EXHIBIT 1.2
-----------
AMENDMENT TO TERM LOAN AGREEMENT
This Amendment to Term Loan Agreement (the "Agreement") is made
effective as of July 26, 2005 (the "Effective Date"), by and among AMLI
Residential Properties, L.P. (the "Borrower"), AMLI Residential Properties
Trust ("General Partner"), Xxxxx Fargo Bank, N.A., individually and as
"Agent," and one or more existing "Lenders" shown on the signature pages
hereof.
RECITALS
A. Borrower, General Partner, agent and certain other Lenders have
entered into a Term Loan Agreement dated as of December 20, 2004 (as
amended, the "Term Loan Agreement"). All capitalized terms used herein and
not otherwise defined shall have the meanings given to them in the Term
Loan Agreement.
B. Pursuant to the terms of the Term Loan Agreement, the Lenders
agreed to provide Borrower with a term loan in an original principal amount
of $110,000,000. The Borrower, General Partner, the Agent and the Lenders
now desire to amend the term Loan Agreement in order to, among other things
(i) revise the Pricing Schedule; and (ii) modify certain covenants under
the Term Loan Agreement.
NOW, THEREFORE, in consideration of the foregoing Recitals and for
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
AGREEMENTS
1. The foregoing Recitals to this Amendment hereby are
incorporated into and made part of this Amendment.
2. The following definitions in Article I of the Term Loan
Agreement are hereby amended and restated in their entirety as follows:
"Applicable Cap rate" means 7.5%.
"Net Operating Income" means operating income from Real Estate
(as determined in accordance with Agreement Accounting Principles)
minus (a) all operating expenses (as determined in accordance with
agreement Accounting Principles but excluding exterior painting,
parking lot maintenance and roofing expenses which could qualify for
capitalization under Agreement Accounting Principles) incurred in
connection with and directly attributable to the generation of such
operating income but excluding interest expense and other debt
service charges and any non-cash charges such as depreciation or
amortization of financing costs, (b) an assumed management fee equal
to 4% of gross rental income (less any management fees included in
Property expenses under clause (a)) and (c) an annual capital reserve
equal to $200 for each Unit.
1
3. The following new definitions are hereby added to Article I of
the Term Loan Agreement:
"Leverage Ratio" is defined in Section 6.24.2.
"Series B Preferred" means the Convertible Preferred Series B
Stock issued by Borrower in 1998 for $75,000,000.
4. Sections 6.24.1, 6.24.2, 6.24.3 and 6.24.4 of the Term Loan
Agreement are hereby amended and restated in their entirety as follows:
6.24.1 TANGIBLE NET WORTH. The Borrower will have tangible Net
Worth of not less than the sum of (a) 489,514,000.00 plus (b) an
amount equal to seventy-five percent (75%) of the net proceeds
received by the Borrower and/or the General Partner by reason of the
issuance and sale of equity interests from and after March 31, 2005;
6.24.2 LEVERAGE. The Borrower will not permit the ratio
expressed as a percentage (the "Leverage Ratio") of (a) Consolidated
Outstanding Indebtedness as of such date to (b) Total Asset Value as
of such date to exceed 60%; provided however, that such ratio may
increase to (but not exceed) 62.5% for no more than two consecutive
quarters if the leverage increase is in conjunction with a portfolio
acquisition by Borrower.
6.24.3 INTEREST COVERAGE. The Borrower will not permit the
ratio of (a) EBITDA of the Consolidated Group, plus (without
duplication) the Consolidated Group Pro Rata Share of EBITDA of each
Investment Affiliate for the four fiscal quarters then ended to (b)
Consolidated Interest Expense for the same period to be less than
1.75 to 1.00; provided however, as long as the Series B Preferred is
outstanding as of the end of the most recent quarter for which
financial results have been reported, there shall be no interest
coverage requirements under this Section 6.24.3;
6.24.4 FIXED CHARGE COVERAGE. The borrower will not permit the
ratio of (a) EBITDA of the Consolidated Group, plus (without
duplication) the Consolidated Group Pro Rata Share of EBITDA of each
Investment Affiliate for the four fiscal quarters then ended to (b)
Fixed Charges for the same period to be less than 1.50 to 1.0;
5. The Pricing Schedule attached to the Term Loan Agreement is
hereby amended and restated in its entirety by the Pricing Schedule
attached hereto as Exhibit A.
6. The Borrower hereby represents and warrants that, as of the
Effective Date, there is no Default or Unmatured Default, the
representations and warranties contained in Article V of the Term Loan
Agreement are true and correct in all material respects as of such date and
the Borrower has no offsets or claims against any of the Lenders.
7. As expressly modified as provided herein, the Term Loan
Agreement shall continue in full force and effect.
2
8. This Amendment may be executed in any number of counterparts,
all of which taken together shall constitute one agreement, and any of the
parties hereto may execute this Amendment by signing any such counterpart.
[ REMAINDER OF PAGE INTENTIONALLY LEFT BLANK ]
3
IN WITNESS WHEREOF, the parties have executed and delivered this
Amendment as of the date first written above.
AMLI RESIDENTIAL PROPERTIES, L.P.
By: AMLI RESIDENTIAL PROPERTIES
TRUST
Its: General Partner
By: [ executed signature ]
------------------------------
Its: Executive Vice President
ADDRESS FOR NOTICES:
-------------------
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: 000-000-0000
FAX: 000-000-0000
AMLI RESIDENTIAL PROPERTIES TRUST
By: [ executed signature ]
------------------------------
Its: Executive Vice President
ADDRESS FOR NOTICES:
-------------------
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: 000-000-0000
FAX: 000-000-0000
S-1
CONTINUATION OF SIGNATURE PAGE
XXXXX FARGO BANK, N.A., Individually
and as Agent
By: /s/ Xxxxx Xxxxx
------------------------
Print
Name: Xxxxx Xxxxx
------------------------
Title: Vice President
------------------------
000 X. Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxx
S-2
CONTINUATION OF SIGNATURE PAGE
COMMERZBANK AG NEW YORK AND
GRAND CAYMAN BRANCHES
By: /s/ Xxxxxxxxx Xxxxx
------------------------
Name: Xxxxxxxxx Xxxxx
------------------------
Title: Vice President
------------------------
By: /s/ Xxxxx Xxxxx
------------------------
Name: Xxxxx Xxxxx
------------------------
Title: Assistant Treasurer
------------------------
ADDRESS FOR NOTICES:
-------------------
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxx Xxxxx
S-3
CONTINUATION OF SIGNATURE PAGE
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxx
------------------------
Name: Xxxxxxx X. Xxxxx
------------------------
Title: Senior Vice President
------------------------
ADDRESS FOR NOTICES:
-------------------
One PNC Xxxxx
X0-XXXX-00-0
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
S-4
CONTINUATION OF SIGNATURE PAGE
COMERICA BANK
By: /s/ Xxxxxx Xxxxx
------------------------
Name: Xxxxxx Xxxxx
------------------------
Title: Vice President
------------------------
ADDRESS FOR NOTICES:
-------------------
000 Xxxxxxxx
XX 0000
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
S-5
EXHIBIT A
PRICING SCHEDULE
----------------
Borrower will pay the lower of the pricing determined by the Ratings Grid
or the pricing determined by the Leverage Grid.
RATINGS GRID
--------------------------------------------------------------------
LEVEL I LEVEL II LEVEL III
DEBT RATING STATUS STATUS STATUS
--------------------------------------------------------------------
Eurodollar Rate Margin .65% .75% .85%
Floating Rate Margin 0% 0% 0%
--------------------------------------------------------------------
For the purposes of the Ratings Grid of this Schedule, the following
terms have the following meanings, subject to the final paragraph of this
Schedule:
"Level I Status" exists at any date if, on such date, the Borrower's
Xxxxx'x Rating is Baa1 or better or the Borrower's S&P Rating is BBB+ or
better.
"Level II Status" exists at any date if, on such date, (i) the
Borrower has not qualified for Level I Status and (ii) the Borrower's
Xxxxx'x Rating is Baa2 or better or the Borrower's S&P Rating is BBB or
better.
"Level III Status" exists at any date if, on such date, (i) the
Borrower has not qualified for Level I Status or Level II Status and (ii)
the Borrower's Xxxxx'x Rating is Baa3 or better or the Borrower's S&P
Rating is BBB- or better.
"Xxxxx'x Rating" means, at any time, the rating issued by Xxxxx'x and
then in effect with respect to the Borrower's senior unsecured long-term
debt securities without third-party credit enhancement.
"S&P Rating" means, at any time, the rating issued by S&P and then in
effect with respect to the Borrower's senior unsecured long-term debt
securities without third-party credit enhancement.
"Status" means either Level I Status, Level II Status, or Level III
Status.
The Applicable Margin shall be determined in accordance with the
foregoing table based on the Borrower's Status as determined from its then-
current Xxxxx'x or S&P Ratings. The credit rating in effect on any date
for the purposes of this Schedule is that in effect at the close of
business on such date. If at any time the Borrower has no Xxxxx'x Rating
and no S&P Rating, pricing shall be determined by the Leverage Grid. If at
any time the Borrower has a Xxxxx'x Rating and an S&P Rating at different
Levels, the lower of the two credit ratings shall be used if such ratings
differ by only one level. If such ratings differ by more than one level,
the applicable Level shall be one Level higher than the Level which is
applicable to the lower of the two ratings.
EXHIBIT A-1
LEVERAGE GRID
----------------------------------------------------------------------
LESS LESS LESS LESS LESS
THAN OR THAN OR THAN OR THAN OR THAN OR
LEVERAGE EQUAL EQUAL EQUAL EQUAL EQUAL
RATIO TO 45% TO 50% TO 55% TO 60% TO 62.5%
----------------------------------------------------------------------
Eurodollar
Rate Margin .70% .85% 1.00% 1.15% 1.25%
----------------------------------------------------------------------
Floating
Rate Margin 0% 0% 0% .10% .25%
----------------------------------------------------------------------
* Leverage is permitted to increase to not more than 62.5% for no more
than two consecutive quarters only if the leverage increase is in
conjunction with a portfolio acquisition.
All margins and fees change quarterly as of the last day of each quarter
based on the Leverage Ratio as of such date. The leverage grid applies so
long as AMLI is not rated or is rated less than investment grade, or if the
Leverage Grid pricing would be lower than the applicable pricing based on
the Ratings Grid.
EXHIBIT A-2
