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): September 16, 1997
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
n/a
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(Former name or former address, if changed since last report)
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Filed: September 18, 1997
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ITEM 5. OTHER EVENTS.
$200MM LINE OF CREDIT. The Company has entered into a $200 million
unsecured, revolving credit agreement (the "Credit Agreement") with First Union
National Bank as Agent and Arranger, Bank of America National Trust and Savings
Association as Syndication Agent, Fleet National Bank, as Documentation Agent,
and various other lenders, with an effective date of September 16, 1997. This
is designed to replace and increase the Company's existing $100 million line of
credit with First Union National Bank and its $30 million line of credit with
First Alabama Bank. The Credit Agreement provides the Company with a $200.0
million credit facility for its general corporate purposes. Loans will bear
interest (at the Company's option) at either (i) the greater of the Prime Rate
or the federal funds rate plus one-half of one percent, or (ii) LIBOR plus 60
basis points (which rate will be adjusted upon changes in the Company's credit
rating). The Credit Agreement contains certain covenants consistent with the
Company's other credit agreements, is for a term of 3 years and thereafter (at
the Company's option) can be converted into a 2 year term loan. The Company
expects to or has drawn $62.3 million to complete an acquisition of three
apartment communities.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
CREDIT AGREEMENT. The Credit Agreement is attached hereto as
Exhibit 10.
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Signature Blocks on Following Page
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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/
--------------------------------
Dorrie E. Green
As Its Vice President
TABLE OF CONTENTS*
Article I. Definitions 1
Section 1.1. Definitions. 1
Section 1.2. General; References to Times. 19
Article II. Credit Facility 19
Section 2.1. Revolving Loans. 19
Section 2.2. Bid Rate Loans. 20
Section 2.3. Swingline Loans. 23
Section 2.4. Rates and Payment of Interest on Loans. 25
Section 2.5. Number of Interest Periods. 26
Section 2.6. Repayment of Loans. 26
Section 2.7. Prepayments. 27
Section 2.8. Continuation. 27
Section 2.9. Conversion. 28
Section 2.10. Notes. 28
Section 2.11. Voluntary Reductions of the Commitment. 28
Section 2.12. Extension of Revolving Termination Date. 29
Section 2.13. Conversion to Term Loans 30
Section 2.14. Amount Limitations. 30
Article III. Payments, Fees and Other General Provisions 31
Section 3.1. Payments. 31
Section 3.2. Pro Rata Treatment. 31
Section 3.3. Sharing of Payments, Etc. 32
Section 3.4. Several Obligations. 33
Section 3.5. Minimum Amounts. 33
Section 3.6. Fees. 33
Section 3.7. Computations. 33
Section 3.8. Usury. 34
Section 3.9. Agreement Regarding Interest and Charges. 34
Section 3.10. Statements of Account. 34
Section 3.11. Defaulting Lenders. 34
Section 3.12. Taxes. 35
Article IV. Yield Protection, Etc. 37
Section 4.1. Additional Costs; Capital Adequacy. 37
Section 4.2. Suspension of LIBOR Loans. 38
Section 4.3. Illegality. 38
Section 4.4. Compensation. 38
Section 4.5. Treatment of Affected Loans. 39
Section 4.6. Change of Lending Office. 39
Section 4.7. Assumptions Concerning Funding of LIBOR Loans. 40
Article V. Conditions Precedent 40
Section 5.1. Initial Conditions Precedent. 40
Section 5.2. Conditions Precedent to All Loans. 42
Section 5.3. Conditions to Conversion to Term Loans. 43
Article VI. Representations and Warranties 43
Section 6.1. Representations and Warranties. 43
Section 6.2. Survival of Representations and Warranties, Etc. 50
Article VII. Affirmative Covenants 50
Section 7.1. Preservation of Existence and Similar Matters. 50
Section 7.2. Compliance with Applicable Law and Material Contracts. 50
Section 7.3. Maintenance of Property. 51
Section 7.4. Conduct of Business. 51
Section 7.5. Insurance. 51
Section 7.6. Payment of Taxes and Claims. 51
Section 7.7. Visits and Inspections. 52
Section 7.8. Use of Proceeds. 52
Section 7.9. Environmental Matters. 52
Section 7.10. Books and Records. 53
Section 7.11. REIT Status. 53
Section 7.12. ERISA Exemptions. 53
Section 7.13. Further Assurances. 53
Section 7.14. Additional Subsidiaries. 53
Section 7.15. NYSE Listing. 53
Article VIII. Information 53
Section 8.1. Quarterly Financial Statements. 54
Section 8.2. Year-End Statements. 54
Section 8.3. Compliance Certificate. 54
Section 8.4. Other Information. 55
Article IX. Negative Covenants 57
Section 9.1. Financial Covenants. 57
Section 9.2. Indebtedness. 58
Section 9.3. Contingent Obligations. 59
Section 9.4. Investments. 59
Section 9.5. Liens; Agreements Regarding Liens; Other Matters. 60
Section 9.6. Distributions to Shareholders. 60
Section 9.7. Merger, Consolidation and Sales of Assets. 61
Section 9.8. Fiscal Year. 61
Section 9.9. Modifications to Material Contracts. 62
Section 9.10. Subordinated Debt Prepayments; Amendments. 62
Section 9.11. Transactions with Affiliates. 62
Section 9.12. Property Acquisition Policy. 62
Section 9.13. Concentration of Assets in Material Subsidiaries. 63
Article X. Default 63
Section 10.1. Events of Default. 63
Section 10.2. Remedies Upon Event of Default. 66
Section 10.3. Remedies Upon Certain Defaults. 68
Section 10.4. Allocation of Proceeds. 68
Section 10.5. Performance by Agent. 68
Section 10.6. Rights Cumulative. 69
Section 10.7. Recision of Acceleration by Requisite Lenders. 69
Article XI. The Agent 69
Section 11.1. Authorization and Action. 69
Section 11.2. Agent's Reliance, Etc. 70
Section 11.3. Notice of Defaults. 70
Section 11.4. First Union as Lender. 71
Section 11.5. Approvals of Lenders. 71
Section 11.6. Lender Credit Decision, Etc. 71
Section 11.7. Indemnification of Agent. 72
Section 11.8. Successor Agent. 73
Section 11.9. Syndication and Documentation Agents. 73
Article XII. Miscellaneous 74
Section 12.1. Notices. 74
Section 12.2. Expenses. 75
Section 12.3. Setoff. 75
Section 12.4. Arbitration. 76
Section 12.5. Successors and Assigns. 77
Section 12.6. Removal of Lenders. 80
Section 12.7. Amendments. 81
Section 12.8. Nonliability of Agent and Lenders. 82
Section 12.9. Confidentiality. 82
Section 12.10. Indemnification. 82
Section 12.11. Termination; Survival. 84
Section 12.12. Severability of Provisions. 84
Section 12.13. GOVERNING LAW. 84
Section 12.14. Counterparts. 84
Section 12.15. Limitation of Liability. 85
Section 12.16. Entire Agreement. 85
Section 12.17. Construction. 85
Schedule 6.1.(b) Ownership Structure
Schedule 6.1.(f) Ownership of Properties; Liens
Schedule 6.1.(g) Indebtedness
Schedule 6.1.(h) Material Contracts
Schedule 6.1.(n) Environmental Laws
Schedule 9.3. Contingent Obligations
Schedule 9.4. Investments
EXHIBIT A Form of Assignment and Acceptance Agreement
EXHIBIT B Form of Designation Agreement
EXHIBIT C Form of Guaranty
EXHIBIT D Form of Notice of Borrowing
EXHIBIT E Form of Notice of Continuation
EXHIBIT F Form of Notice of Conversion
EXHIBIT G Form of Notice of Swingline Borrowing
EXHIBIT H Form of Swingline Note
EXHIBIT I Form of Bid Rate Quote Request
EXHIBIT J Form of Bid Rate Quote
EXHIBIT K Form of Bid Rate Quote Acceptance
EXHIBIT L Form of Revolving Note
EXHIBIT M Form of Bid Rate Note
EXHIBIT N Form of Extension Request
EXHIBIT O Form of Opinion of Counsel
EXHIBIT P Form of Compliance Certificate
* This Table of Contents is not part of the Credit Agreement and is provided
as a convenience only.
THIS CREDIT AGREEMENT dated as of September 16, 1997 by and among MERRY LAND
& INVESTMENT COMPANY, INC., a corporation organized under the laws of the State
of Georgia (the "Borrower"), each of the financial institutions initially a
signatory hereto together with their assignees pursuant to Section 12.5(d),
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Syndication Agent
(the "Syndication Agent"), FLEET NATIONAL BANK, as Documentation Agent (the
"Documentation Agent"), and FIRST UNION NATIONAL BANK, as Agent.
WHEREAS, the Agent and the Lenders desire to make available to the Borrower
a $200,000,000 revolving credit facility, which will include a $25,000,000
swing line facility, on the terms and conditions contained herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto agree as follows:
Article I. Definitions
Section 1.1. Definitions.
In addition to terms defined elsewhere herein, the following terms shall
have the following meanings for the purposes of this Agreement:
"Additional Costs" has the meaning given that term in Section 4.1.
"Adjusted Eurodollar Rate" means, with respect to each Interest Period for
any Fixed LIBOR Loan, the rate obtained by dividing (a) Fixed LIBOR for such
Interest Period by (b) a percentage equal to 1 minus the stated maximum rate
(stated as a decimal) of all reserves, if any, required to be maintained
against "Eurocurrency liabilities" as specified in Regulation D of the Board of
Governors of the Federal Reserve System (or against any other category of
liabilities which includes deposits by reference to which the interest rate on
Fixed LIBOR Loans is determined or any category of extensions of credit or
other assets which includes loans by an office of any Lender outside of the
United States of America to residents of the United States of America).
"Affiliate" means any Person (other than the Agent or any Lender): (a)
directly or indirectly controlling, controlled by, or under common control
with, the Borrower; (b) directly or indirectly owning or holding five percent
(5.0%) or more of any equity interest in the Borrower; or (c) five percent
(5.0%) or more of whose voting stock or other equity interest is directly or
indirectly owned or held by the Borrower. For purposes of this definition,
"control" (including with correlative meanings, the terms "controlling",
"controlled by" and "under common control with") means the possession directly
or indirectly of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities or
by contract or otherwise.
"Agent" means First Union National Bank, in its capacity as contractual
representative of the Lenders under the terms of this Agreement, and any of its
successors.
"Agreement Date" means the date as of which this Agreement is dated.
"Applicable Law" means all applicable provisions of constitutions, statutes,
rules, regulations and orders of all governmental bodies and all orders and
decrees of all courts, tribunals and arbitrators.
"Applicable Margin" means the respective percentages per annum determined,
at any time, based on the range into which the Borrower's Credit Rating then
falls, in accordance with the table set forth below. Any change in the
Borrower's Credit Rating which would cause it to move to a different range in
the table shall effect a change in the Applicable Margin on the Business Day
immediately following the date on which such change occurs. Notwithstanding
any other provision contained in this definition, during any period in which
the Borrower has no Credit Rating from either S&P or Moody's, the Applicable
Margin shall be percentage corresponding to Level 5 in the table. During any
period in which the Borrower shall only have one Credit Rating, the Applicable
Margin shall be based on such Credit Rating. During any period that the
Borrower receives only two Credit Ratings and such Credit Ratings are not
equivalent, the Applicable Margin shall be determined by the lower of such two
Credit Ratings. During any period that the Borrower receives more than two
Credit Ratings and such Credit Ratings are not equivalent, the Applicable
Margin shall be determined by the lowest of all such Credit Ratings; provided,
however, if the two highest Credit Ratings shall be Investment Grade Ratings
and at least one of which shall be from S&P or Moody's, then the Applicable
Margin shall be determined by the lower of such two highest Credit Ratings.
Level
Borrower's Credit Rating
(S&P/Moody's or equivalent)
Applicable Margin
1 A-/A3 or equivalent 0.50%
2 BBB+/Baa1 or equivalent 0.60%
3 BBB/Baa2 or equivalent 0.90%
4 BBB-/Baa3 or equivalent 1.10%
5 Lower than BBB-/Baa3 or equivalent 1.25%
"Asset Backed Security" means any security that (a) 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; (b) is fully guaranteed by the
United States of America 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 (c) 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.
"Assignee" has the meaning given that term in Section 12.5.(d).
"Assignment and Acceptance Agreement" means an Assignment and Acceptance
Agreement among a Lender, an Assignee and the Agent, substantially in the form
of Exhibit A or such other form as may be agreed to by such Lender, such
Assignee and the Agent.
"Base Rate" means the per annum rate of interest equal to the greater of (a)
the Prime Rate or (b) the Federal Funds Rate plus one-half of one percent
(0.5%). Any change in the Base Rate resulting from a change in the Prime Rate
or the Federal Funds Rate shall become effective as of 12:01 a.m. on the
Business Day on which each such change occurs. The Base Rate is a reference
rate used by the Agent in determining interest rates on certain loans and is
not intended to be the lowest rate of interest charged by the Agent or any
Lender on any extension of credit to any debtor.
"Base Rate Loan" means a Loan bearing interest at a rate based on the Base
Rate.
"Benefit Arrangement" means at any time an employee benefit plan within the
meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan
and which is maintained or otherwise contributed to by any member of the ERISA
Group.
"Bid Rate" has the meaning given that term in Section 2.2.(c)(ii)(C).
"Bid Rate Borrowing" has the meaning given that term in Section 2.2.(b).
"Bid Rate Loan" means a loan made by a Lender under Section 2.2.(b).
"Bid Rate Notes" has the meaning given that term in Section 2.10.(b)
"Bid Rate Quote" means an offer in accordance with Section 2.2.(c) by a
Lender to make a Bid Rate Loan with one single specified interest rate.
"Bid Rate Quote Request" has the meaning given that term in Section 2.2.(b).
"Borrower" has the meaning set forth in the introductory paragraph hereof
and shall include the Borrower's successors and assigns.
"Business Day" means (a) any day other than a Saturday, Sunday or other day
on which banks in Charlotte, North Carolina are authorized or required to close
and (b) with reference to a LIBOR Loan, any such day that is also a day on
which dealings in Dollar deposits are carried out in the London interbank
market.
"Capitalized EBITDA" means, with respect to a Person and as of a given date,
(a) such Person's EBITDA for the fiscal quarter most recently ended times (b) 4
and divided by (c) 9.0%.
"Capitalized Lease Obligation" means Indebtedness represented by obligations
under a lease that is required to be capitalized for financial reporting
purposes in accordance with GAAP, and the amount of such Indebtedness shall be
the capitalized amount of such obligations determined in accordance with such
principles.
"Capitalized NOI" means, with respect to an Unencumbered Property, (a) the
Net Operating Income for such Unencumbered Property for the fiscal quarter most
recently ended times (b) 4 and divided by (c) 9.0%.
"Cash Equivalents" means: (a) securities issued, guaranteed or insured by
the United States of America or any of its agencies with maturities of not more
than one year from the date acquired; (b) certificates of deposit with
maturities of not more than one year from the date acquired issued by a United
States federal or state chartered commercial bank of recognized standing, which
has capital and unimpaired surplus in excess of $500,000,000.00 and which bank
or its holding company has a short-term commercial paper rating of at least A-2
or the equivalent by Standard & Poor's Rating Group, a division of McGraw-Hill,
Inc. ("S&P") or at least P-2 or the equivalent by Moody's Investors Services,
Inc. ("Moody's"); (c) reverse repurchase agreements with terms of not more than
seven days from the date acquired, for securities of the type described in
clause (a) above and entered into only with commercial banks having the
qualifications described in clause (b) above; (d) commercial paper issued by
any Person incorporated under the laws of the United States of America or any
State thereof and rated at least A-2 or the equivalent thereof by S&P or at
least P-2 or the equivalent thereof by Moody's, in each case with maturities of
not more than one year from the date acquired; and (e) investments in money
market funds registered under the Investment Company Act of 1940, which have
net assets of at least $500,000,000.00 and at least 85% of whose assets consist
of securities and other obligations of the type described in clauses (a)
through (d) above.
"Commitment" means, as to each Lender, such Lender's obligation to make
Revolving Loans pursuant to Section 2.1. in an amount up to, but not exceeding,
the amount set forth for such Lender on its signature page hereto as such
Lender's "Initial Commitment Amount" or as set forth in the applicable
Assignment and Acceptance Agreement, as the same may be reduced from time to
time pursuant to Section 2.11. or as appropriate to reflect any assignments to
or by such Lender effected in accordance with Section 12.5.
"Commitment Percentage" means, as to each Lender, the ratio, expressed as a
percentage, of (a) the amount of such Lender's Commitment to (b) the sum of (i)
the aggregate amount of the Commitments of all Lenders hereunder; provided,
however, that if at the time of determination the Commitments have terminated
or been reduced to zero, the "Commitment Percentage" of each Lender shall be
the Commitment Percentage of such Lender in effect immediately prior to such
termination or reduction.
"Compliance Certificate" has the meaning given such term in Section 8.3.
"Construction Asset Costs" means, with respect to Real Property Assets on
which construction of improvements has begun (as evidenced by foundation
excavation) but has not yet been completed (as such completion shall be
evidenced by a certificate of occupancy or its equivalent on a building by
building basis after completion of all budgeted amenities, including egress,
ingress, pool, clubhouse and laundry facilities), the aggregate, good faith
estimated cost of construction of such improvements (including land acquisition
costs).
"Contingent Obligation" as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person: (a) with respect
to any indebtedness, lease, dividend or other obligation of another Person if
the primary purpose or intent of the Person incurring such liability, or the
primary effect thereof, is to provide assurance to the obligee of such
liability that such liability will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
liability will be protected (in whole or in part) against loss with respect
thereto; (b) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings; (c) under Interest Rate Agreements; or (d) under any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement
designed to protect that Person against fluctuations in currency values.
Contingent Obligations shall include (i) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), comaking, discounting with recourse or sale with recourse by such
Person of the obligation of another, (ii) the obligation to make take or pay or
similar payments if required regardless of nonperformance by any other party or
parties to an agreement, and (iii) any liability of such Person for the
obligations of another through any agreement to purchase, repurchase or
otherwise acquire such obligation or any property constituting security
therefor, to provide funds for the payment or discharge of such obligation or
to maintain the solvency, financial condition or any balance sheet item or
level of income of another. The amount of any Contingent Obligation shall be
equal to the amount of the obligation so guaranteed or otherwise supported or,
if not a fixed and determined amount, the maximum amount so guaranteed.
"Continue", "Continuation" and "Continued" each refers to the continuation
of a Fixed LIBOR Loan from one Interest Period to another Interest Period
pursuant to Section 2.8.
"Convert", "Conversion" and "Converted" each refers to the conversion of a
Loan of one Type into a Loan of another Type pursuant to Section 2.9.
"Credit Event" means any of the following: (a) the making (or deemed making)
of any Loan and (b) the Conversion of a Loan.
"Credit Rating" means the lowest rating assigned by a Rating Agency to each
series of rated senior unsecured long term indebtedness of the Borrower.
"Default" means any of the events specified in Section 10.1., whether or not
there has been satisfied any requirement for the giving of notice, the lapse of
time or both.
"Defaulting Lender" has the meaning set forth in Section 3.11.
"Designated Lender" means a special purpose corporation which is an
affiliate of a Lender, that is engaged in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its business and that
issues (or the parent of which issues) commercial paper rated at least P-1 (or
the then equivalent grade) by Moody's or A-1 (or the then equivalent grade) by
S&P that, in either case, (a) is organized under the laws of the United States
of America or any state thereof, (b) shall have become a party to this
Agreement pursuant to Section 12.5.(e) and (c) is not otherwise a Lender.
"Designated Lender Note" means a Bid Rate Note of the Borrower evidencing
the obligation of the Borrower to repay Bid Rate Loans made by a Designated
Lender.
"Designating Lender" has the meaning given that term in Section 12.5.(e).
"Designation Agreement" means a Designation Agreement between a Lender and a
Designated Lender and accepted by the Agent, substantially in the form of
Exhibit B or such other form as may be agreed to by such Lender, such
Designated Lender and the Agent.
"Developed Property" means a Real Property Asset improved with one or more
multi-family residential apartment complexes that is owned directly in whole by
the Borrower or any of its Subsidiaries.
"Dollars" or "$" means the lawful currency of the United States of America.
"EBITDA" means, with respect to a Person and for any period, the sum of such
Person's Funds From Operation and Interest Expense for such period. In
determining EBITDA of the Borrower or any Subsidiary, EBITDA attributable to
any Real Property Asset (a) acquired by the Borrower or such Subsidiary during
such period may be included in EBITDA of the Borrower or such Subsidiary, as
applicable, on a pro forma basis in an amount not to exceed the EBITDA for such
Real Property Asset for the immediately preceding period of equal duration, so
long as the Borrower provides the Lenders with evidence of the calculation of
the EBITDA for such Real Property Asset for such period which calculation is
acceptable to the Requisite Lenders in their reasonable discretion and (b)
disposed of during such period shall be disregarded. In addition,
distributions of cash received by the Borrower or any Subsidiary during such
period from any of their Unconsolidated Affiliates shall be included in
Borrower's EBITDA.
"Effective Date" means the later of: (a) the Agreement Date; and (b) the
date on which all of the conditions precedent set forth in Section 5.1. shall
have been fulfilled.
"Eligible Assignee" means any Person who is: (i) currently a Lender; (ii) a
commercial bank, trust company, insurance company, investment bank or pension
fund organized under the laws of the United States of America, or any state
thereof, and having total assets in excess of $5,000,000,000; (iii) a savings
and loan association or savings bank organized under the laws of the United
States of America, or any state thereof, and having a tangible net worth of at
least $500,000,000; or (iv) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation
and Development ("OECD"), or a political subdivision of any such country, and
having total assets in excess of $10,000,000,000, provided that such bank is
acting through a branch or agency located in the United States of America. If
such Person is not currently a Lender, such Person's senior unsecured long term
indebtedness must be rated BBB or higher by S&P, Baa2 or higher by Moody's, or
the equivalent or higher of either such rating by another Rating Agency
acceptable to the Agent. Notwithstanding the foregoing, if an Event of Default
shall have occurred and be continuing under Section 10.1.(a) or (b), the
"Eligible Assignee" shall mean any Person that is not an individual.
"Environmental Laws" means any Applicable Law relating to environmental
protection or the manufacture, storage, disposal or clean-up of Hazardous
Materials including, without limitation, the following: Clean Air Act, 42
U.S.C. <section> 7401 et seq; Federal Water Pollution Control Act, 33 U.S.C.
<section> 1251 et seq.; Solid Waste Disposal Act, 42 U.S.C. <section> 6901 et
seq.; Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. <section> 9601 et seq.; National Environmental Policy Act, 42 U.S.C.
<section> 4321 et seq.; regulations of the Environmental Protection Agency and
any applicable rule of common law and any judicial interpretation thereof
relating primarily to the environment or Hazardous Materials.
"Equity Issuance" means any issuance or sale by a Person of its capital
stock or other similar equity security, or any warrants, options or similar
rights to acquire, or securities convertible into or exchangeable for, such
capital stock or other similar equity security.
"ERISA" means the Employee Retirement Income Security Act of 1974, as in
effect from time to time.
"ERISA Group" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"Event of Default" means any of the events specified in Section 10.1.,
provided that any requirement for notice or lapse of time or any other
condition has been satisfied.
"Extension Request" has the meaning given that term in Section 2.12.
"Federal Funds Rate" means, for any day, the rate per annum (rounded upward
to the nearest 1/100th of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day, provided
that (a) if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day, and
(b) if no such rate is so published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate quoted to the Agent
by federal funds dealers selected by the Agent on such day on such transaction
as determined by the Agent.
"Fees" means the fees and commissions provided for or referred to in Section
3.6. and any other fees payable by the Borrower hereunder or under any other
Loan Document.
"First Union" means First Union National Bank and its successors and
assigns.
"Fixed Charges" means, for a given period, the sum of (a) such Interest
Expense of the Borrower and its Subsidiaries for such period determined on a
consolidated basis, plus (b) the aggregate of all scheduled principal payments
on Indebtedness made by such the Borrower and its Subsidiaries during such
period (excluding balloon, bullet or similar payments of principal due upon the
stated maturity of Indebtedness), plus (c) the aggregate of all dividends paid
or accrued by the Borrower and its Subsidiaries on any Preferred Stock during
such period, plus (d) $50 per each fiscal quarter during such period times the
weighted average of the number of units contained in all Developed Properties
calculated in a manner consistent with how the Borrower calculates such average
as set forth in its financial statements.
"Fixed LIBOR" means, for any Fixed LIBOR Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period. If for any reason such rate is not available, the term "Fixed LIBOR"
shall mean, for any Fixed LIBOR Loan for any Interest Period therefor, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing
on Reuters Screen LIBO Page as the London interbank offered rate for deposits
in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period for a term comparable to such Interest
Period; provided, however, if more than one rate is specified on Reuters Screen
LIBO Page, the applicable rate shall be the arithmetic mean of all such rates.
"Fixed LIBOR Loan" means a Loan bearing interest at a rate based on Fixed
LIBOR.
"Floating LIBOR" means at any time a floating per annum rate of interest
equal to the Adjusted Eurodollar Rate which at such time would be quoted to
apply to a Fixed LIBOR Loan having an Interest Period of 30 days if such Fixed
LIBOR Loan were made two Business Days following such time. Any change in
Floating LIBOR resulting from a change in such Adjusted Eurodollar Rate shall
become effective as of 12:01 a.m. on the Business Day on which each such change
occurs.
"Floating LIBOR Loan" means a Loan bearing interest at a rate based on
Floating LIBOR.
"Floating Rate Debt" means any Indebtedness of the Borrower or any
Subsidiary which bears interest at a fluctuating interest rate. The term
"Floating Rate Debt" shall not include (a) any Indebtedness in respect of which
the Borrower or such Subsidiary, as applicable, has obtained an Interest Rate
Agreement which effectively causes such fluctuating rate to become a fixed rate
less than or equal to a fixed interest rate which could be obtained by
borrowers of comparable creditworthiness as the Borrower on Indebtedness of
comparable duration and principal amount or (b) any Indebtedness which, at the
option of the Borrower or such Subsidiary, as applicable, may bear interest at
a fixed rate for periods of varying length, during any such period in excess of
90 days.
"Foreign Lender" means any Lender organized under the laws of a jurisdiction
other than the United States of America.
"Funds From Operations" means, for any given period, net income for such
period, excluding non-recurring expenses, net realized gains for such period
and equity in earnings (losses) of Unconsolidated Affiliates, to the extent
included in net income, plus depreciation of real property for such period, all
as determined in accordance with GAAP.
"GAAP" means accounting principles as promulgated from time to time in
statements, opinions and pronouncements by the American Institute of Certified
Public Accountants and the Financial Accounting Standards Board and in such
statements, opinions and pronouncements of such other entities with respect to
financial accounting of for-profit entities as shall be accepted by a
substantial segment of the accounting profession in the United States.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any national, state or local government
(whether domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public or statutory
instrumentality, authority, body, agency, bureau or entity (including, without
limitation, the Federal Deposit Insurance Corporation, the Comptroller of the
Currency or the Federal Reserve Board, any central bank or any comparable
authority) or any arbitrator with authority to bind a party at law.
"Guaranty" means a Guaranty executed by any Subsidiary and substantially in
the form of Exhibit C.
"Hazardous Materials" means all or any of the following: (a) substances that
are defined or listed in, or otherwise classified pursuant to, any applicable
Environmental Laws as "hazardous substances", "hazardous materials", "hazardous
wastes", "toxic substances" or any other formulation intended to define, list
or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity
or "TLCP" toxicity, "EP toxicity"; (b) oil, petroleum or petroleum derived
substances, natural gas, natural gas liquids or synthetic gas and drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources;
(c) any flammable substances or explosives or any radioactive materials; and
(d) asbestos in any form or (e) electrical equipment which contains any oil or
dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million.
"Implied Capitalization Value" means, at a given time, the sum of (a) the
Capitalized EBITDA of the Borrower and its Subsidiaries determined on a
consolidated basis at such time, plus (b) all cash, marketable securities and
cash equivalents (excluding tenant deposits and other cash and cash equivalents
the disposition of which by the Borrower or a Subsidiary is restricted in any
way (excluding restrictions in the nature of early withdrawal penalties)) of
the Borrower and its Subsidiaries determined on a consolidated basis at such
time, plus (c) 50% of the amount of "Apartments Under Development" as is or
would be set forth on the consolidated balance sheet of the Borrower at such
time.
"Indebtedness" means, with respect to a Person, at the time of computation
thereof, all of the following (without duplication): (a) obligations of such
Person in respect of money borrowed; (b) obligations of such Person (other than
trade debt incurred in the ordinary course of business), whether or not for
money borrowed (i) represented by notes payable, or drafts accepted, in each
case representing extensions of credit, (ii) evidenced by bonds, debentures,
notes or similar instruments, or (iii) constituting purchase money
indebtedness, conditional sales contracts, title retention debt instruments or
other similar instruments, upon which interest charges are customarily paid or
that are issued or assumed as full or partial payment for property; (c)
Capitalized Lease Obligations of such Person; (d) all reimbursement obligations
of such Person under any letters of credit or acceptances (whether or not the
same have been presented for payment); and (e) all Indebtedness of other
Persons which (i) such Person has guarantied or which is otherwise recourse to
such Person or (ii) are secured by a Lien on any property of such Person.
"Indenture" means that certain Indenture dated as of February 1, 1995 by and
between the Borrower and First Union National Bank, f/k/a First Union National
Bank of Georgia, as Trustee (the "Trustee"), as supplemented by that certain
First Supplemental Indenture dated as of June 1, 1995 by and between the
Borrower and the Trustee.
"Intellectual Property" has the meaning given that term in Section 6.1.(r).
"Interest Expense" means, with respect to a Person and for any period, the
total consolidated interest expense (including, without limitation, capitalized
interest expense and interest expense attributable to Capitalized Lease
Obligations) of such Person and in any event shall include all interest expense
with respect to any Indebtedness in respect of which such Person is wholly or
partially liable.
"Interest Period" means:
(a) with respect to any Fixed LIBOR Loan, each period commencing on the
date such LIBOR Loan is made or the last day of the next preceding Interest
Period for such Loan and ending on the numerically corresponding day in the
first, second, third or sixth calendar month thereafter, as the Borrower may
select in a Notice of Borrowing, Notice of Continuation or Notice of
Conversion, as the case may be, except that each Interest Period that commences
on the last Business Day of a calendar month (or on any day for which there is
no numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar
month; and
(b) with respect to any Bid Rate Loan, the period commencing on the date
such Bid Rate Loan is made and ending on any Business Day not less than 7 nor
more than 180 days thereafter, as the Borrower may select as provided in
Section 2.2.(b).
Notwithstanding the foregoing: (i) if any Interest Period would otherwise end
after the Revolving Termination Date or the Termination Date, such Interest
Period shall end on the Revolving Termination Date or the Termination Date, as
applicable; (ii) each Interest Period that would otherwise end on a day which
is not a Business Day shall end on the next succeeding Business Day (or, if
such next succeeding Business Day falls in the next succeeding calendar month,
on the next preceding Business Day); and (iii) notwithstanding the immediately
preceding clause (i), no Interest Period for any Fixed LIBOR Loan shall have a
duration of less than one month and, if the Interest Period for any Fixed LIBOR
Loan would otherwise be a shorter period, such Loan shall not be available
hereunder for such period.
"Interest Rate Agreement" means any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement or other similar contractual
agreement or arrangement entered into with a nationally recognized financial
institution then having an Investment Grade Rating for the purpose of
protecting against fluctuations in interest rates.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended.
"Investment" means, with respect to any Person and whether or not such
investment constitutes a controlling interest in such Person (a) the purchase
or other acquisition of any share of capital stock, evidence of Indebtedness or
other security issued by any other Person; (b) any loan, advance or extension
of credit to, or contribution (in the form of money or goods) to the capital
of, any other Person; (c) any Guaranty of the Indebtedness of any other Person;
(d) any other investment in any other Person; and (e) any commitment or option
to make an Investment in any other Person.
"Investment Grade Rating" means a Credit Rating of BBB- or higher by S&P,
Baa3 or higher by Moody's, or the equivalent or higher of either such rating by
another Rating Agency.
"Lender" means each financial institution from time to time party hereto as
a "Lender" or a "Designated Lender," together with its respective successors
and assigns; provided, however, that the term "Lender" shall exclude each
Designated Lender when used in reference to any Loan other than a Bid Rate
Loan, the Commitments or terms relating to the any Loan other than a Bid Rate
Loan and the Commitments and shall further exclude each Designated Lender for
all other purposes hereunder except that any Designated Lender which funds a
Bid Rate Loan shall, subject to Section 12.5.(e), have the rights (including
the rights given to a Lender contained in Sections 12.2. and 12.10.) and
obligations of a Lender associated with holding such Bid Rate Loan.
"Lending Office" means, for each Lender and for each Type of Loan, the
office of such Lender specified as such on its signature page hereto or in the
applicable Assignment and Acceptance Agreement, or such other office of such
Lender as such Lender may notify the Agent in writing from time to time.
"LIBOR Loan" means a Loan bearing interest at a rate based on either Fixed
LIBOR or Floating LIBOR.
"Lien" as applied to the property of any Person means: (a) any security
interest, encumbrance, mortgage, deed to secure debt, deed of trust, pledge,
lien, charge, ground lease or lease constituting a Capitalized Lease
Obligation, conditional sale or other title retention agreement, or other
security title or encumbrance of any kind in respect of any property of such
Person, or upon the income or profits therefrom; (b) any arrangement, express
or implied, under which any property of such Person is transferred, sequestered
or otherwise identified for the purpose of subjecting the same to the payment
of Indebtedness or performance of any other obligation in priority to the
payment of the general, unsecured creditors of such Person; (c) the filing of
any financing statement under the Uniform Commercial Code or its equivalent in
any jurisdiction; and (d) any agreement by such Person to grant, give, or
otherwise convey any of the foregoing.
"Loan" means a Revolving Loan, a Term Loan, a Bid Rate Loan or a Swingline
Loan.
"Loan Document" means this Agreement, each Note and each other document or
instrument now or hereafter executed and delivered by the Borrower or any
Subsidiary in connection with, pursuant to or relating to this Agreement.
"Material Adverse Effect" means a materially adverse effect on (a) the
business, assets, liabilities, financial condition, results of operations or
business prospects of the Borrower and its Subsidiaries taken as a whole, (b)
the ability of the Borrower to perform its obligations under any Loan Document
to which it is a party which does not result from a material adverse effect on
the items described in the immediate preceding clause (a), (c) the validity or
enforceability of any of the Loan Documents, (d) the rights and remedies of the
Lenders and the Agent under any of such Loan Documents or (e) the timely
payment of the principal of or interest on the Loans or other amounts payable
in connection therewith. Except with respect to representations made or deemed
made by the Borrower or any Subsidiary in any of the other Loan Documents to
which it is a party, all determinations of materiality shall be made by the
Requisite Lenders in their reasonable judgment unless expressly provided
otherwise.
"Material Contract" means any contract or other arrangement (other than Loan
Documents), whether written or oral, to which the Borrower or any Subsidiary is
a party as to which the breach, nonperformance, cancellation or failure to
renew by any party thereto could have a Material Adverse Effect.
"Material Plan" means at any time a Plan or Plans having aggregate Unfunded
Liabilities in excess of $1,000,000.
"Material Subsidiary" means, as of the date of any determination thereof,
any Subsidiary which has total assets having a book value greater than or equal
to $15,000,000.
"Moody's" means Moody's Investors Services, Inc.
"Multiemployer Plan" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
"Net Operating Income" means, for any Unencumbered Property and for any
given fiscal quarter of the Borrower, the sum of the following (without
duplication): (a) rents and other revenues received in the ordinary course from
such Unencumbered Property (including proceeds of rent loss insurance) minus
(b) all expenses paid or accrued related to the ownership, operation or
maintenance of such Unencumbered Property, including but not limited to taxes,
assessments and the like, insurance, utilities, payroll costs, maintenance,
repair and landscaping expenses and on-site marketing expenses minus (c)
property management fees, if any, paid or accrued in respect of such
Unencumbered Property during such period.
"Net Proceeds" means, with respect to an Equity Issuance by a Person, the
aggregate amount of all cash received by such Person in respect of such Equity
Issuance net of investment banking fees, legal fees, accountants fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred by such Person in connection with such Equity Issuance.
"Note" means a Revolving Note, a Bid Rate Note or a Swingline Note.
"Notice of Borrowing" means a notice in the form of Exhibit D to be
delivered to the Agent pursuant to Section 2.1.(b) evidencing the Borrower's
request for a borrowing of Revolving Loans.
"Notice of Continuation" means a notice in the form of Exhibit E to be
delivered to the Agent pursuant to Section 2.8. evidencing the Borrower's
request for the Continuation of a Fixed LIBOR Loan.
"Notice of Conversion" means a notice in the form of Exhibit F to be
delivered to the Agent pursuant to Section 2.9. evidencing the Borrower's
request for the Conversion of a Loan from one Type to another Type.
"Notice of Swingline Borrowing" means a notice in the form of Exhibit G to
be delivered to the Swingline Lender pursuant to Section 2.3.(b) evidencing the
Borrower's request for a Swingline Loan.
"Obligations" means, individually and collectively: (a) the aggregate
principal balance of, and all accrued and unpaid interest on, all Loans and (b)
all other indebtedness, liabilities, obligations, covenants and duties of the
Borrower owing to the Agent or any Lender of every kind, nature and
description, under or in respect of this Agreement or any of the other Loan
Documents, including, without limitation, the Fees and indemnification
obligations, whether direct or indirect, absolute or contingent, due or not
due, contractual or tortious, liquidated or unliquidated, and whether or not
evidenced by any promissory note.
"Occupancy Rate" means, with respect to a Developed Property at any time,
the ratio, expressed as a percentage, of (a) the number of units of such
Developed Property actually occupied by tenants paying rent pursuant to binding
leases as to which no monetary default has occurred and is continuing to (b)
the aggregate number of units of such Developed Property.
"Other Relevant Subsidiary" means any Subsidiary, individually or together
with other Subsidiaries, the occurrence of any of the events described in
Sections 10.1.(f) or 10.1.(g) with respect to which could reasonably be
expected to have a Material Adverse Effect.
"Participant" has the meaning given that term in Section 12.5.(c).
"PBGC" means the Pension Benefit Guaranty Corporation and any successor
agency.
"Permitted Liens" means, as to any Person: (a) Liens securing taxes,
assessments and other charges or levies imposed by any Governmental Authority
(excluding any Lien imposed pursuant to any of the provisions of ERISA) or the
claims of materialmen, mechanics, carriers, warehousemen or landlords for
labor, materials, supplies or rentals incurred in the ordinary course of
business, which are not at the time required to be paid or discharged under
Section 7.6.; (b) Liens consisting of deposits or pledges made, in the ordinary
course of business, in connection with, or to secure payment of, obligations
under workmen's compensation, unemployment insurance or similar Applicable
Laws; (c) Liens consisting of encumbrances in the nature of zoning
restrictions, easements, and rights or restrictions of record on the use of
real property, which do not materially detract from the value of such property
or impair the use thereof in the business of such Person; (d) Liens in
existence as of the Agreement Date and set forth in Schedule 6.1.(f); and (e)
Liens in favor of the Agent for the benefit of the Lenders.
"Person" means an individual, corporation, partnership, limited liability
company, association, trust or unincorporated organization, or a government or
any agency or political subdivision thereof.
"Plan" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person
which was at such time a member of the ERISA Group for employees of any Person
which was at such time a member of the ERISA Group.
"Post-Default Rate" means, in respect of any principal of any Loan or any
other Obligation that is not paid when due (whether at stated maturity, by
acceleration, by optional or mandatory prepayment or otherwise), a rate per
annum equal to four percent (4.0%) plus the Base Rate as in effect from time to
time.
"Preferred Stock" means, with respect to any Person, shares of capital stock
of, or other equity interests in, such Person which are entitled to preference
or priority over any other capital stock of, or other equity interest in, such
Person in respect of the payment of dividends or distribution of assets upon
liquidation or both.
"Prime Rate" means the rate of interest per annum announced publicly by the
Agent as its prime rate from time to time. The Prime Rate is not necessarily
the best or the lowest rate of interest offered by the Agent or any Lender.
"Principal Office" means the office of the Agent located at One First Union
Center, Charlotte, North Carolina 28288, or such other office of the Agent as
the Agent may designate from time to time.
"Quarterly Date" means the last Business Day of March, June, September and
December in each year, the first of which shall be September 30, 1997.
"Rating Agency" means S&P, Moody's or any other nationally recognized
securities rating agency selected by the Borrower and acceptable to the
Requisite Lenders.
"Real Property Assets" means the real property assets currently owned in
whole or in part by the Borrower or any of its Subsidiaries and listed on
Schedule 6.1.(f), as such Schedule may be modified from time to time to reflect
sales, transfers, assignments, conveyances, development, acquisitions and
purchases of real property assets.
"Register" has the meaning given that term in Section 12.5.(e).
"Regulatory Change" means, with respect to any Lender, any change effective
after the Agreement Date in Applicable Law (including without limitation,
Regulation D of the Board of Governors of the Federal Reserve System) or the
adoption or making after such date of any interpretation, directive or request
applying to a class of banks, including such Lender, of or under any Applicable
Law (whether or not having the force of law and whether or not failure to
comply therewith would be unlawful) by any Governmental Authority or monetary
authority charged with the interpretation or administration thereof or
compliance by any Lender with any request or directive regarding capital
adequacy.
"REIT" means a Person qualifying for treatment as a "real estate investment
trust" under the Internal Revenue Code.
"Rejecting Lender" has the meaning given that term in Section 2.12.(b).
"Requisite Lenders" means, as of any date, Lenders having at least 66 2/3%
of the aggregate amount of the Commitments, or, if the Commitments have been
terminated or reduced to zero, Lenders holding at least 66 2/3% of the
principal amount of the Loans.
"Revolving Loan" means a loan made by a Lender to the Borrower pursuant to
Section 2.1.
"Revolving Note" has the meaning given that term in Section 2.10.(a).
"Revolving Termination Date" means September 16, 2000, or such later date to
which the Revolving Termination Date may be extended pursuant to Section 2.12.
"Secured Indebtedness" means, with respect to any Person, any Indebtedness
of such Person that is secured in any manner by any Lien, and shall include
such Person's pro rata share of the Secured Indebtedness of any of such
Person's Unconsolidated Affiliates.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, together with all rules and regulations issued thereunder.
"Senior Note Agreement" 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.
"Senior Notes" means the Borrower's 6.625% Senior Notes in the aggregate
principal amount of $120,000,000 issued pursuant to the Senior Note Agreements.
"Solvent" means, when used with respect to any Person, that (a) the fair
value and the fair salable value of its assets (excluding any Indebtedness due
from any affiliate of such Person) are each in excess of the fair valuation of
its total liabilities (including all contingent liabilities); and (b) such
Person is able to pay its debts or other obligations in the ordinary course as
they mature and (c) that the Person has capital not unreasonably small to carry
on its business and all business in which it proposes to be engaged.
"S&P" means Standard & Poor's Rating Group, a division of McGraw-Hill
Companies, Inc.
"Subordinated Debt" means Indebtedness of the Borrower or any of its
Subsidiaries that is subordinated in right of payment and otherwise to the
Loans and the other Obligations in a manner satisfactory to the Agent and the
Requisite Lenders in their sole and absolute discretion.
"Subsidiary" means, for any Person, any corporation, partnership or other
entity of which at least a majority of the securities or other ownership
interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other persons performing similar functions of such
corporation, partnership or other entity (without regard to the occurrence of
any contingency) is at the time directly or indirectly owned or controlled by
such Person or one or more Subsidiaries of such Person or by such Person and
one or more Subsidiaries of such Person. "Wholly Owned Subsidiary" means any
such corporation, partnership or other entity of which all of the equity
securities or other ownership interests (other than, in the case of a
corporation, directors' qualifying shares) are so owned or controlled.
"Supermajority Lenders" means, as of any date, Lenders having at least 75%
of the aggregate amount of the Commitments, or, if the Commitments have been
terminated or reduced to zero, Lenders holding at least 75% of the principal
amount of the Loans.
"Swingline Commitment" means the Swingline Lender's obligation to make
Swingline Loans pursuant to Section 2.3. in an amount up to, but not exceeding,
$25,000,000, as such amount may be reduced from time to time in accordance with
the terms hereof.
"Swingline Lender" means First Union, together with its respective
successors and assigns.
"Swingline Loan" means a loan made by the Swingline Lender to the Borrower
pursuant to Section 2.3.(a).
"Swingline Note" means the promissory note of the Borrower payable to the
order of the Swingline Lender in a principal amount equal to the amount of the
Swingline Commitment as originally in effect and otherwise duly completed,
substantially in the form of Exhibit H.
"Tangible Net Worth" means, for any Person and as of a given date, such
Person's total stockholder's equity minus (to the extent reflected in
determining stockholders' equity of such Person): (a) the amount of any write-
up in the book value of any assets contained in any balance sheet of such
Person resulting from revaluation thereof or any write-up in excess of the cost
of such assets acquired and (b) the aggregate of all amounts appearing on the
assets side of any such balance sheet for franchises, licenses, permits,
patents, patent applications, copyrights, trademarks, trade names, goodwill,
treasury stock, experimental or organizational expenses and other like assets
which would be properly classified as intangible assets under GAAP.
"Taxes" has the meaning given that term in Section 3.12.
"Termination Date" means the date two years following the Revolving
Termination Date.
"Term Loan" has the meaning given that term in Section 2.13.
"Type" with respect to any Loan, refers to whether such Loan is a LIBOR Loan
or Base Rate Loan.
"Unconsolidated Affiliate" shall mean, with respect to any Person, any other
Person in whom such Person holds an Investment, which Investment is accounted
for in the financial statements of such Person on an equity basis of accounting
and whose financial results would not be consolidated under GAAP with the
financial results of such Person on the consolidated financial statements of
such Person.
"Unencumbered Property" means a Developed Property which satisfies all of
the following requirements as determined by the Agent: (a) fee simple title to
such Developed Property is vested entirely in the Borrower or a Subsidiary of
the Borrower; (b) neither such Developed Property, nor any interest of the
Borrower or such Subsidiary therein, is subject to any Lien other than
Permitted Liens of the types described in clauses (a), (b), (c) or (e) of the
definition of Permitted Liens or to any agreement (other than this Agreement or
any other Loan Document) that prohibits the creation of any Lien thereon; (c)
if such Developed Property is owned by a Subsidiary, none of the Borrower's
direct or indirect ownership interest in such Subsidiary is subject to any Lien
other than Permitted Liens of the types described in clauses (a), (b), (c) or
(e) of the definition of Permitted Liens or to any agreement (other than this
Agreement or any other Loan Document) that prohibits the creation of any Lien
thereon; (d) such Developed Property has an Occupancy Rate of at least 80%; and
(e) such Developed Property is free of all structural defects, title defects,
environmental conditions or other adverse matters other than defects,
conditions or matters individually or collectively which are not material to
the profitable operation of such Developed Property.
"Unencumbered Property Value" means the sum of (a) the aggregate amount of
Capitalized NOI for all Unencumbered Properties owned by the Borrower and its
Wholly Owned Subsidiaries, plus (b) the aggregate amount of Capitalized NOI for
all Unencumbered Properties owned by Subsidiaries that are not Wholly Owned
Subsidiaries, plus (c) all cash and cash equivalents (excluding tenant deposits
and other cash and cash equivalents the disposition of which by the Borrower or
any Subsidiary, as applicable, is restricted in any way (excluding restrictions
in the nature of early withdrawal penalties)) of the Borrower and its
Subsidiaries determined on a consolidated basis as of the end of the most
recent fiscal quarter, plus (d) 50% of the amount of "Apartments Under
Development" as set forth on the consolidated balance sheet of the Borrower for
the fiscal quarter most recently ending. The aggregate of the amounts of items
(b) through (d) may not account for more than 20% of the Unencumbered Property
Value at any time.
"Unfunded Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (a) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed
by the PBGC for purposes of Section 4044 of ERISA, exceeds (b) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"Unsecured Indebtedness" means, with respect to a Person, all Indebtedness
of such Person that is not Secured Indebtedness.
Section 1.2. General; References to Times.
Unless otherwise indicated, all accounting terms, ratios and measurements
shall be interpreted or determined in accordance with GAAP in effect as of the
Agreement Date. References in this Agreement to "Sections", "Articles",
"Exhibits" and "Schedules" are to sections, articles, exhibits and schedules
herein and hereto unless otherwise indicated. references in this Agreement to
any document, instrument or agreement (a) shall include all exhibits, schedules
and other attachments thereto, (b) shall include all documents, instruments or
agreements issued or executed in replacement thereof, to the extent permitted
hereby and (c) shall mean such document, instrument or agreement, or
replacement or predecessor thereto, as amended, supplemented, restated or
otherwise modified from time to time to the extent permitted hereby and in
effect at any given time. 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. Unless explicitly
set forth to the contrary, a reference to "Subsidiary" means a Subsidiary of
the Borrower or a Subsidiary of such Subsidiary and a reference to an
"Affiliate" means a reference to an Affiliate of the Borrower. Titles and
captions of Articles, Sections, subsections and clauses in this Agreement are
for convenience only, and neither limit nor amplify the provisions of this
Agreement. Unless otherwise indicated, all references to time are references
to Charlotte, North Carolina time.
Article II. Credit Facility
Section 2.1. Revolving Loans.
(a) Generally. Subject to the terms and conditions hereof, during the
period from the Effective Date to but excluding the Revolving Termination Date,
each Lender severally and not jointly agrees to make Revolving Loans to the
Borrower in an aggregate principal amount at any one time outstanding up to,
but not exceeding, the amount of such Lender's Commitment; provided, however,
that in no event shall the aggregate principal amount of all outstanding
Revolving Loans, together with the aggregate principal amount of all
outstanding Swingline Loans, and the aggregate principal amount of all
outstanding Bid Rate Loans, exceed the aggregate amount of the Commitments as
in effect from time to time. Subject to the terms and conditions of this
Agreement, during the period from the Effective Date to but excluding the
Revolving Termination Date, the Borrower may borrow, repay and reborrow
Revolving Loans hereunder.
(b) Requesting Revolving Loans. The Borrower shall give the Agent notice
pursuant to a Notice of Borrowing or telephonic notice of each borrowing of
Revolving Loans. Each Notice of Borrowing shall be delivered to the Agent
before 12:00 noon (a) in the case of Fixed LIBOR Loans, on the date three
Business Days prior to the proposed date of such borrowing and (b) in the case
of Base Rate Loans or Floating LIBOR Loans, on the proposed date of such
borrowing. Any such telephonic notice shall include all information to be
specified in a written Notice of Borrowing and shall be promptly confirmed in
writing by the Borrower pursuant to a Notice of Borrowing sent to the Agent by
telecopy on the same day of the giving of such telephonic notice. The Agent
will transmit by telecopy the Notice of Borrowing (or the information contained
in such Notice of Borrowing) to each Lender promptly upon receipt by the Agent
(but in any event not later than 1:00 p.m. on the date of receipt thereof).
Each Notice of Borrowing or telephonic notice of each borrowing shall be
irrevocable once given and binding on the Borrower.
(c) Disbursements of Revolving Loan Proceeds. No later than 3:00 p.m. on
the date specified in the Notice of Borrowing, each Lender will make available
for the account of its applicable Lending Office to the Agent at the Principal
Office, in immediately available funds, the proceeds of the Revolving Loan to
be made by such Lender. With respect to Revolving Loans to be made after the
Effective Date, unless the Agent shall have been notified by any Lender prior
to the specified date of borrowing that such Lender does not intend to make
available to the Agent the Revolving Loan to be made by such Lender on such
date, the Agent may assume that such Lender will make the proceeds of such
Revolving Loan available to the Agent on the date of the requested borrowing as
set forth in the Notice of Borrowing and the Agent may (but shall not be
obligated to), in reliance upon such assumption, make available to the Borrower
the amount of such Revolving Loan to be provided by such Lender. Subject to
satisfaction of the applicable conditions set forth in Article V. for such
borrowing, the Agent will make the proceeds of such borrowing available to the
Borrower no later than 4:00 p.m. on the date and at the account specified by
the Borrower in such Notice of Borrowing.
Section 2.2. Bid Rate Loans.
(a) Bid Rate Loans. In addition to borrowings of Revolving Loans, at any
time during the period from the Effective Date to but excluding the Revolving
Termination Date the Borrower may, as set forth in this Section, request the
Lenders to make offers to make Bid Rate Loans to the Borrower in Dollars. The
Lenders may, but shall have no obligation to, make such offers and the Borrower
may, but shall have no obligation to, accept any such offers in the manner set
forth in this Section.
(b) Requests for Bid Rate Loans. When the Borrower wishes to request from
the Lenders offers to make Bid Rate Loans, it shall give the Agent notice (a
"Bid Rate Quote Request") so as to be received no later than 10:00 a.m. on the
Business Day next preceding the date of borrowing proposed therein (or such
other time and date as the Borrower and the Agent, with the consent of the
Requisite Lenders, may agree). The Agent shall deliver to each Lender a copy
of each Bid Rate Quote Request promptly upon receipt thereof by the Agent (but
in any event not later than 11:00 a.m. on the date of receipt thereof). The
Borrower may request offers to make Bid Rate Loans for up to three different
Interest Periods in each Bid Rate Quote Request (for which purpose Interest
Periods in different lettered clauses of the definition of the term "Interest
Period" shall be deemed to be different Interest Periods even if they are
coterminous); provided that the request for each separate Interest Period shall
be deemed to be a separate Bid Rate Quote Request for a separate borrowing (a
"Bid Rate Borrowing"). Each Bid Rate Quote Request shall be substantially in
the form of Exhibit I and shall specify as to each Bid Rate Borrowing:
(i) the proposed date of such borrowing, which shall be a Business Day;
(ii) the aggregate amount of such Bid Rate Borrowing, which shall not cause
any of the limits specified in Section 2.14. to be violated; and
(iii) the duration of the Interest Period applicable thereto.
Except as otherwise provided in this subsection (b), no Bid Rate Quote Request
shall be given within five Business Days (or such other number of days as the
Borrower and the Agent, with the consent of the Requisite Lenders, may agree)
of the giving of any other Bid Rate Quote Request.
(c) Bid Rate Quotes.
(i) Each Lender may submit one or more Bid Rate Quotes, each containing an
offer to make a Bid Rate Loan in response to any Bid Rate Quote Request;
provided that, if the Borrower's request under Section 2.2.(b) specified more
than one Interest Period, such Lender may make a single submission containing
one or more Bid Rate Quotes for each such Interest Period. Each Bid Rate Quote
must be submitted to the Agent not later than 12:00 noon on the proposed date
of borrowing (or such other time and date as the Borrower and the Agent, with
the consent of the Requisite Lenders, may agree and of which all Lenders have
been notified); provided that the Lender then acting as Agent may submit a Bid
Rate Quote only if it notifies the Borrower of the terms of the offer contained
therein not later than 11:30 a.m. on the proposed date of such borrowing.
Subject to Articles V. and X., any Bid Rate Quote so made shall be irrevocable
except with the consent of the Agent given at the request of the Borrower. If
any such revocation occurs, then the Agent shall give prompt notice thereof to
all Lenders who submitted Bid Rate Quotes in response to the applicable Bid
Rate Quote Request and each such Lender may revoke its Bid Rate Quote by giving
written notice of such revocation to the Agent no later than 12:20 p.m. on the
proposed date of borrowing. Such Bid Rate Loans may be funded by a Lender's
Designated Lender (if any) as provided in Section 12.5.(e), however such Lender
shall not be required to specify in its Bid Rate Quote whether such Bid Rate
Loan will be funded by such Designated Lender.
(ii) Each Bid Rate Quote shall be substantially in the form of Exhibit J
and shall specify:
(A) the proposed date of borrowing and the Interest Period therefor;
(B) the principal amount of the Bid Rate Loan for which each such offer is
being made; provided that the aggregate principal amount of all Bid Rate Loans
for which a Lender submits Bid Rate Quotes (x) may be greater or less than the
Commitment of such Lender but (y) shall not exceed the principal amount of the
Bid Rate Borrowing for a particular Interest Period for which offers were
requested;
(C) the rate of interest per annum (rounded upwards, if necessary, to the
nearest 1/1,000th of 1%) offered for each such Bid Rate Loan (the "Bid Rate");
and
(D) the identity of the quoting Lender.
Unless otherwise agreed by the Agent and the Borrower, no Bid Rate Quote shall
contain qualifying, conditional or similar language or propose terms other than
or in addition to those set forth in the applicable Bid Rate Quote Request and,
in particular, no Bid Rate Quote may be conditioned upon acceptance by the
Borrower of all (or some specified minimum) of the principal amount of the Bid
Rate Loan for which such Bid Rate Quote is being made.
(d) Notification by Agent. The Agent shall, as promptly as practicable
after the Bid Rate Quotes are submitted (but in any event not later than 12:30
p.m. on the proposed date of borrowing), notify the Borrower of the terms (i)
of any Bid Rate Quote submitted by a Lender that is in accordance with Section
2.2.(c) and (ii) of any Bid Rate Quote that amends, modifies or is otherwise
inconsistent with a previous Bid Rate Quote submitted by such Lender with
respect to the same Bid Rate Quote Request. Any such subsequent Bid Rate Quote
shall be disregarded by the Agent unless such subsequent Bid Rate Quote is
submitted solely to correct a manifest error in such former Bid Rate Quote.
The Agent's notice to the Borrower shall specify (A) the aggregate principal
amount of the Bid Rate Borrowing for which offers have been received and (B)
the principal amounts and Bid Rates so offered by each Lender (identifying the
Lender that made each Bid Rate Quote).
(e) Acceptance by Borrower.
(i) Not later than 1:00 p.m. on the proposed date of borrowing (or such
other time and date as the Borrower and the Agent, with the consent of the
Requisite Lenders, may agree), the Borrower shall notify the Agent of its
acceptance or nonacceptance of the offers so notified to it pursuant to Section
2.2.(d) which notice shall be in the form of Exhibit K. In the case of
acceptance, such notice shall specify the aggregate principal amount of offers
for each Interest Period that are accepted. The failure of the Borrower to
give such notice by such time shall constitute nonacceptance. The Borrower may
accept any Bid Rate Quote in whole or in part (provided any acceptance in part
shall be in a minimum amount of $5,000,000 and integral multiples of $1,000,000
in excess thereof); provided that:
(A) the aggregate principal amount of each Bid Rate Borrowing may not
exceed the applicable amount set forth in the related Bid Rate Quote Request;
(B) the aggregate principal amount of each Bid Rate Borrowing shall comply
with the provisions of Section 3.5. but shall not cause the limits specified in
Section 2.14. to be violated;
(C) acceptance of offers may be made only in ascending order of Bid Rates
in each case beginning with the lowest rate so offered; and
(D) the Borrower may not accept any offer that fails to comply with
Section 2.2.(c) or otherwise fails to comply with the requirements of this
Agreement).
(ii) If offers are made by two or more Lenders with the same Bid Rates for
a greater aggregate principal amount than the amount in respect of which offers
are accepted for the related Interest Period, the principal amount of Bid Rate
Loans in respect of which such offers are accepted shall be allocated by the
Agent among such Lenders in proportion to the aggregate principal amount of
such offers. Determinations by the Agent of the amounts of Bid Rate Loans
shall be conclusive in the absence of manifest error.
(f) Obligation to Make Bid Rate Loans. The Agent shall promptly (and in
any event not later than 2:00 p.m. on the proposed date of borrowing) notify
each Lender that submitted a Bid Rate Quote as to whose Bid Rate Quote has been
accepted and the amount and rate thereof. A Lender who is notified that it has
been selected to make a Bid Rate Loan may designate its Designated Lender (if
any) to fund such Bid Rate Loan on its behalf, as described in Section 12.5.
Any Designated Lender which funds a Bid Rate Loan shall on and after the time
of such funding become the obligee under such Bid Rate Loan and be entitled to
receive payment thereof when due. No Lender shall be relieved of its
obligation to fund a Bid Rate Loan, and no Designated Lender shall assume such
obligation, prior to the time the applicable Bid Rate Loan is funded. Any
Lender whose offer to make any Bid Rate Loan has been accepted shall, not later
than 3:00 p.m. on the date specified for the making of such Loan, make the
amount of such Loan available to the Agent at its Principal Office in
immediately available funds, for account of the Borrower. The amount so
received by the Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Borrower no later than 4:00 p.m. on such
date by depositing the same, in immediately available funds, in an account of
the Borrower designated by the Borrower.
(g) No Effect on Commitment. Except for the purpose and to the extent
expressly stated in Section 2.11., the amount of any Bid Rate Loan made by any
Lender shall not constitute a utilization of such Lender's Commitment.
Section 2.3. Swingline Loans.
(a) Swing Line Loans. Subject to the terms and conditions hereof, during
the period from the Effective Date to but excluding the Revolving Termination
Date, the Swingline Lender agrees to make Swingline Loans to the Borrower in an
aggregate principal amount at any one time outstanding up to, but not
exceeding, the amount of the Swingline Commitment; provided, however, that in
no event shall the aggregate principal amount of all outstanding Swingline
Loans, together with the aggregate principal amount of all outstanding
Revolving Loans and the aggregate principal amount of all outstanding Bid Rate
Loans, exceed the aggregate amount of the Commitments as in effect from time to
time. If at any time the aggregate principal amount of the Swingline Loans
outstanding at such time exceeds the Swingline Commitment in effect at such
time, the Borrower shall immediately pay the Swingline Lender the amount of
such excess. Subject to the terms and conditions of this Agreement, the
Borrower may borrow, repay and reborrow Swingline Loans hereunder.
(b) Procedure for Borrowing Swingline Loans. The Borrower shall give the
Swingline Lender notice pursuant to a Notice of Swingline Borrowing or
telephonic notice of each borrowing of a Swingline Loan. Each Notice of
Swingline Borrowing shall be delivered to the Swingline Lender no later than
3:00 p.m. on the proposed date of such borrowing. Any such telephonic notice
shall include all information to be specified in a written Notice of Swingline
Borrowing and shall be promptly confirmed in writing by the Borrower pursuant
to a Notice of Swingline Borrowing sent to the Swingline Lender by telecopy on
the same day of the giving of such telephonic notice. Not later than 4:00 p.m.
on the date of the requested Swingline Loan and subject to satisfaction of the
applicable conditions set forth in Article V. for such borrowing, the Swingline
Lender will make the proceeds of such Swingline Loan available to the Borrower
in Dollars, in immediately available funds, at the account specified by the
Borrower in the Notice of Swingline Borrowing.
(c) Interest. Swingline Loans shall bear interest at Floating LIBOR or at
such other rate or rates as the Borrower and the Swingline Lender may agree
from time to time in writing. Interest payable on Swingline Loans is solely
for the account of the Swingline Lender. All accrued and unpaid interest on
Swingline Loans shall be payable on the dates and in the manner provided in
Section 2.4. with respect to interest on Base Rate Loans (except as the
Swingline Lender and the Borrower may otherwise agree in connection with any
particular Swingline Loan).
(d) Swingline Loan Amounts, Etc. Each Swingline Loan shall be in the
minimum amounts provided for in Section 3.5..(a) or such other minimum amounts
agreed to by the Swingline Lender and the Borrower. Any voluntary prepayment
of a Swingline Loan must be in integral multiples of $100,000 or the aggregate
principal amount of all outstanding Swingline Loans (or such other minimum
amounts upon which the Swingline Lender and the Borrower may agree) and in
connection with any such prepayment, the Borrower must give the Swingline
Lender prior written notice thereof no later than 4:00 p.m. on the date of such
prepayment. The Swingline Loans shall, in addition to this Agreement, be
evidenced by the Swingline Note.
(e) Repayment and Participations of Swingline Loans. The Borrower agrees
to repay each Swingline Loan within one Business Day of demand therefor by the
Swingline Lender and in any event, within 5 Business Days after the date such
Swingline Loan was made. Notwithstanding the foregoing, the Borrower shall
repay the entire outstanding principal amount of, and all accrued but unpaid
interest on, the Swingline Loans on the Revolving Termination Date (or such
earlier date as the Swingline Lender and the Borrower may agree in writing).
In lieu of demanding repayment of any outstanding Swingline Loan from the
Borrower, the Swingline Lender may, on behalf of the Borrower (which hereby
irrevocably directs the Swingline Lender to act on its behalf), request a
borrowing of Floating LIBOR Loans from the Lenders in an amount equal to the
principal balance of such Swingline Loan. The limitations of Section 3.5.(a)
shall not apply to any borrowing of Floating LIBOR Loans made pursuant to this
subsection. The Swingline Lender shall give notice to the Agent of any such
borrowing of Floating LIBOR Loans not later than 12:00 noon on the proposed
date of such borrowing. Each Lender will make available to the Agent at the
Principal Office for the account of Swingline Lender, in immediately available
funds, the proceeds of the Floating LIBOR Loan to be made by such Lender. The
Agent shall pay the proceeds of such Floating LIBOR Loans to the Swingline
Lender, which shall apply such proceeds to repay such Swingline Loan. If the
Lenders are prohibited from making Loans required to be made under this
subsection for any reason, including without limitation, the occurrence of any
of the Events of Default described in Sections 10.1.(e) or 10.1.(f), each
Lender shall purchase from the Swingline Lender, without recourse or warranty,
an undivided interest and participation to the extent of such Lender's
Commitment Percentage of such Swingline Loan, by directly purchasing a
participation in such Swingline Loan in such amount (regardless of whether the
conditions precedent thereto set forth in Section 5.2. are then satisfied,
whether or not the Borrower has submitted a Notice of Borrowing and whether or
not the Commitments are then in effect, any Event of Default exists or all the
Loans have been accelerated) and paying the proceeds thereof to the Agent on
behalf of the Swingline Lender in Dollars and in immediately available funds.
If such amount is not in fact made available to the Swingline Lender by any
Lender, the Swingline Lender shall be entitled to recover such amount on demand
from such Lender, together with accrued interest thereon for each day from the
date of demand thereof, at the Federal Funds Rate. If such Lender does not pay
such amount forthwith upon the Swingline Lender's demand therefor, and until
such time as such Lender makes the required payment, the Swingline Lender shall
be deemed to continue to have outstanding Swingline Loans in the amount of such
unpaid participation obligation for all purposes of the Loan Documents (other
than those provisions requiring the other Lenders to purchase a participation
therein). Further, such Lender shall be deemed to have assigned any and all
payments made of principal and interest on its Loans, and any other amounts due
to it hereunder, to the Swingline Lender to fund Swingline Loans in the amount
of the participation in Swingline Loans that such Lender failed to purchase
pursuant to this Section until such amount has been purchased (as a result of
such assignment or otherwise).
Section 2.4. Rates and Payment of Interest on Loans.
(a) Rates. The Borrower promises to pay to the Agent for account of each
Lender interest on the unpaid principal amount of each Loan made by such Lender
for the period from and including the date of the making of such Loan to but
excluding the date such Loan shall be paid in full, at the following per annum
rates:
(i) during such periods as such Loan is a Base Rate Loan, at the Base Rate
(as in effect from time to time);
(ii) during such periods as such Loan is a Fixed LIBOR Loan, at the
Adjusted Eurodollar Rate for such Loan for the Interest Period therefor, plus
the Applicable Margin;
(iii) during such periods as such Loan is a Floating LIBOR Loan, at the
Floating LIBOR, plus the Applicable Margin; and
(iv) if such Loan is a Bid Rate Loan, at the Bid Rate for such Loan for the
Interest Period therefor quoted by the Lender making such Loan in accordance
with Section 2.2.
Notwithstanding the foregoing, during the continuance of an Event of Default
the Borrower hereby promises to pay to the Agent for account of each Lender
interest at the Post-Default Rate on the aggregate outstanding principal of all
Loans made by such Lender and on any other amount payable by the Borrower
hereunder or under the Notes held by such Lender (including without limitation,
accrued but unpaid interest to the extent permitted under Applicable Law).
(b) Payment of Interest. Accrued interest on each Loan shall be payable
as provided in each of the following clauses which apply to such Loan: (i) in
the case of a Base Rate Loan or a Floating LIBOR Loan, monthly on the last
Business Day of each calendar month, (ii) in the case of a Fixed LIBOR Loan or
a Bid Rate Loan, on the last day of each Interest Period therefor and, if such
Interest Period is longer than three months, at three-month intervals following
the first day of such Interest Period, (iii) in the case of any Fixed LIBOR
Loan, upon the payment, prepayment or Continuation thereof or the Conversion of
such Loan to a Loan of another Type (but only on the principal amount so paid,
prepaid or Converted) and (iv) in the case of any Base Rate Loan or Floating
LIBOR Loan, upon the payment or prepayment thereof in full. Interest payable
at the Post-Default Rate shall be payable from time to time on demand.
Promptly after the determination of any interest rate provided for herein or
any change therein, the Agent shall give notice thereof to the Lenders to which
such interest is payable and to the Borrower. All determinations by the Agent
of an interest rate hereunder shall be conclusive and binding on the Lenders
and the Borrower for all purposes, absent manifest error.
Section 2.5. Number of Interest Periods.
There may be no more than 5 different Interest Periods for Fixed LIBOR Loans
and no more than 5 different Interest Periods for Bid Rate Loans outstanding at
the same time (for which purpose Interest Periods described in different
lettered clauses of the definition of the term "Interest Period" shall be
deemed to be different Interest Periods even if they are coterminous).
Section 2.6. Repayment of Loans.
(a) Revolving Loans. Unless converted into the Term Loans pursuant to
Section 2.13., the Borrower shall repay the entire outstanding principal amount
of, and all accrued but unpaid interest on, the Revolving Loans on the
Revolving Termination Date.
(b) Bid Rate Loans. The Borrower shall repay the entire outstanding
principal amount of, and all accrued but unpaid interest on, each Bid Rate Loan
on the last day of the Interest Period of such Bid Rate Loan.
(c) Term Loans. The Borrower shall repay the principal balance of the
Term Loans in consecutive quarterly installments due on each Quarterly Date
following the Revolving Termination Date until the Term Loans are paid in full.
Each installment shall be in an amount equal to one-eighth of the initial
aggregate principal balance of the Term Loans. Notwithstanding the foregoing,
the entire outstanding principal balance of the Term Loans shall be due and
payable in full on the Termination Date.
Section 2.7. Prepayments.
(a) Optional. Subject to Section 4.4., the Borrower may prepay any Loan
(other than a Bid Rate Loan) at any time without premium or penalty. Bid Rate
Loans may not be prepaid at the option of the Borrower.
(b) Mandatory. If at any time either (i) the aggregate principal amount
of all outstanding Revolving Loans, together with the aggregate principal
amount of all outstanding Swingline Loans and the aggregate principal amount of
all outstanding Bid Rate Loans, exceeds the aggregate amount of the Commitments
in effect at such time, or (ii) the aggregate principal amount of all
outstanding Bid Rate Loans exceeds 50% of the aggregate amount of the
Commitments in effect at such time, then in either such case the Borrower shall
immediately pay to the Agent for the accounts of the Lenders the amount of such
excess. Such payment shall be applied, in the case of a payment as a result of
the application of clause (ii), as provided in Section 3.2.(f), and otherwise
be applied to pay all amounts of principal outstanding on the Swingline Loans
and the remainder, if any, to pay all amounts of principal outstanding on the
other Loans pro rata in accordance with Section 3.2. If the Borrower is
required to pay any outstanding Fixed LIBOR Loans or Bid Rate Loans by reason
of this Section prior to the end of the applicable Interest Period therefor,
the Borrower shall pay all amounts due under Section 4.4.
Section 2.8. Continuation.
So long as no Default or Event of Default shall have occurred and be
continuing, the Borrower may on any Business Day, with respect to any Fixed
LIBOR Loan, elect to maintain such Fixed LIBOR Loan or any portion thereof as a
Fixed LIBOR Loan by selecting a new Interest Period for such Loan. Each new
Interest Period selected under this Section shall commence on the last day of
the immediately preceding Interest Period. Each selection of a new Interest
Period shall be made by the Borrower giving to the Agent a Notice of
Continuation not later than 12:00 noon on the third Business Day prior to the
date of any such Continuation. Such notice by the Borrower of a Continuation
shall be by telephone or telecopy, confirmed immediately in writing if by
telephone, in the form of a Notice of Continuation, specifying (a) the proposed
date of such Continuation, (b) the Fixed LIBOR Loan and portion thereof subject
to such Continuation and (c) the duration of the selected Interest Period, all
of which shall be specified in such manner as is necessary to comply with all
limitations on Loans outstanding hereunder. Each Notice of Continuation shall
be irrevocable by and binding on the Borrower once given. Promptly after
receipt of a Notice of Continuation (and in any event not later than 1:00 p.m.
on the date of receipt thereof), the Agent shall notify each Lender by telex or
telecopy, or other similar form of transmission of the proposed Continuation.
If the Borrower shall fail to select in a timely manner a new Interest Period
for any Fixed LIBOR Loan in accordance with this Section, such Loan will
automatically, on the last day of the current Interest Period therefor, Convert
into a Floating LIBOR Loan notwithstanding failure of the Borrower to comply
with Section 2.9.
Section 2.9. Conversion.
So long as no Default or Event of Default shall have occurred and be
continuing, the Borrower may on any Business Day, upon the Borrower's giving of
a Notice of Conversion to the Agent, Convert all or a portion of a Loan of one
Type into a Loan of another Type. Any Conversion of a Fixed LIBOR Loan into a
Base Rate Loan or a Floating LIBOR Loan shall be made on, and only on, the last
day of an Interest Period for such Fixed LIBOR Loan. Each such Notice of
Conversion shall be given by the Borrower not later than 12:00 noon (a) on the
Business Day prior to the date of any proposed Conversion into Base Rate Loans
or Floating LIBOR Loans or (b) on the third Business Day prior to the date of
any proposed Conversion into Fixed LIBOR Loans. Promptly upon receipt of a
Notice of Conversion (and in any event not later than 1:00 p.m. on the date of
receipt thereof), the Agent shall notify each Lender by telecopy or other
similar form of transmission of the proposed Conversion. Subject to the
restrictions specified above, each Notice of Conversion shall be by telephone
or telecopy confirmed immediately in writing if by telephone, in the form of a
Notice of Conversion specifying (a) the requested date of such Conversion, (b)
the Type of Loan to be Converted, (c) the portion of such Type of Loan to be
Converted, (d) the Type of Loan such Loan is to be Converted into and (e) if
such Conversion is into a Fixed LIBOR Loan, the requested duration of the
Interest Period of such Loan. Each Notice of Conversion shall be irrevocable
by and binding on the Borrower once given.
Section 2.10. Notes.
(a) Revolving Note. The Revolving Loans made by each Lender shall, in
addition to this Agreement, also be evidenced by a promissory note of the
Borrower substantially in the form of Exhibit L (each a "Revolving Note"),
payable to the order of such Lender in a principal amount equal to the amount
of its Commitment as originally in effect and otherwise duly completed.
(b) Bid Rate Notes. The Bid Rate Loans made by any Lender shall, in
addition to this Agreement, also be evidenced by a single promissory note of
the Borrower substantially in the form of Exhibit M (each a "Bid Rate Note"),
dated the date hereof, payable to the order of such Lender and otherwise duly
completed.
(c) Records; Endorsement on Transfer. The date, amount, interest rate,
Type and duration of Interest Periods (if applicable) of each Loan made by each
Lender to the Borrower, and each payment made on account of the principal
thereof, shall be recorded by such Lender on its books and such entries shall
be binding on the Borrower absent manifest error. Prior to the transfer of any
Note, the Lender shall endorse such items on such Note or any allonge thereof;
provided that the failure of such Lender to make any such recordation or
endorsement shall not affect the obligations of the Borrower to make a payment
when due of any amount owing hereunder or under such Note in respect of the
Loans evidenced by such Note.
Section 2.11. Voluntary Reductions of the Commitment.
The Borrower shall have the right to terminate or reduce the aggregate
unused amount of the Commitments (for which purpose use of the Commitments
shall be deemed to include the aggregate principal amount of all outstanding
Bid Rate Loans and Swingline Loans) at any time and from time to time without
penalty or premium upon not less than 5 Business Days prior written notice to
the Agent of each such termination or reduction, which notice shall specify the
effective date thereof and the amount of any such reduction and shall be
irrevocable once given and effective only upon receipt by the Agent. The Agent
will promptly transmit such notice to each Lender. The Commitments, once
terminated or reduced may not be increased or reinstated. Any reduction in the
aggregate amount of the Commitments shall result in a proportionate reduction
(rounded to the next lowest integral multiple of multiple of $100,000) in the
Swingline Commitment.
Section 2.12. Extension of Revolving Termination Date.
(a) Generally. The Borrower may request that the Agent and the Lenders
extend the current Revolving Termination Date by a one year period by executing
and delivering to the Agent at least 90 days but no more than 120 days prior to
the date two years before the current Revolving Termination Date, a written
request in the form of Exhibit N (an "Extension Request"). The Agent shall
forward to each Lender a copy of each Extension Request delivered to the Agent
promptly after receipt thereof. The Borrower understands that this Section has
been included in this Agreement for the Borrower's convenience in requesting an
extension of the Revolving Termination Date and the Borrower acknowledges that
none of the Lenders nor the Agent has promised (either expressly or impliedly),
nor has any obligation or commitment whatsoever, to extend the Revolving
Termination Date at any time. If all of the Lenders shall have notified the
Agent in writing on or prior to the date which is 30 days prior to the date two
years before the current Revolving Termination Date that they accept such
Extension Request, then the Revolving Termination Date shall be extended to the
date one year following the current Revolving Termination Date. If any Lender
shall not have notified the Agent on or prior to the date which is 30 days
prior to the date two years before the current Revolving Termination Date that
it accepts such Extension Request, the current Revolving Termination Date shall
not be extended. The Agent shall promptly notify the Borrower whether the
Extension Request has been accepted or rejected, and if rejected, the Agent
shall also give the Borrower notice of which Lender or Lenders rejected the
Borrower's Extension Request (each such Lender a "Rejecting Lender").
(b) Rejecting Lenders. Notwithstanding the preceding subsection (a),
after notification from the Agent that an Extension Request has been rejected
(a "Notice of Rejection"), the Revolving Termination Date shall be extended as
requested in such Extension Request if (i) at least the Supermajority Lenders
consented to such Extension Request, (ii) no later than the date two years
before the Revolving Termination Date, the Borrower shall have given written
notice to the Agent and each Lender that the Borrower desires the Revolving
Termination Date to be so extended notwithstanding such rejection and (iii) the
Borrower shall have, no later than 180 days prior to the current Revolving
Termination Date, (x) caused each Rejecting Lender to have assigned its
respective Commitment to an Eligible Assignee subject to and in accordance with
the provisions of Section 12.5.(c) for a purchase price equal to the aggregate
principal balance of Loans then owing to such Rejecting Lender plus any accrued
but unpaid interest thereon and accrued but unpaid fees owing to such Rejecting
Lender, and to the extent the Commitment of any Rejecting Lender is not so
assigned by such date (y) paid to such Rejecting Lender the aggregate principal
balance of Loans then owing to such Rejecting Lender plus any accrued but
unpaid interest thereon and accrued but unpaid fees owing to such Rejecting
Lender, whereupon such Rejecting Lender's Commitment shall terminate, such
Rejecting Lender shall no longer be a party hereto or have any rights or
obligations hereunder or under any of the other Loan Documents. In addition,
in connection with any such assignment by a Rejecting Lender or any such
payment to a Rejecting Lender, the Borrower shall pay the amounts, if any, due
such Rejecting Lender under Section 4.4. If the Borrower desires to cause any
Rejecting Lender to assign its Commitment pursuant to this subsection, the
Borrower shall so notify such Rejecting Lender, the Agent and the other Lenders
in writing no later than the date 210 days prior to the current Revolving
Termination Date. A Rejecting Lender shall be obligated to assign its
Commitment pursuant to this subsection if requested to do so by the Borrower.
Each Lender that is not a Rejecting Lender shall have the right (but not the
obligation) to acquire such Rejecting Lender's Commitment and shall exercise
such right by giving written notice thereof to the Agent no later than 10
Business Days of receipt of the Borrower's notice. Any Lender who has failed
to so notify the Agent within such 10 Business Day period shall be deemed to
have declined to exercise such right. If more than one Lender exercises its
right to acquire a Rejecting Lender's Commitment, each such Lender shall
acquire an amount of such Rejecting Lender's Commitment in proportion to the
Commitments of the Lenders exercising such right. After the expiration of such
10 Business Day period, the Borrower shall have the right to attempt to cause
an Eligible Assignee to accept an assignment of a Rejecting Lender's
Commitment. Neither the Agent nor any Lender shall have any obligation to
assist the Borrower in finding any such Eligible Assignee. If the
Supermajority Lenders do not consent to any Extension Request or if the
Borrower fails to comply with any provision of the subsection, the Revolving
Termination Date shall not be extended.
Section 2.13. Conversion to Term Loans
Subject to the terms and conditions of this Agreement, the aggregate
principal amount of Revolving Loans owing to each Lender shall automatically
convert into a term loan owing to such Lender (each a "Term Loan") effective on
the Revolving Termination Date provided the conditions set forth in Section
5.3. have been satisfied as of the Revolving Termination Date. At least 90
days before but not more than 120 days before the Revolving Termination Date,
the Borrower agrees to deliver to the Agent and each of the Lenders written
notice that the Revolving Loans will convert to Term Loans.
Section 2.14. Amount Limitations.
Notwithstanding any other term of this Agreement or any other Loan Document,
at no time may (a) the aggregate principal amount of all outstanding Revolving
Loans, together with the aggregate principal amount of all outstanding Bid Rate
Loans and the aggregate principal amount of all outstanding Swingline Loans
exceed the aggregate amount of the Commitments at such time or (b) the
aggregate principal amount of all outstanding Bid Rate Loans exceed 50% of the
aggregate amount of the Commitments at such time.
Article III. Payments, Fees and Other General Provisions
Section 3.1. Payments.
Except to the extent otherwise provided herein, all payments of principal,
interest and other amounts to be made by the Borrower under this Agreement or
any other Loan Document shall be made in Dollars, in immediately available
funds, without deduction, set-off or counterclaim, to the Agent at its
Principal Office, not later than 2:00 p.m. on the date on which such payment
shall become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day). Prior to making
any such payment, the Borrower shall give the Agent notice of such payment.
Subject to Sections 3.2. and 3.3., the Agent, or any Lender for whose account
any such payment is made, may (but shall not be obligated to) debit the amount
of any such payment which is not made by such time from any special or general
deposit account of the Borrower with the Agent or such Lender, as the case may
be (with notice to the Borrower, the other Lenders and the Agent). The
Borrower shall, at the time of making each payment under this Agreement or any
Note, specify to the Agent the amounts payable by the Borrower hereunder to
which such payment is to be applied. Each payment received by the Agent for
the account of a Lender under this Agreement or any Note shall be paid to such
Lender at the applicable Lending Office of such Lender no later than 5:00 p.m.
on the date of receipt. If the Agent fails to pay such amount to a Lender as
provided in the previous sentence, the Agent shall pay interest on such amount
until paid at a rate per annum equal to the Federal Funds Rate from time to
time in effect. If the due date of any payment under this Agreement or any
other Loan Document would otherwise fall on a day which is not a Business Day
such date shall be extended to the next succeeding Business Day and interest
shall be payable for the period of such extension.
Section 3.2. Pro Rata Treatment.
Except to the extent otherwise provided herein: (a) each borrowing from the
Lenders under Section 2.1.(a) and Section 2.3.(e) shall be made from the
Lenders, each payment of the Fees under Section 3.6.(a) shall be made for
account of the Lenders, and each termination or reduction of the amount of the
Commitments under Section 2.11. shall be applied to the respective Commitments
of the Lenders, pro rata according to the amounts of their respective
Commitments; (b) each payment or prepayment of principal of Revolving Loans by
the Borrower shall be made for account of the Lenders pro rata in accordance
with the respective unpaid principal amounts of the Revolving Loans held by
them, provided that if immediately prior to giving effect to any such payment
in respect of any Revolving Loans the outstanding principal amount of the
Revolving Loans shall not be held by the Lenders pro rata in accordance with
their respective Commitments in effect at the time such Loans were made, then
such payment shall be applied to the Revolving Loans in such manner as shall
result, as nearly as is practicable, in the outstanding principal amount of the
Revolving Loans being held by the Lenders pro rata in accordance with their
respective Commitments; (c) each payment or prepayment of principal of Term
Loans by the Borrower shall be made for account of the Lenders pro rata in
accordance with the respective unpaid principal amounts of the Term Loan then
owing to each of them; (d) each payment of interest on Revolving Loans and Term
Loans by the Borrower shall be made for account of the Lenders pro rata in
accordance with the amounts of interest on such Loans then due and payable to
the respective Lenders; (e) the making, Conversion and Continuation of
Revolving Loans of a particular Type (other than Conversions provided for by
Section 4.5.) shall be made pro rata among the Lenders according to the amounts
of their respective Commitments (in the case of making of Loans) or their
respective Loans (in the case of Conversions and Continuations of Loans) and
the then current Interest Period for each Lender's portion of each Loan of such
Type shall be coterminous; (f) each prepayment of principal of Bid Rate Loans
by the Borrower pursuant to Section 2.7.(b) shall be made for account of the
Lenders then owed Bid Rate Loans pro rata in accordance with the respective
unpaid principal amounts of the Bid Rate Loan then owing to each such Lender;
and (g) the Lenders' participation in, and payment obligations in respect of,
Swingline Loans under Section 2.3., shall be pro rata in accordance with their
respective Commitments. All payments of principal, interest, fees and other
amounts in respect of the Swingline Loans shall be for the account of the
Swingline Lender only (except to the extent any Lender shall have acquired a
participating interest in any such Swingline Loan pursuant to Section 2.3.(e)).
Section 3.3. Sharing of Payments, Etc.
The Borrower agrees that, in addition to (and without limitation of) any
right of set-off, banker's lien or counterclaim a Lender or the Agent may
otherwise have, each Lender and the Agent shall be entitled, at its option, to
offset balances held by it for the account of the Borrower at any of such
Lender's (or the Agent's) offices, in Dollars or in any other currency, against
any principal of, or interest on, any of such Lender's Loans hereunder (or
other Obligations owing to such Lender or the Agent hereunder) which is not
paid when due (regardless of whether such balances are then due to the
Borrower), in which case such Lender shall promptly notify the Borrower, all
other Lenders and the Agent thereof; provided, however, such Lender's failure
to give such notice shall not affect the validity of such offset. If a Lender
shall obtain payment of any principal of, or interest on, any Loan made by it
to the Borrower under this Agreement, or shall obtain payment on any other
Obligation owing by the Borrower through the exercise of any right of set-off,
banker's lien or counterclaim or similar right or otherwise or through
voluntary prepayments directly to a Lender or other payments made by the
Borrower to a Lender not in accordance with the terms of this Agreement and
such payment should be distributed to the Lenders pro rata in accordance with
Section 3.2. or Section 10.4., as applicable, such Lender shall promptly pay
such amounts to the other Lenders and make such other adjustments from time to
time as shall be equitable, to the end that all the Lenders shall share the
benefit of such payment (net of any reasonable expenses which may be incurred
by such Lender in obtaining or preserving such benefit) pro rata in accordance
with Section 3.2. or Section 10.4. To such end, all the Lenders shall make
appropriate adjustments among themselves (by the resale of participations sold
or otherwise) if such payment is rescinded or must otherwise be restored.
Nothing contained herein shall require any Lender to exercise any such right or
shall affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness or obligation
of the Borrower.
Section 3.4. Several Obligations.
No Lender shall be responsible for the failure of any other Lender to make a
Loan or to perform any other obligation to be made or performed by such other
Lender hereunder, and the failure of any Lender to make a Loan or to perform
any other obligation to be made or performed by it hereunder shall not relieve
the obligation of any other Lender to make any Loan or to perform any other
obligation to be made or performed by such other Lender.
Section 3.5. Minimum Amounts.
(a) Borrowings and Conversions. Each borrowing of Swingline Loans, Base
Rate Loans or Floating LIBOR Loans shall be in an aggregate minimum amount of
$5,000,000 and integral multiples of $1,000,000 in excess thereof. Each
borrowing of Fixed LIBOR Loans, and each Conversion of Base Rate Loans or
Floating LIBOR Loans to Fixed LIBOR Loans, shall be in an aggregate minimum
amount of $5,000,000 and integral multiples of $1,000,000 in excess of that
amount. Each Bid Rate Loan shall be in a minimum amount of $5,000,000 and
integral multiples of $1,000,000 in excess thereof.
(b) Prepayments. Each voluntary prepayment of Revolving Loans or Term
Loans shall be in an aggregate minimum amount of $1,000,000.
(c) Reductions of Commitments. Each reduction of the Commitments under
Section 2.11. shall be in an aggregate minimum amount of $25,000,000 and
integral multiples of $5,000,000 in excess thereof.
Section 3.6. Fees.
(a) Facility Fee. The Borrower agrees to pay to the Agent for the account
of the Lenders a facility fee in respect of the amount of the Commitments
(whether or not utilized), or if the Revolving Loans have been converted to
Term Loans, on the aggregate principal balance of the Term Loans outstanding on
any date such fee is due, at the rate of one-tenth of one percent (0.1%) per
annum for the period from and including the Agreement Date to but excluding the
Termination Date. Such facility fee shall be payable yearly in advance on the
Agreement Date and thereafter on each anniversary of the Agreement Date.
(b) Administrative and Other Fees. The Borrower agrees to pay the
administrative and other fees of the Agent as may be agreed to in writing from
time to time.
Section 3.7. Computations.
Unless otherwise expressly set forth herein, any accrued interest on any
Loan, any Fees or other Obligations due hereunder shall be computed on the
basis of a year of 360 days and the actual number of days elapsed.
Section 3.8. Usury.
In no event shall the amount of interest due or payable on the Loans or
other Obligations exceed the maximum rate of interest allowed by Applicable Law
and, if any such payment is paid by the Borrower or received by any Lender,
then such excess sum shall be credited as a payment of principal, unless the
Borrower shall notify the respective Lender in writing that the Borrower elects
to have such excess sum returned to it forthwith. It is the express intent of
the parties hereto that the Borrower not pay and the Lenders not receive,
directly or indirectly, in any manner whatsoever, interest in excess of that
which may be lawfully paid by the Borrower under Applicable Law.
Section 3.9. Agreement Regarding Interest and Charges.
The parties hereto hereby agree and stipulate that the only charge imposed
upon the Borrower for the use of money in connection with this Agreement is and
shall be the interest specifically described in Section 2.4.(a)(i) through (iv)
and with respect to Swingline Loans, in Section 2.3.(c). Notwithstanding the
foregoing, the parties hereto further agree and stipulate that all agency fees,
syndication fees, facility fees, underwriting fees, default charges, late
charges, funding or "breakage" charges, increased cost charges, attorneys' fees
and reimbursement for costs and expenses paid by the Agent or any Lender to
third parties or for damages incurred by the Agent or any Lender, are charges
made to compensate the Agent or any such Lender for underwriting or
administrative services and costs or losses performed or incurred, and to be
performed or incurred, by the Agent and the Lenders in connection with this
Agreement and shall under no circumstances be deemed to be charges for the use
of money.
Section 3.10. Statements of Account.
The Agent will account to the Borrower monthly with a statement of Loans,
accrued interest and Fees, charges and payments made pursuant to this Agreement
and the other Loan Documents, and such account rendered by the Agent shall be
deemed conclusive upon Borrower absent manifest error. The failure of the
Agent to deliver such a statement of accounts shall not relieve or discharge
the Borrower from any of its obligations hereunder.
Section 3.11. Defaulting Lenders.
(a) Generally. If for any reason any Lender (a "Defaulting Lender") shall
fail or refuse to perform any of its obligations under this Agreement or any
other Loan Document to which it is a party within the time period specified for
performance of such obligation or, if no time period is specified, if such
failure or refusal continues for a period of two Business Days after notice
from the Agent, then, in addition to the rights and remedies that may be
available to the Agent or the Borrower under this Agreement or Applicable Law,
such Defaulting Lender's right to participate in the administration of the
Loans, this Agreement and the other Loan Documents, including without
limitation, any right to vote in respect of, to consent to or to direct any
action or inaction of the Agent or to be taken into account in the calculation
of the Requisite Lenders, shall be suspended during the pendency of such
failure or refusal. If a Lender is a Defaulting Lender because it has failed
to make timely payment to the Agent of any amount required to be paid to the
Agent hereunder (without giving effect to any notice or cure periods), in
addition to other rights and remedies which the Agent or the Borrower may have
under the immediately preceding provisions or otherwise, the Agent shall be
entitled (i) to collect interest from such Defaulting Lender on such delinquent
payment for the period from the date on which the payment was due until the
date on which the payment is made at the Federal Funds Rate, and (ii) to
withhold or setoff and to apply in satisfaction of the defaulted payment and
any related interest, any amounts otherwise payable to such Defaulting Lender
under this Agreement or any other Loan Document. Any amounts received by the
Agent in respect of a Defaulting Lender's Loans shall not be paid to such
Defaulting Lender and shall be held uninvested by the Agent and either applied
against the purchase price of such Loans under the following subsection (b) or
paid to such Defaulting Lender upon the Defaulting Lender's curing of its
default.
(b) Purchase of Defaulting Lender's Commitment. Any Lender who is not a
Defaulting Lender shall have the right, but not the obligation, in its sole
discretion, to acquire all of a Defaulting Lender's Commitment. Any Lender
desiring to exercise such right shall give written notice thereof to the Agent
no sooner than 2 Business Days and not later than 10 Business Days after such
Defaulting Lender became a Defaulting Lender. If more than one Lender
exercises such right, each such Lender shall have the right to acquire an
amount of such Defaulting Lender's Commitment in proportion to the Commitments
of the other Lenders exercising such right. Upon any such purchase, the
Defaulting Lender's interest in the Loans and its rights hereunder (but not its
liability in respect thereof or under the Loan Documents or this Agreement to
the extent the same relate to the period prior to the effective date of the
purchase) shall terminate on the date of purchase, and the Defaulting Lender
shall promptly execute all documents reasonably requested to surrender and
transfer such interest to the purchaser thereof, including an appropriate
Assignment and Acceptance Agreement and, notwithstanding Section 12.5.(d),
shall pay to the Agent an assignment fee in the amount of $6,000. The purchase
price for the Commitment of a Defaulting Lender shall be equal to the amount of
the principal balance of the Loans outstanding and owed by the Borrower to the
Defaulting Lender. Prior to payment of such purchase price to a Defaulting
Lender, the Agent shall apply against such purchase price any amounts retained
by the Agent pursuant to the last sentence of the immediately preceding
subsection (a). The Defaulting Lender shall be entitled to receive amounts
owed to it by the Borrower under the Loan Documents which accrued prior to the
date of the default by the Defaulting Lender, to the extent the same are
received by the Agent from or on behalf of the Borrower. There shall be no
recourse against any Lender or the Agent for the payment of such sums except to
the extent of the receipt of payments from any other party or in respect of the
Loans. If, prior to a Lender's acquisition of a Defaulting Lender's Commitment
pursuant to this subsection, such Defaulting Lender shall cure the event or
condition which caused it to become a Defaulting Lender and shall have paid all
amounts owing by it hereunder as a result thereof, then such Lender shall no
longer have the right to acquire such Defaulting Lender's Commitment.
Section 3.12. Taxes.
(a) Taxes Generally. All payments by the Borrower of principal of, and
interest on, the Loans and all other Obligations shall be made free and clear
of and without deduction for any present or future excise, stamp or other
taxes, fees, duties, levies, imposts, charges, deductions, withholdings or
other charges of any nature whatsoever imposed by any taxing authority, but
excluding (i) franchise taxes, (ii) any taxes (other than withholding taxes)
that would not be imposed but for a connection between the Agent or a Lender
and the jurisdiction imposing such taxes (other than a connection arising
solely by virtue of the activities of the Agent or such Lender pursuant to or
in respect of this Agreement or any other Loan Document), (iii) any withholding
taxes payable with respect to payments hereunder or under any other Loan
Document under Applicable Law in effect on the Agreement Date, (iv) any taxes
imposed on or measured by any Lender's assets, net income, receipts or branch
profits and (v) any taxes arising after the Agreement Date solely as a result
of or attributable to a Lender changing its designated Lending Office after the
date such Lender becomes a party hereto (such non-excluded items being
collectively called "Taxes"). If any withholding or deduction from any payment
to be made by the Borrower hereunder is required in respect of any Taxes
pursuant to any Applicable Law, then the Borrower will:
(i) pay directly to the relevant Governmental Authority the full amount
required to be so withheld or deducted;
(ii) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
Governmental Authority; and
(iii) pay to the Agent for its account or the account of the applicable
Lender, as the case may be, such additional amount or amounts as is necessary
to ensure that the net amount actually received by the Agent or such Lender
will equal the full amount that the Agent or such Lender would have received
had no such withholding or deduction been required.
(b) Tax Indemnification. If the Borrower fails to pay any Taxes when due
to the appropriate Governmental Authority or fails to remit to the Agent, for
its account or the account of the respective Lender, as the case may be, the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Agent and the Lenders for any incremental Taxes, interest or
penalties that may become payable by the Agent or any Lender as a result of any
such failure. For purposes of this Section, a distribution hereunder by the
Agent or any Lender to or for the account of any Lender shall be deemed a
payment by the Borrower.
(c) Tax Forms. Prior to the date that any Lender or participant organized
under the laws of a jurisdiction outside the United States of America becomes a
party hereto, such Person shall deliver to the Borrower and the Agent such
certificates, documents or other evidence, as required by the Internal Revenue
Code or Treasury Regulations issued pursuant thereto (including Internal
Revenue Service Forms 4224 or 1001, as applicable, or appropriate successor
forms), properly completed, currently effective and duly executed by such
Lender or participant establishing that payments to it hereunder and under the
Notes are (i) not subject to United States Federal backup withholding tax or
(ii) not subject to United States Federal withholding tax under the Code
because such payment is either effectively connected with the conduct by such
Lender or participant of a trade or business in the United States or totally
exempt from United States Federal withholding tax by reason of the application
of the provisions of a treaty to which the United States is a party or such
Lender is otherwise exempt.
Article IV. Yield Protection, Etc.
Section 4.1. Additional Costs; Capital Adequacy.
(a) Additional Costs. The Borrower shall promptly pay to the Agent for
the account of a Lender from time to time such amounts as such Lender may
determine to be necessary to compensate such Lender for any costs incurred by
such Lender that it determines are attributable to its making or maintaining of
any LIBOR Loans or its obligation to make any LIBOR Loans hereunder, any
reduction in any amount receivable by such Lender under this Agreement or any
of the other Loan Documents in respect of any of such Loans or such obligation
or the maintenance by such Lender of capital in respect of its Loans or its
Commitments (such increases in costs and reductions in amounts receivable being
herein called "Additional Costs"), resulting from any Regulatory Change that:
(i) changes the basis of taxation of any amounts payable to such Lender under
this Agreement or any of the other Loan Documents in respect of any of such
Loans or its Commitments (other than taxes imposed on or measured by the
overall net income of such Lender or of its Lending Office for any of such
Loans by the jurisdiction in which such Lender has its principal office or such
Lending Office); or (ii) imposes or modifies any reserve, special deposit or
similar requirements (other than Regulation D of the Board of Governors of the
Federal Reserve System or other reserve requirement utilized in the
determination of the Adjusted Eurodollar Rate for such Loan) relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, such Lender, or any commitment of such Lender (including,
without limitation, the Commitments of such Lender hereunder); or (iii) has or
would have the effect of reducing the rate of return on capital of such Lender
to a level below that which such Lender could have achieved but for such
Regulatory Change (taking into consideration such Lender's policies with
respect to capital adequacy).
(b) Lender's Suspension of LIBOR Loans. Without limiting the effect of
the provisions of the immediately preceding subsection (a), if by reason of any
Regulatory Change, any Lender either (i) incurs Additional Costs based on or
measured by the excess above a specified level of the amount of a category of
deposits or other liabilities of such Lender that includes deposits by
reference to which the interest rate on LIBOR Loans is determined as provided
in this Agreement or a category of extensions of credit or other assets of such
Lender that includes LIBOR Loans or (ii) becomes subject to restrictions on the
amount of such a category of liabilities or assets that it may hold, then, if
such Lender so elects by notice to the Borrower (with a copy to the Agent), the
obligation of such Lender to make or Continue, or to Convert any other Type of
Loan into, LIBOR Loans hereunder shall be suspended until such Regulatory
Change ceases to be in effect (in which case the provisions of Section 4.5.
shall apply).
(c) Notification and Determination of Additional Costs. Each of the Agent
and each Lender agrees to notify the Borrower of any event occurring after the
Agreement Date entitling the Agent or such Lender to compensation under any of
the preceding subsections of this Section as promptly as practicable; provided,
however, the failure of the Agent or any Lender to give such notice shall not
release the Borrower from any of its obligations hereunder. The Agent and or
such Lender agrees to furnish to the Borrower a certificate setting forth the
basis and amount of each request by the Agent or such Lender for compensation
under this Section. Determinations by the Agent or any Lender of the effect of
any Regulatory Change shall be conclusive, provided that such determinations
are made on a reasonable basis and in good faith.
Section 4.2. Suspension of LIBOR Loans.
Anything herein to the contrary notwithstanding, if, on or prior to the
determination of any Adjusted Eurodollar Rate for any Interest Period:
(a) the Agent reasonably determines (which determination shall be conclusive)
that by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Adjusted Eurodollar Rate for
such Interest Period, or
(b) the Agent reasonably determines (which determination shall be conclusive)
that the Adjusted Eurodollar Rate will not adequately and fairly reflect the
cost to the Lenders of making or maintaining LIBOR Loans for such Interest
Period; then the Agent shall give the Borrower and each Lender prompt
notice thereof and, so long as such condition remains in effect, the Lenders
shall be under no obligation to, and shall not, make additional LIBOR Loans,
Continue LIBOR Loans or Convert Loans into LIBOR Loans and the Borrower
shall, on the last day of each current Interest Period for each
outstanding LIBOR Loan, either repay such Loan or Convert such Loan into a
Base Rate Loan.
Section 4.3. Illegality.
Notwithstanding any other provision of this Agreement, if it becomes
unlawful for any Lender to honor its obligation to make or maintain LIBOR
Loans hereunder, then such Lender shall promptly notify the Borrower thereof
(with a copy to the Agent) and such Lender's obligation to make or Continue, or
to Convert Loans of any other Type into, LIBOR Loans shall be suspended until
such time as such Lender may again make and maintain LIBOR Loans (in which case
the provisions of Section 4.5. shall be applicable).
Section 4.4. Compensation.
The Borrower shall pay to the Agent for account of each Lender, upon the
request of such Lender through the Agent, such amount or amounts as shall be
sufficient (in the reasonable opinion of such Lender) to compensate it for any
loss, cost or expense that such Lender determines is attributable to:
(a) any payment or prepayment (whether mandatory or optional) of a Fixed LIBOR
Loan or Bid Rate Loan, or Conversion of a Fixed LIBOR Loan, made by such Lender
for any reason (including, without limitation, acceleration) on a date other
than the last day of the Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including, without limitation,
the failure of any of the applicable conditions precedent specified in Article
V. to be satisfied) to borrow a Fixed LIBOR Loan or Bid Rate Loan from such
Lender on the date for such borrowing, or to Convert a Loan of another Type
into a Fixed LIBOR Loan or Continue a Fixed LIBOR Loan on the requested date of
such Conversion or Continuation.
Section 4.5. Treatment of Affected Loans.
If the obligation of any Lender to make LIBOR Loans or to Continue, or to
Convert Base Rate Loans into, LIBOR Loans shall be suspended pursuant to
Section 4.1.(b), Section 4.2. or Section 4.3., then such Lender's LIBOR Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for LIBOR Loans (or, in the case of a
Conversion required by Section 4.1.(b) or 4.3., on such earlier date as such
Lender may specify to the Borrower with a copy to the Agent) and, unless and
until such Lender gives notice as provided below that the circumstances
specified in Section 4.1., 4.2. or 4.3. that gave rise to such Conversion no
longer exist:
(a) to the extent that such Lender's LIBOR Loans have been so Converted,
all payments and prepayments of principal that would otherwise be applied to
such Lender's LIBOR Loans shall be applied instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such Lender as
LIBOR Loans shall be made or Continued instead as Base Rate Loans, and all Base
Rate Loans of such Lender that would otherwise be Converted into LIBOR Loans
shall remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 4.1. or 4.3. that gave rise to the
Conversion of such Lender's LIBOR Loans pursuant to this Section no longer
exist (which such Lender agrees to do promptly upon such circumstances ceasing
to exist) at a time when LIBOR Loans made by other Lenders are outstanding,
then such Lender's Base Rate Loans shall be automatically Converted, on the
first day(s) of the next succeeding Interest Period(s) for such outstanding
LIBOR Loans, to the extent necessary so that, after giving effect thereto, all
Loans held by the Lenders holding LIBOR Loans and by such Lender are held pro
rata (as to principal amounts, Types and Interest Periods) in accordance with
their respective Commitments.
Section 4.6. Change of Lending Office.
Each Lender agrees that it will use reasonable efforts to designate an
alternate Lending Office with respect to any of its Loans affected by the
matters or circumstances described in Sections 3.12., 4.1. or 4.3. to reduce
the liability of the Borrower or avoid the results provided thereunder, so long
as such designation is not disadvantageous to such Lender as determined by such
Lender in its sole discretion, except that such Lender shall have no obligation
to designate a Lending Office located in the United States of America.
Section 4.7. Assumptions Concerning Funding of LIBOR Loans.
Calculation of all amounts payable to a Lender under this Article IV. shall
be made as though such Lender had actually funded LIBOR Loans through the
purchase of deposits in the relevant market bearing interest at the rate
applicable to such LIBOR Loans in an amount equal to the amount of the LIBOR
Loans and having a maturity comparable to the relevant Interest Period;
provided, however, that each Lender may fund each of its LIBOR Loans in any
manner it sees fit and the foregoing assumption shall be used only for
calculation of amounts payable under this Article IV.
Article V. Conditions Precedent
Section 5.1. Initial Conditions Precedent.
The obligation of the Lenders to effect or permit the occurrence of the
first Credit Event hereunder, whether as the making of any Revolving Loans or
Bid Rate Loans or the making of a Swingline Loan, is subject to the following
conditions precedent:
(a) The Agent shall have received each of the following, in form and
substance satisfactory to the Agent:
(i) Counterparts of this Agreement executed by each of the parties hereto;
(ii) Notes executed by the Borrower, payable to each Lender and complying
with the terms of Section 2.10.(a) and (b) and the Swingline Note executed by
the Borrower;
(iii) An opinion of Hull, Towill, Norman & Barrett, P.C. counsel to the
Borrower, addressed to the Agent and the Lenders, in substantially the form of
Exhibit O;
(iv) The Articles of Incorporation of the Borrower certified as of a recent
date by the Secretary of State of the State of Georgia;
(v) A good standing certificate with respect to the Borrower issued as of
a recent date by the Secretary of State of the State of Georgia and
certificates of qualification to transact business or other comparable
certificates issued by the Secretary of State (and any state department of
taxation, as applicable) of each state in which the Borrower is required to be
so qualified;
(vi) A certificate of incumbency signed by the Secretary or Assistant
Secretary of the Borrower with respect to each of the officers of the Borrower
authorized to execute and deliver the Loan Documents to which the Borrower is a
party and the officers of the Borrower then authorized to deliver Notices of
Borrowing, Notices of Swingline Borrowing, Notices of Continuation and Notices
of Conversion;
(vii) Copies (certified by the Secretary or Assistant Secretary of the
Borrower) of the bylaws of the Borrower and of all corporate action taken by
the Borrower to authorize the execution, delivery and performance of the Loan
Documents to which it is a party;
(viii) A Guaranty executed by each Subsidiary;
(ix) The articles of incorporation, articles of organization, certificate of
limited partnership or other comparable organizational instrument (if any) of
each Subsidiary certified as of a recent date by the Secretary of State of the
State of formation of such Subsidiary;
(x) A certificate of good standing or certificate of similar meaning with
respect to each Subsidiary issued as of a recent date by the Secretary of State
of the State of formation of each such Subsidiary and certificates of
qualification to transact business or other comparable certificates issued by
each Secretary of State (and any state department of taxation, as applicable)
of each state in which such Subsidiary is required to be so qualified;
(xi) A certificate of incumbency signed by the Secretary or Assistant Secretary
(or other individual performing similar functions) of each Subsidiary with
respect to each of the officers of such Subsidiary authorized to execute and
deliver the Loan Documents to which such Subsidiary is a party;
(xii) Copies certified by the Secretary or Assistant Secretary of each
Subsidiary (or other individual performing similar functions) of (i) the by-
laws of such Subsidiary, if a corporation, the operating agreement, if a
limited liability company, the partnership agreement, if a limited or general
partnership, or other comparable document in the case of any other form of
legal entity and (ii) all corporate, partnership, member or other necessary
action taken by such Subsidiary to authorize the execution, delivery and
performance of the Loan Documents to which it is a party;
(xiii) A copy of each of the documents, instruments and agreements
evidencing any of the Indebtedness described on Schedule 6.1.(g) (other than
the letters of credit referred to on such Schedule) and a copy of each Material
Contract, certified as true, correct and complete by the chief financial
officer of the Borrower;
(xiv) Evidence that all insurance required to be maintained by the Borrower
and the Subsidiaries under the terms of the Loan Documents is in effect;
(xv) The Fees, if any, then due under Section 3.6.;
(xvi) A Compliance Certificate calculated as of the fiscal quarter ending
June 30, 1997; and
(xvii) Such other documents, agreements and instruments as the Agent on
behalf of the Lenders may reasonably request; and
(b) In the good faith judgment of the Agent and the Lenders: (i)
There shall not have occurred or become known to the Agent or the Lenders
any event, condition, situation or status since the date of the information
contained in the financial and business projections, budgets, pro forma data and
forecasts concerning the Borrower and its Subsidiaries delivered to the
Agent and the Lenders prior to the Agreement Date that has had or could
reasonably be expected to result in a Material Adverse Effect; (ii) No
litigation, action, suit, investigation or other arbitral, administrative
or judicial proceeding shall be pending or threatened which could
reasonably be expected to (1) result in a Material Adverse Effect or
(2) restrain or enjoin, impose materially burdensome conditions on, or
otherwise materially and adversely affect the ability of the Borrower to
fulfill its obligations under the Loan Documents; (iii) The Borrower and
its Subsidiaries shall have received all approvals, consents and waivers,
and shall have made or given all necessary filings and notices as shall be
required to consummate the transactions contemplated hereby without the
occurrence of any default under, conflict with or violation of (1) any
Applicable Law or (2) any agreement, document or instrument to which the
Borrower or any Subsidiary is a party or by which any of them or their
respective properties is bound, except for such approvals, consents,
waivers, filings and notices the receipt, making or giving of which would
not reasonably be likely to (A) have a Material Adverse Effect, or (B)
restrain or enjoin, impose materially burdensome conditions on, or otherwise
materially and adversely affect the ability of the Borrower to fulfill its
obligations under the Loan Documents; and (iv) There shall not have
occurred or exist any other material disruption of financial or capital
markets that could reasonably be expected to materially and adversely
affect the transactions contemplated by the Loan Documents.
Section 5.2. Conditions Precedent to All Loans.
The obligation of the Lenders to make any Loans and of the Swingline Lender
to make Swingline Loans is subject to the further condition precedent that: (a)
no Default or Event of Default shall have occurred and be continuing as of the
date of the making of such Loan or would exist immediately after giving effect
thereto; (b) the representations and warranties made or deemed made by the
Borrower and its Subsidiaries in the Loan Documents to which any of them is a
party, shall be true and correct on and as of the date of the making of such
Loan with the same force and effect as if made on and as of such date except to
the extent that such representations and warranties expressly relate solely to
an earlier date (in which case such representations and warranties shall have
been true and accurate on and as of such earlier date) and except for changes
in factual circumstances specifically and expressly permitted hereunder and (c)
in the case of the borrowing of (i) Revolving Loans, the Agent shall have
received a timely Notice of Borrowing and (ii) a Swingline Loan, the Swingline
Lender shall have received a timely Notice of Swingline Borrowing. Each Credit
Event shall constitute a certification by the Borrower to the effect set forth
in the preceding sentence (both as of the date of the giving of notice relating
to such Credit Event and, unless the Borrower otherwise notifies the Agent
prior to the date of such Credit Event, as of the date of the occurrence of
such Credit Event). In addition, if such Credit Event is the making of a Loan,
the Borrower shall be deemed to have represented to the Agent and the Lenders
at the time such Loan is made that all conditions to the making of such Loan
contained in Article V. have been satisfied.
Section 5.3. Conditions to Conversion to Term Loans.
The conversion of the Revolving Loans into Term Loans pursuant to Section
2.13. is subject to satisfaction of the following conditions:
(a) immediately before and after such conversion, no Default or Event of
Default shall have occurred and be continuing; and
(b) the representations and warranties of the Borrower and its
Subsidiaries contained in the Loan Documents to which any of them is a party
shall be true and correct on and as of the date of such conversion with the
same force and effect as if made on and as of such date except to the extent
such representations or warranties expressly relate solely to an earlier date
(in which case such representations and warranties shall have been true and
accurate on and as of such earlier date) and except for changes in factual
circumstances specifically and expressly permitted hereunder.
The delivery of the notice required under such Section shall constitute a
certification by Borrower to the Agent and the Lenders that the statements in
the immediately preceding clauses (a) and (b) are true.
Article VI. Representations and Warranties
Section 6.1. Representations and Warranties.
In order to induce the Agent and each Lender to enter into this Agreement
and to make Loans, the Borrower represents and warrants to the Agent and each
Lender as follows:
(a) Organization; Power; Qualification. Each of the Borrower and its
Subsidiaries is a corporation, partnership or other legal entity, duly
organized or formed, validly existing and in good standing under the
jurisdiction of its incorporation or formation, has the power and authority to
own or lease its respective properties and to carry on its respective business
as now being and hereafter proposed to be conducted and is duly qualified and
is in good standing as a foreign corporation, partnership or other legal
entity, and authorized to do business, in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification or authorization and where the failure to be so qualified or
authorized would have, in each instance, a Material Adverse Effect.
(b) Ownership Structure. As of the Agreement Date, Schedule 6.1.(b)
correctly sets forth the corporate structure and ownership interests of the
Borrower's Subsidiaries including the correct legal name of each Subsidiary,
its jurisdiction of formation, the Persons holding equity interests in such
Subsidiary, their percentage equity or voting interest in such Subsidiary and
whether such Subsidiary is a Material Subsidiary. Except as set forth in such
Schedule:
(i) no Subsidiary has issued to any third party any securities
convertible into such Subsidiary's capital stock or other equity interests or
any options, warrants or other rights to acquire any securities convertible
into such capital stock or other equity interests, and
(ii) the outstanding capital stock of, or other equity interests in,
each such Subsidiary are owned by the Borrower and its Subsidiaries indicated
on such Schedule, free and clear of all Liens, warrants, options and rights of
others of any kind whatsoever. All such outstanding capital stock and other
equity interests have been validly issued and, in the case of capital stock,
are fully paid and nonassessable.
(c) Authorization of Agreement, Notes, Loan Documents and Borrowings. The
Borrower has the right and power, and has taken all necessary action to
authorize it, to borrow hereunder. The Borrower and the Subsidiaries each has
has the right and power, and has taken all necessary action to authorize it to
execute, deliver and perform each of the Loan Documents to which it is a party
in accordance with their respective terms and to consummate the transactions
contemplated hereby and thereby. The Loan Documents to which the Borrower or
any Subsidiary is a party have been duly executed and delivered by the duly
authorized officers of the Borrower or such Subsidiary, as applicable, and each
is a legal, valid and binding obligation of the Borrower or such Subsidiary, as
applicable, enforceable against it in accordance with its respective terms.
(d) Compliance of Agreement, Notes, Loan Documents and Borrowing with
Laws, etc. The execution, delivery and performance of this Agreement, the
Notes and the other Loan Documents to which the Borrower or any Subsidiary is a
party in accordance with their respective terms and the borrowings hereunder do
not and will not, by the passage of time, the giving of notice, or otherwise:
(i) require any Governmental Approval or violate any Applicable Law (including
all Environmental Laws) relating to the Borrower or any Subsidiary; (ii)
conflict with, result in a breach of or constitute a default under the articles
of incorporation or the bylaws of the Borrower or the organizational documents
of any Subsidiary, or any indenture, agreement or other instrument to which the
Borrower or any Subsidiary is a party or by which it or any of its respective
properties may be bound; or (iii) result in or require the creation or
imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by the Borrower or any Subsidiary.
(e) Compliance with Law; Governmental Approvals. The Borrower and each
Subsidiary is in compliance with each Governmental Approval applicable to it
and in compliance with all other Applicable Law relating to it, except for
noncompliances which, and Governmental Approvals the failure to possess which,
would not, individually or in the aggregate, cause a Default or Event of
Default or have a Material Adverse Effect.
(f) Ownership of Properties; Liens. As of the Agreement Date, Part I of
Schedule 6.1.(f) sets forth all the real property owned or leased by the
Borrower, its Subsidiaries and any of their Unconsolidated Affiliates, and if a
Developed Property, the applicable Occupancy Rate thereof. As of the Agreement
Date, the Borrower and such Persons have good and insurable fee simple title
(or leasehold title if so designated on such Schedule) to all of such real
property. As of the Agreement Date, there are no mortgages, deeds of trust,
indentures, debt instruments or other agreements creating a Lien against any of
such real property or any other property or assets of the Borrower or any of
its Subsidiaries except for Permitted Liens and except as set forth on Part II
of Schedule 6.1.(f).
(g) Indebtedness. Schedule 6.1.(g) is, as of the Agreement Date, a
complete and correct listing of all Indebtedness of the Borrower and its
Subsidiaries, including all guaranties of the Borrower and its Subsidiaries and
all letters of credit and acceptance facilities extended to the Borrower or any
Subsidiary. The Borrower and its Subsidiaries have performed and are in
compliance with all of the terms of such Indebtedness and all instruments and
agreements relating thereto, and no default or event of default, or event or
condition which with the giving of notice, the lapse of time, a determination
of materiality, the satisfaction of any other condition or any combination of
the foregoing, would constitute such a default or event of default, exists with
respect to any such Indebtedness.
(h) Material Contracts. Schedule 6.1.(h) is a true, correct and complete
listing of all Material Contracts as of Agreement Date. Each of the Borrower
and its Subsidiaries that are parties to any Material Contract has performed
and is in compliance with all of the terms of such Material Contract, and no
default or event of default, or event or condition which with the giving of
notice, the lapse of time, a determination of materiality, the satisfaction of
any other condition or any combination of the foregoing, would constitute such
a default or event of default, exists with respect to any such Material
Contract.
(i) Litigation. There are no actions, suits or proceedings pending (nor,
to the knowledge of the Borrower or any Subsidiary, are there any actions,
suits or proceedings threatened, nor is there any basis therefor) against or in
any other way relating adversely to or affecting the Borrower or any Subsidiary
or any of its respective property in any court or before any arbitrator of any
kind or before or by any other Governmental Authority which, if adversely
determined, could have a Material Adverse Effect, and there are no strikes,
slow downs, work stoppages or walkouts or other labor disputes in progress or
threatened relating to the Borrower or any Subsidiary.
(j) Taxes. All federal, state and other tax returns of the Borrower and
its Subsidiaries required by Applicable Law to be filed have been duly filed,
and all federal, state and other taxes, assessments and other governmental
charges or levies upon the Borrower and any of its Subsidiaries and their
respective properties, income, profits and assets which are due and payable
have been paid, except any such nonpayment which is at the time permitted under
Section 7.6. None of the United States income tax returns of the Borrower and
its Subsidiaries are under audit as of Agreement Date. All charges, accruals
and reserves on the books of the Borrower and each of its Subsidiaries in
respect of any taxes or other governmental charges are in accordance with GAAP.
(k) Financial Statements; No Material Adverse Change. The Borrower has
furnished to each Lender copies of (i) the audited consolidated balance sheet
of the Borrower and its consolidated Subsidiaries for the fiscal year ending
December 31, 1996, and the related consolidated statements of income, retained
earnings and cash flow for the fiscal year ending on such date, with the
opinion thereon of Arthur Andersen LLP, and (ii) the unaudited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries for the fiscal
quarter ending June 30, 1997, and the related consolidated statements of
income, retained earnings and cash flow of the Borrower and its consolidated
Subsidiaries for the fiscal quarter period ending on such date. Such balance
sheets and statements (including in each case related schedules and notes) are
complete and correct and present fairly, in accordance with GAAP consistently
applied throughout the periods involved, the consolidated financial position of
the Borrower and its consolidated Subsidiaries as at their respective dates and
the results of operations and the cash flow for such periods (subject, as to
interim statements, to changes resulting from normal year-end audit
adjustments). Neither the Borrower nor any of its consolidated Subsidiaries
has on the Agreement Date any material contingent liabilities, liabilities,
liabilities for taxes, unusual or long-term commitments or unrealized or
forward anticipated losses from any unfavorable commitments, except as referred
to or reflected or provided for in said financial statements. Since December
31, 1996, there has been no material adverse change in the consolidated
financial condition, results of operations, business or prospects of the
Borrower and its consolidated Subsidiaries taken as a whole. Each of the
Borrower and its Material Subsidiaries is Solvent.
(l) ERISA. Each member of the ERISA Group has fulfilled its obligations
under the minimum funding standards of ERISA and the Internal Revenue Code with
respect to each Plan and is in compliance in all material respects with the
presently applicable provisions of ERISA and the Internal Revenue Code with
respect to each Plan. No member of the ERISA Group has (i) sought a waiver of
the minimum funding standard under Section 412 of the Internal Revenue Code in
respect of any Plan, (ii) failed to make any contribution or payment to any
Plan or Multiemployer Plan or in respect of any Benefit Arrangement, or made
any amendment to any Plan or Benefit Arrangement, which has resulted or could
result in the imposition of a Lien or the posting of a bond or other security
under ERISA or the Internal Revenue Code or (iii) incurred any liability under
Title IV of ERISA other than a liability to the PBGC for premiums under Section
4007 of ERISA.
(m) Absence of Defaults. Neither the Borrower nor any Subsidiary is in
default under its articles of incorporation, bylaws, partnership agreement or
other similar organizational documents, and no event has occurred, which has
not been remedied, cured or waived: (i) which constitutes a Default or an
Event of Default; or (ii) which constitutes, or which with the passage of time,
the giving of notice, a determination of materiality, the satisfaction of any
condition, or any combination of the foregoing, would constitute, a default or
event of default by the Borrower or any Subsidiary under any agreement (other
than this Agreement) or judgment, decree or order to which the Borrower or any
Subsidiary is a party or by which the Borrower or any Subsidiary or any of
their respective properties may be bound where such default or event of default
could, individually or in the aggregate, have a Material Adverse Effect.
(n) Environmental Laws. In the ordinary course of business, each of the
Borrower and its Subsidiaries conducts an ongoing review of the effect of
Environmental Laws on its respective business, operations and properties,
including without limitation, its respective Real Property Assets, in the
course of which the Borrower or such Subsidiary identifies and evaluates
associated liabilities and costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure of properties presently
or previously owned, any capital or operating expenditures required to achieve
or maintain compliance with Environmental Laws or required as a condition of
any Governmental Approval, any contract, or any related constraints on
operating activities, any costs or liabilities in connection with off-site
disposal of wastes or Hazardous Materials, and any actual or potential
liabilities to third parties, including employees, and any related costs and
expenses). The Borrower and its Subsidiaries have obtained all Governmental
Approvals which are required under Environmental Laws, and are in compliance
with all terms and conditions of such Governmental Approvals, which the failure
to obtain or to comply with could reasonably be expected to have a Material
Adverse Effect. Each of the Borrower and its Subsidiaries is also in
compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules, and timetables contained in
the Environmental Laws the failure with which to comply could have a Material
Adverse Effect. Except as set forth in Schedule 6.1.(n), neither the Borrower
nor any Subsidiary is aware of, or has received notice of, any past, present,
or future events, conditions, circumstances, activities, practices, incidents,
actions, or plans which, with respect to the Borrower or any of its
Subsidiaries may interfere with or prevent compliance or continued compliance
with Environmental Laws, or may give rise to any common-law or legal liability,
or otherwise form the basis of any claim, action, demand, suit, proceeding,
hearing, study, or investigation, based on or related to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling or the emission, discharge, release or threatened release into the
environment, of any pollutant, contaminant, chemical, or industrial, toxic, or
other Hazardous Material; and there is no civil, criminal, or administrative
action, suit, demand, claim, hearing, notice, or demand letter, notice of
violation, investigation, or proceeding pending or, to the knowledge of the
Borrower or any Subsidiary, after due inquiry, threatened, against the Borrower
or any of its Subsidiaries relating in any way to Environmental Laws.
(o) Investment Company; Public Utility Holding Company. Neither the
Borrower nor any Subsidiary is (i) an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, (ii) a "holding company" or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or (iii) subject to any other
Applicable Law which purports to regulate or restrict its ability to borrow
money or to consummate the transactions contemplated by this Agreement or to
perform its obligations under any Loan Document to which it is a party.
(p) Margin Stock. Neither the Borrower nor any Subsidiary is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose, whether immediate, incidental or ultimate, of
buying or carrying "margin stock" within the meaning of Regulations G and U of
the Board of Governors of the Federal Reserve System.
(q) Affiliate Transactions. Except as permitted by Section 9.11., neither
the Borrower nor any Subsidiary is a party to or bound by any agreement or
arrangement (whether oral or written) to which any Affiliate of the Borrower or
any Subsidiary is a party. Neither the Borrower nor any Subsidiary is a party
to any agreement or arrangement which restricts or prohibits the payment of
dividends or the repayment of inter-company loans by a Subsidiary to the
Borrower.
(r) Intellectual Property. The Borrower and each Subsidiary owns or has
the right to use, under valid license agreements or otherwise, all patents,
licenses, franchises, trademarks, trademark rights, trade names, trade name
rights, trade secrets and copyrights (collectively, "Intellectual Property")
used in the conduct of its businesses as now conducted and as contemplated by
the Loan Documents, which the failure to own or have the right to use could
reasonably be expected to have a Material Adverse Effect, without known
conflict with any patent, license, franchise, trademark, trade secret, trade
name, copyright, or other proprietary right of any other Person.
(s) Accuracy and Completeness of Information. All written information,
reports and other papers and data furnished to the Agent or any Lender by, on
behalf of, or at the direction of, the Borrower or any Subsidiary were, at the
time the same were so furnished, complete and correct in all material respects,
to the extent necessary to give the recipient a true and accurate knowledge of
the subject matter, or, in the case of financial statements, present fairly, in
accordance with GAAP consistently applied throughout the periods involved, the
financial position of the Persons involved as at the date thereof and the
results of operations for such periods. No fact is known to the Borrower or
any Subsidiary which has had, or may in the future have (so far as the Borrower
or any Subsidiary can reasonably foresee), a Material Adverse Effect which has
not been set forth in the financial statements referred to in Section 6.1.(k)
or in such information, reports or other papers or data or otherwise disclosed
in writing to the Agent and the Lenders prior to the Effective Date. No
document furnished or written statement made to the Agent or any Lender in
connection with the negotiation, preparation of execution of this Agreement or
any of the other Loan Documents contains or will contain any untrue statement
of a fact material to the creditworthiness of the Borrower or any Subsidiary or
omits or will omit to state a material fact necessary in order to make the
statements contained therein not misleading.
(t) REIT Status. The Borrower qualifies as a REIT.
(u) Not Plan Assets. The assets of the Borrower or any Subsidiary do not
and will not constitute "plan assets", within the meaning of ERISA, the
Internal Revenue Code and the respective regulations promulgated thereunder.
The execution, delivery and performance of this Agreement, and the borrowing
and repayment of amounts hereunder, do not and will not constitute "prohibited
transactions" under ERISA or the Internal Revenue Code.
(v) Business. As of the Agreement Date, the Borrower and its Subsidiaries
are substantially engaged in the business of owning, managing and developing
upscale apartment communities in the Southern United States of America.
(w) Real Properties. With respect to each Real Property Asset owned or
operated by it or its Subsidiaries, the Borrower represents and warrants to the
Lenders and the Agent as follows:
(i) Title Insurance. Except as to undeveloped land acquired by the
Borrower prior to January 1, 1984, either (i) on the date of purchase of each
such Real Property Asset, 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 Asset, there exists an
attorney's opinion of title dated on or about such date of purchase 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.
(ii) Hazard Insurance. Each such Real Property Asset is covered by
insurance required under Section 7.5.
(iii) Improvements. None of the improvements on any such Real Property
Assets lies outside of the boundaries and building restriction lines of such
property, no improvements on adjoining properties encroach upon such Real
Property Assets, and no improvement located on or forming part of such Real
Property Assets is in violation of any applicable zoning laws or ordinances, in
each case, which could reasonably be expected to have a Material Adverse
Effect.
(iv) Condemnation Proceedings. As of the Agreement Date, there is no
material proceeding pending or threatened for the total or partial condemnation
of any such Real Property Asset, or for the relocation of roadways providing
access thereto.
(v) Purchase Options. There are no outstanding options or rights of first
refusal materially affecting any such Real Property Asset.
(vi) Separate Lots. Each such Real Property Asset 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.
(vii) Ground Leases. Where the interest of the Borrower or any of its
Subsidiaries in any such Real Property Asset 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.
Section 6.2. Survival of Representations and Warranties, Etc.
All statements contained in any certificate, financial statement or other
instrument delivered by or on behalf of the Borrower or any Subsidiary to the
Agent or any Lender pursuant to or in connection with this Agreement or any of
the other Loan Documents (including, but not limited to, any such statement
made in or in connection with any amendment thereto or any statement contained
in any certificate, financial statement or other instrument delivered by or on
behalf of the Borrower prior to the Agreement Date and delivered to the Agent
or any Lender in connection with closing the transactions contemplated hereby)
shall constitute representations and warranties made by the Borrower under this
Agreement. All representations and warranties made under this Agreement and
the other Loan Documents shall be deemed to be made at and as of the Agreement
Date, the Effective Date and at and as of the date of the occurrence of any
Credit Event, except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and accurate on and as of such earlier
date) and except for changes in factual circumstances specifically permitted
hereunder. All such representations and warranties shall survive the
effectiveness of this Agreement, the execution and delivery of the Loan
Documents and the making of the Loans.
Article VII. Affirmative Covenants
For so long as this Agreement is in effect, unless the Requisite Lenders
(or, if required pursuant to Section 12.7., all of the Lenders) shall otherwise
consent in the manner provided for in Section 12.7., the Borrower shall:
Section 7.1. Preservation of Existence and Similar Matters.
Except as otherwise permitted under Section 9.7., preserve and maintain, and
cause each Subsidiary to preserve and maintain, its respective existence,
rights, franchises, licenses and privileges in the jurisdiction of its
incorporation or formation and qualify and remain qualified and authorized to
do business in each jurisdiction in which the character of its properties or
the nature of its business requires such qualification and authorization and
where the failure to be so authorized and qualified could have a Material
Adverse Effect.
Section 7.2. Compliance with Applicable Law and Material Contracts.
Comply, and cause each Subsidiary to comply, with (a) all Applicable Law,
including the obtaining of all Governmental Approvals, the failure with which
to comply could have a Material Adverse Effect, and (b) all terms and
conditions of all Material Contracts to which it is a party.
Section 7.3. Maintenance of Property.
In addition to the requirements of any of the other Loan Documents, (a)
protect and preserve, and cause each Subsidiary to protect and preserve, all of
its material properties, including, but not limited to, all Intellectual
Property, and maintain in good repair, working order and condition all tangible
properties, ordinary wear and tear excepted, and (b) from time to time make or
cause to be made all needed and appropriate repairs, renewals, replacements and
additions to such properties, so that the business carried on in connection
therewith may be properly and effectively conducted at all times.
Section 7.4. Conduct of Business.
Together with its Subsidiaries, at all times carry on their business
described in Section 6.1.(v) ,but may do so anywhere in the continental United
States of America.
Section 7.5. Insurance.
In addition to the requirements of any of the other Loan Documents,
maintain, and cause each Subsidiary to maintain, insurance with financially
sound and reputable insurance companies against such risks and in such amounts
as is customarily maintained by Persons engaged in similar businesses or as may
be required by Applicable Law. Not in limitation of the foregoing, the
Borrower shall, and shall cause its Subsidiaries to, maintain builder's risk
insurance during any period of construction and, upon completion, "all risk"
insurance in an amount at least equal to the greater of (i) 80% of the
replacement cost of the improvements, if any, on each of its Real Property
Assets, and (ii) an amount sufficient to avoid the application of any
coinsurance clause contained in the related insurance policy, with insurers
having an A.M. Best policyholder's rating of not less than A- and financial
size category of not less than X, which insurance shall in any event not
provide for materially less coverage than the insurance in effect on the
Agreement Date. The Borrower will deliver to the Lenders (i) upon request of
any Lender through the Agent from time to time full information as to the
insurance carried, (ii) within 5 days of receipt of notice from any insurer a
copy of any notice of cancellation or material change in coverage from that
existing on the Agreement Date and (iii) promptly upon receipt, notice of any
cancellation or nonrenewal of coverage by the Borrower.
Section 7.6. Payment of Taxes and Claims.
Pay or discharge, and cause each Subsidiary to pay and discharge, when due
(a) all taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits or upon any properties belonging to it, and (b)
all lawful claims of materialmen, mechanics, carriers, warehousemen and
landlords for labor, materials, supplies and rentals which, if unpaid, might
become a Lien on any properties of such Person; provided, however, that this
Section shall not require the payment or discharge of any such tax, assessment,
charge, levy or claim which is being contested in good faith by appropriate
proceedings which operate to suspend the collection thereof and for which
adequate reserves have been established on the books of the Borrower or such
Subsidiary, as applicable, in accordance with GAAP.
Section 7.7. Visits and Inspections.
Permit, and cause each Subsidiary to permit, representatives or agents of
the Agent or any Lender, from time to time, as often as may be reasonably
requested and at the expense of the Agent (unless an Event of Default shall be
continuing in which case the exercise by the Agent of its rights under this
Section shall be at the expense of the Borrower) or such Lender, but only
during normal business hours, to: (a) visit and inspect all properties of the
Borrower and each Subsidiary; (b) inspect and make extracts from their
respective books and records, including but not limited to management letters
prepared by independent accountants; and (c) discuss with its principal
officers, and its independent accountants, its business, assets, liabilities,
financial conditions, results of operations and business prospects. If
requested by the Agent, the Borrower shall execute an authorization letter
addressed to its accountants authorizing the Agent or any Lender to discuss the
financial affairs of the Borrower and any Subsidiary with its accountants.
Section 7.8. Use of Proceeds.
Use the proceeds of Loans for working capital and general corporate
purposes, including without limitation, the financing of the acquisition,
development and construction of Real Property Assets. The Borrower shall not,
and shall not permit any Subsidiary to, use any part of such proceeds to
purchase or carry, or to reduce or retire or refinance any credit incurred to
purchase or carry, any margin stock (within the meaning of Regulations U and X
of the Board of Governors of the Federal Reserve System) or to extend credit to
others for the purpose of purchasing or carrying any such margin stock.
Section 7.9. Environmental Matters.
Comply, and cause all of its Subsidiaries to comply, with all Environmental
Laws, the failure with which to comply could have a Material Adverse Effect.
If the Borrower or any Subsidiary shall (a) receive notice that any violation
of any Environmental Law may have been committed or is about to be committed by
such Person, (b) receive notice that any administrative or judicial complaint
or order has been filed or is about to be filed against the Borrower or any
Subsidiary alleging violations of any Environmental Law or requiring the
Borrower or any Subsidiary to take any action in connection with the release of
Hazardous Materials or (c) receive any notice from a Governmental Authority or
private party alleging that the Borrower or any Subsidiary may be liable or
responsible for costs associated with a response to or cleanup of a release of
a Hazardous Materials or any damages caused thereby, and such notices,
individually or in the aggregate, could have a Material Adverse Effect, the
Borrower shall provide the Agent with a copy of such notice within 10 days
after the receipt thereof by the Borrower or any of the Subsidiaries. The
Borrower and the Subsidiaries shall promptly take all actions necessary to
prevent the imposition of any Liens on any of their respective properties
arising out of or related to any Environmental Laws.
Section 7.10. Books and Records.
Maintain, and cause each of the Subsidiaries to maintain, books and records
pertaining to its business operations in such detail, form and scope as is
consistent with good business practice in accordance with GAAP.
Section 7.11. REIT Status.
At all times maintain its status as a REIT.
Section 7.12. ERISA Exemptions.
Not, and shall not permit any Subsidiary to, permit any of its respective
assets to become or be deemed to be "plan assets" within the meaning of ERISA,
the Internal Revenue Code and the respective regulations promulgated
thereunder.
Section 7.13. Further Assurances.
And shall cause each of its Subsidiaries to, at the Borrower's cost and
expense, upon the request of the Agent, duly execute and deliver or cause to be
duly executed and delivered, to the Agent and the Lenders such further
instruments, documents and certificates, and do and cause to be done such
further acts that may be necessary or advisable in the opinion of the Agent to
carry out more effectively the provisions and purposes of this Agreement and
the other Loan Documents.
Section 7.14. Additional Subsidiaries.
Within 5 Business Days of any Person becoming a Subsidiary after the
Agreement Date, deliver to the Agent each of the following in form and
substance satisfactory to the Agent: (a) a Guaranty executed by such Subsidiary
and (b) the items that would have been delivered under Sections 5.1.(a)(iii),
(viii) through (xiii) and (xvii) if such Subsidiary had been one on the
Agreement Date.
Section 7.15. NYSE Listing.
Maintain at least one class of common stock of the Borrower having trading
privileges on the New York Stock Exchange.
Article VIII. Information
For so long as this Agreement is in effect, unless the Requisite Lenders
(or, if required pursuant to Section 12.7., all of the Lenders) shall otherwise
consent in the manner set forth in Section 12.7., the Borrower shall furnish to
each Lender (or to the Agent if so provided below) at its Lending Office:
Section 8.1. Quarterly Financial Statements.
As soon as available and in any event within 45 days after the close of each
of the first, second and third fiscal quarters of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries as at the end
of such period and the related consolidated statements of income, retained
earnings and cash flows of the Borrower and its Subsidiaries for such period,
setting forth in each case in comparative form the figures for the
corresponding periods of the previous fiscal year, all of which shall be
certified by the chief financial officer of the Borrower, in his or her
opinion, to present fairly, in accordance with GAAP, the consolidated financial
position of the Borrower and its Subsidiaries as at the date thereof and the
results of operations for such period (subject to normal year-end audit
adjustments).
Section 8.2. Year-End Statements.
As soon as available and in any event within 90 days after the end of each
fiscal year of the Borrower, the consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such fiscal year and the related consolidated
statements of income, retained earnings and cash flows of the Borrower and its
Subsidiaries for such fiscal year, setting forth in comparative form the
figures as at the end of and for the previous fiscal year, all of which shall
be certified by (a) the chief financial officer of the Borrower, in his or her
opinion, to present fairly, in accordance with GAAP, the financial position of
the Borrower and its Subsidiaries as at the date thereof and the result of
operations for such period and (b) independent certified public accountants of
recognized national standing acceptable to the Requisite Lenders, whose
certificate shall be unqualified and in scope and substance satisfactory to the
Requisite Lenders and who shall have authorized the Borrower to deliver such
financial statements and certification thereof to the Agent and the Lenders
pursuant to this Agreement.
Section 8.3. Compliance Certificate.
At the time the financial statements are furnished pursuant to Sections 8.1.
and 8.2., a certificate in the form of Exhibit P (a "Compliance Certificate")
executed by the chief financial officer of the Borrower: (a) setting forth in
reasonable detail as at the end of such quarterly accounting period or fiscal
year, as the case may be, the calculations required to establish whether or not
the Borrower, and when appropriate its consolidated Subsidiaries, were in
compliance with the covenants contained in Sections 9.1. and 9.6.; and (b)
stating that, to the best of his or her knowledge, information and belief, no
Default or Event of Default exists, or, if such is not the case, specifying
such Default or Event of Default and its nature, when it occurred and whether
it is continuing and the steps being taken by the Borrower with respect to such
event, condition or failure. At the time the financial statements are
furnished pursuant to Section 8.2., the Borrower will deliver to the Lenders a
certificate of the independent accountants performing the audit of such
financial statements to the effect that, in making such audit, nothing came to
their attention that caused them to believe that the Borrower failed to comply
with any of the terms, covenants, provisions or conditions contained in this
Agreement insofar as they relate to financial matters. Such accountants,
however, shall not be liable to any Person by reason of their failure to obtain
knowledge of any Event of Default or Default which would not be disclosed in
the course of an audit conducted in accordance with GAAP.
Section 8.4. Other Information.
(a) Not later than 90 days prior to the last day of each fiscal year of
the Borrower, the business plan for the Borrower and its Subsidiaries for the
next three succeeding fiscal years, describing strategies for anticipated
growth, marketing and capital needs and otherwise in form and detail reasonably
acceptable to the Requisite Lenders;
(b) not later than 90 days prior to the last day of each fiscal year of
the Borrower, pro forma projected consolidated financial statements for the
Borrower and its Subsidiaries reflecting the forecasted financial condition and
results of operations of the Borrower and its Subsidiaries on a quarterly basis
for the next succeeding year and an annual basis for the two succeeding fiscal
years thereafter, accompanied by calculations establishing whether or not the
Borrower would be in compliance on a pro forma basis with the covenants
contained in Sections 9.1. and 9.6., in each case in form and detail reasonably
acceptable to the Requisite Lenders;
(c) as soon as available and in any event within 30 days after the end of
each fiscal quarter of the Borrower, a statement demonstrating a comparison
between the cost budget of each Real Property Asset in development to the
actual disbursements made, together with a description of each such Real
Property Asset setting forth the ownership, scope, status of completion and
occupancy, if applicable, of each such Real Property Asset, certified as
complete and correct and as having been prepared in accordance with GAAP,
consistently applied, by the chief financial officer or chief accounting
officer of the Borrower;
(d) promptly upon receipt thereof, copies of all reports, if any,
submitted to the Borrower or its Board of Directors by its independent public
accountants including, without limitation, any management report;
(e) within 5 Business Days of the filing thereof, copies of all
registration statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent), reports on Forms 10-K, 10-Q and 8-K
(or their equivalents) and all other periodic reports which the Borrower shall
file with the Securities and Exchange Commission (or any Governmental Authority
substituted therefor) or any national securities exchange;
(f) promptly upon the mailing thereof to the shareholders of the Borrower
generally, copies of all financial statements, reports and proxy statements so
mailed and promptly upon the issuance thereof copies of all press releases
issued by the Borrower;
(g) within 45 days after the end of each fiscal quarter of the Borrower,
an updated Schedule 6.1.(f), certified by the chief financial officer of the
Borrower as true, correct and complete as of the date such updated schedules
are delivered;
(h) if and when any member of the ERISA Group (i) gives or is required to
give notice to the PBGC of any "reportable event" (as defined in Section 4043
of ERISA) with respect to any Plan which might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an
intent to terminate, impose liability (other than for premiums under Section
4007 of ERISA) in respect of, or appoint a trustee to administer any Plan, a
copy of such notice; (iv) applies for a waiver of the minimum funding standard
under Section 412 of the Internal Revenue Code, a copy of such application; (v)
gives notice of intent to terminate any Plan under Section 4041(c) of ERISA, a
copy of such notice and other information filed with the PBGC; (vi) gives
notice of withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of
such notice; or (vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security, a
certificate of the controller of the Borrower setting forth details as to such
occurrence and action, if any, which the Borrower or applicable member of the
ERISA Group is required or proposes to take;
(i) to the extent the Borrower or any Subsidiary is aware of the same,
prompt notice of the commencement of any proceeding or investigation by or
before any Governmental Authority and any action or proceeding in any court or
other tribunal or before any arbitrator against or in any other way relating
adversely to, or adversely affecting, the Borrower or any Subsidiary or any of
their respective properties, assets or businesses which, if determined or
resolved adversely to such Person, could have a Material Adverse Effect, and
prompt notice of the receipt of notice that any United States income tax
returns of the Borrower or any of its Subsidiaries are being audited;
(j) a copy of any amendment to the articles of incorporation, bylaws,
partnership agreement or other similar organizational documents of the Borrower
or any Subsidiary within 5 Business Days of the effectiveness thereof;
(k) prompt notice of any change in the business, assets, liabilities,
financial condition, results of operations or business prospects of the
Borrower or any Subsidiary which has had or may have Material Adverse Effect;
(l) prompt notice of the occurrence of any Default or Event of Default or
any event which constitutes or which with the passage of time, the giving of
notice, or otherwise, would constitute a default or event of default by the
Borrower or any Subsidiary under any Material Contract to which any such Person
is a party or by which any such Person or any of its respective properties may
be bound;
(m) prompt notice of any order, judgment or decree in excess of $500,000
having been entered against the Borrower or any Subsidiary or any of their
respective properties or assets;
(n) prompt notice of the acquisition, incorporation or other creation of
any Subsidiary, the purpose for such Subsidiary, the nature of the assets and
liabilities thereof and whether such Subsidiary is a Material Subsidiary;
(o) notice of any Person becoming a Material Subsidiary within 2 Business
Days of the determination thereof;
(p) prompt notice of any strikes, slow downs, work stoppages or walkouts
or other labor disputes in progress or threatened relating to the Borrower or
any Subsidiary;
(q) promptly upon entering into any Material Contract after the Agreement
Date, a copy to the Agent of such Material Contract;
(r) together with each Compliance Certificate delivered pursuant to
Section 8.3., a property detail report setting forth the Net Operating Income
for each Unencumbered Property; and
(s) from time to time and promptly upon each request, such data,
certificates, reports, statements, opinions of counsel, documents or further
information regarding the business, assets, liabilities, financial condition,
results of operations or business prospects of the Borrower or any of its
Subsidiaries as the Agent or any Lender may reasonably request.
Article IX. Negative Covenants
For so long as this Agreement is in effect, unless the Requisite Lenders
(or, if required pursuant to Section 12.7., all of the Lenders) shall otherwise
consent in the manner set forth in Section 12.7., the Borrower shall not,
directly or indirectly:
Section 9.1. Financial Covenants.
Permit:
(a) Ratio of Indebtedness to Implied Capitalization Value. The ratio of
(i) the Indebtedness of the Borrower and its Subsidiaries determined on a
consolidated basis to (ii) Implied Capitalization Value as at the end of the
fiscal quarter most recently ending, to exceed 0.50 to 1.00 at the end of any
fiscal quarter.
(b) Ratio of Secured Indebtedness to Implied Capitalization Value. The
ratio of (i) the Secured Indebtedness of the Borrower and its Subsidiaries
determined on a consolidated basis to (ii) Implied Capitalization Value as at
the end of the fiscal quarter most recently ending, to exceed 0.30 to 1.00 at
the end of any fiscal quarter.
(c) Minimum Tangible Net Worth. The Tangible Net Worth of the Borrower
and its Subsidiaries determined on a consolidated basis to be less than (i)
$700,000,000 plus (ii) 75% of the Net Proceeds of all Equity Issuance effected
by the Borrower or any of its Subsidiaries at any time after the Agreement
Date.
(d) Ratio of Unencumbered Property Value to Unsecured Indebtedness. The
ratio of (i) the Unencumbered Property Value to (ii) the Unsecured Indebtedness
of the Borrower and its Subsidiaries determined on a consolidated basis, to be
less than 2.0 to 1.0 at any time.
(e) Ratio of Net Operating Income From Unencumbered Properties to
Unsecured Interest Expense. The ratio of (i) Net Operating Income for all
Unencumbered Properties as at the end of each fiscal quarter to (ii) Interest
Expense on Unsecured Indebtedness of the Borrower and its Subsidiaries
determined on a consolidated basis for such fiscal quarter, to be less than
2.00 to 1.00 at the end of such fiscal quarter. For purposes of this
subsection (e), the aggregate amount of Net Operating Income for Unencumbered
Properties owned by Subsidiaries that are not Wholly Owned Subsidiaries may not
account for more than 20% of the amount described in the immediately preceding
clause (i).
(f) Ratio of EBITDA to Fixed Charges. The ratio of (i) EBITDA of the
Borrower and its Subsidiaries determined on a consolidated basis for the
fiscal quarter most recently ending to (ii) Fixed Charges for such fiscal
quarter, to be less than 1.75 to 1.00 at the end of such fiscal quarter.
(g) Construction Limit. The ratio of (i) Construction Asset Costs of the
Borrower and its Subsidiaries determined on a consolidated basis for the
fiscal quarter most recently ending to (ii) Implied Capitalization Value as at
the end of such fiscal quarter, to be greater than 0.20 to 1.00.
(h) Ratio of Floating Rate Debt to Total Indebtedness. The ratio of (i)
all Floating Rate Debt of the Borrower and its Subsidiaries determined on a
consolidated basis to (ii) all Indebtedness of the Borrower and its
Subsidiaries determined on a consolidated basis, to exceed 0.20 to 1.00 at any
time. Solely with respect to Loans which are Floating Rate Debt, during any
period in which the aggregate amount of the Commitments exceeds 20% of all
Indebtedness of the Borrower and its Subsidiaries determined on a consolidated
basis, only the principal amount of such Loans constituting Floating Rate Debt
in excess of the difference between (x) the aggregate amount of the Commitments
minus (y) the aggregate principal amount of all other Floating Rate Debt, shall
be included as Floating Rate Debt in clause (i) of this subsection.
Section 9.2. Indebtedness.
Create, incur, assume, or permit or suffer to exist, or permit any
Subsidiary to create, incur, assume, or permit or suffer to exist, any
Indebtedness other than the following:
(a) the Obligations;
(b) Indebtedness set forth on Schedule 6.1.(g);
(c) Subordinated Debt;
(d) intercompany Indebtedness among the Borrower and its Subsidiaries;
provided, however, that the obligations of each obligor of such Indebtedness
shall: (i) be subordinate to the Obligations on terms acceptable to the
Requisite Lenders in their sole discretion; and (ii) be evidenced by promissory
notes, which shall have been pledged to the Agent, for the benefit of the
Lenders, as security for the Obligations;
(e) Indebtedness arising as a result of Contingent Obligations permitted
under Section 9.3.; and
(f) other Indebtedness incurred or assumed after the Agreement Date so
long as immediately prior to the incurring or assumption thereof, and
immediately thereafter and after giving effect thereto, no Default or Event of
Default is or would be in existence, including without limitation, a Default or
Event of Default resulting from a violation of any of the covenants contained
in Section 9.1.
Section 9.3. Contingent Obligations.
Become or remain liable, or permit any Subsidiary to become or remain
liable, on or under any Contingent Obligation other than the following:
(a) Contingent Obligations in existence as of the Agreement Date and set
forth in Schedule 9.3.;
(b) Contingent Obligations resulting from endorsement of negotiable
instruments for collection in the ordinary course of business;
(c) Contingent Obligations under Interest Rate Agreements (i) with respect
to the Loans and (ii) indexed to interest rates or yields on United States
Treasury Bills or Notes with respect to other Indebtedness incurred or
anticipated to be incurred by the Borrower or any of its Subsidiaries; and
(d) Contingent Obligations incurred in the ordinary course of business
with respect to surety and appeal bonds, performance and return-of-money bonds
and other similar obligations.
Section 9.4. Investments.
Acquire, make or purchase, or permit any Subsidiary to acquire, make or
purchase, after the Agreement Date, any Investment, or permit any Investment of
the Borrower or any Subsidiary to be outstanding on and after the Agreement
Date, other than the following:
(a) Investments in Subsidiaries in existence on the Agreement Date and
disclosed on Schedule 6.1.(b);
(b) Investments in Cash Equivalents;
(c) Investments in Asset Backed Securities;
(d) Investments in existence on the Agreement Date and set forth on
Schedule 9.4.;
(e) intercompany Indebtedness among the Borrower and its Subsidiaries
provided that such Indebtedness is permitted by the terms of Section 9.2.;
(f) loans and advances to employees under incentive plans or for moving,
entertainment, travel and other similar expenses in the ordinary course of
business consistent with past practices;
(g) Investments to acquire equity interests of a Subsidiary or any other
Person who after giving effect to such acquisition would be a Subsidiary so
long as (i) immediately prior to such acquisition, and after giving effect
thereto, no Default or Event of Default is or would be in existence and (ii)
such acquisition could not reasonably be expected to have a Material Adverse
Effect; and
(h) all other Investments not to exceed $15,000,000 in the aggregate at
any time.
Section 9.5. Liens; Agreements Regarding Liens; Other Matters.
(a) Create, assume, or incur, or permit any Subsidiary to create, assume,
or incur, any Lien (other than Permitted Liens) upon any of its properties,
assets, income or profits of any character whether now owned or hereafter
acquired if immediately prior to the creation, assumption or incurring of such
Lien, or immediately thereafter, a Default or Event of Default is or would be
in existence, including without limitation, a Default or Event of Default
resulting from a violation of any of the covenants contained in Section 9.1.;
(b) Enter into, assume or otherwise be bound by, or permit any Subsidiary
to enter into, assume or otherwise be bound by, any agreement (other than the
Loan Documents) prohibiting the creation or assumption of any Lien upon its
properties or assets, whether now owned or hereafter acquired except for any
provision in an instrument or agreement evidencing the Indebtedness referred to
as "Mortgage Notes" on Schedule 6.1(g) which prohibits the creation of a Lien
in the property securing such Indebtedness as of the Agreement Date; or
(c) Create or otherwise cause or suffer to exist or become effective, or
permit any Subsidiary to create or otherwise cause or suffer to exist or become
effective, any consensual encumbrance or restriction of any kind on the ability
of any Subsidiary to: (i) pay dividends or make any other distribution on any
of such Subsidiary's capital stock or other equity interests owned by the
Borrower or any other Subsidiary of the Borrower; (ii) pay any Indebtedness
owed to the Borrower or any other Subsidiary; (iii) make loans or advances to
the Borrower or any other Subsidiary; or (iv) transfer any of its property or
assets to the Borrower or any other Subsidiary.
Section 9.6. Distributions to Shareholders.
Declare or make cash distributions to its shareholders during any period of
four consecutive fiscal quarters in an aggregate amount exceeding 90% of its
Funds From Operations for such four fiscal quarter period except to the extent
necessary for the Borrower to comply with Section 7.11. Notwithstanding the
foregoing, if a Default or Event of Default specified in Section 10.1.(a),
Section 10.1.(b), Section 10.1.(f) or Section 10.1.(g) shall have occurred and
be continuing, or if as a result of the occurrence of any other Event of
Default the Obligations have been accelerated pursuant to Section 10.2.(a), the
Borrower shall not, and shall not permit any Subsidiary to, make (a) any
dividend or other distribution on account of any capital stock or other equity
interest of the Borrower or any Subsidiary; (b) any acquisition for value of
any capital stock or other equity interest of the Borrower or any Subsidiary;
or (c) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire any capital stock or
other equity interest of the Borrower or any Subsidiary.
Section 9.7. Merger, Consolidation and Sales of Assets.
(a) Enter into, or permit any Subsidiary to enter into, any transaction of
merger or consolidation; (b) liquidate, wind-up or dissolve itself (or suffer
any liquidation or dissolution) or permit any Subsidiary to do any of the
foregoing; or (c) convey, sell, lease, sublease, transfer or otherwise dispose
of, in one transaction or a series of transactions, all or any substantial part
of its business or assets, or the capital stock of or other equity interests in
any of its Subsidiaries, whether now owned or hereafter acquired or permit any
Subsidiary to do any of the foregoing; provided, however, that:
(i) any Subsidiary of the Borrower may merge or consolidate with (A) the
Borrower, so long as the Borrower shall be the surviving entity or (B) a
Subsidiary of the Borrower;
(ii) a Subsidiary may sell, transfer or dispose of its assets to the
Borrower or a Wholly Owned Subsidiary of the Borrower;
(iii) a Subsidiary may liquidate provided that immediately prior to such
liquidation and immediately thereafter and after giving effect thereto, no
Default or Event of Default is or would be in existence; and
(iv) the Borrower or any Subsidiary may merge or consolidate with any other
corporation, provided that (A) the Borrower or such Subsidiary shall be the
continuing or surviving corporation and (B) immediately prior to such merger or
consolidation and immediately thereafter and after giving effect thereto, no
Default or Event of Default is or would be in existence.
Further, neither the Borrower nor any Subsidiary shall enter into any sale-
leaseback transactions or other transaction by which the Borrower or a
Subsidiary shall remain liable as lessee (or the economic equivalent thereof)
of any real or personal property that it has sold or leased to another Person.
Section 9.8. Fiscal Year.
Change its fiscal year from that in effect as of the Agreement Date.
Section 9.9. Modifications to Material Contracts.
Enter into, or permit any Subsidiary to enter into, any amendment or
modification to any Material Contract which could have a Material Adverse
Effect or default in the performance of any obligations of the Borrower or any
Subsidiary under any Material Contract or permit any Material Contract to be
canceled or terminated prior to its stated maturity. Not in limitation of the
foregoing, the Borrower will not amend or otherwise modify the terms of any of
the Senior Note Agreements, the Indenture, the Senior Notes, or any other
document, instrument or agreement evidencing any Indebtedness of the Borrower
or any Subsidiary 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 or any Subsidiary, (f) restrict the ability of
the Borrower or any Subsidiary to perform its obligations hereunder or (g) make
any other changes which would increase the obligations of the Borrower or any
Subsidiary thereunder or confer additional rights on the holders of such
Indebtedness.
Section 9.10. Subordinated Debt Prepayments; Amendments.
Prepay any principal of, or accrued interest on, any Subordinated Debt or
otherwise make any voluntary or optional payment with respect to any principal
of, or accrued interest on, any Subordinated Debt prior to the originally
scheduled maturity date thereof or otherwise redeem or acquire for value any
Subordinated Debt or permit any Subsidiary to do any of the foregoing.
Further, the Borrower shall not, or permit any Subsidiary to, amend or modify,
or permit the amendment or modification of, any agreement or instrument
evidencing any Subordinated Debt without the prior written consent of the
Requisite Lenders.
Section 9.11. Transactions with Affiliates.
Permit to exist or enter into, and will not permit any of its Subsidiaries
to permit to exist or enter into, any transaction (including the purchase,
sale, lease or exchange of any property or the rendering of any service) with
any Affiliate of the Borrower or with any director, officer or employee of the
Borrower, any Subsidiary or any other Affiliate, except (i) transactions
involving consideration in aggregate amount for all such transactions not in
excess of $300,000 per fiscal year and (ii) transactions in the ordinary course
of, and pursuant to the reasonable requirements of the, business of the
Borrower or any of its Subsidiaries and upon fair and reasonable terms which
are no less favorable to the Borrower or such Subsidiary than would be obtained
in a comparable arm's length transaction with a Person that is not an
Affiliate.
Section 9.12. Property Acquisition Policy.
Acquire, or permit any Subsidiary to acquire, any Real Property Asset unless
the representations contained in this Agreement which would be applicable to
such Real Property Asset if owned by the Borrower or a Subsidiary, including
without limitation, those set forth in Section 6.1.(w), would be true and
correct if given as of the date of such acquisition. In addition, neither the
Borrower nor any Subsidiary will acquire any new Real Property Asset unless for
each such Real Property Asset 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 Real Property
Asset; and
(b) conduct and document in writing the results of a Phase I environmental
review (a "Phase I") of such Real Property Asset 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
a Material Adverse Effect; provided, that if a Phase I cannot feasibly be
conducted due to time constraints dictated by the terms of the proposed Real
Property Asset, the Borrower shall perform computer database searches to
confirm the absence of any such 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 Real Property Asset transaction, and will
obtain a full Phase I within 60 days after the acquisition of the Real Property
Asset has been effected. At no time shall the aggregate book value of all Real
Property Assets 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 Real Property Assets owned by the Borrower and its Subsidiaries.
Section 9.13. Concentration of Assets in Material Subsidiaries.
Permit the ratio of (a) the aggregate book value of assets of its
Subsidiaries that are not Material Subsidiaries to (b) the aggregate book value
of all assets of the Borrower and its Subsidiaries determined on a consolidated
basis, to exceed 0.20 to 1.00.
Article X. Default
Section 10.1. 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 Applicable Law or pursuant to any judgment or order of
any Governmental Authority:
(a) Default in Payment of Principal. The Borrower shall fail to pay when
due (whether upon demand, at maturity, by reason of acceleration or otherwise)
the principal of any of the Loans.
(b) Default in Payment of Other Amounts. The Borrower shall fail to pay
when due any interest on any of the Loans or any of the other payment
Obligations (other than the principal of any Loan) owing by the Borrower under
this Agreement or any other Loan Document and such failure shall continue for a
period of 3 Business Days after the earlier of (i) the date upon which the
Borrower or any Subsidiary obtains knowledge of such failure or (ii) the date
upon which the Borrower has received written notice of such failure from the
Agent.
(c) Default in Performance. (i) The Borrower or any Subsidiary shall fail
to perform or observe any term, covenant, condition or agreement on its part to
be performed or observed contained in Section 7.11., 7.12. or 8.4.(l) or in
Article IX. or (ii) the Borrower or any Subsidiary shall fail to perform or
observe any term, covenant, condition or agreement contained in this Agreement
or any other Loan Document to which it is a party and not otherwise mentioned
in this Section and in the case of this clause (ii) such failure shall continue
for a period of 30 days after the earlier of (x) the date upon which the
Borrower obtains knowledge of such failure or (y) the date upon which the
Borrower has received written notice of such failure from the Agent.
(d) Misrepresentations. Any written statement, representation or warranty
made or deemed made by or on behalf of the Borrower or any Subsidiary under
this Agreement or under any other Loan Document, or any amendment hereto or
thereto, or in any other writing or statement at any time furnished or made or
deemed made by or on behalf of the Borrower or any Subsidiary to the Agent or
any Lender, shall at any time prove to have been incorrect or misleading in any
material respect when furnished or made.
(e) Indebtedness Cross-Default.
(i) The Borrower or any Subsidiary shall fail to pay when due and
payable the principal of, or interest on, any Indebtedness (other than the
Loans) or any Contingent Obligations having an aggregate outstanding principal
amount of $1,000,000 or more; or
(ii) the maturity of any such Indebtedness shall have (x) been
accelerated in accordance with the provisions of any indenture, contract or
instrument evidencing, providing for the creation of or otherwise concerning
such Indebtedness or (y) been required to be prepaid prior to the stated
maturity thereof; or
(iii) any other event shall have occurred and be continuing which,
with or without the passage of time, the giving of notice, or otherwise, would
permit any holder or holders of such Indebtedness or Contingent Obligation, any
trustee or agent acting on behalf of such holder or holders or any other
Person, to accelerate the maturity of any such Indebtedness or require any such
Indebtedness to be prepaid prior to its stated maturity.
(f) Voluntary Bankruptcy Proceeding. The Borrower, any Material
Subsidiary or any Other Relevant Subsidiary shall: (i) commence a voluntary
case under the Bankruptcy Code of 1978, as amended or other federal bankruptcy
laws (as now or hereafter in effect); (ii) file a petition seeking to take
advantage of any other Applicable Laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts; (iii) consent to, or fail to contest in a timely and
appropriate manner, any petition filed against it in an involuntary case under
such bankruptcy laws or other Applicable Laws or consent to any proceeding or
action described in the immediately following subsection; (iv) apply for or
consent to, or fail to contest in a timely and appropriate manner, the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
or liquidator of itself or of a substantial part of its property, domestic or
foreign; (v) admit in writing its inability to pay its debts as they become
due; (vi) make a general assignment for the benefit of creditors; (vii) make a
conveyance fraudulent as to creditors under any Applicable Law; or (viii) take
any corporate or similar action for the purpose of effecting any of the
foregoing.
(g) Involuntary Bankruptcy Proceeding. A case or other proceeding shall
be commenced against the Borrower, any Material Subsidiary or any Other
Relevant Subsidiary, in any court of competent jurisdiction seeking: (i)
relief under the Bankruptcy Code of 1978, as amended or other federal
bankruptcy laws (as now or hereafter in effect) or under any other Applicable
Laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts; or (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of such Person, or of all
or any substantial part of the assets, domestic or foreign, of such Person.
(h) Contest of Loan Documents. The Borrower or any Subsidiary shall
disavow, revoke or terminate any Loan Document to which it is a party or shall
otherwise challenge or contest in any action, suit or proceeding in any court
or before any Governmental Authority the validity or enforceability of this
Agreement, any Note or any other Loan Document.
(i) Judgment. A judgment or order for the payment of money shall be
entered against the Borrower or any Subsidiary by any court or other tribunal
which exceeds, individually or together with all other such judgments or orders
entered against the Borrower and its Subsidiaries, $1,000,000 in amount (or
which shall otherwise have a Material Adverse Effect) and such judgment or
order shall continue for a period of 30 days without being stayed or dismissed
through appropriate appellate proceedings.
(j) Attachment. A warrant, writ of attachment, execution or similar
process shall be issued against any property of the Borrower or any Subsidiary
which exceeds, individually or together with all other such warrants, writs,
executions and processes, $1,000,000 in amount and such warrant, writ,
execution or process shall not be discharged, vacated, stayed or bonded for a
period of 30 days; provided, however, that if a bond has been issued in favor
of the claimant or other Person obtaining such warrant, writ, execution or
process, the issuer of such bond shall execute a waiver or subordination
agreement in form and substance satisfactory to the Agent pursuant to which the
issuer of such bond subordinates its right of reimbursement, contribution or
subrogation to the Obligations and waives or subordinates any Lien it may have
on the assets of the Borrower or any of its Subsidiaries.
(k) ERISA. Any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $1,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to terminate
a Material Plan shall be filed under Title IV of ERISA by any member of the
ERISA Group, any plan administrator or any combination of the foregoing; or the
PBGC shall institute proceedings under Title IV of ERISA to terminate, to
impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to administer any Material
Plan; or a condition shall exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any Material Plan must be terminated; or
there shall occur a complete or partial withdrawal from, or a default, within
the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more members of the ERISA Group to
incur a current payment obligation in excess of $1,000,000.
(l) Loan Documents. An Event of Default (as defined therein) shall occur
under any of the other Loan Documents.
(m) Change of Control.
(i) Any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
(other than Boone A. Knox, any member of his immediate family or any trust for
the benefit of his family members of which Boone A. Knox owns the majority
legal, beneficial or controlling interest) is or becomes the "beneficial owner"
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
Person will be deemed to have "beneficial ownership" of all securities that
such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 15% of the total voting power of the then outstanding voting stock of the
Borrower; or
(ii) During any twelve-month period (commencing both before and after the
Agreement Date), a majority of the Board of Directors of the Borrower shall no
longer be composed of individuals (A) who were members of such Board of
Directors on the first date of such period, (B) whose election or nomination to
such Board of Directors was approved by individuals referred to in clause (A)
above constituting at the time of such election or nomination at least a
majority of such Board of Directors or (C) whose election or nomination to such
Board of Directors was approved by individuals referred to in clauses (A) and
(B) above constituting at the time of such election or nomination at least a
majority of such Board of Directors.
(n) Dissolution. Any order, judgment or decree is entered against the
Borrower, any Material Subsidiary or any Other Relevant Subsidiary decreeing
the dissolution or split up of such Person and such order remains undischarged
or unstayed for a period in excess of 30 days.
Section 10.2. Remedies Upon Event of Default.
Upon the occurrence of an Event of Default the following provisions shall
apply:
(a) Acceleration; Termination of Facilities.
(i) Automatic. Upon the occurrence of an Event of Default specified
in Sections 10.1.(f) or 10.1.(g), (A)(i) the principal of, and all accrued
interest on, the Loans and the Notes at the time outstanding and (ii) all of
the other Obligations of the Borrower, including, but not limited to, the other
amounts owed to the Lenders, the Swingline Lender and the Agent under this
Agreement, the Notes or any of the other Loan Documents shall become
immediately and automatically due and payable by the Borrower without
presentment, demand, protest, or other notice of any kind, all of which are
expressly waived by the Borrower and (B) each of the Commitments, the
obligation of the Lenders to make Revolving Loans, the Swingline Commitment and
the obligation of the Swingline Lender to make Swingline Loans hereunder, shall
immediately and automatically terminate.
(ii) Optional. If any other Event of Default shall have occurred and
be continuing, the Agent may, and at the direction of the Requisite Lenders
shall: (I) declare (1) the principal of, and accrued interest on, the Loans
and the Notes at the time outstanding and (2) all of the other Obligations,
including, but not limited to, the other amounts owed to the Lenders and the
Agent under this Agreement, the Notes or any of the other Loan Documents 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 by the Borrower and (II) terminate the
Commitments and the obligation of the Lenders to make Revolving Loans
hereunder. Further, if the Agent has exercised any of the rights provided
under the preceding sentence, the Swingline Lender shall: (x) declare the
principal of, and accrued interest on, the Swingline Loans and the Swingline
Note at the time outstanding, and all of the other Obligations owing to the
Swingline Lender, 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 by the Borrower and
(y) terminate the Swingline Commitment and the obligation of the Swingline
Lender to make Swingline Loans.
(b) Loan Documents. The Requisite Lenders may direct the Agent to, and
the Agent if so directed shall, exercise any and all of its rights under any
and all of the other Loan Documents.
(c) Applicable Law. The Requisite Lenders may direct the Agent to, and
the Agent if so directed shall, exercise all other rights and remedies it may
have under any Applicable Law.
(d) Appointment of Receiver. To the extent permitted by Applicable Law,
the Agent and the Lenders shall be entitled to the appointment of a receiver
for the assets and properties of the Borrower and its Subsidiaries, without
notice of any kind whatsoever and without regard to the adequacy of any
security for the Obligations or the solvency of any party bound for its
payment, to take possession of all or any portion of the business operations of
the Borrower and its Subsidiaries and to exercise such power as the court shall
confer upon such receiver.
Section 10.3. Remedies Upon Certain Defaults.
Upon the occurrence of a Default specified in Sections 10.1.(f) or 10.1.(g),
the Commitments shall immediately and automatically terminate.
Section 10.4. Allocation of Proceeds.
If an Event of Default shall have occurred and be continuing and the
maturity of the Notes has been accelerated, all payments received by the Agent
under any of the Loan Documents, in respect of any principal of or interest on
the Obligations or any other amounts payable by the Borrower hereunder or
thereunder, shall be applied by the Agent in the following order and
priority:(a) amounts due to
the Agent and the Lenders in respect of Fees and expenses due under Section
12.2.;
(b) payments of interest on Swingline Loans;
(c) payments of interest on all other Loans, to be applied for the ratable
benefit of the Lenders;(d) payments of principal of Swingline Loans;
(e) payments of principal of Loans, to be applied for the ratable benefit of
the Lenders;(f) amounts
due to the Agent and the Lenders pursuant to Sections 11.7. and 12.10.;(g)
payments of all other amounts due under any of the Loan Documents, if any, to
be applied for the ratable benefit of the Lenders; and(h) any amount remaining
after application as provided above, shall be paid to the Borrower or whomever
else may be legally entitled thereto.
Section 10.5. Performance by Agent.
If the Borrower shall fail to perform any covenant, duty or agreement
contained in any of the Loan Documents, the Agent may perform or attempt to
perform such covenant, duty or agreement on behalf of the Borrower after the
expiration of any cure or grace periods set forth herein. In such event, the
Borrower shall, at the request of the Agent, promptly pay any amount reasonably
expended by the Agent in such performance or attempted performance to the
Agent, together with interest thereon at the applicable Post-Default Rate from
the date of such expenditure until paid. Notwithstanding the foregoing,
neither the Agent nor any Lender shall have any liability or responsibility
whatsoever for the performance of any obligation of the Borrower under this
Agreement or any other Loan Document.
Section 10.6. Rights Cumulative.
The rights and remedies of the Agent and the Lenders under this Agreement
and each of the other Loan Documents shall be cumulative and not exclusive of
any rights or remedies which any of them may otherwise have under Applicable
Law. In exercising their respective rights and remedies the Agent and the
Lenders may be selective and no failure or delay by the Agent or any of the
Lenders in exercising any right shall operate as a waiver of it, nor shall any
single or partial exercise of any power or right preclude its other or further
exercise or the exercise of any other power or right.
Section 10.7. Recision of Acceleration by Requisite Lenders.
If at any time after acceleration of the maturity of the Obligations, the
Borrower shall pay all arrears of interest and all payments on account of
principal of the Obligations which shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by
Applicable Law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Defaults (other than nonpayment of principal of
and accrued interest on the Obligations due and payable solely by virtue of
acceleration) shall be remedied or waived to the satisfaction of the
Supermajority Lenders, then by written notice to the Borrower, the
Supermajority Lenders may elect, in the sole discretion of such Supermajority
Lenders, to rescind and annul the acceleration and its consequences; but such
action shall not affect any subsequent Default or Event of Default or impair
any right or remedy consequent thereon. The provisions of the preceding
sentence are intended merely to bind the Lenders to a decision which may be
made at the election of the Supermajority Lenders; they are not intended to
benefit the Borrower and do not give the Borrower the right to require the
Lenders to rescind or annul any acceleration hereunder, even if the conditions
set forth herein are satisfied.
Article XI. The Agent
Section 11.1. Authorization and Action.
Each Lender hereby appoints and authorizes the Agent to take such action as
agent on such Lender's behalf and to exercise such powers under this Agreement
and the other Loan Documents as are specifically delegated to the Agent by the
terms and thereof, together with such powers as are reasonably incidental
thereto. The Agent shall administer the Loans in the same manner that the
Agent administers loans made for its own account. The relationship between the
Agent and the Lenders shall be that of principal and agent only and nothing
herein shall be construed to deem the Agent a trustee or fiduciary for any
Lender nor to impose on the Agent duties or obligations other than those
expressly provided for herein. At the request of a Lender, the Agent will
forward to each Lender copies or, where appropriate, originals of the documents
delivered to the Agent pursuant to this Agreement or the other Loan Documents.
The Agent will also furnish to any Lender, upon the request of such Lender, a
copy of any certificate or notice furnished to the Agent by the Borrower or any
other Affiliate of the Borrower, pursuant to this Agreement or any other Loan
Document not already delivered to such Lender pursuant to the terms of this
Agreement or any such other Loan Document. As to any matters not expressly
provided for by the Loan Documents (including, without limitation, enforcement
or collection of any of the Obligations), the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Requisite Lenders (or all of the
Lenders if explicitly required under any other provision of this Agreement),
and such instructions shall be binding upon all Lenders and all holders of any
of the Obligations; provided, however, that, notwithstanding anything in this
Agreement to the contrary, the Agent shall not be required to take any action
which is contrary to this Agreement or any other Loan Document or Applicable
Law. Not in limitation of the foregoing, the Agent shall not exercise any
right or remedy it or the Lenders may have under any Loan Document upon the
occurrence of a Default or an Event of Default unless the Requisite Lenders
have so directed the Agent to exercise such right or remedy.
Section 11.2. Agent's Reliance, Etc.
Notwithstanding any other provision of any Loan Document, including without
limitation, the second sentence of Section 11.1., neither the Agent nor any of
its directors, officers, agents, employees or counsel shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement, except for its or their own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, the Agent: (a)
may treat the payee of any Note as the holder thereof until the Agent receives
written notice of the assignment or transfer thereof signed by such payee and
in form satisfactory to the Agent; (b) may consult with legal counsel
(including its own counsel or counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender or any other Person and shall not be responsible
to any Lender or any other Person for any statements, warranties or
representations made by any Person in or in connection with this Agreement or
any other Loan Document; (d) shall not have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or
conditions of any of this Agreement or any other Loan Document or the
satisfaction of any conditions precedent under this Agreement or any Loan
Document on the part of the Borrower or other Persons or inspect the property,
books or records of the Borrower or any other Person; (e) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
other Loan Document, any other instrument or document furnished pursuant
thereto or any Collateral covered thereby or the perfection or priority of any
Lien in favor of the Agent on behalf of the Lenders in any such Collateral; and
(f) shall incur no liability under or in respect of this Agreement or any other
Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telephone or telecopy) believed by it to
be genuine and signed, sent or given by the proper party or parties.
Section 11.3. Notice of Defaults.
The Agent shall not be deemed to have knowledge or notice of the occurrence
of a Default or Event of Default unless the Agent has received notice from a
Lender or the Borrower referring to this Agreement, describing with reasonable
specificity such Default or Event of Default and stating that such notice is a
"notice of default." If any Lender becomes aware of any Default or Event of
Default, it shall promptly send to the Agent such a "notice of default."
Further, if the Agent receives such a "notice of default", the Agent shall give
prompt notice thereof to the Lenders.
Section 11.4. First Union as Lender.
First Union, as a Lender, shall have the same rights and powers under this
Agreement and any other Loan Document as any other Lender and may exercise the
same as though it were not the Agent; and the term "Lender" or "Lenders" shall,
unless otherwise expressly indicated, include First Union in each case in its
individual capacity. First Union and its affiliates may each accept deposits
from, maintain deposits or credit balances for, invest in, lend money to, act
as trustee under indentures of, serve as financial advisor to, and generally
engage in any kind of business with the Borrower, any Subsidiary or any other
affiliate thereof as if it were any other bank and without any duty to account
therefor to the other Lenders. Further, the Agent and any affiliate may accept
fees and other consideration from the Borrower for services in connection with
this Agreement and otherwise without having to account for the same to the
other Lenders.
Section 11.5. Approvals of Lenders.
All communications from the Agent to any Lender requesting such Lender's
determination, consent, approval or disapproval (a) shall be given in the form
of a written notice to such Lender, (b) shall be accompanied by a description
of the matter or issue as to which such determination, approval, consent or
disapproval is requested, or shall advise such Lender where information, if
any, regarding such matter or issue may be inspected, or shall otherwise
describe the matter or issue to be resolved, (c) shall include, if reasonably
requested by such Lender and to the extent not previously provided to such
Lender, written materials and a summary of all oral information provided to the
Agent by the Borrower in respect of the matter or issue to be resolved, and (d)
shall include the Agent's recommended course of action or determination in
respect thereof. Each Lender shall reply promptly, but in any event within ten
Business Days (or such lesser period as may be required under the Loan
Documents for the Agent to respond). Unless a Lender shall give written notice
to the Agent that it objects to the recommendation or determination of the
Agent (together with a written explanation of the reasons behind such
objection) within the applicable time period for reply, such Lender shall be
deemed to have conclusively approved of or consented to such recommendation or
determination.
Section 11.6. Lender Credit Decision, Etc.
Each Lender expressly acknowledges and agrees that neither the Agent nor any
of its officers, directors, employees, agents, counsel, attorneys-in-fact or
other affiliates has made any representations or warranties as to the financial
condition, operations, creditworthiness, solvency or other information
concerning the business or affairs of the Borrower, any Subsidiary or other
Person to such Lender and that no act by the Agent hereinafter taken, including
any review of the affairs of the Borrower, shall be deemed to constitute any
such representation or warranty by the Agent to any Lender. Each Lender
acknowledges that it has, independently and without reliance upon the Agent,
any other Lender or counsel to the Agent, or any of their respective officers,
directors, employees and agents, and based on the financial statements of the
Borrower, the Subsidiaries or any other Affiliate thereof, and inquiries of
such Persons, its independent due diligence of the business and affairs of the
Borrower, the Subsidiaries and other Persons, its review of the Loan Documents,
the legal opinions required to be delivered to it hereunder, the advice of its
own counsel and such other documents and information as it has deemed
appropriate, made its own credit and legal analysis and decision to enter into
this Agreement and the transaction contemplated hereby. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent,
any other Lender or counsel to the Agent or any of their respective officers,
directors, employees and agents, and based on such review, advice, documents
and information as it shall deem appropriate at the time, continue to make its
own decisions in taking or not taking action under the Loan Documents. Except
for notices, reports and other documents and information expressly required to
be furnished to the Lenders by the Agent under this Agreement or any of the
other Loan Documents, the Agent shall have no duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of the
Borrower, any Subsidiary or any other Affiliate thereof which may come into
possession of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or other affiliates. Each Lender acknowledges that the
Agent's legal counsel in connection with the transactions contemplated by this
Agreement is only acting as counsel to the Agent and is not acting as counsel
to such Lender.
Section 11.7. Indemnification of Agent.
Each Lender agrees to indemnify the Agent (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so) pro
rata in accordance with such Lender's respective Commitment Percentage, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may at any time be imposed on, incurred by, or asserted
against the Agent (in its capacity as "Agent" but not as a "Lender") in any way
relating to or arising out of the Loan Documents, any transaction contemplated
hereby or thereby or any action taken or omitted by the Agent under the Loan
Documents (collectively, "Indemnifiable Amounts"); provided, however, that no
Lender shall be liable for any portion of such Indemnifiable Amounts to the
extent resulting from the Agent's gross negligence or willful misconduct or if
the Agent fails to follow the written direction of the Requisite Lenders unless
such failure is pursuant to the advice of counsel that following such written
direction would likely violate Applicable Law or the terms of the Loan
Documents and of which the Lenders have received notice. Without limiting the
generality of the foregoing, each Lender agrees to reimburse the Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including
reasonable counsel fees of the counsel(s) of the Agent's own choosing)
reasonably incurred by the Agent in connection with the preparation, execution,
administration, or enforcement of, or legal advice with respect to the rights
or responsibilities of the parties under, the Loan Documents, any suit or
action brought by the Agent to enforce the terms of the Loan Documents and/or
collect any Obligations, any "lender liability" suit or claim brought against
the Agent and/or the Lenders, and any claim or suit brought against the Agent
and/or the Lenders arising under any Environmental Laws, to the extent that the
Agent is not reimbursed for such expenses by the Borrower. Such out-of-pocket
expenses (including counsel fees) shall be advanced by the Lenders on the
request of the Agent notwithstanding any claim or assertion that the Agent is
not entitled to indemnification hereunder (other than any claim or assertion
that the Agent is not entitled to such out-of-pocket expenses as a result of
its gross negligence or willful misconduct or failure to follow the written
direction of the Requisite Lenders in the absence of the advice of counsel
referred to above) upon receipt of an undertaking by the Agent that the Agent
will reimburse the Lenders if it is actually and finally determined by a court
of competent jurisdiction that the Agent is not so entitled to indemnification.
The agreements in this Section shall survive the payment of the Loans and all
other amounts payable hereunder or under the other Loan Documents and the
termination of this Agreement. If the Borrower shall reimburse the Agent for
any Indemnifiable Amount following payment by any Lender to the Agent in
respect of such Indemnifiable Amount pursuant to this Section, the Agent shall
share such reimbursement on a ratable basis with each Lender making any such
payment.
Section 11.8. Successor Agent.
The Agent may resign at any time as Agent under the Loan Documents by giving
written notice thereof to the Lenders and the Borrower. In the event of a
material breach of its duties hereunder, the Agent may be removed as Agent
under the Loan Documents at any time by the Requisite Lenders upon 30-day's
prior notice. Upon any such resignation or removal, the Requisite Lenders
shall have the right to appoint a successor Agent which appointment shall,
provided no Default or Event of Default shall have occurred and be continuing,
be subject to the Borrower's approval, which approval shall not be unreasonably
withheld or delayed (except that Borrower shall, in all events, be deemed to
have approved each Lender as a successor Agent). If no successor Agent shall
have been so appointed by the Requisite Lenders, and shall have accepted such
appointment, within thirty days after the resigning Agent's giving of notice of
resignation or the Requisite Lenders' removal of the resigning Agent, then the
resigning or removed Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be a Lender, if any Lender shall be willing to serve, and
otherwise shall be a commercial bank having total combined assets of at least
$50,000,000,000. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the resigning
Agent, and the retiring Agent shall be discharged from its duties and
obligations under the Loan Documents arising or accruing thereafter. After any
resigning Agent's resignation or removal hereunder as Agent, the provisions of
this Article XI. shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under the Loan Documents.
Section 11.9. Syndication and Documentation Agents.
Neither the Syndication Agent nor the Documentation Agent in such respective
capacities, assumes any responsibility or obligation hereunder, including,
without limitation, for servicing, enforcement or collection of any of the
Loans, nor any duties as an agent hereunder for the Lenders. The titles of
"Syndication Agent" and "Documentation Agent" are solely honorific and imply no
fiduciary responsibility on the part of either the Syndication Agent or the
Documentation Agent, in its respective capacity as such, to the Agent, the
Borrower or any Lender and the use of such titles does not impose on either
Syndication Agent or the Documentation Agent any duties or obligations greater
than those of any other Lender or entitle either Syndication Agent or the
Documentation Agent to any rights other than those to which any other Lender is
entitled.
Article XII. Miscellaneous
Section 12.1. Notices.
Unless otherwise provided herein, communications provided for hereunder
shall be in writing and shall be mailed, telecopied or delivered as follows:
If to the Borrower:
Merry Land & Investment Company, Inc.
624 Ellis Street
Augusta, Georgia 30903
Attention: Vice President - Finance
Telecopy Number: (706) 722-4838
Telephone Number: (706) 722-6756
If to the Agent:
First Union National Bank
Atlanta Real Estate Lending Group
999 Peachtree Street, 6th Floor
Atlanta, Georgia 30309
Attention: Ms. Susan T. Miller
Telecopy Number: (404) 225-4113
Telephone Number: (404) 225-4030
and
First Union Capital Markets Group
One First Union Center, DC-6
6th Floor
Charlotte, North Carolina 28288-0166
Attention: Ms. Julie Hudson
Telecopy Number: (706) 383-6205
Telephone Number: (706) 383-7189
If to a Lender:
To such Lender's address or telecopy number, as applicable, set forth on its
signature page hereto or in the applicable Assignment and Acceptance Agreement.
or, as to each party at such other address as shall be designated by such party
in a written notice to the other parties delivered in compliance with this
Section. All such notices and other communications shall be effective (i) if
mailed, when received; (ii) if telecopied, when transmitted; or (iii) if hand
delivered, when delivered. Notwithstanding the immediately preceding sentence,
all notices or communications to the Agent or any Lender under Article II.
shall be effective only when actually received. Neither the Agent nor any
Lender shall incur any liability to the Borrower (nor shall the Agent incur any
liability to the Lenders) for acting upon any telephonic notice referred to in
this Agreement which the Agent or such Lender, as the case may be, believes in
good faith to have been given by a Person authorized to deliver such notice or
for otherwise acting in good faith under hereunder.
Section 12.2. Expenses.
The Borrower agrees (a) to pay or reimburse the Agent for all of its
reasonable out-of-pocket costs and expenses incurred in connection with the
preparation, negotiation and execution of, and any amendment, supplement or
modification to, any of the Loan Documents (including due diligence expenses
and travel expenses relating to closing), and the consummation of the
transactions contemplated thereby, including the reasonable fees and
disbursements of counsel to the Agent, (b) to pay or reimburse the Agent and
the Lenders for all their costs and expenses incurred in connection with the
enforcement or preservation of any rights under the Loan Documents, including
the reasonable fees and disbursements of their respective counsel (including
the allocated fees and expenses of in-house counsel) and any payments in
indemnification or otherwise payable by the Lenders to the Agent pursuant to
the Loan Documents, (c) to pay, indemnify and hold the Agent and the Lenders
harmless from any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any failure to pay or delay in paying,
documentary, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of any of the Loan Documents, or consummation of any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
any Loan Document and (d) to the extent not already covered by any of the
preceding subsections, to pay or reimburse the Agent and the Lenders for all
their costs and expenses incurred in connection with any bankruptcy or other
proceeding of the type described in Sections 10.1.(e) or 10.1.(f), including
the reasonable fees and disbursements of counsel to the Agent and any Lender,
whether such fees and expenses are incurred prior to, during or after the
commencement of such proceeding or the confirmation or conclusion of any such
proceeding.
Section 12.3 Setoff.
Subject to Section 3.3. and in addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
the Agent, each Lender and each Participant is 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,
including, but not limited to, indebtedness evidenced by certificates of
deposit, whether matured or unmatured) and any other indebtedness at any time
held or owing by the Agent, such Lender or any affiliate of the Agent or such
Lender, to or for the credit or the account of the Borrower against and on
account of any of the Obligations, irrespective of whether or not any or all of
the Loans and all other Obligations have been declared to be due and payable as
permitted by Section 10.2., and although such obligations shall be contingent
or unmatured.
Section 12.4. Arbitration.
Upon demand of any party hereto, whether made before or after institution of
any judicial proceeding, any claim or controversy arising out of, or relating
to this Agreement or any other Loan Documents ("Disputes") between or among any
such parties shall be resolved by binding arbitration conducted under and
governed by the Commercial Financial Disputes Arbitration Rules (the
"Arbitration Rules") of the American Arbitration Association (the "AAA") and
the Federal Arbitration Act. Disputes may include, without limitation, tort
claims, counterclaims, disputes as to whether a matter is subject to
arbitration, claims brought as class actions, and claims arising from Loan
Documents executed in the future. A judgment upon the award may be entered in
any court having jurisdiction. Notwithstanding the foregoing, this arbitration
provision does not apply to Disputes under or related to Interest Rate
Agreements to which any Lender is a party. All arbitration hearings shall be
conducted in Charlotte, North Carolina. A hearing shall begin within 90 days
of demand for arbitration and all hearings shall concluded within 120 days of
demand for arbitration. These time limitations may not be extended unless a
party shows cause for extension and then no more than a total extension of 60
days. The expedited procedures set forth in Rule 51 et. seq. of the
Arbitration Rules shall be applicable to claims of less than $1,000,000.
Arbitrators shall be licensed attorneys selected from the Commercial Financial
Dispute Arbitration Panel of the AAA. The parties do not waive any Applicable
Laws except as provided herein. Notwithstanding the preceding binding
arbitration provisions, the parties agree to preserve, without diminution, the
following remedies that the Agent or the Lenders may exercise before or after
an arbitration proceeding is brought. Subject to the other terms hereof, the
Agent and the Lenders shall have the right to proceed in any court of proper
jurisdiction or by self-help to exercise or prosecute the following remedies,
as applicable: (i) all rights to foreclose against any real or personal
property or other security by exercising a power of sale or under Applicable
Law by judicial foreclosure including a proceeding to confirm the sale; (ii)
all rights of self-help including peaceful occupation of real property and
collection of rents, set-off, and peaceful possession of personal property;
(iii) obtaining provisional or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment, appointment of receiver and filing an
involuntary bankruptcy proceeding; and (iv) when applicable, a judgment by
confession of judgment. Any claim or controversy with regard to parties
entitlement to such remedies is a Dispute. The parties hereto acknowledge that
by agreeing to binding arbitration they have irrevocably waived any right they
may have to a jury trial with regard to a Dispute.
Section 12.5. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
except that the Borrower may not assign or otherwise transfer any of its rights
under this Agreement without the prior written consent of all Lenders.
(b) Any Lender may make, carry or transfer Loans at, to or for the account
of, any of its branch offices or the office of an affiliate of such Lender
except to the extent such transfer would result in increased costs to the
Borrower.
(c) Any Lender may at any time grant to one or more banks or other
financial institutions, or solely with respect to participations in specific
Bid Rate Loans, any other Person that is not an individual (each such bank,
financial institution or other Person a "Participant") participating interests
in its Commitment or the Obligations owing to such Lender; provided, however,
(i) any such participating interest must be for a constant and not a varying
percentage interest, (ii) no Lender may grant a participating interest in its
Commitment, or if the Commitments have been terminated, the aggregate
outstanding principal balance of Notes held by it, in an amount less than
$10,000,000 and (iii) after giving effect to any such participation by a
Lender, the amount of its Commitment, or if the Commitments have been
terminated, the aggregate outstanding principal balance of Notes held by it, in
which it has not granted any participating interests must be at least
$10,000,000. Except as otherwise provided in Section 12.3., no Participant
shall have any rights or benefits under this Agreement or any other Loan
Document. In the event of any such grant by a Lender of a participating
interest to a Participant, such Lender shall remain responsible for the
performance of its obligations hereunder, and the Borrower and the Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Any agreement pursuant
to which any Lender may grant such a participating interest shall provide that
such Lender shall retain the sole right and responsibility to enforce the
obligations of the Borrower hereunder including, without limitation, the right
to approve any amendment, modification or waiver of any provision of this
Agreement; provided, however, such Lender may agree with the Participant that
it will not, without the consent of the Participant, agree to (i) increase, or
extend the term or extend the time or waive any requirement for the reduction
or termination of, such Lender's Commitment, (ii) extend the date fixed for the
payment of principal of or interest on the Loans or portions thereof owing to
such Lender, (iii) reduce the amount of any such payment of principal, or (iv)
reduce the rate at which interest is payable thereon. An assignment or other
transfer which is not permitted by subsection (d) or (e) below shall be given
effect for purposes of this Agreement only to the extent of a participating
interest granted in accordance with this subsection (c). The selling Lender
shall notify the Agent and the Borrower of the sale of any participation
hereunder and the terms thereof.
(d) Any Lender may with the prior written consent of the Agent and, so
long as no Default or Event of Default shall have occurred and be continuing,
the Borrower (which consent, in the case of the Agent and the Borrower, shall
not be unreasonably withheld) assign to one or more Eligible Assignees (each an
"Assignee") all or a portion of its Commitment and its other rights and
obligations under this Agreement and the Notes; provided, however, (i) no such
consent by the Borrower or the Agent shall be required in the case of any
assignment to another Lender or any affiliate of such Lender or another Lender;
(ii) any partial assignment shall be in an amount at least equal to $10,000,000
and after giving effect to such assignment the assigning Lender retains a
Commitment, or if the Commitments have been terminated, holds Notes having an
aggregate outstanding principal balance, of at least $10,000,000; (iii) each
such assignment shall be effected by means of an Assignment and Acceptance
Agreement and (iv) the Agent, in its capacity as a Lender, shall not effect any
assignment of its Commitment, if after giving effect thereto, the amount of
such Commitment would be less than the amount of any other Lender's Commitment.
Upon execution and delivery of such instrument and payment by such Assignee to
such transferor Lender of an amount equal to the purchase price agreed between
such transferor Lender and such Assignee, such Assignee shall be deemed to be a
Lender party to this Agreement as of the effective date of the Assignment and
Acceptance Agreement and shall have all the rights and obligations of a Lender
with a Commitment as set forth in such Assignment and Acceptance Agreement, and
the transferor Lender shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall be
required. Upon the consummation of any assignment pursuant to this subsection
(d), the transferor Lender, the Agent and the Borrower shall make appropriate
arrangements so that new Notes are issued to the Assignee and such transferor
Lender, as appropriate. In connection with any such assignment, the transferor
Lender shall pay to the Agent an administrative fee for processing such
assignment in the amount of $3,000; provided, however, such fee shall not be
payable in connection with the first assignment of all or any portion of the
Commitment of any Lender initially a party to this Agreement to an affiliate of
such Lender.
(e) Any Lender (each, a "Designating Lender") may at any time while the
Borrower has been assigned an Investment Grade Rating from either S&P or
Moody's designate one Designated Lender to fund Bid Rate Loans on behalf of
such Designating Lender subject to the terms of this subsection (e) and the
provisions in the immediately preceding subsections (c) and (d) shall not apply
to such designation. No Lender may designate more than one Designated Lender.
The parties to each such designation shall execute and deliver to the Agent for
its acceptance a Designation Agreement. Upon such receipt of an appropriately
completed Designation Agreement executed by a Designating Lender and a designee
representing that it is a Designated Lender, the Agent will accept such
Designation Agreement and give prompt notice thereof to the Borrower,
whereupon, (i) the Borrower shall execute and deliver to the Designating Lender
a Designated Lender Note payable to the order of the Designated Lender, (ii)
from and after the effective date specified in the Designation Agreement, the
Designated Lender shall become a party to this Agreement with a right to make
Bid Rate Loans on behalf of its Designating Lender pursuant to Section 2.2.
after the Borrower has accepted a Bid Rate Loan (or portion thereof) of the
Designating Lender, and (iii) the Designated Lender shall not be required to
make payments with respect to any obligations in this Agreement except to the
extent of excess cash flow of such Designated Lender which is not otherwise
required to repay obligations of such Designated Lender which are then due and
payable; provided, however, that regardless of such designation and assumption
by the Designated Lender, the Designating Lender shall be and remain obligated
to the Borrower, the Agent and the Lenders for each and every of the
obligations of the Designating Lender and its related Designated Lender with
respect to this Agreement, including, without limitation, any indemnification
obligations under Section 11.7. and any sums otherwise payable to the Borrower
by the Designated Lender. Each Designating Lender shall serve as the
administrative agent of the Designated Lender and shall on behalf of, and to
the exclusion of, the Designated Lender: (i) receive any and all payments made
for the benefit of the Designated Lender and (ii) give and receive all
communications and notices and take all actions hereunder, including, without
limitation, votes, approvals, waivers, consents and amendments under or
relating to this Agreement and the other Loan Documents. Any such notice,
communication, vote, approval, waiver, consent or amendment shall be signed by
the Designating Lender as administrative agent for the Designated Lender and
shall not be signed by the Designated Lender on its own behalf and shall be
binding on the Designated Lender to the same extent as if signed by the
Designated Lender on its own behalf. The Borrower, the Agent and the Lenders
may rely thereon without any requirement that the Designated Lender sign or
acknowledge the same. No Designated Lender may assign or transfer all or any
portion of its interest hereunder or under any other Loan Document, other than
assignments to the Designating Lender which originally designated such
Designated Lender. The Borrower, the Lenders and the Agent each hereby agrees
that it will not institute against any Designated Lender or join any other
Person in instituting against any Designated Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding under any
federal or state bankruptcy or similar law, until the later to occur of (x) one
year and one day after the payment in full of the latest maturing commercial
paper note issued by such Designated Lender and (y) the Termination Date.
(f) The Agent shall maintain at the Principal Office a copy of each
Assignment and Acceptance Agreement delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Commitment of each Lender from time to time (the "Register"). The Agent shall
give each Lender and the Borrower notice of the assignment by any Lender of its
rights as contemplated by this Section. 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 and copies
of each Assignment and Acceptance Agreement shall be available for inspection
by the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice to the Agent. Upon its receipt of an Assignment and
Acceptance Agreement executed by an assigning Lender, together with each Note
subject to such assignment (the "Surrendered Note"), the Agent shall, if such
Assignment and Acceptance Agreement has been completed and if the Agent
receives the processing and recording fee described in subsection (d) above,
(i) accept such Assignment and Acceptance Agreement, (ii) record the
information contained therein in the Register, and (iii) give prompt notice
thereof to the Borrower.
(g) In addition to the assignments and participations permitted under the
foregoing provisions of this Section, any Lender may assign and pledge all or
any portion of its Loans and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating Circular issued
by such Federal Reserve Bank, and such Loans and Notes shall be fully
transferable as provided therein. No such assignment shall release the
assigning Lender from its obligations hereunder.
(h) A Lender may furnish any information concerning the Borrower, or any
Subsidiaries in the possession of such Lender from time to time to Assignees
and Participants (including prospective Assignees and Participants) subject to
compliance with Section 12.9.
(i) Anything in this Section to the contrary notwithstanding, no Lender
may assign or participate any interest in any Loan held by it hereunder to the
Borrower or any Subsidiary or Affiliate of the Borrower.
(j) Each Lender agrees that, without the prior written consent of the
Borrower and the Agent, it will not make any assignment hereunder in any manner
or under any circumstances that would require registration or qualification of,
or filings in respect of, any Loan or Note under the Securities Act or any
other securities laws United States of America or of any other jurisdiction.
Section 12.6. Removal of Lenders.
If (a) a Lender requests compensation pursuant to Section 3.12. or Section
4.1. and the Requisite Lenders are not also doing the same, or (b) the
obligation of a Lender to make LIBOR Loans or to Continue, or to Convert Base
Rate Loans into, LIBOR Loans shall be suspended pursuant to Section 4.1.(b),
Section 4.2. or Section 4.3. but the obligation of the Requisite Lenders shall
not have been suspended under such Sections, the Borrower may either (A) demand
that such Lender (the "Affected Lender"), and upon such demand the Affected
Lender shall promptly, assign its Commitment and all of its Loans to an
Eligible Assignee subject to and in accordance with the provisions of Section
12.5.(d) for a purchase price equal to the aggregate principal balance of Loans
then owing to the Affected Lender plus any accrued but unpaid interest thereon,
accrued but unpaid Fees owing to the Affected Lender and any amounts owing the
Affected Lender under Section 4.4., or (B) pay to the Affected Lender the
aggregate principal balance of Loans then owing to the Affected Lender plus any
accrued but unpaid interest thereon, accrued but unpaid Fees owing to the
Affected Lender and any amounts owing the Affected Lender under Section 4.4.,
whereupon the Affected Lender shall no longer be a party hereto or have any
rights or obligations hereunder or under any of the other Loan Documents. Each
of the Agent and the Affected Lender shall reasonably cooperate in effectuating
the replacement of an Affected Lender under this Section, but at no time shall
the Agent, the Affected Lender or any other Lender be obligated in any way
whatsoever to initiate any such replacement or to assist in finding an Eligible
Assignee. The exercise by the Borrower of its rights under this Section shall
be at the Borrower's sole cost and expenses and at no cost or expense to the
Agent, the Affected Lender or any of the other Lenders. The terms of this
Section shall not in any way limit the Borrower's obligation to pay to any
Affected Lender compensation owing to such Affected Lender pursuant to Section
3.12. or Section 4.1.
Section 12.7. Amendments.
Except as otherwise expressly provided in this Agreement, any consent or
approval required or permitted by this Agreement or in any Loan Document to be
given by the Lenders may be given, and any term of this Agreement or of any
other Loan Document may be amended, and the performance or observance by the
Borrower or any Subsidiary of any terms of this Agreement or such other Loan
Document or the continuance of any Default or Event of Default may be waived
(either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Requisite
Lenders (and, in the case of an amendment to any Loan Document, the written
consent of the Borrower). Notwithstanding the foregoing, no amendment, waiver
or consent shall, unless in writing, and signed by all of the Lenders (or the
Agent at the written direction of all of the Lenders), do any of the following:
(i) increase the Commitments of the Lenders or subject the Lenders to any
additional obligations; (ii) reduce the principal of, or interest rates that
have accrued or that will be charged on the outstanding principal amount of,
any Loans or other Obligations; (iii) reduce the amount of any Fees payable
hereunder; (iv) postpone any date fixed for any payment of any principal of,
interest on, or Fees with respect to, any Loans or any other Obligations; (v)
change the Commitment Percentages; (vi) amend this Section or amend the
definitions of the terms used in this Agreement or the other Loan Documents
insofar as such definitions affect the substance of this Section; (vii) release
any Guarantor that is a Material Subsidiary from its obligations under its
Guaranty or (viii) modify the definition of the term "Requisite Lenders" or
"Supermajority Lenders" or modify in any other manner the number or percentage
of the Lenders required to make any determinations or waive any rights
hereunder or to modify any provision hereof. Notwithstanding the foregoing, no
amendment, waiver or consent shall, unless in writing and signed by the
Designating Lender on behalf of its Designated Lender affected thereby, (a)
subject such Designated Lender to any additional obligations, (b) reduce the
principal of, interest on, or other amounts due with respect to, the Designated
Lender Note made payable to such Designated Lender, or (c) postpone any date
fixed for any payment of principal of, or interest on, or other amounts due
with respect to the Designated Lender Note made payable to the Designated
Lender. Further, no amendment, waiver or consent unless in writing and signed
by the Agent, in addition to the Lenders required hereinabove to take such
action, shall affect the rights or duties of the Agent under this Agreement or
any of the other Loan Documents. Any amendment, waiver or consent relating to
Section 2.3. or the obligations of the Swingline Lender under this Agreement or
any other Loan Document shall, in addition to the Lenders required hereinabove
to take such action, require the written consent of the Swingline Lender. No
waiver shall extend to or affect any obligation not expressly waived or impair
any right consequent thereon and any amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose set forth
therein. No course of dealing or delay or omission on the part of the Agent or
any Lender in exercising any right shall operate as a waiver thereof or
otherwise be prejudicial thereto. Except as otherwise explicitly provided for
herein or in any other Loan Document, no notice to or demand upon the Borrower
shall entitle the Borrower to other or further notice or demand in similar or
other circumstances.
Section 12.8. Nonliability of Agent and Lenders.
The relationship between the Borrower and the Lenders and the Agent shall be
solely that of borrower and lender. Neither the Agent nor any Lender shall
have any fiduciary responsibilities to the Borrower and no provision in this
Agreement or in any of the other Loan Documents, and no course of dealing
between or among any of the parties hereto, shall be deemed to create any
fiduciary duty owing by the Agent or any Lender to any Lender, the Borrower or
any Subsidiary. Neither the Agent nor any Lender undertakes any responsibility
to the Borrower to review or inform the Borrower of any matter in connection
with any phase of the Borrower's business or operations.
Section 12.9. Confidentiality.
Except as otherwise provided by Applicable Law, the Agent and each Lender
shall utilize all non-public information obtained pursuant to the requirements
of this Agreement which has been identified as confidential or proprietary by
the Borrower in accordance with its customary procedure for handling
confidential information of this nature and in accordance with safe and sound
banking practices but in any event may make disclosure: (a) to any of their
respective affiliates (provided they shall agree to keep such information
confidential in accordance with the terms of this Section); (b) as reasonably
required by any bona fide Assignee, Participant or other transferee in
connection with the contemplated transfer of any Commitment or participations
therein as permitted hereunder (provided they shall agree to keep such
information confidential in accordance with the terms of this Section); (c) as
required by any Governmental Authority or representative thereof or pursuant to
legal process; (d) to the Agent's or such Lender's independent auditors and
other professional advisors (provided they shall be notified of the
confidential nature of the information); and (e) after the happening and during
the continuance of an Event of Default, to any other Person, in connection with
the exercise by the Agent or the Lenders of rights hereunder or under any of
the other Loan Documents.
Section 12.10. Indemnification.
(a) The Borrower shall and hereby agrees to indemnify, defend and hold
harmless the Agent, any affiliate of the Agent and each of the Lenders and
their respective directors, officers, shareholders, agents, employees and
counsel (each referred to herein as an "Indemnified Party") from and against
any and all losses, costs, claims, damages, liabilities, deficiencies,
judgments or expenses of every kind and nature (including, without limitation,
amounts paid in settlement, court costs and the fees and disbursements of
counsel incurred in connection with any litigation, investigation, claim or
proceeding or any advice rendered in connection therewith) (the foregoing items
referred to herein as "Claims and Expenses") incurred by an Indemnified Party
in connection with, arising out of, or by reason of, any suit, cause of action,
claim, arbitration, investigation or settlement, consent decree or other
proceeding (the foregoing referred to herein as an "Indemnity Proceeding")
which is in any way related directly or indirectly to: (i) this Agreement or
any other Loan Document or the transactions contemplated thereby; (ii) the
making of any Loans hereunder; (iii) any actual or proposed use by the Borrower
of the proceeds of the Loans; (iv) the Agent's or any Lender's entering into
this Agreement; (v) the fact that the Agent and the Lenders have established
the credit facility evidenced hereby in favor of the Borrower; (vi) the fact
that the Agent and the Lenders are creditors of the Borrower and have or are
alleged to have information regarding the financial condition, strategic plans
or business operations of the Borrower and the Subsidiaries; (vii) the fact
that the Agent and the Lenders are material creditors of the Borrower and are
alleged to influence directly or indirectly the business decisions or affairs
of the Borrower and the Subsidiaries or their financial condition; (viii) the
exercise of any right or remedy the Agent or the Lenders may have under this
Agreement or the other Loan Documents; provided, however, that the Borrower
shall not be obligated to indemnify any Indemnified Party for any acts or
omissions of such Indemnified Party in connection with matters described in
this clause (viii) that constitute gross negligence or willful misconduct; (ix)
any violation or non-compliance by the Borrower or any Subsidiary of any
Applicable Law (including any Environmental Law) including, but not limited to,
any Indemnity Proceeding commenced by (A) the Internal Revenue Service or state
taxing authority or (B) any Governmental Authority or other Person under any
Environmental Law, including any Indemnity Proceeding commenced by a
Governmental Authority or other Person seeking remedial or other action to
cause the Borrower or its Subsidiaries (or its respective properties) (or the
Agent and/or the Lenders as successors to the Borrower) to be in compliance
with such Environmental Laws.
(b) The Borrower's indemnification obligations under this Section shall
apply to all Indemnity Proceedings arising out of, or related to, the foregoing
whether or not an Indemnified Party is a named party in such Indemnity
Proceeding. In this connection, this indemnification shall cover all costs and
expenses of any Indemnified Party in connection with any deposition of any
Indemnified Party or compliance with any subpoena (including any subpoena
requesting the production of documents). This indemnification shall, among
other things, apply to any Indemnity Proceeding commenced by other creditors of
the Borrower or any Subsidiary, any shareholder of the Borrower or any
Subsidiary (whether such shareholder(s) are prosecuting such Indemnity
Proceeding in their individual capacity or derivately on behalf of the
Borrower), any account debtor of the Borrower or any Subsidiary or by any
Governmental Authority. This indemnification shall apply to any Indemnity
Proceeding arising during the pendency of any bankruptcy proceeding filed by or
against the Borrower and/or any Subsidiary.
(c) All out-of-pocket fees and expenses of, and all amounts paid to third-
persons by, an Indemnified Party shall be advanced by the Borrower at the
request of such Indemnified Party notwithstanding any claim or assertion by the
Borrower that such Indemnified Party is not entitled to indemnification
hereunder upon receipt of an undertaking by such Indemnified Party that such
Indemnified Party will reimburse the Borrower if it is actually and finally
determined by a court of competent jurisdiction that such Indemnified Party is
not so entitled to indemnification hereunder.
(d) An Indemnified Party may conduct its own investigation and defense of,
and may formulate its own strategy with respect to, any Indemnified Proceeding
covered by this Section and, as provided above, all costs and expenses incurred
by the Indemnified Party shall be reimbursed by the Borrower. No action taken
by legal counsel chosen by an Indemnified Party in investigating or defending
against any such Indemnified Proceeding shall vitiate or in any way impair the
obligations and duties of the Borrower hereunder to indemnify and hold harmless
each such Indemnified Party; provided, however, that (i) if the Borrower is
required to indemnify an Indemnified Party pursuant hereto and (ii) the
Borrower has provided evidence reasonably satisfactory to such Indemnified
Party that the Borrower has the financial wherewithal to reimburse such
Indemnified Party for any amount paid by such Indemnified Party with respect to
such Indemnified Proceeding, such Indemnified Party shall not settle or
compromise any such Indemnified Proceeding without the prior written consent of
the Borrower (which consent shall not be unreasonably withheld or delayed).
(e) If and to the extent that the obligations of the Borrower hereunder
are unenforceable for any reason, the Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of such obligations which
is permissible under Applicable Law. The Borrower's obligations hereunder
shall survive any termination of this Agreement and the other Loan Documents
and the payment in full of the Obligations, and are in addition to, and not in
substitution of, any other of their obligations set forth in this Agreement or
any other Loan Document to which it is a party.
Section 12.11. Termination; Survival.
At such time as (a) all of the Commitments have been terminated, (b) none of
the Lenders is obligated any longer under this Agreement to make any Loans and
(c) all Obligations (other than obligations which survive as provided in the
following sentence) have been paid and satisfied in full, this Agreement shall
terminate. Notwithstanding any termination of this Agreement, or of the other
Loan Documents, the indemnities to which the Agent and the Lenders are entitled
under the provisions of Sections 11.7., 12.2. and 12.10. and any other
provision of this Agreement and the other Loan Documents, and the waivers of
jury trial and submission to jurisdictions contained in Section 12.4., 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 12.12. Severability of Provisions.
Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 12.13. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NORTH CAROLINA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE
FULLY PERFORMED, IN SUCH STATE.
Section 12.14. Counterparts.
This Agreement and any amendments, waivers, consents or supplements may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which counterparts together shall constitute but
one and the same instrument.
Section 12.15. Limitation of Liability.
Neither the Agent nor any Lender, nor any affiliate, officer, director,
employee, attorney, or agent of the Agent or any Lender shall have any
liability with respect to, and the Borrower hereby waives, releases, and agrees
not to sue any of them upon, any claim for any special, indirect, incidental,
or consequential damages suffered or incurred by the Borrower in connection
with, arising out of, or in any way related to, this Agreement or any of the
other Loan Documents, or any of the transactions contemplated by this Agreement
or any of the other Loan Documents. The Borrower hereby waives, releases, and
agrees not to sue the Agent or any Lender or any of the Agent's or any Lender's
affiliates, officers, directors, employees, attorneys, or agents for punitive
damages in respect of any claim in connection with, arising out of, or in any
way related to, this Agreement or any of the other Loan Documents, or any of
the transactions contemplated by this Agreement or financed hereby.
Section 12.16. Entire Agreement.
This Agreement, the Notes, and the other Loan Documents embody the final,
entire agreement among the parties hereto and supersede any and all prior
commitments, agreements, representations, and understandings, whether written
or oral, relating to the subject matter hereof and may not be contradicted or
varied by evidence of prior, contemporaneous, or subsequent oral agreements or
discussions of the parties hereto.
Section 12.17. Construction.
The Agent, the Borrower and each Lender acknowledge that each of them has
had the benefit of legal counsel of its own choice and has been afforded an
opportunity to review this Agreement and the other Loan Documents with its
legal counsel and that this Agreement and the other Loan Documents shall be
construed as if jointly drafted by the Agent, the Borrower and each Lender.
IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to
be executed by their authorized officers all as of the day and year first above
written.
Borrower:
Merry Land & Investment Company, Inc.
By: /s/
Name:
Title:
[Signature Page to Credit Agreement dated as of
September 16, 1997 with Merry Land & Investment Company, Inc.]
First Union National Bank, as Agent and as a Lender
By: /s/
Name:
Title:
Initial Commitment Amount:
$50,000,000
Lending Office (all Types of Loans):
First Union National Bank
One First Union Center
Charlotte, North Carolina 28288-0166
Attn: Julie Hudson
Telecopier: (704) 383-6205
Telephone: (704) 383-7189
[Signature Page to Credit Agreement dated as of
September 16, 1997 with Merry Land & Investment Company, Inc.]
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Syndication Agent
and as a Lender
By: /s/
Name:
Title:
Initial Commitment Amount:
$30,000,000
Lending Office (all Types of Loans):
Bank of America National Trust and Savings Association
231 South LaSalle Street, 12th Floor
Chicago, Illinois 60649
Attn: John Moore
Telecopier: (312) 974-4970
Telephone: (312) 828-1801
[Signature Page to Credit Agreement dated as of
September 16, 1997 with Merry Land & Investment Company, Inc.]
FLEET NATIONAL BANK, as Documentation Agent and as a Lender
By: /s/
Name:
Title:
Initial Commitment Amount:
$30,000,000
Lending Office (all Types of Loans):
Fleet National Bank
111 Westminster Street, RI MO 215
Providence, Rhode Island 02903
Attn: James B. McLaughlin
Telecopier: (401) 278-5166
Telephone: (401) 278-3247
[Signature Page to Credit Agreement dated as of
September 16, 1997 with Merry Land & Investment Company, Inc.]
BANK HAPOALIM B.M.
By: /s/
Name:
Title:
By: /s/
Name:
Title:
Initial Commitment Amount:
$20,000,000
Lending Office (all Types of Loans):
Bank Hapoalim B.M.
1177 Avenue of the Americas
New York, New York 10036
Attn: Laura Raffa
Telecopier: (212) 782-2187
Telephone: (212) 728-2177
[Signature Page to Credit Agreement dated as of
September 16, 1997 with Merry Land & Investment Company, Inc.]
CRESTAR BANK
By: /s/
Name:
Title:
Initial Commitment Amount:
$30,000,000
Lending Office (all Types of Loans):
Crestar Bank
8245 Boone Boulevard, Suite 820
Vienna, Virginina 22182
Attn: Donna M. Beames
Telecopier: (703) 902-9190
Telephone: (703) 902-9116
[Signature Page to Credit Agreement dated as of
September 16, 1997 with Merry Land & Investment Company, Inc.]
REGIONS BANK
By: /s/
Name:
Title:
Initial Commitment Amount:
$15,000,000
Lending Office (all Types of Loans):
Regions Bank
417 North 20th Street, 2nd Floor
Birmingham, Alabama 35208
Attn: James R. Beaird
Telecopier: (205) 326-7662
Telephone: (205) 326-7691
[Signature Page to Credit Agreement dated as of
September 16, 1997 with Merry Land & Investment Company, Inc.]
WACHOVIA BANK, N.A.
By: /s/
Name:
Title:
Initial Commitment Amount:
$25,000,000
Lending Office (all Types of Loans):
Wachovia Bank, N.A.
191 Peachtree Street
Atlanta, Georgia 30303
Attn: Mary F. Hughes
Telecopier: (404) 332-4066
Telephone: (404) 332-4836
CREDIT AGREEMENT
Dated as of September 16, 1997
by and among
Merry Land & Investment Company, Inc.,
as Borrower,
The financial institutions party hereto
and their assignees under Section 12.5.(a),
as Lenders,
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as Syndication Agent,
FLEET NATIONAL BANK,
as Documentation Agent,
and
First Union National Bank,
as Agent and as Arranger
<PAGE>
Merry Land & Investment Company, Inc.
Schedule 6.1.(b)
Ownership Structure
<TABLE>
<CAPTION>
Name Jurisdiction Owner % Ownership Material Sub
<S> <C> <C> <C> <C>
Merry Land & Investment Company, Georgia (PARENT)
Inc. (MLIC)
Merry Land Apartment Communities, Maryland MLIC 100% No
Inc. (MLAC)
ML Apartments Limited (MLAL) Maryland MLIC 100% Yes
ML Alabama Apartments Inc. Alabama MLIC 100% No
ML Tennessee Apartments LP Georgia MLAC/MLAL 1%(GP)/99%(LP) Yes
ML North Carolina Apartments LP Georgia MLAC/MLAL 1%(GP)/99%(LP) Yes
ML Texas Apartments LP Texas MLAC/MLAL 1%(GP)/99%(LP) Yes
MLA Inc. Georgia MLIC 100% No
</TABLE>
NOTE: Five other limited partnerships have been formed in anticipation of the
purchase of five apartment communities. These partnerships do not have any
assets. It is uncertain at this time if the purchase of these five apartment
communities will be consummated. For purposes of this Agreement, these five
other limited partnerships are not currently considered "Subsidiaries",
because they have no assets or liabilities.
<PAGE>
Merry Land & Investment Company, Inc.
Schedule 6.1.(f)
PART I
Ownership of Properties
<TABLE>
<CAPTION>
City State Property Occupancy
8/27/97
<S> <C> <C> <C>
Apartment Properties
Greensboro NC Adams Farm 86.0%
Tampa FL Audubon Village 99.8%
Tallahasse FL Augustine Club 97.7%
Orlando FL Auvers Village 98.5%
Ft. Myers FL Beach Club 96.9%
Atlanta GA Belmont Crossing 94.9%
Atlanta GA Belmont Landing 96.2%
Charlotte NC Berkshire Place 97.9%
Jacksonville FL Bermuda Cove 96.0%
Orlando FL Bishop Park 98.1%
Augusta GA Broadway 97.5%
Richmond VA Champions Club 97.2%
Atlanta GA Champions Park 99.1%
Atlanta GA Chatelaine 94.0%
High Point NC Chatham Wood 96.2%
Nashville TN Cherry Creek 98.0%
Jacksonville FL Claire Point 98.4%
Columbia MD Clarys Crossing 98.0%
Augusta GA Cobb House 95.2%
Ft. Myers FL Colony Place 97.7%
Orlando FL Conway Station 96.7%
Orlando FL Copper Terrace 95.0%
Ft. Lauderdale FL Country Club Place 96.1%
Ft. Worth TX Coventry at Cityview 96.0%
Melbourne FL Cypress Cove 96.9%
Jacksonville FL Deerbrook 97.2%
Raleigh NC Duraleigh Woods 92.3%
Charlotte NC English Hills 96.8%
Tampa FL Essex Place 98.6%
Tampa FL Falls 95.4%
Savannah GA Greentree 93.3%
Atlanta GA Gwinnett Crossing 93.7%
Atlanta GA Harvest Grove 96.3%
Greenville SC Haywood Point 96.3%
Richmond VA Hickory Creek 99.3%
Columbia SC Hollows 96.7%
Charlotte NC Hunt Club 97.3%
Savannah GA Huntington 95.2%
Daytona Beach FL Indigo Plantation 93.8%
Charlotte NC Kimmerly Glen 97.7%
Charlotte NC Lake Point 94.9%
Miami FL Lakeridge 97.7%
Memphis TN Landings 97.6%
Atlanta GA Lexington Glen 96.3%
Orlando FL Lexington Park 96.4%
Tampa FL Lofton Place 98.9%
Savannah GA Long Point 66.7%
Dallas TX Madison at Cedar Springs 98.2%
Dallas TX Madison at Chase Oaks 96.8%
Ft. Lauderdale FL Madison at Coral Square 97.9%
Atlanta GA Madison at River Sound 55.0%
Dallas TX Madison at Round Grove 92.8%
Austin TX Madison at Stone Creek 96.7%
Austin TX Madison at the Arboretum 93.8%
Dallas TX Madison on Melrose 96.5%
Dallas TX Madison on Parkway 93.6%
Savannah GA Magnolia Villas 94.4%
Ft. Lauderdale FL Mariner Club 93.8%
Savannah GA Marsh Cove 97.3%
Orlando FL Mission Bay 98.7%
Raleigh NC Misty Woods 96.4%
Charlotte NC Oaks 95.9%
Tallahasse FL Plantations at Killearn 97.8%
Charlotte NC Pointe 95.0%
Ft. Myers FL Polos East 99.4%
Jacksonville FL Princeton Square 96.5%
Tampa FL Promenade 99.7%
Austin TX Quarry Lakes 99.3%
Charleston SC Quarterdeck 99.1%
Houston TX Ranchstone 99.1%
Charlotte NC Regency 89.9%
Jacksonville FL Royal Oaks 92.6%
Raleigh NC Sailboat Bay 97.4%
Austin TX Sedona Springs 96.5%
Atlanta GA Shadow Lake 96.9%
Birmingham AL Shoal Run 96.4%
Raleigh NC Sommerset Place 97.2%
Augusta GA South Augusta 57.3%
Jacksonville FL Spicewood Springs 94.9%
Charlotte NC Steeplechase 96.0%
Charleston SC Summit Place 99.1%
Atlanta GA Sweetwater Glen 95.0%
Augusta GA Telfair Square 85.7%
Houston TX The Palms at South Shore 99.0%
Raleigh NC Timber Hollow 100.0%
Jacksonville FL Timberwalk 97.5%
Orlando FL Valencia Plantation 100.0%
Ft. Myers FL Viridian Lake 95.9%
Jacksonville FL Waterford 97.5%
Nashville TN Waterford Place 98.3%
W. Palm Beach FL Waterford Village 98.7%
Charleston SC Welleby Lake 91.8%
Savannah GA West Wind Landing 98.4%
Atlanta GA Willow Trail 99.1%
Atlanta GA Windridge 96.0%
Charleston SC Windsor Place 98.7%
Augusta GA Woodbine West 100.0
Augusta GA Woodcrest 85.1%
Augusta GA Woodknoll 98.1%
Commercial Properties
Augusta GA Augusta Bldg Supply 100.0%
Augusta GA Commerce Building 0.0%
Augusta GA Convention Center 0.0%
</TABLE>
<PAGE>
Merry Land & Investment Company, Inc.
Schedule 6.1.(f)
PART I
<TABLE>
<CAPTION>
Ownership of Properties
Occupancy
City State Property 8/27/97
<S> <C> <C> <C>
Augusta GA 325 Eighth Street 0.0%
Augusta GA 624 Ellis Street Leonard 60.0%
Building
Thomson GA Thomson Warehouse 0.0%
</TABLE>
Dispositions
NONE
<PAGE>
Merry Land & Investment Company, Inc.
Schedule 6.1.(f)
PART II
Liens
<TABLE>
<CAPTION>
Property Rate Due Date Original Balance Current Balance
<S> <C> <C> <C> <C>
Estates @ Quarry Lake 9.7600% 7/1/01 $10,750,000 $10,681,667
Estates @ Quarry Lake 9.7600% 7/1/01 2,000,000 1,987,287
Mariners Club 7.7500% 10/15/02 9,600,000 9,600,000
Plantations @ Killearn 7.6250% 12/1/05 5,300,000 5,174,133
$27,650,000 $27,443,087
</TABLE>
<PAGE>
Merry Land & Investment Company, Inc.
Schedule 6.1.(g)
<TABLE>
<CAPTION>
Indebtedness 9/16/97
<S> <C>
6.625% Senior unsecured notes, 1999 $40,000,000
6.625% Senior unsecured notes, 2000 40,000,000
6.625% Senior unsecured notes, 2001 40,000,000
7.25% Senior unsecured notes, 2002 40,000,000
6.875% Senior unsecured notes, 2003 40,000,000
6.875% Senior unsecured notes, 2004 40,000,000
7.25% Senior unsecured notes, 2005 120,000,000
6.90% Senior unsecured notes, 2007 50,000,000
Total senior unsecured notes 410,000,000
9.76% Mortgage Notes, 2001 10,681,667
9.76% Mortgage Notes, 2001 1,987,287
7.75% Mortgage Note, 2002 9,600,000
7.625% Mortgage Note, 2002 5,174,133
Line of credit- First Union 0.00
27,443,087
Letters of Credit (various beneficiaries) 2,455,486
Total debt $439,898,573
</TABLE>
<PAGE>
Merry Land & Investment Company, Inc.
Schedule 6.1.(h)
Material Contracts
NONE
<PAGE>
MERRY LAND & INVESTMENT COMPANY, INC.
SCHEDULE 6.1(N)
ENVIRONMENTAL MATTERS
Reference is hereby made to the Borrower's discussion of Environmental Issues
(none of which is reasonably expected to have a Material Adverse Effect) in its
Form 10-K for the fiscal year ended December 31, 1995, reprinted as follows:
ENVIRONMENTAL ISSUES
LANDFILL SITES. Portions of the Company's land holdings in Richmond County,
Georgia, were used by the County for two municipal landfills during the late
1960's and early 1970's. One site is comprised of 71 acres and the other, the
"New Savannah Road Landfill", 96 acres. Both landfills were closed in the mid-
1970's and have been held by the Company and its predecessors as unimproved
land since that time. Although the sites were used primarily as municipal
landfills, there have been some reports that some industrial wastes may have
been disposed of at the sites.
In 1992, a contractor for the U.S. Environmental Protection Agency tested the
New Savannah Road landfill and found that some contamination was present in
soil samples but that sufficient data had not been taken to permit a complete
evaluation of the site. Accordingly, the contractor recommended that further
action be taken which the Company believes would consist principally of
additional testing of the site's groundwater and surface water. The Company
has had no further contact with the EPA or its agents since that time and the
site has not been included on the National Priorities List.
As a result of the EPA's review of the site in 1992, Merry Land retained an
environmental consultant to conduct studies of both sites. The consultant
reported that its studies of the sites did not reveal the presence on either
site of contaminants in amounts likely to result in the EPA listing either site
on the NPL. However, the studies were limited in nature and did not represent
an examination of all portions of the landfill sites. There can be no
assurance that a more complete investigation or further testing would not
reveal higher levels or different types of contamination at the sites.
In 1994, the Environmental Protection Division of the State of Georgia
published its initial Hazardous Site Inventory under its "Superfund" law, which
requires investigation, and if appropriate, remedial action of listed sites.
The 96-acre tract was included on this list. In the third quarter of 1994, the
Company accrued $200,000 as a non-recurring charge, representing the Company's
estimate of its share of the potential cost if further investigation of the
site was required. On April 24, 1995, the Georgia EPD notified the Company
that it had determined that there was insufficient evidence to include the site
on its Hazardous Site Inventory and removed the site from the inventory as of
that date. The Company reversed the $200,000 non-recurring charge in the
second quarter of 1995.
Should further investigation or remedial action be required for the landfill,
the Company believes that there will likely be other entities which will be
responsible for a portion of the cost of the investigation or remediation.
These entities include Richmond County, which operated the landfills, any
identified company or municipality whose waste was placed in the landfill, and
the company that owned the site at the time of the disposal of the waste.
There can be no assurances that the Company will not have material liability
with respect to these landfill sites.
SOUTHERN WOOD PIEDMONT-AUGUSTA SITE. A portion of the Company's land holdings
is located adjacent to a site formerly operated as a wood treatment facility by
Southern Wood Piedmont-Augusta. Southern Wood Piedmont-Augusta was the subject
of a property damage class action lawsuit arising from the alleged
contamination of that site and neighboring properties, including the Company
property. The Company received approximately $0.8 million in a 1990 settlement
of its property damage claim. In June 1992, the Company sold 16 acres of land
which may have been contaminated by Southern Piedmont-Augusta to that company.
The contamination at the Southern Wood Piedmont-Augusta site is the subject of
current remediation by Southern Wood Piedmont-Augusta under state oversight.
This includes remediation of contamination on the remaining Company property in
the area of the former plant. Although the Company expects that the state-
supervised efforts will sufficiently address the contamination on the Company's
property, there is no assurance that some remediation liability may not attach
to the Company.
<PAGE>
Merry Land & Investment Company, Inc.
Schedule 9.3.
Contingent Obligations
NONE
<PAGE>
Merry Land & Investment Company, Inc.
Schedule 9.4.
<TABLE>
<CAPTION>
Investments
Marketable Securities: 9/16/97
Shares Total Cost
<S> <C> <C>
Boddie Noell 141,500 $1,808,215
</TABLE>
<PAGE>
EXHIBIT A
FORM OF ASSIGNMENT AND Acceptance AGREEMENT
THIS ASSIGNMENT AND Acceptance AGREEMENT dated as of ___________, _____ (the
"Agreement") by and among _________________________ (the "Assignor"),
_________________________ (the "Assignee"), Merry Land & Investment Company,
Inc. (the "Borrower") and First Union National Bank, as Agent (the "Agent").
WHEREAS, the Assignor is a Lender under that certain Credit Agreement dated as
of September 16, 1997 (as amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"), by and among the Borrower, the
financial institutions party thereto and their assignees under Section 12.5.(d)
thereof (the "Lenders"), Bank of America National Trust and Savings
Association, as Syndication Agent, Fleet National Bank, as Documentation Agent,
and First Union National Bank, as Agent and Arranger;
WHEREAS, the Assignor desires to assign to the Assignee all or a portion of the
Assignor's Commitment under the Credit Agreement, all on the terms and
conditions set forth herein;
WHEREAS, the Borrower and the Agent consent to such assignment on the terms and
conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged by the parties hereto, the parties
hereto hereby agree as follows:
Section 1. Assignment.
(a)Subject to the terms and conditions of this Agreement and in consideration
of the payment to be made by the Assignee to the Assignor pursuant to Section 2
of this Agreement, effective as of ____________, _____ (the "Assignment Date"),
the Assignor hereby irrevocably sells, transfers and assigns to the Assignee,
without recourse, a $__________ interest (such interest being the "Assigned
Commitment") in and to the Assignor's Commitment and all of the other rights
and obligations of the Assignor under the Credit Agreement, such Assignor's
Revolving Note and the other Loan Documents (representing ______% in respect of
the aggregate amount of all Lenders' Commitments), including without
limitation, a principal amount of outstanding Revolving Loans equal to
$_________, all voting rights of the Assignor associated with the Assigned
Commitment, all rights to receive interest on such amount of Loans and all
commitment and other Fees with respect to the Assigned Commitment and other
rights of the Assignor under the Credit Agreement and the other Loan Documents
with respect to the Assigned Commitment, all as if the Assignee were an
original Lender under and signatory to the Credit Agreement having a Commitment
equal to such amount of the Assigned Commitment. The Assignee, subject to the
terms and conditions hereof, hereby assumes all obligations of the Assignor
with respect to the Assigned Commitment as if the Assignee were an original
Lender under and signatory to the Credit Agreement having a Commitment equal to
the Assigned Commitment, which obligations shall include, but shall not be
limited to, the obligation of the Assignor to make Revolving Loans to the
Borrower with respect to the Assigned Commitment and the obligation to
indemnify the Agent as provided therein (the foregoing enumerated obligations,
together with all other similar obligations more particularly set forth in the
Credit Agreement and the other Loan Documents, shall be referred to
hereinafter, collectively, as the "Assigned Obligations"). [In addition, the
Assignor hereby irrevocably sells, transfers and assigns to the Assignee,
without recourse, a $____________ interest in and to the Assignor's Bid Rate
Note, including without limitation, a principal amount of outstanding Bid Rate
Loans owing to the Assignor in an aggregate amount equal to $__________, all
rights to receive interest on such amount of Bid Rate Loans and other rights of
the Assignor under the Credit Agreement and the other Loan Documents with
respect to such Bid Rate Loans, all as if the Assignee had originally made such
amount of Bid Rate Loans to the Borrower. The obligations assigned pursuant to
the immediately preceding sentence shall constitute Assigned Obligations
hereunder.] The Assignor shall have no further duties or obligations with
respect to, and shall have no further interest in, the Assigned Obligations or
the Assigned Commitment from and after the Assignment Date.
(b)The assignment by the Assignor to the Assignee hereunder is without recourse
to the Assignor. The Assignee makes and confirms to the Agent, the Assignor,
and the other Lenders all of the representations, warranties and covenants of a
Lender under Article XI. of the Credit Agreement. Not in limitation of the
foregoing, the Assignee acknowledges and agrees that, except as set forth in
Section 4 below, the Assignor is making no representations or warranties with
respect to, and the Assignee hereby releases and discharges the Assignor for
any responsibility or liability for: (i) the present or future solvency or
financial condition of the Borrower or any of its Subsidiaries, (ii) any
representations, warranties, statements or information made or furnished by the
Borrower or any of its Subsidiaries in connection with the Credit Agreement or
otherwise, (iii) the validity, efficacy, sufficiency, or enforceability of the
Credit Agreement, any Loan Document or any other document or instrument
executed in connection therewith, or the collectibility of the Assigned
Obligations, (iv) the perfection, priority or validity of any Lien with respect
to any collateral at any time securing the Obligations or the Assigned
Obligations under the Notes or the Credit Agreement and (v) the performance or
failure to perform by the Borrower of any obligation under the Credit Agreement
or any other Loan Document. Further, the Assignee acknowledges that it has,
independently and without reliance upon the Agent, or on any affiliate or
subsidiary thereof, or any other Lender and based on the financial statements
supplied by the Borrower and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to become a
Lender under the Credit Agreement. The Assignee also acknowledges that it
will, independently 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 decisions in taking or not taking action
under the Credit Agreement or any Note or pursuant to any other obligation.
Except as expressly provided in the Credit Agreement, the Agent shall have no
duty or responsibility whatsoever, either initially or on a continuing basis,
to provide the Assignee with any credit or other information with respect to
the Borrower or any of its Subsidiaries or to notify the Assignee of any
Default or Event of Default. The Assignee has not relied on the Agent as to
any legal or factual matter in connection therewith or in connection with the
transactions contemplated thereunder.
Section 2. Payment by Assignee. In consideration of the assignment made
pursuant to Section 1 of this Agreement, the Assignee agrees to pay to the
Assignor on the Assignment Date, an amount equal to $_________ representing the
aggregate principal amount outstanding of the Revolving Loans owing to the
Assignor under the Credit Agreement and the other Loan Documents being assigned
hereby. [Further, the Assignee agrees to pay to the Assignor on the Assignment
Date, an amount equal to $____________ representing the aggregate principal
amount outstanding of the Bid Rate Loans owing to the Assignor under the Credit
Agreement and the other Loan Documents being assigned hereby.]
Section 3. Payments by Assignor. The Assignor agrees to pay to the Agent on
the Assignment Date the administration fee, if any, payable under the
applicable provisions of the Credit Agreement.
Section 4. Representations and Warranties of Assignor. The Assignor hereby
represents and warrants to the Assignee that (a) as of the Assignment Date (i)
the Assignor is a Lender under the Credit Agreement having a Commitment under
the Credit Agreement (without reduction by any assignments thereof which have
not yet become effective), equal to $___________ and that the Assignor is not
in default of its obligations under the Credit Agreement; and (ii) the
outstanding balance of Revolving Loans owing to the Assignor [and the
outstanding principal balance of Bid Rate Loans owing to the Assignor] (without
reduction by any assignments thereof which have not yet become effective) is
$__________ [and $__________ , respectively]; and (b) it is the legal and
beneficial owner of the Assigned Commitment which is free and clear of any
adverse claim created by the Assignor.
Section 5. Representations, Warranties and Agreements of Assignee. The
Assignee (a) represents and warrants that it is (i) legally authorized to enter
into this Agreement and (ii) an "accredited investor" (as such term is used in
Regulation D of the Securities Act) and an Eligible Assignee; (b) confirms that
it has received a copy of the Credit Agreement, together with copies of the
most recent financial statements delivered pursuant thereto and such other
documents and information (including without limitation the Loan Documents) as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Agreement; (c) appoints and authorizes the Agent to take such action
as contractual representative on its behalf and to exercise such powers under
the Loan Documents as are delegated to the Agent by the terms thereof together
with such powers as are reasonably incidental thereto; and (d) agrees that it
will become a party to and shall be bound by the Credit Agreement, the other
Loan Documents to which the other Lenders are a party on the Assignment Date
and will perform in accordance therewith all of the obligations which are
required to be performed by it as a Lender.
Section 6. Recording and Acknowledgment by the Agent. Following the execution
of this Agreement, the Assignor will deliver to the Agent (a) a duly executed
copy of this Agreement for acknowledgment and recording by the Agent and (b)
the Assignor's Revolving Note [and Bid Rate Note]. The Borrower agrees to
exchange such Note[s] for [a] new Note[s] as provided in Section 12.5.(d) of
the Credit Agreement. Upon such acknowledgment and recording, from and after
the Assignment 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 under the Credit Agreement for periods
prior to the Assignment Date directly between themselves.
[Include this Section only if Borrower's consent is required under Section
12.5.(d) Section 7. Agreements of the Borrower. The Borrower hereby agrees
that the Assignee shall be a Lender under the Credit Agreement having a
Commitment equal to the Assigned Commitment. The Borrower agrees that the
Assignee shall have all of the rights and remedies of a Lender under the Credit
Agreement and the other Loan Documents as if the Assignee were an original
Lender under and signatory to the Credit Agreement, including, but not limited
to, the right of a Lender to receive payments of principal and interest with
respect to the Assigned Obligations, and to the Revolving Loans made by the
Lenders after the date hereof and to receive the commitment and other Fees
payable to the Lenders as provided in the Credit Agreement. Further, the
Assignee shall be entitled to the indemnification provisions from the Borrower
in favor of the Lenders as provided in the Credit Agreement and the other Loan
Documents. The Borrower further agrees, upon the execution and delivery of
this Agreement, to execute in favor of the Assignee a Revolving Note in an
initial amount equal to the Assigned Commitment [and a Bid Rate Note].
Further, the Borrower agrees that, upon the execution and delivery of this
Agreement, the Borrower shall owe the Assigned Obligations to the Assignee as
if the Assignee were the Lender originally making such Loans and entering into
such other obligations. Upon receipt by the Assignor of the amounts due the
Assignor under Section 2, the Assignor agrees to surrender to the Borrower such
Assignor's Note[s].
Section 8. Addresses. The Assignee specifies as its address for notices and
its Lending Office for all Loans, the offices set forth below:
Notice Address:
Telephone No.:
Telecopy No.:
Domestic Lending Office:
Telephone No.:
Telecopy No.:
LIBOR Lending Office:
Telephone No.:
Telecopy No.:
Section 9. Payment Instructions. All payments to be made to the Assignee
under this Agreement by the Assignor, and all payments to be made to the
Assignee under the Credit Agreement, shall be made as provided in the Credit
Agreement in accordance with the following instructions:
Section 10. Effectiveness of Assignment. This Agreement, and the assignment
and assumption contemplated herein, shall not be effective until (a) this
Agreement is executed and delivered by each of the Assignor, the Assignee, the
Agent, and if required under Section 12.5.(d) of the Credit Agreement, the
Borrower, and (b) the payment to the Assignor of the amounts owing by the
Assignee pursuant to Section 2 hereof and (c) the payment to the Agent of the
amounts owing by the Assignor pursuant to Section 3 hereof. Upon recording and
acknowledgment of this Agreement by the Agent, from and after the Assignment
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Agreement, have the rights and obligations of a Lender
thereunder and (ii) the Assignor shall, to the extent provided in this
Agreement, relinquish its rights and be released from its obligations under the
Credit Agreement; provided, however, that if the Assignor does not assign its
entire interest under the Loan Documents, it shall remain a Lender entitled to
all of the benefits and subject to all of the obligations thereunder with
respect to its Commitment.
Section 11. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH CAROLINA APPLICABLE TO
CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
Section 12. Counterparts. This Agreement may be executed in any number of
counterparts each of which, when taken together, shall constitute one and the
same agreement.
Section 13. Headings. Section headings have been inserted herein for
convenience only and shall not be construed to be a part hereof.
Section 14. Amendments; Waivers. This Agreement may not be amended, changed,
waived or modified except by a writing executed by the Assignee and the
Assignor; provided, however, any amendment, waiver or consent which shall
affect the rights or duties of the [Borrower or the] Agent under this Agreement
shall not be effective unless signed by the [Borrower or the] Agent[, as
applicable].
Section 15. Entire Agreement. This Agreement embodies the entire agreement
between the Assignor and the Assignee with respect to the subject matter hereof
and supersedes all other prior arrangements and understandings relating to the
subject matter hereof.
Section 16. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.
Section 17. Definitions. Terms not otherwise defined herein are used herein
with the respective meanings given them in the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Assignment and
Acceptance Agreement as of the date and year first written above.
ASSIGNOR:
[Name of Assignor]
By: Name:
Title:
ASSIGNEE:
[Name of Assignee]
By: Name:
Title:
[Include signature of the Borrower only if required under Section 12.5.(d) of
the Credit Agreement]
Agreed and consented to as of the
date first written above.
BORROWER:
Merry Land & Investment Company, Inc.
By:
Name:
Title:
Accepted as of the date first written above.
AGENT:
First Union National Bank, as Agent
By:
Name:
Title:
EXHIBIT B
FORM OF designation AGREEMENT
THIS designation AGREEMENT dated as of ___________, _____ (the "Agreement") by
and among _________________________ (the "Designating Lender"),
_________________________ (the "Designated Lender") and First Union National
Bank, as Agent (the "Agent").
WHEREAS, the Designating Lender is a Lender under that certain Credit Agreement
dated as of September 16, 1997 (as amended, restated, supplemented or otherwise
modified from time to time, the "Credit Agreement"), by and among Merry Land &
Investment Company, Inc., a Georgia corporation (the "Borrower"), the financial
institutions party thereto and their assignees under Section 12.5.(d) thereof
(the "Lenders"), Bank of America National Trust and Savings Association, as
Syndication Agent, Fleet National Bank, as Documentation Agent, and First Union
National Bank, as Agent and Arranger;
WHEREAS, pursuant to Section 12.5.(e), the Designating Lender desires to
designate the Designated Lender as its "Designated Lender" under and as defined
in the Credit Agreement; and
WHEREAS, the Agent consents to such designation on the terms and conditions set
forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged by the parties hereto, the parties
hereto hereby agree as follows:
Section 1. Designation. Subject to the terms and conditions of this
Agreement, the Designating Lender hereby designates the Designated Lender, and
the Designated Lender hereby accepts such designation, to have a right to make
Bid Rate Loans on behalf of the Designating Lender pursuant to Section 2.2. of
the Credit Agreement. Any assignment by the Designating Lender to the
Designated Lender of rights to make a Bid Rate Loan shall only be effective at
the time such Bid Rate Loan is funded by the Designated Lender. The Designated
Lender, subject to the terms and conditions hereof, hereby agrees to make such
accepted Bid Rate Loans and to perform such other obligations as may be
required of it as a Designated Lender under the Credit Agreement.
Section 2. Designating Lender Not Discharged. Notwithstanding the designation
of the Designated Lender hereunder, the Designating Lender shall be and remain
obligated to the Borrower, the Agent and the Lenders for each and every of the
obligations of the Designating Lender and its related Designated Lender with
respect to the Credit Agreement and the other Loan Documents, including,
without limitation, any indemnification obligations under Section 11.7. and any
sums otherwise payable to the Borrower by the Designated Lender.
Section 3. No Representations by Designating Lender. The Designated Lender
makes no representation or warranty and, except as set forth in Section 8
below, assumes no responsibility pursuant to this Agreement with respect to (a)
any statements, warranties or representations made in or in connection with any
Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Loan Document or any other instrument
and document furnished pursuant thereto and (b) the financial condition of the
Borrower or any of its Subsidiaries or the performance or observance by the
Borrower of any of its obligations under any Loan Document or any other
instrument or document furnished pursuant thereto.
Section 4. Representations and Covenants of Designated Lender. The Designated
Lender makes and confirms to the Agent, the Designating Lender, and the other
Lenders all of the representations, warranties and covenants of a Lender under
Article XI. of the Credit Agreement. Not in limitation of the foregoing, the
Designated Lender (a) represents and warrants that it (i) is legally authorized
to enter into this Agreement; (ii) is an "accredited investor" (as such term is
used in Regulation D of the Securities Act) and (iii) meets the requirements of
a "Designated Lender" contained in the definition of such term contained in the
Credit Agreement; (b) confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant thereto and such other documents and information (including
without limitation the Loan Documents) as it has deemed appropriate to make its
own credit analysis and decision to enter into this Agreement; (c) confirms
that it has, independently and without reliance upon the Agent, or on any
affiliate thereof, or any other Lender and based on such financial statements
and such other documents and information, made its own credit analysis and
decision to become a Designated Lender under the Credit Agreement; (d) appoints
and authorizes the Agent to take such action as contractual representative on
its behalf and to exercise such powers under the Loan Documents as are
delegated to the Agent by the terms thereof together with such powers as are
reasonably incidental thereto; and (e) agrees that it will become a party to
and shall be bound by the Credit Agreement, the other Loan Documents to which
the other Lenders are a party on the Effective Date (as defined below) and will
perform in accordance therewith all of the obligations which are required to be
performed by it as a Designated Lender. The Designated Lender also
acknowledges that it will, independently 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 decisions in taking or
not taking action under the Credit Agreement or any Note or pursuant to any
other obligation. The Designated Lender acknowledges and agrees that except as
expressly required under the Credit Agreement, the Agent shall have no duty or
responsibility whatsoever, either initially or on a continuing basis, to
provide the Designated Lender with any credit or other information with respect
to the Borrower or any other Subsidiary or to notify the Designated Lender of
any Default or Event of Default.
Section 5. Appointment of Designating Lender as Attorney-In-Fact. The
Designated Lender hereby appoints the Designating Lender as the Designated
Lender's agent and attorney-in-fact, and grants to the Designating Lender an
irrevocable power of attorney, to receive any and all payments to be made for
the benefit of the Designated Lender under the Credit Agreement, to deliver and
receive all notices and other communications under the Credit Agreement and
other Loan Documents and to exercise on the Designated Lender's behalf all
rights to vote and to grant and make approvals, waivers, consents of amendments
to or under the Credit Agreement or other Loan Documents. Any document
executed by the Designating Lender on the Designated Lender's behalf in
connection with the Credit Agreement or other Loan Documents shall be binding
on the Designated Lender. The Borrower, the Agent and each of the Lender may
rely on and are beneficiaries of the preceding provisions.
Section 6. Acceptance by the Agent. Following the execution of this Agreement
by the Designating Lender and the Designated Lender, the Designating Lender
will deliver to the Agent a duly executed original of this Agreement for
acceptance by the Agent whereupon this Agreement shall become effective as of
the date of such acceptance or such other date as may be specified on the
signature page hereof (the "Effective Date").
Section 7. Effect of Designation. Upon such acceptance and recording by the
Agent, as of the Effective Date, the Designated Lender shall be a party to the
Credit Agreement with a right to make Bid Rate Loans as a Lender pursuant to
Section 2.2. of the Credit Agreement and the rights and obligations of a Lender
related thereto; provided, however, that the Designated Lender shall not be
required to make payments with respect to such obligations except to the extent
of excess cash flow of such Designated Lender which is not otherwise required
to repay obligations of such Designated Lender which are then due and payable.
Notwithstanding the foregoing, the Designating Lender, as administrative agent
for the Designated Lender, shall be and remain obligated to the Borrower, the
Agent and the Lenders for each and every of the obligations of the Designated
Lender and its Designating Lender with respect to the Credit Agreement.
Section 8. Indemnification of Designated Lender. The Designating Lender
unconditionally agrees to pay or reimburse the Designated Lender and save the
Designated Lender harmless against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed or asserted by any of the
parties to the Loan Documents against the Designated Lender, in its capacity as
such, in any way relating to or arising out of this Agreement or any other Loan
Documents or any action taken or omitted by the Designated Lender hereunder or
thereunder, provided that the Designating Lender shall not be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements if the same results from the
Designated Lender's gross negligence or willful misconduct.
Section 9. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH CAROLINA APPLICABLE TO
CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
Section 10. Counterparts. This Agreement may be executed in any number of
counterparts each of which, when taken together, shall constitute one and the
same agreement.
Section 11. Headings. Section headings have been inserted herein for
convenience only and shall not be construed to be a part hereof.
Section 12. Amendments; Waivers. This Agreement may not be amended, changed,
waived or modified except by a writing executed by the Designated Lender and
the Designating Lender; provided, however, any amendment, waiver or consent
which shall affect the rights or duties of the Agent under this Agreement shall
not be effective unless signed by the Agent.
Section 13. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.
Section 14. Definitions. Terms not otherwise defined herein are used herein
with the respective meanings given them in the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Designation
Agreement as of the date and year first written above.
Effective Date:
DESIGNATING LENDER:
[Name of Designating Lender]
By:
Name:
Title:
Designated Lender:
[Name of Designated Lender]
By:
Name:
Title:
Accepted as of the date first written above.
AGENT:
First Union National Bank, as Agent
By:
Name:
Title:
EXHIBIT C
FORM OF GUARANTY
THIS GUARANTY dated as of _______________ executed and delivered by
________________, a _____________ (the "Guarantor") in favor of (a) First Union
National Bank, in its capacity as Agent (the "Agent") for the Lenders under
that certain Credit Agreement dated as of September 16, 1997 (as the same may
be amended, restated, supplemented or otherwise modified from time to time in
accordance with its terms, the "Credit Agreement"), by and among Merry Land &
Investment Company, Inc., a Georgia corporation (the "Borrower"), the financial
institutions initially party thereto and their assignees under Section 12.5.(d)
thereof (the "Lenders"), Bank of America National Trust and Savings
Association, as Syndication Agent, Fleet National Bank, as Documentation Agent,
and First Union National Bank, as Agent and as Arranger and (b) the Lenders.
WHEREAS, pursuant to the Credit Agreement, the Agent and the Lenders have
agreed to make available to the Borrower certain financial accommodations on
the terms and conditions set forth in the Credit Agreement;
WHEREAS, the Borrower owns, directly or indirectly, __________ of the issued
and outstanding capital stock of, or other equity interest in, the Guarantor;
WHEREAS, the Borrower, the Guarantor and the other Subsidiaries of the
Borrower, though separate legal entities, are mutually dependent on each other
in the conduct of their respective businesses as an integrated operation and
have determined it to be in their mutual best interests to obtain financing
from the Agent and the Lenders through their collective efforts;
WHEREAS, the Guarantor acknowledges that it will receive direct and indirect
benefits from the Agent and the Lenders making such financial accommodations
available to the Borrower under the Credit Agreement and, accordingly, the
Guarantor is willing to guarantee the Borrower's obligations to the Agent and
the Lenders on the terms and conditions contained herein; and
WHEREAS, the Guarantor's execution and delivery of this Guaranty is a condition
to the Agent and the Lenders making, and continuing to make, such financial
accommodations to the Borrower.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Guarantor, the Guarantor
agrees as follows:
Section 1. Guaranty. The Guarantor hereby absolutely, irrevocably and
unconditionally guaranties the due and punctual payment and performance when
due, whether at stated maturity, by acceleration or otherwise, of all of the
following (collectively referred to as the "Guarantied Obligations"): (a) all
indebtedness and obligations owing by the Borrower to any Lender or the Agent
under or in connection with the Credit Agreement and any other Loan Document,
including without limitation, the repayment of all principal of the Revolving
Loans, the Term Loans and Bid Rate Loans, and the payment of all interest,
Fees, charges, attorneys fees and other amounts payable to any Lender or the
Agent thereunder or in connection therewith; (b) any and all extensions,
renewals, modifications, amendments or substitutions of the foregoing; (c) all
expenses, including, without limitation, attorneys' fees and disbursements,
that are incurred by the Lenders and the Agent in the enforcement of any of the
foregoing or any obligation of the Guarantor hereunder and (d) all other
Obligations.
Section 2. Guaranty of Payment and Not of Collection. This Guaranty is a
guaranty of payment, and not of collection, and a debt of the Guarantor for its
own account. Accordingly, the Lenders and the Agent shall not be obligated or
required before enforcing this Guaranty against the Guarantor: (a) to pursue
any right or remedy the Lenders or the Agent may have against the Borrower or
any other Person or commence any suit or other proceeding against the Borrower
or any other Person in any court or other tribunal; (b) to make any claim in a
liquidation or bankruptcy of the Borrower or any other Person; or (c) to make
demand of the Borrower or any other Person or to enforce or seek to enforce or
realize upon any collateral security held by the Lenders or the Agent which may
secure any of the Guarantied Obligations.
Section 3. Guaranty Absolute. The Guarantor guarantees that the Guarantied
Obligations will be paid strictly in accordance with the terms of the documents
evidencing the same, regardless of any Applicable Law now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Agent or the Lenders with respect thereto. The liability of the Guarantor
under this Guaranty shall be absolute and unconditional in accordance with its
terms and shall remain in full force and effect without regard to, and shall
not be released, suspended, discharged, terminated or otherwise affected by,
any circumstance or occurrence whatsoever, including without limitation, the
following (whether or not the Guarantor consents thereto or has notice
thereof):
(a)(i) any change in the amount, interest rate or due date or other term of any
of the Guarantied Obligations, (ii) any change in the time, place or manner of
payment of all or any portion of the Guarantied Obligations, (iii) any
amendment or waiver of, or consent to the departure from or other indulgence
with respect to, the Credit Agreement, any other Loan Document, or any other
document or instrument evidencing or relating to any Guarantied Obligations, or
(iv) any waiver, renewal, extension, addition, or supplement to, or deletion
from, or any other action or inaction under or in respect of, the Credit
Agreement, any of the other Loan Documents, or any other documents, instruments
or agreements relating to the Guarantied Obligations or any other instrument or
agreement referred to therein or evidencing any Guarantied Obligations or any
assignment or transfer of any of the foregoing;
(b)any lack of validity or enforceability of the Credit Agreement, any of the
other Loan Documents, or any other document, instrument or agreement referred
to therein or evidencing any Guarantied Obligations or any assignment or
transfer of any of the foregoing;
(c)any furnishing to the Agent or the Lenders of any additional security for
the Guarantied Obligations, or any sale, exchange, release or surrender of, or
realization on, any Collateral;
(d)any settlement or compromise of any of the Guarantied Obligations, any
security therefor, or any liability of any other party with respect to the
Guarantied Obligations, or any subordination of the payment of the Guarantied
Obligations to the payment of any other liability of the Borrower or any other
Loan Party;
(e)any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to the Guarantor,
the Borrower or any other Person, or any action taken with respect to this
Guaranty by any trustee or receiver, or by any court, in any such proceeding;
(f)any act or failure to act by the Borrower or any other Person which may
adversely affect the Guarantor's subrogation rights, if any, against the
Borrower to recover payments made under this Guaranty;
(g)any nonperfection of any security interest or other Lien on any collateral
securing in any way any of the Obligations;
(h)any application of sums paid by the Borrower or any other Person with
respect to the liabilities of the Borrower to the Agent or the Lenders,
regardless of what liabilities of the Borrower remain unpaid;
(i)any defect, limitation or insufficiency in the borrowing powers of the
Borrower or in the exercise thereof; or
(j)any other circumstance which might otherwise constitute a defense available
to, or a discharge of, the Guarantor hereunder.
Section 4. Action with Respect to Guarantied Obligations. The Lenders and the
Agent may, at any time and from time to time, without the consent of, or notice
to, the Guarantor, and without discharging the Guarantor from its obligations
hereunder take any and all actions described in Section 3 and may otherwise:
(a) amend, modify, alter or supplement the terms of any of the Guarantied
Obligations, including, but not limited to, extending or shortening the time of
payment of any of the Guarantied Obligations or changing the interest rate that
may accrue on any of the Guarantied Obligations; (b) amend, modify, alter or
supplement the Credit Agreement or any other Loan Document; (c) sell, exchange,
release or otherwise deal with all, or any part, of any Collateral; (d) release
any Loan Party or other Person liable in any manner for the payment or
collection of the Guarantied Obligations; (e) exercise, or refrain from
exercising, any rights against the Borrower or any other Person; and (f) apply
any sum, by whomsoever paid or however realized, to the Guarantied Obligations
in such order as the Lenders shall elect.
Section 5. Representations and Warranties. The Guarantor hereby makes to the
Agent and the Lenders all of the representations and warranties made by the
Borrower with respect to or in any way relating to the Guarantor in the Credit
Agreement and the other Loan Documents, as if the same were set forth herein in
full.
Section 6. Covenants. The Guarantor will comply with all covenants which the
Borrower is to cause the Guarantor to comply with under the terms of the Credit
Agreement or any of the other Loan Documents.
Section 7. Waiver. The Guarantor, to the fullest extent permitted by
Applicable Law, hereby waives notice of acceptance hereof or any presentment,
demand, protest or notice of any kind, and any other act or thing, or omission
or delay to do any other act or thing, which in any manner or to any extent
might vary the risk of the Guarantor or which otherwise might operate to
discharge the Guarantor from its obligations hereunder.
Section 8. Inability to Accelerate Loan. If the Agent and/or the Lenders are
prevented under Applicable Law or otherwise from demanding or accelerating
payment of any of the Guarantied Obligations by reason of any automatic stay or
otherwise, the Agent and/or the Lenders shall be entitled to receive from the
Guarantor, upon demand therefor, the sums which otherwise would have been due
had such demand or acceleration occurred.
Section 9. Reinstatement of Guarantied Obligations. If claim is ever made on
the Agent or any Lender for repayment or recovery of any amount or amounts
received in payment or on account of any of the Guarantied Obligations, and the
Agent or such Lender repays all or part of said amount by reason of (a) any
judgment, decree or order of any court or administrative body of competent
jurisdiction, or (b) any settlement or compromise of any such claim effected by
the Agent or such Lender with any such claimant (including the Borrower or a
trustee in bankruptcy for the Borrower), then and in such event the Guarantor
agrees that any such judgment, decree, order, settlement or compromise shall be
binding on it, notwithstanding any revocation hereof or the cancellation of the
Credit Agreement, any of the other Loan Documents, or any other instrument
evidencing any liability of the Borrower, and the Guarantor shall be and remain
liable to the Agent or such Lender for the amounts so repaid or recovered to
the same extent as if such amount had never originally been paid to the Agent
or such Lender.
Section 10. Subrogation. Upon the making by the Guarantor of any payment
hereunder for the account of the Borrower, the Guarantor shall be subrogated to
the rights of the payee against the Borrower; provided, however, that the
Guarantor shall not enforce any right or receive any payment by way of
subrogation or otherwise take any action in respect of any other claim or cause
of action the Guarantor may have against the Borrower arising by reason of any
payment or performance by the Guarantor pursuant to this Guaranty, unless and
until all of the Guarantied Obligations have been indefeasibly paid and
performed in full. If any amount shall be paid to the Guarantor on account of
or in respect of such subrogation rights or other claims or causes of action,
the Guarantor shall hold such amount in trust for the benefit of the Agent and
the Lenders and shall forthwith pay such amount to the Agent to be credited and
applied against the Guarantied Obligations, whether matured or unmatured, in
accordance with the terms of the Credit Agreement or to be held by the Agent as
collateral security for any Guarantied Obligations existing.
Section 11. Payments Free and Clear. All sums payable by the Guarantor
hereunder, whether of principal, interest, Fees, expenses, premiums or
otherwise, shall be paid in full, without set-off or counterclaim or any
deduction or withholding whatsoever (including any withholding Taxes or
liability imposed by any Governmental Authority, or any Applicable Law
promulgated thereby), and if the Guarantor is required by such Applicable Law
or by such Governmental Authority to make any such deduction or withholding,
the Guarantor shall pay to the Agent and the Lenders such additional amount as
will result in the receipt by the Agent and the Lenders of the full amount
payable hereunder had such deduction or withholding not occurred or been
required.
Section 12. Set-off. In addition to any rights now or hereafter granted under
any of the other Loan Documents or Applicable Law and not by way of limitation
of any such rights, the Guarantor hereby authorizes the Agent, at any time or
from time to time, without any prior notice to the Guarantor 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, including,
but not limited to, indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other indebtedness at any time held or owing by
the Agent, or any affiliate of the Agent, to or for the credit or the account
of the Guarantor against and on account of any of the Guarantied Obligations,
although such obligations shall be contingent or unmatured. The Agent agrees
to give the Guarantor prompt notice after the exercise by the Agent of such
right of set-off but the failure of the Agent to give such notice shall not
affect the validity of any such set-off. The Guarantor agrees, to the fullest
extent permitted by Applicable Law, that any Participant may exercise rights of
setoff or counterclaim and other rights with respect to its participation as
fully as if such Participant were a direct creditor of the Guarantor in the
amount of such participation.
Section 13. Subordination. The Guarantor hereby expressly covenants and
agrees for the benefit of the Agent and the Lenders that all obligations and
liabilities of the Borrower to the Guarantor of whatever description ,
including without limitation, all intercompany receivables of the Guarantor
from the Borrower (collectively, the "Junior Claims") shall be subordinate and
junior in right of payment to all Guarantied Obligations. If an Event of
Default shall have occurred and be continuing, then the Guarantor shall not
accept any direct or indirect payment (in cash, property, securities by setoff
or otherwise) from the Borrower on account of or in any manner in respect of
any Junior Claim until all of the Guarantied Obligations have been indefeasibly
paid in full.
Section 14. Avoidance Provisions. It is the intent of the Guarantor, the
Agent and the Lenders that in any Proceeding, the Guarantor's maximum
obligation hereunder shall equal, but not exceed, the maximum amount which
would not otherwise cause the obligations of the Guarantor hereunder (or any
other obligations of the Guarantor to the Agent and the Lenders) to be
avoidable or unenforceable against the Guarantor in such Proceeding as a result
of Applicable Law, including without limitation, (a) Section 548 of the
Bankruptcy Code of 1978, as amended (the "Bankruptcy Code") and (b) any state
fraudulent transfer or fraudulent conveyance act or statute applied in such
Proceeding, whether by virtue of Section 544 of the Bankruptcy Code or
otherwise. The Applicable Laws under which the possible avoidance or
unenforceability of the obligations of the Guarantor hereunder (or any other
obligations of the Guarantor to the Agent and the Lenders) shall be determined
in any such Proceeding are referred to as the "Avoidance Provisions".
Accordingly, to the extent that the obligations of the Guarantor hereunder
would otherwise be subject to avoidance under the Avoidance Provisions, the
maximum Guarantied Obligations for which the Guarantor shall be liable
hereunder shall be reduced to that amount which, as of the time any of the
Guarantied Obligations are deemed to have been incurred under the Avoidance
Provisions, would not cause the obligations of the Guarantor hereunder (or any
other obligations of the Guarantor to the Agent and the Lenders), to be subject
to avoidance under the Avoidance Provisions. This Section is intended solely
to preserve the rights of the Agent and the Lenders hereunder to the maximum
extent that would not cause the obligations of the Guarantor hereunder to be
subject to avoidance under the Avoidance Provisions, and neither the Guarantor
nor any other Person shall have any right or claim under this Section as
against the Agent and the Lenders that would not otherwise be available to such
Person under the Avoidance Provisions.
Section 15. Information. The Guarantor assumes all responsibility for being
and keeping itself informed of the financial condition of the Borrower and the
other Loan Parties, and of all other circumstances bearing upon the risk of
nonpayment of any of the Guarantied Obligations and the nature, scope and
extent of the risks that the Guarantor assumes and incurs hereunder, and agrees
that neither the Agent nor any Lender shall have any duty whatsoever to advise
the Guarantor of information regarding such circumstances or risks.
Section 16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH CAROLINA APPLICABLE TO
CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
Section 17. ARBITRATION. Upon demand of any party hereto or having rights
hereunder, whether made before or after institution of any judicial proceeding,
any claim or controversy arising out of, or relating to this Guaranty or any
other Loan Documents ("Disputes") between or among any such parties shall be
resolved by binding arbitration conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association (the "AAA") and the Federal Arbitration Act. Disputes
may include, without limitation, tort claims, counterclaims, disputes as to
whether a matter is subject to arbitration, claims brought as class actions,
and claims arising from Loan Documents executed in the future. A judgment upon
the award may be entered in any court having jurisdiction. Notwithstanding the
foregoing, this arbitration provision does not apply to Disputes under or
related to Interest Rate Agreements to which any Lender is a party. All
arbitration hearings shall be conducted in Charlotte, North Carolina. A
hearing shall begin within 90 days of demand for arbitration and all hearings
shall concluded within 120 days of demand for arbitration. These time
limitations may not be extended unless a party shows cause for extension and
then no more than a total extension of 60 days. The expedited procedures set
forth in Rule 51 et. seq. of the Arbitration Rules shall be applicable to
claims of less than $1,000,000. Arbitrators shall be licensed attorneys
selected from the Commercial Financial Dispute Arbitration Panel of the AAA.
The parties do not waive any Applicable Laws except as provided herein.
Notwithstanding the preceding binding arbitration provisions, the parties agree
to preserve, without diminution, the following remedies that the Agent or the
Lenders may exercise before or after an arbitration proceeding is brought.
Subject to the other terms hereof, the Agent and the Lenders shall have the
right to proceed in any court of proper jurisdiction or by self-help to
exercise or prosecute the following remedies, as applicable: (i) all rights to
foreclose against any real or personal property or other security by exercising
a power of sale or under Applicable Law by judicial foreclosure including a
proceeding to confirm the sale; (ii) all rights of self-help including peaceful
occupation of real property and collection of rents, set-off, and peaceful
possession of personal property; (iii) obtaining provisional or ancillary
remedies including injunctive relief, sequestration, garnishment, attachment,
appointment of receiver and filing an involuntary bankruptcy proceeding; and
(iv) when applicable, a judgment by confession of judgment. Any claim or
controversy with regard to parties entitlement to such remedies is a Dispute.
The parties hereto acknowledge that by agreeing to binding arbitration they
have irrevocably waived any right they may have to a jury trial with regarding
to a Dispute.
Section 18. Loan Accounts. The Agent and each Lender may maintain books and
accounts setting forth the amounts of principal, interest and other sums paid
and payable with respect to the Guarantied Obligations, and in the case of any
dispute relating to any of the outstanding amount, payment or receipt of any of
the Guarantied Obligation or otherwise, the entries in such books and accounts
shall deemed conclusive upon the Guarantor absent manifest error. The failure
of the Agent or any Lender to maintain such books and accounts shall not in any
way relieve or discharge the Guarantor of any of its obligations hereunder.
Section 19. Waiver of Remedies. No delay or failure on the part of the Agent
or any Lender in the exercise of any right or remedy it may have against the
Guarantor hereunder or otherwise shall operate as a waiver thereof, and no
single or partial exercise by the Agent or any Lender of any such right or
remedy shall preclude other or further exercise thereof or the exercise of any
other such right or remedy.
Section 20. Termination. This Guaranty shall remain in full force and effect
until indefeasible payment in full of the Guaranties Obligations and the other
Obligations and the termination or cancellation of the Credit Agreement.
Section 21. Successors and Assigns. Each reference herein to the Agent or the
Lenders shall be deemed to include such Person's respective successors and
assigns (including, but not limited to, any holder of the Guarantied
Obligations) in whose favor the provisions of this Guaranty also shall inure,
and each reference herein to the Guarantor shall be deemed to include the
Guarantor's successors and assigns, upon whom this Guaranty also shall be
binding. The Lenders may, in accordance with the applicable provisions of the
Credit Agreement, assign, transfer or sell any Guarantied Obligation, or grant
or sell participation in any Guarantied Obligations, to any Person without the
consent of, or notice to, the Guarantor and without releasing, discharging or
modifying the Guarantor's obligations hereunder. The Guarantor hereby consents
to the delivery by the Agent or any Lender to any Assignee or Participant (or
any prospective Assignee or Participant) of any financial or other information
regarding the Borrower or the Guarantor. The Guarantor may not assign or
transfer its obligations hereunder to any Person.
Section 22. Amendments. This Guaranty may not be amended except in writing
signed by the Requisite Lenders (or all of the Lender if required under the
terms of the Credit Agreement), the Agent and the Guarantor.
Section 23. Payments. All payments to be made by the Guarantor pursuant to
this Guaranty shall be made in Dollars, in immediately available funds to the
Agent at the Principal Office, not later than 2:00 p.m. on the date of demand
therefor.
Section 24. Notices. All notices and other communications required or
provided for hereunder shall be in writing (including facsimile transmission or
similar writing) and all such notices and other communications shall be deemed
effective (a) if mailed, when received; (b) if telecopied, when transmitted; or
(c) if hand delivered, when delivered; provided, however, that any notice of a
change of address for notices shall not be effective until received.
Section 25. Severability. In case any provision of this Guaranty shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 26. Headings. Section headings used in this Guaranty are for
convenience only and shall not affect the construction of this Guaranty.
Section 27. Definitions. (a) For the purposes of this Guaranty:
"Proceeding" means any of the following: (i) a voluntary or involuntary case
concerning the Guarantor shall be commenced under the Bankruptcy Code of 1978,
as amended; (ii) a custodian (as defined in such Bankruptcy Code or any other
applicable bankruptcy laws) is appointed for, or takes charge of, all or any
substantial part of the property of the Guarantor; (iii) any other proceeding
under any Applicable Law, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding-up or composition for adjustment of debts,
whether now or hereafter in effect, is commenced relating to the Guarantor;
(iv) the Guarantor is adjudicated insolvent or bankrupt; (v) any order of
relief or other order approving any such case or proceeding is entered by a
court of competent jurisdiction; (vi) the Guarantor makes a general assignment
for the benefit of creditors; (vii) the Guarantor shall fail to pay, or shall
state that it is unable to pay, or shall be unable to pay, its debts generally
as they become due; (viii) the Guarantor shall call a meeting of its creditors
with a view to arranging a composition or adjustment of its debts; (ix) the
Guarantor shall by any act or failure to act indicate its consent to, approval
of or acquiescence in any of the foregoing; or (x) any corporate action shall
be taken by the Guarantor for the purpose of effecting any of the foregoing.
(b)Terms not otherwise defined herein are used herein with the respective
meanings given them in the Credit Agreement.
IN WITNESS WHEREOF, the Guarantor has duly executed and delivered this Guaranty
as of the date and year first written above.
[GUARANTOR]
By:
Name:
Title:
Address for Notices:
Attention:
Telecopier: (____) _________
Telephone: (____) _________
EXHIBIT D
FORM OF NOTICE OF BORROWING
____________, _____
First Union National Bank, as Agent
One First Union Center
Charlotte, North Carolina 28288-0166
Attention: Jane Hurley
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of September 16,
1997 (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"), by and among Merry Land & Investment Company,
Inc. (the "Borrower"), the financial institutions initially party thereto and
their assignees under Section 12.5.(d) thereof (the "Lenders"), Bank of America
National Trust and Savings Association, as Syndication Agent, Fleet National
Bank, as Documentation Agent, and First Union National Bank, as Agent (the
"Agent") and Arranger. Capitalized terms used herein, and not otherwise
defined herein, have their respective meanings given them in the Credit
Agreement.
1.Pursuant to Section 2.1.(b) of the Credit Agreement, the Borrower hereby
requests that the Lenders make Revolving Loans to the Borrower in an aggregate
amount equal to $___________________.
2.The Borrower requests that such Revolving Loans be made available to the
Borrower on ____________, _____.
3.The Borrower hereby requests that the requested Revolving Loans all be of the
following Type:
[Check one box only]
_Base Rate Loans
_Floating LIBOR Loans
_Fixed LIBOR Loans, each with an initial Interest Period for a duration of:
[Check one box only]
_one month
_two months
_three months
_six months
4.The proceeds of this borrowing of Revolving Loans will be used for the
following purpose: _____________________________________________________
____________________________________________________________.
5.The Borrower requests that the proceeds of this borrowing of Revolving Loans
be made available to the Borrower by ____________________________.
The Borrower hereby certifies to the Agent and the Lenders that as of the date
hereof and as of the date of the making of the requested Revolving Loans and
after giving effect thereto, (a) no Default or Event of Default has or shall
have occurred and be continuing, and (b) the representations and warranties
made or deemed made by the Borrower and its Subsidiaries in the Loan Documents
to which any of them is a party, are and shall be true and correct, except to
the extent that such representations and warranties expressly relate solely to
an earlier date (in which case such representations and warranties were true
and accurate on and as of such earlier date) and except for changes in factual
circumstances specifically and expressly permitted under the Credit Agreement.
In addition, the Borrower certifies to the Agent and the Lenders that all
conditions to the making of the requested Revolving Loans contained in Article
V. of the Credit Agreement will have been satisfied at the time such Revolving
Loans are made.
If notice of the requested borrowing of Revolving Loans was previously given by
telephone, this notice is to be considered the written confirmation of such
telephone notice required by Section 2.1.(b) of the Credit Agreement.
Merry Land & Investment Company, Inc.
By:
Name:
Title:
EXHIBIT E
FORM OF NOTICE OF CONTINUATION
____________, _____
First Union National Bank, as Agent
One First Union Center
Charlotte, North Carolina 28288-0166
Attention: Jane Hurley
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of September 16,
1997 (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"), by and among Merry Land & Investment Company,
Inc. (the "Borrower"), the financial institutions initially party thereto and
their assignees under Section 12.5.(d) thereof (the "Lenders"), Bank of America
National Trust and Savings Association, as Syndication Agent, Fleet National
Bank, as Documentation Agent, and First Union National Bank, as Agent (the
"Agent") and Arranger. Capitalized terms used herein, and not otherwise
defined herein, have their respective meanings given them in the Credit
Agreement.
Pursuant to Section 2.8. of the Credit Agreement, the Borrower hereby requests
a Continuation of a borrowing of Fixed LIBOR Loans under the Credit Agreement,
and in that connection sets forth below the information relating to such
Continuation as required by such Section of the Credit Agreement:
1.The proposed date of such Continuation is ____________, _____.
2.The aggregate principal amount of Fixed LIBOR Loans subject to the requested
Continuation is $________________________ and was originally borrowed by the
Borrower on ____________, ______.
3.The portion of such principal amount subject to such Continuation is
$__________________________.
4.The current Interest Period for each of the Fixed LIBOR Loans subject to such
Continuation ends on ________________, _____.
5.The duration of the new Interest Period for each of such Fixed LIBOR Loans or
portion thereof subject to such Continuation is:
[Check one box only]
_one month
_two months
_three months
_six months
The Borrower hereby certifies to the Agent and the Lenders that as of the date
hereof, as of the proposed date of the requested Continuation, and after giving
effect to such Continuation, no Default or Event of Default has or shall have
occurred and be continuing.
If notice of the requested Continuation was given previously by telephone, this
notice is to be considered the written confirmation of such telephone notice
required by Section 2.8. of the Credit Agreement.
Merry Land & Investment Company, Inc.
By:
Name:
Title:
EXHIBIT F
FORM OF NOTICE OF CONVERSION
____________, _____
First Union National Bank, as Agent
One First Union Center
Charlotte, North Carolina 28288-0166
Attention: Jane Hurley
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of September 16,
1997 (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"), by and among Merry Land & Investment Company,
Inc. (the "Borrower"), the financial institutions initially party thereto and
their assignees under Section 12.5.(d) thereof (the "Lenders"), Bank of America
National Trust and Savings Association, as Syndication Agent, Fleet National
Bank, as Documentation Agent, and First Union National Bank, as Agent (the
"Agent") and Arranger. Capitalized terms used herein, and not otherwise
defined herein, have their respective meanings given them in the Credit
Agreement.
Pursuant to Section 2.9. of the Credit Agreement, the Borrower hereby requests
a Conversion of a borrowing of Revolving Loans of one Type into Revolving Loans
of another Type under the Credit Agreement, and in that connection sets forth
below the information relating to such Conversion as required by such Section
of the Credit Agreement:
1.The proposed date of such Conversion is ______________, _____.
2.The Revolving Loans to be Converted pursuant hereto are currently:
[Check one box only]
_Base Rate Loans
_Floating LIBOR Loans
_Fixed LIBOR Loans
3.The aggregate principal amount of Revolving Loans subject to the requested
Conversion is $_____________________ and was originally borrowed by the
Borrower on ____________, ______.
4.The portion of such principal amount subject to such Conversion is
$___________________.
5.The amount of such Loans to be so Converted is to be converted into Revolving
Loans of the following Type:
[Check one box only]
_Base Rate Loans
_Floating LIBOR Loans
_Fixed LIBOR Loans, each with an initial Interest Period for a duration of:
[Check one box only]
_one month
_two months
_three months
_six months
The Borrower hereby certifies to the Agent and the Lenders that as of the date
hereof and as of the date of the requested Conversion and after giving effect
thereto, (a) no Default or Event of Default has or shall have occurred and be
continuing, and (b) the representations and warranties made or deemed made by
the Borrower and its Subsidiaries in the Loan Documents to which any of them is
a party, are and shall be true and correct, except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties were true and accurate on and as
of such earlier date) and except for changes in factual circumstances
specifically and expressly permitted under the Credit Agreement.
If notice of the requested Conversion was given previously by telephone, this
notice is to be considered the written confirmation of such telephone notice
required by Section 2.9. of the Credit Agreement.
Merry Land & Investment Company, Inc.
By:
Name:
Title:
EXHIBIT G
FORM OF NOTICE OF SWINGLINE BORROWING
____________, _____
First Union National Bank
One First Union Center
Charlotte, North Carolina 28288-0166
Attention: Jane Hurley
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of September 16,
1997 (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"), by and among Merry Land & Investment Company,
Inc. (the "Borrower"), the financial institutions initially party thereto and
their assignees under Section 12.5.(d) thereof (the "Lenders"), Bank of America
National Trust and Savings Association, as Syndication Agent, Fleet National
Bank, as Documentation Agent, and First Union National Bank, as Agent (the
"Agent") and Arranger. Capitalized terms used herein, and not otherwise
defined herein, have their respective meanings given them in the Credit
Agreement.
1.Pursuant to Section 2.3.(b) of the Credit Agreement, the Borrower hereby
requests that the Swingline Lender make a Swingline Loan to the Borrower in an
amount equal to $___________________.
2.The Borrower requests that such Swingline Loan be made available to the
Borrower on ____________, _____.
3.The proceeds of this Swingline Loan will be used for the following purpose:
_________________________________________________________________
_________________________________________________________________.
4.The Borrower requests that the proceeds of such Swingline Loan be made
available to the Borrower by ______________________________.
The Borrower hereby certifies to the Agent and the Lenders that as of the date
hereof and as of the date of the making of the requested Swingline Loan and
after giving effect thereto, (a) no Default or Event of Default has or shall
have occurred and be continuing, and (b) the representations and warranties
made or deemed made by the Borrower and its Subsidiaries in the Loan Documents
to which any of them is a party, are and shall be true and correct, except to
the extent that such representations and warranties expressly relate solely to
an earlier date (in which case such representations and warranties were true
and accurate on and as of such earlier date) and except for changes in factual
circumstances specifically and expressly permitted under the Credit Agreement.
In addition, the Borrower certifies to the Agent and the Lenders that all
conditions to the making of the requested Swingline Loan contained in Article
V. of the Credit Agreement will have been satisfied at the time such Swingline
Loan is made.
If notice of the requested borrowing of this Swingline Loan was previously
given by telephone, this notice is to be considered the written confirmation of
such telephone notice required by Section 2.3.(b) of the Credit Agreement.
Merry Land & Investment Company, Inc.
By:
Name:
Title:
EXHIBIT H
FORM OF SWINGLINE NOTE
$25,000,000_______________, 19__
FOR VALUE RECEIVED, the undersigned, Merry Land & Investment Company, Inc., a
Georgia corporation (the "Borrower"), hereby promises to pay to the order of
First Union National Bank (the "Swingline Lender") to its address at
___________________________, or at such other address as may be specified by
the Swingline Lender to the Borrower, the principal sum of TWENTY-FIVE MILLION
AND NO/100 DOLLARS (or such lesser amount as shall equal the aggregate unpaid
principal amount of Swingline Loans made by the Swingline Lender to the
Borrower under the Credit Agreement), on the dates and in the principal amounts
provided in the Credit Agreement, and to pay interest on the unpaid principal
amount owing hereunder, at the rates and on the dates provided in the Credit
Agreement.
The date, amount of each Swingline Loan, and each payment made on account of
the principal thereof, shall be recorded by the Swingline Lender on its books
and, prior to any transfer of this Note, endorsed by the Swingline Lender on
the schedule attached hereto or any continuation thereof, provided that the
failure of the Swingline Lender to made any such recordation or endorsement
shall not affect the obligations of the Borrower to make a payment when due of
any amount owing under the Credit Agreement or hereunder in respect of the
Swingline Loans.
This Note is the Swingline Note referred to in the Credit Agreement dated as of
September 16, 1997 (as amended, restated, supplemented or otherwise modified
from time to time in accordance with its terms, the "Credit Agreement") among
the Borrower, the financial institutions initially party thereto and their
assignees under Section 12.5.(d) thereof, Bank of America National Trust and
Savings Association, as Syndication Agent, Fleet National Bank, as
Documentation Agent, and First Union National Bank, as Agent and Arranger, and
evidences Swingline Loans made thereunder. Terms used but not otherwise
defined in this Note have the respective meanings assigned to them in the
Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of this Note
upon the occurrence of certain events and for prepayments of Swingline Loans
upon the terms and conditions specified therein.
This Note shall be governed by, and construed in accordance with, the laws of
the State of NORTH CAROLINA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.
The Borrower hereby waives presentment for payment, demand, notice of demand,
notice of non-payment, protest, notice of protest and all other similar
notices.
Time is of the essence for this Note.
IN WITNESS WHEREOF, the undersigned has executed and delivered this Swingline
Note under seal as of the date first written above.
Merry Land & Investment Company, Inc.
By:
Name:
Title:
ATTEST:
By:
Name:
Title:
[CORPORATE SEAL]
SCHEDULE OF Swingline LOANS
This Note evidences Swingline Loans made under the within-described Credit
Agreement to the Borrower, on the dates and in the principal amounts set forth
below, subject to the payments and prepayments of principal set forth below:
Date of Loan
Principal Amount of Loan
Amount Paid or Prepaid
Unpaid Principal Amount
Notation
Made By
EXHIBIT I
FORM OF BID RATE QUOTE REQUEST
______________, _____
First Union National Bank, as Agent
One First Union Center
Charlotte, North Carolina 28288-0166
Attention: Jane Hurley
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of September 16,
1997 (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"), by and among Merry Land & Investment Company,
Inc. (the "Borrower"), the financial institutions initially party thereto and
their assignees under Section 12.5.(d) thereof, Bank of America National Trust
and Savings Association, as Syndication Agent, Fleet National Bank, as
Documentation Agent, and First Union National Bank, as Agent (the "Agent") and
Arranger. Capitalized terms not otherwise defined herein are used herein with
the respective meanings given them in the Credit Agreement.
The Borrower hereby requests Bid Rate Quotes for the following proposed Bid
Rate Borrowings:
Borrowing Date
Amount1
Interest Period2
______________, ______
$___________________
___________ days
Merry Land & Investment Company, Inc.
By:
Name:
Title:
EXHIBIT J
FORM OF BID RATE QUOTE
________________, ____
First Union National Bank, as Agent
One First Union Center
Charlotte, North Carolina 28288-0166
Attention: Jane Hurley
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of September 16,
1997 (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"), by and among Merry Land & Investment Company,
Inc. (the "Borrower"), the financial institutions initially party thereto and
their assignees under Section 12.5.(d) thereof (the "Lenders"), Bank of America
National Trust and Savings Association, as Syndication Agent, Fleet National
Bank, as Documentation Agent, and First Union National Bank, as Agent (the
"Agent") and Arranger. Capitalized terms not otherwise defined herein are used
herein with the respective meanings given them in the Credit Agreement.
In response to the Borrower's Bid Rate Quote Request dated _____________, 19__,
the undersigned hereby makes the following Bid Rate Quote(s) on the following
terms:
1.Quoting Lender:____________________________
2.Person to contact at quoting Lender:____________________________
3.The undersigned offers to make Bid Rate Loan(s) in the following principal
amount(s), for the following Interest Period(s) and at the following Bid
Rate(s):
Borrowing Date
Amount1
Interest Period
Bid Rate
__________, 19___
$_____________
_________days
__________%
The undersigned understands and agrees that the offer(s) set forth above,
subject to satisfaction of the applicable conditions set forth in the Credit
Agreement, irrevocably obligate[s] the undersigned to make the Bid Rate Loan(s)
for which any offer(s) [is/are] accepted, in whole or in part.
By:
Name:
Title:
EXHIBIT K
FORM OF BID RATE QUOTE ACCEPTANCE
__________________, 19__
First Union National Bank, as Agent
One First Union Center
Charlotte, North Carolina 28288-0166
Attention: Jane Hurley
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of September 16,
1997 (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"), by and among Merry Land & Investment Company,
Inc. (the "Borrower"), the financial institutions initially party thereto and
their assignees under Section 12.5.(d) thereof (the "Lenders"), Bank of America
National Trust and Savings Association, as Syndication Agent, Fleet National
Bank, as Documentation Agent, and First Union National Bank, as Agent and
Arranger. Capitalized terms not otherwise defined herein are used herein with
the respective meanings given them in the Credit Agreement.
The Borrower hereby accepts the following offer(s) of Bid Rate Quotes:
Quote Date
Quoting Lender
Amount Accepted1
____________, 19____
__________________
$_______________
____________, 19____
__________________
$_______________
____________, 19____
__________________
$_______________
Merry Land & Investment Company, Inc.
By:
Name:
Title:
EXHIBIT L
FORM OF REVOLVING NOTE
$___________________________________, 19__
FOR VALUE RECEIVED, the undersigned, Merry Land & Investment Company, Inc., a
Georgia corporation (the "Borrower"), hereby promises to pay to the order of
____________________ (the "Lender"), in care of First Union National Bank, as
Agent (the "Agent") to First Union National Bank, One First Union Center,
Charlotte, North Carolina 28288, or at such other address as may be specified
by the Agent to the Borrower, the principal sum of ________________ AND
____/100 DOLLARS (or such lesser amount as shall equal the aggregate unpaid
principal amount of Revolving Loans or if the Revolving Loans have been
converted into Term Loans under Section 2.13. the Term Loan, made by the Lender
to the Borrower under the Credit Agreement), on the dates and in the principal
amounts provided in the Credit Agreement, and to pay interest on the unpaid
principal amount owing hereunder, at the rates and on the dates provided in the
Credit Agreement.
The date, amount of each Revolving Loan or the Term Loan, as applicable, made
by the Lender to the Borrower, and each payment made on account of the
principal thereof, shall be recorded by the Lender on its books and, prior to
any transfer of this Note, endorsed by the Lender on the schedule attached
hereto or any continuation thereof, provided that the failure of the Lender to
made any such recordation or endorsement shall not affect the obligations of
the Borrower to make a payment when due of any amount owing under the Credit
Agreement or hereunder in respect of such Loans made by the Lender.
This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of September 16, 1997 (as amended, restated, supplemented or otherwise
modified from time to time in accordance with its terms, the "Credit
Agreement") among the Borrower, the financial institutions initially party
thereto and their assignees under Section 12.5.(d) thereof, Bank of America
National Trust and Savings Association, as Syndication Agent, Fleet National
Bank, as Documentation Agent, and First Union National Bank, as Agent and
Arranger and evidences Revolving Loans, or the Term Loan, made by the Lender
thereunder. Terms used but not otherwise defined in this Note have the
respective meanings assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of this Note
upon the occurrence of certain events and for prepayments of Loans upon the
terms and conditions specified therein.
Except as permitted by Section 12.5.(d) of the Credit Agreement, this Note may
not be assigned by the Lender to any other Person.
This Note shall be governed by, and construed in accordance with, the laws of
the State of NORTH CAROLINA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.
The Borrower hereby waives presentment for payment, demand, notice of demand,
notice of non-payment, protest, notice of protest and all other similar
notices.
Time is of the essence for this Note.
IN WITNESS WHEREOF, the undersigned has executed and delivered this Revolving
Note under seal as of the date first written above.
Merry Land & Investment Company, Inc.
By:
Name:
Title:
ATTEST:
By:
Name:
Title:
[CORPORATE SEAL]
SCHEDULE OF LOANS
This Note evidences Revolving Loans or the Term Loan made under the within-
described Credit Agreement to the Borrower, on the dates and in the principal
amounts set forth below, subject to the payments and prepayments of principal
set forth below:
Date of Loan
Principal Amount of Loan
Amount Paid or Prepaid
Unpaid Principal Amount
Notation
Made By
EXHIBIT M
FORM OF BID RATE NOTE
____________, 19__
FOR VALUE RECEIVED, the undersigned, Merry Land & Investment Company, Inc., a
Georgia corporation (the "Borrower"), hereby promises to pay to the order of
________________ (the "Lender"), in care of First Union National Bank, as Agent
(the "Agent") to First Union National Bank, One First Union Center, Charlotte,
North Carolina 28288, or at such other address as may be specified by the Agent
to the Borrower, the aggregate unpaid principal amount of Bid Rate Loans made
by the Lender to the Borrower under the Credit Agreement, on the dates and in
the principal amounts provided in the Credit Agreement, and to pay interest on
the unpaid principal amount of each such Bid Rate Loan, at such office at the
rates and on the dates provided in the Credit Agreement.
The date, amount, interest rate and maturity date of each Bid Rate Loan made by
the Lender to the Borrower, and each payment made on account of the principal
thereof, shall be recorded by the Lender on its books and, prior to any
transfer of this Note, endorsed by the Lender on the schedule attached hereto
or any continuation thereof, provided that the failure of the Lender to make
any such recordation or endorsement shall not affect the obligations of the
Borrower to make a payment when due of any amount owing under the Credit
Agreement or hereunder in respect of the Bid Rate Loans made by the Lender.
This Note is one of the Bid Rate Notes referred to in the Credit Agreement
dated as of September 16, 1997 (as amended, restated, supplemented or otherwise
modified from time to time in accordance with its terms, the "Credit
Agreement") among the Borrower, the financial institutions initially party
thereto and their assignees under Section 12.5.(d) thereof, Bank of America
National Trust and Savings Association, as Syndication Agent, Fleet National
Bank, as Documentation Agent, and First Union National Bank, as Agent and
Arranger and evidences Bid Rate Loans made by the Lender thereunder. Terms
used but not otherwise defined in this Note have the respective meanings
assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of this Note
upon the occurrence of certain events and for prepayments of Bid Rate Loans
upon the terms and conditions specified therein.
Except as permitted by Section 12.5.(d) of the Credit Agreement, this Note may
not be assigned by the Lender to any other Person.
This Note shall be governed by, and construed in accordance with, the laws of
the State of NORTH CAROLINA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.
The Borrower hereby waives presentment for payment, demand, notice of demand,
notice of non-payment, protest, notice of protest and all other similar
notices.
Time is of the essence for this Note.
IN WITNESS WHEREOF, the undersigned has executed and delivered this Bid Rate
Note under seal as of the date first written above.
Merry Land & Investment Company, Inc.
By:
Name:
Title:
ATTEST:
By:
Name:
Title:
[CORPORATE SEAL]
SCHEDULE OF BID RATE LOANS
This Note evidences Bid Rate Loans made under the within-described Credit
Agreement to the Borrower, on the dates, in the principal amounts, bearing
interest at the rates and maturing on the dates set forth below, subject to the
payments and prepayments of principal set forth below:
Date of Loan
Principal Amount of Loan
Interest Rate
Maturity
Date of Loan
Amount
Paid or Prepaid
Unpaid Principal Amount
Notation
Made By
EXHIBIT N
FORM OF EXTENSION REQUEST
____________, _____
First Union National Bank, as Agent
One First Union Center
Charlotte, North Carolina 28288-0166
Attention: Jane Hurley
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of September 16,
1997 (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"), by and among Merry Land & Investment Company,
Inc. (the "Borrower"), the financial institutions initially party thereto and
their assignees under Section 12.5.(d) thereof (the "Lenders"), Bank of America
National Trust and Savings Association, as Syndication Agent, Fleet National
Bank, as Documentation Agent, and First Union National Bank, as Agent (the
"Agent") and Arranger. Capitalized terms used herein, and not otherwise
defined herein, have their respective meanings given them in the Credit
Agreement.
Pursuant to Section 2.12. of the Credit Agreement, the Borrower hereby requests
that the Lenders agree to extend the Revolving Termination Date from its
current date of _______, ____ by one year to ________, ____.
The Borrower hereby certifies to the Agent and the Lenders that as of the date
hereof (a) no Default or Event of Default has occurred and is continuing, and
(b) the representations and warranties made or deemed made by the Borrower and
its Subsidiaries in the Loan Documents to which any of them is a party, are
true and correct, except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties were true and accurate on and as of such earlier date) and
except for changes in factual circumstances specifically and expressly
permitted under the Credit Agreement.
Merry Land & Investment Company, Inc.
By:
Name:
Title:
EXHIBIT P
FORM OF COMPLIANCE CERTIFICATE
First Union National Bank, as Agent
One First Union Center
Charlotte, North Carolina 28288-0166
Each of the Lenders Party to the Credit Agreement referred to below
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of September 16,
1997 (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"), by and among Merry Land & Investment Company,
Inc. (the "Borrower"), the financial institutions initially party thereto and
their assignees under Section 12.5.(d) thereof, Bank of America National Trust
and Savings Association, as Syndication Agent, Fleet National Bank, as
Documentation Agent, and First Union National Bank, as Agent (the "Agent") and
Arranger. Capitalized terms not otherwise defined herein are used herein with
the respective meanings given them in the Credit Agreement.
Pursuant to Section 8.3. of the Credit Agreement, the undersigned hereby
certifies to the Lender as follows:
(1)The undersigned is the chief financial officer of the Borrower.
(2)The undersigned has examined the books and records of the Borrower and has
conducted such other examinations and investigations as are reasonably
necessary to provide this Compliance Certificate.
(3)To the best of the undersigned's knowledge, information and belief, no
Default or Event of Default exists [if such is not the case, specify such
Default or Event of Default and its nature, when it occurred and whether it is
continuing and the steps being taken by the Borrower with respect to such
event, condition or failure].
(4)To the best of the undersigned's knowledge, information and belief, the
representations and warranties made or deemed made by the Borrower and its
Subsidiaries in the Loan Documents to which any of them is a party, are true
and correct on and as of the date hereof except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall have been true and
accurate on and as of such earlier date) and except for changes in factual
circumstances specifically and expressly permitted under the Credit Agreement.
(5)Attached hereto as Schedule 1 are the calculations required to establish
whether or not the Borrower, and when appropriate its consolidated
Subsidiaries, were in compliance with the covenants contained in Sections 9.1.
and 9.6.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the
date first above written.
Title: of Merry Land & Investment Company, Inc.
1 Minimum amount of $5,000,000 or larger multiple of $1,000,000.
2 No less than 7 days and up to 180 days after the borrowing date and must end
on a Business Day.
1 Minimum amount of $5,000,000 or larger multiple of $1,000,000.
1 Minimum amount of $5,000,000 or larger multiple of $1,000,000.
EXHIBIT O
OPINION OF BORROWER'S COUNSEL
September 16, 1997
THE LENDERS PARTY TO THE CREDIT AGREEMENT REFERRED TO BELOW AND FIRST UNION
NATIONAL BANK, AS AGENT
Re: MERRY LAND & INVESTMENT COMPANY, INC. CREDIT AGREEMENT DATED
AS OF SEPTEMBER 16, 1997; FIRST UNION NATIONAL BANK, AGENT
Ladies & Gentlemen:
We have acted as counsel to Merry Land & Investment Company, Inc., a Georgia
corporation (the "Borrower") in connection with the transactions contemplated
by the Credit Agreement of even date (the "Credit Agreement") by and among the
Borrower, the Lenders referred to therein, Bank of America National Trust and
Savings Association, as Syndication Agent, Fleet National Bank, as
Documentation Agent, and First Union National Bank, a national banking
association, as Agent (the "Agent") and Arranger. We are also counsel to the
Subsidiaries listed on Schedule 6.1(b) of the Credit Agreement. Capitalized
terms defined in the Credit Agreement are used herein as defined therein. This
opinion is being delivered pursuant to Section 5.1(a)(iii) of the Credit
Agreement.
As such counsel, we have examined an executed copy of the Credit Agreement, the
Revolving Notes, the Bid Rate Notes, the Swingline Note and the Guaranties
executed by each of the Subsidiaries (all of such documents being referred to
collectively herein as the "Loan Documents"). We have also examined the
articles of incorporation, bylaws, certificates of limited partnership and
partnership agreements, as applicable of the Borrower and its Subsidiaries,
the corporate and partnership minute books of the Borrower and its
Subsidiaries, certificates of officers of the Borrower, its Subsidiaries, and
public officials, and such other documents, and have made such other
investigations, as we have deemed necessary or appropriate for the purpose of
giving the opinions herein expressed. As such counsel, we have participated in
the preparation of the Loan Documents and have consulted with officers of the
Borrower and its Subsidiaries and its independent public accountants concerning
the terms and provisions thereof and the representations and warranties made by
the Borrower and its Subsidiaries thereunder.
In giving the opinions expressed herein and making our investigations in
connection herewith, we have assumed
a.the due authorization by the parties thereto other than the Borrower and its
Subsidiaries of the documents examined by us;
b.the due execution and delivery by the parties thereto other than the Borrower
and its Subsidiaries of the documents examined by us;
c.the genuineness of all signatures of individuals other than individuals
signing on behalf of the Borrower or any Subsidiary;
d.the personal legal capacity of all individual signatories;
e.the authenticity of all documents presented to us as originals;
f.the conformity to the originals of all documents presented to us as copies;
g.the integrity and completeness of the corporate and partnership minute books
of the Borrower and its Subsidiaries presented to us for our examination, and
we have no reason to believe that the foregoing assumptions are unwarranted;
h.the accuracy of the Borrower's federal income tax returns for the taxable
periods to which our opinion relates and the Borrower prepared schedules which
relate to the Borrower's compliance with real estate investment trust ("REIT")
qualification tests; and
i.that all persons required to file Schedules 13D and 13G under the Securities
and Exchange Act of 1934 have done so and duly apprised the Borrower during the
periods to which our opinion relates and that to the best of our knowledge no
persons required to file have failed to do so.
Opinions or statements herein given "to the best of our knowledge" and the
factual matters on which we have relied in giving other opinions herein (except
for our opinions as to corporate matters that we have given in reliance upon
our own investigation of the corporate and partnership minute books of the
Borrower and its Subsidiaries, and certificates of public officials and
officers of the Borrower and its Subsidiaries) are based upon (a) information
coming to our attention in the course of our representation of the Borrower and
its Subsidiaries in connection with the transactions contemplated by the Credit
Agreement, or otherwise actually known to the lawyers in our firm who have
given substantive attention to such transactions, (b) the Borrower's
representations and warranties contained in the Loan Documents, and (c)
inquiries of representatives of the Borrower and its Subsidiaries whom we
believe to be reasonably well-informed as to the factual matters in question,
but without any other investigations made for purposes of giving such opinions
or statements unless otherwise stated herein. However, nothing has come to our
attention that would cause us to believe that our reliance thereon for purposes
of such opinions is unwarranted.
Based upon and subject to the foregoing and the further limitations and
qualifications hereinafter expressed, it is our opinion that:
1. DULY ORGANIZED CORPORATIONS, PARTNERSHIPS. The Borrower and each corporate
Subsidiary is a corporation duly organized and validly existing in good
standing under the laws of its respective state of formation and has the full
corporate power and authority to own its properties and to carry on its
business as now being conducted and is duly qualified and authorized to do
business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification and authorization. The
Subsidiaries that are partnerships have been duly organized as limited
partnerships and are validly existing in good standing under the laws of their
respective states of formation and have the power and authority to own their
properties and to carry on their business and are duly qualified and authorized
to do business in each jurisdiction in which the character of their properties
or the nature of their business requires such qualification and authorization.
All of the outstanding stock of the corporate Subsidiaries is owned by
Borrower. All of the outstanding partnership interests of the Subsidiaries
that are partnerships are owned by corporate Subsidiaries.
2. FULL CORPORATE POWER. The Borrower and each Subsidiary has full corporate or
partnership power and authority to execute, deliver and perform its obligations
under the Loan Documents to which it is a party, all corporate or partnership
action required for the execution, delivery and performance thereof has been
duly taken, and each of such Loan Documents to which it is a party has been
duly executed and delivered by the Borrower or Subsidiary, as applicable, and
constitutes the legal, valid and binding obligation of the Borrower or
Subsidiary, as applicable, enforceable against the Borrower or Subsidiary, as
applicable, in accordance with its terms.
3. EXECUTION OF THE LOAN DOCUMENTS. The execution, delivery and performance by
each of the Borrower and its Subsidiaries of the Loan Documents to which it is
a party do not:
3.1 require any approval or consents of the stockholders of the Borrower,
3.2 conflict with, or result in a breach of or constitute a default under:
3.2.1 the articles of incorporation, bylaws, certificate of limited partnership
or partnership agreement, as applicable of the Borrower or any Subsidiary;
3.2.2 any law or any order, writ, injunction or decree of any court or
governmental authority to which the Borrower or any Subsidiary or its property
is subject; or
3.2.3 any document, instrument or agreement evidencing any of the Indebtedness
set forth on Schedule 6.1(g) of the Credit Agreement or any material agreement
or instrument to which the Borrower or any Subsidiary is a party or by which
the Borrower or its property is bound; or
3.3 result in the creation or imposition of any lien, charge or encumbrance
upon the properties of the Borrower and any Subsidiary.
4. NO LITIGATION. There are no pending or, to the best of our knowledge,
threatened, suits or proceedings against the Borrower, any Subsidiary or its
respective properties before any court, arbitrator or governmental or
administrative body or agency, that if adversely determined would have a
material adverse effect on the business, condition (financial or otherwise),
operations, liability, assets or prospects of the Borrower, except as set forth
on Schedule 5.1(g) to the Credit Agreement.
5. NO AUTHORIZATION. No authorization, consent or approval of any governmental
authority or third party, not heretofore obtained, is required for the
execution and delivery of any of the Loan Documents by the Borrower or any
Subsidiary.
6. NOT AN "INVESTMENT COMPANY". Neither the Borrower nor any Subsidiary is, nor
is the Borrower or any Subsidiary 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.
7. REIT QUALIFICATION. The Borrower met the requirements for qualification and
taxation as a REIT under the Internal Revenue Code of 1986, as amended (the
"Code"), for the taxable years 1990-1996.
8. 1997 REIT QUALIFICATION. The Borrower's diversity of stock ownership and
proposed method of operation should allow it to qualify as a REIT for 1997.
9. REGULATIONS G.T.U AND X. The making of any Loans and the application of the
proceeds thereof as provided in the Credit Agreement do not violate Regulation
G, T, U or X of the Board of Governors of the Federal Reserve System.
10. USURY. If governed by the laws of the State of Georgia, the provisions of
the Loan Documents with respect to payment of interest, fees, costs, and other
charges for the use of money would not violate the interest and usury laws as
in effect in the State of Georgia.
11. GOVERNING LAW. In a properly presented and argued case, a state court or a
federal court located in the State of Georgia and applying the conflict of law
rules of the State of Georgia should give effect to each of the provisions of
the Loan Documents providing that such document is to be governed by the laws
of the State of North Carolina.
The opinions expressed in paragraph 2 above are subject to the following
qualifications and limitations:
11.1 Enforcement of the Loan Documents may be limited by fraudulent conveyance,
bankruptcy, insolvency, reorganization, moratorium or similar state or federal
debtor relief laws from time to time in effect which affect the enforcement of
creditors' rights in general.
11.2 Enforcement of the Loan Documents is subject to general equitable
principles and to general standards of commercial reasonableness and the
possible unenforceability of provisions purporting to waive certain rights of
guarantors.
11.3 The enforceability of provisions in the Loan Documents providing for
indemnification and contribution may be limited by federal or state securities
laws and the public policy underlying such laws.
11.4 The enforceability of provisions in the Loan Documents to the effect that
terms may not be waived or modified except in writing and with respect to the
waiver of trial by jury may be limited under certain circumstances.
11.5 Our opinion with respect to the enforceability of the Loan Documents is
based upon the assumption that the relevant law of the State of North Carolina
is substantially similar to the law of the State of Georgia.
The foregoing opinions are limited to matters involving the federal laws of the
United States, the law of the State of Georgia, the Alabama Business
Corporation Act and the Maryland General Corporation Law and we do not express
any opinion as to the laws of any other jurisdiction.
The opinions expressed in paragraphs 7-8 are based upon the Code, the U.S.
Treasury Regulations promulgated thereunder, current administrative positions
of the U.S. Internal Revenue Service and existing judicial decisions, any of
which could be changed at any time, possibly on a retroactive basis. Any such
changes could adversely affect the opinions rendered herein.
This opinion is delivered solely for your benefit in connection with the Credit
Agreement and may not be relied upon by any other person or for any other
purpose without our prior written consent, except that it may be relied upon as
of the date hereof by any successor or permitted assignee of a Lender or the
Agent succeeding to the rights of such Lender or the Agent under the Loan
Documents.
HULL, TOWILL, NORMAN & BARRETT, P.C.
