AMENDMENT NO. 2
TO CREDIT AGREEMENT
This AMENDMENT NO. 2 TO CREDIT AGREEMENT (this "Amendment No. 2") is
made and entered into as of the 1st day of September, 2002 by and between HOME
PROPERTIES OF NEW YORK, L.P. (the "Borrower") and MANUFACTURERS AND TRADERS
TRUST COMPANY, as Administrative Agent (in such capacity, the "Administrative
Agent"), for each of the lenders (the "Lenders") now or hereafter party to the
Credit Agreement referenced below.
R E C I T A L S:
A. The Borrower, the Administrative Agent, Manufacturers and Traders Trust
Company ("M&T") and Citizens Bank of Rhode Island ("CBRI") entered into a Credit
Agreement dated as of August 23, 1999 (the "1999 Credit Agreement"), pursuant to
which the Lenders agreed to make certain revolving credit and letters of credit
facilities available to the Borrower.
B. On or about July 12, 2000, M&T assigned to Chevy Chase Bank, FSB ("CCB")
a portion of its Commitment which constituted 15% of all Commitments and loans
previously made pursuant thereto.
C. The Borrower, the Administrative Agent, M&T, CBRI and CCB entered into
Amendment No. 1 to Credit Agreement, dated as of September 6, 2000, ("Amendment
No. 1") pursuant to which certain amendments to the 1999 Credit Agreement were
made. The 1999 Credit Agreement as amended by Amendment No. 1 and as hereby
amended and as from time to time further amended, supplemented, modified,
replaced or restated is hereinafter referred to as the "Credit Agreement."
D. Borrower has requested the Lenders to further amend the Credit Agreement
as provided herein and subject to the terms and conditions set forth herein, and
the Required Lenders are willing to amend the Credit Agreement as set forth
herein. Amendments made by Amendment No. 1 are hereinafter restated with any
further modification or amendments made by this Amendment No. 2.
P R O V I S I O N S:
NOW, THEREFORE, in consideration of any prior extension of credit by
the Lenders to Borrower, and/or in consideration of the Lenders having entered
into the Credit Agreement with Borrower, and in consideration of the mutual
promises set forth below, Borrower, Administrative Agent and the Lenders hereby
agree as follows:
1. Definitions. The term "Credit Agreement" as used herein and in the Loan
Documents shall mean the Credit Agreement as hereby amended and modified. Any
capitalized terms used herein without definition shall have the meaning set
forth in the Credit Agreement.
2. Amendment Effective Date. This Amendment No. 2 shall be effective on the
later of September 1, 2002 or the first date that the following conditions have
been satisfied (the "Effective Date"):
2.1 The Administrative Agent shall have received a fully executed
counterpart of this Amendment No.2 from the Lenders, the Borrower and the
Guarantor and the fully executed Notes from the Borrower.
2.2 The Administrative Agent shall have received an opinion of counsel to
the Borrower and the Guarantor acceptable to it in its sole discretion and such
other certificates, instruments and other writings pertaining to the Borrower
and the Guarantor as it shall require in connection herewith.
2.3 The Administrative Agent shall have received payment in immediately
available funds of any and all fees agreed to between the Borrower and the
Administrative Agent and all out-of-pocket expenses incurred by the
Administrative Agent in connection with the preparation, negotiation and
execution of this Amendment No. 2 and related documents.
3. Amendment of Certain Provisions of the Credit Agreement. Subject to the
terms and conditions set forth herein, the Credit Agreement is hereby amended as
set forth below:
(a) Section 1.01 of the Credit Agreement is hereby amended to
amend and restate in its entirety the definitions of "Applicable Eurodollar
Margin," "Capital Expenditure Reserve Account," "Commitment," "Fixed Charges,"
"Maturity Date," "Management Company" and "Maximum Availability," and "Total
Property Value" to read as follows:
"Applicable Eurodollar Margin" means, as of any date of determination, the
percentage set forth below under the appropriate heading corresponding to an
"implied" or "corporate" rating as rated by Fitch IBCA ("Fitch IBCA") and/or S&P
(the "S&P Rating") and/or Xxxxx'x (the "Xxxxx'x Rating" and, each of the Fitch
IBCA, S&P Rating and the Xxxxx'x Rating referred to herein as a "Rating").
Rating Service Rating Applicable Eurodollar Margin
BBB+ 105 basis points
BBB 115 basis points
BBB- 125 basis points
The Administrative Agent shall determine the Applicable Eurodollar Margin
from time to time in accordance with the above table and notify the Borrower and
the Banks of such determination from time to time.
In the event the Borrower is Rated by two Rating Services and there is a
different Rating between the two Rating Services, the lower Rating from the two
Rating Services shall be used to determine the Applicable Eurodollar Margin. In
the event the Borrower is Rated by more than two Rating Services, the lower
Rating, of the two highest Ratings, shall be used to determine the Applicable
Eurodollar Margin. In the event the Rating by any Rating Service is not in the
BBB range, the Applicable Eurodollar Margin shall be (i) 105 basis points if the
Rating is above BBB+ or (ii) 125 basis points if the Rating is below BBB-.
In the event the Borrower ceases to be Rated by any Rating Service, a Rate
equivalent to the most recent Rating of the Borrower by any Rating Service shall
be used to determine the Applicable Eurodollar Margin.
Any necessary adjustment in the Applicable Eurodollar Margin pursuant to
the terms hereof, shall become effective immediately upon any change in a
Rating.
"Capital Expenditure Reserve Amount" means, for any period, an amount equal
to (i) $300 multiplied by the number of apartment units contained in all
Projects multiplied by (ii) a fraction, the numerator of which is equal to the
number of days in such period and the denominator of which is equal to 365.
"Commitment" means, with respect to each Lender, the commitment of such
Lender to make Revolving Loans and to acquire participations in Letters of
Credit hereunder, expressed as an amount representing the maximum aggregate
amount of such Lender's Revolving Credit Exposure hereunder, as such commitment
may be (a) reduced from time to time pursuant to Section 2.07 and (b) reduced or
increased from time to time pursuant to assignments by or to such lender
pursuant to Section 9.04. The initial amount of each Lender's Commitment is set
forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which
such Lender shall have assumed its Commitment, as applicable. The initial
aggregate amount of the Lenders' Commitments is $115,000,000.
"Fixed Charges" means, with respect to any fiscal period, the sum of (i)
Total Interest Expense and (ii) the aggregate of all scheduled principal
payments on Indebtedness made or required to be made during such fiscal period
for the Consolidated Businesses (but excluding balloon payments of principal due
upon the stated maturity of an Indebtedness) and (iii) the aggregate of all
dividends declared and payable on any of the Company's, the Borrower's or any of
their Subsidiaries' preferred stock, convertible preferred stock or preferred
partnership units, as the case may be, provided, however, that the distributions
payable on the currently outstanding Class A Limited Partnership Interests,
Class B Limited Partnership Interests, Class C Limited Partnership Interests,
and Class D Limited Partnership Interests of the Borrower shall not be included
in this clause (iii).
"Management Company" means Home Properties Management, Inc. and Home
Properties Resident Services, Inc., both Maryland corporations of which no less
than 95% of the issued and outstanding capital stock is and shall continue to be
owned, beneficially and of record, by the Borrower.
"Maturity Date" means September 1, 2005, unless (i) the Borrower advises
the Administrative Agent on or before June 1, 2005, in writing of its desire to
extend the Maturity Date and pays the Administrative Agent an extension fee (the
"Extension Fee") equal to the product of the Commitment and 15 basis points, and
(ii) there exists no Event of Default under the Credit Agreement or any of the
other Loan Documents, in which case "Maturity Date" means September 1, 2006.
Upon payment, the Extension Fee shall be fully earned and non-refundable.
"Maximum Availability" means the lesser of (a) $115,000,000 or (b) the sum
of (i) 60% of the Total Property Value of Unencumbered Eligible Projects plus
(ii) 60% of the Total Property Value of Encumbered Eligible Projects minus the
amount of any Secured Indebtedness affecting such Projects, provided that such
amount in this clause (ii) shall not be less than zero.
"Total Property Value" means, as of any date, the sum of (i) with respect
to all Eligible Projects which have been owned by the Borrower for not less than
four full consecutive calendar quarters, as of the first day of each fiscal
quarter for the immediately preceding consecutive four calendar quarters, an
amount equal to Adjusted NOI relating to such Eligible Project for such period
divided by an annual interest rate equal to 9.0% and (ii) with respect to all
Eligible Projects which have been owned by the Borrower for less than four full
consecutive calendar quarters, an amount equal to the cost of acquiring such
Eligible Projects less reasonable and customary transaction costs incurred in
connection with such acquisition.
(b) Section 1.01 of the Credit Agreement is further amended to insert the
following ------------- definitions:
"Rating Service" means Fitch IBCA Rating or any other nationally
recognized, independent, securities rating service acceptable to the Agent.
"Total Unencumbered Value" means, as of any measurement date, the sum of
(i) with respect to all Unencumbered Eligible Projects which have been owned by
the Borrower, as of the measurement date, for not less than four (4) full
consecutive calendar quarters, an amount equal to Adjusted NOI for such
Unencumbered Eligible Project for the immediately preceding four (4) consecutive
calendar quarters as of the measurement date, divided by 9.0%; (ii) with respect
to all Unencumbered Eligible Projects which have been owned by the Borrower for
less than four (4) full consecutive calendar quarters as of the measurement
date, an amount equal to the cost of acquiring such Unencumbered Eligible
Projects less reasonable and customary transaction costs incurred in connection
with such acquisition and (iii) an amount equal to the EBITDA derived from
management and development activities of the Consolidated Businesses for the
immediately preceding consecutive four (4) calendar quarters as of the
measurement date divided by 15%, however, not to exceed $20 million. The sum of
(i) and (ii) shall never fall below $100,000,000.
"Unsecured Indebtedness" means, for any applicable period, without duplication,
(a) all obligations for borrowed money or advances of any kind, (b) all
obligations evidenced by bonds, debentures, notes or similar instruments, and
(c) all obligations upon which interest charges are customarily paid, that are
not secured by a Lien.
"Annual Facility Fee Rate" means, as of any date of determination, the
percentage set forth below under the appropriate heading corresponding to the
Rating Service Rating
Rating Service Rating Annual Facility Fee
--------------------- --------------------
BBB+ 10 basis points
BBB 15 basis points
BBB- 20 basis points
The Administrative Agent shall determine the Annual Facility Fee Rate from
time to time in accordance with the above table and notify the Borrower and the
Lenders of such determination from time to time.
In the event the Borrower is Rated by two Rating Services and there is a
different Rating between the two Rating Services, the lower Rating from the two
Rating Services shall be used to determine the Annual Facility Fee Rate. In the
event the Borrower is Rated by more than two Rating Services, the lower Rating,
of the two highest Ratings, shall be used to determine the Annual Facility Fee
Rate. In the event the Rating by any Rating Service is not in the BBB range, the
Annual Facility Fee Rate shall be (i) 10 basis points if the Rating is above
BBB+; or (ii) 20 basis points if the Rating is below BBB-.
In the event the Borrower ceases to be Rated by any Rating Service, a Rate
equivalent to the most recent Rating of the Borrower by any Rating Service shall
be used to determine the Annual Facility Fee Rate.
Any necessary adjustment in the Annual Facility Fee Rate pursuant to the
terms hereof, shall become effective immediately upon any change in a Rating.
(c) Section 2.10(b) of the Credit Agreement is hereby deleted in its
entirety and replaced ---------------- with the following:
"(b) Borrower agrees to pay to the Administrative Agent for the account of
each Lender, an annual facility fee, which as of the measurement date shall
accrue at a rate per annum based on the Annual Facility Fee Rate. The annual
facility fee shall be the product of the Commitment of such Lender during the
period from and including the Effective Date to but excluding the date on which
such Commitment terminates and the Annual Facility Fee Rate; provided that, if
such Lender continues to have any Revolving Credit Exposure after its Commitment
terminates, then such annual facility fee shall continue to accrue on the daily
amount of such Lender's Revolving Credit Exposure from and including the date on
which its Commitment terminates to but excluding the date on which such Lender
ceases to have any Revolving Credit Exposure. Accrued annual facility fees shall
be payable in arrears on the last day of March, June, September and December of
each year and on the date on which the Commitments terminate, commencing on the
first such date to occur after the date hereof, provided that any annual
facility fees accruing after the date on which the Commitments terminate shall
be payable on demand. All annual facility fees shall be computed on the basis of
a year of three hundred sixty (360) days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day). Any
necessary adjustment in the annual facility fee pursuant to the terms hereof,
shall become effective immediately upon any change in a Rating. "
(d) Section 2.04(b)(i) of the Credit Agreement is hereby deleted in its
entirety and ------------------ replaced with the following:
"(i) the LC Exposure shall not exceed $15,000,000"
(e) Section 5.08(g) of the Credit Agreement is hereby deleted in its
entirety and replaced ---------------- with the following:
"(g) Working capital needs of the Borrower, provided, however, in no event
shall the LC Exposure and the amount of the Loans used by the Borrower for
working capital purposes exceed 20% of the Maximum Availability in the
aggregate."
(f) Section 6.01(e) of the Credit Agreement is hereby deleted in its
entirety and replaced ---------------- with the following:
"Total Unencumbered Value. At no time shall (i) the Unsecured Indebtedness
be greater than 60% of the Total Unencumbered Value, (ii) the Total Unencumbered
Value be less than $100,000,000 or (iii) the Unencumbered Eligible Projects
consist of less than ten (10) Eligible Projects."
(g) An additional Section 6.01(i) of the Credit Agreement is hereby added
--------------- as follows:
"(i) Minimum Occupancy Level for Unencumbered Eligible Projects. As of the
first day of each calendar quarter for the immediately preceding four
consecutive calendar quarters, the weighted average economic occupancy for
Unencumbered Eligible Projects shall not be less than 80% with the exception
that each individual project within the definition of Unencumbered Eligible
Projects shall have an occupancy level of not less than 75%. If the occupancy
level of an individual project falls below 75%, a capitalization rate of 10%
will be used to determine the value of the individual Unencumbered Eligible
Project. Notwithstanding the foregoing, the property known as 0000 Xxxx Xxxxxx
xx Xxxxxxxxx, Xxx Xxxx shall be excluded from this calculation through and
including the covenant compliance period ending September 30, 2003. Borrower
will include a schedule of occupancy levels of Unencumbered Eligible Projects
within its Quarterly Compliance Certificates."
(h) Schedules 2.01, 3.02, 3.04, 3.07 and 3.13 of the Credit
Agreement are replaced by the corresponding revised schedules that are made a
part hereof.
4. Representations and Warranties. In order to induce the Administrative
Agent and the Lenders to enter into this Amendment No. 2, the Borrower
represents and warrants to the Administrative Agent and the Lenders as follows:
(a) The execution, delivery and performance by Borrower of this Amendment
No. 2 and the consummation of the transactions contemplated hereby, are within
the Borrower's powers, have been duly authorized by all necessary action, and do
not (i) contravene Borrower's Partnership Agreement, (ii) violate any law
(including, without limitation, the Securities Exchange Act of 1934), rule,
regulation (including, without limitation, Regulation X of the Board of
Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award applicable to the Borrower, (iii) conflict with
or result in the breach of, or constitute a default under, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument binding
on or affecting the Borrower or any of its properties other than as specified in
the Credit Agreement, or (iv) result in or require the creation or imposition of
any Lien upon or with respect to any of the properties of Borrower.
(b) Other than those that have already been obtained and are in full force
and effect, or as would not reasonably be expected to have a Material Adverse
Effect, no authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any other third
party is required to be obtained by the Borrower for the due execution, delivery
or performance by Borrower of this Amendment No. 2.
(c) This Amendment No. 2 has been duly executed and delivered by the
Borrower. This Amendment No. 2 is the legal, valid and binding obligation of
each party hereto, enforceable against the Borrower in accordance with its terms
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or other laws relating to or limiting creditors' rights or by equitable
principles generally.
(d) All of the Borrower's representations and warranties
contained in the Credit Agreement are true and correct, the Borrower is in
compliance with all the affirmative covenants contained in the Credit Agreement,
the Borrower has not violated any of the negative covenants contained in the
Credit Agreement and no Event of Default has occurred under the terms of the
Credit Agreement and/or any of the Loan Documents.
(e) There has been no material adverse change in the condition, financial
or otherwise, of the Borrower since the date of the most recent financial
reports of the Borrower received by the Administrative Agent and each Lender
under Section 5.01 of the Credit Agreement.
(f) The business and properties of the Borrower are not, and since the most
recent financial report of the Borrower received by the Administrative Agent and
the Lenders under Section 5.01 of the Credit Agreement, have not been,
materially adversely affected in any substantial way as the result of any fire,
explosion, earthquake, accident, strike, lockout, combination of workers, flood,
embargo, riot, activities of armed forces, war or acts of God or the public
enemy, or the cancellation or loss of any major contracts.
5. Attorneys' Fees and Expenses. The Borrower shall pay all of the
Administrative Agent's and the Lenders' attorneys' fees, plus expenses and
disbursements, incurred and to be incurred in connection with the preparation,
negotiation and execution of this Amendment No. 2.
6. Entire Agreement. This Amendment No. 2 sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relative to such subject matter. No promise, condition, representation
or warranty, express or implied, not herein set forth shall bind any party
hereto, and not one of them has relied on any such promise, condition,
representation or warranties. Each of the parties hereto acknowledges that,
except as in this Amendment No. 2 otherwise expressly stated, no
representations, warranties or commitments, express or implied, have been made
by any party to the other. None of the terms or conditions of this Amendment No.
2 may be changed, modified, waived or canceled orally or otherwise, except as
provided in the Credit Agreement. Upon the Effective Date, Amendment No. 1 shall
be superceded and replaced by this Amendment No. 2.
7. Full Force and Effect of Credit Agreement. Except as hereby specifically
amended, modified, waived or supplemented, the Credit Agreement and all other
Loan Documents are hereby confirmed and ratified in all respects and shall
remain in full force and effect according to their respective terms. The parties
agree that each reference in the Credit Agreement to "the Credit Agreement",
"thereunder", "thereof", "therein" or words of like import referring to the
Credit Agreement and each referenced in the Loan Documents to the "Credit
Agreement" shall mean and be a reference to the Credit Agreement, as amended and
otherwise modified by this Amendment No. 2.
8. Counterparts. This Amendment No. 2 may be executed in any number of
counterparts, each of which shall be deemed an original as against any party
whose signature appears thereon, and all of which shall together constitute one
and the same instrument.
9. Governing Law. This Amendment No. 2 is governed by New York law. Any
litigation involving this Amendment No. 2, the Credit Agreement, the Notes or
any other Loan Document shall, at the Administrative Agent's sole option, be
triable only in a court located in Monroe County, New York. BORROWER,
ADMINISTRATIVE Agent and the Lenders party hereto WAIVE THE RIGHT TO A JURY
TRIAL IN ANY LITIGATION IN WHICH BORROWER, AND ADMINISTRATIVE Agent and the
Lenders party hereto ARE PARTIES. No other Person is a third party beneficiary
of this jury trial waiver.
10. Enforceability. Should any one or more of the provisions of this
Amendment No. 2 be determined to be illegal or unenforceable as to one or more
of the parties hereto, all other provisions nevertheless shall remain effective
and binding on the parties hereto.
11. Successors and Assigns. This Amendment No. 2 shall be binding upon and
inure to the benefit of each of the Borrower, the Lenders and the Administrative
Agent, and their respective successors, assigns and legal representatives;
provided, however, that the Borrower, without the prior consent of all of the
Lenders, may not assign any rights, powers, duties or obligations hereunder.
12. Consent of Guarantor. Home Properties of New York, Inc., a Maryland
corporation, by its execution and delivery hereof (a) consents and agrees to the
amendments to the Credit Agreement set forth herein and (b) reaffirms its
obligations set forth in the Guaranty.
IN WITNESS WHEREOF, Borrower, Agent and the Lenders have executed and
unconditionally delivered this Amendment No. 2 all as of the day and year first
above written.
HOME PROPERTIES OF NEW YORK, LP
By: Home Properties of NY, Inc.,
its General Partner
By: /s/ Xxxxxx X. Xxxx
-----------------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
MANUFACTURERS AND TRADERS
TRUST COMPANY, as Lender and as
Administrative Agent
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
CITIZENS BANK OF RHODE ISLAND
By: /s/ Xxxxx X. Xxxxxxxxxxxx
-----------------------------------------------------
Name: Xxxxx X. Xxxxxxxxxxxx
Title: Vice President
CHEVY CHASE BANK, FSB
By: /s/ X. Xxxxxx X'Xxxxx, III
-----------------------------------------------------
Name: X. Xxxxxx X'Xxxxx, III
Title: Vice President
STATE OF NEW YORK )
COUNTY OF MONROE ) ss:
On the ____ day of _______________ in the year 2002 before me, the
undersigned, a Notary Public in and for said State, personally appeared Xxxxxx
X. Xxxx of Home Properties of New York, Inc., personally known to me or proved
to me on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his capacity, and that by his signature on the instrument, the
individual, or the person upon behalf of which the individual acted, executed
the instrument.
Notary Public
STATE OF NEW YORK )
COUNTY OF MONROE ) ss:
On the ____ day of _______________ in the year 2002 before me, the
undersigned, a Notary Public in and for said State, personally appeared Xxxx X.
Xxxxxxx of Manufacturers and Traders Trust Company, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.
Notary Public
STATE OF )
COUNTY OF ) ss:
On the ____ day of _______________ in the year 2002 before me, the
undersigned, a Notary Public in and for said State, personally appeared Xxxxx X.
Xxxxxxxxxxxx of Citizens Bank of Rhode Island, personally known to me or proved
to me on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his capacity, and that by his signature on the instrument, the
individual, or the person upon behalf of which the individual acted, executed
the instrument.
Notary Public
STATE OF )
COUNTY OF ) ss:
On the ____ day of _______________ in the year 2002 before me, the
undersigned, a Notary Public in and for said State, personally appeared X.
Xxxxxx X'Xxxxx III of Chevy Chase Bank, FSB, personally known to me or proved to
me on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his capacity, and that by his signature on the instrument, the
individual, or the person upon behalf of which the individual acted, executed
the instrument.
Notary Public
The undersigned by its execution and delivery hereof (a) consents and
agrees to the Amendment No.2 herein and (ii) ratifies and reaffirms its
obligations set forth in the Guaranty, (iii) acknowledges and agrees that the
Guaranty is, and shall continue to be, in full force and (iv), except that, on
and after the Amendment Effective Date, each reference in the Guaranty to "the
Credit Agreement", "thereunder", "thereof", "therein" or words of like import
referring to the Credit Agreement shall mean and be a reference to the Credit
Agreement, as amended and otherwise modified by Amendment No. 2 . This Consent
shall be governed by, and construed in accordance with, the laws of the State of
New York.
Home Properties of New York, Inc.
By: /s/ Xxxxxx X. Xxxx
-----------------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
Schedule 2.01
Lenders' Commitments
Manufacturers and Traders Trust Company $74,750,000.00
Citizens Bank of Rhode Island $23,000,000.00
Chevy Chase Bank, F.S.B. $17,250,000.00
Schedule 3.02
Schedule 3.04
Schedule 3.07
Schedule 3.13
