Swap Transaction Confirmation between Morgan Guaranty Trust Company of New York and Summit Properties Partnership LP (September 15, 1999)

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Summary

This agreement confirms the terms of a swap transaction between Morgan Guaranty Trust Company of New York and Summit Properties Partnership LP. Under this agreement, Morgan pays a fixed interest rate and Summit pays a floating interest rate on a notional amount of $30 million, with payments exchanged semi-annually and quarterly, respectively, until December 15, 2003. The agreement includes provisions for collateral, credit support, and termination rights if a master agreement is not executed within 60 days. The transaction is governed by standard industry definitions and may be subject to early termination under certain conditions.

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EX-10.15 9 g67224ex10-15.txt SWAP TRANSACTION 1 Exhibit 10.15 SWAP TRANSACTION Date: 15 September 1999 The purpose of this letter agreement is to confirm the terms and conditions of the Swap Transaction entered into between: MORGAN GUARANTY TRUST COMPANY OF NEW YORK and SUMMIT PROPERTIES PARTNERSHIP LP On the Trade Date and identified by the Morgan Deal Number specified below (the "Swap Transaction"). This letter agreement constitutes a Confirmation as referred to in the agreement specified below. The definitions and provisions contained in the 1991 IDA Definitions as supplemented by the 1998 IDA Supplement (as published by the International Swaps and Derivates Association, Inc.) are incorporated into this Confirmation. In the event of any inconsistency between those definitions and provisions and this Confirmation, this Confirmation will govern. This Confirmation represents an amendment and restatement of any prior documents or other confirming communications between the parties with respect to the Swap Transaction. Morgan Guaranty Trust Company of New York is, together with other United Kingdom listed institutions, subject to the Bank of England's Code of Conduct. In connection therewith, this and certain future wholesale money market transactions will be outside the Financial Services Act, but you will have the benefit of the Code of Conduct. 1. If MORGAN GUARANTY TRUST COMPANY OF NEW YORK ("Morgan") and SUMMIT PROPERTIES PARTNERSHIP LP (the "Counterparty") are parties to a Master Agreement, Interest Rate and Currency Exchange Agreement or other similar Agreement (a "Swap Agreement"), this Confirmation supplements, forms a part of, and is subject to such Swap Agreement, this Confirmation supplements, forms a part of, and is subject to the Swap Agreement most recently executed between the parties. If Morgan and the Counterpart are not yet parties to a Swap Agreement, the parties agree that this Transaction will be documented under a master agreement to be entered into on the basis of the printed form of Master Agreement (Multicurrency-Cross Border) published by the International Swaps and Derivatives Association, Inc., together with such changes as shall be agreed between the parties (the "Master Agreement"). Upon execution and delivery by the parties of the Master Agreement, this Confirmation shall supplement, form a part of, and be subject to such Master Agreement. Until the parties execute and deliver the Master Agreement, 2 this Confirmation shall supplement, form a part of, and be subject to the printed form of Master Agreement published by IDA, as if the parties had executed that agreement (but without any Schedule thereto) on the Trade Date of this Transaction. The parties hereby agree that if they have not executed a Master Agreement, together with a Credit Support Annex, within 60 Calendar days from the Trade Date, Morgan shall have the right (in its sole discretion) to terminate this transaction on any Business Day (such day being referred to herein as an "Elective Termination Date"). Any such termination shall be referred to as an "Effective termination" and the Counterpart will be deemed the Affected Party. 2. The terms of the particular Swap Transaction to which this Confirmation relates are as follows: Morgan Deal Number 406306 Trade Date: 14 September 1999 Effective Date: 16 September 1999, subject to adjustment in accordance with the Modified Following Business Day convention Termination Date: 15 December 2003, subject to adjustment in accordance with the Modified Following Business Day Convention FIXED AMOUNTS: Fixed Rate Payer: Morgan Notional Amount: 30,000,000.00 USD Fixed Rate Payer Payment Dates: Each 15 December, 15 June starting with 15 December 1999 up to, and including, the Termination Date, subject to adjustment in accordance with the Following Business Day Convention and there will be no adjustment to the Calculation Period. Fixed Rate: 6.625000 percent Fixed Rate Day Count Fraction: 30/360 Initial Calculation Period: From 16 September 1999 to 15 December 1999, subject to adjustment in accordance with the Following Business Day Convention. FLOATING AMOUNT: 2 3 Floating Rate Payer: Counterparty Notional Amount: 30,000,000.00 USD Floating Rate Payer Payment Dates: Each 15 December, 15 March, 15 June, 15 September starting with 15 December 1999 up to, and including, the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention and there will be an adjustment to the Calculation Period. Floating Rate Option: USD-LIBOR-BBA Designated Maturity: 3 Month Spread: Plus 0.110000 percent Floating Rate Day Count Fraction: Actual/360 Reset Dates: The first day of each Calculation Period. Compounding: Inapplicable Initial Calculation Period: From 16 September 1999 to 15 December 1999, subject to adjustment in accordance with the Modified Following Business Day Convention. Floating Rate for Initial calculation Period: 5.510000 percent (Excluding Spread where applicable) Payment Business Day Locations for Counterpart: London, New York Payment Business Day Locations for Morgan: London, New York Payments will be: Net ADDITIONAL COMMENTS: CREDIT ENHANCEMENT. This Confirmation is supplemented by the standard form of IDA Credit Support Annex which is hereby incorporated by reference together with the following additional provisions pursuant to which the Counterpart is required to deliver Eligible Collateral to Morgan. This Section will be superceded by any Credit Support Annex executed between Morgan and the counterparty after the Trade Date hereof. The provisions contained in this Section of this Confirmation are deemed to be Paragraph 13 - "Elections and Variables" for the 3 4 purposes of the Credit Support Annex and together with the Credit Support Annex shall constitute a Credit Support Document with respect to the counterparty. Capitalized terms used herein and not otherwise defined shall have the meanings given terms in the Credit Support Annex. Eligible Collateral: Cash, Treasury Bills, Treasury Notes, Treasury Bonds and Agency Securities (as defined below) in accordance with the valuation percentages set forth in Exhibit A. Custodian: Any mutually agreed upon Bank (as defined in the Federal Deposit Insurance Act) having a Long-Term Debt Rating of BBB+/Baa1 or higher. "Long Term Debt Rating" means, with respect to a party, the rating assigned by either S&P or Moody's to the long term, unsecured and unsubordinated indebtedness of such party. "Moody's" means Moody's Investors Service, Inc. "S&P" means Standard & Poor's Ratings Group. Use of Posted Collateral: The provisions of Paragraph 6(c) shall apply. Substitution of Collateral: Consent required. Valuation Date: Any Local Business Day. Minimum Transfer Amount: $100,000, provided, however, that if any Event of Default has occurred and is containing with respect to the Counterpart, the Minimum Transfer Amount shall be $0. Delivery Amount: Shall have the meaning specified in Paragraph 3(a). Return Amount: Shall have meaning specified in Paragraph 3(b). Credit Support Amount: Shall have the meaning specified in Paragraph 3(c). 4 5 Rounding: Delivery and Return Amounts will be rounded to the nearest $10,000. "THRESHOLD" means, with respect to the Counterpart the amounts determined on the basis of the lower of the Long Term Debt Ratings by Moody's or S&P as set forth in the following table, provided, however, that if (i) the Counterpart has not Long Term Debt Rating, or (ii) an Event of Default has occurred and is continuing with respect to the Counterparty, the Threshold shall be U.S. $0: LONG TERM DEBT RATING THRESHOLD (S&P/MOODY'S) COUNTERPARTY ------------- ------------ AAA/Aaa $25 AA+/Aa1 $25 AA/Aa2 $25 AA-/Aa3 $25 A+/A1 $25 A/A2 $25 A-/A3 $25 BBB+/Baa1 $10 BBB/Baa2 $7 BBB/Baa3 $5 Below BB-/Baa3 $0 i. The cross default provision of section 5(a)(vi) of the Agreement shall apply to both parties with regarding to any obligation in respect of borrowed money and commitments to lend in an aggregate amount of not less than the threshold amount which for Morgan shall be 3 percent of the total stockholders equity of Morgan and which for the counterparty shall be an amount reflective of its credit as agreed to by the parties. ii. The credit event upon a merger provisions of section 5(b)(iv) of the Agreement shall not apply to Morgan. 5 6 3. Account Details PAYMENTS TO MORGAN: Account for payments in USD Morgan Guaranty Trust Co. of New York ABA 021 000 238 Favour: Morgan Guaranty Trust Co. of New York London Branch Account No.: 670 07 054 Reference: Swaps Group PAYMENTS TO COUNTERPARTY: Account for payments in USD: Favour: SUMMIT PROPERTIES PARTNERSHIP LP ABA/Bank No.: Account No.: Reference: 4. Offices (a) The Office of Morgan for the Swap transaction is LONDON: and (b) The Office of the Counterparty for the Swap Transaction is CHARLOTTE All enquiries regarding payments and/or rate resettings only should be sent to: Morgan Guaranty Trust Company of New York 60 Victoria Embankment London, EC4Y OJP Attention: Derivatives Processing Center Telephone: 011 44 ###-###-#### Facsimile: 011 44 ###-###-#### Telex : 896631 MGT G Cable: Morgan Bank Please quote the Morgan Deal Number indicated above. All enquiries regarding confirmations should be sent to: 6 7 Morgan Guaranty Trust Company of New York 60 Wall Street New York, New York 10260 Attention: Vola Grilli Telephone: 1 ###-###-#### Facsimile: 1 ###-###-#### Please quote the Morgan Deal Number indicated above. JP MORGAN SECURITIES INCORPORATED is acting solely as agent for Morgan and will have no obligations under this Swap Transaction. Each party represents that (i) it is entering into the transaction evidenced hereby as principal (and not as agent or in any other capacity); (ii) the other party is not acting as a fiduciary for it; (iii) it is not relying upon any representations except hose expressly set forth in the Agreement or t his confirmation; (iv) it has consulted with its own legal, regulatory, tax, business, investment, financial, and accounting advisors to the extent is has deemed necessary, and it has made its own investment, hedging, and trading decisions based upon its own judgment and upon any advice from such advisors as it has deemed necessary and not upon any view expressed by the other party; and (v) it is entering into this transaction with a full understanding of the terms, conditions and risks thereof and it is capable of and willing to assume those risks. Please confirm that the foregoing correctly sets forth the terms of our agreement by executing a copy of this Confirmation and returning it to us or by sending to us a letter, telex or facsimile substantially similar to this letter, which letter, telex or facsimile sets forth the material terms of the Swap Transaction to which this Confirmation relates and indicates agreement to those terms. When referring to this Confirmation, please indicate: Morgan Deal Number: 406306. Yours sincerely, JP MORGAN SECURITIES INCORPORATED, as Agent for and signing on behalf of: MORGAN GUARANTY TRUST COMPANY OF NEW YORK By: /s/ Jason P. Manske ------------------------------------- Name: Jason P. Manske Title: Vice President 7 8 Confirmed as of the date first above written: SUMMIT PROPERTIES PARTNERSHIP LP By: /s/ Gregg Adzema ------------------------------------ Name: Gregg Adzema Title: Vice President - Finance 8 9 EXHIBIT A COLLATERAL VALUATION PERCENTAGES
"VALUATION PERCENTAGE" (A) Cash 100% (B) negotiable debt obligations issued by the U.S. Treasury 98% Department having an original maturity at issuance of not more than one year ("Treasury Bills") (C) negotiable debt obligations issued by the U.S. Treasury 95% Department having an original maturity at issuance of more than one year but not more than ten years ("Treasury Notes") (D) negotiable debt obligations issued by the U.S. Treasury 95% Department having an original maturity at issuance of more than ten years ("Treasury Bonds") (E) Other: Agency Securities 95%
As used herein, "Agency Securities" means negotiable debt obligations which are fully guaranteed as to both principal and interest by the Federal National Mortgage Association, the Government National Mortgage Corporation or the Federal Home Loan Mortgage Corporation, but excluding (i) interest only and principal only securities and (ii) Collateralized Mortgage Obligations, Real Estate Mortgage Investment Conduits and similar derivative securities. 9