Mid-America Apartment Communities, Inc.
Mid-America Apartments, L.P.
Revolving Credit Agreement
AmSouth Bank of Alabama
Administrative Agent
December __, 1996
Contents
1 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 3
1.8 Letters of Credit 5
1.9 Drafts under the Letter of Credit 6
1.10 Maturity of Loans 7
1.11 Unused Fee 7
1.12 Letter of Credit Fees 7
1.13 Commitment Fee 8
1.14 Interest Periods 8
1.15 Interest 8
1.16 Maximum Eurodollar Borrowings 9
1.17 Borrowers' termination of Borrowing Rights 9
1.18 Prepayments 9
1.19 Payments generally 10
1.20 Funding losses 11
1.21 Pro-rata treatment 11
1.22 Whole dollars 12
2 Eurodollar Borrowing 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 14
2.5 Defective notices 15
3 Conditions 15
3.1 Conditions to effectiveness 15
3.2 Conditions to Borrowings 16
3.3 Conditions to Maintaining Loan 19
3.4 Conditions to Release of Property 20
3.5 Conditions to Addition of Property 21
4 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 23
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 24
4.11 Title to assets 24
4.12 Contracts or restrictions affecting Borrowers 24
4.13 No default 24
4.14 Patents and Trademarks 24
4.15 Hazardous Substances 25
4.16 Real Estate Investment Trust 25
5 Affirmative Covenants 25
5.1 Financial information 25
5.2 Maintenance of property; insurance 27
5.3 Compliance with laws 29
5.4 Books and records; payment of Taxes 29
5.5 Notice of Defaults 29
5.6 ERISA events 29
5.7 Use of proceeds 30
5.8 Maintenance of existence; merger; sale of assets 30
5.9 Right of inspection 30
5.10 Environmental laws 30
5.11 Notice of adverse change in assets 31
5.12 Indemnification 31
5.13 Debt service coverage ratio 31
5.14 Adjusted NOI ratio 31
5.15 Payrate 31
5.16 Net worth 31
5.17 Qualification as a Real Estate Investment Trust 31
6 Negative Covenants of Borrowers 32
6.1 Indebtedness 32
6.2 Guaranties 33
6.3 Sale of Assets 33
6.4 Accounts Receivable From Related Persons 34
6.5 Loans to Officers and Employees 34
6.6 Line of Credit Financing 34
6.7 Trademarks and Trade Names 34
6.8 Net Operating Loss 34
6.9 Dividend Payout 34
6.10 Other Financial Ratios 35
6.11 Control 35
6.12 Arizona 35
7 Default 35
7.1 Events of Default 35
7.2 Action on Default 41
7.3 Notice of Default 42
8 The Administrative Agent 42
8.1 Appointment and authorization 42
8.2 Other conduct 42
8.3 Scope of obligations 42
8.4 Consultation with experts 43
8.5 Liability of Administrative Agent 43
8.6 Indemnification 43
8.7 Successor Administrative Agent 44
8.8 Fees 44
9 Change in circumstances 45
9.1 Eurocurrency Reserve Requirements 45
9.2 Increased cost or reduced return 45
9.3 LIBOR unavailable or inadequate 47
9.4 Illegal Loans 48
9.5 Termination of suspension 48
9.6 Taxes on payments 48
9.7 Change of Office 50
9.8 Replacement of Lender 51
10 Miscellaneous 51
10.1 Notices 52
10.2 No waivers; remedies cumulative; integration;
survival 52
10.3 Expenses; documentary Taxes 53
10.4 Indemnification 53
10.5 Sharing of set-offs 55
10.6 Amendments and waivers 55
10.7 Successors and assigns 56
10.8 Borrowers' liability 58
10.9 No reliance on Margin Stock collateral 59
10.10 Credit decision 59
10.11 Alabama law 59
10.12 Waiver of jury trial 59
10.13 Venue of Actions 60
10.14 Execution 60
10.15 Survival 60
11 Definitions and usages 60
11.1 Definitions 60
11.2 Accounting terms and determinations 76
11.3 Miscellaneous usages 77
List of Schedules 77
List of Exhibits 78
Revolving Credit Agreement
This Revolving Credit Agreement is dated as of December __, 1996 (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 of Alabama, an Alabama banking corporation, as
Administrative Agent for the Lenders, its successors and assigns
(in such capacity, the "Administrative Agent").
The parties, intending to be legally bound, severally agree as
follows:
1Loan 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 Loan, in an
aggregate principal amount not to exceed,
at any one time outstanding, the lesser
of:
* the sum of Ninety Million Dollars
($90,000,000.00), or
* the Borrowing Base reduced by (a) the
amount of all outstanding Letters of
Credit, (b) the amount of outstanding
Advances, and (c) the FTB Letter of
Credit, to the extent of $2,615,903.
If the Borrowers should desire to obtain
funds to pay construction costs incurred
with respect to a Development Project,
the Borrower shall submit to the
Administrative Agent (i) detailed plans
and specifications for the Development
Project, and (ii) paid invoices, duly
certified to be true and correct by MAAC,
the architect performing inspections
during the construction of the
Development Project and the general
contractor, if any, constructing the
Development Project. Such costs and
expenses must be verified and approved by
the Administrative Agent's own
construction consultant, at the expense
of the Borrowers.
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
$90,000,000.
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").
1.5 Maximum amounts of LoansNo Lender shall make Loans in an
and Borrowings 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.
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 sizeEach Borrowing shall be in the principal
amount of $2,000,000 or a larger integral
multiple of $500,000.
1.7 Swing Line FacilityThe "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
* 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
* 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.
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.
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 (each a "Letter of Credit"),
subject to the terms and conditions of
this paragraph hereinafter set forth:
* 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
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).
* The aggregate amount of Letters of
Credit outstanding at any one time
shall not exceed $20,000,000.
* 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.
* No Letter of Credit shall have an
expiration date beyond the Maturity
Date.
* 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.
The Borrowers acknowledge that First
Tennessee has issued a letter of credit
in the face amount of $7,230,903.00 (the
"FTB Letter of Credit") for and in behalf
of America First. Notwithstanding any
provision in this Agreement to the
contrary, so long as the FTB Letter of
Credit is outstanding, the maximum
principal amount that the Lenders are
obligated to advance to the Borrowers
with respect to the Loans shall be
reduced by the amount the Lenders will be
required to pay to First Tennessee in the
event that America First does not make
immediate reimbursement to First
Tennessee of any draft drawn under the
FTB Letter of Credit pursuant to the
provisions hereof. If at any time during
the term of this Agreement, a draft is
drawn under the FTB Letter of Credit, and
First Tennessee does not receive
immediate reimbursement for the amount of
such draft in accordance with the terms
and provisions of the reimbursement
agreement between it and America First,
then and in such event, upon demand of
First Tennessee, the Administrative Agent
will pay to First Tennessee an amount
equal to the lesser of (a) the amount of
such draft or (b) the sum of
$2,615,903.00. Any such payment by the
Administrative Agent to First Tennessee
shall constitute an Advance to the
Borrowers, subject to all of the terms
and conditions of this Agreement
applicable to Advances. If the FTB
Letter of Credit expires or otherwise
terminates prior to the Termination Date
(other than by reason of a default by
America First of its reimbursement
obligations to First Tennessee), then,
subject to all of the terms and
conditions set forth herein and in all
other Loan Documents, the Aggregate
Commitment shall no longer be reduced as
provided in this Section 1.8.
1.9 Drafts under the Any draw honored by the Administrative
Letter of Credit Agent under a Letter of Credit shall
constitute an automatic Advance 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 immediately
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 Event
of Default), and Section 1.17 (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.
1.11Unused Fee The Borrowers shall pay a fee (an "Unused
Fee") on the average daily unused portion
of the Aggregate Commitment at the rate
of 0.25% per annum.
Unused Fees shall accrue from the date of
this Agreement until the Maturity Date.
The Borrowers shall jointly and severally
pay accrued Unused Fees to the
Administrative Agent for the account of
each Lender quarterly in arrears on each
January 1, April 1, July 1 and October 1
and on the Maturity Date, commencing
December __, 1996. The Borrowers agree
that such Unused 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 purposes of this
calculation, any issued and outstanding
Letters of Credit shall be deemed to
constitute a portion of the Loan which is
outstanding, and, therefore, not subject
to payment of a Unused Fee.
1.12 Letter of Credit The annual fee for the issuance of a
Fees Letter of Credit shall be equal to the
greater of (i) Two Hundred Fifty Dollars
($250.00) or (ii) one and one-quarter
percent (1 1/4%) 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.
1.13 Commitment Fee The Borrowers have agreed to pay to the
Lenders a commitment fee in the aggregate
amount set forth on Schedule 1.13. 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. A portion of that
amount, as set forth on Schedule 1.13,
will be retained by the Administrative
Agent as administrative or servicing fee;
and the balance will be shared by the
Administrative Agent with the Lenders on
a pro rata basis in accordance with their
respective Proportionate Share, as set
forth on Schedule 1.13.
1.14 Interest Periods Each Eurodollar Loan shall have an
Interest Period of thirty (30), sixty
(60) or ninety (90) 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.
1.15 Interest 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.
Each Loan evidenced by the Swing Line
Facility Note shall bear interest at the
Prime Rate minus .75% on its unpaid
principal amount from the date such Loan
is made until repaid.
The Borrowers shall pay on the Conversion
Date accrued interest on any Loan
converted prior to the last day of its
Interest Period.
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.
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.
1.16 Maximum Eurodollar Notwithstanding anything to the contrary
Borrowings contained herein, there shall not be more
than seven (7) Eurodollar Borrowings
outstanding at any given time.
1.17 Borrowers' The Borrowers may, upon at least three
Termination of Business Days' notice to the
Borrowing Rights 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, including
Unused Fees and funding losses, and other
amounts owing by the Borrowers under this
Agreement, shall be payable on the
effective date of the termination. The
Administrative Agent shall promptly
notify the Lenders of such termination of
the Borrowers' Borrowing Rights.
1.18 Prepayments 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.
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.
If a Development Project for which
Advances have been made in accordance
with the Borrowing Base has not become a
Negatively Pledged Property or a
Mortgaged Property within one (1) year
from the date a certificate of occupancy
(or other comparable governmental
approval if a certificate of occupancy is
not utilized by the appropriate
governmental authority) has been issued,
or if no certificate of occupancy (or
comparable approval) has been issued
within 24 months from the first Advance
for such Development Project, the amount
of such Advance shall be immediately due.
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 1.20 (Funding losses).
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 ratable share of the
prepayment.
1.19 Payments generally 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.
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.
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.
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.
1.20 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.
1.21 Pro-rata treatment Except as otherwise expressly provided in
this Agreement, or to the extent
otherwise reasonably required due to a
Lender's failure to fund,
* each payment of a Unused 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.
1.22 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.
2 Eurodollar Borrowing and
Conversion procedures
2.1 Borrowing Notices The Borrowers shall notify the
Administrative Agent (a "Borrowing
Notice") by 1:00 p.m. on the third
Business Day immediately preceding a
Eurodollar Borrowing.
A Borrowing Notice shall be in
substantially the form of Exhibit C and
shall specify:
* the aggregate principal amount of the
Eurodollar Borrowing,
* the Interest Period (which shall not
extend beyond the Maturity Date), and
* the Borrowers' account at the
Administrative Agent to which the
proceeds of the Eurodollar Borrowing
are to be deposited.
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 Eurodollar Borrowing.
Not later than 12 p.m. on the day of a
Eurodollar Borrowing, each Lender shall
make available the full amount of its
Loan to be included in the Eurodollar
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 Eurodollar Borrowing.
2.3 Lender's failure Unless a Lender notifies the
to fund 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, 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 1.20 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.
3 Conditions
3.1 Conditions to This Agreement shall become effective
effectiveness when the Administrative Agent has
received the following documents, each
dated the date of this Agreement:
* 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 Negative Pledges and Mortgages
upon those Properties identified in
Schedule 2;
* Title Documents consisting of current
and complete title searches or reports
(with legible copies of all
instruments of record) for each and
all of the 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; and
* such other documents as the
Administrative Agent reasonably
requests and deems satisfactory
relating to each Borrower's existence,
the corporate authority for and
validity of this Agreement 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 BorrowingsThe 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 Borrowers' 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 by the Borrowers
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);
* if a new Eligible Property is offered
as a Property, the Borrowers shall
have satisfied all of the same
conditions specified herein with
respect to the initial Properties,
including, without limitation, the
furnishing of adequate financial
information to determine the value of
such Property in accordance with the
provisions hereof, a current survey, a
current Level I Environmental Survey
and such other information as shall be
indicated by such Survey (including,
if so indicated, an asbestos survey),
and current Title Documents, all of
which must be satisfactory to the
Administrative Agent and its counsel;
* no mechanic's lien claim shall have
been filed or asserted against any
Property, which has not been "bonded
off" such Property in accordance with
applicable law;
* all licenses, permits and approvals of
governmental authorities required for
the operation of the respective
Properties shall have been obtained
and are in full force and effect;
* 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 One
Hundred Thousand Dollars ($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
or any 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; and
* there shall have occurred no material
adverse change in the financial
condition of either Borrower.
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, as they apply to the
Borrowers, are satisfied.
3.3 Conditions to * The Administrative Agent shall have
Maintaining Loan the right, at any time and from time
to time, to require the Borrowers to
furnish to the Administrative Agent
current financial information, updated
appraisals and/or environmental
studies of any one or more of the
Properties if, in the unrestricted
discretion of the Administrative
Agent, such Properties shall have
declined in value in any material
amount or may be in violation of any
applicable Environmental Laws. 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 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.
* 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.
* Although the Administrative shall have
the right to require as many
appraisals and environmental surveys
as it shall elect with respect to each
Property, the Borrowers shall be
obligated to pay for only one (1)
appraisal and one (1) environmental
survey, with respect to each Property
during any one (1) consecutive twelve
(12) month period. Any initial
appraisals and environmental studies
furnished to the Administrative Agent
in connection with each Property shall
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 * The privilege is given and reserved so
of Property that the Borrowers or Arizona may
obtain the release of a Property from
any Negative Pledge or 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
Borrowing Base for such Negatively
Pledged Property, or Mortgaged
Property, as the case may be, 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.
* 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, or (2) the release not
causing a Default.
* Any such requested release shall be
made at the sole cost and expense of
the Borrowers.
3.5 Conditions to Subject to the satisfaction of the same
Addition of conditions and requirements set forth
Property herein with respect to the initial
Properties, the Borrowers shall be
entitled to offer Apartment Communities
which, if approved by the Administrative
Agent as Eligible Properties, shall (upon
satisfaction of the same conditions
imposed for the initial Properties) then
be deemed to constitute Properties and
available for use in determining the
Borrowing Base.
4 Representations and
warranties
Each Borrower represents and warrants
that:
4.1 Corporate Mid-America is a limited partnership duly
existence and organized, validly existing and in good
power 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, the States of Tennessee,
Mississippi, Arkansas, Ohio, South
Carolina, Florida and Georgia, and will
be so qualified in every other
jurisdiction in which an Eligible
Property is offered to the Lenders as a
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, the States
of Tennessee, Mississippi, Arkansas,
Ohio, Texas and Georgia, and will be so
qualified in every other jurisdiction in
which an Eligible Property is offered to
the Lenders as a Property.
Arizona is a corporation duly organized,
validly existing, and in good standing
under the laws of the State of Arizona;
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, the State
of Mississippi.
4.2 Corporate, The execution, delivery and performance
Partnership and by the Borrower of this Agreement are
governmental within the Borrower's corporate or
authorization partnership, as the case may be, powers,
non-contravention 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 The consolidated balance sheet of MAAC
information prepared as of the 30th day of June,
1996, 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 Since June 30, 1996, there has been no
adverse change 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 United States federal income tax returns
of the Borrower have been examined or the
applicable statute of limitations has run
through the period ended
* if the Borrower is MAAC, December 31,
199_, and
* if the Borrower is Mid-America,
December 31, 199_.
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 Each member of the Controlled Group has
ERISA 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 The Borrower is not an 'investment
company or public company' within the meaning of the
utility holding Investment Company Act of 1940 or a
company '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 Neither Borrower nor Arizona is a party
restrictions to, nor subject to, any agreement or
affecting instrument, including, without
Borrowers 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 nor Arizona 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 or Arizona.
4.14 Patents and TrademarksEach Borrower possesses all necessary
patents, service marks, trademarks, trade
names, copyrights, and licenses necessary
to the conduct of its business.
4.15 Hazardous SubstancesTo the best of the Borrower's knowledge,
(a) except strictly in accordance 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 or Arizona, and
(b) no aboveground or underground storage
tanks exist on any of the Apartment
Communities of Borrowers or Arizona. 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 either Borrower or Arizona or
otherwise issued to or received by either
Borrower or Arizona.
4.16 Real Estate MAAC is qualified under the Code as a
Investment Trust real estate investment trust.
5 Affirmative Covenants
Each Borrower agrees that:
5.1 Financial informationThe Borrower shall deliver to the
Administrative Agent for distribution to
each Lender:
* As soon as available, and in any event
within ninety-five (95) 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 thirty (30) days
after the end of each calendar
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
calendar month, and such statements of
income and surplus to be for the
period from the beginning of the
fiscal year to the end of such month,
in each case subject only to audit and
year-end adjustment. The certificate
of the Certifying Officer shall state
that:
a)the attached financial
statement, together with any
explanatory notes referred to and
attached thereto, is correct and
complete and fairly resents 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,
b)that such financial statement
has been prepared in accordance
with GAAP applied on a consistent
basis maintained throughout the
period involved, and
c)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;
* within 15 days of mailing or filing,
copies of all annual reports to its
stockholders and all reports that the
Borrower files with the Securities and
Exchange Commission;
* upon request of the Administrative
Agent, but in any event no 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; and
* promptly, such other financial
information as may be reasonably
requested by the Administrative Agent
or a Lender.
5.2 Maintenance of property;a) The Borrower shall keep all property
insurance useful and necessary in its business
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 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, and in any
such event covering loss of rents
for a minimum period of one (1)
year;
* Hazard insurance insuring the
Apartment Communities and other
assets against loss by fire (with
extended coverage) and against
such other hazards and perils
(including but not limited to
loss by windstorm, hail,
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 the
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 lawsThe Borrower shall 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; The Borrower shall keep proper books and
payment of Taxes 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 The Borrower shall keep in full force and
existence; merger; saleeffect its corporate or partnership
of assets 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 wholly-owned
consolidated 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 inspectionThe 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 Arizona 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 of each Borrower's and Arizona's
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 with respect to
any of such Borrower's Apartment
Communities or operations.
5.11 Notice of adverse At the time of either Borrower's first
change in assets 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 Properties.
5.12 Indemnification The Borrower shall defend, indemnify and
hold the Administrative Agent 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 could or
might incur by reason of any violation of
any Environmental Laws by either Borrower
or by any predecessors or successors to
title to any Property of such Borrower.
5.13 Debt service The Borrower shall maintain as of the end
coverage ratio 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.
5.14 Adjusted NOI ratio The Borrower shall maintain at all times
as of the end of each fiscal quarter
using a trailing six (6) months a ratio
of Adjusted NOI from Unsecured Properties
to Interest on Unsecured Debt of at least
2.25 to 1.00.
5.15 Payrate The Borrower shall maintain a Payrate of
not less than fifteen percent (15%)
during the period ending on the 1st day
of July, 1997, and of not less than
sixteen percent (16%) at all times
thereafter.
5.16 Net worth The Borrower shall maintain at all times
beginning on the Effective Date a
consolidated Tangible Net Worth which is
not less than Two Hundred Million Dollars
($200,000,000.00) plus seventy-five
percent (75%) of net proceeds of new
equity offerings.
5.17 Qualification as a MAAC shall at all times remain (a)
Real Estate qualified under the Code as a real estate
Investment Trust investment trust and (b) the general
partner of Mid-America.
6 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, either directly or indirectly:
6.1 Indebtedness Incur, create, assume or permit to exist
any indebtedness to any Person other than
the Lenders, except as follows and
subject to full compliance with the terms
of this Agreement:
* Obligations in place as of the
Effective Date;
* Purchase money debt of the Borrowers
and their Affiliates and debt assumed
in the acquisition of an Apartment
Community or a business entity;
* Intra-company debt of either Borrower
or any Affiliate to a Borrower or an
Affiliate;
* Other property-specific, long-term
(five (5) years or more) secured debt,
including, without limitation, letters
of credit issued in support of
property-specific financing, which
financing has or originally had a
maturity of not less than five (5)
years, in all instances with a loan to
value ratio of not greater than
seventy percent (70%), based on an
appraisal approved by the
Administrative Agent;
* Construction debt for present or
future payments of amounts not to
exceed Thirty Million Dollars
($30,000,000.00) in the aggregate, and
the applicable Development Project has
been negatively pledged or mortgaged
to secure such construction debt,
subject to the Administrative Agent's
refusal, at its option, to fund
construction using terms and
conditions the same or as similar to
those approved by the Administrative
Agent for the Apartment Community in
Memphis, Tennessee known as "Lincoln
on The Green";
* Unsecured debt in addition to the
Loans only when MAAC achieves an
investment grade rating of at least
BBB- from S&P or Baa-3 from βββββ'β;
* Trade payables in the ordinary course
of business;
* Obligations under leases of personal
property; or
* Contractual obligations incurred in
the ordinary course of the apartment
leasing business.
6.2 Guaranties Guarantee or otherwise in any way become
or be responsible for the indebtedness or
obligations of any other Person, by any
means whatsoever, whether by agreement to
purchase the indebtedness of any other
Person or agreement for the furnishing of
funds to any other Person through the
purchase of goods, supplies or services
(or by way of stock purchase, capital
contribution, advance or loan) for the
purpose of paying or discharging the
indebtedness of any other Person, or
otherwise, except for (a) the endorsement
of negotiable instruments by either
Borrower in the ordinary course of
business for collection; (b) guaranties
of renewals, replacements or extensions
of indebtednesses, liabilities and
obligations outstanding as of the date
hereof, which are presently guaranteed by
either of the Borrowers; provided,
however, that the maximum amount of each
such guaranty shall not exceed the lesser
of (i) the amount guaranteed as of the
date hereof, or (ii) the amount
outstanding as of the date of such new
guaranty; (c) guaranties of the Debt of
Affiliates or Subsidiaries to the extent
such Debt would be of a type permitted in
Section 6.1 and provided that such Debt
being guaranteed is considered Debt of
the Borrowers for purposes of the
financial covenants in Articles 5 and 6
of this Agreement, and (d) other
guaranties which do not exceed, in the
aggregate, at any one time outstanding,
the principal sum of Two Million Dollars
($2,000,000.00).
6.3 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.
6.4 Accounts Receivable FromPermit or allow the aggregate of accounts
Related Persons 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.
6.5 Loans to Officers andPermit or allow loans to directors,
Employees officers, partners, shareholders and
employees of both Borrowers to exceed, in
the aggregate, the sum of Five Hundred
Thousand Dollars ($500,000.00).
6.6 Line of Credit FinancingIncur (a) additional debt which
constitutes "line of credit" financing as
contemplated by this Agreement, or (b)
other interim financing for project
acquisition or construction (excluding
seller financing), except as permitted
under Section 6.1.
6.7 Trademarks and TradeSell, transfer, convey, grant any
Names security interest in, or otherwise
encumber any existing or hereafter
acquired trademarks, service marks or
trade names owned by the Borrower.
6.8 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.
6.9 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.
6.10 Other Financial Ratiosa) Permit Total Liabilities to exceed
sixty-three percent (63%) of the Total
Market Value of Assets during the
period ending on the 1st day of July,
1997, or to exceed sixty percent (60%)
thereof at any time thereafter, or to
permit the aggregate amount of Secured
Debt to exceed fifty percent (50%) of
the Total Market Value of Assets.
b) Permit Unsecured Debt to exceed sixty-
five percent (65%) of the Total Market
Value of Unencumbered Assets during
the period ending on the 1st day of
July, 1997, or to exceed sixty-two and
one-half percent (62 1/2%) of the Total
Market Value of Unencumbered Assets at
any time thereafter.
c) Permit Total Development and Joint
Venture Investment to exceed ten
percent (10%) of the Total Market
Value of Assets.
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 Fixed Charges for the
same period of at least 1.7 to 1.0.
6.11 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.
6.12 Arizona (As to MAAC only) Sell, transfer or
otherwise dispose of any shares of stock
in Arizona, or permit any such shares of
stock to be disposed of, sold, or
otherwise transferred.
7 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 Business Days after the due
date (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 10
Business Days after its due date;
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) 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 $100,000, 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 $750,000 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 Arizona
* 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 Arizona 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
Arizona 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 Arizona 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 Arizona 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) except for a transfer from MAAC to
MAAC of Delaware, Inc., a Delaware
corporation which is a wholly-owned
Subsidiary of MAAC, 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 ββββββ β. βββββ,
Simon β.β. βββββββββ, and H. ββββ
ββββββ, ββ. 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 the Administrative Agent,
which consent shall not be
unreasonably withheld, Mid-America,
Arizona or any other Person granting
to the Administrative Agent a Negative
Pledge or 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 Property or any
portion thereof, or permit the same to
be sold, assigned, transferred,
conveyed, contracted for or
encumbered; provided, further,
however, that the encumbrance of any
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.
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 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.
8 The Administrative Agent
8.1 Appointment and Each Lender irrevocably authorizes the
authorization 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 obligationsThe 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.
8.4 Consultation with The Administrative Agent may consult with
experts 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 Neither the Administrative Agent nor any
Administrative Agentof 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 AdministrativeThe Administrative Agent may resign by
Agent 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.
9 Change in circumstances
9.1 Eurocurrency ReserveIf a Lender notifies the Administrative
Requirements 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 If any Regulatory Action (other than the
reduced return 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 In calculating any amount payable under
amount 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 Subject to the following sentence, the
compensation 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 If a Lender demands compensation under
Borrower 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 If on or before the second Business Day
inadequate 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 * Two-Thirds of the Lenders advise the
obligation to make Loans 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 If the Lenders' obligations to make Loans
Borrowing Notice given 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 If a Lender determines that it may not
Loans 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 If the obligation of a Lender to make
Rate Loans 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 When the circumstances giving rise to a
suspension 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 Each Lender shall deliver to each of the
Borrowers and to the Administrative Agent
delivery of Tax Forms * 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.
withholding Taxes 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.
failure to furnish Tax not withstanding anything to the contrary
Forms 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
Unused 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).
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.
10 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 No failure or delay by the Administrative
cumulative; integration; Agent or a Lender in exercising a right,
survival 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 The Borrowers shall pay, and shall be
Taxes 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 this Agreement.
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 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 An amendment to or waiver of a provision
waivers 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 or waiver 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 1.21 (Pro-rata
treatment), or
(f) amends this Section 10.6.
10.7 Successors and assignsThe provisions of this Agreement shall be
binding upon and inure to the benefit of
the parties and their respective
(a) generally successors and assigns, except that
neither Borrower may assign, delegate or
otherwise transfer any of its rights or
obligations under this Agreement.
(b) participations 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) assignments 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.
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,
* 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,
* 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, and
* no further consent or action by any
party shall be required.
(d)assignment to A Lender may assign all or a
Federal Reserve Bank 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.
(e) funding losses No Assignee, Participant or other
and changed transferee of any Lender's rights may
circumstances 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.
(f) registration of The Administrative Agent shall maintain
assignments 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.
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 and that
the liability of the Borrowers is joint
and several.
10.9 No reliance on MarginEach Lender represents to the
Stock collateral 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 trialThe 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 ActionsAs 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.
11 Definitions and usages
11.1 Definitions In this Agreement, the following terms
shall have the following meanings:
Account Balance Agreements shall mean,
collectively, the documents between the
Borrowers and the Administrative Agent
that govern certain cash management
services to be made available by the
Administrative Agent to the Borrowers,
including making Advances under the Loans
to cover overdrafts in the Designated
Account, and using any excess funds on
deposit in the Designated Account to make
payments on the outstanding Advances
under the Loans, all from time to time as
more particularly set forth in the
various Account Balance Agreements.
Adjusted NOI shall mean, as to any
Property, for any period, the actual Net
Operating Income of such 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 expenses of Two Hundred Dollars
($200.00) per rental unit on average per
year.
Administrative Agent shall mean AmSouth
Bank of Alabama, or its successors or
assigns.
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.
America First shall mean America First
Florida REIT, Inc., a Delaware
corporation, a wholly-owned Subsidiary of
MAAC.
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 Arizona, whether or not it is
subject to a Negative Pledge or Mortgage.
Arizona shall mean America First Arizona
REIT, Inc., an Arizona corporation, which
is a wholly-owned Subsidiary of Mid-
America.
Assignee shall have the meaning assigned
to such term in Section 10.7(c).
Base Rate for a day means a rate per
annum equal to the higher of (a) the
Prime Rate or (b) the sum of the Federal
Funds Rate for the day plus 1.00%. Any
change in the Base Rate due to a change
in the Prime Rate or the Federal Funds
Rate shall be effective on the effective
date of such change in the Prime Rate or
the Federal Funds Rate, respectively.
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) sixty-
five percent (65%) of the fair market
value of the Properties which at the time
of determination are subject to the
Negative Pledges or the Mortgages plus
(b) the lesser of (i) $15,000,000 of
construction costs approved by the
Administrative Agent for a Development
Project or (ii) fifty percent (50%) of
such approved costs; provided, however,
the amount available under (b) above
shall in no event exceed thirty percent
(30%) of the sum of (a) plus (b). The
Properties existing as of the date
hereof, the present fair market value of
each thereof and the resulting Borrowing
Base, are all as set forth in Schedule 2,
attached hereto, and made a part hereof
by reference. No other Apartment
Community shall be deemed to constitute a
Property until such time as the
Administrative Agent shall have received
and approved, inter alia, Level I
Environmental Surveys together with such
other information (including asbestos
surveys) as may be recommended, by such
Level I Environmental Surveys, and
current information regarding the
Adjusted NOI of such Property, and a
Negative Pledge Agreement or Mortgage, as
selected by the Borrowers (and related
documentation as may be required by the
Administrative Agent), all in form,
content and conclusion satisfactory to
the Administrative Agent. The fair
market value of Properties 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
multiplying the prior calendar quarter's
Annualized Adjusted NOI of such
Properties by the integer ten (10). MAAC
shall have the right, at its
option, to determine fair market value by
appraisal, provided that (i) valuations
shall not be mixed between appraisal and
Net Operating Income, (ii) all appraisals
must be current within eighteen (18)
months, and (iii) all appraisals must
meet Federal Institutions Reform,
Recovery and Enforcement Act guidelines
and be approved by the Administrative
Agent and all Lenders. Notwithstanding
anything to the contrary contained
herein, if a 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
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 65% of the fair market value of such
Property (as determined in this
definition) immediately prior to such
damage or injury; provided, however, that
if the damaged 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.
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.
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.
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 (excluding
letters of credit enhancements for
other loans), 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.
Designated Account shall mean the demand
deposit account of Mid-America with the
Administrative Agent, designated for the
cash management services contemplated by
the Account Balance Agreements.
Development Project is a real property
which is being developed into, or upon
which improvements are being constructed
to enable it to become, an Eligible
Property.
EBITDA shall mean, on a consolidated
basis, earnings before interest, taxes,
depreciation and amortization, calculated
in accordance with GAAP, consistently
applied.
Eligible Property shall mean an Apartment
Community which has met (or which, upon
completion of construction and
development in accordance with plans and
specifications approved by the
Administrative Agent, will have met) all
of the requirements of the Administrative
Agent for approval as a Property. No
Apartment Community shall be deemed to
constitute an Eligible Property unless
(a) a certificate of occupancy (or its
equivalent) 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 (or its
equivalent) upon completion of
construction; and (b) the Apartment
Community has achieved an occupancy rate
of at least eighty percent (80%) for at
least two (2) consecutive months.
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 Margin.
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.
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.
First Tennessee shall mean First
Tennessee Bank National Association, a
national banking association having its
principal place of business in Memphis,
Tennessee.
FTB Letter of Credit shall have the
meaning assigned to that term in Section
1.8.
Funds from Operations has the meaning
assigned in Section 6.9.
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.
Interest Period shall have the meaning
assigned to that term in Section 1.14.
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.
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
βββββ 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 βββββ 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 Negative
Pledges, 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 Arizona 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.
Market Value of Unencumbered Assets shall
mean Annualized Adjusted NOI of
Unencumbered Assets multiplied by the
integer ten (10).
Margin means 175 basis points.
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 October 1, 1998.
Mid-America shall have the meaning
assigned to such term in the introductory
paragraph of this Agreement.
Moody's shall mean βββββ'β 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 Arizona 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
Eligible Properties subject to the lien
of a Mortgage.
Negative Pledges shall mean each and all
of those agreements now or at any time
hereafter executed by either Borrower as
a condition to or otherwise in connection
with the Loans, pursuant to which such
Borrower, as the owner of an Eligible
Property, shall agree that it will not
voluntarily sell, assign, transfer or
convey such Eligible Property, nor place
or permit the existence of any Lien upon
such Eligible Property, in each instance
without the prior written consent of Two-
thirds of the Lenders. All such Negative
Pledges shall be in recordable form and
shall contain such terms and provisions
as the Administrative Agent shall
require; and such term shall include all
renewals, modifications, restatements,and
amendments thereof, in whole or in part.
Negatively Pledged Property shall mean
the Eligible Properties subject to a
Negative Pledge.
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.
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).
Payrate shall mean, for any calendar
quarter, the ratio of Annualized EBITDA
to Total Liabilities.
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.
Property shall mean an Apartment
Community, now owned or hereafter
acquired by either Borrower or Arizona,
which is now or at any time hereafter
subject to a Negative Pledge or a
Mortgage in connection with the Loans.
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.
Secured Debt shall mean any indebtedness
of either Borrower which is secured, in
whole or in part, by a lien upon or
security interest in an Apartment
Community, except that the Loans shall
not be deemed to constitute a Secured
Debt.
Subsidiary of a Person means a
corporation or other entity a majority of
whose Voting Stock is directly or
indirectly owned by the Person.
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
$5,000,000, 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) October 31, 1998, or (b) the date
as of which the Borrowers shall have
terminated the Lender's commitment under
the provisions of Section 1.17 hereof, or
(c) the Lenders have terminated this
Agreement under the provisions of Section
7 hereof.
Title Documents shall mean any and all
real property title searches, real
property title abstracts, title reports
and other real property title information
regarding any Properties, issued by a
title insurance company or other source
pre-approved by the Administrative Agent,
as the Administrative Agent may
reasonably require hereunder or as the
Administrative Agent may otherwise
request from time to time.
Total Annualized Debt Service on
Indebtedness shall mean for any period
the aggregate amount of principal and
interest payments due for such period
upon liabilities for borrowed money, but
excluding balloon payments.
Total Annualized Fixed Charges shall mean
for any period the aggregate amount of
preferred stock distributions; principal;
and interest due for such period upon
liabilities for borrowed money, 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.
Unencumbered Assets shall mean assets
which are not subject to any Lien
securing an indebtedness or obligation
owed to any Person, and, in addition,
Mortgaged Properties.
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.
Unsecured Debt shall mean the aggregate
amount of all liabilities of both
Borrowers not secured by a Lien upon or
in either Borrower's assets; and such
term shall include, for the purposes of
this Agreement, the Loans.
Unused Fees shall have the meaning
assigned to that term in Section 1.11.
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.
11.2 Accounting terms andUnless otherwise stated, all accounting
determinations 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 usagesIn 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 All indications of time of day shall mean
Central Standard Time 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 References to a statute include all
regulations 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 (1.3)
Schedule 1.13 Fees
Schedule 2 List of Existing Properties and Fair
Market Value (3.1)
Schedule 3 Notice Addresses (10.1)
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)
MID-AMERICA APARTMENT COMMUNITIES,
INC.
By______________________________
Name__________________________
Title_________________________
By______________________________
Name__________________________
Title_________________________
MID-AMERICA APARTMENTS, L.P.
By Mid-America Apartments Communities,
Inc.
Its Sole General Partner
By______________________________
Name__________________________
Title_________________________
By______________________________
Name__________________________
Title_________________________
Signature page to
Revolving Credit Agreement
AMSOUTH BANK OF ALABAMA,
in its individual capacity as Lender
and as Administrative Agent
By______________________________
Name__________________________
Title_________________________
Signature page to
Revolving Credit Agreement
HIBERNIA NATIONAL BANK
By______________________________
Name__________________________
Title_________________________
Signature page to
Revolving Credit Agreement
SIGNET BANK
By______________________________
Name__________________________
Title_________________________
Signature page to
Revolving Credit Agreement
FIRST TENNESSEE BANK, N.A.
By______________________________
Name__________________________
Title_________________________
SCHEDULE 1
List of Lenders
AmSouth Bank of Alabama
Hibernia National Bank
Signet Bank
First Tennessee Bank, N.A.
SCHEDULE 1.13
Fees
TOTAL FEES $206,250.00
Administrative Agent $52,500.00
AmSouth Bank of Alabama, as Lender 37,500.00
Signet Bank 56,250.00
Hibernia National Bank 56,250.00
First Tennessee Bank, N.A. 3,750.00
