for a period of five days or
default shall occur in the making of any payment of the principal
of any Note; or
(b) default shall occur in the observance or performance of
any covenant set forth in Sections 7.4, 7.10, 7.11, 8.1, 8.2,
8.4, 8.8 or 8.9; or
(c) default shall occur in the observance or performance of
any other obligation, covenant, undertaking, condition or
provision in respect of the Notes or contained in this Agreement
which is not remedied within thirty (30) days after the earlier
of: (I) the date on which the Borrower shall have obtained
knowledge of the occurrence of any Default and (ii) receipt by
the Borrower of written notice from the Agent or any Lender
requiring the same to be remedied; or
(d) the Borrower (I) defaults on any payment of principal
or of interest on any Indebtedness for Borrowed Money in excess
of $500,000 individually or in the aggregate or (ii) defaults in
the performance or observance of any provision contained in any
agreement respecting any other Indebtedness in excess of
$1,000,000 individually or in the aggregate; or
(e) there shall be entered in any court of competent
jurisdiction, any final judgment ordering the Borrower to pay
money in excess of $250,000 or the equivalent thereof in another
currency, and such judgment shall remain undismissed,
undischarged, or unstayed pending appeal and in effect for a
period of thirty (30) days from the entry thereof; or
(f) any representation in Article V hereof shall prove to
have been false or incorrect as of the date of the making
thereof, or any other representation or warranty made by the
Borrower herein or in connection with the consummation of this
Agreement shall prove to have been false or incorrect in any
material respect as of the date of the making thereof; or
(g) the Borrower shall become insolvent or unable to pay
its debts as they fall due, or shall stop, suspend or threaten to
stop or suspend payment of all or a material part of its debts or
shall propose or make a general assignment or an arrangement or
composition with or for the benefit of its creditors, or a
moratorium shall be agreed or declared in respect of or affecting
all or a material part of the Indebtedness of the Borrower; or
(h) there shall be entered an order by any competent court,
or a resolution passed, for the winding up or dissolution of the
Borrower, save for the purposes of reconstruction, amalgamation
or reorganization on terms approved by the Required Lenders; or
(I) the Borrower shall initiate or consent to judicial
proceedings relating to itself under any applicable liquidation,
bankruptcy, insolvency, composition, reorganization or other
similar laws (including a proceeding to appoint a receiver,
trustee, custodian or other similar official for it or for all or
any material part of its assets), or there shall be commenced
against the Borrower any such proceeding that results in the
entry of an order for relief or remains undismissed, unbonded or
unstayed pending appeal and in effect for a period of sixty (60)
days from the date of entry thereof; or the Borrower shall make a
conveyance or assignment for the benefit of, or shall enter into
any composition or other arrangement with, its creditors
generally, save for the purposes of reconstruction, amalgamation
or reorganization on terms approved by the Required Lenders; or
(j) the Borrower shall take any action authorizing, or in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth above in clauses (g)
through (I); or
(k) a claim is asserted or threatened against the Borrower
or any Subsidiary which could have a material adverse effect on
the Borrower, including without limitation any such claim that
reasonably could be expected to result in liability or legally
required expenditures in an amount (I) that is equal to or
exceeds 20% of the Borrower's Tangible Net Worth or (ii) payment
of which, if made as of the time such claim is asserted or
threatened, would cause the Borrower to violate any of the
provisions of Articles VI, VII or VIII hereof or otherwise result
in any Event of Default; or
(l) any Termination Event with respect to a Plan shall have
occurred and the sum (determined as of the date of occurrence of
such Termination Event) of the Insufficiency of such Plan and the
Insufficiency of any and all other Plans with respect to which a
Termination Event shall have occurred and be continuing (or in
the case of a Multiple Employer Plan with respect to which a
Termination Event described in clause (ii) of the definition of
Termination Event shall have occurred and be continuing, the
liability of the Borrower, any Subsidiary and the ERISA
Affiliates related thereto) is equal to or greater than
$1,000,000; or
(m) the Borrower, any Subsidiary or any ERISA Affiliate
shall fail to pay when due any amount or amounts equal to or
greater than $100,000 that it is obligated to pay under Title IV
of ERISA; or
(n) the Borrower, any Subsidiary or any ERISA Affiliate
shall have committed a failure described in Section 302(f)(1) of
ERISA or Section 412(n)(1) of the Code and the amount determined
under Section 302(f)(3) of ERISA or Section 412(n)(3) of the Code
in respect of such failure shall be equal to or greater than
$1,000,000; or
(o) the Borrower, any Subsidiary or any ERISA Affiliate
shall have been notified by the sponsor of a Multiemployer Plan
that it has incurred Withdrawal Liability to such Multiemployer
Plan in an amount that, when aggregated with all other amounts
required to be paid to Multiemployer Plans in connection with
Withdrawal Liabilities (determined as of the date of such
notification), exceeds $500,000 or requires annual payments which
exceed by more than $100,000 the annual payments required to be
made by the Borrower, such Subsidiary or such ERISA Affiliate to
such Multiemployer Plan immediately or prior to the incurrence of
such Withdrawal Liability; or
(p) the Borrower, any Subsidiary or any ERISA Affiliate
shall have been notified by the sponsor of a Multiemployer Plan
that such Multiemployer Plan is insolvent or in reorganization or
is being terminated, within the meaning of Title IV of ERISA, if
as a result of such insolvency, reorganization or termination the
aggregate annual contributions of the Borrower, any Subsidiary
and the ERISA Affiliates to all Multiemployer Plans that are then
insolvent, in reorganization or being terminated have been or
will be increased over the amounts contributed to such
Multiemployer Plans for the respective plan years that include
the date hereof by an amount exceeding $1,000,000;
(q) the aggregate amount of the Insufficiencies as of the
last day of any Plan year in respect of all Plans having any
Insufficiency as of such date shall exceed $1,000,000; or
(r) a Change in Control shall occur.
SECTION 9.2. Remedies. Upon the occurrence of an Event of
Default, with the consent of the Required Lenders, the Agent may,
or upon the request of the Required Lenders, the Agent shall, by
notice to the Borrower:
(a) Acceleration; Termination of Total Commitment.
Declare the principal of and interest on the Loans and the Notes
at the time outstanding, and all other amounts owed to the
Lenders and to the Agent under this Agreement or any of the other
Loan Documents and all other Obligations, to be forthwith due and
payable, whereupon the same shall immediately become due and
payable without presentment, demand, protest or other notice of
any kind, all of which are expressly waived, anything in this
Agreement or the other Loan Documents to the contrary
notwithstanding, and terminate the Total Commitment and any right
of the Borrower to request borrowings thereunder; provided, that
upon the occurrence of an Event of Default specified in Section
9.1(g), (h), (I) and (j), the Total Commitment shall be
automatically terminated and all Obligations shall automatically
become due and payable. Nothing herein shall be construed to
permit the Agent or any Lender to charge or collect any unmatured
or unearned interest.
(b) Rights of Collection. Exercise on behalf of the
Lenders all of its other rights and remedies under this
Agreement, the other Loan Documents and applicable law, in order
to satisfy all of the Borrower's Obligations;
provided, that upon the occurrence of an Event of Default
specified in Section 9.1(a) and the continuance thereof for a
period of thirty (30) days, the Agent shall take such actions
described in this Section 9.2 upon the request of all of the
Facility B Lenders (excluding First Union National Bank of
Georgia to the extent that it ever becomes a Facility B Lender).
SECTION 9.3. Rights and Remedies Cumulative; Non-Waiver;
etc. The enumeration of the rights and remedies of the Agent and
the Lenders set forth in this Agreement is not intended to be
exhaustive and the exercise by the Agent and the Lenders of any
right or remedy shall not preclude the exercise of any other
rights or remedies, all of which shall be cumulative, and shall
be in addition to any other right or remedy given hereunder or
under the Loan Documents or that may now or hereafter exist in
law or in equity or by suit or otherwise. No delay or failure to
take action on the part of the Agent and the Lenders in
exercising any right, power or privilege shall operate as a
waiver thereof, nor shall any single or partial exercise of any
such right, power or privilege preclude other or further exercise
thereof or the exercise of any other right, power or privilege or
shall be construed to be a waiver of any Event of Default. No
course of dealing between Borrower, the Agent, and the Lenders or
their respective agents or employees shall be effective to
change, modify or discharge any provision of this Agreement or
any of the other Loan Documents or to constitute a waiver of any
Event of Default.
ARTICLE X
THE AGENT
---------
SECTION 10.1. Appointment. Each of the Lenders hereby
irrevocably designates and appoints First Union National Bank of
Georgia as the Agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes
First Union National Bank of Georgia as the Agent for such Lender
to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to the
Agent by the terms of this Agreement and such other Loan Docu-
ments, together with such other powers as are reasonably inciden-
tal thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement or such other Loan Documents, the
Agent shall not have any duties or responsibilities, except those
expressly set forth herein and therein, or any fiduciary rela-
tionship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be
read into this Agreement or the other Loan Documents or otherwise
exist against the Agent. To the extent any provision of this
Agreement permits action by the Agent, the Agent shall, subject
to the provisions of Section 11.12 hereof and of this Article X,
take such action if directed in writing to do so by the Required
Lenders.
SECTION 10.2. Delegation of Duties. The Agent may execute
any of its duties under this Agreement and the other Loan Docu-
ments by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining
to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
SECTION 10.3. Exculpatory Provisions. Neither the Agent
nor any of its officers, directors, employees, agents, attorneys-in-
fact or Affiliates shall be (a) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in
connection with this Agreement or the other Loan Documents
(except for its or such Person's own gross negligence or willful
misconduct), or (b) responsible in any manner to any of the
Lenders for any recitals, statements, representations or warran-
ties made by the Borrower or any officer thereof contained in
this Agreement or the other Loan Documents or in any certificate,
report, statement or other document referred to or provided for
in, or received by the Agent under or in connection with, this
Agreement or the other Loan Documents or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this
Agreement or the other Loan Documents or for any failure of the
Borrower to perform its obligations hereunder or thereunder. The
Agent shall not be under any obligation to any Lender to ascer-
tain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement, or
to inspect the properties, books or records of the Borrower.
SECTION 10.4. Reliance by Agent. The Agent shall be
entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversa-
tion believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and
other experts selected by the Agent. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes
unless such Note shall have been transferred in accordance with
Section 11.11 hereof. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement and
the other Loan Documents unless it shall first receive such
advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction
by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take
any such action except for its own gross negligence or willful
misconduct. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and
the Notes in accordance with a request of the Required Lenders
(except for such events which require the consent of each of the
Lenders as set forth in Section 11.12), and such request and any
action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Notes.
SECTION 10.5. Notice of Default. The Agent shall not be
deemed to have knowledge or notice of the occurrence of any
Default or Event of Default hereunder unless the Agent has
received notice from a Lender or the Borrower referring to this
Agreement, describing 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, the Agent shall promptly
give notice thereof to the Lenders. The Agent shall take such
action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Lenders; 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 Lenders.
SECTION 10.6. Non-Reliance on Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates has made any representations or warranties to it
and that no act by the Agent hereinafter taken, including any
review of the affairs of the Borrower, shall be deemed to
constitute any representation or warranty by the Agent to any
Lender. Each Lender represents to the Agent that it has,
independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation
into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own
decision to make its Loans hereunder and enter into this
Agreement. Each Lender also represents that it will, indepen-
dently and without reliance upon the Agent or any other Lender,
and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analy-
sis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to
the business, operations, property, financial and other condition
and creditworthiness of the Borrower. Except for notices,
reports and other documents expressly required to be furnished to
the Lenders by the Agent hereunder or by the other Loan Docu-
ments, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concern-
ing the business, operations, property, financial and other
condition or creditworthiness of the Borrower which may come into
the possession of the Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
SECTION 10.7. Indemnification. The Lenders agree to indem-
nify the Agent in its capacity as such (to the extent not reim-
bursed by the Borrower and without limiting the obligation of the
Borrower to do so), ratably according to the respective amounts
of their Commitment Percentages, from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation,
at any time following the payment of the Notes) be imposed on,
incurred by or asserted against the Agent in any way relating to
or arising out of this Agreement or the other Loan Documents, or
any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action
taken or omitted by the Agent under or in connection with any of
the foregoing; provided that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the Agent's bad faith, gross
negligence or willful misconduct. The agreements in this Section
10.7 shall survive the payment of the Notes and all other amounts
payable hereunder.
SECTION 10.8. Agent in Its Individual Capacity. The Agent
and its Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower as
though the Agent were not the Agent hereunder. With respect to
Loans made or renewed by it and any Note issued to it, the Agent
shall have the same rights and powers under this Agreement and
the other Loan Documents as any Lender and may exercise the same
as though it were not the Agent, and the terms "Lender" and
"Lenders" shall include the Agent in its individual capacity.
SECTION 10.9. Successor Agent. Upon at least sixty (60)
days' prior written notice to the Borrower and the Lenders, (a)
the Agent may resign as Agent hereunder and (b) the Agent may be
removed as Agent hereunder, with or without cause, by the
Required Lenders. If the Agent shall resign or be so removed as
Agent under this Agreement, then the Required Lenders, with the
prior written approval of the Borrower (which approval shall not
be unreasonably withheld), shall appoint from among the Lenders a
successor agent for the Lenders whereupon such successor agent
shall succeed to the rights, powers and duties of the Agent, and
the term "Agent" shall mean such successor agent effective upon
its appointment, and the former Agent's rights, powers and duties
as Agent shall be terminated, without any other or further act or
deed on the part of such former Agent or any of the parties to
this Agreement or any holders of the Notes. After any retiring
Agent's resignation or removal hereunder as Agent, the provisions
of Section 10.7 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this
Agreement.
ARTICLE XI
MISCELLANEOUS
-------------
SECTION 11.1. Notices.
(a) Method of Communication. Except as otherwise provided
in this Agreement, all notices and communications hereunder shall
be in writing, or by telephone subsequently confirmed in writing.
Any notice shall be effective if delivered by hand delivery or
sent via telecopy, recognized overnight courier service or
certified mail, return receipt requested, and shall be presumed
to be received by a party hereto (I) on the date of delivery if
delivered by hand or sent by telecopy, (ii) on the next Business
Day if sent by recognized overnight courier service and (iii) on
the third Business Day following the date sent by certified mail,
return receipt requested. A telephonic notice to the Agent as
understood by the Agent will be deemed to be the controlling and
proper notice in the event of a discrepancy with or failure to
receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be
sent to it at the following addresses, or any other address as to
which all the other parties are notified in writing.
If to the Borrower: Merry Land & Investment Company, Inc.
624 Ellis Street
Augusta, Georgia 30901
Attention: Peter S. Knox
Telecopy No.: (706) 722-4681
If to the Agent: First Union National Bank of Georgia
999 Peachtree Street, N.E., 9th Floor
Atlanta, Georgia 30309
Attention: Portfolio Management
Telecopy No.: (404) 827-7199
and
First Union National Bank of
North Carolina
One First Union Center
301 South College Street, TW-10
Charlotte, North Carolina 28288
Attention: Syndication Agency Services
Telecopy No.: (704) 383-0288
If to the Lenders: The address set forth on the signature
pages hereto
(c) Agent's Office. The Agent hereby designates its office
located at the address set forth above, or any subsequent office
which shall have been specified for such purpose by written
notice to the Borrower, as the Agent's Office referred to herein,
to which payments due are to be made and at which Loans will be
disbursed.
SECTION 11.2. Expenses. The Borrower will pay all out-of-pocket
expenses of the Agent in connection with: (a) the
preparation, execution and delivery of this Agreement and each of
the other Loan Documents, whenever the same shall be executed and
delivered, including appraiser's fees, search fees, recording
fees, taxes and the reasonable fees and disbursements of counsel
for the Agent; (b) the preparation, execution and delivery of any
waiver, amendment or consent by the Agent or the Lenders relating
to this Agreement or any of the Loan Documents including fees and
disbursements of counsel for the Agent, search fees, recording
fees, taxes imposed in connection therewith and title insurance
premiums; and (c) upon an Event of Default, consulting with one
or more Persons, including appraisers, accountants and attorneys,
concerning or related to the nature, scope or value of any right
or remedy of the Agent or any of the Lenders hereunder or under
any of the other Loan Documents, including any review of factual
matters in connection therewith, which expenses shall include the
fees and disbursements of such Persons. In addition, the
Borrower will pay all out-of-pocket expenses of the Agent and
each Lender in connection with prosecuting or defending any claim
in any way arising out of, related to, connected with, or enforc-
ing any provision of, this Agreement or any of the other Loan
Documents, which expenses shall include the fees and disburse-
ments of counsel and of experts and other consultants retained by
the Agent or any of the Lenders.
SECTION 11.3. Stamp and Other Taxes. The Borrower will pay
any and all stamp, registration, recordation and similar taxes,
fees or charges and shall indemnify the Lenders against any and
all liabilities with respect to or resulting from any delay in
the payment or omission to pay any such taxes, fees or charges
which may be payable or determined to be payable in connection
with the execution, delivery, performance or enforcement of this
Agreement and any of the other Loan Documents or the perfection
of any rights thereunder.
SECTION 11.4. Set-off. In addition to any rights now or
hereafter granted under applicable law and not by way of limita-
tion of any such rights, upon and after the occurrence of any
Event of Default and during the continuance thereof, the Lenders,
any Affiliates of the Lenders and any participant of a Lender in
accordance with Section 11.11 are hereby authorized by the
Borrower at any time or from time to time, without notice to the
Borrower or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any
and all deposits (general or special, time or demand, including,
but not limited to, indebtedness evidenced by certificates of
deposit, whether matured or unmatured, excluding government
securities required by applicable law to be held as security for
worker's compensation and similar claims) and any other
indebtedness at any time held or owing by the Lenders or any
Affiliate of the Lenders, or any participant to or for the credit
or the account of the Borrower against and on account of the
Obligations (applied to current Obligations first) irrespective
of whether or not (a) the Lenders shall have made any demand
under this Agreement or any of the other Loan Documents, or (b)
the Agent shall have declared any or all of the Obligations to be
due and payable as permitted by Section 9.2 and although such
Obligations shall be contingent or unmatured.
SECTION 11.5. Governing Law. This Agreement, the Notes and
the other Loan Documents, unless otherwise expressly set forth
therein, shall be governed by, construed and enforced in accor-
dance with the laws of the State of Georgia, without reference to
the conflicts or choice of law principles thereof.
SECTION 11.6. Consent to Jurisdiction. The Borrower hereby
irrevocably consents to the personal jurisdiction of the state
and federal courts located in Richmond County, Georgia, in any
action, claim or other proceeding arising out of any dispute in
connection with this Agreement, the Notes and the other Loan
Documents, any rights or obligations hereunder or thereunder, or
the performance of such rights and obligations. The Borrower
hereby irrevocably consents to the service of a summons and
complaint and other process in any action, claim or proceeding
brought by the Agent or any Lender in connection with this
Agreement, the Notes or the other Loan Documents, any rights or
obligations hereunder or thereunder, or the performance of such
rights and obligations, on behalf of itself or its property, in
the manner specified in Section 11.1. Nothing in this Section
11.6 shall affect the right of the Agent or any Lender to serve
legal process in any other manner permitted by applicable law or
affect the right of the Agent or any Lender to bring any action
or proceeding against the Borrower or its properties in the
courts of any other jurisdictions.
SECTION 11.7. Waiver of Jury Trial. TO THE EXTENT PERMITTED
BY APPLICABLE LAW, THE BORROWER, THE AGENT AND THE LENDERS, BY
EXECUTION HEREOF, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON THIS AGREEMENT, THE NOTES OR THE OTHER LOAN
DOCUMENTS, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT, THE NOTES, ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT
CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR THEREWITH,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT HERETO OR
THERETO. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE AGENT
AND THE LENDERS TO ENTER INTO THIS AGREEMENT.
SECTION 11.8. Reversal of Payments. To the extent the
Borrower makes a payment or payments to the Agent for the ratable
benefit of the Lenders or the Agent receives any payment or pro-
ceeds of any collateral for the Borrower's benefit, which pay-
ments or proceeds or any part thereof are subsequently invali-
dated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other
party under any bankruptcy law, state or federal law, common law
or equitable cause, then, to the extent of such payment or
proceeds received, the Obligations or part thereof intended to be
satisfied shall be revived and continued in full force and effect
as if such payment or proceeds had not been received by the
Agent.
SECTION 11.9. Injunctive Relief. The Borrower recognizes
that, in the event the Borrower fails to perform, observe or dis-
charge any of its obligations or liabilities under this Agree-
ment, any remedy of law may prove to be inadequate relief to the
Lenders. Therefore, the Borrower agrees that the Lenders, at the
Lenders' option, shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of
proving actual damages.
SECTION 11.10. Accounting Matters. All financial and
accounting calculations, measurements and computations made for
any purpose relating to this Agreement, including, without
limitation, all computations utilized by the Borrower to deter-
mine whether it is in compliance with any covenant contained
herein, shall, except as otherwise expressly contemplated hereby
or unless there is an express written direction by the Agent to
the contrary agreed to by the Borrower, be performed in accor-
dance with generally accepted accounting principles. In the
event that changes in generally accepted accounting principles
shall be mandated by the Financial Accounting Standards Board, or
any similar accounting body of comparable standing, or shall be
recommended by the Borrower's certified public accountants, to
the extent that such changes would modify such accounting terms
or the interpretation or computation thereof, such changes shall
be followed in defining such accounting terms only from and after
the date the Borrower and the Lenders shall have amended this
Agreement to the extent necessary to reflect any such changes in
the financial covenants and other terms and conditions of this
Agreement.
SECTION 11.11. Successors and Assigns; Participations.
(a) Benefit of Agreement. This Agreement shall be binding
upon and inure to the benefit of the Borrower, the Lenders, the
Agent, all future holders of the Notes, and their respective
successors and assigns, except that the Borrower may not assign
or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender.
(b) Assignment by Lenders. Each Lender may assign to one
or more Eligible Assignees all or a portion of its interests,
rights and obligations under this Agreement (including, without
limitation, all or a portion of the Loans at the time owing to it
and the Notes held by it); provided, that:
(I) each such assignment shall be of a constant, and
not a varying, percentage of all the assigning Lender's
rights and obligations under this Agreement and in a minimum
amount of at least $10,000,000;
(ii) each such assignment shall be made to an Eligible
Assignee approved in writing by the Borrower, which approval
shall not be unreasonably withheld;
(iii) the parties to each such assignment shall execute
and deliver to the Agent, for its acceptance and recording
in the Register, an Assignment and Acceptance in the form of
Exhibit E (an "Assignment and Acceptance"), together with
any Note or Notes subject to such assignment and such
assignee's payment of Agent's syndication expenses not to
exceed $2,500 for each assignment; and
(iv) such assignment shall not, without the consent of
the Borrower, require the Borrower to file a registration
statement with the Securities and Exchange Commission or
apply to or qualify the Loans or the Notes under the blue
sky laws of any state.
Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Accep-
tance, which effective date shall be at least five (5) Business
Days after the execution thereof, (A) the assignee thereunder
shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a
Lender hereby and (B) the Lender thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its
obligations under this Agreement.
(c) Rights and Duties Upon Assignment. By executing and
delivering an Assignment and Acceptance, the Lender assignor
thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows:
(i) other than the representation and warranty that it
is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim, such
Lender assignor makes no representation or warranty and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with
this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this
Agreement or any other instrument or document furnished
pursuant hereto;
(ii) such Lender assignor makes no representation or
warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under
this Agreement or any other instrument or document furnished
pursuant hereto;
(iii) such assignee confirms that it has received a copy
of this Agreement, together with copies of the financial
statements referred to in Sections 5.1(c) and 6.1 and such
other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into
such Assignment and Acceptance;
(iv) such assignee will, independently and without
reliance upon the Agent, such Lender assignor or any other
Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this
Agreement;
(v) such assignee confirms that it is an Eligible
Assignee;
(vi) such assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such
powers under this Agreement and the other Loan Documents as
are delegated to the Agent by the terms hereof and thereof,
together with such powers as are reasonably incidental
thereto; and
(vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by
the terms of this Agreement are required to be performed by
it as a Lender.
(d) Register. The Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders and the
Commitment Percentage of, and principal amount of the Loans owing
to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive, in the absence of manifest
error, and the Borrower, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall
be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior
notice.
(e) Issuance of New Notes. Upon its receipt of an
Assignment and Acceptance executed by an assigning Lender and an
Eligible Assignee together with any Note or Notes subject to such
assignment and the written consent to such assignment, the Agent
shall, if such Assignment and Acceptance has been completed and
is in the form of Exhibit E:
(I) accept such Assignment and Acceptance;
(ii) record the information contained therein in the
Register;
(iii) give prompt notice thereof to the Lenders and the
Borrower; and
(iv) promptly deliver a copy of such Assignment and
Acceptance to the Borrower.
Within five (5) Business Days after receipt of notice, the
Borrower shall execute and deliver to the Agent, in exchange for
the surrendered Note or Notes, a new Note or Notes to the order
of such Eligible Assignee in amounts equal to the commitments
assumed by it pursuant to such Assignment and Acceptance and a
new Note or Notes to the order of the assigning Lender in an
amount equal to the commitments retained by it hereunder. Such
new Note or Notes shall be in an aggregate principal amount equal
to the aggregate principal amount of such surrendered Note or
Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of
the assigned Notes delivered to the assignor Lender. Each
surrendered Note or Notes shall be canceled and returned to the
Borrower.
(f) Participations. Each Lender may, without the consent
of the Borrower, sell participations to one or more banks or
other entities in all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a
portion of its commitments hereunder and the Loans owing to it
and the Notes held by it); provided, that:
(i) such Lender's obligations under this Agreement
(including, without limitation, its commitments hereunder)
shall remain unchanged;
(ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such
obligations;
(iii) such Lender shall remain the holder of the Notes
held by it for all purposes of this Agreement;
(iv) the Borrower, the Agent and the other Lenders
shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations
under this Agreement;
(v) such Lender shall not permit such participant the
right to approve any waivers, amendments or other modifica-
tions to this Agreement or any other Loan Document other
than waivers, amendments or modifications which would reduce
the principal of or the interest rate on any Loan, extend
the term or increase the amount of the commitments of such
participant, reduce the amount of any fees to which such
participant is entitled or extend any scheduled payment date
for principal; and
(vi) any such disposition shall not, without the
consent of the Borrower, require the Borrower to file a
registration statement with the Securities and Exchange
Commission to apply to qualify the Loans or the Notes under
the blue sky law of any state.
(g) Disclosure of Information; Confidentiality. Any Lender
may, in connection with any assignment, proposed assignment,
participation or proposed participation pursuant to this Section
11.11, disclose to the assignee, participant, proposed assignee
or proposed participant, any information relating to the Borrower
furnished to such Lender by or on behalf of the Borrower;
provided, that prior to any such disclosure, each such assignee,
proposed assignee, participant or proposed participant shall
agree with the Borrower or such Lender (which in the case of an
agreement with only such Lender, the Borrower shall be recognized
as a third party beneficiary thereof) to preserve the
confidentiality of any confidential information relating to the
Borrower received from such Lender.
SECTION 11.12. Amendments, Waivers and Consents. Except as
set forth below, any term, covenant, agreement or condition of
this Agreement or any of the other Loan Documents may be amended
or waived by the Lenders, and any consent given by the Lenders
if, but only if, such amendment, waiver or consent is in writing
signed by the Required Lenders and, in the case of an amendment,
by the Borrower; provided, that no amendment, waiver or consent
shall (a) increase the amount or extend the time of the
obligation of the Lenders to make Loans, (b) extend the origi-
nally scheduled time or times of payment of the principal of any
Loan or the time or times of payment of interest on any Loan, (c)
increase the amount of the principal of any Loan or decrease the
rate of interest thereon, (d) permit any subordination of the
principal of or interest on any Loan, or (e) amend the provisions
of this Section 11.12 or the definition of "Required Lenders",
without the prior written consent of each Lender. In addition,
no amendment, waiver or consent to the provisions of Article X
hereof shall be made without the prior written consent of the
Agent.
SECTION 11.13. Performance of Borrower's Duties. The
Borrower's obligations under this Agreement and each of the other
Loan Documents shall be performed by the Borrower at its sole
cost and expense.
SECTION 11.14. Indemnification. The Borrower agrees to
reimburse the Agent and the Lenders for all reasonable costs and
expenses, including counsel fees and disbursements, incurred, and
to indemnify and hold the Agent and the Lenders harmless from and
against all losses suffered by the Agent and the Lenders, in
connection with (a) the exercise by the Agent and the Lenders of
any right (other than the rights described in Section 11.11
hereof) or remedy granted to them under this Agreement or any of
the other Loan Documents, (b) any claim, and the prosecution or
defense thereof, arising out of or in any way connected with this
Agreement or any of the other Loan Documents, and (c) the collec-
tion or enforcement of the Obligations or any of them; provided,
that the Borrower shall not be obligated to reimburse the Agent
or the Lenders for costs and expenses, or indemnify the Agent or
the Lenders for any loss, resulting from the bad faith, gross
negligence or willful misconduct of the Agent or the Lenders.
SECTION 11.15. All Powers Coupled with Interest. All
powers of attorney and other authorizations granted to the
Lenders, the Agent and any Persons designated by the Lenders
pursuant to any provisions of this Agreement or any of the other
Loan Documents shall be deemed coupled with an interest and shall
be irrevocable so long as any of the Obligations remain unpaid or
unsatisfied and the Total Commitment has not been terminated.
SECTION 11.16. Survival of Indemnities. Notwithstanding
any termination of this Agreement, the indemnities to which the
Agent and the Lenders are entitled under the provisions of this
Article XI and any other provision of this Agreement and the
other Loan Documents shall continue in full force and effect and
shall protect the Agent and the Lenders against events arising
after such termination as well as before.
SECTION 11.17. Titles and Captions. Titles and captions of
Articles, Sections and subsections in this Agreement are for
convenience only, and neither limit nor amplify the provisions of
this Agreement.
SECTION 11.18. Severability of Provisions. Any provision
of this Agreement or any other Loan Document which is prohibited
or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective only to the extent of such prohibi-
tion or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 11.19. Counterparts. This Agreement may be execut-
ed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed shall be
deemed to be an original and shall be binding upon all parties,
their successors and assigns, and all of which taken together
shall constitute one and the same agreement.
SECTION 11.20. Term of Agreement. This Agreement shall
remain in effect from the Closing Date through and including the
date upon which all Obligations shall have been indefeasibly and
irrevocably paid and satisfied in full. No termination of this
Agreement shall affect the rights and obligations of the parties
hereto arising prior to such termination.
SECTION 11.21. Adjustments. If any Lender (a "Benefitted
Lender") shall at any time receive any payment of all or part of
its Loans, or interest thereon, or if any Lender shall at any
time receive any collateral in respect to its Loans (whether
voluntarily or involuntarily, by set-off, or otherwise) in a
greater proportion than any such payment to and collateral
received by any other Lender, if any, in respect of such other
Lender's Loans, or interest thereon, such Benefitted Lender shall
purchase for cash from the other Lenders such portion of each
such other Lender's Loan, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such Benefitted Lender to
share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, that if all
or any portion of such excess payment or benefits is thereafter
recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned to the
extent of such recovery, but without interest. The Borrower
agrees that each Lender so purchasing a portion of another
Lender's Loan may exercise all rights of payment (including,
without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such
portion.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers, all
as of the day and year first written above.
BORROWER:
[CORPORATE SEAL] MERRY LAND & INVESTMENT COMPANY,
INC.
ATTEST:
By: By:
- --------------------------- --------------------------------
Name: Name:
- --------------------------- --------------------------------
Title: Title: __________ President
- --------------------------- --------------------------------
AGENT:
FIRST UNION NATIONAL BANK
OF GEORGIA
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
FACILITY A LENDERS:
FIRST UNION NATIONAL BANK
OF GEORGIA
By:
--------------------------------
Name:
--------------------------------
Title: __________ President
--------------------------------
Address:
699 Broad Street
Augusta, Georgia 30913
Attention: Mr. Sam Shreiber
Telecopy No. (706) 823-2678
<PAGE>
FACILITY B LENDERS:
BANK HAPOALIM B.M.
By:
--------------------------------
Name:
--------------------------------
Title: __________ President
--------------------------------
Address:
1515 Market Street
Philadelphia, PA 19102
Attention: Ellen Frank
Telecopy No.: (215) 655-2217
BANK SOUTH, N.A.
By:
--------------------------------
Name:
--------------------------------
Title: Corporate Banking Officer
Address:
56 Marietta Street
Atlanta, Georgia 30303
Attention: Greg M. Autry
Telecopy No.: (404) 521-7309
COMMERZBANK AG, ATLANTA AGENCY
By:
--------------------------------
Name:
--------------------------------
Title: __________ President
--------------------------------
By:
--------------------------------
Name:
--------------------------------
Title: __________ President
Address:
Promenade Two, Suite 3500
1230 Peachtree Street, NE
Atlanta, Georgia 30309
Attention: Eric R. Kagerer
Telecopy No.: (404) 888-6539
DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK
By:
--------------------------------
Name:
--------------------------------
Title: __________ President
Address:
c/o New York Branch
609 5th Avenue, 8th Floor
New York, New York 10017
Attention: Linda O'Connell
Telecopy No.: (212) 745-1556
MELLON BANK, N.A.
By:
--------------------------------
Name:
--------------------------------
Title: __________ President
Address:
Mellon Bank Center
1735 Market Street
Philadelphia, PA 19101-7899
Attention: Michael J. DiSanto
Telecopy No.: (215) 533-3472
<PAGE>
<TABLE>
<CAPTION>
Schedule I
to
Credit Agreement
dated as of June 30, 1995
among
Merry Land & Investment Company, Inc.,
the Lenders party thereto
and
First Union National Bank of Georgia, as Agent
FACILITY A LENDERS
Commitment Percentage of
Lender Facility A Commitment Facility A Loans Total Commitment Percentage
<S> <C> <C> <C>
First Union National $100,000,000 100% 62.50%
Bank of Georgia
<CAPTION>
FACILITY B LENDERS
Commitment Percentage of
Lender Facility B Commitment Facility B Loans Total Commitment Percentage
<S> <C> <C> <C>
Bank Hapoalim B.M. $10,000,000 16.67% 6.25%
Bank South, N.A. $10,000,000 16.67% 6.25%
CommerzBank $20,000,000 33.33% 12.50%
DG Bank $10,000,000 16.67% 6.25%
Mellon Bank, N.A. $10,000,000 16.67% 6.25%
</TABLE>
<PAGE>
CREDIT AGREEMENT
DATED AS OF JUNE 30, 1995
BETWEEN
MERRY LAND & INVESTMENT COMPANY, INC.,
THE LENDERS PARTY HERETO,
AND
FIRST UNION NATIONAL BANK OF GEORGIA, AS AGENT
ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . 1
SECTION 1.2. General . . . . . . . . . . . . . . . . . . 15
SECTION 1.3. Other Definitions and Provisions. . . . . . 16
ARTICLE II REVOLVING CREDIT FACILITY . . . . . . . . . . . . . 16
SECTION 2.1. Revolving Credit Loans. . . . . . . . . . . 16
SECTION 2.2. Procedure for Advances of Loans . . . . . . 17
SECTION 2.3. Notes . . . . . . . . . . . . . . . . . . . 18
SECTION 2.4. Optional Permanent Reduction of Total
Commitment . . . . . . . . . . . . . . . . 18
SECTION 2.5. Termination and Extension of Total
Commitment . . . . . . . . . . . . . . . . 18
SECTION 2.6. Use of Proceeds.. . . . . . . . . . . . . . 19
ARTICLE III GENERAL LOAN PROVISIONS. . . . . . . . . . . . . . 19
SECTION 3.1. Interest. . . . . . . . . . . . . . . . . . 19
SECTION 3.2. Notice and Manner of Conversion or
Continuation of Loans. . . . . . . . . . . 21
SECTION 3.3. Commitment and Agent's Fees . . . . . . . . 22
SECTION 3.4. Manner and Application of Payments. . . . . 22
SECTION 3.5. Nature of Obligations of Lenders to Make
Loans; Assumption by Agent . . . . . . . . 23
SECTION 3.6. Changed Circumstances . . . . . . . . . . . 23
SECTION 3.7. Indemnity.. . . . . . . . . . . . . . . . . 25
SECTION 3.8. Capital Requirements. . . . . . . . . . . . 25
SECTION 3.9. Taxes.. . . . . . . . . . . . . . . . . . . 26
ARTICLE IV CLOSING; CONDITIONS OF CLOSING AND BORROWING. . . . 28
SECTION 4.1. Closing . . . . . . . . . . . . . . . . . . 28
SECTION 4.2. Conditions of Initial Loans and Advances. . 28
SECTION 4.3. Conditions to All Loans and Advances. . . . 30
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BORROWER . . . . . 31
SECTION 5.1. General Representations and Warranties. . . 31
SECTION 5.2. Representations and Warranties as to Real
Properties . . . . . . . . . . . . . . . . 35
ARTICLE VI FINANCIAL INFORMATION AND NOTICES . . . . . . . . . 37
SECTION 6.1. Financial Statements and Information. . . . 38
SECTION 6.2. Accuracy of Information . . . . . . . . . . 42
ARTICLE VII AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . 42
SECTION 7.1. Books and Records . . . . . . . . . . . . . 42
SECTION 7.2. Payments. . . . . . . . . . . . . . . . . . 43
SECTION 7.3. Corporate Existence, Etc. . . . . . . . . . 43
SECTION 7.4. Payment of Taxes. . . . . . . . . . . . . . 43
SECTION 7.5. Insurance . . . . . . . . . . . . . . . . . 43
SECTION 7.6. Continuance of Business . . . . . . . . . . 44
SECTION 7.7. Continuance of Management . . . . . . . . . 44
SECTION 7.8. Environmental Covenant. . . . . . . . . . . 44
SECTION 7.9. Maintenance, Etc. . . . . . . . . . . . . . 45
SECTION 7.10. Interest Expense. . . . . . . . . . . . . . 45
SECTION 7.11. Tangible Net Worth. . . . . . . . . . . . . 45
SECTION 7.12. Further Assurances. . . . . . . . . . . . . 45
ARTICLE VIII NEGATIVE COVENANTS. . . . . . . . . . . . . . . . 45
SECTION 8.1. Indebtedness. . . . . . . . . . . . . . . . 45
SECTION 8.2. Encumbrances. . . . . . . . . . . . . . . . 46
SECTION 8.3. Sale of Assets. . . . . . . . . . . . . . . 46
SECTION 8.4. Merger. . . . . . . . . . . . . . . . . . . 47
SECTION 8.5. Property Acquisition Policy . . . . . . . . 47
SECTION 8.6. Certain Investments Prohibited. . . . . . . 48
SECTION 8.7. Transactions With Affiliates and Related
Persons. . . . . . . . . . . . . . . . . . 48
SECTION 8.8. Restricted Payments . . . . . . . . . . . . 49
SECTION 8.9. Development Activity. . . . . . . . . . . . 49
SECTION 8.10. Amendments to Senior Note Agreement . . . . 49
ARTICLE IX DEFAULT . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 9.1. Events of Default . . . . . . . . . . . . . 49
SECTION 9.2. Remedies. . . . . . . . . . . . . . . . . . 52
SECTION 9.3. Rights and Remedies Cumulative;
Non-Waiver; etc. . . . . . . . . . . . . . 53
ARTICLE X THE AGENT. . . . . . . . . . . . . . . . . . . . . . 53
SECTION 10.1. Appointment. . . . . . . . . . . . . . . . 53
SECTION 10.2. Delegation of Duties . . . . . . . . . . . 53
SECTION 10.3. Exculpatory Provisions . . . . . . . . . . 54
SECTION 10.4. Reliance by Agent. . . . . . . . . . . . . 54
SECTION 10.5. Notice of Default. . . . . . . . . . . . . 55
SECTION 10.6. Non-Reliance on Agent and Other Lenders. . 55
SECTION 10.7. Indemnification. . . . . . . . . . . . . . 55
SECTION 10.8. Agent in Its Individual Capacity . . . . . 56
SECTION 10.9. Successor Agent. . . . . . . . . . . . . . 56
ARTICLE XI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 56
SECTION 11.1. Notices. . . . . . . . . . . . . . . . . . 56
SECTION 11.2. Expenses . . . . . . . . . . . . . . . . . 57
SECTION 11.3. Stamp and Other Taxes. . . . . . . . . . . 58
SECTION 11.4. Set-off. . . . . . . . . . . . . . . . . . 58
SECTION 11.5. Governing Law. . . . . . . . . . . . . . . 59
SECTION 11.6. Consent to Jurisdiction. . . . . . . . . . 59
SECTION 11.7. Waiver of Jury Trial.. . . . . . . . . . . 59
SECTION 11.8. Reversal of Payments . . . . . . . . . . . 59
SECTION 11.9. Injunctive Relief. . . . . . . . . . . . . 60
SECTION 11.10. Accounting Matters . . . . . . . . . . . . 60
SECTION 11.11. Successors and Assigns; Participations . . 60
SECTION 11.12. Amendments, Waivers and Consents . . . . . 64
SECTION 11.13. Performance of Borrower's Duties . . . . . 64
SECTION 11.14. Indemnification. . . . . . . . . . . . . . 64
SECTION 11.15. All Powers Coupled with Interest . . . . . 65
SECTION 11.16. Survival of Indemnities. . . . . . . . . . 65
SECTION 11.17. Titles and Captions. . . . . . . . . . . . 65
SECTION 11.18. Severability of Provisions . . . . . . . . 65
SECTION 11.19. Counterparts . . . . . . . . . . . . . . . 65
SECTION 11.20. Term of Agreement. . . . . . . . . . . . . 65
SECTION 11.21. Adjustments. . . . . . . . . . . . . . . . 65
<PAGE>
LIST OF EXHIBITS
Exhibit A -- Form of Facility A Note
Exhibit B -- Form of Facility B Note
Exhibit C -- Form of Notice of Borrowing
Exhibit D -- Form of Notice of Conversion/Continuation
Exhibit E -- Form of Assignment and Acceptance
LIST OF SCHEDULES
Schedule I - Lenders and Commitments
Schedule 5.1(e) - Material Adverse Changes
Schedule 5.1(f) - Indebtedness for Borrowed Money and Secured Debt
Schedule 5.1(g) - Litigation
Schedule 5.1(j) - Contingent Liabilities
Schedule 5.1(m) - Subsidiaries and Other Interests
Schedule 5.1(n) - Certain Contracts
Schedule 5.1(o) - Affiliate Transactions
Schedule 5.2(a) - Encumbrances on Real Property
Schedule 5.2(d) - Flood Insurance Exceptions
Schedule 5.2(I) - Condemnation Proceedings
Schedule 8.2 - Encumbrances
<PAGE>
EXHIBIT A
to
Credit Agreement
dated as of June __, 1995
among
Merry Land & Investment Company, Inc.,
the Lenders referred to therein,
and First Union National Bank of Georgia, as Agent
FACILITY A NOTE
$____________ June __, 1995
FOR VALUE RECEIVED, the undersigned, MERRY LAND & INVESTMENT
COMPANY, INC., a Georgia corporation (the "Borrower"), promises
to pay to the order of FIRST UNION NATIONAL BANK OF GEORGIA, a
national banking association (the "Lender"), at the place and
times provided in the Credit Agreement referred to below, the
principal sum of _______________ Dollars ($___________) or, if
less, the principal amount of all outstanding Facility A Loans
made by the Lender from time to time pursuant to that certain
Credit Agreement dated as of even date herewith (together with
all amendments and other modifications, if any, from time to time
hereafter made thereto, the "Credit Agreement") among the Borrow-
er, the Lenders who are or may become a party thereto (collec-
tively, the "Lenders") and First Union National Bank of Georgia,
as Agent for the Lenders. Capitalized terms used herein and not
defined herein shall have the meanings ascribed to them in the
Credit Agreement.
The unpaid principal amount of this Facility A Note from
time to time outstanding is subject to repayment on the
Termination Date as provided in the Credit Agreement and shall
bear interest as provided in Section 3.1 of the Credit Agreement.
All payments of principal of and interest on this Facility A Note
shall be payable in lawful currency of the United States of
America in immediately available funds to the account designated
in the Credit Agreement.
This Note is a Facility A Note referred to in, is entitled
to the benefits of, and evidences Obligations incurred under, the
Credit Agreement, to which reference is made for a statement of
the terms and conditions on which the Borrower is permitted and
required to make repayments of principal of the Obligations
evidenced by this Facility A Note and on which such Obligations
may be declared to be immediately due and payable.
THIS FACILITY A NOTE SHALL BE GOVERNED, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF GEORGIA, WITHOUT REFER-
ENCE TO THE CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF.
The Borrower hereby waives all requirements as to diligence,
presentment, demand of payment, protest and (except as required
by the Credit Agreement) notice of any kind with respect to this
Facility A Note.
IN WITNESS WHEREOF, the undersigned Borrower has executed
this Facility A Note under seal as of the day and year first
above written.
MERRY LAND & INVESTMENT COMPANY, INC.,
a Georgia corporation
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
(Corporate Seal)
<PAGE>
EXHIBIT B
to
Credit Agreement
dated as of June __, 1995
among
Merry Land & Investment Company, Inc.,
the Lenders referred to therein,
and First Union National Bank of Georgia, as Agent
FACILITY B NOTE
$___________ June __, 1995
FOR VALUE RECEIVED, the undersigned, MERRY LAND & INVESTMENT
COMPANY, INC., a Georgia corporation (the "Borrower") promises to
pay to the order of _______________________________________, a
________________________________ (the "Lender"), at the place and
times provided in the Credit Agreement referred to below, the
principal sum of _____________________ Dollars ($____________)
or, if less, the principal amount of all outstanding Facility B
Loans made by the Lender from time to time pursuant to that
certain Credit Agreement dated as of even date herewith (together
with all amendments and other modifications, if any, from time to
time hereafter made thereto, the "Credit Agreement") among the
Borrower, the Lenders who are or may become a party thereto
(collectively, the "Lenders") and First Union National Bank of
Georgia, as Agent for the Lenders. Capitalized terms used herein
and not defined herein shall have the meanings ascribed to them
in the Credit Agreement.
The unpaid principal amount of this Facility B Note from
time to time outstanding is subject to repayment on the
Termination Date as provided in the Credit Agreement and shall
bear interest as provided in Section 3.1 of the Credit Agreement.
All payments of principal of and interest on this Facility B Note
shall be payable in lawful currency of the United States of
America in immediately available funds to the account designated
in the Credit Agreement.
This Note is a Facility B Note referred to in, is entitled
to the benefits of, and evidences Obligations incurred under, the
Credit Agreement, to which reference is made for a statement of
the terms and conditions on which the Borrower is permitted and
required to make repayments of principal of the Obligations
evidenced by this Facility B Note and on which such Obligations
may be declared to be immediately due and payable.
THIS FACILITY B NOTE SHALL BE GOVERNED, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF GEORGIA, WITHOUT REFER-
ENCE TO THE CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF AND IS
INTENDED TO TAKE EFFECT AS AN INSTRUMENT UNDER SEAL.
The Borrower hereby waives all requirements as to diligence,
presentment, demand of payment, protest and (except as required
by the Credit Agreement) notice of any kind with respect to this
Facility B Note.
IN WITNESS WHEREOF, the undersigned Borrower has executed
this Facility B Note under seal as of the day and year first
above written.
MERRY LAND & INVESTMENT COMPANY, INC.,
a Georgia corporation
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
(Corporate Seal)
<PAGE>
EXHIBIT C
to
Credit Agreement
dated as of June __, 1995
among
Merry Land & Investment Company, Inc.,
the Lenders referred to therein,
and First Union National Bank of Georgia, as Agent
NOTICE OF BORROWING
First Union National Bank
of Georgia, as Agent
[Address]
Attention: ____________________
Ladies and Gentlemen:
This irrevocable Notice of Borrowing is delivered to you, in
your capacity as Agent, under Section 2.2 of the Credit Agreement
dated as of June __, 1995 (the "Credit Agreement") by and among
Merry Land & Investment Company, Inc. (the "Borrower"), the
Lenders which are, or may from time to time become, party thereto
(collectively, the "Lenders") and First Union National Bank of
Georgia, as Agent for the Lenders.
1. The Borrower hereby requests that the Lenders make a
Facility A Loan in the principal amount of $__________ and/or a
Facility B Loan in the principal amount of $__________. (For
Facility A Loans or Facility B Loans which are LIBOR Rate Loans
complete with an amount equal to $1,000,000 or a whole multiple
of $50,000 in excess thereof and for Facility A Loans or Facility
B Loans which are Prime Rate Loans complete with an amount equal
to at least $250,000.)
2. The Borrower hereby requests that the Loan(s) be made
on the following Business Day: ______________. (Complete with a
date at least one (1) Business Day after the date of this Notice
for a Prime Rate Loan and at least three (3) Business Days after
the date of this Notice for a LIBOR Rate Loan.)
3. The Borrower hereby requests that the Loan(s) bear
interest at the following interest rate, PLUS the Applicable
Margin, as set forth below: (Check one.)
<TABLE>
<CAPTION>
Principal Component Interest Interest
of Loans Rate Period
------------------- ------------------------- -------------------------
<S> <C> <C>
[Facility A Loans] [Prime Rate or LIBOR Rate] [One, two or three months]
[Facility B Loans]
</TABLE>
4. The principal amount of all Loans outstanding as of the
date hereof (including the requested Loan) does not exceed the
maximum amount permitted to be outstanding pursuant to the terms
of the Credit Agreement.
5. The obligations of the Borrower set forth in the Credit
Agreement and the other Loan Documents are valid, binding and
enforceable obligations of the Borrower as of the date hereof,
both before and after giving effect to the Loan requested herein.
6. All of the conditions applicable to the Loan requested
herein as set forth in the Credit Agreement have been satisfied
as of the date hereof and will remain satisfied to the date of
such Loan.
7. No Default or Event of Default exists, and none will
exist upon the making of the Loan requested herein.
8. The representations and warranties of the Borrower
under the Credit Agreement and the other Loan Documents are true
and correct in all material respects as of the date hereof, both
before and after giving effect to the Loan requested herein.
9. All capitalized undefined terms used herein have the
meanings assigned thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned have executed this
Notice of Borrowing this ____ day of _______, 19__.
MERRY LAND & INVESTMENT COMPANY, INC.,
a Georgia corporation
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
(Corporate Seal)
<PAGE>
EXHIBIT D
to
Credit Agreement
dated as of June __, 1995
among
Merry Land & Investment Company, Inc.,
the Lenders referred to therein,
and First Union National Bank of Georgia, as Agent
NOTICE OF CONVERSION/CONTINUATION
First Union National Bank
of Georgia, as Agent
[Address]
Attention: ____________________
Ladies and Gentlemen:
This irrevocable Notice of Conversion/Continuation is
delivered to you, in your capacity as Agent, under Section 3.2 of
the Credit Agreement dated as of June __, 1995 (the "Credit
Agreement") by and among Merry Land & Investment Company, Inc.
(the "Borrower"), the Lenders which are, or may from time to time
become, party thereto (collectively, the "Lenders") and First
Union National Bank of Georgia, as Agent for the Lenders.
1. This Notice of Conversion/Continuation is submitted for
the purpose of: (Check one and complete applicable information.)
[ ] CONVERTING A PRIME RATE LOAN INTO A LIBOR RATE LOAN
(a) Such Loan is a [Facility A Loan] or [Facility B
Loan].
(b) The aggregate outstanding principal balance of
such Loan is $_______________.
(c) The principal amount of such Loan to be converted
is $_______________. (Complete with an amount
equal to $1,000,000 or a whole multiple of $50,000
in excess thereof.)
(d) The requested effective date of the conversion of
such Loan is _______________. (Complete with a
Business Day at least three (3) Business Days
after the date of this Notice.)
(e) The requested Interest Period applicable to the
converted Loan is _______________. (Complete with
a period of one (1), two (2) or three (3) months.)
[ ] CONVERTING A LIBOR RATE LOAN INTO A PRIME RATE LOAN
(a) Such Loan is a [Facility A Loan] or Facility B
Loan].
(b) The aggregate outstanding principal balance of
such Loan is $_______________.
(c) The last day of the current Interest Period for
such Loan is _______________.
(d) The principal amount of such Loan to be converted
is $_______________. (Complete with an amount
equal to at least $250,000.)
(e) The requested effective date of the conversion of
such Loan is _______________. (Complete with a
Business Day which is the same date as that listed
in (b) above and which shall be at least three (3)
Business Days after the date of this Notice.)
[ ] CONTINUING A LIBOR RATE LOAN AS A LIBOR RATE LOAN
(a) Such Loan is a [Facility A Loan] or Facility B
Loan].
(b) The aggregate outstanding principal balance of
such Loan is $_______________.
(c) The last day of the current Interest Period for
such Loan is _______________.
(d) The principal amount of such Loan to be continued
is $_______________. (Complete with an amount
equal to $1,000,000 or an integral multiple of
$50,000 in excess thereof.)
(e) The requested effective date of the continuation
of such Loan is _______________. (Complete with a
Business Day which is the same date as that listed
in (b) above and which shall be at least three (3)
Business Days after the date of this Notice.)
(f) The requested Interest Period applicable to the
continued Loan is _______________. (Complete with
a period of one (1), two (2) or three (3) months.)
2. The principal amount of all Loans outstanding as of the
date hereof does not exceed the maximum amount permitted to be
outstanding pursuant to the terms of the Credit Agreement.
3. The obligations of the Borrower set forth in the Credit
Agreement and the Loan Documents are valid, binding and
enforceable obligations of the Borrower as of the date hereof,
both before and after giving effect to the conversion or
continuation of the Loan requested herein.
4. All of the conditions applicable to the conversion or
continuation of the Loan requested herein as set forth in the
Credit Agreement have been satisfied as of the date hereof and
will remain satisfied to the date of such Loan.
5. No Default or Event of Default exists, and none will
exist upon the conversion or continuation of the Loan requested
herein.
6. The representations and warranties of the Borrower
under the Credit Agreement and the other Loan Documents are true
and correct in all material respects as of the date hereof, both
before and after giving effect to the conversion or continuation
of the Loan requested herein.
7. All capitalized undefined terms used herein have the
meanings assigned thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned have executed this
Notice of Conversion/Continuation this ____ day of __________,
19__.
MERRY LAND & INVESTMENT COMPANY, INC.,
a Georgia corporation
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
(Corporate Seal)
<PAGE>
EXHIBIT E
to
Credit Agreement
dated as of June __, 1995
among
Merry Land & Investment Company, Inc.,
the Lenders referred to therein,
and First Union National Bank of Georgia, as Agent
ASSIGNMENT AND ACCEPTANCE
Dated _________
Reference is made to the Credit Agreement dated as of June
__, 1995 (as amended, restated, modified or otherwise
supplemented from time to time, the "Credit Agreement") by and
among Merry Land & Investment Company, Inc., a Georgia
corporation (the "Borrower"), the Lenders which are, or may from
time to time become, party thereto (collectively, the "Lenders")
and First Union National Bank of Georgia, as Agent for the
Lenders. Capitalized terms which are defined in the Credit
Agreement and which are used herein without definition shall have
the same meanings herein as in the Credit Agreement.
______________________________________ (the "Assignor") and
__________________________________ (the "Assignee") agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor,
as of the Effective Date (as defined below), a ____%
interest in and to the Facility A Commitment, a ______%
interest in and to the Facility B Commitment and all of the
Assignor's related interests, rights and obligations under
the Credit Agreement. This Assignment and Acceptance is
entered pursuant to, and authorized by, Section 11.12 of the
Credit Agreement.
2. The Assignor represents that, as of the date hereof, in each
case without giving effect to assignments which have not yet
become effective, (a) its Total Commitment Percentage is
____%, (b) its Commitment Percentage of Facility A Loans is
____%, (c) its Commitment Percentage of Facility B Loans is
___%, (d) the outstanding principal balance of its Facility
A Loans is $________; and (e) the outstanding principal
balance of its Facility B Loans is $___________.
3. The Assignor and the Assignee agree that, as of the
Effective Date and after giving effect to this Assignment
and Acceptance, their respective Total Commitment
Percentages, Commitment Percentages and outstanding
principal balances of Loans shall be as set forth on
SCHEDULE 1 hereto.
4. The Assignor (a) makes no representation or warranty and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with
the Credit Agreement or any other Loan Document or the
execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto, other
than that the Assignor is the legal and beneficial owner of
the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim, (b) makes
no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or
its Subsidiaries or the performance or observance by the
Borrower or its Subsidiaries of any of their obligations
under the Credit Agreement or any other instrument or
document furnished or executed pursuant thereto, and (c)
attaches the Facility A Note or Facility B Note, as
applicable, delivered to it under the Credit Agreement and
requests that the Borrower exchange such Note for new Notes
payable to each of the Assignor and the Assignee as follows:
<TABLE>
<CAPTION>
Facility A Note
Payable to the Order of: Principal Amount of Note:
------------------------ -------------------------
<S> <C>
_______________________ $_______________
_______________________ $_______________
Facility B Note
Payable to the Order of: Principal Amount of Note:
------------------------ -------------------------
_______________________ $_______________
_______________________ $_______________
</TABLE>
5. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance, (b)
confirms that it has received a copy of the Credit Agree-
ment, together with copies of the most recent financial
statements delivered pursuant to Section 6.1(a) thereof and
such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to
enter into this Assignment and Acceptance; (c) agrees that
it will, independently and without reliance upon the
Assignor or any other Lender or Agent and based on such
documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement, (d)
confirms that it is an Eligible Assignee, (e) appoints and
authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under the Credit
Agreement and the other Loan Documents as are delegated to
the Agent by the terms thereof, together with such powers as
are reasonably incidental thereto, (f) agrees that it will
perform in accordance with their terms all the obligations
which by the terms of the Credit Agreement and the other
Loan Documents are required to be performed by it as a
Lender, (g) agrees that it will be bound by the terms and
conditions of the Intercreditor Agreement as if it were a
party thereto and (h) agrees that it will keep confidential
all the information with respect to the Borrower, furnished
to it by the Borrower or the Assignor other than (I)
information required or requested to be disclosed by it
pursuant to regulatory requirements or legal process, (ii)
information requested by and disclosed to its auditors,
accountants and attorneys and (iii) information generally
available to the public or otherwise available to the
Assignee on a nonconfidential basis.
6. The effective date for this Assignment and Acceptance shall
be ____________ (the "Effective Date"). Following the
execution of this Assignment and Acceptance, it will be
delivered to the Agent for consent by the Borrower and the
Agent and acceptance and recording in the Register.
7. Upon such consents, acceptance and recording, from and after
the Effective Date, (a) the Assignee shall be a party to the
Credit Agreement and the other Loan Documents to which
Lenders are parties and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations
of a Lender under each such agreement, and (b) the Assignor
shall, to the extent provided in this Assignment and
Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement and the other Loan
Documents.
8. Upon such consents, acceptance and recording, from and after
the Effective Date, the Agent shall make all payments in
respect of the interest assigned hereby (including payments
of principal, interest, fees and other amounts) to the
Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments for periods prior to the
Effective Date or with respect to the making of this
assignment directly between themselves.
9. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE DEEMED TO BE A
CONTRACT UNDER SEAL AND SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA, WITHOUT
REGARD TO CONFLICT OF LAW PRINCIPLES.
ASSIGNOR
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
ASSIGNEE
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Acknowledged and Consented to:
MERRY LAND & INVESTMENT COMPANY, INC.,
a Georgia corporation
By:
- --------------------------------------
Name:
- --------------------------------------
Title:
- --------------------------------------
(Corporate Seal)
<TABLE>
<CAPTION>
Schedule 1
to
Assignment and Acceptance
Commitment Commitment Outstanding Outstanding
Total Percentage Percentage Principal Principal
Commitment of of Balance of Balance of
Percentage Facility A Facility B Facility A Facility B
Loans Loans Loans Loans
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Assignor
Assignee
</TABLE>
