FORWARD TREASURY LOCK AGREEMENT
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Amended on December 17, 1997
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WHEREAS, Gables Realty Limited Partnership ("Counterparty") wishes to defer
the fixing of the effective cost to it of its financings based on current
interest rates and J.P. Morgan Securities Inc. ("JPMS"), is willing to enter
into this Forward Treasury Lock Agreement, dated as of September 22, 1997 and
amended on December 17, 1997 to enable Counterparty to do so.
NOW, THEREFORE, Counterparty and JPMS hereby agree as follows:
1. DEFINITIONS: As used in this Agreement, the following terms shall have the
following meanings:
(a) This "Agreement" shall mean this Forward Treasury Lock Agreement.
(b) The "Determination Date" shall mean the day specified below opposite
the term "Determination Date". JPMS may, upon written notice to and
with the consent of Counterparty, change the Determination Date.
Counterparty may also, upon written notice to and with consent of
JPMS, change the Determination Date.
(c) The "Notional Principal" shall mean that amount specified below
opposite the term "Notional Principal".
(d) The "Offer Price" for the Reference Treasury on any day shall mean the
spot "offer" price for the Reference Treasury less JPMS' hedging
costs, expressed as a percentage, all as determined by JPMS in its
reasonable good faith judgment.
(e) The "Payment Amount" on any day shall mean an amount equal to the
product of (i) the difference of the Reference Price minus the Offer
Price for the Reference Treasury on such day multiplied by (ii) the
Notional Principal.
(f) The "Reference Price" for the Reference Treasury shall mean that
price, expressed as a percentage, specified below opposite the term
"Reference Price".
(g) The "Reference Treasury" shall mean the United States Treasury Bill or
Note having the interest rate and maturity specified below opposite
the term "Reference Treasury".
(h) The "Settlement Date" shall mean the day specified below opposite the
term "Settlement Date".
2. PAYMENT: The parties hereto agree that on the Settlement Date a payment
shall be made equal to the Payment Amount on the Determination Date. If the
Payment Amount is a positive number, MGT shall pay the Payment Amount to
Counterparty. If such Payment Amount is a negative number, Counterparty
shall pay the absolute value of such Payment Amount to MGT.
3. DEFAULT; SET-OFF: In the event a party (the "Defaulting Party") shall (i)
fail to make the payment due to Section 2 hereof, or (ii) have an Act of
Insolvency (as defined below) occur in respect of it, the other party (the
"Non-Defaulting Party") shall have the right, without notice or demand of
any kind, to (A) set-off and apply to such Defaulting Party's obligations
all property of the Defaulting Party held by the Non-Defaulting Party and
all liabilities of and amounts owed by the Non-Defaulting Party to the
Defaulting Party, whether matured or unmatured, and whether arising
hereunder or under any other agreement or transaction between the parties,
and (B) in the case of an Act of Insolvency, establish a Determination Date
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as of the date of default in which case the Payment Amount shall be
immediately payable. The Defaulting Party shall be liable to the
Non-Defaulting Party for the Payment Amount and the amount of all
reasonable legal and other professional expenses incurred by the
Non-Defaulting Party in connection with or as a consequence of an Event of
Default, together with interest thereon at LIBOR plus 2%.
"Act of Insolvency", with respect to any party, shall mean (i) the
commencement by such party as debtor of any case or proceeding under any
bankruptcy, insolvency, reorganization, liquidation, moratorium,
dissolution, delinquency or similar law, or such party seeking the
appointment or election of a receiver, conservator, trustee, custodian or
similar official for such party or any substantial part of its property, or
the convening of any meeting of creditors for the purpose of commencing any
such case or proceeding or seeking such an appointment or election, (ii)
the commencement of any such case or proceeding against such party, or
another seeking such an appointment or election, or the filing against a
party of an application for a protective decree under the provisions of the
Securities Investor Protection Act of 1970, which (a) is consented to or
not timely contested by such party, (b) results in the entry of an order
for relief, such an appointment or election, the issuance of such
protective decree or the entry of an order having a similar effect, or (c)
is not dismissed within 15 days, (iii) the making by a party of a general
assignment for the benefit of creditors, or (iv) the admission in writing
by a party of such party's inability to pay such party's debts as they
become due.
4. NO ASSIGNMENT: The Counterparty may not, without prior written consent of
JPMS, assign, transfer or set over to another, in whole or in part, any or
all of its benefits, rights, duties and obligations under this Agreement,
and any such purported assignment shall be null and void.
5. EARLY TERMINATION BY AGREEMENT: At any time, either party shall have the
right by notice to the other to request that the parties negotiate with
respect to the termination of this Agreement. In such case, the parties
shall promptly negotiate in good faith with respect to an early termination
date and the amount, if any, payable by one party to the other, as the case
may be, in satisfaction for such early termination. Any such early
termination and all terms thereof shall be subject to the mutual agreement
of the parties, and each party shall have complete and unfettered
discretion as to its agreement to a proposed termination.
6. COUNTERPARTS: This Agreement may be executed in counterparts, each of which
will be deemed an original.
7. GOVERNING LAW AND JURISDICTION: This Agreement shall be governed by and
construed in accordance with the law of the State of New York without
reference to choice of law doctrines. This Agreement, including settlement
and delivery, shall be subject to the rules and regulations of the
appropriate self-regulatory organizations and the federal and state
securities laws.
8. MISCELLANEOUS: This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and
supercedes all oral communication and prior writings with respect thereto.
No amendment, modification or waiver in respect of this Agreement will be
effective unless in writing and executed by each of the parties or
confirmed by an exchange of any rights, powers, remedies and privileges
provided by law. A failure or delay in exercising any right, power or
privilege will not be presumed to preclude any subsequent or further
exercise of any other right, power or privilege. The headings used in this
Agreement are for convenience of reference only and are not to affect the
construction of or to be taken into consideration in interpreting this
Agreement. Should any part of this Agreement be held void and unenforceable
it shall not affect any other part of this Agreement.
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Reference Treasury: 7 7/8% of November 15, 2004
Notional Principal: USD 75,000,000
Agreement Date: September 22, 1997
Amendment Date: December 17, 1997
Determination Date: February 13, 1998
Settlement Date: February 17, 1998
Reference Yield: 6.121%
Reference Price: 109 - 17 3/4
The Office of JPMS for this transaction is:
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260
For Treasury Lock information only:
Facsimile Transmission Number: (212)-648-5088
Telephone Number: (212) 648-6712
Attention: Bob Candella
If you are in agreement with the foregoing, please complete the signature line
below and return to Bob Candella via facsimile at (212) 648-5088 (Phone: (212)
648-6712).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date specified on the first
page of this Agreement.
Gables Realty Limited Partnership J.P. MORGAN SECURITIES, INC.
By: /s/ Marvin R. Banks, Jr. By: /s/ Jason Manske
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Name: Marvin R. Banks, Jr. Name: Jason Manske
Title: Senior Vice President Title: Vice President
Address: 2859 Paces Ferry Rd. Address: 60 Wall Street
Suite 1450 New York, NY 10260
Atlanta, GA 30339