EXHIBIT 10.9
Mid-America Apartment Communities, Inc.
Mid-America Apartments, L.P.
Revolving Credit Agreement
(Amended and Restated)
AmSouth Bank
Administrative Agent
March 16, 1998
Contents
I. LOAN TERMS 1
1.1. The Loans 1
1.2. Borrowings 2
1.3. Commitments 2
1.4. Notes 2
1.5. Maximum amounts of Loans and Borrowings 2
1.6. Minimum Borrowing size 2
1.7. Swing Line Facility 2
1.8. Letters of Credit 4
1.9. Drafts under a Letter of Credit 5
1.10. Maturity of Loans 5
1.11. Fees 5
1.12. Interest Periods 7
1.13. Interest 7
1.14. Maximum Eurodollar Borrowings 8
1.15. Borrowers' termination of Borrowing Rights 8
1.16. Voluntary and Mandatory Prepayments 8
1.17. Payments generally 10
1.18. Funding losses 11
1.19. Pro-rata treatment 11
1.20. Whole dollars 12
II. BORROWINGS AND CONVERSION PROCEDURES 12
2.1. Borrowing Notices 12
2.2. Funding of Loans 12
2.3. Lender's failure to fund 13
2.4. Conversions 13
2.5. Defective notices 14
III. CONDITIONS 15
3.1. Conditions to effectiveness
of this Agreement 15
3.2. Conditions to Borrowings 16
3.3. Conditions to Maintaining Loans 17
3.4. Conditions to Release
of Mortgaged Property 18
3.5. Conditions to Addition of Property 19
IV. Representations and warranties 21
4.1. Corporate existence and power 21
4.2. Corporate, partnership and governmental
authorization; non-contravention 22
4.3. Binding effect 22
4.4. Financial information 22
4.5. No material adverse change 22
4.6. Litigation 22
4.7. Taxes 23
4.8. Compliance with ERISA 23
4.9. Not an investment company
or public utility holding company 23
4.10. Margin Regulations 23
4.11. Title to assets 23
4.12. Contracts or restrictions affecting
Borrowers 24
4.13. No default 24
4.14. Patents and Trademarks 24
4.15. Hazardous Substances 24
4.16. Real Estate Investment Trust 24
4.17. Subsidiaries 24
V. Affirmative Covenants 25
5.1. Financial information 25
5.2. Maintenance of property;insurance 26
5.3. Compliance with laws 27
5.4. Books and records; payment of Taxes 27
5.5. Notice of Defaults 28
5.6. ERISA events 28
5.7. Use of proceeds 28
5.8. Maintenance of existence; merger;
sale of assets 28
5.9. Right of inspection 29
5.10. Environmental laws 29
5.11. Notice of adverse change in assets 29
5.12. Indemnification 29
5.13. Qualification as a Real Estate Investment
Investment Trust 31
5.14. Ownership of Subsidiaries 31
VI. Negative Covenants of Borrowers 31
6.1. Liens 31
6.2. Sale of Assets 32
6.3. Accounts Receivable from Related Persons 32
6.4. Loans to Officers and Employees 32
6.5. Trademarks and Trade Names 32
6.6. Net Operating Loss 33
6.7. Dividend Payout 33
6.8. Other Financial Covenants 33
6.9. Control 34
6.10. Subsidiary Ownership 34
6.11. Subsidiary Debt 34
VII. Default 34
7.1. Events of Default 34
7.2. Action on Default 39
7.3. Notice of Default 39
VIII. The Administrative Agent 40
8.1. Appointment and authorization 40
8.2. Other conduct 40
8.3. Scope of obligations 40
8.4. Consultation with experts 40
8.5. Liability of Administrative Agent 40
8.6. Indemnification 41
8.7. Successor Administrative Agent 41
8.8. Fees 42
IX. Change in circumstances 42
9.1. Eurocurrency Reserve Requirements 42
9.2. Increased cost or reduced return 42
9.3. LIBOR unavailable or inadequate 44
9.4. Illegal Loans 45
9.5. Termination of suspension 45
9.6. Taxes on payments 45
9.7. Change of Office 47
9.8. Replacement of Lender 47
X. Miscellaneous 48
10.1. Notices 48
10.2. No waivers; remedies cumulative;
integration; survival 48
10.3. Expenses; documentary Taxes 49
10.4. Indemnification 49
10.5. Sharing of set-offs 50
10.6. Amendments and waivers 51
10.7. Successors and assigns 51
10.8. Borrowers' liability 54
10.9. No reliance on Margin Stock collateral 54
10.10. Credit decision 54
10.11. Alabama law 54
10.12. Waiver of jury trial 54
10.13. Venue of Actions 55
10.14. Execution 55
10.15. Survival 55
XI. Definitions and usages 55
11.1. Definitions 55
11.2. Accounting terms and determinations 67
11.3. Miscellaneous usages 67
List of Schedules 68
List of Exhibits 69
Revolving Credit Agreement
This Revolving Credit Agreement is dated as of
March 16, 1998 (this "Agreement") among
Mid-America Apartment Communities, Inc. ("MAAC"),
Mid-America Apartments, L.P. ("Mid-America"),
the financial institutions listed on Schedule 1 as
amended or supplemented from time to time (the
"Lenders"), and
AmSouth Bank, an Alabama banking corporation, as
Administrative Agent for the Lenders, its
successors and assigns (in such capacity, the
"Administrative Agent").
This Agreement is executed in amendment and
restatement of that certain Revolving Credit Agreement
among the Borrowers, the Administrative Agent and
certain lenders, dated November 20, 1997.
The parties, intending to be legally bound,
severally agree
as follows:
I. LOAN TERMS
1.1. The Loans
Each Lender shall make loans ("Loans") to MAAC and
Mid-America, jointly and severally (each a
"Borrower" and together the "Borrowers").
The agreements of the Lenders to make Loans, are
several and not joint.
All Loans shall be made on the terms, and
subject to the conditions, of this Agreement. The
Borrowers may borrow, repay, prepay and reborrow
under this Agreement from the Effective Date until
the Termination Date of the Loans, in an
aggregate principal amount not to exceed, at any one
time outstanding, the lesser of:
the sum of Two Hundred
Million Dollars ($200,000,000.00), or
the Borrowing Base reduced by (a) the
amount of all outstanding Letters of Credit
and (b) the amount of outstanding Advances.
1.2. Borrowings
All Loans to the Borrowers that have
Interest Periods that begin on the same day
and end on the same day shall constitute a
single borrowing ("Borrowing").
1.3. Commitments
A Lender's Commitment as of the date of
this Agreement is the amount shown opposite
its name on Schedule 1; a Lender's Commitment
may be subsequently reduced pursuant to this
Agreement or increased pursuant to a
permitted assignment. As of the date of this
Agreement, the Aggregate Commitment is
$200,000,000.00.
1.4. Notes
The Loans shall be evidenced by promissory
notes of the Borrowers, payable to the order
of each Lender, in the principal amount of
their respective Proportionate Share of the
Aggregate Commitment, and in the form
substantially the same as the copy of the Note
attached hereto as Exhibit A (the "Notes").
The Notes, in addition to evidencing new
indebtedness, also amend, restate, renew and
consolidate certain notes related to the
Mortgaged Property, as explained on Exhibit I
attached hereto.
1.5. Maximum amounts of Loans and Borrowings
(a) No Lender shall make Loans in
an aggregate unpaid principal amount
that exceeds the Lender's Commitment.
Each Borrowing shall consist of Loans made
by the Lenders in proportion to their
respective Commitments.
(b) No Loan shall be made to the Borrowers if,
immediately following the making of the Loan, the
aggregate unpaid principal amount of all Loans to the
Borrowers would exceed the lesser of the Aggregate
Commitment or the Borrowing Base.
1.6. Minimum Borrowing size
Each Borrowing shall be in the principal amount of
$2,000,000 or a larger integral multiple of $500,000.
1.7. Swing Line Facility
(a) The "Swing Line Facility" is being extended
under, and as a component of, the Aggregate Commitment,
and shall be advanced and readvanced by the
Administrative Agent to the Borrowers in accordance
with the provisions of this Agreement hereinafter set
forth, and shall be evidenced by, and payable, together
with interest thereon, in accordance with the
provisions of, the Swing Line Facility Note. The
Borrowers expressly acknowledge and agree that:
1. the Administrative Agent directly
assumes the obligation to fund, and shall have the
sole obligation to fund, 100% of each Advance of
the Swing Line Facility which is made, or required
to be made, in accordance with the provisions of
this Agreement, and
2. the Borrowers shall not have the
right under any fact or circumstance to look to
any other party, including, without limitation,
any other Lender, for the funding of all or any
portion of the Swing Line Facility which is
required to be made in accordance with the
provisions of this Agreement if the Administrative
Agent shall default in doing so, all risk of such
default being assumed in all respects by the
Borrowers.
(b) Subject to satisfaction of the applicable
general terms and conditions set forth in this
Agreement, Advances under the Swing Line Facility will
be available on any day the Administrative Agent is
open for business and on the same day notice is given
by the Borrowers to the Administrative Agent, provided
that any such request by the Borrowers for an Advance
under the Swing Line Facility is received by the
Administrative Agent prior to 1:00 P.M., Birmingham
time, on the date such Advance is requested. The
outstanding principal balance under the Swing Line
Facility may be prepaid, in whole or in part and at any
time, without prior notice to the Administrative Agent
and without payment of penalty or premium. Notice of
prepayments under the Swing Line Facility must be
received by the Administrative Agent prior to 1:00
P.M., Birmingham time, and payment received by the
close of business on the day of notice for the
Borrowers to receive credit for such prepayment that
day. With respect to an Advance under the Swing Line
Facility in excess of $750,000, the Borrowers shall
submit to the Administrative Agent a detailed request
for the Advance in the form attached hereto as Exhibit
B. For an Advance of $750,000 or less under the Swing
Line Facility, the Borrowers shall submit to the
Administrative Agent a written memo requesting such
Advance. Notwithstanding anything to the contrary
contained herein, all controlled advances and payments
automatically generated by the Administrative Agent's
cash management system shall not require any of the
above notices from the Borrowers. The Borrowers shall
notify the Administrative Agent in writing of the
responsible officer, who shall be either the chief
financial officer, the chief executive officer, the
chief operating officer, or the treasurer (the
"Responsible Officer") authorized to request Advances
under the Swing Line Facility on behalf of the
Borrowers.
(c) Upon request of the Administrative Agent,
each of the other Lenders shall within 24 hours of such
request fund their Proportionate Share in each Advance
under the Swing Line; however, the failure of any such
Lender to fund their Proportionate Share of each
Advance under the Swing Line Facility shall not relieve
the Administrative Agent from its obligation under
subparagraph 1.7(a) above to fund the entire Advance.
1.8. Letters of Credit
The Letter of Credit Facility is being extended under,
and as a component of, the Aggregate Commitment. The
Borrowers shall have the right, from time to time, to
request the Administrative Agent to issue one or more
unconditional and irrevocable letters of credit for its
account or a Subsidiary's (each a "Letter of Credit"). The
Borrowers, the Lenders and the Administrative Agent
acknowledge and agree that the Existing Letters of Credit
previously issued by the Administrative Agent for the
account of MAAC shall each constitute a Letter of Credit
hereunder for all purposes. Any request by the Borrowers
for a Letter of Credit shall be subject to the terms and
conditions of this paragraph hereinafter set forth:
(a) Each request for the issuance of a Letter of
Credit shall be in writing, shall state the requested
date of issuance of the Letter(s) of Credit (which
shall be at least five (5) Business Days after the
request is received by the Administrative Agent), shall
state the requested amount of the Letter(s) of Credit
and the purposes for which the Letter(s) of Credit are
requested, shall indicate both the account party and
the beneficiary of the Letter(s) of Credit, and shall
specify the terms of the Letter(s) of Credit (which
terms shall be reasonably satisfactory to the
Administrative Agent).
(b) The aggregate amount of Letters of Credit
outstanding at any one time shall not exceed
$60,000,000.
(c) At no time during the term of the Loans shall
there be more than twenty (20) Letters of Credit in the
aggregate outstanding, unless otherwise agreed to by
Administrative Agent in its sole discretion.
(d) No Letter of Credit shall have an expiration
date beyond the Maturity Date.
(e) The purpose of each Letter of Credit shall be
to provide credit enhancement for tax exempt bond
financing of the Borrowers or a Subsidiary or for such
other purposes as may be acceptable to the
Administrative Agent, which approval shall not be
unreasonably withheld or delayed.
(f) The Administrative Agent shall have the sole
obligation to issue Letter(s) of Credit under this
Agreement, and Borrower shall not have the right under
any fact or circumstance to look to any other party,
including, without limitation, any other Lender, for
the issuance of the Letter(s) of Credit if the
Administrative Agent defaults in doing so, all such
risk of default being assumed by the Borrowers.
(g) Upon written request of a Lender, the
Administrative Agent shall provide a copy of the
Letter(s) of Credit to such Lender.
1.9. Drafts under a Letter of Credit
Any draw honored by the Administrative Agent under a
Letter of Credit shall constitute an automatic Advance at
the Base Rate and shall be evidenced by and payable,
together with interest thereon, in accordance with the
provisions of the Notes. Upon request of the Administrative
Agent, each of the other Lenders shall, not later than 24
hours after such request, fund their respective
Proportionate Share in each such Advance which is made as a
result of a draw under a Letter of Credit.
1.10. Maturity of Loans
Subject to Section 7.2, (Action on Default), and
Section 1.15 (Borrowers' termination of Borrowing Rights),
the unpaid principal amount of each Loan shall be due and
payable on the Maturity Date.
The Borrowing Rights of the Borrowers and the
obligation of the Lenders to extend Loans shall permanently
terminate on the Termination Date.
1.11. Fees
(a) Letter of Credit Fees
The annual fee for the issuance of a Letter
of Credit shall be equal to one and one-quarter percent
(1.25%) per annum multiplied by the face amount of such
Letter of Credit; and any such fee shall be paid
annually in advance for the entire period of time that
such Letter of Credit is outstanding (the "Letter of
Credit Fee"). One-eighth of one percent (.125%) of
each Letter of Credit Fee shall be retained by the
Administrative Agent for its sole account, and the
remaining one and one-eighth percent (1.125%) shall be
shared with the Lenders in accordance with their
respective Proportionate Share. The Borrowers shall
also pay to the Administrative Agent an administrative
fee at the customary rate charged by the Administrative
Agent for the issuance of letters of credit generally.
(b) Commitment Fee
The Borrowers have agreed to pay to the
Lenders a commitment fee (the "Commitment Fee")
pursuant to a separate letter agreement among the
Administrative Agent and the Borrowers. Such payment
is being made in consideration of the agreement of the
Lenders to make funds available to the Borrowers under
the terms and provisions hereof from the Effective Date
until the Termination Date. The Borrowers agree that
this commitment fee is fair and reasonable, considering
the condition of the money market, the creditworthiness
of the Borrowers and the interest rate to be paid for
the Loan.
(c) Facility Fee
The Borrowers shall pay an annual fee, due on
the closing of the Loans and on November 24, 1998 (the
"Facility Fee"). Such payment shall be made in
consideration of the Lenders' agreement to make funds
available to the Borrowers under the terms and
provisions hereof. The Facility Fee due on closing
shall be payable pursuant to a separate letter
agreement between the Administrative Agent and each
Lender. The Facility Fee due on November 24, 1998,
shall be payable to the Lenders in accordance with
their respective Proportionate Share.
(d) Collateral Fee
The Borrowers shall pay to the Administrative
Agent, for the sole benefit of the Administrative
Agent, a fee of $3,500 for each Apartment Community
submitted to the Administrative Agent for inclusion as
a Mortgaged Property throughout the term of the Loans.
(e) Other Fees
The Borrowers shall pay the Administrative
Agent such other fees as required by the Administrative
Agent in a separate letter agreement between the
Administrative Agent and the Borrowers.
1.12. Interest Periods
Each Eurodollar Loan shall have an Interest Period of
thirty (30) or sixty (60) days (the "Interest Period") as
the Borrowers specify in the applicable Borrowing or
Conversion Notice, except that:
an Interest Period that would otherwise end
on a day that is not a Business Day shall end on the
following Business Day unless the following Business
Day falls in another calendar month, in which case the
Interest Period shall end on the preceding Business
Day, and
an Interest Period that begins on the last
Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the
calendar month at the end of the Interest Period) shall
end on the last Business Day of a calendar month.
1.13. Interest
For each Loan, the Borrowers may elect that such Loan
accrue interest at either the Base Rate or the Eurodollar
Rate.
(a) Each Eurodollar Loan shall bear interest at
the Eurodollar Rate on its unpaid principal amount from
the first to the last day in its applicable Interest
Period. Accrued interest shall be payable on
Eurodollar Loans on the last day of the applicable
Interest Period.
(b) Each Base Rate Loan and each Loan evidenced
by the Swing Line Facility Note shall bear interest at
the Base Rate on its unpaid principal amount from the
date such Loan is made until repaid. Accrued interest
shall be payable on Base Rate Loans and Loans evidenced
by the Swing Line Facility Note on the first day of
each month.
(c) The Borrowers shall pay on the Conversion
Date accrued interest on any Loan converted prior to
the last day of its Interest Period.
(d) Overdue principal of or interest on a Loan
shall bear interest, payable on demand, from the first
day the principal or interest is overdue until paid
(after as well as before judgment) at a rate per annum
equal to the sum of 2% plus the applicable interest
rate on the particular Loan for each day.
(e) Upon the successful completion, reasonably
satisfactory to all of the Lenders, of MAAC's issuance
or sale of common or preferred stock that produces net
proceeds of no less than $90,000,000, the interest
rates available hereunder shall be modified as follows:
1. the Margin utilized in calculating
the Eurodollar Rate shall equal one and one
quarter percent (1.25%); and
2. the Base Rate shall equal the Prime
Rate minus .75%. The Borrowers may submit to the
Lenders a written request for such continuation
of, or reduction in, the Margin and the Base Rate,
and shall deliver to the Lenders such information,
reports and opinions with such request that the
Lenders deem desirable or necessary.
(f) The Administrative Agent shall determine the
interest rates for all Loans and shall promptly notify
the Borrowers and the Lenders of such interest rates.
Such determinations shall be conclusive in the absence
of manifest error.
1.14. Maximum Eurodollar Borrowings
Notwithstanding anything to the contrary contained
herein, there shall not be more than nine (9) Eurodollar
Borrowings outstanding at any given time.
1.15. Borrowers' termination of Borrowing Rights
The Borrowers may, upon at least three Business Days'
notice to the Administrative Agent, permanently terminate
their Borrowing Rights. If the Borrowers so terminate their
Borrowing Rights, the unpaid principal amount of all Loans
to the Borrowers with all accrued interest, and all fees,
and funding losses, and other amounts owing by the Borrowers
under this Agreement, shall be payable on the effective date
of the termination. Additionally, the Borrowers shall cause
all outstanding Letters of Credit to be surrendered to the
Administrative Agent on such date of termination. The
Administrative Agent shall promptly notify the Lenders of
such termination of the Borrowers' Borrowing Rights.
1.16. Voluntary and Mandatory Prepayments
(a) The Borrowers may prepay on any Business Day
the unpaid principal amount of the Loans in a Borrowing
in whole or in a part that is $2,000,000 or a larger
integral multiple of $500,000.
(b) In the event the aggregate outstanding
balance of the Loans shall at any time exceed the
Borrowing Base, the Borrowers shall immediately make a
principal payment which will reduce the outstanding
aggregate principal balance of the Loans to an amount
not exceeding the Borrowing Base.
(c) (i) If a Development Project for which
Advances have been made in accordance with the
Borrowing Base has not become a Stabilized Property
within one (1) year from the date Certificates of
Occupancy have been issued for all buildings within the
Development Project, the Advance Rate of such
Development Project shall be reduced from 50% to 25%;
(ii) if such Development Project has not become a
Stabilized Property within 18 months of the date
Certificates of Occupancy have been issued for all
buildings within the Development Project, the Advance
Rate shall be reduced to $0.00; and (iii) if
Certificates of Occupancy for all buildings within the
Development Project have not been issued within 24
months from the commencement of construction of such
Development Project, the Advance Rate shall be reduced
to $0.00; and then, in all such instances, a payment of
principal shall immediately be due and payable in an
amount sufficient to reduce the outstanding principal
balance of the Loans to an amount not exceeding the
Borrowing Base. Nothing in this subsection shall
preclude the Borrowers from subsequently resubmitting a
Development Project described in this subsection in
accordance with Section 3.5 hereof.
(d) A prepayment of principal must be accompanied
by payment of accrued interest on the principal amount
prepaid. Prepayments of Loans accruing interest at the
Eurodollar Rate shall be subject to Section 1.18
(Funding losses).
(e) In the event a Curative Measure is not
substantially completed within ninety (90) days of the
date the subject Mortgaged Property was added to the
Borrowing Base, the Borrowers shall, within ten (10)
days after notice from the Administrative Agent to
Borrowers, make a prepayment of principal equal to the
cost of such Curative Measure as set forth in the
applicable Inspection Report, unless such Curative
Measure is completed within such ten (10) day period.
(f) If a Stabilized Property has been injured or
damaged by fire or other casualty to the extent that
twenty-five percent (25%) of the apartment units
included in such Stabilized Property has been rendered
uninhabitable, the Borrowing Base shall be immediately
reduced, and the Loans repaid by the corresponding
amount, in an amount equal to 60% of the Fair Market
Value of such Stabilized Property immediately prior to
such damage or injury; provided, however, that if the
damaged Stabilized Property is insured in an amount
sufficient to rebuild or restore such damage and if
rental insurance is payable for the repair and
reconstruction period, no reduction in the Borrowing
Base will result hereunder. It is agreed that after
such damaged Stabilized Property has been repaired to
the Administrative Agent's satisfaction, the Borrowing
Base shall be recalculated as of the date the
Administrative Agent approved such repair, based on the
then Fair Market Value.
Prepayment Notices
The Borrowers shall notify the Administrative Agent of
a prepayment, specifying the date of the prepayment and the
amount of the Borrowings to be prepaid, at least two (2)
Business Days before the date of prepayment.
Upon receipt of a notice of prepayment, the
Administrative Agent shall promptly notify each Lender of
its contents and of the Lender's Proportionate Share of the
prepayment.
1.17. Payments generally
(a) The Borrowers shall make each payment of
principal of and interest on its Borrowings and of fees
hereunder by 11:00 a.m. on the date due, in immediately
available funds in Birmingham, Alabama, to the
Administrative Agent at its Notice Address. The
Administrative Agent shall promptly distribute to each
Lender its Proportionate Share of each such payment.
(b) If a payment of principal, interest or fees
is due on a day that is not a Business Day, the date
for the payment shall be extended to the following
Business Day, except that if the following Business Day
falls in another calendar month, the date for the
payment of a Loan shall be the preceding Business Day.
If the date for a payment of principal is so extended,
or is extended by operation of law or otherwise,
interest on the payment shall be payable for the
extended time.
(c) All interest and fees shall be computed on
the basis of a year of 360 days and paid for the actual
number of days elapsed.
(d) Entries in records maintained by a Lender in
accordance with its usual practice evidencing the
Borrowers' indebtedness to the Lender under this
Agreement and under the Notes, including the amounts of
Loans, applicable Interest Periods and payments of
principal and interest, shall be prima facie evidence
of the existence and amounts of the obligations of the
Borrowers to which the entries relate. A Lender's
failure to maintain such records, or any error therein,
shall not affect the Borrowers' obligations to repay
the Loans in accordance with this Agreement.
1.18. Funding losses
If
- the Borrowers make a payment of principal of
a Loan before the last day of the Interest Period for
such Loan (including prepayment of Loans pursuant to
Section 9.4 (Illegal Loans), or
- the Borrowers fail to borrow or prepay or to
convert a Loan after the Administrative Agent has
notified any other Lender of the Borrowing, prepayment
or Conversion, then the Borrowers shall reimburse each
Lender on demand for any resulting loss or expense
incurred by it, including any loss incurred in
obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period
after such payment or Conversion or failure to borrow,
prepay or convert, provided that the Lender has
delivered to the Borrowers a certificate reasonably
detailing the amount of the loss or expense, which
certificate shall be conclusive in the absence of
manifest error.
1.19. Pro-rata treatment
Except as otherwise expressly provided in this
Agreement, or to the extent otherwise required due
to a Lender's failure to fund,
- each payment of a fee shall be allocated among the
Lenders in their Proportionate Share for the relevant period,
- each payment of principal of a Borrowing shall
be allocated among the Lenders in their
respective Proportionate Share of the unpaid principal
amounts of their Loans included in the Borrowing, and
- each payment of interest on a Borrowing shall
be allocated among the Lenders in their respective
Proportionate Share of the amounts of accrued and
unpaid interest on their Loans included in the
Borrowing.
1.20. Whole dollars
In computing the amounts of the Lenders' Loans to be
included in a Borrowing, the Administrative Agent may round
each Lender's Loan to the next higher or lower whole dollar
amount.
II. BORROWINGS AND CONVERSION PROCEDURES
2.1. Borrowing Notices
(a) The Borrowers shall notify the Administrative
Agent (a "Borrowing Notice") by 1:00 p.m., Birmingham
time, on the third Business Day immediately preceding a
Eurodollar Borrowing and by 1:00 p.m., Birmingham time,
on the Business Day immediately preceding a Base Rate
Borrowing.
(b) A Borrowing Notice shall be in substantially
the form of Exhibit C and shall specify:
1. the aggregate principal amount of
the Borrowing,
2. whether the Borrowing is a
Eurodollar Loan or a Base Rate Loan,
3. the Interest Period for a
Eurodollar Borrowing (which shall not extend
beyond the Maturity Date),
4. the Borrowers' account at the
Administrative Agent to which the proceeds of the
Borrowing are to be deposited, and
5. whether the Borrowing is to be
utilized for a particular Development Project
subject to a Mortgage.
2.2. Funding of Loans
The Administrative Agent shall promptly notify each
Lender of the contents of each Borrowing Notice and of the
principal amount of the Lender's Loan to be included in the
Borrowing.
Not later than 12 p.m. on the day of a Borrowing, each
Lender shall make available the full amount of its Loan to
be included in the Borrowing, in immediately available funds
in Birmingham, to the Administrative Agent at its Notice
Address.
Unless the Administrative Agent determines that an
applicable condition specified in Section 3 has not been
satisfied, the Administrative Agent shall make the funds
received from the Lenders pursuant to this Section 2.2
available to the Borrowers at the Administrative Agent's
Notice Address by 2 p.m. on such day for a Borrowing.
2.3. Lender's failure to fund
Unless a Lender notifies the Administrative Agent
before the date of a Borrowing (whether for a Eurodollar
Borrowing, a draw under a Letter of Credit or any other
Borrowing available hereunder) that the Lender will not make
available to the Administrative Agent the full amount of its
Loan to be included in the Borrowing, the Administrative
Agent may assume that the Lender's Loan will be made
available to the Administrative Agent on the day of the
Borrowing and may, in reliance on that assumption, make the
full amount of the Loan available to the Borrowers.
If the Administrative Agent makes the full amount of a
Lender's Loan available to the Borrowers, and the Lender
does not make available to the Administrative Agent some or
all of the Loan (the "Unfunded Amount") by the date of the
Borrowing, then the Lender shall pay the Administrative
Agent on demand interest at the Federal Funds Rate on the
Unfunded Amount from the date of the Borrowing until the
Lender makes the Unfunded Amount available to the
Administrative Agent or the Borrowers repay the Loan.
If a Lender does not make the full amount of its Loan
included in a Borrowing available to the Administrative
Agent by the third Business Day after the date of the
Borrowing, the Borrowers shall, promptly on the
Administrative Agent's demand, repay the full amount of such
Loan to the Administrative Agent, together with accrued
interest at the interest rate for the Loans comprising the
Borrowing.
Nothing in this Section 2.3 shall relieve a Lender of
the obligation to make the full amount of its Loans
available to the Administrative Agent.
2.4. Conversions
The Borrowers may at any time at the end of an Interest
Period, if they are not in Default, convert the Loans
bearing interest at the Eurodollar Rate into new Loans for
an additional Interest Period (a "Conversion"). A
Conversion shall convert each Loan in a Borrowing in the
same proportion. Since each Loan in a Borrowing shall be
converted in the same proportions, Conversion shall refer
equally to Conversion of Loans and Conversion of Borrowings.
A Borrower may initiate a Conversion by notifying the
Administrative Agent (a "Conversion Notice") not later than
1:00 p.m. on the third Business Day before the Conversion
Date.
The Administrative Agent shall promptly notify each
Lender of the contents of each Conversion Notice and of the
Lender's Loans that will result from the Conversion.
A Conversion Notice shall be in substantially the form
of Exhibit D and shall:
- state the Conversion Date,
- identify each then outstanding Borrowing that
is to be converted,
- state the aggregate unpaid principal amount
of the Loans in such outstanding Borrowings, and
- state the principal amount and Interest
Period (which shall not extend beyond the Maturity
Date) of each Borrowing into which such outstanding
Borrowings are to be converted.
Each Borrowing resulting from a Conversion must, as to
amount and Interest Period, conform to the requirements for
a Borrowing comprised of Loans made on such date (as if the
Loans to be converted had been prepaid, and the new Loans
made, on the Conversion Date), and a Conversion Notice shall
be effective solely as to the resulting Borrowings that do
so conform. If a Conversion Notice purports to or is
effective to convert only part of the Borrowings specified
in the Conversion Notice, the remaining parts of such
Borrowings shall on the Conversion date automatically be
converted into a single Base Rate Borrowing. The Borrowers
shall be liable to the Lenders for any funding losses in
accordance with Section 1.18 on any portion of a Borrowing
not converted.
A Conversion of a Loan must satisfy the conditions in
Section 3.2 for the making of a Loan.
If part or all of a Loan is not otherwise converted by
the last day of its Interest Period, it shall automatically
be converted on the last day of its Interest Period into a
Base Rate Loan.
2.5. Defective notices
The Administrative Agent shall promptly notify a Lender
or the Borrowers if the Administrative Agent believes that a
notice or other document given to the Administrative Agent
by a party under Section 1 or this Section 2 fails to
conform to the requirements of such Section.
III. CONDITIONS
3.1. Conditions to effectiveness of this Agreement
This Agreement shall become effective when the
Administrative Agent has received the following documents:
-for each party to the Agreement, an original
or telecopied counterpart of this Agreement signed by
all parties;
-an original Note executed to the order of
each Lender, in the principal amount of such Lender's
Commitment and evidencing such Lender's Loans;
- the original Mortgages upon the Initial
Properties identified in Schedule 2;
- a Subsidiary Guaranty executed by each
Subsidiary executing a Mortgage on the Initial
Properties;
- title insurance policies, appraisals,
evidence of appropriate zoning, environmental reports,
surveys, evidence of insurance and such other
information as the Administrative Agent may request for
each and all of the Initial Properties;
- opinions of counsel satisfactory to the
Administrative Agent to each of the Borrowers,
substantially in the form of Exhibit E;
- a certificate of a senior officer of each
Borrower that (i) no Default has occurred and is
continuing and (ii) the representations and warranties
of the Borrowers contained in this Agreement are true
on the date of this Agreement, substantially in the
form of Exhibit J; and
- such other documents as the Administrative
Agent reasonably requests and deems satisfactory
relating to each Borrower's and Subsidiary's existence,
the corporate authority for and validity of this
Agreement, the Mortgages, each Subsidiary Guaranty and
any other relevant matter.
The Administrative Agent shall promptly notify the
Borrowers and the Lenders when this Agreement becomes
effective, and such notice shall be conclusive and binding
on all parties.
3.2. Conditions to Borrowings
The obligation of a Lender to make a Loan to the
Borrowers as part of a Borrowing is subject to the
satisfaction of the following conditions:
- this Agreement is effective;
- the Administrative Agent receives a Borrowing
Notice conforming to the requirements of this
Agreement;
- immediately after the Borrowing, the
aggregate unpaid principal amount of the Loans will not
exceed the lesser of the Aggregate Commitment or the
Borrowing Base;
- each Borrower represents that no material
adverse change in its financial condition or results of
operations has occurred;
- immediately before and after the Borrowing,
no Default will have occurred and be continuing;
- the representations and warranties of the
Borrowers contained in this Agreement are true on and
as of the date of the Borrowing with the same effect as
if made on and as of such date (except to the extent
such representations and warranties expressly relate to
an earlier date);
- the Administrative Agent receives, with the
Borrowing Notice, an update to the title policy for
each Borrowing on a Development Project;
- no mechanic's lien claim shall have been
filed or asserted against any Mortgaged Property, which
has not been "bonded off" such Mortgaged Property in
accordance with applicable law;
- all licenses, permits and approvals of
governmental authorities required for the operation of
the respective Mortgaged Properties shall have been
obtained and are in full force and effect;
- each request for a Borrowing for a
Development Project shall be subject to the approval of
the Administrative Agent and the Administrative Agent's
construction consultant, which approval shall not be
unreasonably withheld or delayed;
- there shall have occurred no material
violation of any applicable laws, ordinances, rules or
regulations; it being understood that a single
violation shall be deemed material if it involves by
way of fees, fines, costs, expenses, curative work or
other potential loss or expense to the Borrowers
exceeding the sum of $100,000.00 or $500,000 in the
aggregate for multiple violations;
- there shall be no action, suits or
proceedings pending, or to the Borrowers' knowledge,
threatened against or affecting either Borrower, any
Subsidiary or any Mortgaged Property, at law or in
equity, or before any governmental agencies, which, if
adversely determined, would substantially impair the
ability of the Borrowers to pay their obligations as
set forth herein or adversely affect the priority or
security of a Mortgage; and
- there shall have occurred no material adverse
change in the financial condition of either Borrower or
any Mortgaged Property.
Each Borrowing shall constitute a representation and
warranty by the Borrowers that, on the date of the
Borrowing, the conditions set forth in this Section 3.2 are
satisfied.
3.3. Conditions to Maintaining Loans
(a) The Administrative Agent shall have the
right, at any time and from time to time, to require
the Borrowers to furnish to the Administrative Agent
current financial information, Inspection Reports,
and/or environmental studies of any one or more of the
Mortgaged Properties if, in the unrestricted discretion
of the Administrative Agent, such Mortgaged Properties
shall have declined in value in any material amount or
may be in violation of any applicable Environmental
Laws. The Borrowers shall have the right to require
the Administrative Agent to commission updated
appraisals, and the Administrative Agent shall also
have the right to require updated appraisals if
required by law or banking regulations. Any such
appraisals and environmental studies must be in form,
content and conclusion satisfactory to the
Administrative Agent, subject to the Administrative
Agent's approval in all respects, and must be made by a
qualified, licensed professional selected and
commissioned by the Administrative Agent. If any such
current financial information, updated appraisal or
environmental study should reflect a decline in value,
the Borrowing Base shall be reduced accordingly; and,
if the then outstanding Loans should exceed the reduced
Borrowing Base, the Borrowers shall be obligated
immediately to reduce the Loans to an amount not
exceeding the applicable reduced Borrowing Base. If
any such appraisal or current financial information
should reflect an increase in value, the applicable
Borrowing Base shall be increased accordingly to the
extent appropriate.
(b) For each Development Project, the Borrower
shall provide to the Administrative Agent a quarterly
statement of occupancy, no later than the 15th day
after the end of each quarter for the immediately
preceding calendar quarter.
(c) If any environmental study should reflect the
necessity or desirability for action to be taken to
prevent or cure the violation or prospective violation
of applicable Environmental Laws, the Borrowers shall,
at their sole cost and expense, immediately undertake
such action and diligently prosecute same to
conclusion.
(d) Although the Administrative Agent shall have
the right to require as many appraisals and
environmental surveys as it shall elect with respect to
each Mortgaged Property, the Borrowers shall be
obligated to pay for only one (1) appraisal and one (1)
environmental survey, with respect to each Mortgaged
Property during any one (1) consecutive twelve (12)
month period. Any appraisals requested by the
Borrowers pursuant to Section 3.3(a) shall be at
Borrowers' sole expense and shall be excluded from
consideration in determining whether the Borrowers are
obligated to pay the costs of additional appraisals
required by the Administrative Agent. Any initial
appraisals and environmental studies furnished to the
Administrative Agent in connection with each Mortgaged
Property shall also be excluded from consideration in
determining whether Borrowers are obligated to pay the
cost of additional appraisals or environmental studies
for any such Property.
3.4. Conditions to Release of Mortgaged Property
(a) The privilege is given and reserved so that
the Borrowers may obtain the release of a Mortgaged
Property from the lien of a Mortgage upon payment to
the Administrative Agent, for application upon the
Loan, a principal amount equal to the amount of the
applicable Advance Rate for such Mortgaged Property,
together with all interest accrued upon such amount,
and all out-of-pocket expenses and advances then due
and owing to the Administrative Agent in connection
with the Loans.
(b) The release privilege herein granted is
conditioned upon (1) there being no Default existing
(a) at the time any such release is requested, or (b)
on the date the release is to be delivered, (2) the
release not causing a Default, and (3) continued
compliance with the Borrowing Base upon the release of
the subject Mortgaged Property.
(c) Any Apartment Community remaining subject to
a Mortgage shall not be dependent on the Mortgaged
Property being released for access, utilities,
amenities or any other matter.
(d) Any such requested release shall be made at
the sole cost and expense of the Borrowers.
3.5. Conditions to Addition of Property
The Borrowers shall be entitled to offer Apartment
Communities which, if approved by Two-Thirds of the Lenders,
shall, upon satisfaction of the following conditions, then
be deemed to constitute Mortgaged Properties and available
for use in determining the Borrowing Base:
(a) For Apartment Communities to be added to the
Borrowing Base as either a Stabilized Property or a
Development Project, the Borrower shall deliver to the
Administrative Agent the following, all in form and
content satisfactory to the Administrative Agent:
1. Evidence that the entity holding
title to the Apartment Community is either a
Borrower or a Subsidiary;
2. an environmental report or reports
evidencing that the Apartment Community is in
material compliance with all Environmental Laws,
using the standard generally applied by
sophisticated commercial lenders experienced in
real estate financing;
3. evidence of hazard and liability
insurance as required herein;
4. evidence of compliance with current
zoning regulations;
5. a current appraisal meeting the
guidelines of the Federal Institutions Reform,
Recovery and Enforcement Act;
6. a Mortgage granting to the
Administrative Agent, for the benefit of the
Lenders, a first lien on the subject Apartment
Community or Development Project, together with a
Subsidiary Guaranty if the owner of the applicable
Apartment Community or Development Project is not
a Borrower;
7. an opinion of local counsel,
opining that the owner of the Apartment Community
or Development Project is qualified to do business
in the state where the Apartment Community or
Development Project is located and that the
Mortgage is a valid and binding obligation of the
owner, enforceable in accordance with its terms;
8. a title insurance policy in the
amount of the Advance Rate of a Stabilized
Property and in the amount of sixty percent (60%)
of the Project Budget for a Development Project,
issued by a title insurance company acceptable to
the Administrative Agent, insuring the priority
lien of the Mortgage, subject only to exceptions
approved by Two-Thirds of the Lenders;
9. a current survey, certified to the
Administrative Agent, which requirement shall be
waived if the insuring title insurance company
deletes the standard survey exception;
10. an Inspection Report;
11. for Florida Apartment Communities
only, evidence that the Fair Market Value of the
proposed Apartment Community, when added to the
Fair Market Value of all the Florida Mortgaged
Properties, does not exceed $110,000,000 in the
aggregate; and
12. additionally, for Development
Projects only:
i) the Project Budget;
ii) plans and specifications;
iii) copies of all design and construction contracts;
iv) copies of all building permits;
v) a written statement from the Borrower that
construction has either commenced or will
commence within thirty (30) days;
vi) if construction has
commenced, evidence satisfactory to the
Administrative Agent of the Work Completed;
and
vii) evidence of availability
of all necessary utilities.
(b) For a Development Project to be converted to
a Stabilized Property, the Borrower shall deliver to
the Administrative Agent:
1. All of the items described in (a)
above to the extent not already submitted, and, if
previously submitted, up-dated if deemed necessary
by the Administrative Agent;
2. A copy of the Certificate of
Occupancy for all buildings included in the
Development Project;
3. Evidence that the Development
Project has achieved and maintained an occupancy
rate of at least 80% for at least the two
immediately preceding calendar months;
4. A current, as-built survey, showing
all improvements, and such other detail as shall
be required by the Administrative Agent; and
5. A certificate of the architect,
certifying that the Development Project has been
completed in substantial accordance with the plans
and specifications which had previously been
delivered to, and approved by, the Administrative
Agent.
IV. Representations and warranties
Each Borrower represents and warrants that:
4.1. Corporate existence and power
Mid-America is a limited partnership duly organized,
validly existing and in good standing under the laws of the
State of Tennessee; it has the power and authority to own
its properties and assets and is in good standing and duly
qualified to carry on its business in every jurisdiction
wherein such qualification is necessary, including, without
limitation, every jurisdiction in which an Apartment
Community is offered to the Lenders as a Mortgaged Property.
MAAC is a corporation duly organized, validly existing,
and in good standing under the laws of the State of
Tennessee; it has the power and authority to own its
properties and assets and is in good standing and duly
qualified to carry on its business in every jurisdiction
wherein such qualification is necessary, including, without
limitation, every jurisdiction in which an Apartment
Community is offered to the Lenders as a Mortgaged Property.
4.2. Corporate, partnership and governmental authorization; non
contravention
The execution, delivery and performance by the Borrower
of this Agreement are within the Borrower's corporate or
partnership, as the case may be, powers, have been duly
authorized by all necessary corporate or partnership, as the
case may be, action, require no action by or in respect of,
or filing with, any governmental body, agency or official
and do not contravene, or constitute a default under, any
provision of applicable law or regulation or of the articles
of incorporation or by-laws or partnership agreement of the
Borrower or of any material agreement, judgment, injunction,
order, decree or other instrument binding upon the Borrower
or result in the creation or imposition of any Lien on any
asset of the Borrower.
4.3. Binding effect
This Agreement is a valid and binding agreement of the
Borrower, enforceable in accordance with its terms, except
as enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights
generally and (ii) general principles of equity.
4.4. Financial information
The consolidated balance sheet of MAAC prepared as of
the 30th day of September, 1997, together with any
explanatory notes therein referred to and attached thereto,
is correct and complete and fairly presents the financial
condition of the Borrowers as of the date of said balance
sheet. A copy of such balance sheet has been delivered to
each Lender.
4.5. No material adverse change
Since September 30, 1997, there has been no material
adverse change in the financial position or results of
operations of the Borrowers, considered as a whole.
4.6. Litigation
There is no action, suit or proceeding pending against,
or, to the knowledge of the Borrower, threatened against or
affecting, the Borrower before any court or arbitrator or
any governmental body, agency or official in which there is
a reasonable probability of an adverse decision that would
materially adversely affect the business, financial position
or results of operations of the Borrower or that in any
manner draws into question the validity or enforceability of
this Agreement.
4.7. Taxes
The Borrower has filed all United States federal income
tax returns and all other material tax returns that are
required to be filed by it and has paid all Taxes then due
pursuant to such returns or pursuant to any assessment
received by the Borrower, except for Taxes contested in good
faith by appropriate proceedings and as to which appropriate
reserves in accordance with generally accepted accounting
principles have been established. The charges, accruals and
reserves on the books of the Borrower for Taxes are, in the
Borrower's opinion, adequate.
4.8. Compliance with ERISA
Each member of the Controlled Group has fulfilled its
obligations under the minimum funding standards of ERISA and
the Code for each Pension Plan and is in compliance in all
material respects with ERISA and the Code, and has not
incurred any liability to the PBGC or a Pension Plan under
Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA.
4.9. Not an investment company or public utility holding company
The Borrower is not an 'investment company' within the
meaning of the Investment Company Act of 1940 or a 'holding
company' within the meaning of the Public Utility Holding
Company Act of 1935.
4.10. Margin regulations
At no time will Margin Stock comprise more than 5% of
the value of the assets of a Borrower.
4.11. Title to assets
Each Borrower has good and marketable title to all its
properties and assets reflected on the consolidated balance
sheet referred to herein, except for (a) such assets shown
on said balance sheet that have been disposed of since said
date as no longer used or useful in the conduct of business,
(b) inventory sold in the ordinary course of business and
thereafter accounted for as accounts receivable or cash, (c)
accounts receivable collected and property accounted for,
and (d) items which have been amortized in accordance with
GAAP applied on a consistent basis; and all such properties
and assets are free and clear of Liens except as otherwise
expressly permitted by the provisions hereof.
4.12. Contracts or restrictions affecting Borrowers
Neither Borrower is a party to, nor subject to, any
agreement or instrument, including, without limitation, any
partnership agreement, partnership restrictions, voting
trust or shareholders' agreement, materially and adversely
affecting its business, Apartment Communities, or other
assets, operations or condition (financial or otherwise).
4.13. No default
Neither Borrower is in default in the performance,
observance or fulfillment of any of the obligations,
covenants, or conditions contained in any agreement or
instrument to which it is a party, which default (if not
cured) would materially and adversely and substantially
affect the financial condition, property or operations of
such Borrower.
4.14. Patents and Trademarks
Each Borrower possesses all necessary patents, service
marks, trademarks, trade names, copyrights, and licenses
necessary to the conduct of its business.
4.15. Hazardous Substances
To the best of the Borrower's knowledge, (a) except
strictly in compliance with all applicable Environmental
Laws, no Hazardous Substances are located upon or have been
stored, processed or disposed of on or released or
discharged (including ground water contamination) from any
Apartment Community owned or leased by either Borrower, and
(b) no aboveground or underground storage tanks exist on any
of the Apartment Communities. No private or governmental
lien or judicial or administrative notice or action related
to Hazardous Substances or other environmental matters has
been filed against any Apartment Community.
4.16. Real Estate Investment Trust
MAAC is qualified under the Code as a real estate
investment trust.
4.17. Subsidiaries
The Subsidiaries granting Mortgages on the Initial
Properties are correctly identified on Schedule 4 attached
hereto, and all are 100% owned, directly or indirectly, by
either or both of the Borrowers.
V. Affirmative Covenants
Each Borrower agrees that:
5.1. Financial information
(a) The Borrower shall deliver to the
Administrative Agent for distribution to each Lender:
As soon as available, and in any event within
one hundred five (105) days after the end of each
fiscal year of MAAC, a consolidated unqualified audit
as of the close of such fiscal year of MAAC, together
with a consolidated unqualified audit report and
opinion of an independent certified public accountant
acceptable to the Administrative Agent, prepared in
accordance with GAAP, showing the financial condition
of MAAC as of the close of such year, which audit shall
include, inter alia, consolidated financial results of
both Borrowers and all Subsidiaries of each of them;
and the results of operations during such year; and
within fifty (50) days after the end of each fiscal
quarter, consolidated financial statements similar to
those mentioned above, not audited but certified by the
Certifying Officer, such balance sheets to be as of the
end of such fiscal quarter, and such statements of
income and surplus to be for the period from the
beginning of the fiscal year to the end of such fiscal
quarter, in each case subject only to audit and year
end adjustment. The certificate of the Certifying
Officer shall state that:
1. the attached financial statement,
together with any explanatory notes referred to
and attached thereto, is correct and complete and
fairly represents the financial condition of MAAC
as of the date of the financial statement, and the
results of its operations for the period ending on
the date reflected in said financial statement,
2. that such financial statement has
been prepared in accordance with GAAP applied on a
consistent basis maintained throughout the period
involved, and
3. to the best of such Certifying
Officer's knowledge, the Borrowers are not in
Default under any of the terms and provisions of
this Agreement, or, if the Borrowers are in
Default, identifying with particularity each such
Default;
(b) Contemporaneously with the distribution
thereof to the Borrower's shareholders or the filing
thereof with the Securities and Exchange Commission,
copies of all statements, notices and reports,
specifically including reports on SEC Forms 10-K and 10Q;
(c) In no event later than the 22nd day of each
calendar quarter, but as of the last day of the
immediately preceding calendar quarter, a Borrowing
Base Certificate in the form attached hereto as Exhibit F
together with a compliance certificate in
substantially the form attached hereto as Exhibit J;
and
(d) promptly, such other financial information as
may be reasonably requested by the Administrative Agent
or a Lender.
5.2. Maintenance of property; insurance
(a) The Borrower shall keep all its
property useful and necessary in its business and
all the Mortgaged Property, whether owned by a
Borrower or a Subsidiary, in good working order
and condition, ordinary wear and tear excepted.
(b) The Borrower at all times shall
maintain (or cause to be maintained) with respect
to each Mortgaged Property in some company or
companies (having a Best's rating of A:VIII or
better, except for liability insurance maintained
with respect to Properties located in Texas, which
shall be maintained with a company or companies
having a Best's rating of at least A-:VII)
approved by the Administrative Agent:
- Comprehensive public liability
insurance covering claims for bodily injury,
death, and property damage, with minimum limits
satisfactory to the Administrative Agent, but in
any event not less than those amounts customarily
maintained by companies in the same or
substantially similar business;
- Business interruption insurance
and/or loss of rents insurance in a minimum amount
specified by the Administrative Agent for each
Mortgaged Property, and in any such event covering
loss of rents for a minimum period of one (1)
year;
- Hazard insurance insuring each
Mortgaged Property against loss by fire (with
extended coverage) and against such other hazards
and perils (including but not limited to loss by
earthquake, windstorm, hail, flood, explosion,
riot, aircraft, smoke, vandalism, malicious
mischief and vehicle damage) as the Administrative
Agent, in its sole discretion, shall from time to
time require, all such insurance to be issued in
such form, with such deductible provision, and for
such amount as shall be satisfactory to the
Administrative Agent; and
- Such other insurance as the
Administrative Agent may, from time to time,
reasonably require by notice in writing to the
Borrowers.
(c) The Borrower shall not, nor permit
any other Person to, cancel, terminate, or
materially amend any of the insurance policies
required by this Section 5 without giving at least
thirty (30) days' prior written notice to the
Administrative Agent. The Borrower will deliver
(or cause to be delivered) to the Administrative
Agent original or certified copies of the
insurance policies, or satisfactory certificates
of insurance, and, as often as the Administrative
Agent may reasonably request, a report of a
reputable insurance broker with respect to such
insurance. At the option of the Borrower, the
Borrower may maintain the insurance coverages
required by this Section 5, pursuant to so-called
"blanket insurance policies", in which event the
Borrower shall, from time to time, upon the
Administrative Agent's request, furnish to the
Administrative Agent certificates from the
respective insurance companies (or their
authorized agents) setting forth the types and
amounts of insurance being maintained, any
applicable deductible provisions, and such other
information as the Administrative Agent may
require (including, without limitation, the
effective dates of any such insurance), together
with copies of all such blanket insurance
policies.
5.3. Compliance with laws
The Borrower shall, and shall cause each Subsidiary to,
comply in all material respects with all applicable laws,
ordinances, rules, regulations and requirements of
governmental authorities, except where the necessity of
compliance is contested in good faith by appropriate
proceedings.
5.4. Books and records; payment of Taxes
The Borrower shall keep proper books and records in
which full and correct entries are made of all dealings and
transactions in relation to its business and activities.
While a Default is continuing, representatives of any Lender
may inspect the Borrower's relevant books and records at any
reasonable time.
The Borrower shall pay and discharge, at or before
maturity, all their respective material Tax liabilities,
except for liabilities contested in good faith by
appropriate proceedings and as to which appropriate reserves
in accordance with generally accepted accounting principles
have been established.
5.5. Notice of Defaults
The Borrower shall, within five Business Days of a
senior officer of the Borrower obtaining knowledge of a
continuing Default, deliver to the Administrative Agent a
certificate of the Certifying Officer setting forth the
details of the Default and the action the Borrower is taking
or proposes to take with respect to the Default.
5.6. ERISA events
If a member of the Controlled Group
- gives or is required to give notice to the
PBGC of a 'reportable event' or knows that the plan
administrator of a Pension Plan has given or is
required to give notice of such reportable event,
- receives notice of complete or partial
Withdrawal Liability under Title IV of ERISA,
- receives notice from the PBGC under Title IV
of ERISA of an intent to terminate or appoint a trustee
to administer a Pension Plan, or
- knows that a Pension Plan is terminated or in
reorganization, then the Borrower shall within five
Business Days deliver a copy of the notice to the
Administrative Agent.
5.7. Use of proceeds
The Borrower shall use Loan proceeds only for its
general corporate purposes. The Borrower shall not use any
Loan proceeds for any purpose that violates Regulations G,
T, U or X of the Federal Reserve Board.
5.8. Maintenance of existence; merger; sale of assets
The Borrower shall keep in full force and effect its
corporate or partnership existence, as the case may be, and
its rights, privileges and franchises necessary or desirable
in the normal conduct of business, provided that a
Subsidiary of a Borrower may merge or consolidate with or
into the Borrower (but only if the Borrower is the surviving
entity) or a Subsidiary of the Borrower. A Borrower shall
not (i) consolidate or merge with or into another Person
unless the Borrower is the surviving entity and no Default
by the Borrower exists immediately thereafter, or (ii) sell,
lease or otherwise transfer all or substantially all of its
assets to any other Person, except for the distribution of
ordinary dividends to shareholders and distributions to
partners. As used herein "substantially all" shall mean
more than thirty percent (30%) of the total assets.
5.9. Right of inspection
The Borrower shall permit any Person designated by the
Administrative Agent to visit and inspect any of the
properties, corporate books and financial reports of each
Borrower and all Subsidiaries and to discuss its affairs,
finances and accounts with its principal officers, at all
such reasonable times during normal business hours and as
often as the Administrative Agent may reasonably request.
5.10. Environmental laws
The Borrower shall maintain at all times all Apartment
Communities in compliance with all Environmental Laws, and
immediately notify the Administrative Agent of any notice,
action, lien or similar action alleging either the location
of any Hazardous Substances or the violation of any
Environmental Laws or any release of Hazardous Substances
with respect to any Apartment Communities or operations.
5.11. Notice of adverse change in assets
At the time of either Borrower's first knowledge or
notice, such Borrower shall immediately notify the
Administrative Agent of any information that may adversely
affect in any material manner the assets of either Borrower,
including, but not limited to, the value or marketability of
any Mortgaged Properties.
5.12. Indemnification
(a) General. The Borrower shall defend, indemnify and
hold the Administrative Agent and the other Lenders harmless
from and against any and all loss, costs, damage or expense,
of every kind and nature, including, without limitation,
reasonable attorneys' fees and costs, which the
Administrative Agent and the other Lenders could or might
incur by reason of any violation of any Environmental Laws
by either Borrower, any Subsidiary or by any predecessors or
successors to title to any Mortgaged Property. The
indemnification granted herein shall run only to the benefit
of the Administrative Agent and the Lenders and shall not
give any rights of indemnification to any successors in
title. Notwithstanding the foregoing, the Borrowers shall
have no obligation to indemnify the Administrative Agent and
the other Lenders for liability resulting solely from the
gross negligence or willful misconduct of the Administrative
Agent, or any of the other Lenders, as determined in a final
non-appealable order by a court of competent jurisdiction.
(b) Letter of Credit. The Borrowers hereby agree to
protect, indemnify, pay and save the Administrative Agent
and the Lenders harmless from and against any and all
claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys' fees
and disbursements) which the Administrative Agent and/or the
Lenders may incur or be subject to as a result of (i) the
issuance of the Letters of Credit, other than to the extent
of the bad faith, gross negligence or wilful misconduct of
the Administrative Agent and/or the Lenders or (ii) the
failure of the Administrative Agent to honor a drawing under
any Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de
jure or de facto government or governmental authority
(collectively, "Governmental Acts"), other than to the
extent of the bad faith, gross negligence or wilful
misconduct of the Administrative Agent. As between the
Borrowers and the Administrative Agent and the Lenders, the
Borrowers assume all risks of the acts and omissions of any
beneficiary with respect to its use, or misuse of, the
Letters of Credit issued by the Administrative Agent. In
furtherance and not in limitation of the foregoing, the
Administrative Agent and the Lenders shall not be
responsible (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application
for and issuance of such Letters of Credit, even if it
should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or insufficiency of any instrument transferring or
assigning or purporting to transfer or assign any such
Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for failure of
the beneficiary of any such Letter of Credit to comply fully
with conditions required in order to draw upon such Letter
of Credit, other than as a result of the bad faith, gross
negligence or wilful misconduct of the Administrative Agent;
(iv) for errors, omissions, interruptions or delays in
transmission or delivery of any message, by mail, cable,
telegraph, telex, facsimile transmission, or otherwise,
unless the result of the bad faith, gross negligence or
wilful misconduct of the Administrative Agent; (v) for
errors in interpretation of any technical terms, unless the
result of the bad faith, gross negligence or wilful
misconduct of the Administrative Agent; (vi) for any loss or
delay in the transmission or otherwise of any documents
required in order to make a drawing under any such Letter of
Credit or of the proceeds thereof; (vii) for the
misapplication by the beneficiary of any such Letter of
Credit of the proceeds of such Letter of Credit; and (viii)
for any consequence arising from causes beyond the control
of the Administrative Agent, including any Government Acts,
in each case other than to the extent of the bad faith,
gross negligence or wilful misconduct of the Administrative
Agent. None of the above shall affect, impair or prevent
the vesting of the Administrative Agent's rights and powers
hereunder. In furtherance and not in limitation of the
specific provisions hereinabove set forth, any action taken
or omitted by the Administrative Agent under or in
connection with the Letters of Credit issued by it or the
related certificates, if taken or omitted in good faith,
shall not put the Administrative Agent under any resulting
liability to the Borrowers provided that, notwithstanding
anything in the foregoing to the contrary, the
Administrative Agent will be liable to the Borrowers for any
damages suffered by the Borrowers as a result of the
Administrative Agent's grossly negligent or wilful failure
to pay under any Letter of Credit after the presentation to
it of a sight draft and certificates strictly in compliance
with the terms and conditions of the Letter of Credit.
5.13. Qualification as a Real Estate Investment Trust
MAAC shall at all times remain (a) qualified under the
Code as a real estate investment trust and (b) the general
partner of Mid-America.
5.14. Ownership of Subsidiaries
MAAC or Mid-America shall at all times remain a direct
or indirect owner of 100% of the ownership interest of each
Subsidiary that is the owner of a Mortgaged Property.
VI. Negative Covenants of Borrowers
Each Borrower covenants and agrees that, at all times
from and after the Effective Date, unless Two-Thirds of
Lenders shall otherwise consent in writing, it will not, nor
shall it permit a Subsidiary that is the owner of a
Mortgaged Property to, either directly or indirectly:
6.1. Liens
Incur, create, assume or suffer to exist any mortgage,
pledge, lien, charge or other encumbrance of any nature
whatsoever on any of the Mortgaged Properties other than:
(a) Deposits under workmen's compensation,
unemployment insurance and Social Security laws, or to
secure the performance of bids, tenders, contracts
(other than for the repayment of borrowed money) or
leases or to secure statutory obligations or surety or
appeal bonds, or to secure indemnity, performance or
other similar bonds in the ordinary course of business;
(b) Liens imposed by law (other than tax liens),
such as carriers', warehousemen's or mechanics' liens,
incurred in good faith in the ordinary course of
business and in an amount of less than $100,000;
(c) Liens in favor of the Lenders;
(d) Purchase money security interests arising in
the ordinary course of the apartment leasing business; and
(e) Liens for real property and personal property
taxes, but not yet delinquent.
6.2. Sale of Assets
Sell, lease, transfer or dispose (other than in the
normal course of business) of all or a substantial part of
its assets.
6.3. Accounts Receivable from Related Persons
Permit or allow the aggregate of accounts receivable
and other loans and indebtedness owed by Related Persons to
the Borrowers to exceed the sum of Five Hundred Thousand
Dollars ($500,000.00) in the aggregate as to both Borrowers.
6.4. Loans to Officers and Employees
Permit or allow loans to directors, officers, partners,
shareholders and employees of both Borrowers to exceed, in
the aggregate, the sum of One Million Dollars
($1,000,000.00).
6.5. Trademarks and Trade Names
Sell, transfer, convey, grant any security interest in,
or otherwise encumber any existing or hereafter acquired
trademarks, service marks or trade names owned by the
Borrower.
6.6. Net Operating Loss
Permit or allow a Net Operating Loss of more than One
Million Dollars ($1,000,000.00) in any quarterly period or
in any amount for any two (2) consecutive quarterly periods
in any one (1) fiscal year.
6.7. Dividend Payout
Make a dividend payment (including both common stock
dividends and preferred stock dividends) which is greater
than ninety percent (90%) of Funds from Operations or that
would otherwise violate the United States federal tax laws
governing the qualifications of real estate investment
trusts. As used herein, "Funds from Operations" shall mean
consolidated net income of MAAC (computed in accordance with
GAAP), excluding gains (or losses) from debt restructuring
or sales of property, plus depreciation of real property.
Upon written pre-approval of the Administrative Agent,
exceptions may be made where the Board of Directors of MAAC
determines, in good faith, that a special dividend must be
paid to avoid taxes due to excess gains from the sale of
Property.
6.8. Other Financial Covenants
(a) Permit Total Liabilities to exceed sixty
percent (60%) of the Total Market Value of Assets.
(b) Permit Total Development and Joint Venture
Investment to exceed (i) eleven percent (11%) of the
Total Market Value of Assets from the date hereof
through December 31, 1998, and (ii) ten percent (10%)
of the Total Market Value of Assets, commencing on
January 1, 1999, until the termination of this
Agreement.
(c) Fail to maintain as of the end of each fiscal
quarter a ratio of Annualized EBITDA for trailing six
(6) months to Total Annualized Fixed Charges for the
same period of at least 1.75 to 1.0.
(d) Fail to maintain as of the end of each fiscal
quarter a ratio of Annualized EBITDA for trailing six
(6) months to Total Annualized Debt Service on
Indebtedness for the same period of at least 2.0 to
1.0.
(e) Fail to maintain at all times beginning on
the Effective Date a consolidated Tangible Net Worth
which is not less than Four Hundred Seventy Million
Dollars ($470,000,000) plus seventy percent (70%) of
net proceeds of new equity offerings.
(f) Permit the ratio of Adjusted NOI for all
Mortgaged Properties (based on the prior three (3)
months, annualized) to Assumed Debt Service to be less
than 1.0 to 1.0.
6.9. Control
Permit any Person, or group of Persons, acting in
concert for the purpose of influencing the affairs of MAAC
to control more than twenty percent (20%) of the outstanding
voting shares of MAAC.
6.10. Subsidiary Ownership
Sell, transfer or otherwise dispose of any shares of
stock or partnership interests or other ownership interest
in any Subsidiary that is the owner of a Mortgaged Property,
or permit any such shares of stock or partnership interests
or other ownership interest to be disposed of, sold, or
otherwise transferred.
6.11. Subsidiary Debt
Permit any Subsidiary that is the owner of a Mortgaged
Property to incur, create, or permit to exist any
indebtedness to any Person other than the Lenders with the
exception of purchase money security interests and
contractual obligations, incurred in the ordinary course of
the apartment leasing business.
VII. Default
7.1. Events of Default
Each of the following events shall be a Default by the
Borrowers:
(a) the Borrowers fail to pay
- any principal of a Loan when due,
- any interest on a Loan within five
(5) Business Days after the Administrative Agent
provides the Borrower with written notice of such
failure (except interest due and payable on the
Termination Date which must be paid on the
Termination Date), or
- a fee or other amount payable under
this Agreement within five (5) Business Days after
the Administrative Agent provides the Borrower
with written notice of such failure; or
(b) a representation, warranty, certification or
statement made by either Borrower in this Agreement or
in a certificate, financial statement or other document
delivered pursuant to this Agreement is materially
incorrect when made (or deemed made); or
(c) either Borrower fails to observe or perform
- a covenant applicable to it
regarding use of Loan proceeds, notice of Defaults
or maintenance of existence, merger, or sales of
assets; or
- a financial covenant applicable to
it contained in Section 5 or Section 6; or
(d) either Borrower fails to observe or perform a
covenant or agreement made by it in this Agreement
(other than those referred to in Section 7.1(a), 7.1(b)
or 7.1(c) above) for 30 days after the Administrative
Agent notifies the Borrower of such failure; or
(e) either Borrower defaults with respect to any
other agreement to which either Borrower is a party or
with respect to any other indebtedness when due or the
performance of any other obligation incurred in
connection with any indebtedness for borrowed money, if
the Borrower's obligations or exposure exceeds
$500,000, and if the effect of such default is to
accelerate the maturity of such indebtedness, or if the
effect of such default is to permit the holder thereof
to cause such indebtedness to become due prior to its
stated maturity; provided, however, if the amount in
default is less than $1,000,000 and no other default
exists under any other agreement described in this
subparagraph, and the Borrower is diligently and in
good faith contesting any default under this paragraph
to the reasonable satisfaction of the Administrative
Agent, it shall not be a Default hereunder; or
(f) either Borrower or any Subsidiary that is at
the time the owner of a Mortgaged Property
- commences a voluntary case or other
proceeding seeking liquidation, reorganization or
other relief for itself or its debts under a
bankruptcy, insolvency, receivership or similar
law or seeking the appointment of a trustee,
receiver, liquidator, custodian or similar
official of it or a substantial part of its
property,
- consents to any such relief or to
the appointment of or taking possession by any
such official in an involuntary case or other
proceeding commenced against it,
- makes a general assignment for the
benefit of creditors,
- fails generally to pay its debts as
they become due, or
- takes the appropriate action to
authorize any of the foregoing; or
(g) an involuntary case or other proceeding is
commenced against either Borrower or any Subsidiary
that is at the time the owner of a Mortgaged Property
seeking liquidation, reorganization or other relief
with respect to it or its debts under a bankruptcy,
insolvency, receivership or other similar law or
seeking the appointment of a trustee, receiver,
liquidator, custodian or similar official of the
Borrower or such Subsidiary or a substantial part of
its property, and such case or proceeding (i) results
in an order for relief or such adjudication or
appointment, or (ii) remains undismissed and unstayed
for 60 days; or
(h)
- a member of the Controlled Group
fails to pay when due an aggregate amount in
excess of $5,000,000 that it is liable to pay to
the PBGC or to a Pension Plan under Title IV of
ERISA,
- a member of the Controlled Group
and/or a plan administrator files a notice of
intent under Title IV of ERISA to terminate a
Pension Plan or Pension Plans having aggregate
Unfunded Vested Liabilities in excess of
$35,000,000 (collectively, a Material Pension
Plan),
- the PBGC institutes proceedings
under Title IV of ERISA to terminate or to cause a
trustee to be appointed to administer a Material
Pension Plan,
- a fiduciary of a Material Pension
Plan institutes a proceeding against a member of
the Controlled Group to enforce Section 515 or
4219(c)(5) of ERISA and such proceeding is not
dismissed within 60 days thereafter,
- a condition exists that entitles
the PBGC to obtain a decree adjudicating that a
Material Pension Plan must be terminated, or
- either Borrower is notified by the
plan administrator of a Pension Plan that the
Pension Plan is in reorganization or is being
terminated, within the meaning of Title IV of
ERISA, and solely as a result of such
reorganization or termination the aggregate annual
contributions of the Borrower to all Pension Plans
that are then in reorganization or have been or
are being terminated is increased over the amounts
required to be contributed to such Pensions Plans
for their most recently completed plan years by an
amount exceeding $15,000,000; or
(i) a judgment or order against either Borrower
or any Subsidiary that is at the time the owner of a
Mortgaged Property for the payment of more than
$1,000,000 continues unsatisfied and unstayed for 60
days or a judgment creditor takes legal action to levy
on such judgment; or
(j) either Borrower or any Subsidiary that is at
the time an owner of a Mortgaged Property shall have
concealed, removed, or permitted to be concealed or
removed, any part of its property, with intent to
hinder, delay or defraud its creditors or any of them,
or made or suffered a transfer of any of its property
which may be fraudulent under any bankruptcy,
fraudulent conveyance or similar law; or shall have
made any transfer of its property to or for the benefit
of a creditor at a time when other creditors similarly
situated have not been paid; or shall have suffered or
permitted, while insolvent, any creditor to obtain a
lien upon any of its property through legal proceedings
or distraint which is not vacated within thirty (30)
days from the date thereof; or
(k) there shall occur, whether in a single
transaction or successive transactions, a change or
changes in the ownership of more than five percent (5%)
of the partnership interests of Mid-America, or Mid
America shall grant or convey or permit to be granted
or conveyed, voluntarily or involuntarily, directly or
indirectly, any security interest in, pledge of or
other lien or encumbrance upon any owner's partnership
interests in Mid-America; or MAAC shall cease to be the
sole general partner of Mid-America; or any single
Person or related group of Persons shall control more
than twenty percent (20%) of MAAC's voting shares.
Exchanges by existing limited partners of Mid-America
of their respective limited partnership interests for
capital stock of MAAC, not exceeding, in the aggregate,
as to all such exchanges, transfers of not more than
thirty-five percent (35%) of the partnership interests
of Mid-America, shall not constitute an Event of
Default; or
(l) any officer of MAAC who, in the reasonable
judgment of the Administrative Agent, occupies a
position of substantial and material management,
responsibility ("Material Officer"), shall, by reason
of death, permanent disability, or departure from the
employ of MAAC, cease to be active in the management of
MAAC, and MAAC does not, within a period of five (5)
Business Days from such permanent disability, death or
departure, deliver written notice of such event to the
Administrative Agent and, within a period of thirty
(30) days from such permanent disability, death or
departure, secure a replacement for such officer, such
replacement to be, by reason of his or her experience
and credentials, reasonably satisfactory to and
approved by the Administrative Agent. For the purposes
of this Section (l), permanent disability means any
disability that prevents such Material Officer from
rendering, in any one calendar year, full-time services
for a period of thirty (30) consecutive days, or in the
aggregate, for forty-five (45) days, and (ii) at the
present time, the Persons whom the Administrative Agent
deems to be Material Officers are George E. Cates,
Simon R.C. Wadsworth, and H. Eric Bolton, Jr. Further,
the Administrative Agent shall have the right to review
and approve the credentials of any individual proposed
for the office of President or Executive Vice President
of MAAC; or
(m) Except as expressly permitted in Section 3.4,
or except with the consent of Two-Thirds of the
Lenders, which consent shall not be unreasonably
withheld, Mid-America or any Subsidiary granting to the
Administrative Agent a Mortgage shall sell, assign,
transfer, convey, lease with an option to purchase,
enter into a contract of sale, grant an option to
purchase, or encumber all or any part of its interest
in any Mortgaged Property or any portion thereof, or
permit the same to be sold, assigned, transferred,
conveyed, contracted for or encumbered; provided,
however, the entering of either a contract of sale or
option to purchase shall not be a default hereunder so
long as such contract of sale or option to purchase
requires the fulfillment of the conditions set forth in
Section 3.4 above; and provided further, however, that
the encumbrance of any Mortgaged Property by any
mechanic's lien claim shall not be deemed to constitute
an Event of Default so long as a Borrower shall
promptly notify the Administrative Agent of such
mechanic's lien claim, and shall diligently and in good
faith contest (or cause to be contested) the same by
appropriate proceedings and shall establish such
reserves with respect thereto as the Administrative
Agent shall specify; or
(n) MAAC fails to maintain its qualification as a
real estate investment trust under the Code.
7.2. Action on Default
During the continuance of a Default, the Administrative
Agent shall, if requested by Two-Thirds of the Lenders,
notify the Borrowers that
- the Borrowers' Rights are terminated,
whereupon such Borrowing Rights shall terminate, or
- all the Borrowers' Loans, with accrued
interest, and all other amounts payable by the
Borrowers under this Agreement, are immediately due and
payable, whereupon all such Loans, accrued interest and
other amounts payable under this Agreement shall be
immediately due and payable by the Borrowers without
presentment, demand, protest or other notice of any
kind, all of which the Borrowers waive, provided that
if the Default is one described in Section 7.1(f) or
7.1(g), then without notice to the Borrowers or other
act by the Administrative Agent or Two-Thirds of the
Lenders, the Borrowers' Borrowing Rights shall
immediately terminate, and the Loans, with accrued
interest, and other amounts payable under this
Agreement, shall become immediately due and payable by
the Borrowers without presentment, demand, protest or
other notice of any kind, all of which the Borrowers
waive, and the Administrative Agent may and shall, at
the request of Two-Thirds of the Lenders, exercise all
rights and remedies available to it hereunder and under
applicable law or in equity.
7.3. Notice of Default
On the request of a Lender, the Administrative Agent
shall promptly give the notice referred to in Section 7.1(d)
and shall promptly notify all the Lenders that such notice
has been given.
VIII. The Administrative Agent
8.1. Appointment and authorization
Each Lender irrevocably authorizes the Administrative
Agent to take such action as agent on the Lender's behalf
and to exercise such powers as are given to the
Administrative Agent under this Agreement, together with all
powers reasonably incidental thereto.
8.2. Other conduct
The Administrative Agent and its Affiliates
- shall have the same rights and powers under
this Agreement as any other Lender and may exercise or
refrain from exercising such rights and powers as
though it were not the Administrative Agent and
- may accept deposits from, lend money to and
generally engage in any kind of business with the
Borrowers or their Affiliates as if it were not the
Administrative Agent.
8.3. Scope of obligations
The obligations of the Administrative Agent under this
Agreement are only those expressly set forth herein.
Without limiting the generality of the foregoing, the
Administrative Agent shall not be required to take any
action with respect to a Default except as expressly
provided in Section 7. The Administrative Agent shall
administer the Loans and perform its duties hereunder using
the same degree of care it uses in the administration of its
own loans of similar amount and structure.
8.4. Consultation with experts
The Administrative Agent may consult with legal
counsel, independent public accountants and other experts
selected by the Administrative Agent and shall not be liable
for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel,
accountants or experts.
8.5. Liability of Administrative Agent
Neither the Administrative Agent nor any of its
directors, officers, agents, or employees shall be
- liable for any action it takes or does not
take in connection with this Agreement (i) with the
consent or at the request of Two-Thirds of the Lenders,
unless the consent or request of all of the Lenders is
expressly required by this Agreement, or (ii) in the
absence of its own gross negligence or willful
misconduct, or
- responsible for or have a duty to ascertain,
inquire into or verify (i) any statement, warranty or
representation made in connection with this Agreement
or a Borrowing, (ii) a Borrower's performance or
observance of any covenant or agreement, (iii) the
satisfaction of any condition in Section 3 (except for
the receipt of items required to be delivered to the
Administrative Agent), or (iv) the validity,
effectiveness or genuineness of this Agreement or any
other instrument or writing furnished in connection
herewith.
The Administrative Agent shall not incur any liability
by acting in reliance upon any notice, consent, certificate,
statement or other writing (which may be a bank wire, telex,
telecopy or similar writing) it believes is genuine or
signed by the proper parties.
8.6. Indemnification
Each Lender shall, ratably in accordance with its
Commitment, indemnify the Administrative Agent (to the
extent not reimbursed by the Borrowers) against any cost,
expense, claim, demand, action, loss or liability (except
such as result from the Administrative Agent's gross
negligence or willful misconduct) that the Administrative
Agent may suffer or incur in connection with this Agreement
or any action the Administrative Agent takes or omits
hereunder.
8.7. Successor Administrative Agent
The Administrative Agent may resign by giving notice
thereof to the Lenders and the Borrowers. So long as no
Default exists, the Administrative Agent may be removed upon
the request of the Borrowers. Upon such resignation or
removal, the Borrowers may appoint a successor
Administrative Agent with the consent of Two-Thirds of the
Lenders. If the Borrowers are in Default, Two-Thirds of the
Lenders may appoint a successor Administrative Agent. If
the Administrative Agent resigns or is removed and no
successor Administrative Agent is so appointed and accepts
such appointment within 30 days after the resigning
Administrative Agent's notice of resignation or its removal,
then the resigning or removed Administrative Agent may, on
behalf of the Lenders, shall appoint a successor
Administrative Agent that is a commercial bank organized or
licensed under the laws of the United States of America or
of any State thereof and having a combined capital and
surplus of at least $100,000,000. Upon a successor
Administrative Agent's written acceptance of its appointment
as Administrative Agent, the successor Administrative Agent
shall succeed to and become vested with all the rights and
duties of the resigning or removed Administrative Agent, and
the resigning or removed Administrative Agent shall be
discharged from its duties and obligations as Administrative
Agent. After the Administrative Agent's resignation or
removal, the provisions of this Section 8 shall continue to
inure to its benefit as to any action it took or omitted to
take while it was Administrative Agent.
8.8. Fees
The Borrowers shall pay the Administrative Agent for
its account such fees for its services under this Agreement
as the Borrowers and the Administrative Agent may agree.
IX. Change in circumstances
9.1. Eurocurrency Reserve Requirements
If a Lender notifies the Administrative Agent and the
Borrowers that the Lender is or will be generally subject to
Eurocurrency Reserve Requirements as a result of which the
Lender will incur additional costs on its Loans, then the
Lender shall, to the extent such costs are actually
incurred, for each day from the later of the date of such
notice and the date on which the Lender becomes subject to
the Eurocurrency Reserve Requirements, be entitled to
additional interest on each Loan made by the Lender at a
rate per annum (rounded upward to the nearest .01%) equal to
the remainder obtained by subtracting (i) LIBOR for the
Eurodollar Loan from (ii) the rate obtained by dividing such
LIBOR by the excess of 100% over the Eurocurrency Reserve
Requirements.
Such additional interest shall be payable in arrears to
the Administrative Agent, for the account of the Lender, on
each date interest is payable on the Loan.
A Lender that gives a notice under this Section 9.1
shall promptly withdraw such notice by notifying the
Administrative Agent and the Borrowers if Eurocurrency
Reserve Requirements cease to apply to it or the
circumstances giving rise to such notice otherwise cease to
exist.
9.2. Increased cost or reduced return
If any Regulatory Action (other than the imposition of
Eurocurrency Reserve Requirement) taken after the date
hereof
- imposes, modifies or deems applicable any
reserve, special deposit or similar requirement against
assets of, deposits with or for the account of or
credit extended by a Lender or its Office,
- imposes on a Lender or its Office or the
London interbank market any other condition affecting
the Lender's Eurodollar Loans, or
- imposes, modifies or deems applicable any
standards of capital adequacy, and such Regulatory
Action will, in the Lender's judgment,
- increase the cost to the Lender or Office of
making or maintaining any Eurodollar Loan,
- reduce the amount receivable by the Lender or
Office under this Agreement with respect to any such
Eurodollar Loan, or
- reduce the rate of return on the Lender's
capital as a consequence of its obligations under this
Agreement (taking into consideration the Lender's
policies on capital adequacy) by an amount the Lender
deems material, then the Lender shall promptly notify
the Borrowers and the Administrative Agent thereof,
enclosing (i) a certificate of an officer of the Lender
describing the Regulatory Action leading to the
increased costs or reduction with, if possible, a copy
of the relevant law, regulation, interpretation or
guideline and (ii) the Lender's calculation setting
forth in reasonable detail the dollar amount of the
increased costs or reduction.
determination of amount
In calculating any amount payable under this Section
9.2, a Lender may use reasonable averaging and attribution
methods. A Lender's determination of the amount shall be
conclusive in the absence of manifest error.
payment of compensation
Subject to the following sentence, the Borrowers shall
pay a Lender within 30 days after receipt of a notice from
the Lender under this Section 9.2 such amounts as will
compensate the Lender for the increased costs or reduction.
The Borrowers will not, however, be required to pay the
Lender any amount set forth in the notice that relates to
any period prior to the 30th day before the date the Lender
gives the notice. Each Lender agrees that it shall notify
the Borrowers immediately upon becoming aware of such
increased costs.
Base Rate election by Borrower
If a Lender demands compensation under this Section 9.2
with respect to a Eurodollar Loan, then the Borrowers may,
on at least five Business Days' prior notice to the Lender
and the Administrative Agent, elect that, until the Lender
or the Administrative Agent notifies the Borrowers that the
circumstances giving rise to the demand for compensation no
longer apply, all Loans to the Borrowers that would
otherwise be made by the Lender as Eurodollar Loans, shall
be made instead as Loans at the Base Rate (on which interest
and principal shall be payable contemporaneously with the
related Loans of the other Lenders).
9.3. LIBOR unavailable or inadequate
If on or before the second Business Day before an
Interest Period for a Borrowing
- dollar deposits in the applicable amounts are
not being offered to the Administrative Agent in the
relevant market for the Interest Period, or
suspension of obligation to make Loans
- Two-Thirds of the Lenders advise the
Administrative Agent that the LIBOR will not adequately
and fairly reflect the cost to such Lenders of funding
their Loans for the Interest Period, then the
Administrative Agent shall promptly notify the
Borrowers and the Lenders thereof, whereupon the
obligations of the Lenders to make, or permit
Conversion of Loans into, Eurodollar Loans shall be
suspended, and any subsequent request by the Borrowers
for a Eurodollar Loan or for Conversion into a
Eurodollar Loan shall be deemed to be a request for, or
for Conversion into, a Loan bearing interest at the
Base Rate.
suspension after Borrowing Notice given
If the Lenders' obligations to make Loans is
suspended pursuant to this Section 9.3 after the
Borrowers give the Borrowing Notice for the Borrowing
that includes such Loans, then unless the Borrowers
notify the Administrative Agent at least one Business
Day before the date of such Borrowing that the
Borrowers elect not to borrow on such date, the
Borrowing shall instead accrue interest at the Base
Rate.
9.4. Illegal Loans
If, after the date of this Agreement, any Regulatory
Action makes it unlawful or impossible for a Lender or its
Office to make, maintain or fund its Eurodollar Loans, and
the Lender so notifies the Administrative Agent, then the
Administrative Agent shall promptly notify the other Lenders
and the Borrowers, whereupon the obligation of the Lender to
make or permit Conversions into Eurodollar Loans shall be
suspended.
prepayment of illegal Loans
If a Lender determines that it may not lawfully
continue to maintain an outstanding Eurodollar Loan to the
Borrowers to the end of the Eurodollar Loan's applicable
Interest Period and so specifies in the notice it gives
pursuant to this Section 9.4, the Administrative Agent shall
so notify the Borrowers, and the Borrowers shall immediately
prepay in full the unpaid principal amount of the Eurodollar
Loan with accrued interest. As each such Loan is prepaid,
the Lender shall make a Loan bearing interest at the Base
Rate to the Borrower in an equal principal amount with
interest and principal payable contemporaneously with the
related Loans of the other Lenders.
new Loans made as Base Rate Loans
If the obligation of a Lender to make Eurodollar Loans
is suspended pursuant to this Section 9.4, then until the
Lender or the Administrative Agent notifies the Borrowers
that the circumstances giving rise to the suspension no
longer apply, all Loans that would otherwise be made by the
Lender as Eurodollar Loans shall be made instead as Loans
accruing interest at the Base Rate (on which interest and
principal shall be payable contemporaneously with the
related Loans of the other Lenders).
9.5. Termination of suspension
When the circumstances giving rise to a suspension of
the obligation to make Eurodollar Loans under Section 9.3 or
Section 9.4 no longer exist, the Administrative Agent shall
so notify the Borrowers and the Lenders, whereupon the
suspension shall terminate.
9.6. Taxes on payments
(a) Each Lender shall deliver to each of the
Borrowers and to the Administrative Agent:
- no more than 30 days after the date it
becomes a Lender, either a statement that it is
incorporated in the United States of America or, if it
is not so incorporated, two duly completed copies of,
as applicable, a United States Internal Revenue Service
Form 1001 or Form 4224 (including a Form W-9 or
equivalent) promulgated under the Internal Revenue Code
(each, as applicable to any Person and together with
any successor form, a "Tax Form") indicating that the
Lender is entitled to receive payments under this
Agreement without deduction or withholding of United
States federal income Taxes as permitted by the
Internal Revenue Code,
- such extensions or renewals of the Tax Form
as applicable because of expiration of the Tax Form or
as the Borrowers reasonably request (but only to the
extent the Lender determines that it may properly
effect such extensions or renewals under applicable Tax
treaties, laws, regulations and directives), and
- if a Loan is transferred to an Affiliate of
the Lender, a new Tax Form for the Affiliate.
The Borrowers and the Administrative Agent may each
rely on a Tax Form in its possession until the
earlier of the expiration date of the Tax Form or
receipt of any revised or successor form pursuant to
this Section 9.6.
(b) If a Tax imposed by the United States of
America, or any political subdivision or taxing
authority thereof, subjects a Lender or its Office to
any deduction or withholding on a payment (including
fees) on its Loans to the Borrowers, the Lender shall
promptly notify the Borrowers of the Tax, enclosing a
copy of the relevant statute, regulation or
interpretation requiring the deduction or withholding
and setting forth in reasonable detail the Lender's
calculation of the dollar amount of the Tax. Within 30
days after it receives the notice (or a longer period
that complies with the law relating to the Tax without
subjecting the Lender to additional payments with
respect to the Tax), the Borrowers shall, as requested
by the Lender in the notice,
- increase the amount of the payment so that
the Lender will receive a net amount (after deduction
of the Tax) equal to the amount due hereunder,
- pay the Tax to the appropriate taxing
authority for the Lender's account, and
- as promptly as possible, send the Lender
evidence showing payment of the Tax, together with any
additional documentary evidence the Lender reasonably
requests.
The Borrowers shall indemnify a Lender for any
incremental Taxes, interest or penalties that may become
payable as a result of the Borrowers' failure to comply with
this Section 9.6.
(c) Notwithstanding anything to the contrary in
this Section 9.6, the Borrowers shall not be required
to make any payment to a Lender or taxing authority
under this Section 9.6 as a result of any deduction or
withholding or incremental Tax, interest or penalty
- that is caused by the Lender's failure or
inability to furnish the Borrowers with a Tax Form, or
an extension or renewal thereof, pursuant to this
Section 9.6 unless such failure or inability is the
result of a change in an applicable law, regulation or
Tax treaty or in the interpretation thereof by a
regulatory authority that becomes effective after the
date of this Agreement, or
- for any period for which the Lender or its
applicable Office has furnished a Tax Form to the
Borrowers that incorrectly indicates that the Lender or
its applicable Office is not subject to such deduction
or withholding.
9.7. Change of Office
A Lender shall designate a different Office for its
Loans if such designation will avoid the need for giving a
notice pursuant to Section 9.4 with respect to suspension of
Loans, or reduce the amount of compensation under Section
9.2 (Increased cost or reduced return), or Section 9.6,
(Taxes on payments), and will not, in the Lender's judgment,
be disadvantageous to the Lender.
9.8. Replacement of Lender
If
- the obligation of a Lender to make Eurodollar
Loans is suspended under Section 9.4 (Illegal Loans),
- a Lender demands compensation or payment
under Section 9.2 (Increased cost or reduced return),
or Section 9.6 (Taxes on payments), or
- a Lender's senior unsecured debt is rated
lower than BBB- by S&P, then the Borrowers may, on five
Business Days' notice to the Administrative Agent and
the Lender, select a replacement bank or banks (which
may be one or more of the other Lenders) to purchase
the Lender's Loans and assume its Commitment. The
purchase price for the Lender's Loans shall be the sum
of the unpaid principal amount of the Loans, with
accrued interest, the Lender's share of accrued but
unpaid Fees and other amounts due to the Lender under
this Agreement (including any amounts due under Section
1.20 (Funding losses) for each Loan so purchased on a
date other than the last day of the Interest Period for
the Loan) less the prorated portion of the Fees
previously received by such Lender, from the date of
such purchase through the last day of the applicable
period for which the Fees had been paid. Upon the
execution and delivery of an assignment and assumption
agreement substantially in the form of Exhibit G by
such Lender and each replacement bank (and, if the
replacement bank is not a Lender, with the subscribed
consent of the Borrowers and the Administrative Agent),
each such replacement bank shall be deemed to be, a
'Lender' for all purposes of this Agreement, and the
Administrative Agent shall notify the other Lenders
accordingly.
X. Miscellaneous
10.1. Notices
Except as otherwise stated, all notices, requests,
consents and other communications to any party to this
Agreement shall be in writing. For purposes of this Section
10.1 (writing) shall include writings in any form that
provides the recipient, using the systems routinely used by
the recipient for communication, with a permanent record and
a human-readable text. All notices to a party shall be
given at the addresses, telecopy number or other electronic
addresses or by other methods set forth on Schedule 3 or at
such other addresses, numbers or by such other reasonable
methods as such party may specify for the purpose by notice
to the Administrative Agent and the Borrowers (each a
"Notice Address").
Each notice, request, consent or other communication
given under this Agreement shall be effective when received
at the number or address or by the method specified pursuant
to this Section 10.1. Any requirement in this Agreement
that a notice or other communication be 'prompt' or be given
'promptly' shall mean that such notice or other
communication shall promptly be transmitted by telephone (if
oral notice is permitted), bank wire, telex, telecopy,
computer link or other means that normally provides nearly
instantaneous transmission.
10.2. No waivers; remedies cumulative; integration; survival
No failure or delay by the Administrative Agent or a
Lender in exercising a right, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies provided in
this Agreement shall be cumulative and not exclusive of
other rights or remedies provided by law. This Agreement
constitutes the entire agreement and understanding among the
parties and supersedes all prior agreements and
understandings, oral or written, relating to its subject
matter.
All covenants, agreements, representations and
warranties of the Borrowers in this Agreement or in
certificates or other documents delivered pursuant to this
Agreement shall be considered to have been relied on by the
Lenders and shall survive the making of any Loans,
regardless of any investigation made by or on behalf of the
Lenders, and shall continue in full force and effect as long
as any obligation of the Borrowers under this Agreement is
unpaid or the Borrowers' Borrowing Rights have not
terminated.
10.3. Expenses; documentary Taxes
The Borrowers shall pay, and shall be jointly and
severally liable for, the reasonable Expenses of the
Administrative Agent in connection with (i) its drafting and
negotiation of this Agreement, any waiver or consent
hereunder or any amendment hereof (all of which documents
shall be prepared by counsel for the Administrative Agent)
and (ii) the effectiveness of this Agreement under Section
3.1.
If a Default by the Borrowers occurs, the Borrowers
shall pay the reasonable Expenses incurred by the
Administrative Agent in connection with such Default. In
addition, if there is a Default by the Borrowers, the
Borrowers shall pay the reasonable Expenses incurred by any
Lender, including collection and other enforcement
proceedings, resulting therefrom.
The Borrowers shall, jointly and severally, indemnify
the Administrative Agent and the Lenders against all
transfer, documentary or similar Taxes payable by reason of
the execution and delivery of the Notes and this Agreement,
and the execution, delivery and recordation of the
Mortgages.
10.4. Indemnification
Each Borrower shall indemnify the Administrative Agent
and each Lender and shall hold the Administrative Agent and
each Lender jointly and severally harmless from and against
any and all liabilities, damages, costs and Expenses of any
kind in connection with an actual or threatened
investigative, administrative or judicial proceeding
(whether or not the Administrative Agent or Lender is a
party thereto) (collectively, "Claims") incurred by the
Administrative Agent or Lender to the extent arising out of
- a Borrower's breach of, or any Default under,
this Agreement,
- any claim by a Person not a party to this
Agreement that either Borrower's, the Administrative
Agent's or a Lender's conduct in connection with this
Agreement is unlawful by a court of competent
jurisdiction or has or will violate such Person's legal
rights, but only to the extent that the Lender's or
Administrative Agent's conduct is deemed unlawful or
violative due to some action or inaction of the
Borrowers or either of them,
- an actual or proposed use of Loan proceeds by
the Borrowers, or
- an action initiated by either or both
Borrowers against the Administrative Agent or a Lender
relating to this Agreement, unless a court of competent
jurisdiction enters a final non-appealable order on the
entire merits of the controversy in such action in
favor of the Borrowers.
Notwithstanding anything to the contrary in this
Section 10.4, neither the Administrative Agent nor a Lender
shall be indemnified for any Claim to the extent such Claim
- is caused by the Administrative Agent's or
Lender's gross negligence or willful misconduct, as
determined in a final non-appealable order by a court
of competent jurisdiction, or
- results from a Lender's claims against other
Lenders not attributable to a Borrower's actions and
for which the Borrowers otherwise have no liability.
10.5. Sharing of set-offs
If a Lender exercises a right of set-off or
counterclaim or otherwise receives payment of a portion of
the aggregate amount of principal and interest due on its
Loans to the Borrowers, and such payment is greater than the
proportion received by any other Lender of the aggregate
amount of principal and interest due on such other Lender's
Loans to the Borrowers, the Lender receiving the
proportionately greater payment shall purchase
participations in the Loans made to the Borrowers by the
other Lenders, and other adjustments shall be made as
required so that all payments of principal and interest on
the Loans to the Borrowers shall be shared by the Lenders
pro-rata, provided that this Section 10.5 shall not impair a
Lender's right to exercise, to the extent permitted by
applicable law, a right of set-off or counterclaim and to
apply the amount subject to such exercise to the payment of
indebtedness of the Borrowers other than indebtedness on
Loans. A Participant in a Loan, whether or not acquired
pursuant to the foregoing arrangements, may exercise rights
of set-off or counterclaim and other rights with respect to
its participation as fully as if the Participant were a
direct creditor of the Borrowers in the amount of such
participation.
10.6. Amendments and waivers
An amendment to or waiver of a provision of this
Agreement must be in writing and signed by the Borrowers and
Two-Thirds of the Lenders (and, if the rights or duties of
the Administrative Agent are affected thereby, by the
Administrative Agent), provided that each affected Lender
must sign an amendment, waiver or consent that
(a) increases or decreases the Commitment of such
Lender or subjects such Lender to additional
obligations, except as contemplated in Section 9.8
(Replacement of Lender),
(b) reduces the principal of or rate of interest
on any Loan or any fees hereunder,
(c) postpones the Maturity Date or other date
fixed for payment of principal or interest on a Loan or
of any fees hereunder or for the termination of the
Borrowers' Borrowing Rights,
(d) changes the percentage of the Commitments or
of the aggregate unpaid principal amount of the Loans,
or the Borrowing Base, or the number of Lenders
required for the Lenders to take any action under this
Agreement,
(e) amends Section 1.19 (Pro-rata treatment),
(f) amends this Section 10.6, or
(g) releases substantially all of the Mortgaged
Property.
10.7. Successors and assigns
(a) The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties
and their respective successors and assigns, except
that neither Borrower may assign, delegate or otherwise
transfer any of its rights or obligations under this
Agreement.
(b) A Lender may grant a bank or other
institution (a "Participant") a participating interest
in its Commitment or some or all of its Loans. If a
Lender grants a participating interest to a
Participant, the Lender shall remain responsible for
the performance of its obligations under this
Agreement, and the Borrowers and the Administrative
Agent shall continue to deal solely with the Lender in
connection with this Agreement, regardless of whether
the Lender has notified the Borrowers and the
Administrative Agent of the grant. An agreement
granting such a participating interest shall provide
that the Lender shall retain the sole right and
responsibility to enforce the obligations of the
Borrowers under this Agreement, including the right to
approve any amendment, modification or waiver of any
provision of this Agreement. Subject to Section
10.7(e) (funding losses and changed circumstances), a
Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of
Section 9 (Change in circumstances), with respect to
its participating interest. An assignment or other
transfer that is not permitted by Section 10.7(c)
(assignments), or 10.7(d) (assignment to Federal
Reserve Bank), shall be given effect only to the extent
that it is a participating interest granted in
accordance with this Section 10.7(b).
(c) A Lender may assign to one or more banks or
other institutions (each an "Assignee") all or a
proportionate part of its rights and obligations under
this Agreement, and each Assignee shall assume such
rights and obligations, pursuant to an assignment and
assumption agreement in substantially the form of
Exhibit G. The assignment and assumption agreement
shall be signed by the Assignee and the transferor
Lender, with (and subject to) the subscribed
acknowledgment and consent of the Administrative Agent
and the subscribed consent, which shall not be
unreasonably withheld, of the Borrowers, provided that
such consents shall not be required if the Assignee is
a Lender or a Federal Reserve Bank, and provided
further that the consent of the Borrowers shall not be
required after and during the continuance of a Default.
(d) Upon the later of (i) the effective date
stated in the assignment and assumption agreement
(which shall not be earlier than the fifth Business Day
after execution of such agreement) or (ii) payment by
the Assignee to the transferor Lender of the purchase
price agreed between them, and payment by the
transferor Lender or the Assignee to the Administrative
Agent of a registration and processing fee of $2,500,
(i) the Assignee shall be a Lender
party to this Agreement and shall have all the
rights and obligations of a Lender with the
Commitment set forth in the assignment and
assumption agreement,
(ii) the transferor Lender shall be
released from its obligations under this Agreement
to a corresponding extent so long as the Assignee
at the time of transfer has a net worth at least
equal to the net worth of the transferor Lender,
(iii) The Borrower shall
execute and deliver replacement
Notes to the order of the Assignee
and, if necessary, the assigning
Lender; and
(iv) no further consent or action by any
party shall be required.
(e) A Lender may assign all or a proportionate
part of its rights under this Agreement to a Federal
Reserve Bank, and the Borrowers, if requested by the
Lender, shall issue a promissory note to be pledged to
the Federal Reserve Bank evidencing the Borrowers'
obligations on the Lender's Loans to the Borrowers.
Such assignment shall not release the transferor Lender
from its obligations under this Agreement.
(f) No Assignee, Participant or other transferee
of any Lender's rights may receive any greater payment
under Section 1.20 (Funding losses), and Section 9.2
(Increased cost and reduced return), than the
transferor Lender would have received with respect to
the rights transferred, unless such transfer was made
with the Borrowers' prior consent.
(g) The Administrative Agent shall maintain at
one of its offices in Birmingham, Alabama, a copy of
each assignment and assumption agreement delivered to
it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and
principal amount of the Loans owing to, each Lender
(the "Register"). The entries in the Register shall be
conclusive in the absence of manifest error, and the
Borrowers, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the
Register as a Lender for all purposes of this
Agreement. The Register shall be available for
inspection by the Borrowers or Lender at any reasonable
time upon reasonable notice.
(h) If an Assignee is not already a Lender, it
shall deliver to the Administrative Agent a completed
administrative questionnaire in the form required by
the Administrative Agent. Upon its receipt of (i) an
assignment and assumption agreement executed by an
assigning Lender and an Assignee (and, if required, by
the Borrowers), (ii) the completed administrative
questionnaire (unless the Assignee is already a Lender)
and (iii) the registration and processing fee referred
to in Section 10.7(c), the Administrative Agent shall
record the information contained in the assignment and
assumption agreement in the Register and give prompt
notice thereof to the Lenders.
10.8. Borrowers' liability
The parties acknowledge that the rights and obligations
(including the representations, warranties, agreements,
breaches, liabilities, indemnities and Defaults) of the
Borrowers under this Agreement are joint and several.
10.9. No reliance on Margin Stock collateral
Each Lender represents to the Administrative Agent and
the other Lenders that it is not relying upon any Margin
Stock as collateral in the extension or maintenance of the
credit provided for in this Agreement.
10.10. Credit decision
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it
deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender,
and based on such documents and information as it deems
appropriate at the time, continue to make its own credit
decisions in taking or not taking any action under this
Agreement.
10.11. Alabama law
This Agreement shall be governed by and construed in
accordance with the laws of the State of Alabama.
10.12. Waiver of jury trial
The Borrowers, the Lenders and the Administrative Agent
hereby irrevocably and unconditionally waive trial by jury
in any legal action or proceeding relating to this Agreement
and for any counterclaim therein.
10.13. Venue of Actions
As an integral part of the consideration for making of
the Loans, it is expressly understood and agreed that no
suit or action shall be commenced by either Borrower, or by
any successor, personal representative or assignee thereof,
with respect to the Loans contemplated hereby, or with
respect to this Agreement or any other document or
instrument which now or hereafter evidences or secures all
or any part of the Loans, other than in a state court of
competent jurisdiction in and for the County of the State in
which the principal place of business of the Administrative
Agent is situated, or in the United States District Court
for the District in which the principal place of business of
the Administrative Agent is situated, and not elsewhere.
Nothing in this paragraph contained shall prohibit the
Administrative Agent from instituting suit in any court of
competent jurisdiction for the enforcement of its rights
hereunder or in any other document or instrument which
evidences or secures the loan indebtedness.
10.14. Execution
This Agreement may be executed in counterparts.
Delivery of an executed counterpart signature page to this
Agreement, including delivery by telecopier, shall be
effective as delivery of a manually executed counterpart of
this Agreement.
10.15. Survival
Section 9 (Change in circumstances), Section 10.3
(Expenses), and Section 10.4 (Indemnification) shall survive
termination of this Agreement or the Borrowers' Borrowing
Rights.
XI. Definitions and usages
11.1. Definitions
In this Agreement, the following terms shall have the
following meanings:
Adjusted NOI shall mean, as to any Mortgaged Property,
for any period, the actual Net Operating Income of such
Mortgaged Property for such period; provided that (i) all
annual expenses, including, but not limited to, taxes and
insurance, shall be accounted for on an accrual basis; and
(ii) expenses shall include an assumed management fee of
five percent (5%) and capital expenditures of Two Hundred
Dollars ($200.00) per rental unit on average per year.
Administrative Agent shall mean AmSouth Bank, its
successors or assigns.
Advance Rate shall mean for Mortgaged Properties: (a)
the amount shown as the Advance Rate on Schedule 2 for the
Initial Properties from the date hereof until the first
quarterly determination of Fair Market Value, which shall
occur on March 22, 1998, except for Paddock Park Ocala II,
which shall occur on June 22, 1998; (b) subject to
subclauses (d) and (e) herein, 60% of Fair Market Value for
a Stabilized Property (including the Initial Properties
after the first quarterly determination of Fair Market
Value); (c) subject to adjustment as provided in Section
1.16(c), 50% of the Project Budget to the extent of Work
Completed for a Development Project; (d) for the period
commencing on the date a Development Project is converted to
a Stabilized Property in accordance with Section 3.5(b),
until the next succeeding quarterly determination of Fair
Market Value, 60% of the appraised value of the subject
Development Project, as reflected in the appraisal ordered
and approved by the Administrative Agent; and (e) for the
period commencing on the date a Stabilized Property is added
to the Borrowing Base and continuing thereafter through a
full calendar quarter, 60% of the appraised value of the
subject Stabilized Property, as reflected in the appraisal
ordered and approved by the Administrative Agent.
Advances or Loan Advances shall mean advances of
principal upon the Loans by the Lenders to either or both of
the Borrowers under the terms of this Agreement,
specifically including, without limitation, advances under
the Swing Line Facility, the Notes and draws under the
Letters of Credit.
Affiliate of a specified Person means another Person
that directly, or indirectly through one or more
intermediaries, controls, is controlled by or is under
common control with the specified Person. In the foregoing
definition, control of a Person means possession, directly
or indirectly, of the power to direct or cause the direction
of the management or policies of a Person, whether through
the ownership of voting securities, by contract or
otherwise.
Aggregate Commitment means the sum of the Commitments
of the Lenders at any time available to the Borrower under
the Loans.
Annualized Adjusted NOI shall mean, for the most recent
two calendar quarters, the Adjusted NOI for such calendar
quarters, multiplied by the integer two (2).
Annualized EBITDA shall mean EBITDA for the most recent
two calendar quarters, multiplied by the integer two (2).
Apartment Community shall mean an apartment community
owned by either Borrower or Subsidiary, whether or not it is
subject to a Mortgage.
Assignee shall have the meaning assigned to such term
in Section 10.7(c).
Assumed Debt Service shall mean the assumed
amortization of the outstanding Loans, calculated on the
basis of a 25-year amortization and an 8.5% interest rate.
Base Rate shall mean (a) from the date hereof through
June 30, 1998, a rate per annum equal to the Prime Rate
minus .75%, and (b) commencing July 1, 1998, but subject to
Section 1.13(e), continuing thereafter until the Loans are
paid in full, a rate equal to the Prime Rate. Any change in
the Base Rate due to a change in the Prime Rate shall be
effective on the effective date of such change in the Prime
Rate.
Base Rate Loan means a Loan bearing interest at the
Base Rate.
Borrowers mean MAAC and Mid-America, jointly, and,
individually, a "Borrower".
Borrowing shall have the meaning assigned to that term
in Section 1.2.
Borrowing Base is the limitation on the amount of the
Loan which may be outstanding at any time and from time to
time during the term of this Agreement. The Borrowing Base
shall equal (a) the Advance Rate for Stabilized Properties
which at the time of determination are subject to the
Mortgages plus (b) the Advance Rate for Development Projects
which at the time of determination are subject to Mortgages;
provided, however, the amount available under (b) above
shall in no event exceed $50,000,000 in the aggregate at any
one time outstanding.
Borrowing Base Certificate shall mean a certificate
substantially in the form of Exhibit F, duly executed by the
Certifying Officer, setting forth in reasonable detail the
calculations for each component of the Borrowing Base.
Borrowing Notice shall have the meaning assigned to
that such term in Section 2.1.
Borrowing Rights of the Borrowers means the rights of
the Borrowers under this Agreement to require the Lenders to
make Loans.
Business Day means a day other than a Saturday, Sunday
or other day on which commercial banks in Birmingham,
Alabama and New York, New York are authorized or required by
law to close.
Certificate of Occupancy shall mean a certificate of
occupancy issued by the governmental authority in whose
jurisdiction the subject Mortgaged Property lies, or such
other comparable governmental approval if a certificate of
occupancy is not utilized by the applicable governmental
authority.
Certifying Officer shall mean MAAC's chief financial
officer.
Claims shall have the meaning assigned to that term in
Section 10.4.
Code shall mean the Internal Revenue Code of 1986, as
amended, or any successor Federal tax code.
Commitment shall mean the portion of the Loans to be
made available by a Lender.
Controlled Group means, for a Borrower, all members of
a controlled group of corporations and all trades or
businesses (whether or not incorporated) under common
control that, together with the Borrower, are treated as a
single employer under Section 414 of the Internal Revenue
Code.
Conversion means shall have the meaning assigned to
that term in Section 2.4.
Conversion Date shall mean the date on which a
Conversion occurs.
Conversion Notice shall have the meaning assigned to
that term in Section 2.4.
Curative Measure shall mean the repairs, renovations
and replacements recommended for immediate action for an
Apartment Community in an Inspection Report.
Debt of a Person at a date means, without duplication,
- all obligations of the Person for borrowed
money, including all obligations of the Person
evidenced by bonds, debentures, notes or other similar
instruments,
- all obligations of the Person to pay the
deferred purchase price of property or services, except
trade accounts payable and deferred compensation
arising in the ordinary course of business,
- all obligations of the Person as lessee under
capital leases,
- all Debt of others secured by a Lien on
assets of the Person, whether or not the Debt is
assumed by the Person,
- all Debt of others Guaranteed by the Person,
- all letters of credit, banker's acceptances,
swap transactions and similar hedge agreements, and
- all Debt of any partnership for which such
Person is a general partner.
Default means a condition or event that constitutes an
event of default hereunder or that with the giving of notice
or lapse of time or both would, unless cured or waived,
become a Default, as more specifically set forth in Section 7.
Development Project is a real property which is being
developed into, or upon which improvements are being
constructed to enable it to become, an Apartment Community.
EBITDA shall mean, on a consolidated basis, earnings
before interest, taxes, depreciation and amortization,
calculated in accordance with GAAP.
Environmental Laws means all applicable local, state or
federal laws, rules or regulations pertaining to
environmental regulation, contamination or cleanup,
including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, the Resource Conservation and Recovery Act of 1976 or
any state lien or superlien or environmental cleanup
statutes.
ERISA means the Employee Retirement Income Security Act
of 1974.
Eurocurrency Reserve Requirements for any day means the
aggregate of the maximum reserve percentage (including any
marginal, special, emergency or supplemental reserves)
established by the Federal Reserve Board and any other
banking authority to which a Lender is subject and
applicable to 'eurocurrency liabilities', as such term is
defined in Regulation D of the Federal Reserve Board, or any
similar category of assets of liabilities relating to
eurocurrency fundings. Eurocurrency Reserve Requirements
shall be adjusted automatically on and as of the effective
date of any change in such reserve percentage.
Eurodollar Borrowing means a Borrowing bearing interest
at the Eurodollar Rate.
Eurodollar Loan means a Loan bearing interest at the
Eurodollar Rate.
Eurodollar Rate shall mean the LIBOR Rate, plus the
applicable Margin.
Existing Letters of Credit means (a) that certain
letter of credit issued by AmSouth Bank, dated July 7, 1997,
in an amount not to exceed in the aggregate $7,230,903.00,
bearing Letter of Credit No. S314065; (b) that certain
letter of credit issued by AmSouth Bank, dated May 6, 1996,
in an amount not to exceed in the aggregate $168,000,
bearing Letter of Credit No. S312398; (c) that certain
letter of credit issued by AmSouth Bank, dated January 29,
1997, in an amount not to exceed in the aggregate
$455,778.21, bearing Letter of Credit No. S312294; (d) that
certain letter of credit issued by AmSouth Bank, dated
December 19, 1997, in an amount not to exceed in the
aggregate $6,057,206, bearing Letter of Credit No. S314660;
(e) that certain letter of credit issued by AmSouth Bank,
dated January 15, 1998, in an amount not to exceed in the
aggregate $11,005,940, bearing Letter of Credit No. S314760;
and (f) any and all replacements and substitutions of any of
the letters of credit discussed in (a), (b), (c), (d) and
(e).
Expenses of a Person means the Person's reasonable out
of pocket expenses (including reasonable fees and expenses
of the Person's outside counsel) and reasonably allocable
expenses of counsel who are employees of the Person.
Fair Market Value shall be determined quarterly, on a
"Net Operating Income" basis, not later than the twenty
second (22nd) day of each calendar quarter, but as of the
last day of the immediately preceding calendar quarter, from
the Effective Date until the Termination Date of the Loans,
by dividing the prior calendar quarter's annualized Adjusted
NOI of Stabilized Properties subject to Mortgages by 9.5%.
Federal Funds Rate for a day means the rate per annum
(rounded upwards, if necessary, to the nearest 0.01%) equal
to the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve
System arranged by federal funds brokers on the day, as
published by the Federal Reserve Bank of New York on the
Business Day following that day, provided that:
- if the day is not a Business Day, the Federal
Funds Rate for the day shall be the rate on such
transactions on the preceding Business Day as so
published on the following Business Day, and
- if no such rate is so published on the
following Business Day, the Federal Funds Rate for the
day shall be the average rate on such transaction
quoted to the Administrative Agent on the day by three
federal funds brokers of recognized standing selected
by the Administrative Agent.
Federal Reserve Board means the Board of Governors of
the Federal Reserve System.
Fees shall mean, collectively, the fees described in
Section 1.11(a) through (e), both inclusive.
Funds from Operations has the meaning assigned in
Section 6.7.
GAAP means generally accepted accounting principles in
the United States of America in effect from time to time,
consistently applied.
Hazardous Substances shall mean and include all
hazardous and toxic substances, wastes or materials, any
pollutants or contaminants (including, without limitation,
asbestos and raw materials which include hazardous
constituents), or any other similar substances or materials
which are included under or regulated by any applicable
Environmental Laws.
Initial Properties shall mean the Properties listed on
Schedule 2.
Inspection Report shall mean the written report
commissioned by the Administrative Agent as part of the due
diligence process for determining whether an Apartment
Complex may become a Mortgaged Property.
Interest Period shall have the meaning assigned to that
term in Section 1.12.
Lenders shall have the meaning assigned to such term in
the introductory paragraph of this Agreement.
Letter(s) of Credit shall have the meaning assigned to
that term in Section 1.8.
Letter of Credit Facility shall mean the portion of the
Aggregate Commitment that may be utilized for the issuance
of Letters of Credit, not to exceed $60,000,000 at any one
time.
LIBOR for an Interest Period means
- the interest rate per annum for deposits in
U.S. dollars for a maturity most nearly comparable to
the Interest Period that appears on page 3750 (or a
successor page) of the Dow Jones Telerate Screen as of
11 a.m., London time, on the second Business Day before
the first day of the Interest Period, or
- if such rate does not so appear on the Dow
Jones Telerate Screen, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%)
equal to the rate at which U.S. dollar deposits
approximately equal in principal amount to the
Administrative Agent's portion of such Borrowing and
for a maturity comparable to the Interest Period, are
offered to the principal London office of the
Administrative Agent in immediately available funds in
the London interbank market at approximately 11 a.m.,
London time, on the second Business Day before the
first day of the Interest Period.
Lien means, for an asset, a mortgage, lien (including
without limitation statutory liens), pledge, charge,
security interest or encumbrance of any kind in respect of
the asset, including the interest of a vendor or lessor
under a conditional sales agreement, capital lease or other
title retention agreement, or any preferential arrangement
of any kind.
Loan Documents shall mean this Agreement, the Notes,
the Mortgages, any other instrument or document at any time
evidencing or securing the Loans, and any other instrument
or document executed by the Borrowers or any Subsidiary with
or in favor of the Administrative Agent or the Lenders in
connection with the Loans.
Loans shall have the meaning assigned to such term in
Section 1.1, and, individually, a Loan.
MAAC shall have the meaning given to such term in the
introductory paragraph of this Agreement.
Management Fees means, with respect to each Apartment
Community for any period, an amount equal to five percent
(5%) of the aggregate rent due and payable for such period
under leases with tenants at such Apartment Community.
Margin shall mean (a) from the date hereof through June
30, 1998, one and one-quarter percent (1.25%) and (b)
commencing July 1, 1998, but, subject to Section 1.13(e),
continuing thereafter until the Loans are paid in full, two
percent (2%).
Margin Stock means 'margin stock' as defined in
Regulation U of the Federal Reserve Board.
Material Officer shall have the meaning assigned to
such term in Section 7.1(l).
Maturity Date means November 24, 1999.
Mid-America shall have the meaning given to such term
in the introductory paragraph of this Agreement.
Moody's shall mean Moody's Investors Service, Inc.
Mortgage shall mean any deed of trust, mortgage, deed
to secure debt, or other similar lien instrument, executed
by the Borrowers or a Subsidiary for the purpose of securing
the Loans, and constituting a valid first lien upon or
security title in an Apartment Community.
Mortgaged Property shall mean the Stabilized Properties
and Development Projects subject to the lien of a Mortgage.
Net Operating Income or NOI means, with respect to any
Apartment Community for the most recent two calendar
quarters, "actual property rental and other income" (as
determined by GAAP) attributable to such Apartment Community
accruing for such period, minus the amount of all expenses
(as determined in accordance with GAAP) incurred in
connection with and directly attributable to the ownership
and operations of such Apartment Community for such period,
including, without limitation, Management Fees and amounts
accrued for the payment of real estate taxes and insurance
premiums, but excluding interest expense or other debt
service charges and any non-cash charges such as
depreciation or amortization of financing costs. In
calculating NOI attributable to any Apartment Community
first acquired or opened by either Borrower during a
quarter, "actual property rental and other income" and
expenses shall be adjusted for the purposes of this
definition to reflect the full amount of "actual property
rental and other income" and expenses that would have been
attributable to such Apartment Community if it had been
owned or opened for the full quarter.
Net Operating Loss for any period shall mean the amount
by which expenses exceed income, all determined in
accordance with GAAP.
Net Worth or Tangible Net Worth means the sum of
consolidated shareholders' equity and minority interests in
MAAC, determined in accordance with GAAP, reduced by the
amount of any intangible assets of MAAC, determined in
accordance with GAAP.
Notes shall have the meaning assigned to such term in
Section 1.4.
Notice Addresses shall have the meaning assigned in
Section 10.1.
Obligor shall mean either Borrower or any Subsidiary
granting a Mortgage to secure the Loans.
Office of a Lender means the Lender's office designated
as its office and located at the address set forth on
Schedule 3, or such other office as the Lender designates as
its office by notice to the Borrowers and the Administrative
Agent.
Participant shall have the meaning assigned to such
term in Section 10.7(b).
PBGC means the Pension Benefit Guaranty Corporation.
Pension Plan at a time means an employee pension
benefit plan that is covered by Title IV of ERISA or subject
to the minimum funding standards under Section 412 of the
Internal Revenue Code and is either (a) maintained by a
member of the Controlled Group for employees of a member of
the Controlled Group or (b) maintained pursuant to a
collective bargaining agreement or other arrangement under
which more than one employer makes contributions and to
which a member of the Controlled Group is then making or
accruing an obligation to make contributions or has within
the preceding five plan years made contributions.
Person means an individual, a corporation, a
partnership, an association, a trust or any other entity or
organization, including a government or political
subdivision or an agency or instrumentality thereof.
Prime Rate means the per annum rate of interest
publicly announced by the Administrative Agent as its Prime
Rate at its principal office in Birmingham, Alabama. Each
change in the Prime Rate shall be effective on the date such
change is publicly announced as effective.
Project Budget means the total cost of a particular
phase of a Development Project, not to exceed $20,000,000
for any one such phase of a Development Project.
Proportionate Share means the respective pro rata
interests of the Lenders in the Aggregate Commitment and in
the Loans.
Register shall have the meaning assigned to such term
in Section 10.7(f).
Regulatory Action means the adoption of an applicable
law, rule or regulation, or a change therein, or a change in
the interpretation or administration thereof by a
governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof,
or compliance by a Lender (or its Office) with a request or
directive (whether or not having the force of law) of the
authority, central bank or comparable agency.
Related Person shall mean any Person (i) which now or
hereafter directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under
common control with either Borrower, or (ii) which now or
hereafter beneficially owns or holds ten percent (10%) or
more of the partnership interests of Mid-America, or ten
percent (10%) or more of the capital stock of MAAC, or (iii)
ten percent (10%) or more of the capital stock, partnership
interest or other form of ownership interest of which is
beneficially owned or held by either Borrower. For the
purposes hereof, "control" shall mean possession, directly
or indirectly, of the power to direct or cause the direction
of the management and policies of a Person, whether through
the ownership of voting stock or interests, by contract or
otherwise.
Responsible Officer shall have the meaning ascribed to
that term in Section 1.7 hereof.
S&P means Standard & Poor's Corporation or a successor.
Stabilized Property shall mean an Apartment Community
(a) for which a Certificate of Occupancy has been issued for
the entire Apartment Community, or the Borrowers shall
furnish satisfactory proof to the effect that the
improvements for the entire Apartment Community have been
completed and that the local government having jurisdiction
does not issue a Certificate of Occupancy; and (b) which has
achieved an occupancy rate of at least eighty percent (80%)
for at least the immediately preceding two (2) consecutive
months.
Subsidiary means a corporation, partnership or other
legal entity, the voting interest of which is one hundred
percent (100%) directly or indirectly owned by either MAAC
and/or Mid-America.
Subsidiary Guaranty means the guaranty agreement
executed or to be executed by each Subsidiary executing a
Mortgage, in the form attached hereto as Exhibit H.
Swing Line Facility shall have the meaning assigned to
such term in Section 1.7.
Swing Line Facility Note shall mean that certain
promissory note executed by the Borrowers in the principal
amount of $6,000,000, evidencing the Swing Line Facility.
Tax includes any present or future tax, assessment or
governmental charge or levy.
Tax Form shall have the meaning assigned to that term
in Section 9.6.
Termination Date shall mean the earlier of (a) the
Maturity Date or (b) the date as of which the Borrowers
shall have terminated the Lenders' commitment under the
provisions of Section 1.15 hereof, or (c) the Lenders have
terminated this Agreement under the provisions of Section 7
hereof.
Total Annualized Debt Service on Indebtedness shall
mean for any period the aggregate amount of principal and
interest payments including capitalized interest for
construction purposes due for such period upon Debt, but
excluding balloon payments.
Total Annualized Fixed Charges shall mean for any
period the aggregate amount of preferred stock
distributions, principal, and interest (including
capitalized interest for Development Projects) due for such
period upon Debt, but excluding balloon payments.
Total Development and Joint Venture Investment shall
mean the aggregate from time to time of (i) a Borrower's
expenditures with respect to any Apartment Community for
land acquisition, development and construction costs until a
Certificate of Occupancy is received for such entire
Apartment Community (or, if no Certificate of Occupancy is
available from the local governmental authority having
jurisdiction until all construction of the entire Apartment
Community has been completed), plus (ii) the amount of funds
or other assets invested by a Borrower in any joint venture
arrangement with any Person, whether or not a Related
Person.
Total Liabilities shall mean the aggregate amount of
all liabilities of both Borrowers, from time to time
outstanding, calculated on a consolidated basis, in
accordance with GAAP, applied on a consistent basis. (For
the purposes hereof, with respect to indebtednesses of any
joint venture in which a Borrower is a party, such
Borrower's pro rata share of the joint venture's liabilities
shall be considered a liability of such Borrower, if such
joint venture liability is non-recourse; but if such joint
venture liability is a recourse obligation, the total amount
of such joint venture liability shall be considered a
liability of the Borrower.)
Total Market Value of Assets shall mean, for any
calendar quarter, the EBITDA for the most recent two (2)
calendar quarters, multiplied by the integer two (2)
(thereby converting the calendar quarter's EBITDA to an
annualized amount), and then multiplying the result so
obtained by the integer ten (10).
Two-Thirds of the Lenders means Lenders having
Commitments aggregating at least two-thirds of the Aggregate
Commitment except that if the Borrowers' Borrowing Rights
have terminated or for purposes of Section 7.2 (Action on
Event of Default),
Two-Thirds of the Lenders means Lenders having two
thirds of the aggregate unpaid principal amount of all Loans
to the Borrowers.
Unfunded Amount shall have the meaning assigned to such
term in Section 2.3.
Unfunded Vested Liabilities for a Pension Plan at a
time means the amount (if any) by which (i) the present
value of all vested nonforfeitable benefits under the
Pension Plan exceeds (ii) the fair market value of all
Pension Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for the
Pension Plan, but only to the extent that such excess
represents a potential liability of a member of the
Controlled Group to the PBGC or the Pension Plan under Title
IV of ERISA.
Withdrawal Liability means liability to a multiemployer
plan as a result of a complete or partial withdrawal from
the multiemployer plan, as such terms are defined in Part I
of Subtitle E of ERISA.
Work Completed means the extent to which construction
has been completed on a Development Project at the point of
determination.
11.2. Accounting terms and determinations
Unless otherwise stated, all accounting terms used in
this Agreement shall be interpreted, all accounting
determinations under this Agreement shall be made and all
financial statements of a Borrower required to be delivered
under this Agreement shall be prepared in accordance with
GAAP.
11.3. Miscellaneous usages
In this Agreement, unless otherwise stated or the
context otherwise clearly requires, the following usages
apply:
time periods
In computing periods from a specified date to a later
specified date, the words 'from' and 'commencing on' (and
the like) mean 'from and including,' and the words 'to,'
'until' and 'ending on'( and the like) mean 'to but
excluding.'
when action may be taken
Any action permitted to be taken under this Agreement
may be taken at any time and from time to time.
Birmingham, Alabama time
All indications of time of day shall mean the time then
in effect in Birmingham, Alabama.
'including'; 'or'
'Including' means 'including, but not limited to.' 'A
or B' means 'A or B or both.'
statutes and regulations
References to a statute include all regulations
promulgated under or implementing the statute, as in effect
at the relevant time.
agreements
References to an agreement (including this Agreement)
shall refer to the agreement as amended at the relevant
time.
governmental agencies
References to any governmental or quasi-governmental
agency or authority shall include any successor agency or
authority.
section references
References to numbered sections in this Agreement shall
refer to all included sections. For example, references to
Section 6 shall also refer to Sections 6.1, 6.1(a), etc.
other defined terms
Other defined terms are contained within the body of
this Agreement.
List of Schedules
Schedule 1 List of Lenders and Commitments
Schedule 2 Initial Properties
Schedule 3 Notice Addresses
Schedule 4 Subsidiaries and Ownership
List of Exhibits
Exhibit A Notes (1.4)
Exhibit B Swingline Request (1.7)
Exhibit C Borrowing Notice (2.1)
Exhibit D Conversion Notice (2.4)
Exhibit E Attorney Opinion (3.1)
Exhibit F Borrowing Base Certificate (5.1)
Exhibit G Assignment (9.8)
Exhibit H Subsidiary Guaranty
Exhibit I Florida Restated Notes
Exhibit J Compliance Certificate
Signature page to
Revolving Credit Agreement
MID-AMERICA APARTMENT COMMUNITIES,
INC.
By /s/ Simon R.C. Wadsworth
Name Simon R.C. Wadsworth
Title CFO
MID-AMERICA APARTMENTS, L.P.
By Mid-America Apartments Communities,
Inc.
Its Sole General Partner
By /s/ Simon R.C. Wadsworth
Name Simon R.C. Wadsworth
Title CFO
Signature page to
Revolving Credit Agreement
AMSOUTH BANK,
in its individual capacity as Lender
and as Administrative Agent
By____/s/ Lawrence Clark
Name___Lawrence Clark
Title__VP
Signature page to
Revolving Credit Agreement
HIBERNIA NATIONAL BANK
By____/s/ Susan Robinson
Name______Susan Robinson
Title_____Vice President
Signature page to
Revolving Credit Agreement
COLUMBUS BANK & TRUST COMPANY
By____/s/ Jon C. Dodds
Name______Jon C. Dodds
Title_____Sr. Vice President
Signature page to
Revolving Credit Agreement
COMMERZBANK AKTIENGESELLSCHAFT, ATLANTA AGENCY
By_____/s/ Harry Yergey
Name Harry Yergey
Title__Senior Vice President
By_____/s/ Eric Kagerer
Name___Eric Kagerer
Title__Vice President
Signature page to
Revolving Credit Agreement
PNC BANK, NATIONAL ASSOCIATION
By /s/ Lee K. Zoller
Name Lee K. Zoller
Title Assistant Vice President
Signature page to
Revolving Credit Agreement
FIRST TENNESSEE BANK, N.A.
By /s/ Rick Neal
Name Rick Neal
Title SVP
Signature page to
Revolving Credit Agreement
NATIONAL BANK OF COMMERCE
By /s/ Billy Frank
Name Billy Frank
Title Assistant Vice President
Signature page to
Revolving Credit Agreement
MELLON BANK, N.A.
By /s/ Wayne P. Robertson
Name Wayne P. Robertson
Title Vice President
SCHEDULE 1
List of Lenders Commitments: Percentage:
AmSouth Bank $37,000,000 18.5%
Hibernia National Bank 28,000,000 14.0%
Columbus Bank & Trust Company 15,000,000 7.5%
First Tennessee Bank, N.A. 20,000,000 10.0%
Commerzbank 24,000,000 12.0%
Aktiengesellschaft,
Atlanta Agency
PNC Bank, National Association 28,000,000 14.0%
National Bank of Commerce 20,000,000 10.0%
Mellon Bank, N.A. 28,000,000 14.0%
_____________ ______
TOTAL $200,000,000 100.0%
SCHEDULE 2
[List of Initial Properties]
Availability
Property Advance Rate as of 3/20/98
I. Stabilized Properties:
1. Paddock Club Huntsville (AL) 60% 4,980,000.00
2. Anatole (FL) 60% 5,106,000.00
3. Whisperwood (GA) 60% 13,980,000.00
4. Whisperwood Spa I (GA) 60% 9,060,000.00
5. Woods (TX) 60% 6,960,000.00
6. Township (VA) 60% 6,210,000.00
7. Paddock Club Brandon I (FL) 60% 12,600,000.00
8. Paddock Club Greenville (SC) 60% 7,680,000.00
9. Paddock Club Columbia I (SC) 60% 6,240,000.00
10. Paddock Club Columbia II (SC) 60% 4,800,000.00
11. Paddock Club Tallahassee (FL) 60% 5,700,000.00
12. Reflection Pointe (MS) 60% 7,830,000.00
13. Paddock Park Ocala II (FL) 54.5% 7,957,000.00
14. Colony at Southpark (SC) 60% 4,500,000.00
15. Walden Run (GA) 60% 8,259,000.00
16. Lane at Towne Crossing (TX) 60% 6,840,000.00
II. Development Projects:
1. Paddock Club 50% of cost 2,553,832.00
Huntsville II (AL)
2. Whisperwood Spa II (GA) 50% of cost 3,153,809.00
3. Paddock Club Gainesville 50% of cost 96,492.00
(FL)
4. Paddock Club Brandon II 50% of cost 0.00
(FL)
5. Paddock Club Mandarin 50% of cost 6,306,681.00
(FL)
_______________
TOTAL
BORROWING BASE $130,812,814.00
SCHEDULE 3
[Notice Addresses]
AmSouth Bank
Real Estate Department
9th Floor
AmSouth/Sonat Building
1900 5th Avenue North
Birmingham, Alabama 35203
Attention: Mr. Lawrence B. Clark
Hibernia National Bank
313 Carondolet Street
Suite 1400
New Orleans, Louisiana 70130
Attention: Edward "Skip" Santos
Columbus Bank & Trust Company
Real Estate Lending/Main Office
4th Floor
1148 Broadway
Columbus, Georgia 31902
Attention: Mr. Jon C. Dodds
First Tennessee Bank, N.A.
1st Floor-Real Estate 165 Madison Avenue
Memphis, Tennessee 38103
Attention: Ms. Jennifer Andrews
Commerzbank Aktiengesellschaft, Atlanta Agency
Promenade Two, Suite 3500
Atlanta, Georgia 30309
Attention: Mr. Eric Kagerer
PNC Bank, N.A.
500 West Jefferson Street, Suite 1200
Louisville, Kentucky 40202 Attention:
Mr. Lee K. Zoller
National Bank of Commerce
7770 Poplar Avenue
Suite 105
Germantown, Tennessee 38138
Attention: Mr. Billy Frank
Mellon Bank, N.A.
One Mellon Bank Center
Suite 2915
Pittsburgh, Pennsylvania 15258
Attention: Mr. Wayne Robertson
Mid-America Apartment Communities, Inc.
6584 Poplar
Suite 340
Memphis, Tennessee 38138
Attention: Mr. Simon R.C. Wadsworth
Mid-America Apartments, L.P.
6584 Poplar
Suite 340
Memphis, Tennessee 38138
Attention: Mr. Simon R.C. Wadsworth
SCHEDULE 4
[Subsidiaries and Ownership]
Paddock Club Huntsville, A Limited Partnership, a Georgia limited
partnership
Paddock Club Tallahassee, A Limited Partnership, a Georgia
limited partnership
Paddock Club Brandon, A Limited Partnership, a Georgia limited
partnership
Paddock Park Ocala II, A Limited Partnership, a Georgia limited
partnership
Whisperwood Associates, A Limited Partnership, a Georgia limited
partnership
Whisperwood Spa & Club, A Limited Partnership, a Georgia limited
partnership
Paddock Club Greenville, A Limited Partnership, a Georgia limited
partnership
Paddock Club Wildewood, A Limited Partnership, a Georgia limited
partnership
Paddock Club Columbia Phase II, A Limited Partnership, a Georgia
limited partnership
Mid-America Apartments of Texas, L.P., a Texas limited
partnership
EXHIBIT A
NOTE
Birmingham, Alabama
_______________, 1998
For value received, Mid-America Apartment Communities,
Inc., a Tennessee corporation, and Mid-America Apartments, L.P.,
a Tennessee limited partnership (jointly, the "Borrowers"),
jointly and severally promise to pay to the order of
_____________________, a banking association (the "Lender"), for
the account of its Lending Office, the principal sum of
_______________ Million and No/100 Dollars ($__,000,000.00), or
such lesser amount as shall equal the unpaid principal amount of
all Loans made by the Lender to the Borrowers pursuant to the
Credit Agreement referred to below, on the dates and in the
amounts provided in the Credit Agreement. The Borrowers jointly
and severally promise to pay interest on the unpaid principal
amount of this Note on the dates and at the rate or rates
provided for in the Credit Agreement.
All such payments of principal and interest
shall be made in lawful money of the United States of America in
Federal or other immediately available funds at the office of
AmSouth Bank, 1900 5th Avenue North, Birmingham, Alabama, 35203,
or such other address as may be specified from time to time
pursuant to the Credit Agreement.
All Loans made by the Lender, the respective
maturities thereof, the interest rates from time to time
applicable thereto, and all repayments of the principal thereof
shall be recorded by the Lender and, prior to any transfer
hereof, endorsed by the Lender on the schedule attached hereto,
or on a continuation of such schedule attached to and made a part
hereof; provided that the failure of the Lender to make any such
recordation or endorsement shall not affect the joint and several
obligations of the Borrowers hereunder or under the Credit
Agreement. The books and records of the Administrative Agent
shall be prima facie evidence of all sums due Lender.
This Note is one of the Notes evidencing Loans referred
to in, and is entitled to the benefits of, the Revolving Credit
Agreement (Amended and Restated) dated as of March 16, 1998,
among the Borrowers, the Lenders listed on the signature pages
thereof and AmSouth Bank, as Administrative Agent (as the same
may be amended, supplemented and modified from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement are
used herein with the same meanings. Reference is made to the
Credit Agreement for provisions for the optional and mandatory
prepayment and the repayment hereof and the acceleration of the
maturity hereof, as well as the obligation of the Borrowers to
pay all costs of collection, including reasonable attorneys fees,
in the event this Note is collected by law or through an attorney
at law.
Each Borrower hereby waives presentment, demand,
protest, notice of demand, protest and nonpayment and any other
notice required by law relative hereto, except to the extent as
otherwise may be expressly provided for in the Credit Agreement.
This Note shall be governed by and construed in
accordance with the laws of the State of Alabama.
IN WITNESS WHEREOF, each Borrower has caused this
Note to be duly executed, under seal, by its duly authorized
officer as of the day and year first above written.
MID-AMERICA APARTMENT COMMUNITIES, INC.,
a Tennessee corporation
By______________________________
Its___________________________
MID-AMERICA APARTMENTS, L.P.,
a Tennessee limited partnership
By Mid-America Apartment Communities, Inc.
Its Sole General Partner
By______________________________
Its___________________________
LOANS AND PAYMENTS OF PRINCIPAL
Base Rate or Amount of
Euro-Dollar Amount of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
EXHIBIT B
SWING LINE REQUEST
[Date]______________________
AmSouth Bank, as Administrative Agent
RE: Revolving Credit Agreement dated as of March 16, 1998,
between Mid-America Apartment Communities, Inc., Mid-America
Apartments, L.P., the Lenders parties thereto, and AmSouth
Bank, as Administrative Agent (as amended, supplemented or
modified from time to time, the "Credit Agreement";
capitalized terms used but not defined in this Request have
the meanings given them in the Credit Agreement)
Ladies and Gentlemen:
Pursuant to Section 1.7 of the Credit Agreement, the
undersigned Borrowers request an Advance under the Swing Line
Note as follows:
Date of Borrowing _____________ ___, 199____; and
Aggregate principal amount $_____________.
The net proceeds of the Borrowing are to be [deposited in our
account with you, No. ] [wire to [bank], A.B.A. #
, reference ].
Any questions regarding this notice should be directed
to [contact Person].
MID-AMERICA APARTMENT COMMUNITIES, INC.
By:__________________________
Title:______________________
By:__________________________
Title:______________________
MID-AMERICA APARTMENTS, L.P.
By: Mid-America Apartment Communities,
Inc. Title: The Sole General Partner
By:__________________________
Title:______________________
By:__________________________
Title:______________________
EXHIBIT C
BORROWING NOTICE
[Date]
AmSouth Bank, as Administrative Agent
RE: Revolving Credit Agreement dated as of March 16, 1998,
between Mid-America Apartment Communities, Inc., Mid-America
Apartments, L.P., the Lenders parties thereto, and AmSouth
Bank, as Administrative Agent (as amended, supplemented or
modified from time to time, the "Credit Agreement";
capitalized terms used but not defined in this Notice have
the meanings given them in the Credit Agreement)
Ladies and Gentlemen:
Pursuant to Section 2.1 of the Credit Agreement, the
undersigned Borrowers request a Borrowing, as follows:
Date of Borrowing: _____________ ___, 199____;
Aggregate principal amount: $_____________;
Interest Rate (check one):
__ (a) Eurodollar Rate; or
__ (b) Base Rate (If Base Rate is selected,
accrued interest will be payable on
the first day of each month.)
Interest Period (if Eurodollar Rate is selected):
circle one: 30 or 60 days.
The Borrowing [is/is not] to be utilized for a
Development Project. If the Borrowing is related to a
Development Project, such Development Project is known
as ______________________________________, and evidence
of the Work Completed is attached hereto.
The net proceeds of the Borrowing are to be [deposited in our
account with you, No. ] [wire to [bank], A.B.A. #
, reference ].
Any questions regarding this Notice should be directed
to [contact person].
MID-AMERICA APARTMENT COMMUNITIES, INC.
By:_____________________________________
Title:_________________________________
By:_____________________________________
Title:_________________________________
MID-AMERICA APARTMENTS, L.P.
By: Mid-America Apartment Communities, Inc.
Title: The Sole General Partner
By:_____________________________________
Title:_________________________________
By:_____________________________________
Title:_________________________________
EXHIBIT D
CONVERSION NOTICE
[Date]
AmSouth Bank, as Administrative Agent
RE: Revolving Credit Agreement dated as of March 16, 1998,
between Mid-America Apartment Communities, Inc., Mid-America
Apartments, L.P., the Lenders parties thereto, and AmSouth
Bank, as Administrative Agent (as amended, modified or
supplemented from time to time, the "Credit Agreement";
capitalized terms used but not defined in this Notice have
the meanings given them in the Credit Agreement)
Ladies and Gentlemen:
Pursuant to Section 2.4 of the Credit Agreement, the
undersigned Borrowers request a Conversion of certain Borrowings,
as follows:
Conversion date:
Borrowings to be converted:
Borrowing or Conversion date: _____________
Type: _____________
Interest Period: _____________
[Repeat as necessary]
Aggregate unpaid principal amount of Borrowings to be
converted: $
To be converted into the following Borrowings:
Type: _____________
Principal amount: _____________
Interest Period: _____________
[Repeat as necessary]
Any questions regarding this Notice should be directed
to [contact person].
MID-AMERICA APARTMENT COMMUNITIES, INC.
By:
Title:
MID-AMERICA APARTMENTS, L.P.
By: Mid-America Apartment Communities, Inc.
Title: The Sole General Partner
By:
Title:
EXHIBIT E
FORM OF OPINION OF COUNSEL TO BORROWERS
_______________, 1998
To the Lenders and the Administrative
Agent referred to below
c/o AmSouth Bank, as Administrative Agent
Ladies and Gentlemen:
I am Counsel for Mid-America Apartment Communities,
Inc., a Tennessee corporation ("MAAC") and Mid-America
Apartments, L.P., a Tennessee limited partnership ("Mid-America")
(jointly, the "Borrowers") and have acted as counsel for the
Borrowers in connection with the Revolving Credit Agreement dated
as of ________ ___, 1998 (the "Credit Agreement") between the
Borrowers, the Lenders parties thereto, and AmSouth Bank, as
Administrative Agent. Terms defined in the Credit Agreements are
used herein as therein defined.
I have examined originals or copies, certified or
otherwise identified to my satisfaction, of such documents,
corporate records, certificates of public officials and other
instruments and have conducted such other investigations of fact
and law as I have deemed necessary or advisable for purposes of
this opinion. I have assumed the due execution and delivery of
the Credit Agreement by the Administrative Agent and the Lenders.
Upon the basis of the foregoing, I am of the opinion
that:
1. MAAC is a real estate investment trust, duly
incorporated, validly existing and in good standing under the
laws of the State of Tennessee, and has all corporate powers and
all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
2. Mid-America is a limited partnership duly
incorporated, validly existing and in good standing under the
laws of the State of Tennessee, and has all corporate powers and
all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
3. [Same opinion as 1 for each corporate Subsidiary
and same as 2 for each partnership Subsidiary, executing a
Guaranty and a Mortgage on the closing date].
4. The execution, delivery and performance by the
Borrowers of the Credit Agreement and the Borrowings thereunder
are within each Borrower's corporate or partnership, as the case
may be, powers, have been duly authorized by all necessary
corporate or partnership, as the case may be, action, require no
action by or in respect of, or filing with, any governmental
body, agency or official and do not contravene, or constitute a
default under, any provision of applicable law or regulation or
of the certificate of incorporation, by-laws or partnership
agreement of either Borrower or of any material agreement,
judgment, injunction, order, decree or other instrument binding
upon either Borrower or result in the creation or imposition of
any Lien on any asset of a Borrower or any of its Subsidiaries.
5. [Same opinion as 4 for each Subsidiary signing a
Guaranty and a Mortgage on the closing date.]
6. The Notes and the Credit Agreement have been duly
executed and delivered by each Borrower and constitute the valid
and binding agreement of the Borrowers, enforceable in accordance
with their respective terms except as enforcement may be limited
by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights in general. The enforcement of
the Borrowers' obligations under the Credit Agreement is subject
to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law.)
7. [Same opinion as 6 as relates to execution,
delivery and enforceability of Guaranty and Mortgage by each
Subsidiary.]
8. There is no action, suit or proceeding pending
against, or to the best of my knowledge threatened against or
affecting, either Borrower or any of its Subsidiaries before any
court or arbitrator or any governmental body, agency or official
in which there is a reasonable possibility of a decision that
could materially adversely affect the business, consolidated
financial position or consolidated results of operations of
either Borrower and its consolidated Subsidiaries, considered as
a whole, or which in any manner draws into question the validity
of the Notes and the Credit Agreement.
9. The use of proceeds of any Loan under the Credit
Agreement, in the manner contemplated in the Credit Agreement,
will not entail a violation of any of the provisions of
Regulation G, U, T or X of the Board of Governors of the Federal
Reserve System.
10. Neither Borrower is an 'investment company' within
the meaning of the Investment Company Act of 1940 or a 'holding
company' within the meaning of the Public Utility Holding Company
Act of 1935.
I am admitted to practice law in the State of
Tennessee, and in giving the opinions set forth above, I express
no opinion as to any laws other than the federal laws of the
United States
Very truly yours,
BORROWING BASE CERTIFICATE
EXHIBIT F
FOR THE ________________ Quarter 199__
PART I BORROWING BASE CALCULATION
A. Stabilized Properties
PROPERTY UNITS REVENUE/ NOI MGMNT CAP.EX. ADJSTD CAPPED AVAILABLE
1,000 FEE5% ($200/u) NOI AT 9.5% 60%
B. Development Projects
PROPERTY PROJECT COSTS TO AVAILABILITY TO
BUDGET DATE DATE (AT 50%)
BORROWING BASE ______________
$_____________
PART II Representations and Warranties; Events of Default
1) The representations and warranties set forth in the
Agreement are true and correct as of the date of this
Certificate.
2) No Event of Default, or event which would constitute an
event of Default with the passage of time or giving of notice or
both, has occurred under the Agreement, except as follows:
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Dated this _____ day of ______________, 199___.
MID-AMERICA APARTMENT COMMUNITIES, INC.
BY____________________________________
ITS___________________________________
MID-AMERICA APARTMENTS, L.P.
BY MID-AMERICA APARTMENT COMMUNITIES, INC.
ITS SOLE GENERAL PARTNER
BY________________________________
ITS_______________________________
Exhibit G
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Agreement is dated as of _________, 199_, between
__________________ (the "Assignor"), ________________ (the
"Assignee"), Mid-America Apartment Communities, Inc., Mid-America
Apartments, L.P. (the "Borrowers"), and AmSouth Bank, as
Administrative Agent (the "Administrative Agent").
R E C I T A L S
A. This Assignment and Assumption Agreement (the
"Agreement") relates to the Revolving Credit Agreement dated as
of March 16, 1998, between the Borrowers, the Assignor and the
other Lenders party thereto, as Lenders, and the Administrative
Agent (as amended, modified and supplemented from time to time,
the "Credit Agreement"). Except as otherwise provided herein,
terms used in this Agreement shall have the meanings given them
in the Credit Agreement.
B. The Assignor is obligated under the Credit
Agreement to make Loans to the Borrowers in an aggregate unpaid
principal amount not to exceed $[_______________].
C. At the date of this Agreement, the aggregate
unpaid principal amount of the Assignor's Loans to the Borrowers
is $[_____________].
D. The Assignor proposes to assign to the Assignee
all of the Assignor's rights under the Credit Agreement in
respect of $[_______________] of its Commitment (the "Assigned
Commitment Amount") together with a corresponding portion of its
outstanding Loans, and the Assignee proposes to accept assignment
of such rights and assume the Assignor's corresponding
obligations on such terms.
A G R E E M E N T
The parties, intending to be legally bound, agree as
follows:
1. Assignment. The Assignor hereby assigns and sells
to the Assignee all of the Assignor's rights under the Credit
Agreement to the extent of the Assigned Commitment Amount, and
the Assignee hereby accepts such assignment from the Assignor and
assumes all of the Assignor's obligations under the Credit
Agreement to the extent of the Assigned Commitment Amount,
including the purchase from the Assignor of the corresponding
portion of the unpaid principal amount of the Loans made by the
Assignor. Upon the execution and delivery of this Agreement by
the parties and the payment of the amounts specified in Section 2
required to be paid on the date of this Agreement, as of
[effective date1/:
(i) the Assignee shall succeed to the rights and
be obligated to perform the obligations of a Lender
under the Credit Agreement with a Commitment equal to
the Assigned Commitment Amount; and
(ii) the Commitment of the Assignor shall be
reduced by a like amount [like amounts] and the
Assignor released from its obligations under the Credit
Agreement to the extent such obligations have been
assumed by the Assignee.
The assignment provided for in this Agreement shall be without
recourse to the Assignor.
2. Payments. As consideration for the assignment and
sale effected in paragraph 1 above, the Assignee shall pay the
Assignor on the date(s) and in the amount(s) previously agreed
between them. Facility Fees accrued to but not including the
date of this Agreement in respect of the Assigned Commitment
Amount are for the account of the Assignor and such fees accruing
from and including the date of this Agreement are for the account
of the Assignee. If the Assignor or Assignee receives any amount
under the Credit Agreement that is for the account of the other,
it shall promptly pay such other party.
3. Consent of the Borrowers2/ and acknowledgment of
the Administrative Agent. Pursuant to Section 10.7 of the Credit
Agreement, each Borrower consents to, and the Administrative
Agent acknowledges, the assignment and assumption provided in
this Agreement.
4. Non-reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no
responsibility with respect to, the solvency or financial
condition or statements of the Borrowers or the validity and
enforceability of the obligations of the Borrowers under the
Credit Agreement. The Assignee acknowledges that it has,
independently and without reliance on the Assignor, and based on
such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement
and will continue to be responsible for making its own
independent appraisal of the business, affairs and financial
condition of the Borrowers.
5. Alabama law. This Agreement shall be governed by
and construed in accordance with the laws of the State of
Alabama.
6. Counterparts. This Agreement may be executed in
counterparts.
[Assignor]
By:
Title:
[Assignee]
By:
Title:
[Borrowers' consent not required if Assignee is a Lender]
The undersigned consent to the foregoing assignment:
MID-AMERICA APARTMENT COMMUNITIES, INC.
By:
Title:
By:
Title:
MID-AMERICA APARTMENTS, L.P.
By: Mid-America Apartment Communities, Inc.
Title: The Sole General Partner
By:
Title:
By:
Title:
EXHIBIT H
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (this "Guaranty"), dated as of
____________, 199_ (this "Guaranty"), is made by
__________________________, a ____________ (the "Guarantor"), of
the obligations of Mid-America Apartment Communities, Inc., a
Tennessee corporation, and Mid-America Apartments, L.P., a
Tennessee limited partnership (jointly, the "Borrowers"), under
the Credit Agreement (defined below) among the Borrowers, AmSouth
Bank, as Administrative Agent (the "Administrative Agent"), and
the lenders parties to the Credit Agreement (singly, a "Lender"
and collectively, the "Lenders").
BACKGROUND
1. The Borrower, the Administrative Agent, and the Lenders
have entered into a Revolving Credit Agreement, dated as of March
16, 1998 (said Credit Agreement, as it may hereafter be amended
or otherwise modified from time to time, being the "Credit
Agreement"). The capitalized terms not otherwise defined herein
have the meanings specified in the Credit Agreement.
2. Pursuant to the Credit Agreement, the Borrowers may,
subject to the terms of the Credit Agreement, request that the
Lenders make Advances.
3. It is a condition precedent to the obligation of the
Lenders to make such Advances that the Guarantor guarantee
repayment thereof upon the terms and conditions set forth herein.
4. The Guarantor is a Subsidiary of one of the Borrowers
and the Borrowers and the Guarantor are members of the same
consolidated group of companies and partnerships and are engaged
in related businesses.
5. The partners, members, or board of directors, as
applicable, of the Guarantor have determined that (i) the
execution, delivery, and performance of this Guaranty is
necessary and convenient to the conduct, promotion, and
attainment of the Guarantor's business and (ii) the Advances may
reasonably be expected to benefit, directly or indirectly the
Guarantor.
6. The Guarantor desires to induce the Lenders to make
such Advances.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and in
order to induce the Lenders to make Advances under the Credit
Agreement, the Guarantor hereby agrees as follows:
1. Guaranty
(a) The Guarantor, jointly and severally with any and
all other guarantors of the Advances and the Loans, hereby
unconditionally guarantees the full and punctual payment of,
and promises to pay, when due, whether at stated maturity,
by mandatory prepayment, by acceleration or otherwise, the
Loans, and agrees to pay any and all expenses (including
counsel fees and expenses) incurred in enforcement or
collection of all or any part thereof, whether such
obligations, indebtedness and liabilities are direct,
indirect, fixed, contingent, joint, several or joint and
several, and any rights under this Guaranty.
(b) Anything contained in this Guaranty to the
contrary notwithstanding, the obligations of the Guarantor
hereunder shall be limited to a maximum aggregate amount
equal to the largest amount that would not render its
obligations hereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the
United States Code or any applicable provisions of
comparable state law (collectively, the "Fraudulent Transfer
Laws"), in each case after giving effect to all other
liabilities of the Guarantor, contingent or otherwise, that
are relevant under the Fraudulent Transfer Laws
(specifically excluding, however, any liabilities of the
Guarantor in respect of intercompany indebtedness to the
Borrowers or other Affiliates or Subsidiaries of the
Borrowers to the extent that such indebtedness would be
discharged in an amount equal to the amount paid by the
Guarantor hereunder) and treating as assets, subject to
Paragraph 4(a) hereof, to the value (as determined under the
applicable provisions of the Fraudulent Transfer Laws) of
any rights to subrogation or contribution of the Guarantor
pursuant to (i) Applicable Law or (ii) any agreement
providing for an equitable allocation among the Guarantor
and other Affiliates or Subsidiaries of the Borrowers of
obligations arising under guaranties by such parties.
2. Guaranty Absolute. The Guarantor guarantees that the
Loans will be paid strictly in accordance with the terms of the
Credit Agreement, the Notes, and the other Loan Documents,
regardless of any Applicable Law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such
terms or the rights of the Lenders with respect thereto;
provided, however, nothing contained in this Guaranty shall
require the Guarantor to make any payment under this Guaranty in
violation of any Applicable Law, regulation or order now or
hereafter in effect. The obligations and liabilities of the
Guarantor hereunder are independent of the obligations of the
Borrowers under the Credit Agreement and any Applicable Law. The
liability of the Guarantor under this Guaranty shall be absolute
and unconditional irrespective of:
(a) the taking or accepting of any other security or
guaranty for any or all of the Loans, including any
reduction or termination of the Commitments;
(b) any increase, reduction or payment in full at any
time or from time to time of any part of the Loans;
(c) any lack of validity or enforceability of the
Credit Agreement, the Notes, or any other Loan Documents or
other agreement or instrument relating thereto, including
but not limited by the unenforceability of all or any part
of the Loans by reason of the fact that (i) the Loans and/or
the interest paid or payable with respect thereto, exceeds
the amount permitted by Applicable Law, (ii) the act of
creating the Loans, or any part thereof, is ultra vires,
(iii) the officers creating same acted in excess of their
authority, or (iv) for any other reason;
(d) any lack of corporate or partnership power of the
Borrowers, as the case may be, or any other Person at any
time liable for the payment of any or all of the Loans;
(e) any applicable bankruptcy, reorganization,
insolvency, receivership, liquidation, arrangement,
conservatorship, moratorium, or similar laws, rules or
regulations, or principles of equity affecting the
enforcement of creditors's rights generally ("Debtor Relief
Laws") involving the Borrowers, the Guarantor or any other
Person obligated on any of the Loans;
(f) any renewal, compromise, extension, acceleration
or other change in the time, manner or place of payment of,
or in any other term of, all or any of the Loans; any
adjustment, indulgence, forbearance, or compromise that may
be granted or given by any Lender or the Administrative
Agent to the Borrowers, the Guarantor, or any Person at any
time liable for the payment of any or all of the Loans; or
any other modification, amendment, or waiver of or any
consent to departure from the Credit Agreement, the Notes,
or any other Loan Documents and other agreement or
instrument relating thereto without notification of the
Guarantor (the right to such notification being herein
specifically waived by the Guarantor);
(g) any exchange, release, sale, subordination, or non-
perfection of any collateral or Lien therein or any lack of
validity or enforceability or change in priority,
destruction, reduction, or loss or impairment of value of
any collateral or Lien therein;
(h) any release or amendment or waiver of or consent
to departure from any other guaranty for all or any of the
Loans;
(i) the failure by any Lender or the Administrative
Agent to make any demand upon or to bring any legal,
equitable, or other action against the Borrowers or any
other Person (including without limitation any other
guarantor), or the failure or delay by any Lender or the
Administrative Agent to, or the manner in which any Lender
or the Administrative Agent shall, proceed to exhaust rights
against any direct or indirect security for the Loans;
(j) the existence of any claim, defense, set-off, or
other rights which the Borrowers or the Guarantor may have
at any time against the Borrowers, the Lenders, or any
guarantor, or any other Person, whether in connection with
this Guaranty, the other Loan Documents, the transactions
contemplated thereby, or any other transaction;
(k) any failure of any Lender or the Administrative
Agent to notify the Guarantor of any renewal, extension, or
assignment of the Loans or any part thereof, or the release
of any security, or of any other action taken or refrained
from being taken by any Lender or the Administrative Agent,
it being understood that the Lenders and the Administrative
Agent shall not be required to give the Guarantor any notice
of any kind under any circumstances whatsoever with respect
to or in connection with the Loans;
(l) any payment by the Borrowers to the Lenders or the
Administrative Agent is held to constitute a preference
under any Debtor Relief Law or if for any other reason the
Lenders or the Administrative Agent is required to refund
such payment or pay the amount thereof to another Person; or
(m) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the
Borrowers, the Guarantor, any other guarantor or other
Person liable on the Loans, including without limitation any
defense by reason of any disability or other defense of the
Borrowers, or the cessation from any cause whatsoever of the
liability of the Borrowers, or any claim that the
Guarantor's obligations hereunder exceed or are more
burdensome than those of the Borrowers.
This Guaranty shall continue to be effective or reinstated,
as the case may be, if any time any payment of any of the Loans
is rescinded or must otherwise be returned by any Lender or any
other Person upon the insolvency, bankruptcy or reorganization of
either Borrower, the Guarantor or otherwise, all as though such
payment had not been made.
3. Waiver. To the extent not prohibited by Applicable
Law, the Guarantor hereby waives: (a) promptness, protests,
diligence, presentments, acceptance, performance, demands for
performance, notices of nonperformance, notices of protests,
notices of dishonor, notices of acceptance of this Guaranty and
of the existence, creation or incurrence of new or additional
indebtedness, and any of the events described in Paragraph 2 and
of any other occurrence or matter with respect to any of the
Loans, this Guaranty or any of the other Loan Documents; (b) any
requirement that the Administrative Agent or any Lender protect,
secure, perfect, or insure any Lien or security interest or any
property subject thereto or exhaust any right or take any action
against the Borrowers or any other Person or any collateral or
pursue any other remedy in the Administrative Agent's or any
Lender's power whatsoever; (c) any right to assert against the
Administrative Agent or any Lender as a counterclaim, set-off or
cross-claim, any counterclaim, set-off or claim which it may now
or hereafter have against the Borrowers or either of them or
other Person liable on the Loans; (d) any right to seek or
enforce any remedy or right that the Administrative Agent or any
Lender now has or may hereafter have against the Borrowers or
either of them (to the extent permitted by Applicable Law); (e)
any right to participate in any collateral or any right
benefitting the Administrative Agent or the Lenders in respect of
the Loans; and (f) any right by which it might be entitled to
require suit on an accrued right of action in respect of any of
the Loans or require suit against the Borrowers or either of them
or any other Person.
4. Subrogation and Subordination. The Guarantor hereby
irrevocably waives any claim or other rights which it may have or
hereafter acquire against the Borrowers or either of them that
arise from the existence, payment, performance or enforcement of
the Guarantor's obligations under this Guaranty, including,
without limitation, any right of subrogation, reimbursement,
exoneration, contribution, indemnification, any right to
participate in any claim or remedy of any Lender against the
Borrowers or either of them or any collateral which any Lender
now has or hereafter acquires, whether or not such claim, remedy
or right arises in equity, or under contract, statutes or common
law, including without limitation, the right to take or receive
from the Borrowers or either of them, directly or indirectly, in
cash or other property or by set-off or in any other manner,
payment or security on account of such claim or other rights. If
any amount shall be paid to the Guarantor in violation of the
preceding sentence and the Loans shall not have been paid in
full, such amount shall be deemed to have been paid to the
Guarantor for the benefit of, and held in trust for the benefit
of, the Lenders, and shall forthwith be paid to the
Administrative Agent to be credited and applied upon the Loans,
whether matured or unmatured, in accordance with the terms of the
Credit Agreement. The Guarantor acknowledges that it will
receive direct and indirect benefits from the financing
arrangements contemplated by the Credit Agreement and that the
waiver set forth in this Paragraph 4 is knowingly made in
contemplation of such benefits. Notwithstanding anything to the
contrary contained in this Paragraph 4, any waiver and release
shall not be effective as to any such claim or entitlement or
such subrogation and other rights that accrue after the
indefeasible payment, performance and other satisfaction in full
of the Loans, all other amounts payable under this Guaranty and
termination of the Commitments.
5. Representations and Warranties. The Guarantor hereby
represents and warrants as follows:
(a) The Guarantor is a ___________________ duly
organized, validly existing and in good standing under the
laws of the State of _________; it has the power and
authority to own its properties and assets and is in good
standing and duly qualified to carry on its business in
every jurisdiction wherein such qualification is necessary,
including, without limitation, every state in which it owns
an Apartment Community.
(b) The execution, delivery and performance by the
Guarantor of this Guaranty are within the Guarantor's
corporate or partnership, as the case may be, powers, have
been duly authorized by all necessary corporate or
partnership, as the case may be, action, require no action
by or in respect of, or filing with, any governmental body,
agency or official and do not contravene, or constitute a
default under, any provision of applicable law or regulation
or of the articles of incorporation or by-laws or
partnership agreement of the Guarantor or of any material
agreement, judgment, injunction, order, decree or other
instrument binding upon the Guarantor or result in the
creation or imposition of any Lien on any asset of the
Guarantor.
(c) There is no action, suit or proceeding pending
against, or, to the knowledge of the Guarantor, threatened
against or affecting, the Guarantor before any court or
arbitrator or any governmental body, agency or official in
which there is a reasonable probability of an adverse
decision that would materially adversely affect the
business, financial position or results of operations of the
Guarantor or that in any manner draws into question the
validity or enforceability of this Guaranty.
(d) The Guarantor is not a party to, nor subject to,
any agreement or instrument, including, without limitation,
any partnership agreement, partnership restrictions, voting
trust or shareholders' agreement, materially and adversely
affecting its business, Apartment Communities, or other
assets, operations or condition (financial or otherwise).
(e) To the best of the Guarantor's knowledge, (a)
except strictly in compliance with all applicable
Environmental Laws, no Hazardous Substances are located upon
or have been stored, processed or disposed of on or released
or discharged (including ground water contamination) from
any Apartment Community owned or leased by the Guarantor,
and (b) no aboveground or underground storage tanks exist on
any of the Apartment Communities owned or leased by the
Guarantor. No private or governmental lien or judicial or
administrative notice or action related to Hazardous
Substances or other environmental matters has been filed
against any Apartment Community owned or leased by the
Guarantor.
6. Covenants. The Guarantor hereby expressly assumes,
confirms, and agrees to perform, observe, and be bound by all
conditions and covenants set forth in the Credit Agreement, to
the extent applicable to it, as if it were a signatory thereto.
The Guarantor further covenants and agrees (a) punctually and
properly to perform all of the Guarantor's covenants and duties
under any Mortgage or other Loan Documents; (b) from time to time
promptly to furnish the Administrative Agent with any information
or writings which the Administrative Agent may reasonably request
concerning this Guaranty; and (c) to notify promptly the
Administrative Agent of any claim, action, or proceeding
affecting this Guaranty.
7. Amendments, Etc. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by the Guarantor therefrom
shall in any event be effective unless the same shall be in writing
and signed by the Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose
for which given.
8. Addresses for Notices. Unless otherwise provided herein,
all notices, requests, consents and demands shall be in writing and
shall be delivered by hand or overnight courier service, mailed or
sent by telecopy to the respective addresses specified herein and to
the attention of the individuals listed thereunder, or, as to any
party, to such other addresses as may be designated by it in written
notice to all other parties. All notices, requests, consents and
demands hereunder shall be deemed to have been given on the date of
receipt if delivered by hand or overnight courier service or sent by
telecopy, or if mailed, effective on the earlier of actual receipt or
three (3) days after being mailed by certified mail, return receipt
requested, postage prepaid, addressed as aforesaid.
9. No Waiver; Remedies. No failure on the part of the
Administrative Agent or any Lender to exercise, and no delay in
exercising, any right hereunder or under any of the other Loan
Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder or under any of the other Loan
Documents preclude any other or further exercise thereof or the
exercise of any other right. Neither the Administrative Agent nor any
Lender shall be required to (a) prosecute collection or seek to
enforce or resort to any remedies against the Borrowers or either of
them or any other Person liable on any of the Loans, (b) join the
Borrowers or either of them or any other Person liable on any of the
Loans in any action in which Lender prosecutes collection or seeks to
enforce or resort to any remedies against the Borrowers or either of
them or other Person liable on any of the Loans, or (c) seek to
enforce or resort to any remedies with respect to any Liens granted to
(or benefitting, directly or indirectly) the Administrative Agent or
any Lender by the Borrowers or either of them or any other Person
liable on any of the Loans. Neither the Administrative Agent nor any
Lender shall have any obligation to protect, secure or insure any of
the Liens or the properties or interest in properties subject thereto.
The remedies herein provided are cumulative and not exclusive of any
remedies provided by Applicable Law.
10. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, each Lender is hereby authorized
at any time and from time to time, to the fullest extent permitted by
Law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or
the account of the Guarantor against any and all of the obligations of
the Guarantor now or hereafter existing under this Guaranty,
irrespective of whether or not such Lender shall have made any demand
under this Guaranty. Each Lender agrees promptly to notify the
Guarantor after any such set-off and application, provided that the
failure to give such notice shall not affect the validity of such set
off and application. The rights of each Lender under this Paragraph
10 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may have.
11. Continuing Guaranty; Transfer of Notes. This Guaranty is an
irrevocable continuing guaranty of payment and shall (a) remain in
full force and effect until termination of the Commitments and final
payment in full (after the Maturity Date) of the Loans and all other
amounts payable under this Guaranty, (b) be binding upon the
Guarantor, its successors and assigns, and (c) inure to the benefit of
and be enforceable by each Lender and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c),
to the extent permitted by Section 10.7 of the Credit Agreement, each
Lender may assign or otherwise transfer its rights under the Credit
Agreement, the Notes or any of the other Loan Documents or any
interest therein to any Person, and such other Person shall thereupon
become vested with all the rights or any interest therein, as
appropriate, in respect thereof granted to the Lender herein or
otherwise.
12. Information. The Guarantor acknowledges and agrees that it
shall have the sole responsibility for obtaining from the Borrowers
such information concerning each Borrower's financial condition or
business operations as the Guarantor may require, and that neither the
Administrative Agent nor any Lender has any duty at any time to
disclose to any Guarantor any information relating to the business
operations or financial conditions of the Borrowers.
13. GOVERNING LAW. THE AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ALABAMA AND THE
UNITED STATES OF AMERICA. WITHOUT EXCLUDING ANY OTHER JURISDICTION,
THE GUARANTOR AGREES THAT THE STATE AND FEDERAL COURTS OF ALABAMA
LOCATED IN BIRMINGHAM, ALABAMA, SHALL HAVE JURISDICTION OVER
PROCEEDINGS IN CONNECTION HEREWITH.
14. WAIVER OF JURY TRIAL. THE GUARANTOR, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY KNOWINGLY, VOLUNTARILY, IRREVOCABLY AND
INTENTIONALLY WAIVE, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY. THIS PROVISION IS A MATERIAL
INDUCEMENT TO EACH LENDER ENTERING INTO THE CREDIT AGREEMENT.
15. Ratable Benefit. This Guaranty is for the ratable benefit
of the Lenders, each of which shall share any proceeds of this
Guaranty pursuant to the terms of the Credit Agreement.
16. Guarantor Insolvency. Should the Guarantor become
insolvent, fail to pay its debts generally as they become due,
voluntarily seek, consent to, or acquiesce in the benefits of any
Debtor Relief Law or become a party to or be made the subject of any
proceeding provided for by any Debtor Relief Law (other than as a
creditor or claimant) that could suspend or otherwise adversely affect
the right of any Lender granted hereunder, then, the obligations of
the Guarantor under this Guaranty shall be, as between the Guarantor
and such Lender, a fully-matured, due, and payable obligation of the
Guarantor to such Lender (without regard to whether there is a Default
or Event of Default under the Credit Agreement or whether any part of
the Loans is then due and owing by the Borrowers to such Lender),
payable in full by the Guarantor to such Lender upon demand, which
shall be the estimated amount owing in respect of the contingent claim
created hereunder.
17. ENTIRE AGREEMENT. THIS GUARANTY, TOGETHER WITH THE OTHER
LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES
REGARDING THE SUBJECT MATTER HEREIN AND THEREIN AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
duly executed and delivered by its duly authorized representative as
of the date first above written.
___________________________________
By________________________________
Its______________________________
EXHIBIT I
In order to derive the benefit of Florida law providing exemption
from certain documentary stamp taxes and intangible taxes, the parties
have agreed that the Notes (a) amend and restate in their entirety and
renew those certain notes secured, inter alia, by Florida real
property, issued by various borrowers to other lenders who have
assigned their interest thereunder to the Administrative Agent (unless
previously held by Mortgagee) for the benefit of the Lenders (the
"Assigned Notes"), being more particularly described below, and (b)
consolidate said Assigned Notes with the new and additional
indebtedness represented by this Agreement.
See page 2 of this Exhibit I for a description of the Assigned Notes.
Table 1 to Exhibit "I"
Property Original Original Date of Original Outstanding
Obligor Obligee Note Principal Principal
Amount of Balance of
Note Note
1. Anatole Mid-America AmSouth
Apartments Bank
, L.P.
2. Paddock Paddock Club First Union June 4, $15,760,000 $15,607,570.65
Club Brandon, A National 1996 0.00
Brandon, Limited Bank of
Phase I Georgia
3. Paddock Flournoy AmSouth July 15, $14,950,000
Club Development Bank 1997
Mandarin Company
4.Paddock Paddock Berkshire August 2, $8,600,000 $8,402,246.66
Club Club Mortgage 1990
Tallahassee Tallahassee, Finance
Phase I A Limited (f/k/a
Partnership Krupp
Mortgage
Corporation)
EXHIBIT J
TO
REVOLVING CREDIT AGREEMENT
CHIEF FINANCIAL OFFICER'S
CERTIFICATE OF COVENANT COMPLIANCE
In accordance with the requirements of the Revolving Credit
Agreement (the "Loan Agreement") between Mid-America Apartment
Communities, Inc., and Mid-America Apartments, L.P., and AmSouth Bank,
as Administrative Agent, dated March 16, 1998 (the "Agreement"), I do
hereby certify as follows (capitalized terms used in this certificate
having the meanings defined for them in the Loan Agreement):
1. I am the Chief Financial Officer of the
Borrower and am duly authorized to execute and deliver
this Certificate.
2. On and as of the date hereof, the Borrower is
in compliance with all the terms and provisions set
forth in the Loan Agreement on its part to be observed
and performed, and no Event of Default specified in
Article Seven of the Loan Agreement, nor any event that
upon notice or lapse of time or both would constitute
such an Event of Default, exists.
3. The attached calculations are true and
correct based on the Borrower's unaudited financial
statement for the fiscal quarter ended ________, ____.
Dated: ________________ _________________________
Simon R.C. Wadsworth
Chief Financial Officer
Mid-America Apartment Communities, Inc.
Mid-America Apartment Communities
Revolving Credit Agreement
Debt Covenant Worksheet
for Compliance Certificate
Quarter Quarter
Ending Ending Annualized
_________ _________ __________
Total Liabilities
EBITDA-MAA
EBITDA-FDC
EBITDA-Combined
Total Market Value
Total Liabilities/Total
Market Value
Total Development and JV
Investment
As % of Total Market Value
Total Annualized Fixed
Charges
Preferred Dividend
Principal (from below)
Interest
Total Annualized Fixed
Charges
EBITDA/ANNUALIZED FIXED
CHARGES:
Principal
From Mac Schedule
Westside Creek II
FDC
Total Principal
Total Annualized Debt
Service:
Principal
Interest
Total Debt Service
EBITDA/DEBT SERVICE
Tangible Net Worth
Equity
Less Intangibles
Tangible Net Worth
AmSouth Properties only
Adjusted NOI of Mortgaged
Properties
Assumed Debt Service
Adjusted NOI/Assumed Debt
Service
Dividend Payments
Common Dividend Payment
Preferred Divident Payment
Total Dividend Payment
FFO
FFO + Preferred Dividend
Total Dividends/FFO+Preferred
[Quarter]
>2.00:1 Debt Service Ratio
>1.75:1 Fixed Charge Ratio
>1.0:1.0 Adjusted NOI Ratio
>$470MM Net Worth
<10% MVA Development &
Construction Debt
<90% FFO Dividend payout
<60% Debt/Total Market
Value of Assets
_______________________________
1/Not earlier than fifth Business Day after execution.
2/Consent not required if Assignee is a Lender.