SIXTH AMENDED AND RESTATED CREDIT AGREEMENT

SIXTH AMENDED AND RESTATED CREDIT AGREEMENT

DATED AS OF MARCH 31, 2005

BY AND AMONG

GABLES REALTY LIMITED PARTNERSHIP,

AS BORROWER,

WACHOVIA CAPITAL MARKETS, LLC,

AS SOLE LEAD ARRANGER AND SOLE BOOK RUNNER,

WACHOVIA BANK, NATIONAL ASSOCIATION,

AS ADMINISTRATIVE AGENT,

PNC BANK, NATIONAL ASSOCIATION,

AS CO-DOCUMENTATION AGENT,

U.S. BANK, NATIONAL ASSOCIATION,

AS CO-DOCUMENTATION AGENT,

BANK OF AMERICA, N.A.,

AS CO‑SYNDICATION AGENT,

WELLS FARGO BANK, N.A.,

AS CO-SYNDICATION AGENT

AND

THE FINANCIAL INSTITUTIONS PARTY HERETO
AND THEIR ASSIGNEES UNDER SECTION 12.5,

AS LENDERS

 

 

 

            THIS SIXTH AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") dated as of March 31, 2005 by and among GABLES REALTY LIMITED PARTNERSHIP , a Delaware limited partnership ("Borrower"), each of the financial institutions initially a signatory hereto together with their assignees pursuant to Section 12.5(d) (collectively, the "Lenders" and individually a "Lender"), and WACHOVIA BANK, NATIONAL ASSOCIATION , as Agent (the "Agent").

WHEREAS, the Borrower, Gables-Tennessee Properties, L.L.C. ("Gables-TN"), Wachovia Bank, National Association and certain other lenders entered into that certain Fifth Amended and Restated Credit Agreement dated as of February 20, 2003, as amended to date (the "Fifth Amended Credit Agreement"); and

WHEREAS, Borrower has requested that Agent and the Lenders amend certain provisions of the Fifth Amended Credit Agreement; and

WHEREAS, Gables-TN has been released as a borrower under the Fifth Amended Credit Agreement; and

WHEREAS, Agent, Borrower and the Lenders desire to amend and restate the Fifth Amended Credit Agreement in its entirety;

NOW, THEREFORE, in consideration of the recitals herein and the mutual covenants contained herein, the parties hereto hereby amend and restate the Fifth Amended Credit Agreement in its entirety as follows:

ARTICLE I. DEFINITIONS

Section 1.1      Definitions .

    In addition to terms defined elsewhere herein, the following terms shall have the following meanings for the purposes of this Agreement:

    " Accounts Receivable " means each of the accounts receivable of the Borrower and its Subsidiaries  which (i) arose in the ordinary course of business of the Borrower and its Subsidiaries, (ii) would be classified under GAAP as a current asset on the balance sheet of the Borrower or such Subsidiary and is not more than 90 days past due under the original terms and (iii) to the knowledge of the Borrower or such Subsidiary, is the valid and binding obligation of the account debtor.

    " Additional Costs " has the meaning given that term in Section 4.1.

    " Adjusted EBITDA " means as of any date the sum of (a)(i) EBITDA for the most recently ended fiscal quarter of Borrower multiplied by (ii) four (4), less (b) the Capital Reserve.

    " Adjusted Eurodollar Rate " means, with respect to each Interest Period for any LIBOR Loan, the rate obtained by dividing (a) LIBOR for such Interest Period by (b) a percentage equal to 1 minus the stated maximum rate (stated as a decimal) of all reserves, if any, required to be maintained against "Eurocurrency liabilities" as specified in Regulation D of the Board of Governors of the Federal Reserve System (or against any other category of liabilities which includes deposits by reference to which the interest rate on LIBOR Loans is determined or any category of extensions of credit or other assets which includes loans by an office of any Lender outside of the United States of America to residents of the United States of America).

    " Adjusted Gross Asset Value " means as of any date the sum of (a) Gross Asset Value minus (b) the sum of (i) the value, to the extent included in Gross Asset Value, of any assets that are owned or leased by any Excluded Subsidiaries or Unconsolidated Affiliates, and (ii) the value, to the extent included in Gross Asset Value, of all Multifamily Properties, Non-Multifamily Properties and Condominium Properties that are owned or leased by a Qualified Intermediary and that are consolidated with the assets of Borrower, the Subsidiaries and the other Loan Parties in accordance with GAAP.

    " Affiliate " means as to any Person:  (a) any other Person directly or indirectly controlling, controlled by, or under common control with such Person; (b) any other Person directly or indirectly owning or holding twenty percent (20.0%) or more of any Equity Interest in such Person; or (c) any other Person twenty percent (20.0%) or more of whose voting stock or other Equity Interest is directly or indirectly owned or held by such Person.  For purposes of this definition, "control" (including with correlative meanings, the terms "controlling", "controlled by" and "under common control with") means the possession directly or indirectly of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or by contract or otherwise.  The Affiliates of a Person shall include any executive officer or director of such Person.

    " Agent " means Wachovia Bank, as contractual representative for the Lenders under the terms of this Agreement, and any of its successors.

    " Agreement Date " means the date as of which this Agreement is dated.

    " Applicable Law " means all applicable provisions of constitutions, statutes, rules, regulations and orders of all applicable governmental bodies and all orders and decrees of all courts, tribunals and arbitrators of any such governmental bodies.

    " Applicable Margin " means at any time the percentage rate per annum set forth below in the Base Rate Margin column with respect to Base Rate Loans or the LIBOR Margin column with respect to LIBOR Loans determined based upon the Credit Rating of Borrower:

Pricing Level                              Base Rate Margin             LIBOR Margin

Pricing Level 1                          [-0.25%]                                  0.60%

Pricing Level 2                          [-0.25%]                                  0.70%

Pricing Level 3                          [-0.25%]                                  0.85%

Pricing Level 4                          [-0.25%]                                  1.20%

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As of the Agreement Date, the Applicable Margin is determined based on Pricing Level 2.  Any issuance, change or withdrawal of a Credit Rating or other circumstance that would result in a change to a different Pricing Level shall effect a change in the Applicable Margin, as applicable, on each Performance Pricing Determination Date (provided that each change in the Applicable Margin as a result of a change in the Credit Rating shall be effective only for Loans (including Conversions or Continuations) which are made on or after the date of the relevant Performance Pricing Determination Date).

    " Assignee " has the meaning given that term in Section 12.5(d).

    " Assignment and Acceptance Agreement " means an Assignment and Acceptance Agreement among a Lender, an Assignee and the Agent, substantially in the form of Exhibit A .

    " Bankruptcy Code " means Title 11, U.S.C.A., as amended from time to time or any successor statute thereto.

    " Base Capitalization Rate Index " initially means 6.77%.  In the event the Capitalization Rate Index is provided to the Agent on or before the March 20 ^th , June 20 ^th , September 20 ^th or December 20 ^th , as applicable, immediately preceding a Recalculation Date for the twelve (12) month period ending the month immediately preceding the month in which such Recalculation Date occurs in accordance with the terms of the Capitalization Rate Index Agreement, the Base Capitalization Rate Index shall, after the recalculation of the Capitalization Rate as provided in the definition of Capitalization Rate on the Recalculation Date, be adjusted to be the Capitalization Rate Index as set forth in such Capitalization Rate Index Report.  By way of example, if the initial Base Capitalization Rate Index is 6.77%, and on June 20, 2005 the Capitalization Rate Index is 6.98% for the twelve‑month period ending May 31, 2005, the new Capitalization Rate thereafter would be 6.98% until the same is recalculated as provided herein and the Base Capitalization Rate Index would be reset to 6.98%.

    " Base Rate " means the per annum rate of interest equal to the greater of (a) the Prime Rate or (b) the Federal Funds Rate plus one‑half of one percent (0.5%).  Any change in the Base Rate resulting from a change in the Prime Rate or the Federal Funds Rate shall become effective as of 12:01 a.m. on the Business Day on which each such change occurs.  The Base Rate is a reference rate used by the Lender acting as the Agent in determining interest rates on certain loans and is not intended to be the lowest rate of interest charged by the Lender acting as the Agent or any other Lender on any extension of credit to any debtor.

    " Base Rate Loan " means a Loan bearing interest at a rate based on the Base Rate.

    " Benefit Arrangement " means at any time an employee benefit plan within the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by any member of the ERISA Group.

    " Bond Enhanced Debt " means as of any date the sum of (a) the Indebtedness under the Tax Exempt Bonds of the Borrower and its Subsidiaries determined on a consolidated basis, plus (b) Borrower's and its Subsidiaries' pro rata share of the Indebtedness under Tax Exempt Bonds of its Unconsolidated Affiliates (other than Excluded Unconsolidated Affiliates) but without double-counting.

    " Bond Enhancement Value " means as of any date the lesser of (a) $12,209,260 or (b) the sum of (i) (A) total Bond Enhanced Debt multiplied by (B) .01 (or one percent), divided by (ii) the Capitalization Rate.

    " Borrower " has the meaning set forth in the introductory paragraph hereof.

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    " Business Day " means (a) any day other than a Saturday, Sunday or other day on which banks in Charlotte, North Carolina or New York, New York are authorized or required to close and (b) with reference to a LIBOR Loan, any such day that is also a day on which dealings in Dollar deposits are carried out in the London interbank market.

    " Capital Reserve " means with respect to the Multifamily Properties and Non-Multifamily Properties now or hereafter owned, or occupied under a Ground Lease, by Borrower, any of the Subsidiaries or any other Loan Party, an annual capital replacement reserve in the amount equal to $200 multiplied by the aggregate number of apartment units within such Properties.  Notwithstanding the foregoing, Capital Reserves will not apply to any such Multifamily Properties or Non-Multifamily Properties which are not also Completed Properties.                                                                       

    " Capitalization Rate " means initially 6.77%; provided, however, that on the Recalculation Date, the Capitalization Rate shall be increased or decreased, as applicable, by the amount (expressed in basis points), if any, by which the Capitalization Rate Index as reported in the month in which such Recalculation Date occurs for the twelve (12) month period ending the month immediately preceding the month in which such Recalculation Date occurs exceeds or is less than, as applicable, the Base Capitalization Rate Index.  By way of example, if the Capitalization Rate Index as reported for the month of June, 2005 for the twelve (12) month period ending May 31, 2005 is 6.98%, then the new Capitalization Rate would be 6.98%; and if the Capitalization Rate Index as reported for the month of June, 2005 for the twelve (12) month period ending May 31, 2005 is 6.80%, then the new Capitalization Rate would be 6.80%.  No adjustment or recomputation, retroactive or otherwise, shall be made to the Capitalization Rate as a result of a subsequent revision or change in the Capitalization Rate Index for the applicable period published in a later Capitalization Rate Index Report.  The Capitalization Rate, as the same may be adjusted as provided above, shall be effective as of each Recalculation Date.  Notwithstanding the foregoing, if for any reason the Capitalization Rate Index Report due in the month of a Recalculation Date for the twelve (12) month period ending the month immediately preceding the month in which such Recalculation Date occurs is not provided to Agent on or before the 20 ^th day of the month in which such Recalculation Date occurs, or Agent reasonably determines that the Capitalization Rate Index is not being prepared consistent with the terms of the Capitalization Rate Index Agreement, then Borrower and Agent shall negotiate in good faith to determine a replacement Capitalization Rate Index acceptable to Borrower, Agent and the Requisite Lenders and to enter into such agreements acceptable to Borrower, Agent and the Requisite Lenders to provide for the delivery of the same to the Agent and the Lenders.  The costs of obtaining a replacement Capitalization Rate Index shall be the sole responsibility of Borrower.  In the event that Borrower, Agent and the Requisite Lenders are unable on or before the date that is fifty (50) days following such Recalculation Date to agree upon the replacement Capitalization Rate Index and enter into such agreements as described above and modifications to this Agreement and as may be required by the Agent in connection with the same, then the Capitalization Rate shall be the rate as specified by the Requisite Lenders in the exercise of their good faith discretion at any time thereafter as the Capitalization Rate (which Capitalization Rate shall be effective when so designated), and the Requisite Lenders may designate a new Capitalization Rate each Recalculation Date thereafter (provided, however, that Borrower and Agent shall first negotiate in good faith to determine each such new Capitalization Rate, provided further that any such new Capitalization Rate shall be subject to the approval of the Requisite Lenders in the exercise of their good faith discretion, and in the absence of reaching agreement in respect of any such new Capitalization Rate, the Requisite Lenders shall exercise their good faith discretion in determining such new Capitalization Rates).  In no event shall the Capitalization Rate be reduced below 6.75% or increased above 8.25%.  For clarification, at all times that the Capitalization Rate Index is below 6.75%, the Capitalization Rate shall be 6.75%, and at all times that the Capitalization Rate Index is above 8.25%, the Capitalization Rate shall be 8.25%.  If the Capitalization Rate is at the minimum and the Capitalization Rate Index is at or reduced below the minimum Capitalization Rate, the Capitalization Rate shall not increase until such time as the Capitalization Rate Index exceeds the minimum Capitalization Rate.

 

 

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    " Capitalization Rate Index " shall mean the Market Cap Rate Index for Apartments determined by RCA pursuant to the Capitalization Rate Index Agreement by averaging the unleveraged initial capitalization rates for all third-party apartment sales transactions reported to RCA to Agent and Borrower for the twelve (12) month period most recently ended, as prepared and calculated pursuant to the Capitalization Rate Index Agreement and delivered to the Agent in the Capitalization Rate Index Report.

    " Capitalization Rate Index Agreement " means the letter agreement among Agent, Borrower and RCA providing for the preparation and delivery by RCA of the Capitalization Rate Index and the Capitalization Rate Index Report to Agent and Borrower.

    " Capitalization Rate Index Report " means the quarterly report prepared by RCA pursuant to the Capitalization Rate Index Agreement setting forth the Capitalization Rate Index and the other information required by the Capitalization Rate Index Agreement.

    " Capitalized Lease Obligation " means obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.  The amount of a Capitalized Lease Obligation is the capitalized amount of such obligation as would be required to be reflected on the balance sheet prepared in accordance with GAAP of the applicable Person as of the applicable date.

    " Cash Equivalents " means:  (a) securities issued, guaranteed or insured by the United States of America or any of its agencies with maturities of not more than two years from the date acquired; (b) certificates of deposit with maturities of not more than two years from the date acquired which are issued by a United States federal or state chartered commercial bank of recognized standing, or a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development, or a political subdivision of any such country, acting through a branch or agency, which bank at the time of the acquisition thereof has capital and unimpaired surplus in excess of $500,000,000 and which bank or its holding company at the time of the acquisition thereof has a short‑term commercial paper rating of at least A‑2 or the equivalent by S&P or at least P‑2 or the equivalent by Moody's; (c) reverse repurchase agreements with terms of not more than seven days from the date acquired, for securities of the type described in clause (a) above and entered into only with commercial banks having the qualifications described in clause (b) above; (d) commercial paper issued by any Person incorporated under the laws of the United States of America or any State thereof and rated at the time of the acquisition thereof at least A‑2 or the equivalent thereof by S&P or at least P‑2 or the equivalent thereof by Moody's, in each case with maturities of not more than two years from the date acquired; and (e) investments in money market or other mutual funds registered under the Investment Company Act of 1940, which have at the time of the acquisition thereof net assets of at least $500,000,000 and at least 85% of whose assets consist of securities and other obligations of the type described in clauses (a) through (d) above.

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    " Change of Control " means the occurrence of any of the following:

(a)        any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person will be deemed to have "beneficial ownership" of all securities that such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than thirty-three percent (33%) of the total voting power of the then outstanding voting stock of GBP;

(b)        as of any date a majority of the Board of Trustees of GBP consists of individuals who were not either (i) directors of GBP as of the corresponding date of the previous year, (ii) selected or nominated to become directors by the Board of Trustees of GBP of which a majority consisted of individuals described in clause (b)(i) above, or (iii) selected or nominated to become directors by the Board of Trustees of GBP of which a majority consisted of individuals described in clause (b)(i) above and individuals described in clause (b)(ii), above;

(c)        GBP fails to directly own all of the Equity Interests of General Partner;

(d)        General Partner fails to directly own an Equity Interest in Borrower, shall fail to be the sole general partner of Borrower, or shall fail to control the management and policies of Borrower; or

(e)        GBP fails to own, directly or indirectly, at least fifty-five percent (55%) of the Equity Interests of Borrower.

    " Co-Documentation Agent"  means PNC Bank, National Association and U.S. Bank, National Association.

    " Collateral Account " means a special non‑interest bearing deposit account maintained by the Agent at the Principal Office and under its sole dominion and control.

    " Commitment " means, as to each Lender, such Lender's obligation  to make Revolving Loans pursuant to Section 2.1, to issue (in the case of the Issuing Lender) or participate in (in the case of the other Lenders) Letters of Credit pursuant to Section 2.4 and to participate in Swingline Loans pursuant to Section 2.2, to an amount up to, but not exceeding (but in the case of the Lender acting as the Issuing Lender excluding the aggregate amount of participations in the Letters of Credit held by other Lenders), the amount set forth for such Lender on its signature page hereto as such Lender's "Commitment Amount" or as set forth in the applicable Assignment and Acceptance Agreement, as the same may be reduced from time to time pursuant to Section 2.12, increased pursuant to Section 2.15, or as appropriate to reflect any assignments to or by such Lender effected in accordance with Section 12.5.

    " Commitment Percentage " means, as to each Lender, the ratio, expressed as a percentage, of (a) the amount of such Lender's Commitment to (b) the aggregate amount of the Commitments of all Lenders hereunder; provided, however, that if at the time of determination the Commitments have terminated or been reduced to zero, the "Commitment Percentage" of each Lender shall be the Commitment Percentage of such Lender in effect immediately prior to such termination or reduction.

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    " Competitive Advance " means a Loan made to Borrower by any Lender not determined by that Lender's Commitment Percentage pursuant to Section 2.3.

    " Competitive Advance Note " means the promissory note made by Borrower in favor of a Lender to evidence the Competitive Advances made by that Lender, substantially in the form of Exhibit B .

    " Competitive Bid " means a written bid to provide a Competitive Advance substantially in the form of Exhibit C , signed by a Responsible Officer of a Lender and properly completed to provide all information required to be included therein.

    " Competitive Bid Request " means a written request submitted by Borrower to the Agent to provide a Competitive Bid, substantially in the form of Exhibit D signed by a Responsible Officer of Borrower and properly completed to provide all information required to be included therein.

    " Completed Property " means any Multifamily Property (or phase of a Multifamily Property) that constituted Construction-in-Process until the first to occur of (a) eighteen (18) months following completion of such Multifamily Property (or phase thereof) as evidenced by the issuance of a temporary or permanent certificate of occupancy (whichever occurs first) for such Multifamily Property or any phase thereof, and (b) the first day of the first fiscal quarter following the date on which such Multifamily Property (or phase thereof) is at least eighty‑five percent (85%) occupied by tenants who are paying rent under executed leases.

    " Compliance Certificate " has the meaning given that term in Section 8.3.

    " Condominium Conversion " means the conversion of a completed Multifamily Property into residential condominium units which will be deemed to have occurred once both of the following have occurred:  (i) notice of the conversion to a condominium has been sent to the tenants of such Multifamily Property if required by Applicable Law and (ii) a declaration of condominium or other similar document with respect to such Multifamily Property has been filed with the applicable Governmental Authority.

    " Condominium Property " means a completed, operating Multifamily Property that is the subject of a Condominium Conversion into residential condominium units for the purpose of sale of units therein.  A Condominium Property shall not include a property that is new construction or the substantial renovation of an existing Multifamily Property.

    " Condominium Property Value " means, as of any date of determination, the sum of the following:  (a) the sum of (i) the Net Operating Income attributable to such Condominium Property for the fiscal quarter ending immediately prior to the conversion of such Condominium Property multiplied by four (4) and divided by the Capitalization Rate, plus (ii) the cost of capital improvements made to such Condominium Property in connection with such conversion, which amount pursuant to this clause (ii) shall not as to any Condominium Property exceed twenty‑five percent (25%) of the amount determined in accordance with the preceding clause (a) (i) with respect to such Condominium Property, minus (b) ninety percent (90%) of the gross actual contractual sales price of each individual condominium unit sale from such Condominium Property prior to any deductions for commissions, fees and any other expenses.  Notwithstanding the foregoing, no value will be attributed to any Condominium Property twenty‑four (24) months after the Condominium Conversion.  In addition, no value shall be attributable to a Condominium Property at any time following the earlier of the date on which (x) all condominium units within such Condominium Property have been sold or otherwise conveyed, (y) the management of such Condominium Property has been turned over to such Condominium Property's homeowner's association or similar entity or (z) less than ten percent (10%) of the residential units with such Condominium Property remain unsold.

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    " Consolidated Income Available for Distribution " means, in any period of four (4) fiscal quarters, the sum of the following for such period, calculated on a consolidated basis for the Borrower and its Subsidiaries:  (i) EBITDA, less (ii) GAAP Interest Expense less (iii) letter of credit fees on Tax Exempt Bonds, plus (iv) economic gains from sales of assets (defined as net cash proceeds from the sale of such assets less the cumulative cash invested in such assets that has been capitalized in accordance with GAAP), less (v) economic losses from sales of assets (calculated as provided in clause (iv) above), plus (vi) the net cash proceeds associated with any extraordinary, unusual or nonrecurring gains included in calculating net income, less (vii) the net cash payments associated with any extraordinary, unusual or nonrecurring losses included in calculating net income.

    " Consolidated Indebtedness " means at any date the Indebtedness of the Borrower, its Subsidiaries and the other Loan Parties (excluding Indebtedness of GDTRS), determined on a consolidated basis as of such date.

    " Construction-in-Process " means at any time on a consolidated basis for a Person and its Subsidiaries, the sum of all cash expenditures for land and improvements (including indirect costs internally allocated and development costs) on all properties that are under construction or with respect to which construction is reasonably anticipated to commence within eighteen (18) months of the relevant determination.  Construction-in-Process shall include, without limitation, land and other capitalizable costs with respect to which such Person is engaging in pre-development work or is in the development or construction permitting process.  By way of clarification, Construction-in-Process shall include all such cash expenditures for land and improvements incurred by or on behalf of a Qualified Intermediary which is consolidated with any such Person in accordance with GAAP.  In the event that all or a portion of the Construction-in-Process is held by a Qualified Intermediary and such Qualified Intermediary becomes subject to any bankruptcy or insolvency proceedings, then the Construction-in-Process held by such Qualified Intermediary shall be deemed to be zero dollars ($0) during the pendency of such proceedings.                                                                  

    " Contingent Liabilities " as to any Person, but without duplication of any amount included or includable in items (a) through (h) of Indebtedness, as applied to any obligation, mean and include liabilities or obligations with respect to:  (a) a guaranty (other than by endorsement of negotiable instruments for collection in the ordinary course of business), directly or indirectly, in any manner, of any part or all of any payment obligation in respect of any  Indebtedness; (b) an agreement, direct or indirect, contingent or otherwise, and whether or not constituting a guaranty, the practical effect of which is to assure the payment of any part or all of any payment obligation in respect of any Indebtedness, whether by:  (i) the purchase of securities or obligations primarily for the purpose of assuring the owner of such Indebtedness of the payment of such Indebtedness, (ii) the purchase, sale or lease (as lessee or lessor) of property or the purchase or sale of services primarily for the purpose of enabling the obligor with respect to such Indebtedness to make any payment of or on account of any part or all of such Indebtedness, or assuring the

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owner of such Indebtedness against loss, (iii) the supplying of funds to or in any other manner investing in the obligor with respect to such Indebtedness so as to enable the obligor to pay such Indebtedness, the primary purpose of which is to assure the payment of such Indebtedness to the holder thereof, or to protect such owner against loss in respect thereof, (iv) repayment of amounts drawn down by beneficiaries of letters of credit (including Letters of Credit), or (v) the supplying of funds to or investing in a Person on account of all or any part of such Person's obligation with respect to any Indebtedness or indemnifying or holding harmless, in any way, such Person against loss with respect to such Indebtedness; (c) all obligations, contingent or otherwise, of such Person under any synthetic lease, tax retention operating lease, off balance sheet loan or similar off balance sheet financing arrangement as and to the extent such liabilities or obligations are required to be included as liabilities on the balance sheet of such Person in accordance with GAAP, (d) all obligations of such Person with respect to any take-out commitment to the extent all conditions to such commitment have been satisfied or waived net of asset value (but not less than zero); (e) all obligations of such Person with respect to any forward equity commitment; (f) purchase obligations to the extent all conditions to such purchase have been satisfied or waived net of asset value (but not less than zero); and (f) Derivative Obligations (but excluding forward equity commitments, which are to be included in clause (e) above) as and to the extent such liabilities or obligations are required to be included as liabilities on the balance sheet of such Person in accordance with GAAP; and (h) all obligations under performance and/or completion guaranties (or other agreements the practical effect of which is to assure performance or completion of such obligations) as and to the extent such obligations are required to be included as liabilities on the balance sheet of such Person in accordance with GAAP.  Notwithstanding anything to the contrary contained herein, Contingent Liabilities should not be deemed to include (x) guaranties of unadvanced funds under any indebtedness of any Person, including under any construction loans or lines of credit, to the extent the same amount have not been drawn, or (y) any amounts under (h) above, unless and until a claim for payment has been made thereunder, at which time any such guaranty of such performance and/or completion shall be deemed to be a Contingent Liability in an amount equal to such claim.  In addition, an obligation to purchase property in the ordinary course of a Person's business (and not made primarily to assure the payment of, or to enable a Person to pay, Indebtedness), which includes the issuance of equity in such Person as consideration for such purchase (such as the issuance of units in an operating partnership) shall be only included within clause (f) above.

    " Continue ", " Continuation " and " Continued " each refers to the continuation of a LIBOR Loan from one Interest Period to another Interest Period pursuant to Section 2.9.

    " Contribution Agreement " means the Contribution Agreement of even date herewith in substantially the form of Exhibit E to be executed by the Borrower and the Guarantors.

    " Convert ", " Conversion " and " Converted " each refers to the conversion of a Loan of one Type into a Loan of another Type pursuant to Section 2.10.

    " Co‑Syndication Agent " means Bank of America, N.A. and Wells Fargo Bank, N.A.

    " Credit Event " means any of the following: (a) the making (or deemed making) of any Loan, (b) the Conversion of a Loan and (c) the issuance of a Letter of Credit.

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    " Credit Rating " means the lowest rating assigned by a Rating Agency to each series of rated senior unsecured, non-credit enhanced long term indebtedness of the Borrower (or if no such debt exists, its issuer credit rating for debt of such type).  If, at any time after Borrower obtains a Credit Rating, (a) the rating system of any of the Rating Agencies (as opposed to the rating of the Borrower) shall change, or (b) any of the Rating Agencies shall no longer perform the functions of a securities rating agency, then the Borrower and the Agent shall promptly negotiate in good faith to amend the reference to the specific ratings in this Agreement for the determination of the Pricing Level, and pending such amendment, the applicable rating in effect as of the date the event described in this paragraph occurred shall continue to apply.

    " Debt Service " means, for any period, the sum of:  (a) Interest Expense of the Borrower, its  Subsidiaries and the other Loan Parties determined on a consolidated basis for such period plus (b) all regularly scheduled principal payments made with respect to Indebtedness of the Borrower, its Subsidiaries and the other Loan Parties during such period, other than any balloon, bullet or similar principal payment which repays or discharges such Indebtedness in full or, to the extent not pursuant to an amortization schedule which requires two or more periodic payments of principal, a significant part.  Debt Service shall include the portion of rent payable by the Borrower, any of its Subsidiaries or any other Loan Party during such period under Capitalized Lease Obligations that should be treated as principal under GAAP.

    " Default " means any of the events specified in Section 10.1, whether or not there has been satisfied any requirement for the giving of notice, the lapse of time, or both.

    " Defaulting Lender " has the meaning set forth in Section 3.11.

    " Derivative Obligations " means all obligations of any Person under Interest Rate Agreements and all other obligations of such Person in respect of any interest rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, forward equity transaction, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, forward transaction, collar transaction, currency swap, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of the foregoing transactions) or any combination of the foregoing transactions.

    " Dollars " or " $ " means the lawful currency of the United States of America.                                            

    " EBITDA " with respect to the Borrower and its Subsidiaries (or any asset of Borrower or such Subsidiary) for any period means (without duplication) an amount, determined on a consolidated basis, equal to the sum of (a) the net income (or loss) (including net income attributable to the rental of units of Condominium Properties after the Condominium Conversion but prior to the sale thereof) of such Persons (or attributable to such asset) for such period before their income (or loss) from Unconsolidated Affiliates (other than Excluded Unconsolidated Affiliates) and before minority interests plus (b) depreciation and amortization, interest expense, preferred dividends, federal and state income taxes, and any extraordinary or non-recurring losses (including impairment charges) deducted in calculating such net income, including losses from unusual items, asset dispositions, debt refinancings or debt forgiveness, minus (c) any extraordinary or non-recurring gains included in calculating such net income, including gains from unusual items, asset dispositions, debt refinancings or debt forgiveness, plus (d) non‑cash expenses associated with stock compensation of such Persons deducted in calculating such net income, plus (e) Borrower's pro rata share of EBITDA from its Unconsolidated Affiliates (other than Excluded Unconsolidated Affiliates), all as determined in accordance with GAAP.  EBITDA shall in no event include any income, gain or loss, in any case, realized on the sale of any portion of a Condominium Property.

                               10                                                

    " Effective Date " means the later of: (a) the Agreement Date; and (b) the date on which all of the conditions precedent set forth in Section 5.1 shall have been fulfilled or waived in writing by the Requisite Lenders.

    " Eligible Assignee " means any Person who is: (i) currently a Lender; (ii) a commercial bank, trust company, insurance company, investment bank or pension fund organized under the laws of the United States of America, or any state thereof, and having total assets in excess of $5,000,000,000; (iii) a savings and loan association or savings bank organized under the laws of the United States of America, or any state thereof, and having a tangible net worth of at least $500,000,000; or (iv) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development, or a political subdivision of any such country, and having total assets in excess of $10,000,000,000, provided that such bank is acting through a branch or agency located in the United States of America.

    " Eligible QI Cash and Cash Equivalents " means at any time the sum of (a) the proceeds from the sale of Properties by the Borrower or a Subsidiary which are held by a Qualified Intermediary as cash or Cash Equivalents in a "qualified escrow account" within the meaning of the regulations issued pursuant to Section 1031 of the Internal Revenue Code as cash or Cash Equivalents pursuant to an exchange agreement intended for the purposes of implementing a tax deferred exchange transaction under Section 1031 of the Internal Revenue Code, minus (b) all costs, expenses and other obligations incurred by or owing to such Qualified Intermediary or any other Person which are to be paid from such qualified escrow account prior to or at the time of the disbursement of the proceeds from such qualified escrow account by the Qualified Intermediary.  In the event (i) all or a portion of the cash or Cash Equivalents held by the Qualified Intermediary become subject to any Lien or (ii) the Qualified Intermediary becomes subject to any bankruptcy or insolvency proceedings, then with respect to clause (i) above, the value of the cash or Cash Equivalents subject to such Lien shall be reduced by the principal amount of such Lien, and with respect to clause (ii) above, the cash or Cash Equivalents held by such Qualified Intermediary shall be deemed to be zero dollars ($0).

    " Environmental Laws " means any Applicable Law relating to environmental protection or the manufacture, storage, disposal or clean‑up of Hazardous Materials including, without limitation, the following: Clean Air Act, 42 U.S.C. § 7401 et seq.; Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq.; National Environmental Policy Act, 42 U.S.C. § 4321 et seq.; regulations of the Environmental Protection Agency and any applicable rule of common law and any judicial interpretation thereof relating primarily to the environment or Hazardous Materials.                                                                        

    " Equity Interest " means, with respect to any Person, any share of capital stock of (or other ownership or profit interests in) such Person, any warrant, option or other right for the purchase or other acquisition from such Person of any share of capital stock of (or other ownership or profit interests in) such Person, any security (other than a security constituting Indebtedness) convertible into or exchangeable for any share of capital stock of (or other ownership or profit interests in) such Person or warrant, right or option for the purchase or other acquisition from such Person of such shares (or such other interests), and any other ownership or profit interest in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such share, warrant, option, right or other interest is authorized or otherwise existing on any date of determination.

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    " Equity Issuance " means any issuance by a Person of any Equity Interest and shall in any event include the issuance of any Equity Interest upon the conversion or exchange of any security constituting Indebtedness that is convertible or exchangeable, or is being converted or exchanged, for Equity Interests.

    " ERISA " means the Employee Retirement Income Security Act of 1974, as in effect from time to time.

    " ERISA Group " means the Borrower, GBP, any Subsidiary and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower, GBP or any of their respective Subsidiaries, are treated as a single employer under Section 414 of the Internal Revenue Code.

    " Event of Default " means any of the events specified in Section 10.1, provided that any requirement for notice or lapse of time or any other condition has been satisfied.

    "Excluded Property" means any Property that is not located entirely in a state within the  contiguous 48 states of the continental United States or the District of Columbia.

    " Excluded Subsidiary " means any Subsidiary (a) (i) which has a legal structure and capitalization intended to make such entity a single purpose, "bankruptcy remote" entity; (ii) for which none of the Borrower, GBP, any of their respective Subsidiaries (other than another Excluded Subsidiary) or any other Loan Party has any Contingent Liability or is otherwise liable with respect to any of the Indebtedness of such Subsidiary or has any direct obligation to maintain or preserve such Subsidiary's financial condition or to cause such Subsidiary to achieve any specified levels of operating results, except for customary exceptions for fraud, misapplication of funds, environmental indemnities, and other similar exceptions from non‑recourse liability; and (iii) which is directly obligated for any Secured Indebtedness; or (b) which is not a Wholly Owned Subsidiary.

    " Excluded Unconsolidated Affiliate " means any Unconsolidated Affiliate of Borrower or its Subsidiaries which is required by GAAP to be accounted for by Borrower by the cost method of accounting.

    " Facility Fee " means the per annum percentage in the table set forth below corresponding to the Pricing Level at which the "Applicable Margin" is determined in accordance with the definition thereof:

Pricing Level                                          Applicable Facility Fee Percentage

Pricing Level 1                                                  0.15%                    

Pricing Level 2                                                  0.15%

Pricing Level 3                                                  0.20%

Pricing Level 4                                                  0.30%

 

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Changes in the Facility Fee resulting from a change in a Pricing Level shall become effective as of the Performance Pricing Determination Date.  As of the Agreement Date, the Facility Fee is determined based on Pricing Level 2.

    " Fair Market Value " means, with respect to (a) a security listed on a principal national securities exchange, the price of such security as reported on such exchange by any widely recognized reporting method customarily relied upon by financial institutions, and (b) with respect to any other property, the price which could be negotiated in an arm's-length free market transaction, for cash, between a willing seller and a willing buyer, neither of which is under pressure or compulsion to complete the transaction.

    " Federal Funds Rate " means, for any day, the rate per annum (rounded upward to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate quoted to the Agent by federal funds dealers selected by the Agent on such day on such transaction as determined by the Agent.

    " Fees " means the fees and commissions provided for or referred to in Section 3.6 and any other fees payable by the Borrower to the Agent or any Lender hereunder or under any other Loan Document.

    " Fifth Amended Credit Agreement " has the meaning given that term in the recitals.

    " Fixed Charges " means, for any period, the sum (without duplication) of (a) Debt Service for such period and (b) Preferred Dividends for such period.  Fixed Charges shall include, without duplication, the Borrower's and its Subsidiaries' pro rata share of Fixed Charges of its Unconsolidated Affiliates (other than Excluded Unconsolidated Affiliates).

    " Floating Rate Debt " means all Indebtedness for borrowed money of the Borrower, its Subsidiaries and the other Loan Parties which bears interest at fluctuating rates (and in any event shall include all Loans and other Indebtedness of the Borrower under any of the Loan Documents) and for which the Borrower, such Subsidiary or such other Loan Party has not obtained Interest Rate Agreements which Interest Rate Agreements effectively cause such variable rates to be equivalent to, or to be capped at, fixed rates.                                                                 

    " GAAP " means U.S. generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession, which are applicable to the circumstances as of the Agreement Date.

 

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    " GAAP Interest Expense " means with respect to the Borrower, its Subsidiaries and the other Loan Parties for any period of time determined on a consolidated basis, the sum of (a) the Interest Expense of such Persons for such Period minus (b) capitalized interest not funded by a construction loan which is included in calculating such Interest Expense.

    " Gables GP, Inc. " means Gables GP, Inc., a Texas corporation.

    " Gables Group " means, taken as a whole, GBP, General Partner, the Borrower, the other Loan Parties and the Subsidiaries.

    " GBP " means Gables Residential Trust, a Maryland trust.

    " GDTRS " collectively means (to the extent and for so long as designated in writing delivered to Agent as a GDTRS by Borrower) any one or more of the following:  (a) a TRS directly or indirectly owned by Borrower or (b) any entity directly or indirectly wholly-owned by a TRS of Borrower; each of which entity's purpose is to directly or indirectly through a joint venture acquire, construct, develop, own, finance, rehabilitate, renovate, lease, manage and dispose of Multifamily Properties and other activities incidental thereto.  It is acknowledged and agreed that (i) there may be TRSs which either do not qualify as GDTRSs based upon their purpose or are not designated in writing to Agent by Borrower as GDTRSs and (ii) there may at any time and from time to time be any number of GDTRSs provided that the other requirements in respect of GDTRSs under this Agreement shall remain satisfied.

    " GDTRS Asset Value " means the sum of all the cash expenditures for land and improvements (including indirect costs internally allocated and development costs) determined in accordance with GAAP on all Multifamily Properties of GDTRS whether under development or completed.

    " GDTRS Investment " means the cash contributed, loaned or advanced to GDTRS by Borrower and its Subsidiaries.

    " General Partner " means Gables GP, Inc.

    " Governing Documents " of any Person means the declaration of trust, certificate or articles of incorporation, by-laws, partnership agreement or operating or members agreement, as the case may be, and any other organizational or governing documents, of such Person.

    " Governmental Approvals " means all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, and reports to, all Governmental Authorities.

    " Governmental Authority " means any national, state or local government (whether domestic or foreign), any political subdivision thereof or any other governmental, quasi‑governmental, judicial, public or statutory instrumentality, authority, body, agency, bureau or entity (including, without limitation, the Federal Deposit Insurance Corporation, the Comptroller of the Currency or the Federal Reserve Board, any central bank or any comparable authority) or any arbitrator with authority to bind a party at law.

                                                                            14                                                

    " Gross Asset Value " on a consolidated basis for Borrower, and its Subsidiaries, shall mean as of any date of determination the sum (without duplication) of the following:

(a)                 the sum of (i) the Adjusted EBITDA (excluding any EBITDA attributable to assets included within clauses (b)-(j) of this definition), as determined for the fiscal quarter just ended prior to the date of determination, divided by (ii)  the Capitalization Rate; plus

(b)                 the GAAP book value of Properties which have been owned or leased pursuant to a Ground Lease by Borrower or any Subsidiary for less than six (6) full fiscal quarters; plus

(c)                 the Bond Enhancement Value as of the date of determination; plus

(d)                 the GAAP book value of Unimproved Land, Notes Receivable, Accounts Receivable and Investments in Excluded Unconsolidated Affiliates of Borrower and its Subsidiaries; plus

(e)                 the GAAP book value of Construction-in-Process of the Borrower and its Subsidiaries for any Multifamily Property or Non-Multifamily Property that is not a Completed Property; plus

(f)                 the aggregate amount of the unpledged portion of all unrestricted cash and Cash Equivalents of Borrower and its Subsidiaries; plus

(g)                 the aggregate amount of Eligible QI Cash and Cash Equivalents of  Borrower and its Subsidiaries; plus

(h)                 the Condominium Property Value as of the date of determination; plus

(i)                 the Borrower's and its Subsidiaries' pro rata share of the preceding items of any Unconsolidated Affiliate of the Borrower or its Subsidiaries which Unconsolidated Affiliate is not included under clause (d) above (determined in a manner consistent with the foregoing); plus

(j)                 the Borrower's and its Subsidiaries' GDTRS Investment; plus

(k)                 the GAAP book value of Investments made in accordance with Section 9.3(g) hereof.

Notwithstanding the foregoing, the amount included under clause (g) above shall not at any time exceed ten percent (10%) of Gross Asset Value.  Any income or asset attributable to GDTRS shall only be counted under clause (j) above.  Gross Asset Value shall be calculated on a pro forma basis as if assets acquired during the relevant period were owned as of the beginning of the relevant period, and all assets disposed of during the relevant period were not owned during any portion of the relevant period.

    " Ground Lease " means collectively the Short‑Term Ground Leases and the Long‑Term Ground Leases.

    " Guarantor " means GBP, General Partner and any other Person that is now or hereafter a party to the Guaranty as a "Guarantor".

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    " Guaranty " means the Guaranty Agreement of even date herewith in substantially the form of Exhibit F to be executed by the Guarantors as of the Agreement Date.

    " Hazardous Materials " means all or any of the following: (a) substances that are defined or listed in, or otherwise classified pursuant to, any applicable Environmental Laws as "contaminant", "hazardous substances", "hazardous materials", "hazardous wastes", "pollutant", "toxic substances" or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, "TCLP" toxicity or "EP toxicity"; (b) oil, petroleum or petroleum derived substances, natural gas, natural gas liquids or synthetic gas and drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas or geothermal resources; (c) any flammable substances or explosives or any radioactive materials; (d) asbestos in any form; (e) electrical equipment which contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of fifty parts per million; and (f) any other chemicals, materials or substances regulated pursuant to any Environmental Law.

    " Indebtedness " of any Person means at any date, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments (but excluding such obligations to the extent of principal amounts reflected as restricted cash that are escrowed or maintained in a trust or escrow account or other fund with one or more trustees relating to Tax Exempt Bonds pursuant to the applicable indenture or other agreement pertaining to such obligations), (c) all obligations of such Person to pay the deferred purchase price of property or services, (d) Capitalized Lease Obligations of such Person, (e) all obligations of such Person to reimburse any bank or other Person in respect of amounts payable under a banker's acceptance, (f) all obligations with respect to Redeemable Preferred Stock of such Person, (g) all obligations of such Person to reimburse any bank or other Person in respect of amounts paid or to be paid or to be paid under a letter of credit or similar instrument, (h) all obligations of others secured by a Lien on any asset of such Person, whether or not such obligations are assumed by such Person, and (i) all Contingent Liabilities of such Person; provided , however , that to the extent such Person has liabilities with respect to (u) trade accounts payable arising in the ordinary course of business that are not outstanding more than thirty (30) days past the due date as provided in the invoice relating thereto, (v) dividends accrued but not paid by such Person, (w) retainage held by such Person for Construction-in-Process, (x) interest payable by such Person for credit on trade accounts payable in the ordinary course of business in good standing, (y) real estate property taxes payable by such Person, and (z) tenant security deposits held by such Person, then Indebtedness shall only include the amount by which (1) (A) the aggregate sum of the liabilities described in clauses (u), (v), (w), (x), (y) and (z) minus (B) the sum of (i) the amount held in escrow deposits with banks or other financial institutions or held by Borrower as restricted cash in accordance with GAAP for payment of real estate property taxes included in clause (y) to the extent such taxes are not delinquent, plus  (ii) the cash amount of tenant security deposits held by such Person in segregated accounts and reflected as restricted cash in accordance with GAAP together with interest thereon, in each case to the extent the corresponding assets for the items described in (u), (v), (w), (x), (y) and (z) are not included in Gross Asset Value, exceeds (2) $50,000,000.

    " Intellectual Property " has the meaning given that term in Section 6.1(r).

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    " Interest Expense " means, with respect to the Borrower, its Subsidiaries and the other Loan Parties for any period of time, (a) the interest expense, whether paid, accrued or capitalized (without deduction of consolidated interest income) of such Person for such period plus (b) recurring fees (such as recurring issuer, trustee and credit enhancement fees), whether paid or accrued, in connection with Tax Exempt Bonds or other credit enhanced Indebtedness of such Person for such period plus (c) such Persons' pro rata share of Interest Expense of its Unconsolidated Affiliates (other than Excluded Unconsolidated Affiliates).  Interest Expense shall not include capitalized interest funded under a construction loan.

    " Interest Period " means with respect to any LIBOR Loan, each period commencing on the date such LIBOR Loan is made or the last day of the next preceding Interest Period for such Loan and ending 7, 30, 60, 90, 180, 270 or 360 days thereafter, as the Borrower may select in a Notice of Borrowing, Notice of Continuation or Notice of Conversion, as the case may be, except that each Interest Period of 30, 60, 90, 180, 270 or 360 day's duration that commences on the last Business Day of a calendar month shall end on the last Business Day of the appropriate subsequent calendar month. Notwithstanding the foregoing:  (i) no Interest Period shall end after the Termination Date; and (ii) each Interest Period that would otherwise end on a day which is not a Business Day shall end on the next succeeding Business Day (or, if such next succeeding Business Day falls in the next succeeding calendar month, on the next preceding Business Day).

    " Interest Rate Agreement " means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar contractual agreement or arrangement entered into with a nationally recognized financial institution then having a Credit Rating of BBB-/Baa3 (or equivalent) or higher from both Rating Agencies for the purpose of protecting against fluctuations in interest rates.

    " Internal Revenue Code " means the Internal Revenue Code of 1986, as amended.

    " Investment " means, (x) with respect to any Person, any acquisition or investment (whether or not of a controlling interest) by such Person, by means of any of the following:  (a) the purchase or other acquisition of any Equity Interest in another Person, (b) a loan, advance or extension of credit to, capital contribution to, Contingent Liabilities with respect to Indebtedness of, or purchase or other acquisition of any Indebtedness of, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute the business or a division or operating unit of another Person and (y) with respect to any Property or other asset, the acquisition thereof.  Any binding commitment to make an Investment in any other Person, as well as any binding option of another Person to require an Investment in such Person, shall constitute an Investment.  Except as expressly provided otherwise, for purposes of determining compliance with any covenant contained in a Loan Document, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

    " Issuing Lender " means Wachovia Bank in its capacity as the Lender issuing the Letters of Credit and its successors and assigns.

    " Joinder Agreement " means the joinder agreement with respect to the Guaranty and the Contribution Agreement to be executed and delivered pursuant to Section 7.12 by any additional Guarantor, substantially in the form of Exhibit G .

17

    " Lead Arranger " means Wachovia Capital Markets, LLC.

    " L/C Commitment Amount " equals $25,000,000.

    " Lender " means each financial institution from time to time party hereto as a "Lender", together with its respective successors and permitted assigns.  The Issuing Lender shall also be a Lender.

    " Lending Office " means, for each Lender and for each Type of Loan, the office of such Lender specified as such on its signature page hereto or in the applicable Assignment and Acceptance Agreement, or such other office of such Lender as such Lender may notify the Agent in writing from time to time.

    " Letter of Credit " means an irrevocable standby letter of credit in respect of obligations of the Borrower or a Subsidiary incurred pursuant to contracts made or performances undertaken or to be undertaken in the ordinary course of such Person's business which is payable upon presentation of a sight draft and other documents described in the letter of credit, if any, as originally issued pursuant to this Agreement or as amended, modified, extended, renewed or supplemented, and individually any one of them.

    " Letter of Credit Documents " means, with respect to any Letter of Credit, collectively, any application therefor, any certificate or other document presented in connection with a drawing under such Letter of Credit and any other agreement, instrument or other document governing or providing for (a) the rights and obligations of the parties concerned or at risk with respect to such Letter of Credit or (b) any collateral security for any of such obligations.

    " Letter of Credit Liabilities " means, without duplication, at any time and in respect of any Letter of Credit, the sum of (a) the Stated Amount of such Letter of Credit plus (b) the aggregate unpaid principal amount of all Reimbursement Obligations of the Borrower at such time due and payable in respect of all drawings made under such Letter of Credit.  For purposes of this Agreement, a Lender (other than the Lender acting as the Issuing Lender) shall be deemed to hold a Letter of Credit Liability in an amount equal to its participation interest in the related Letter of Credit under Section 2.4, and the Lender acting as the Issuing Lender shall be deemed to hold a Letter of Credit Liability in an amount equal to its retained interest in the related Letter of Credit after giving effect to the acquisition by the Lenders other than the Lender acting as the Issuing Lender of their participation interests under such Section.

    " Leverage Ratio " means as of any date of determination the ratio (expressed as a percentage) of the Total Indebtedness to the Gross Asset Value.

    "LIBOR " means, for any LIBOR Loan for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period.  If for any reason such rate is not available, the term "LIBOR" shall mean, for any LIBOR Loan for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) appearing on the Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on the Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates.

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    " LIBOR Loans " means Loans bearing interest at a rate based on LIBOR.

    " Lien " as applied to the property of any Person means:  (a) any security interest, encumbrance, mortgage, deed to secure debt, deed of trust, pledge, lien, charge or lease constituting a Capitalized Lease Obligation, conditional sale or other title retention agreement, or other security title, encumbrance or preferential arrangement which has the same practical effect of constituting a security interest or encumbrance of any kind, whether voluntarily incurred or arising by operation of law, in respect of any property of such Person, or upon the income or profits therefrom; (b) any arrangement, express or implied, under which any property of such Person is transferred, sequestered or otherwise identified for the purpose of subjecting the same to the payment of Indebtedness or performance of any other obligation in priority to the payment of the general, unsecured creditors of such Person; and (c) the filing of any financing statement under the Uniform Commercial Code or its equivalent in any jurisdiction, other than a financing statement filed in respect of a lease not constituting a Capitalized Lease Obligation pursuant to Section 9-505 (or a successor provision) of the Uniform Commercial Code as in effect in an applicable jurisdiction that is not in the nature of a security interest.

    " Loan " means a Revolving Loan, a Swingline Loan or a Competitive Advance.  Amounts drawn under a Letter of Credit shall also be considered Revolving Loans as provided in Section 2.4.

    " Loan Document " means this Agreement, each Note, each Letter of Credit Document, the Guaranty, the Contribution Agreement, each Joinder Agreement, and each other document or instrument now or hereafter executed and delivered by a Loan Party in connection with, pursuant to or relating to this Agreement.

    " Loan Party " means the Borrower and each other Person who guarantees all or a portion of the Obligations and/or who pledges any collateral security to secure all or a portion of the Obligations.  Schedule 1.1(b) sets forth the Loan Parties in addition to the Borrower as of the Agreement Date.

    " Long-Term Ground Lease " means a ground lease containing the following terms and conditions: (a) a remaining term (exclusive of any unexercised extension options) of forty (40) years or more from the Agreement Date; (b) the right of the lessee to mortgage and encumber its interest in the leased property without the consent of the lessor; (c) the obligation of the lessor to give the holder of any mortgage Lien on such leased property written notice of any defaults on the part of the lessee and agreement of such lessor that such lease will not be terminated until such holder has had a reasonable opportunity to cure or complete foreclosures, and fails to do so; (d) reasonable transferability of the lessee's interest under such lease, including ability to sublease (provided, however, that any right of first refusal, right of first offer, purchase right or other similar right retained by the lessor in such lease or any right to consent to a transferee or sublessee retained by the lessor in such Lease which may not be unreasonably withheld shall not be deemed to restrict such transferability); and (e) such other rights customarily required by mortgagees making a loan secured by the interest of the holder of the leasehold estate demised pursuant to a ground lease.

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    " Material Adverse Effect " means a materially adverse change in or effect on (a) the business, assets, liabilities, financial condition, results of operations or business prospects of the Gables Group, (b) the ability, taken as a whole, of the Borrower and the other Loan Parties to perform their obligations under any Loan Document to which it is a party, (c) the validity or enforceability of any of the Loan Documents, or (d) the rights and remedies of the Lenders and the Agent under any of the Loan Documents.

    " Material Contract " means any contract or other arrangement (other than Loan Documents), whether written or oral, to which the Borrower, any Subsidiary or any other Loan Party is a party as to which the breach, nonperformance, cancellation or failure to renew by any party thereto could reasonably be expected to have a Material Adverse Effect.

     " Material Subsidiary " means any Wholly Owned Subsidiary (other than with respect to clause (a) below, Excluded Subsidiaries) of Borrower or GBP which either (a) has assets which constitute more than five percent (5%) of Gross Asset Value at the end of the most recent fiscal quarter of Borrower, or (b) owns (or is the lessee under a Ground Lease of) an Unencumbered Asset included in determining the Unencumbered Asset Value. 

    " Maximum Competitive Advance " means, with respect to any Competitive Bid made by a Lender, the amount set forth therein as the maximum Competitive Advance which that Lender is willing to make in response to the related Competitive Bid Request.

    " Moody's " means Moody's Investors Service, Inc. and its successors.

    " Multiemployer Plan " means at any time an employee pension benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions, including for these purposes any Person which ceased to be a member of the ERISA Group during such five year period.

    " Multifamily Property " means a residential rental apartment community.  A Multifamily Property may include useable improvements attributable to uses other than multifamily rental apartment use provided that the extent of such improvements does not cause such property to be a Non-Multifamily Property.  Multifamily Properties shall exclude Non‑Multifamily Properties.

    " Negative Pledge " means a provision of any agreement (other than this Agreement or any other Loan Document) that prohibits, restricts or limits the creation or assumption of any Lien on any assets of a Person or entitles another Person to obtain or claim the benefit of a Lien on any assets of such Person; provided , however , that an agreement that establishes a maximum ratio of unsecured debt to unencumbered assets, or of secured debt to total assets, or that otherwise conditions a Person's ability to encumber its assets upon the maintenance of one or more specified ratios that limit such Person's ability to encumber its assets but that do not generally prohibit the encumbrance of its assets, or the encumbrance of specific assets or that limits the encumbrance of specific assets or pools or assets in combination with other assets or pools of assets, shall not constitute a Negative Pledge for purposes of this Agreement.

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    " Net Operating Income " means for each Unencumbered Asset, for any period of time, an amount equal to (i) the aggregate rental and other income from the operation of such Unencumbered Asset during such period; minus (ii) all expenses and other proper charges incurred in connection with the operation of such Unencumbered Asset (including, without limitation, real estate taxes, insurance premiums, management fees, bad debt expenses and rent under ground leases) during such period or properly allocable to such period; but, in any case, before payment of or provision for debt service charges for such period, income taxes for such period and capital expenses for such period, all as determined in accordance with GAAP.  Notwithstanding anything in this Agreement to the contrary, (x) for the purpose of determining Condominium Property Value, no Net Operating Income attributable to a Condominium Property for the period after the end of the calendar quarter immediately preceding the Condominium Conversion with respect to such Condominium Property shall be included, (y) for the purpose of calculating compliance with the covenants set forth in Sections 9.1(e) and (j), Net Operating Income attributable to a Condominium Property following the Condominium Conversion may be included, and (z) in no event shall Net Operating Income include any income, gain or loss in any case realized on the sale of any portion of a Condominium Property.

    " Net Proceeds " means with respect to any Equity Issuance by a Person, the aggregate amount of all cash and the Fair Market Value of all other property received by such Person in respect of such Equity Issuance net of investment banking fees, legal fees, accountants' fees, underwriting discounts and commissions and other customary fees and expenses actually incurred by such Person in connection with such Equity Issuance. 

    " Non-Multifamily Property " means any Property for which greater than twenty percent (20%) of the square footage of the useable improvements therein owned or leased by a Person is attributable to uses other than multifamily rental apartment use.

    " Nonrecourse Indebtedness " means, with respect to a Person, Indebtedness for borrowed money in respect of which recourse for payment (except for customary exceptions for fraud, misapplication of funds, environmental indemnities, and other similar exceptions from non‑recourse liability) is contractually limited to specific assets of such Person encumbered by a Lien securing such Indebtedness; provided that the amount of any claims for liability with respect to any customary exceptions from non‑recourse liability shall not be considered Nonrecourse Indebtedness.

    " Note " means a Revolving Note, a Swingline Note or a Competitive Advance Note.

    " Notes Payable " means, from time to time and at any time, those certain items included in the "Notes Payable" line item of the financial statements of Borrower and its Subsidiaries as contemplated in Section 6.1(g) and Article VIII, as applicable.

    " Notes Receivable " mean mortgage and notes receivable and reimbursement agreements (to the extent obligations are payable under such reimbursement agreements), including interest payments thereunder, of Borrower or any Subsidiary in a Person (other than Borrower or its Subsidiaries).

    " Notice of Borrowing " means a notice in the form of Exhibit H to be delivered to the Agent pursuant to Section 2.1(b) evidencing the Borrower's request for a borrowing of Revolving Loans.

 

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    " Notice of Continuation " means a notice in the form of Exhibit I to be delivered to the Agent pursuant to Section 2.9 evidencing the Borrower's request for the Continuation of a LIBOR Loan.

    " Notice of Conversion " means a notice in the form of Exhibit J to be delivered to the Agent pursuant to Section 2.10 evidencing the Borrower's request for the Conversion of a Loan from one Type to another Type.

    " Notice of Swingline Borrowing " means a notice in the form of Exhibit K to be delivered to the Agent pursuant to Section 2.2 evidencing the Borrower's request for a borrowing of Swingline Loans.

    " Obligations " means, individually and collectively: (a) the aggregate principal balance of, and all accrued and unpaid interest on, all Loans; (b) all Reimbursement Obligations and all other Letter of Credit Liabilities; and (c) all other indebtedness, liabilities, obligations, covenants and duties of the Borrower and the other Loan Parties owing to the Agent, the Swingline Lender, the Issuing Lender or any Lender of every kind, nature and description, under or in respect of this Agreement or any of the other Loan Documents, including, without limitation, the Fees and indemnification obligations, whether direct or indirect, absolute or contingent, due or not due, contractual or tortious, liquidated or unliquidated, and whether or not evidenced by any promissory note.

    " Participant " has the meaning given that term in Section 12.5(c).

    " Patriot Act " means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as the same may be amended from time to time, and corresponding provisions of future laws.

    " PBGC " means the Pension Benefit Guaranty Corporation and any successor agency.

    " Performance Pricing Determination Date " means each date on which the Credit Rating changes.               

    " Permitted Liens " means (a) Liens securing taxes, assessments, governmental charges or levies (excluding any Lien imposed pursuant to the provisions of ERISA) or claims for labor, material and supplies which are not at the time required to be paid or discharged under Section 7.6; (b) Liens on deposits or pledges made in connection with, or to secure payment of worker's compensation, unemployment insurance, old age pensions or other social security obligations, and deposits with utility companies and other similar deposits in the ordinary course of business; (c) encumbrances consisting of easements, rights of way, covenants, zoning and other land-use restrictions, restrictions on the use of real property and defects and irregularities in the title thereto, landlord's or lessor's liens under leases to which the Borrower or any Guarantor is a party or bound, and other minor non-monetary liens or encumbrances on properties, none of which interferes materially and adversely with the use of the property affected in the ordinary course of business and which matters do not make title to such property unmarketable by the conveyancing standards in effect where such property is located; (d) restrictions or limitations on sale of the property established pursuant to the contribution or other acquisition agreements pursuant to which the applicable Borrower or Guarantor acquired such property; (e) Liens on Properties other than Unencumbered Assets in respect of judgments or awards the existence of which does not constitute a Default or Event of Default; and (f) with respect to any Unencumbered Asset of Borrower or Guarantors, Liens and encumbrances expressly consented to in writing by the Agent.

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    " Person " means an individual, corporation, partnership, limited liability company, joint stock company, association, trust or unincorporated organization, joint venture, a government or any agency or political subdivision thereof, or any other entity of whatever nature.

    " Plan " means at any time an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code and either (a) is maintained, or contributed to, by any member of the ERISA Group for employees of any member of the ERISA Group or (b) has at any time within the preceding five years been maintained, or contributed to, by any Person which was at such time a member of the ERISA Group for employees of any Person which was at such time a member of the ERISA Group.

    " Post‑Default Rate " means, in respect of any principal of any Loan or any other Obligation that is not paid when due (whether at stated maturity, by acceleration, by optional or mandatory prepayment or otherwise), a rate per annum equal to four percent (4.0%) plus the Base Rate as in effect from time to time.

    " Preferred Dividends " means, for any given period and without duplication, all Restricted Payments accrued or paid (and in the case of Restricted Payments paid, which were not accrued during a prior period) during such period on Preferred Stock issued by the Borrower, a Subsidiary or any other Loan Party, plus all Stock Repurchases during such period of Preferred Stock issued by the Borrower, a Subsidiary or any other Loan Party that are in the nature of a periodic regularly scheduled or mandatory purchase, put or similar repurchases, excluding in all events scheduled or mandatory redemptions or repurchases which relate to all of the applicable issuance and, to the extent not pursuant to a redemption or repurchase schedule which requires two or more periodic redemptions or repurchases, any significant part of the applicable issuance.  Preferred Dividends shall not include dividends or distributions paid or payable (a) solely in Equity Interests (other than Redeemable Preferred Stock) payable to holders of such class of Equity Interests; (b) to the Borrower or a Subsidiary; or (c) constituting or resulting in the redemption of Preferred Stock, other than scheduled redemptions not constituting balloon, bullet or similar redemptions in full.

    " Preferred Stock " means, with respect to any Person, Equity Interests in such Person which are entitled to preference or priority over any other Equity Interest in such Person in respect of the payment of dividends or other payments or distribution of assets over the holder of any other Equity Interest.

    " Pricing Level " means one of the following four pricing levels, as applicable, based on the higher of the Credit Ratings by S&P and Moody's, provided, that during any period that the Borrower has no Credit Rating, Pricing Level 4 would be the applicable Pricing Level:

"Pricing Level 1" means the Pricing Level which would be applicable for so long as the Credit Rating is greater than or equal to BBB+ by S&P or Baa1 by Moody's;

 

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"Pricing Level 2" means the Pricing Level which would be applicable for so long as (a) the Credit Rating is equal to BBB by S&P or Baa2 by Moody's, and (b) Pricing Level 1 is not applicable;

"Pricing Level 3" means the Pricing Level which would be applicable for so long as (a) the Credit Rating is equal to BBB- by S&P or Baa3 by Moody's and (b) Pricing Levels 1 and 2 are not applicable; and

"Pricing Level 4" means the Pricing Level which would be applicable for so long as (a) the Credit Rating is less than BBB- by S&P or Baa3 by Moody's or the Borrower has no Credit Rating from either S&P or Moody's, and (b)  Pricing Levels 1, 2 and 3 are not applicable.

If the Borrower shall only obtain a Credit Rating from one of the Rating Agencies, the Borrower shall be entitled to the benefit of the applicable Pricing Level based on the Credit Rating issued by such Rating Agency.

    " Prime Rate " means the rate of interest per annum announced publicly by the Lender acting as the Agent as its prime rate from time to time.  The Prime Rate is not necessarily the best or the lowest rate of interest offered by the Lender acting as the Agent or any other Lender.

    " Principal Office " means the office of the Agent located at One Wachovia Center, Charlotte, North Carolina, or such other office of the Agent as the Agent may designate from time to time.

    " Property " means any parcel of real property, together with all improvements thereon, owned or leased pursuant to a Ground Lease by Borrower, GBP or any of their respective Subsidiaries or Unconsolidated Affiliates.

    " Qualified Intermediary " means any Person serving as a "qualified intermediary" and/or "exchange accommodation title holder" for purposes of a sale or exchange pursuant to and qualifying for tax treatment under Section 1031 of the Internal Revenue Code.

    " Rating Agencies " means S&P and Moody's.

    " RCA " means Real Capital Analytics, Inc.

    " Recalculation Date " means each March 31, June 30, September 30 and December 31, with the first recalculation date being June 30, 2005.

    " Redeemable Preferred Stock " of any Person means any Preferred Stock issued by such Person which is at any time prior to the Termination Date either (i) mandatorily redeemable for cash (by sinking fund or similar payments or otherwise) or (ii) redeemable for cash at the option of the holder thereof.

    " Register " has the meaning given that term in Section 12.5(e).

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    " Regulatory Change " means, with respect to any Lender, any change in Applicable Law effective after the Agreement Date (including without limitation, Regulation D of the Board of Governors of the Federal Reserve System) or the adoption or making after such date of any interpretation, directive or request applying to a class of banks, including such Lender, of or under any Applicable Law (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) by any Governmental Authority or monetary authority charged with the interpretation or administration thereof or compliance by any Lender with any request or directive regarding capital adequacy.

    " Reimbursement Obligation " means the absolute, unconditional and irrevocable obligation of the Borrower to reimburse the Issuing Lender for any drawing honored by the Issuing Lender under a Letter of Credit, but only as and to the extent that such Reimbursement Obligation has not been repaid by a Revolving Loan in accordance with Section 2.4.

    " REIT " means a Person qualifying for treatment as a "real estate investment trust" under the Internal Revenue Code.

    " Requisite Lenders " means, as of any date, Lenders whose aggregate Commitment Percentage equals or exceeds 66-2/3% (excluding Defaulting Lenders who, accordingly, are not entitled to vote), or if the Commitments are no longer in effect, Lenders holding at least 66-2/3% of the aggregate outstanding principal amount of the Loans and participations in Letters of Credit (excluding Defaulting Lenders who, accordingly, are not entitled to vote).

    " Responsible Officer " means (a) with respect to the General Partner (acting as a signatory for Borrower), the General Partner's President, chief financial officer, chief accounting officer or any other senior officer, (b) with respect to any other Loan Party, such Loan Party's chief executive officer, chief financial officer, or any other senior officer, and (c) with respect to any Lender, any officer, partner, managing member or similar person apparently authorized to execute documents on behalf of such Lender.  A Responsible Officer shall also include any other person or officer specifically authorized and designated as such by the applicable Person.

    " Restricted Payment " means any dividend or other distribution, direct or indirect, on account of any Equity Interest of GBP, General Partner, Borrower or any of the Subsidiaries now or hereafter outstanding, except a dividend payable solely in Equity Interests of identical class to the holders of that class.

    " Revolving Loan " means a loan made by a Lender to the Borrower pursuant to Section 2.1(a).

    " Revolving Note " has the meaning given that term in Section 2.11(a).

    " Secured Indebtedness " means as of any date the Total Indebtedness of Borrower, its Subsidiaries and the other Loan Parties outstanding and that is secured in any manner by any Lien (other than a Permitted Lien).  Secured Indebtedness includes, without double-counting, Secured Recourse Indebtedness.

    " Secured Recourse Indebtedness " means as of any date any Secured Indebtedness that is recourse to Borrower.

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    " Securities Act " means the Securities Act of 1933, as amended from time to time, together with all rules and regulations issued thereunder.

    " Short-Term Ground Lease " means any ground lease which either (i) is not a Long-Term Ground Lease or (ii) has a Qualified Intermediary as the lessor.

    " Solvent " means, when used with respect to any Person, that (a) the fair value and the fair salable value of its assets are each in excess of the fair valuation of its total liabilities (including all contingent liabilities computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that could reasonably be expected to become an actual and matured liability); (b) such Person is able to pay its debts or other obligations in the ordinary course as they mature; and (c) such Person has capital not unreasonably small to carry on its business and all business in which it proposes to be engaged.

    " S&P " means Standard & Poor's Rating Services, a division of The McGraw-Hill Companies, Inc. and its successors.

    " Stated Amount " means the amount available to be drawn by a beneficiary under a Letter of Credit from time to time, as such amount may be increased, reinstated or reduced from time to time in accordance with the terms of such Letter of Credit.

    " Stock Repurchases " means (a) any redemption, conversion, exchange, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any Equity Interest of GBP, General Partner, Borrower or any of the Subsidiaries now or hereafter outstanding; and (b) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire any Equity Interests of GBP, General Partner, Borrower or any of the Subsidiaries now or hereafter outstanding.

    " Subsidiary " means, for any Person, any corporation, partnership, limited liability company or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership, limited liability company or other entity (without regard to the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person, and shall include all Persons the accounts of which are consolidated with those of such Person pursuant to GAAP; provided however, GDTRS shall not be a treated as a Subsidiary of Borrower other than for purposes of Sections 6.1(s), 7.4, 7.7 and 7.10 of this Agreement.

    " Swingline Commitment " means the Swingline Lender's obligation to make Swingline Loans pursuant to Section 2.2 in an amount up to, but not exceeding, $50,000,000, as such amount may be reduced from time to time in accordance with the terms hereof.

    " Swingline Lender " means Wachovia Bank, together with its successors and assigns.

    " Swingline Loan " means a loan made by the Swingline Lender to the Borrower pursuant to Section 2.2(a).

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    " Swingline Note " means the promissory note of the Borrower payable to the order of the Swingline Lender in a principal amount equal to the amount of the Swingline Commitment as originally in effect and otherwise duly completed, substantially in the form of Exhibit L .

    " Tangible Net Worth " means, as of any given time: (a) the Gross Asset Value less (b) the Total Indebtedness.

    " Tax Exempt Bonds " mean tax exempt revenue bonds or similar instruments issued by a Governmental Authority on behalf of Borrower, GBP, any Subsidiary, or any of Borrower's, GBP's or the Subsidiaries' Unconsolidated Affiliates (other than Excluded Unconsolidated Affiliates) to finance Multifamily Properties of such Person.

    " Taxes " has the meaning given that term in Section 3.12.

    " Termination Date " means June 30, 2008, as the same may be extended as provided in Section 2.17.

    " Titled Agent " means any of the Lead Arranger, the Co-Documentation Agent, Co‑Syndication Agent and their respective successors and permitted assigns.

    " Total Commitment " means, as of any date, the sum of the then current Commitments of the Lenders.  As of the Effective Date, the Total Commitment (including the Swingline Commitment) is $400,000,000.  After the Effective Date, the aggregate amount of the Total Commitment may be increased to an amount not exceeding $600,000,000, provided that such increase is in accordance with the provisions of Section 2.15.

    " Total Indebtedness " means, as of a given date, the sum of (a) the Consolidated Indebtedness plus (b) the Borrower's, GBP's and the Subsidiaries' pro rata share of Indebtedness of their Unconsolidated Affiliates (other than Excluded Unconsolidated Affiliates).

    " TRS " means a Subsidiary of the Borrower or GBP that is a "taxable REIT subsidiary" within the meaning of Section 856(l) of the Internal Revenue Code.

    " Type " with respect to any Loan, refers to whether such Loan is a LIBOR Loan or Base Rate Loan.

    " Unconsolidated Affiliate " means, with respect to any Person, any other Person which is not a Subsidiary of such Person; provided however, GDTRS shall not be treated as an Unconsolidated Affiliate of Borrower.

    " Unencumbered Adjusted Net Operating Income " means as of any date the sum of (a)(i) the aggregate amount of the Net Operating Income from the Unencumbered Assets for the most recently ended fiscal quarter of Borrower multiplied by (ii) four (4), less (b) the Capital Reserve for the Unencumbered Assets.

    "Unencumbered Asset Certificate" has the meaning given that term in Section 8.3.

    " Unencumbered Asset Value " means, as of any date, the sum (without duplication) of: 

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(a)             the sum of (i) Unencumbered Adjusted Net Operating Income (excluding any Unencumbered Adjusted Net Operating Income attributable to assets included within clauses (b)‑(f) of this definition) as determined for the most recent fiscal quarter of Borrower most recently ended divided by (ii) the Capitalization Rate;

(b)             the GAAP book value of any Unencumbered Asset which has been owned (or leased pursuant to a Ground Lease) for less than six (6) full fiscal quarters;

(c)              the amount of Construction-in-Process by the Borrower and Guarantors included in Unencumbered Assets with respect to a Multifamily Property that is not a Completed Property;

(d)              the development cost determined in accordance with GAAP as of such date of Construction-in-Process with respect to a Multifamily Property that is not a Completed Property leased by Borrower or a Guarantor from a Qualified Intermediary pursuant to a Ground Lease provided such Multifamily Property is a "replacement property" for other Property of Borrower or such Guarantor to effectuate a like-kind exchange pursuant to Section 1031 of the Internal Revenue Code; provided that the aggregate amount under this clause (d) and clause (e) below shall not exceed 10% of the combined Unencumbered Asset Value;

(e)              Eligible QI Cash and Cash Equivalents of Borrower or a Guarantor as of such date, provided however , the aggregate amount associated with this clause (e) and clause (d) above shall not exceed 10% of the combined Unencumbered Asset Value; and

(f)               the Condominium Property Value.

Unencumbered Asset Value shall be calculated on a pro forma basis as if assets acquired during the relevant period were owned as of the beginning of the relevant period, and all assets disposed of during the relevant period were not owned during any portion of the relevant period.

    " Unencumbered Assets " means every Multifamily Property, Condominium Property or Construction-in-Process with respect to a Multifamily Property that satisfies all of the following requirements: 

(a)                 such Multifamily Property, Condominium Property or Construction-in-Process is (i) owned in fee simple solely by Borrower or a Guarantor (except for any individual units within a Condominium Property that have been sold to unaffiliated third party purchasers), or (ii) leased solely by Borrower or a Guarantor pursuant to a Ground Lease;

(b)                 unless such property constitutes Construction-in-Process that is not a Completed Property or a Condominium Property that is being improved following Condominium Conversion, such Multifamily Property or Condominium Property is a fully constructed Property for which valid certificates of occupancy have been issued that are in full force and which property is in service;

(c)                neither such Multifamily Property, Condominium Property or Construction-in-Process, nor any interest of Borrower or such Guarantor therein, is subject to any Lien (other than Permitted Liens) or to any Negative Pledge;

 

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(d)                  if such Multifamily Property, Condominium Property or Construction-in-Process is owned or leased by a Guarantor, (i) none of Borrower's or any of Guarantor's direct or indirect ownership interest in such Guarantor is subject to any Lien (other than Permitted Liens) or to any Negative Pledge, and (ii) such Guarantor has not directly or indirectly guarantied or assumed liability for any Indebtedness of any other Person (except only pursuant to the Loan Documents);

(e)                 such Multifamily Property, Condominium Property or Construction-in-Process is free of all structural defects, damage by fire or other casualty or subject to any condemnation or other taking (unless the damage therefrom has been fully repaired), title defects, environmental conditions or other adverse matters which, collectively, materially impair the value of such property as reasonably determined by Agent, except with respect to any environmental conditions to the extent that a credit-worthy third party has provided an indemnification on reasonable terms and such Person is reasonably likely to honor such indemnification, all as reasonably determined by the Agent, in respect of any and all costs associated with such environmental conditions;

(f)                 if such Property constitutes Construction-in-Process and construction of above-ground improvements has commenced or a Condominium Property and improvements or alterations thereto have commenced, such construction has not been terminated, suspended or otherwise interrupted for more than 120 consecutive days (unless such delay is a result of force majeure);

(g)                 such Multifamily Property, Condominium Property or Construction-in-Process is not an Excluded Property; and

(h)                 such Multifamily Property, Condominium Property or Construction-in-Process has been designated by the Borrower as an "Unencumbered Asset" on Schedule 6.1(w) or on an Unencumbered Asset Certificate delivered by the Borrower to the Agent pursuant to Section 8.3.

    " Unimproved Land " means any land of the Borrower, its Subsidiaries or the other Loan Parties, or in which the Borrower, any of its Subsidiaries or another Loan Party has an interest (either directly or indirectly, through an Unconsolidated Affiliate or otherwise) with respect to which the commencement of grading, construction of improvements or infrastructure has not yet commenced and for which no such construction is planned to commence within twelve (12) months of the date of determination.

    " Unsecured Implied Debt Service " means an amount equal to the debt service that would be payable on the Unsecured Indebtedness for the fiscal quarter most recently ending, multiplied by four (4), calculated based on a thirty (30) year mortgage style amortization schedule using an interest rate equal to the interest rate on ten year obligations issued by the United States Treasury most recently prior to the date of determination plus one and one-fourth percent (1.25%).

    " Unsecured Indebtedness " means Total Indebtedness of the type described in clauses (a) and (b) of the definition of Indebtedness and any Contingent Liabilities with respect thereto outstanding at any time which is not secured by a Lien, other than any Permitted Liens.

    " Unsecured Interest Expense " means, for a given period, Interest Expense for such period with respect to Unsecured Indebtedness.

 

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    " Wachovia Bank " means Wachovia Bank, National Association and its successors.

    " Wholly Owned Subsidiary " means any Subsidiary of Borrower or GBP in respect of which all of the equity securities or other ownership interests (other than, in the case of a corporation, directors' qualifying shares) are at the time directly or indirectly owned by Borrower, GBP, General Partner or any other member of the Gables Group.

Section 1.2      General; References to Times . 

    Unless otherwise indicated, all accounting terms, ratios and measurements shall be interpreted or determined in accordance with GAAP in effect as of the Agreement Date.  References in this Agreement to "Sections", "Articles", "Exhibits" and "Schedules" are to sections, articles, exhibits and schedules herein and hereto unless otherwise indicated.  references in this Agreement to any document, instrument or agreement (a) shall include all exhibits, schedules and other attachments thereto, (b) shall include all documents, instruments or agreements issued or executed in replacement thereof, to the extent permitted hereby and (c) shall mean such document, instrument or agreement, or replacement or predecessor thereto, as amended, supplemented, restated or otherwise modified as of the date of this Agreement and from time to time thereafter to the extent not prohibited hereby and in effect at any given time.  Wherever from the context it appears appropriate, each term stated in either the singular or plural shall include the singular and plural, and pronouns stated in the masculine, feminine or neuter gender shall include the masculine, the feminine and the neuter.  Unless explicitly set forth to the contrary, a reference to "Subsidiary" means a Subsidiary of the Borrower or a Subsidiary of such Subsidiary and a reference to an "Affiliate" means a reference to an Affiliate of the Borrower.  Titles and captions of Articles, Sections, subsections and clauses in this Agreement are for convenience only, and neither limit nor amplify the provisions of this Agreement.  Unless otherwise indicated, all references to time are references to Charlotte, North Carolina time.  Notwithstanding anything to the contrary in this Agreement, for the purposes of this Agreement the assets, liabilities, income, and loss of GDTRS shall not be consolidated with the assets, liabilities, income and loss of Borrower and for the purposes of this Agreement, the assets, liabilities, income, and loss of GDTRS shall be excluded from all covenant calculations made under this Agreement (provided that the Investment of Borrower and its Subsidiaries in GDTRS shall be included in Gross Asset Value as provided by the definition thereof and shall be permitted subject to, and as provided by Section 9.3).

ARTICLE II. CREDIT FACILITY

Section 2.1           Revolving Loans . 

(a)                 Generally .  Subject to the terms and conditions hereof, during the period from the Effective Date to but excluding the Termination Date, each Lender severally and not jointly agrees to make Revolving Loans to the Borrower in an aggregate principal amount at any one time outstanding up to, but not exceeding, the amount of such Lender's Commitment.  Subject to the terms and conditions of this Agreement, during the period from the Effective Date to but excluding the Termination Date, the Borrower may borrow, repay and reborrow Revolving Loans hereunder.

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(b)               Requesting Revolving Loans .  The Borrower shall give the Agent notice pursuant to a Notice of Borrowing or telephonic notice of each borrowing of Revolving Loans.  Each Notice of Borrowing shall be delivered to the Agent (i) before 11:00 a.m. in the case of LIBOR Loans, on the date three (3) Business Days prior to the proposed date of such borrowing and (ii) before 10:00 a.m. in the case of Base Rate Loans, on the day of the proposed date of such borrowing.  Any such telephonic notice shall include all information to be specified in a written Notice of Borrowing and shall be promptly confirmed in writing by the Borrower pursuant to a Notice of Borrowing sent to the Agent by telecopy on the same day of the giving of such telephonic notice.  The Agent will transmit by telecopy the Notice of Borrowing (or the information contained in such Notice of Borrowing) or the information contained in a telephonic notice of borrowing (if such telephonic notice is received prior to a Notice of Borrowing) to each Lender promptly upon receipt by the Agent.  Each Notice of Borrowing or telephonic notice of each borrowing shall be irrevocable once given and binding on the Borrower.

(c)               Disbursements of Revolving Loan Proceeds .  No later than 1:00 p.m. on the date specified in the Notice of Borrowing, each Lender will make available for the account of its applicable Lending Office to the Agent at the Principal Office, in immediately available funds, the proceeds of the Revolving Loan to be made by such Lender.  Subject to satisfaction of the applicable conditions set forth in Article V for such borrowing, the Agent will make the proceeds of such borrowing available to the Borrower in Dollars, in immediately available funds, no later than 2:00 p.m. on the date and at the account specified by the Borrower in such Notice of Borrowing. 

Section 2.2            Swingline Loans . 

(a)               Swingline Loans .  Subject to the terms and conditions hereof, during the period from the Effective Date to but excluding the Termination Date, the Swingline Lender agrees to make Swingline Loans to the Borrower in an aggregate principal amount at any one time outstanding up to, but not exceeding, the amount of the Swingline Commitment.  If at any time the aggregate principal amount of the Swingline Loans outstanding at such time exceeds the Swingline Commitment in effect at such time, the Borrower shall immediately pay the Agent for the account of the Swingline Lender the amount of such excess.  Subject to the terms and conditions of this Agreement, the Borrower may borrow, repay and reborrow Swingline Loans hereunder.

(b)                 Procedure for Borrowing Swingline Loans .  The Borrower shall give the Agent and the Swingline Lender notice pursuant to a Notice of Swingline Borrowing or telephonic notice of each borrowing of a Swingline Loan.  Each Notice of Swingline Borrowing shall be delivered to the Swingline Lender no later than 11:00 a.m. on the proposed date of such borrowing.  Any such telephonic notice shall include all information to be specified in a written Notice of Swingline Borrowing and shall be promptly confirmed in writing by the Borrower pursuant to a Notice of Swingline Borrowing sent to the Swingline Lender by telecopy on the same day of the giving of such telephonic notice.  On the date of the requested Swingline Loan and subject to satisfaction of the applicable conditions set forth in Article V for such borrowing, the Swingline Lender will make the proceeds of such Swingline Loan available to the Borrower in Dollars, in immediately available funds, at the account specified by the Borrower in the Notice of Swingline Borrowing not later than 2:00 p.m. on such date.

 

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(c)               Interest .  Swingline Loans shall bear interest at a per annum rate equal to either (i) the Adjusted Eurodollar Rate for an Interest Period of 7 days plus the Applicable Margin for LIBOR Loans, (ii) the Base Rate plus the Applicable Margin for Base Rate Loans, as specified in the Notice of Swingline Borrowing, or (iii) a transaction rate mutually agreed to in writing by Borrower and Swingline Lender in connection with any particular Swingline Loan.  Interest payable on Swingline Loans is solely for the account of the Swingline Lender.  All accrued and unpaid interest on Swingline Loans shall be payable on the dates and in the manner provided in Section 2.5 with respect to interest on Base Rate Loans or LIBOR Loans, as applicable (except as the Swingline Lender and the Borrower may otherwise agree in writing in connection with any particular Swingline Loan).

(d)                 Swingline Loan Amounts, Etc .  Each Swingline Loan shall be in the minimum amount of $1,000,000 and integral multiples of $100,000 or such other minimum amounts agreed to by the Swingline Lender and the Borrower.  Any voluntary prepayment of a Swingline Loan must be in integral multiples of $100,000 or the aggregate principal amount of all outstanding Swingline Loans (or such other minimum amounts upon which the Swingline Lender and the Borrower may agree) and in connection with any such prepayment, the Borrower must give the Swingline Lender prior written notice thereof no later than 10:00 a.m. on the date of such prepayment.  The Swingline Loans shall, in addition to this Agreement, be evidenced by the Swingline Note.

(e)                Repayment and Participations of Swingline Loans .  The Borrower agrees to repay each Swingline Loan within fifteen (15) Business Days after the date such Swingline Loan was made.  Notwithstanding the foregoing, the Borrower shall repay the entire outstanding principal amount of, and all accrued but unpaid interest on, the Swingline Loans on the Termination Date (or such earlier date as the Swingline Lender and the Borrower may agree in writing).  In the event that the Agent has not either (x) received a Notice of Borrowing or a Competitive Bid Request indicating that such Swingline Loan is to be repaid with the proceeds thereof within fifteen (15) Business Days of the date such Swingline Loan was made or (y) received notice from the Borrower that it intends to repay such Swingline Loan within fifteen (15) Business Days of the date such Swingline Loan was made and, in the case of this clause (y) only, such Swingline Loan is not repaid by 11:30 a.m. on such date, the Swingline Lender may, on behalf of the Borrower (which hereby irrevocably directs the Swingline Lender to act on its behalf), request a borrowing of Revolving Loans (which shall be Base Rate Loans) from the Lenders in an amount equal to the principal balance of such Swingline Loan.  The limitations of Section 3.5(a) shall not apply to any borrowing of Base Rate Loans made pursuant to this subsection.  The Swingline Lender shall give notice to the Agent of any such borrowing of Base Rate Loans not later than 12:00 noon on the proposed date of such borrowing, and the Agent shall promptly give notice to the Lenders of any such borrowing of Base Rate Loans.  No later than 2:00 p.m. on such date, each Lender will make available to the Agent at the Principal Office for the account of Swingline Lender, in immediately available funds, the proceeds of the Base Rate Loan to be made by such Lender.  The Agent shall pay the proceeds of such Base Rate Loans to the Swingline Lender, which shall apply such proceeds to repay such Swingline Loan.  If the Lenders are prohibited from making Loans required to be made under this subsection for any reason, including without limitation, the occurrence of any of the Events of Default described in Sections 10.1(f) or 10.1(g), each Lender shall purchase from the Swingline Lender, without recourse or warranty, an undivided interest and participation to the extent of such Lender's Commitment Percentage of such Swingline Loan, by directly purchasing a participation in such Swingline Loan in such amount (regardless of whether the conditions precedent thereto set forth in Section 5.2 are then satisfied, whether or not the Borrower has submitted a Notice of Borrowing and whether or not the Commitments are then in effect, any Event of Default exists or all the Loans have been accelerated) and paying the proceeds thereof to the Agent for the account of the Swingline

 

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Lender in Dollars and in immediately available funds.  If such amount is not in fact made available to the Swingline Lender by any Lender, the Swingline Lender shall be entitled to recover such amount on demand from such Lender, together with accrued interest thereon for each day from the date of demand thereof, at the Federal Funds Rate.  If such Lender does not pay such amount forthwith upon the Swingline Lender's demand therefor, and until such time as such Lender makes the required payment, the Swingline Lender shall be deemed to continue to have outstanding Swingline Loans in the amount of such unpaid participation obligation for all purposes of the Loan Documents (other than those provisions requiring the other Lenders to purchase a participation therein).  Further, such Lender shall be deemed to have assigned any and all payments made of principal and interest on its Loans, and any other amounts due to it hereunder, to the Swingline Lender to fund Swingline Loans in the amount of the participation in Swingline Loans that such Lender failed to purchase pursuant to this Section until such amount has been purchased (as a result of such assignment or otherwise).  A Lender's obligation to purchase such a participation in a Swingline Loan shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including without limitation, (i) any claim of setoff, counterclaim, recoupment, defense or other right which such Lender or any other Person may have or claim against the Agent, the Swingline Lender or any other Person whatsoever, (ii) the occurrence or continuation of a Default or Event of Default (including without limitation, any of the Defaults or Events of Default described in Sections 10.1(f) or 10.1(g)) or the termination of any Lender's Commitment, (iii) the existence (or alleged existence) of an event or condition which has had or could have a Material Adverse Effect, (iv) any breach of any Loan Document by the Agent, any Lender or the Borrower or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.  Upon the receipt by Swingline Lender of any payment in respect of any Swingline Loan, Swingline Lender shall promptly pay to each Lender that has acquired and funded a participation therein under this Section 2.2(e) such Lender's Commitment Percentage of such payment; provided, however, that in the event that such payment received by the Swingline Lender is required to be returned, such Lender will return to the Swingline Lender any portion thereof previously distributed by the Swingline Lender to it.

Section 2.3         Competitive Advances . 

(a)                 For so long as the Borrower maintains a Credit Rating of BBB- or better from S&P or Baa3 or better from Moody's, subject to the terms and conditions hereof, at any time and from time to time from the Effective Date to but excluding the Termination Date, and provided that no Default or Event of Default shall have occurred and be continuing, Borrower may request and each Lender may in its sole and absolute discretion make Competitive Advances to Borrower in such principal amounts as Borrower may request pursuant to a Competitive Bid Request that do not result in (i) the aggregate principal amount outstanding under the Competitive Advance Notes (after giving effect to all amounts requested thereunder) being in excess of an amount equal to 50% of the aggregate amount of the Commitments, and (ii) the aggregate principal amount outstanding under the Notes (after giving effect to all amounts requested thereunder) plus the Letter of Credit Liabilities being in excess of the aggregate amount of the Commitments.

 

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(b)                Borrower shall request Competitive Advances by submitting a duly completed Competitive Bid Request to the Agent, which Competitive Bid Request shall specify the relevant date, amount and maturity for the proposed Competitive Advance.  Each request shall be for an advance on the basis of a margin over the Adjusted Eurodollar Rate and shall have a maturity date equal to one of the Interest Periods not exceeding 180 days (subject to the limitations therein).  In the event that the Borrower shall have submitted two (2) Competitive Bid Requests in any calendar month, any additional Competitive Bid Requests during such month shall be accompanied by payment of a nonrefundable $2500 competitive bid request fee for the account of the Agent.  Any Competitive Advance shall be a LIBOR Loan.  The proposed funding date shall be a Business Day.  The Agent shall incur no liability whatsoever hereunder in acting upon any Competitive Bid Request purportedly made by a Responsible Officer of Borrower, which hereby agrees to indemnify the Agent from any loss, cost, expense or liability as a result of so acting.  The Competitive Bid Request must be received by the Agent not later than 10:00 a.m. on a Business Day that is at least four (4) Business Days prior to the date of the proposed Competitive Advance.

(c)                 Each Competitive Bid Request must be made for a Competitive Advance of at least $3,000,000 and shall be in an integral multiple of $1,000,000.

(d)                 No Competitive Bid Request shall be made for a Competitive Advance with a maturity of less than 7 days or more than 180 days, or with a maturity date subsequent to the Termination Date.  The Borrower may request offers to make Competitive Advances for up to six (6) Interest Periods in a single Competitive Bid Request.

(e)                 The Agent shall, promptly after receipt of a Competitive Bid Request, provide the Lenders a copy thereof by telecopier.  Any Lender may, by written notice to the Agent, advise the Agent that it elects not to be so notified of Competitive Bid Requests, in which case the Agent shall not notify such Lender of the Competitive Bid Request.

(f)                 Each Lender receiving a Competitive Bid Request may, in its sole and absolute discretion, make or not make a Competitive Bid responsive to the Competitive Bid Request.  A Lender shall have no obligation to make a Competitive Bid.  Each Competitive Bid shall be submitted so as to be received by the Agent not later than 10:00 a.m. (or, in the case of the Lender acting as Agent, not later than 9:00 a.m.) on the date which is three (3) Business Days prior to the requested Competitive Advance.  Any Competitive Bid received by the Agent after 10:00 a.m. (or 9:00 a.m. in the case of the Lender acting as Agent) on such date shall be disregarded for purposes of this Agreement.  The Agent shall incur no liability whatsoever hereunder in acting upon any Competitive Bid purportedly made by a Responsible Officer of a Lender, each of which hereby agrees to indemnify the Agent from any loss, cost, expense or liability as a result of so acting with respect to that Lender.

(g)                 Each Competitive Bid shall specify the margin over the Adjusted Eurodollar Rate for the offered Maximum Competitive Advance set forth in the Competitive Bid.  The Maximum Competitive Advance offered by a Lender in a Competitive Bid shall not exceed the Competitive Advance requested and may be less than the Competitive Advance requested by Borrower in the Competitive Bid Request, but shall be an integral multiple of $1,000,000.  Any Competitive Bid which offers an interest rate other than a margin over the Adjusted Eurodollar Rate, is in a form other than as set forth in Exhibit C or which otherwise contains any term, condition, qualification or provision not contained in the Competitive Bid Request (including without limitation a requirement of a minimum advance) or is received after the time set forth in this Section 2.3(g) shall be disregarded for purposes of this Agreement.  A Competitive Bid once submitted to the Agent shall, subject to the terms of Section 4.3 and Article V, be irrevocable until 12:00 noon on the date which is two (2) Business Days prior to the requested Competitive Advance set forth in the related Competitive Bid Request, and shall expire by its terms at such time unless accepted by Borrower on or prior thereto.

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(h)                 Promptly after 10:00 a.m. on the date which is three (3) Business Days prior to the date of the proposed Competitive Advance, the Agent shall notify Borrower of the names of the Lenders providing Competitive Bids to the Agent at or before 10:00 a.m. on that date (or 9:00 a.m. in the case of the Lender acting as Agent) and satisfying the conditions of this Section 2.3 and the Maximum Competitive Advance and margin over the Adjusted Eurodollar Rate set forth by each such Lender in its Competitive Bid.

(i)                 Borrower may, in its sole and absolute discretion, reject any or all of the Competitive Bids.  If Borrower accepts any Competitive Bid, by telephone or in writing (provided that any acceptance by telephone shall be confirmed promptly by hand delivery or telecopy of such acceptance signed by Borrower), the following shall apply:  (i)  Borrower must accept all Competitive Bids at all lower margins over the Adjusted Eurodollar Rate before accepting any portion of a Competitive Bid at a higher margin over the Adjusted Eurodollar Rate, (ii) if two or more Lenders have submitted a Competitive Bid at the same margin, then Borrower must accept either all of such Competitive Bids or accept such Competitive Bids in the same proportion as the Maximum Competitive Advance of each Lender bears to the aggregate Maximum Competitive Advances of all such Lenders, (iii) Borrower may not accept Competitive Bids for an aggregate amount in excess of the requested Competitive Advance set forth in the Competitive Bid Request, and (iv) the aggregate principal amount of the Competitive Bids accepted must be at least $3,000,000 and shall be in an integral multiple of $1,000,000.  Acceptance by Borrower of a Competitive Bid must be made prior to 12:00 noon on the date which is two (2) Business Days prior to the requested Competitive Advance.  Acceptance of a Competitive Bid by Borrower shall be accomplished by telephonic or written notification thereof to the Agent (provided that any acceptance by telephone shall be confirmed promptly by hand delivery or telecopy of such acceptance signed by Borrower) and shall be irrevocable upon such notification.  The Agent shall promptly notify each of the Lenders whose Competitive Bid has been accepted by Borrower by telephone, which notification shall promptly be confirmed in writing delivered in person or by telecopier to such Lenders.  Any Competitive Bid not accepted or rejected by Borrower by 12:00 noon, on the date which is two (2) Business Days prior to the proposed Competitive Advance, shall be deemed rejected.

(j)                 In the case of a Competitive Bid, the Agent shall determine the Adjusted Eurodollar Rate on the date which is two (2) Business Days prior to the date of the proposed Competitive Advance, and shall promptly thereafter notify Borrower and the Lenders whose Competitive Bids were accepted by Borrower of such Adjusted Eurodollar Rate.

(k)               A Lender whose Competitive Bid has been accepted by Borrower shall make the Competitive Advance in accordance with the Competitive Bid Request and with its Competitive Bid, subject to the applicable conditions set forth in this Agreement, by making funds immediately available to the Agent at the Principal Office in the amount of such Competitive Advance not later than 1:00 p.m. on the date set forth in the Competitive Bid Request.  The Agent shall then promptly make available to the Borrower the aggregate amount of the Competitive Advances made available to the Agent by crediting such amount in immediately available funds to the account of the Borrower on the books of such office of Agent.

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(l)                  The Agent shall notify Borrower and the Lenders promptly after any Competitive Advance is made of the amounts and maturity of such Competitive Advances, the identity of the Lenders making such Competitive Advances, and the margin over the Adjusted Eurodollar Rate for such Competitive Advances.

(m)                The Competitive Advances made by a Lender shall be evidenced by that Lender's Competitive Advance Note.

(n)                 Each Competitive Advance shall be subject to all of the provisions of this Agreement generally, provided, however, that a Competitive Advance shall not reduce a Lender's Commitment or a Lender's obligation to fund its Commitment Percentage of any Revolving Loan or to participate in Swingline Loans or Letters of Credit.  If the Borrower prepays any Competitive Advance prior to the end of the applicable Interest Period, the Borrower shall pay all amounts due under Section 4.4.

(o)                The principal amount of any "Competitive Advances" (as defined in the Fifth Amended Credit Agreement) outstanding as of the date hereof shall continue as Competitive Advances under this Agreement for the balance of the term and at such rate as exists under the Fifth Amended Credit Agreement.

 

Section 2.4            Letters of Credit . 

(a)                 Letters of Credit .  Subject to the terms and conditions of this Agreement, the Issuing Lender, on behalf of the Lenders, agrees to issue for the account of the Borrower during the period from and including the Effective Date to, but excluding, the date 30 days prior to the Termination Date one or more Letters of Credit up to a maximum aggregate Stated Amount at any one time outstanding not to exceed the L/C Commitment Amount.

(b)                 Terms of Letters of Credit .

                    (i)                 At the time of issuance, the amount, form, terms and conditions of each Letter of Credit, and of any drafts or acceptances thereunder, shall be subject to approval by the Issuing Lender and the Borrower.  Notwithstanding the foregoing, in no event may the expiration date of any Letter of Credit extend beyond the earlier of (A) the date that is one (1) year from its date of issuance or (B) the date that is five (5) days prior to the Termination Date.  Notwithstanding the foregoing, a Letter of Credit may provide for the renewal thereof for a single additional renewal period of up to one (1) year.

                    (ii)                 In the event that the term of any such Letter of Credit is so extended beyond the then applicable Termination Date, then not later than twenty (20) Business Days prior to the Termination Date Borrower shall deposit in the Collateral Account cash in an amount equal to the maximum liability under each such Letter of Credit.

(c)                Requests for Issuance of Letters of Credit .  The Borrower shall give the Issuing Lender written notice (or telephonic notice promptly confirmed in writing) at least five (5) Business Days prior to the requested date of issuance of a Letter of Credit, such notice to describe in reasonable detail the proposed terms of such Letter of Credit and the nature of the transactions or obligations proposed to be supported by such Letter of Credit, and in any event shall set forth with respect to such Letter of Credit (i) the proposed initial Stated Amount, (ii) the beneficiary or beneficiaries, and (iii) the proposed expiration date.  The Borrower shall also execute and deliver such customary letter of credit application forms as requested from time to time by the Issuing Lender.  Provided the Borrower has given the notice prescribed by the first sentence of this subsection and subject to Section 2.14 and the other terms and conditions of this Agreement, including, without limitation, the satisfaction of any applicable conditions precedent set forth in Article V, the Issuing Lender shall issue the requested Letter of Credit on the requested date of issuance for the benefit of the stipulated beneficiary and will notify each Lender of the issuance of such Letter of Credit within a reasonable time after the issuance thereof.  The Issuing Lender shall deliver to the Borrower a copy of each issued Letter of Credit within a reasonable time after the date of issuance thereof.  To the extent any term of a Letter of Credit Document is inconsistent with a term of any Loan Document, the term of such Loan Document shall control.

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(d)                 Reimbursement Obligations .  Upon receipt by the Issuing Lender from the beneficiary of a Letter of Credit of any demand for payment under such Letter of Credit, the Issuing Lender shall promptly notify the Borrower and the Agent of the amount to be paid by the Issuing Lender as a result of such demand and the date on which payment is to be made by the Issuing Lender to such beneficiary in respect of such demand; provided , however , the Issuing Lender's failure to give, or delay in giving, such notice shall not discharge the Borrower in any respect from the applicable Reimbursement Obligation.  The Borrower hereby unconditionally and irrevocably agrees to pay and reimburse the Agent for the account of the Issuing Lender for the amount of each demand for payment under such Letter of Credit on or prior to the date on which payment is to be made by the Issuing Lender to the beneficiary thereunder, without presentment, demand, protest or other formalities of any kind.  Upon receipt by the Issuing Lender of any payment in respect of any Reimbursement Obligation, the Issuing Lender shall promptly pay to each Lender that has acquired and funded a participation therein under the second sentence of Section 2.4(i) such Lender's Commitment Percentage of such payment; provided, however, that in the event that such payment received by the Issuing Lender is required to be returned, such Lender will return to the Issuing Lender any portion thereof previously distributed by the Issuing Lender to it.

(e)                 Manner of Reimbursement .  Upon its receipt of a notice referred to in Section 2.4(d), the Borrower shall advise the Agent and the Issuing Lender whether or not the Borrower intends to borrow hereunder to finance its obligation to reimburse the Issuing Lender for the amount of the related demand for payment.  If the Borrower fails to so advise the Agent and the Issuing Lender, or if the Borrower fails to reimburse the Issuing Lender for a demand for payment under a Letter of Credit by the date of such payment, then (i) if the applicable conditions contained in Article V would permit the making of Revolving Loans, the Borrower shall be deemed to have requested a borrowing of Revolving Loans (which shall be Base Rate Loans) in an amount equal to the unpaid Reimbursement Obligation and the Agent shall give each Lender prompt notice (which shall be no later than 12:00 p.m.) of the amount of the Revolving Loan to be made available to the Agent for the account of the Issuing Lender not later than 1:00 p.m. and (ii) if such conditions would not permit the making of Revolving Loans, the provisions of Section 2.4(j) shall apply.  The limitations of Section 3.5(a) shall not apply to any borrowing of Base Rate Loans under this subsection.

(f)                 Effect of Letters of Credit on Commitments .  Upon the issuance by the Issuing Lender of any Letter of Credit and until such Letter of Credit shall have expired or been terminated, the Commitment of each Lender shall be deemed to be utilized for all purposes of this Agreement in an amount equal to the product of (i) such Lender's Commitment Percentage and (ii) the sum of (A) the Stated Amount of such Letter of Credit plus (B) any related Reimbursement Obligations then outstanding.

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(g)                Issuing Lender's Duties Regarding Letters of Credit; Unconditional Nature of Reimbursement Obligation .  In examining documents presented in connection with drawings under Letters of Credit and making payments under such Letters of Credit against such documents, the Issuing Lender shall only be required to use the same standard of care as it uses in connection with examining documents presented in connection with drawings under letters of credit in which it has not sold participations and making payments under such letters of credit.  The Borrower assumes all risks of the acts and omissions of, or misuse of the Letters of Credit by, the respective beneficiaries of such Letters of Credit.  In furtherance and not in limitation of the foregoing, neither the Agent, the Issuing Lender nor any of the Lenders shall be responsible for (i) the form, validity, sufficiency, accuracy, genuineness or legal effects of any document submitted by any party in connection with the application for and issuance of or any drawing honored under any Letter of Credit even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any Letter of Credit, or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) failure of the beneficiary of any Letter of Credit to comply fully with conditions required in order to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telex, telecopy or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit, or of the proceeds thereof; (vii) the misapplication by the beneficiary of any Letter of Credit, or the proceeds of any drawing under any Letter of Credit; or (viii) any consequences arising from causes beyond the control of the Agent, the Issuing Lender or the Lenders.  None of the above shall affect, impair or prevent the vesting of any of the Agent's, the Issuing Lender's or any Lender's rights or powers hereunder.  Any action taken or omitted to be taken by the Issuing Lender under or in connection with any Letter of Credit, if taken or omitted in the absence of gross negligence or willful misconduct, shall not create against the Agent, the Issuing Lender or any Lender any liability to the Borrower or any Lender.  In this connection, the obligation of the Borrower to reimburse the Issuing Lender for any drawing made under any Letter of Credit shall be absolute, unconditional and irrevocable and shall be paid strictly in accordance with the terms of this Agreement under all circumstances whatsoever, including without limitation, the following circumstances: (A) any lack of validity or enforceability of any Letter of Credit Document or any term or provisions therein; (B) any amendment or waiver of or any consent to departure from all or any of the Letter of Credit Documents; (C) the existence of any claim, setoff, defense or other right which the Borrower may have at any time against the Agent, any Lender, the Issuing Lender, any beneficiary or transferee of a Letter of Credit or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or in the Letter of Credit Documents or any unrelated transaction; (D) any breach of contract or dispute between the Borrower, any beneficiary or transferee of a Letter of Credit, the Agent, the Issuing Lender, any Lender or any other Person; (E) any draft, certificate, demand, statement or any other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein or made in connection therewith being untrue or inaccurate in any respect whatsoever; (F) any

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 non‑application or misapplication by the beneficiary or transferee of a Letter of Credit or any other Person of the proceeds of any drawing under such Letter of Credit; (G) payment by the Issuing Lender under any Letter of Credit against presentation of a draft, certificate, demand, statement or other document which does not comply with the terms of such Letter of Credit; (H) any improper use which may be made of any Letter of Credit or any improper acts or omissions of any beneficiary or transferee of any Letter of Credit in connection therewith; (I) any irregularity in the transaction with respect to which any Letter of Credit is issued, including any fraud by the beneficiary or any transferee of such Letter of Credit; (J) the legality, validity, form, regularity or enforceability of the Letter of Credit; (K) the failure of any payment by Issuing Lender to conform to the terms of a Letter of Credit (if, in Issuing Lender's good faith judgment, such payment is determined to be appropriate); (L) the surrender or impairment of any security for the performance or observance of any of the terms of any of the Loan Documents; (M) the occurrence of any Default or Event of Default; and (N) any other act, omission to act, delay or circumstance whatsoever that might, but for the provisions of this Section, constitute a legal or equitable defense to or discharge of the Borrower's Reimbursement Obligations.  Notwithstanding anything to the contrary contained in this Section or Section 12.9, but not in limitation of the Borrower's unconditional obligation to reimburse the Issuing Lender for any drawing made under a Letter of Credit as provided in this Section, (i) the Issuing Lender shall be and remain liable for matters arising solely from its gross negligence and willful misconduct as actually and finally determined by a court of competent jurisdiction, and (ii) the Borrower shall have no obligation to indemnify the Agent, the Issuing Lender or any Lender in respect of any liability incurred by the Issuing Lender arising solely out of the gross negligence or willful misconduct of the Issuing Lender in respect of a Letter of Credit as actually and finally determined by a court of competent jurisdiction.  Except as otherwise provided in this Section, nothing in this Section shall affect any rights the Borrower may have with respect to the Issuing Lender's gross negligence or willful misconduct with respect to any Letter of Credit.

(h)                 Amendments, Etc .  The issuance by the Issuing Lender of any extension, amendment, supplement or other modification to any Letter of Credit shall be subject to the same conditions applicable under this Agreement to the issuance of new Letters of Credit (including, without limitation, that the request therefor be made through the Issuing Lender), and no such extension, amendment, supplement or other modification shall be issued unless either (i) the respective Letter of Credit affected thereby would have complied with such conditions had it originally been issued hereunder in such extended, amended, supplemented or modified form or (ii) the Requisite Lenders shall have consented thereto.  In connection with any such extension, amendment, supplement or other modification, the Borrower shall pay the Fees, if any, payable under Section 3.6(b).

(i)                 Lenders' Participation in Letters of Credit .  Immediately upon the issuance by the Issuing Lender of any Letter of Credit each Lender shall be deemed to have irrevocably and unconditionally purchased and received from the Issuing Lender, without recourse or warranty, an undivided interest and participation to the extent of such Lender's Commitment Percentage of the liability of the Issuing Lender with respect to such Letter of Credit and each Lender thereby shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and shall be unconditionally obligated to the Issuing Lender to pay and discharge when due, such Lender's Commitment Percentage of the Issuing Lender's liability under such Letter of Credit.  In addition, upon the making of each payment by a Lender to the Agent for the account of the Issuing Lender in respect of any Letter of Credit pursuant to Section 2.4(j), such Lender shall, automatically and without any further action on the part of the Agent, the Issuing Lender or such Lender, acquire (i) a participation in an amount equal to such payment in the Reimbursement Obligation owing to the Issuing Lender by the Borrower in respect of such Letter of Credit and (ii) a participation in a percentage equal to such Lender's Commitment Percentage in any interest or other amounts payable by the Borrower in respect of such Reimbursement Obligation (other than the Fees payable to the Issuing Lender pursuant to Section 3.6(b)).

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(j)                 Payment Obligation of Lenders .  Each Lender severally agrees to pay to the Agent for the account of the Issuing Lender on demand in immediately available funds in Dollars the amount of such Lender's Commitment Percentage of each drawing paid by the Issuing Lender under each Letter of Credit to the extent such amount is not reimbursed by the Borrower pursuant to Section 2.4(d).  Each such Lender's obligation to make such payments to the Agent for the account of the Issuing Lender under this subsection, and the Issuing Lender's right to receive the same, shall be absolute, irrevocable and unconditional and shall not be affected in any way by any circumstance whatsoever, including without limitation, (i) the failure of any other Lender to make its payment under this subsection, (ii) the financial condition of the Borrower or any other Loan Party, (iii) the existence of any Default or Event of Default, including any Event of Default described in Section 10.1(f) or 10.1(g), or (iv) the termination of the Commitments.  Each such payment to the Agent for the account of the Issuing Lender shall be made without any offset, abatement, withholding or deduction whatsoever.

(k)                 Information to Lenders .  Upon the request of any Lender from time to time, the Issuing Lender shall deliver to such Lender information reasonably requested by such Lender with respect to each Letter of Credit then outstanding.  Other than as set forth in this subsection and in Section 2.4(c), the Issuing Lender shall have no duty to notify the Lenders regarding the issuance or other matters regarding Letters of Credit issued hereunder.  The failure of the Issuing Lender to perform its requirements under this subsection shall not relieve any Lender from its obligations under Section 2.4(j).

Section 2.5     Rates and Payment of Interest on Loans . 

(a)                 Rates .  The Borrower promises to pay to the Agent for the account of each Lender interest on the unpaid principal amount of each Loan made by such Lender for the period from and including the date of the making of such Loan to but excluding the date such Loan shall be paid in full, at the following per annum rates:

                    (i)                 during such periods as such Loan is a Base Rate Loan, at the Base Rate (as in effect from time to time) plus the Applicable Margin (utilizing the applicable "Base Rate Margin" as identified in the definition of Applicable Margin, it being acknowledged that the Applicable Margin is a negative number, the addition of which will result in an interest rate applicable to Base Rate Loans which is lower than the corresponding Base Rate);

                    (ii)                 during such periods as such Loan (other than a Competitive Advance) is a LIBOR Loan, at the Adjusted Eurodollar Rate for such Loan for the Interest Period therefor plus the Applicable Margin (utilizing the applicable "LIBOR Margin" as identified in the definition of Applicable Margin); and

                    (iii)                  with respect to each Competitive Advance, at the margin over the Adjusted Eurodollar Rate determined pursuant to Section 2.3.

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Notwithstanding the foregoing, during the continuance of an Event of Default, the Borrower shall pay to the Agent for the account of each Lender interest at the Post-Default Rate on the outstanding principal amount of any Loan made by such Lender, on all Reimbursement Obligations and on any other amount payable by the Borrower hereunder or under the Notes held by such Lender to or for the account of such Lender (including without limitation, accrued but unpaid interest to the extent permitted under Applicable Law).

(b)                 Payment of Interest .  Accrued interest on each Loan shall be payable (i) in the case of a Base Rate Loan on the first day of each calendar month, (ii) in the case of a LIBOR Loan, on the last day of each Interest Period therefor (provided, however, if any Interest Period for a LIBOR Loan exceeds ninety (90) days, interest shall also be payable with respect to such Loans on the last Business Day of each March, June, September and December, as applicable), and (iii) in the case of any Loan, upon the payment, prepayment or Continuation thereof or the Conversion of such Loan to a Loan of another Type (but only on the principal amount so paid, prepaid, Continued or Converted).  Interest payable at the Post-Default Rate shall be payable from time to time on demand.  Promptly after the determination of any interest rate provided for herein or any change therein, the Agent shall give notice thereof to the Lenders to which such interest is payable and to the Borrower.  All determinations by the Agent of an interest rate hereunder shall be conclusive and binding on the Lenders and the Borrower for all purposes, absent manifest error.

Section 2.6            Number of Interest Periods . 

    There may be no more than eight (8) different Interest Periods for LIBOR Loans (excluding Competitive Advances) outstanding at the same time.

Section 2.7              Repayment of Loans . 

    The Borrower shall repay the entire outstanding principal amount of, and all accrued but unpaid interest on, the Loans, together with all other amounts then outstanding under this Agreement, on the Termination Date.

Section 2.8              Prepayments . 

(a)                 Optional .  Subject to Section 3.5 and Section 4.4, the Borrower may prepay any Loan at any time without premium or penalty.  The Borrower shall give the Agent at least one (1) Business Day's prior written notice of the prepayment of any Revolving Loan.  The Agent shall promptly notify the Lenders of such notice of prepayment.

(b)                 Mandatory .  If at any time the aggregate principal amount of all outstanding Revolving Loans, together with the aggregate amount of all Letter of Credit Liabilities and the aggregate principal amount of all outstanding Swingline Loans and Competitive Advances, exceeds the amount of the Total Commitment in effect at such time, the Borrower shall immediately pay to the Agent for the accounts of the Lenders the amount of such excess.  Such payment shall be applied by the Agent to pay all amounts of principal outstanding on the Revolving Loans and any Reimbursement Obligations pro rata in accordance with Section 3.2 and if any Letters of Credit are outstanding at such time the remainder, if any, shall be deposited by the Agent into the Collateral Account for application to any Reimbursement Obligations.  If the Borrower is required to pay any outstanding LIBOR Loans by reason of this Section prior to the end of the applicable Interest Period therefor, the Borrower shall pay all amounts due under Section 4.4.  Notwithstanding the foregoing, the Borrower shall have the right, and may designate, which Loans are to be repaid or prepaid and in what order (e.g., Base Rate Loans first, then LIBOR Loans, then Competitive Advances).

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Section 2.9         Continuation . 

    So long as no Default or Event of Default shall have occurred and be continuing, the Borrower may on any Business Day, with respect to any Revolving Loan that is a LIBOR Loan, elect to maintain such LIBOR Loan or any portion thereof as a LIBOR Loan by selecting a new Interest Period for such LIBOR Loan.  Each new Interest Period selected under this Section shall commence on the last day of the immediately preceding Interest Period.  Each selection of a new Interest Period shall be made by the Borrower's giving to the Agent a Notice of Continuation not later than 11:00 a.m. on the third (3 ^rd ) Business Day prior to the date of any such Continuation.  Such notice by the Borrower of a Continuation shall be by telephone or telecopy, confirmed immediately in writing if by telephone, in the form of a Notice of Continuation, specifying (a) the proposed date of such Continuation, (b) the LIBOR Loans and portions thereof subject to such Continuation and (c) the duration of the selected Interest Period, all of which shall be specified in such manner as is necessary to comply with all limitations on Loans outstanding hereunder.  Each Notice of Continuation shall be irrevocable by and binding on the Borrower once given.  Promptly after receipt of a Notice of Continuation, the Agent shall notify each Lender by telecopy, or other similar form of transmission, of the proposed Continuation.  If the Borrower shall fail to select in a timely manner a new Interest Period for any such LIBOR Loan in accordance with this Section, or shall fail to give a timely Notice of Conversion with respect to a Base Rate Loan, or if a Default or Event of Default shall have occurred and be continuing, such Loan will automatically, on the last day of the current Interest Period therefor, Convert into (or, with respect to a Base Rate Loan, continue as) a Base Rate Loan notwithstanding the first sentence of Section 2.10 or the Borrower's failure to comply with any of the terms of such Section.

Section 2.10      Conversion . 

    So long as no Default or Event of Default shall have occurred and be continuing, the Borrower may on any Business Day, upon the Borrower's giving of a Notice of Conversion to the Agent, Convert all or a portion of a Revolving Loan of one Type into a Revolving Loan of another Type.  Any Conversion of a Revolving Loan that is a LIBOR Loan into a Base Rate Loan shall be made on, and only on, the last day of an Interest Period for such LIBOR Loan and, upon Conversion of a Base Rate Loan into a LIBOR Loan, the Borrower shall pay accrued interest to the date of Conversion on the principal amount so Converted.  Each such Notice of Conversion shall be given not later than 11:00 a.m. on the Business Day prior to the date of any proposed Conversion into Base Rate Loans and on the third (3 ^rd ) Business Day prior to the date of any proposed Conversion into LIBOR Loans.  Promptly after receipt of a Notice of Conversion, the Agent shall notify each Lender by telecopy, or other similar form of transmission, of the proposed Conversion.  Subject to the restrictions specified above, each Notice of Conversion shall be by telephone (confirmed immediately in writing) or telecopy in the form of a Notice of Conversion specifying (a) the requested date of such Conversion, (b) the Type of Revolving Loan to be Converted, (c) the portion of such Type of Revolving Loan to be Converted, (d) the Type of Revolving Loan such Revolving Loan is to be Converted into and (e) if such Conversion is into a LIBOR Loan, the requested duration of the Interest Period of such Loan.  Each Notice of Conversion shall be irrevocable by and binding on the Borrower once given.

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Section 2.11       Notes . 

(a)                 Revolving Note .  The Revolving Loans made by each Lender shall, in addition to this Agreement, also be evidenced by a promissory note of the Borrower substantially in the form of Exhibit M (each a "Revolving Note"), payable to the order of such Lender in a principal amount equal to the amount of its Commitment as originally in effect and otherwise duly completed.  By delivery of the Revolving Notes, there shall not be deemed to have occurred, and there has not otherwise occurred, any payment, satisfaction or novation of the Indebtedness evidenced by the "Revolving Notes" described in the Fifth Amended Credit Agreement, which Indebtedness is instead allocated among the Lenders as of the date hereof and evidenced by the Revolving Notes and their respective Commitment Percentages, and the Lenders shall as of the date hereof make such adjustments to the outstanding Revolving Loans of such Lenders so that such outstanding Revolving Loans are consistent with their respective Commitment Percentages.

(b)                 Records .  The date, amount, interest rate, Type and duration of Interest Periods (if applicable) of each Loan made by each Lender to the Borrower, and each payment made on account of the principal thereof, shall be recorded by such Lender on its books and such entries shall be binding on the Borrower absent manifest error.

(c)                 Lost, Stolen, Destroyed or Mutilated Notes .  Upon receipt by the Borrower of (i) written notice from a Lender that a Note of such Lender has been lost, stolen, destroyed or mutilated, and (ii) (A) in the case of loss, theft or destruction, an unsecured agreement of indemnity from such Lender in form reasonably satisfactory to the Borrower, or (B) in the case of mutilation, upon surrender and cancellation of such Note, the Borrower shall at its own expense execute and deliver to such Lender a new Note dated the date of such lost, stolen, destroyed or mutilated Note.

Section 2.12     Voluntary Reductions of the Commitment . 

    The Borrower shall have the right to terminate or reduce the aggregate unused amount of the Commitments (for which purpose use of the Commitments shall be deemed to include the aggregate amount of Letter of Credit Liabilities and the aggregate principal amount of all outstanding Swingline Loans and Competitive Advances) at any time and from time to time without penalty or premium upon not less than fifteen (15) Business Days prior written notice to the Agent of each such termination or reduction, which notice shall specify the effective date thereof and the amount of any such reduction and shall be irrevocable once given and effective only upon receipt by the Agent.  The Agent will promptly transmit such notice to each Lender.  The Commitments may not be reduced below $100,000,000 in the aggregate unless the Borrower terminates the Commitments in their entirety, and, once terminated or reduced, the Commitments may not be increased or reinstated.  Any reduction in the aggregate amount of the Commitments shall result in a proportionate reduction (rounded to the next lowest integral multiple of multiple of $100,000) in the maximum amount of Competitive Advances.

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Section 2.13        Expiration or Maturity Date of Letters of Credit Past Termination Date. 

    If on the date (the "Facility Termination Date") the Commitments are terminated (whether voluntarily, by reason of acceleration following the occurrence of an Event of Default or otherwise), there are any Letters of Credit outstanding hereunder, the Borrower shall, on the Facility Termination Date, pay to the Agent an amount of money equal to the Stated Amount of such Letter(s) of Credit for deposit into the Collateral Account.  If a drawing pursuant to any such Letter of Credit (including for the purposes hereof any Letter of Credit whose term is extended beyond the Termination Date pursuant to Section 2.4(b)) occurs on or prior to the expiration date of such Letter of Credit, the Borrower authorizes the Issuing Lender to notify the Agent, and authorizes the Agent to pay to the Issuing Lender monies deposited in the Collateral Account for Issuing Lender to make payment to the beneficiary with respect to such drawing or the payee with respect to such presentment.  If no drawing occurs on or prior to the expiration date of such Letter of Credit, the Agent shall withdraw the monies deposited in the Collateral Account with respect to such outstanding Letter of Credit on or before the date fifteen (15) Business Days after the expiration date of such Letter of Credit and apply such funds to the Obligations, if any, then due and payable in the order prescribed by Section 10.3.  No amount drawn under a Letter of Credit after the Facility Termination Date shall be subject to reinstatement.

Section 2.14        Amount Limitations . 

    Notwithstanding any other term of this Agreement or any other Loan Document, at no time may the aggregate principal amount of all outstanding Revolving Loans, together with the aggregate principal amount of all outstanding Swingline Loans and Competitive Advances  and the aggregate amount of all Letter of Credit Liabilities, exceed the aggregate amount of the Commitments at such time.

Section 2.15       Increase of Commitments .                                                                    

    Subject to the approval of the Agent (which shall not be unreasonably withheld or delayed), the Borrower shall have the right to request an increase in the aggregate amount of the Commitments (provided that there shall be no more than two such increases in the Commitments and the aggregate amount of such increases in the Commitments pursuant to this Section shall not exceed $200,000,000) by providing written notice to the Agent, which notice shall be irrevocable once given.  Each such increase in the Commitments must be an aggregate minimum amount of $20,000,000 and integral multiples of $1,000,000 in excess thereof.  The Agent shall promptly notify each Lender of such request.  Each existing Lender shall have the right to increase its Commitment by an amount so that such Lender's Commitment Percentage shall not be decreased as a result of such requested increase in the Commitments.  All other allocations of such requested increase shall be subject to the approval of the Agent.  Each Lender shall notify the Agent within ten (10) Business Days after receipt of the Agent's notice whether such Lender wishes to increase the amount of its Commitment.  If a Lender fails to deliver any such notice to the Agent within such time period, then such Lender shall be deemed to have declined to increase its Commitment.  No Lender shall be required to increase its Commitment and any new Lender(s) becoming a party to this Agreement in connection with any such requested increase must be an Eligible Assignee.  In the event a new Lender or Lenders become a party to this Agreement, or if any existing Lender agrees to increase its Commitment, such Lender shall on the date it becomes a Lender hereunder (or increases its Commitment, in the case of an existing Lender) (and as a condition thereto) purchase from the other Lenders its Commitment Percentage (as determined after giving effect to the increase of

 

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Commitments) of any outstanding Revolving Loans, by making available to the Agent for the account of such other Lenders at the Principal Office, in same day funds, an amount equal to the sum of (a) the portion of the outstanding principal amount of such Revolving Loans to be purchased by such Lender plus (b) the aggregate amount of payments previously made by the other Lenders under Sections 2.2(e) or 2.4(j) which have not been repaid, and the Borrower shall pay to such other Lenders interest accrued and unpaid to and as of such date on such portion of the outstanding principal amount of such Revolving Loans.  The Borrower shall also pay to the Lenders amounts payable, if any, to such Lenders under Section 4.4 as a result of the prepayment of any such Revolving Loans.  No increase of the Commitments may be effected under this Section if either (x) a Default or Event of Default shall be in existence on the effective date of such increase or (y) any representation or warranty made or deemed made by the Borrower or any other Loan Party in any Loan Document to which any such Loan Party is a party is not (or would not be) true or correct in all material respects on the effective date of such increase (except for representations or warranties which expressly relate solely to an earlier date and except for changes in factual circumstances or transactions, in either event not prohibited hereunder).  In connection with any increase in the aggregate amount of the Commitments pursuant to this subsection, (A) any Lender becoming a party hereto shall execute such documents and agreements as the Agent may reasonably request and (B) the Borrower shall make appropriate arrangements so that each new Lender, and any existing Lender increasing its Commitment, receives a new or replacement Note, as appropriate, in the amount of such Lender's Commitment and a Competitive Advance Note within two (2) Business Days of the effectiveness of the applicable increase in the aggregate amount of Commitments.  The Borrower shall also execute and deliver to the other Lenders replacement Competitive Advance Notes increasing the principal face amount thereof to 50% of the new Total Commitment.

Section 2.16  &nbs