EXHIBIT 10(a)
THIRD AMENDMENT TO
REVOLVING CREDIT LOAN AGREEMENT
AMONG
XXXXX EQUITY, INC.
and
FLEET NATIONAL BANK, AS ARRANGER AND ADMINISTRATIVE AGENT
and
XXXXX FARGO BANK, NATIONAL ASSOCIATION, AS SYNDICATION AGENT
and
THE LENDERS PARTY HERETO
THIRD AMENDMENT TO REVOLVING CREDIT LOAN AGREEMENT
--------------------------------------------------
This THIRD AMENDMENT TO REVOLVING CREDIT LOAN AGREEMENT is dated as of
the 16th day of December, 2002, by and among XXXXX EQUITY, INC., a Florida
corporation (the "Borrower"), FLEET NATIONAL BANK, as agent for the Lenders
under the Credit Agreement described below (the "Agent"), and FLEET NATIONAL
BANK ("Fleet"), XXXXX FARGO BANK, NATIONAL ASSOCIATION, AS SYNDICATION AGENT
("Xxxxx Fargo"), COMPASS BANK ("Compass "), COMMERZBANK AG, NEW YORK AND GRAND
CAYMAN BRANCHES, AS DOCUMENTATION AGENT ("Commerzbank") and COMERICA BANK
("Comerica"). Fleet and Xxxxx Fargo are sometimes herein called the "Continuing
Lenders" and Compass, Commerzbank and Comerica are sometimes herein called the
"Exiting Lenders."
WHEREAS, the parties hereto are parties to that certain Revolving
Credit Loan Agreement dated as December 28, 2001, as amended by First Amendment
to Revolving Credit Loan Agreement dated as April 5, 2002, and by Second
Amendment to Revolving Credit Loan Agreement dated as June 10, 2002 (as amended,
the "Credit Agreement"); and
WHEREAS, the Borrower has requested that the Lenders approve a release
of the Mortgaged Property owned by Xxxxx Ravinia, LLC located at Three Ravinia
Drive in Atlanta, Georgia and has requested certain amendments to the Credit
Agreement in connection therewith, including a decrease in the Total Commitment.
NOW, THEREFORE, the parties hereby agree that effective upon the
Amendment Effective Date (as defined in paragraph 12 below) the Credit Agreement
is amended as follows:
1. Definitions: ss.1.1 of the Credit Agreement is amended to provide
that the following terms shall have the following meanings and, to the extent
that any of the following terms are already defined in the Credit Agreement,
such definitions shall be deemed to be amended and restated by the following
definitions:
Applicable Base Rate Margin. As of any date of determination:
(i) 0.40% per annum, if Total Liabilities is less than
thirty-five percent (35%) of Gross Asset Value;
(ii) 0.65% per annum, if Total Liabilities is equal to or
greater than thirty-five percent (35%) of Gross Asset Value and less
than or equal to forty-five percent (45%) of Gross Asset Value;
(iii) 0.90% per annum, if Total Liabilities is greater than
forty-five percent (45%) of Gross Asset Value and less than or equal to
fifty-five percent (55%) of Gross Asset Value;
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(iv) 1.125% per annum, if Total Liabilities is greater than
fifty-five percent (55%) of Gross Asset Value and less than or equal to
sixty percent (60%) of Gross Asset Value; and
(v) 1.25% per annum, if Total Liabilities is greater than
sixty percent (60%) of Gross Asset Value
The Applicable Base Rate Margin shall be determined by the Agent as of the
Amendment Effective Date. Any change in the Applicable Base Rate Margin shall
become effective as of the 46th day following the end of the fiscal quarter on
which the ratio of Total Liabilities to Gross Asset Value changed above or below
an applicable percentage level set forth above.
Applicable LIBOR Margin. As of any date of determination:
(i) 1.65% per annum, if Total Liabilities is less than
thirty-five percent (35%) of Gross Asset Value;
(ii) 1.90% per annum, if Total Liabilities is equal to or
greater than thirty-five percent (35%) of Gross Asset Value and less
than or equal to forty-five percent (45%) of Gross Asset Value; and
(iii) 2.15% per annum, if Total Liabilities is greater than
forty-five percent (45%) of Gross Asset Value and less than or equal to
fifty-five percent (55%) of Gross Asset Value;
(iv) 2.375% per annum, if Total Liabilities is greater than
fifty-five percent (55%) of Gross Asset Value and less than or equal to
sixty percent (60%) of Gross Asset Value; and
(v) 2.50% per annum, if Total Liabilities is greater than
sixty percent (60%) of Gross Asset Value.
The Applicable LIBOR Margin shall be determined by the Agent as of the Amendment
Effective Date. Any change in the Applicable LIBOR Margin shall become effective
as of the 46th day following the end of the fiscal quarter on which the ratio of
Total Liabilities to Gross Asset Value changed above or below an applicable
percentage level set forth above.
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Borrowing Base Value. The aggregate value for all Mortgaged Properties,
determined as follows:
(i) for each Stabilized Property (other than a Pro Forma
Stabilized Property), Borrowing Base Value shall equal sixty-five
percent (65%) of the lesser of (a) the Appraised Value of such
Stabilized Property or (b) an amount equal to the Adjusted Net
Operating Income of such Stabilized Property, divided by the
Capitalization Rate,
(ii) for each Pro Forma Stabilized Property, Borrowing Base
Value shall equal sixty-five percent (65%) the lesser of (a) the
Appraised Value of such Pro Forma Stabilized Property or (b) an amount
equal to the Pro Forma Adjusted Net Operating Income of such Pro Forma
Stabilized Property determined based on the Effective Leases of such
Property (and excluding all income from any other Leases) as of the end
of the last preceding quarter for which a Compliance Certificate has
been delivered pursuant to ss.7.4(d), divided by the Capitalization
Rate, or
(iii) for each Non-Stabilized Property included within the
Collateral, Borrowing Base Value shall equal fifty-five percent (55%)
the Appraised Value of such Non-Stabilized Property.
Capitalization Rate. Ten percent (10%).
Collateral Cash Flow. The aggregate Adjusted Net Operating Income
derived from the Mortgaged Properties.
Gross Asset Value. The sum of the following and without duplication:
(a) the Borrower's Total Net Operating Income for the six month period that
ended as of the end of the last preceding quarter for which a Compliance
Certificate has been delivered pursuant to ss.7.4(d), less (i) the portion of
Total Net Operating Income from the real property assets (other than Ravinia and
Post Oak) acquired during such six month period, less (ii) the portion of Total
Net Operating Income from Ravinia and Post Oak, multiplied by two and divided by
the Capitalization Rate, (b) unrestricted cash and cash equivalents, (c) 100% of
actual costs incurred in Construction in Progress, restricted to a maximum of
10% of Gross Asset Value, (d) acquisitions of real property assets during said
six month period at their cost basis, (e) Ravinia and Post Oak at their cost
basis; (f) undeveloped land at its cost basis, restricted to a maximum of 5% of
Gross Asset Value, and (g) Borrower's Unconsolidated Entity Percentage of the
assets owned by Unconsolidated Entities, (the amount of such assets being that
shown on the balance sheet of the applicable Unconsolidated Entity prepared in
accordance with Generally Accepted Accounting Principles, adjusted to add back
the accumulated depreciation of its real estate assets).
Post Oak. The Real Estate Asset owned by a Related Company known as
The Lakes on Post Oak located in Houston Texas.
Ravinia. The Real Estate Asset owned by a Related Company located at
Three Ravinia Drive in Atlanta, Georgia.
Ravinia Release Prepayment. The prepayment of the Loans in the amount
of $85,000,000 to be received by the Agent simultaneously with the release of
the Security Documents encumbering Ravinia.
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Total Net Operating Income. With respect to any fiscal period of the
Borrower, the sum of (i) the Net Operating Income for all Real Estate Assets
owned by the Borrower or any of the Related Companies, (ii) plus, to the extent
deducted when computing such Net Operating Income, bad debt expenses and
corporate expense allocations, (iii) less an assumed management fee equal to
four percent (4%) of rental income from such Real Estate Assets for such period,
(iv) less the Reserve Amount for such Real Estate Assets.
2. Decrease in Total Commitment and Application of Ravinia Release
Prepayment. The Total Commitment is hereby decreased to $100,000,000 and each
Lender hereby modifies, effective on the Amendment Effective Date, its
Commitment to the amount shown on the revised Schedule 1.2 attached hereto. As
of the Amendment Effective Date, the Commitment Percentages of the Lenders shall
be adjusted as shown on said revised Schedule 1.2. The Ravinia Release
Prepayment shall not be distributed to all Lenders according to their pro rata
shares pursuant to ss. 14.5(a), but rather shall be applied first to prepay in
full all of the Loans owed to the Exiting Lenders and then among the Continuing
Lenders so that following the Amendment Effective Date each of the Continuing
Lenders will be owed its new Commitment Percentage of all outstanding Loans.
Attached hereto is a schedule showing the distribution of the Ravinia Release
Prepayment among the Lenders. Upon the receipt of such prepayment by each
Exiting Lender on or after the Amendment Effective Date, it shall no longer be a
Lender hereunder.
3. Release of Ravinia. Each of the Lenders hereby consents, pursuant to
ss.5.5, to the release of Ravinia from the lien of the Security Documents on the
Amendment Effective Date and authorizes the Agent to execute and deliver a
Cancellation of Security Deed and Assignment of Leases and Rents, UCC financing
statement terminations and other documents reasonably requested to effect such
release. The Agent is also authorized to terminate the Guaranty of Xxxxx Ravinia
as of the Effective Date. Thereafter, the term "Guarantor" as defined in the
Credit Agreement shall no longer include Xxxxx Ravinia.
4. Amendment of ss.8.3(d). ss.8.3(d) is hereby amended and restated to
read as follows:
(d) Investments in the following categories so long as the
aggregate amount, without duplication, of all Investments described in this
paragraph (d) (other than Permitted Development) does not exceed, at any time,
twenty-five percent (25%) of Gross Asset Value and the aggregate amount of each
of the following categories of Investments does not exceed the specified
percentage of Gross Asset Value set forth in the following table:
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Category of Investment Maximum Percentage of Gross Asset Value
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Permitted Development 10%
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Real Estate Assets that are not office buildings or 5%
office parks
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Unconsolidated Entities primarily engaged in the 25%
business of development, management or ownership of
real estate located in the United States
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Undeveloped land 5%
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Mortgages and notes receivable 5%
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5. Amendment of ss.9.3. ss.9.3 is hereby amended and restated to read
as follows:
ss.9.3. Total Liabilities to Gross Asset Value. The Borrower will not
permit Total Liabilities to exceed sixty-five percent (65%) of Gross Asset
Value, calculated as of the end of each fiscal quarter.
6. Amendment of ss.9.4. ss.9.4 is hereby amended and restated to read
as follows:
ss.9.4. Adjusted EBITDA to Interest Expense. The Borrower will not
permit the ratio of its Adjusted EBITDA to Interest Expense to be less than 1.75
to 1.0 for any period of four consecutive fiscal quarters, calculated as of the
end of each fiscal quarter.
7. Amendment of ss.9.5. ss.9.5 is hereby amended and restated to read
as follows:
ss.9.5. EBITDA to Fixed Charges. The Borrower will not permit the ratio
of its EBITDA to Fixed Charges to be less than 1.5 to 1.0 for any period of four
consecutive fiscal quarters, calculated as of the end of each fiscal quarter.
8. Updated Schedules. Effective of the Amendment Effective Date the
following Schedules to the Credit Agreement shall be deemed to be amended to
delete therefrom all references to items relating to Ravinia:
Schedule 1.2 Mortgaged Properties
Schedule 6.7 Litigation
Schedule 6.15 Insider Transactions
Schedule 6.18 Environmental Reports and Environmental Matters
Schedule 6.20 Rent Rolls
Schedule 6.22(d) Property Condition Reports
Schedule 6.22 (l) Other Material Agreements
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9. Representations and Warranties. The Borrower represents and warrants
that, to its knowledge and belief, no Default or Event of Default has occurred
and is continuing on the date hereof.
10. Effectiveness of Loan Documents. The Borrower hereby confirms that
each of the Security Documents (other than the Ravinia Security Documents that
are being released) shall continue to secure the payment and performance of all
of the Obligations under the Credit Agreement as amended hereby and the
Borrower's obligations under the Security Documents shall continue to be valid
and enforceable and shall not be impaired or limited by the execution or
effectiveness of this Amendment. Every reference contained in the Loan Documents
to the Credit Agreement shall mean and be a reference to the Credit Agreement as
amended hereby and as the Credit Agreement may be further amended. Except as
specifically amended by this Amendment, the Credit Agreement and each of the
Loan Documents shall remain in full force and effect and are hereby ratified and
confirmed.
11. Miscellaneous. This Amendment shall be governed by, interpreted and
construed in accordance with all of the same provisions applicable under the
Credit Agreement including, without limitation, all definitions set forth in
ss.1.1, the rules of interpretation set forth in ss.1.2, the provisions relating
to governing law set forth in ss.20, the provisions relating to counterparts in
ss.22 and the provision relating to severability in ss.26.
12. Conditions to Effectiveness. This Third Amendment to Credit
Agreement shall become effective on the earliest date (the "Amendment Effective
Date") that each of the following conditions shall have been satisfied:
(a) This Third Amendment to Credit Agreement shall have been duly
executed and delivered by all of the parties hereto and the Borrower shall have
executed and delivered to each Continuing Lender a new Note in the amount of its
Commitment as in effect on and after the Amendment Effective Date.
(b) The Agent shall have received updated certificates and other items
relating to the Borrower as described in ss.10.2, ss.10.3 and ss.10.4 and a
favorable opinion addressed to the Lenders and the Agent, in form and substance
reasonably satisfactory to the Lenders and the Agent as to the matters addressed
in the opinions delivered pursuant to ss.10.5.
(c) The Agent shall have received the Ravinia Release Prepayment in
immediately available funds.
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(d) The Agent shall have received an endorsement to each of the Title
Policies (other than the Ravinia Title Policy) confirming that this amendment
does not affect the priority of the insured mortgage and that the Ravinia
Release Prepayment does not reduce the amount of insurance coverage thereunder
except that the tie-in endorsements may be replaced to reflect the decrease in
the Total Commitment.
(e) The Agent shall have received the fees payable to the Agent and the
Continuing Lenders in the amounts set forth in the fee letter dated December 11,
2002 from the Continuing Lenders to the Borrower.
In the event that the Amendment Effective Date has not occurred on or before
December 31, 2002 then this instrument shall be void and the Credit Agreement
shall remain in effect as though this instrument had never been executed.
[signature pages follow]
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as a sealed instrument as of the date first set forth above.
BORROWER:
XXXXX EQUITY, INC., a Florida corporation
By: /S/ Xxxxxxxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
Title: Senior Vice President
AGENT:
FLEET NATIONAL BANK, as Agent
By: /S/ Xxxx X. Xxxxx
-----------------
Name: Xxxx X. Xxxxx
Title: Director
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Lender Signature Page
FLEET NATIONAL BANK
By: /S/ Xxxx X. Xxxxx
-----------------
Name: Xxxx X. Xxxxx
Title: Director
Commitment before Amendment Effective Date: $35,000,000
Commitment Percentage before Amendment Effective Date: 28%
Commitment on and after Amendment Effective Date: $50,000,000
Commitment Percentage on and after Amendment Effective Date: 50%
Notice Address: Fleet National Bank
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Structured Real Estate
With a copy to:
Fleet National Bank.
000 Xxxxxxxxx Xxxxxx Xxxxx, X.X.
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxx, Director
Fax: (000)000-0000 or 000-0000
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Lender Signature Page
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By: /S/ Xxxxx X. Xxxxx, III
-----------------------
Name: Xxxxx X. Xxxxx, III
Title: Vice President
Commitment before Amendment Effective Date: $40,000,000
Commitment Percentage before Amendment Effective Date: 32%
Commitment on and after Amendment Effective Date: $50,000,000
Commitment Percentage on and after Amendment Effective Date: 50%
Notice Address: Xxxxx Fargo Bank, N.A.
c/o Wells Fargo Florida Real Estate Group
Suite 1450
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxx, III
Fax: (000) 000-0000
With a copy to:
Xxxxx Fargo Bank, N.A.
Suite 1450
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
Fax: (000) 000-0000
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Lender Signature Page
COMPASS BANK
By: /S/ Xxxxxxx Xxxx Xxxxx
----------------------
Name: Xxxxxxx Xxxx Xxxxx
Title: Senior Vice President
Commitment before Amendment Effective Date: $20,000,000
Commitment Percentage before Amendment Effective Date: 16%
Commitment on and after Amendment Effective Date: $0
Commitment Percentage on and after Amendment Effective Date: 0%
Notice Address: Compass Bank
00 Xxxxx 00xx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
Fax: (000) 000-0000
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Lender Signature Page
COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES
By: /S/ E. Xxxxxx Xxxxx
----------------------------------------
Name: E. Xxxxxx Xxxxx
Title: Assistant Vice President
By: /S/ Xxxxx X. Xxxxx, Xx.
-------------------------------
Name: Xxxxx X. Xxxxx, Xx.
Title: Vice President
Commitment before Amendment Effective Date: $20,000,000
Commitment Percentage before Amendment Effective Date: 16%
Commitment on and after Amendment Effective Date: $0
Commitment Percentage on and after Amendment Effective Date: 0%
Notice Address: Commerzbank AG, New York and
Grand Cayman Branches
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxxx Xxxxx, Assistant Vice President
Fax: (000) 000-0000
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Lender Signature Page
COMERICA BANK
By: /S/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: Account Officer
Commitment before Amendment Effective Date: $10,000,000
Commitment Percentage before Amendment Effective Date: 8%
Commitment on and after Amendment Effective Date: $0
Commitment Percentage on and after Amendment Effective Date: 0%
Notice Address: Comerica Bank
000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxx, Account Officer
Fax: (000) 000-0000
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SCHEDULE 1.1
Commitments
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Commitment Commitment on Commitment % prior to Commitment % after
prior to and after Amendment Effective Amendment Effective
Lender Amendment Amendment Effective Date Date
Effective Date Date
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Fleet National Bank $35,000,000 $50,000,000 28% 50%
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Xxxxx Fargo Bank, National
Association $40,000,000 $50,000,000 32% 50%
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Compass Bank $20,000,000 0 16% 0
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Commerzbank AG, New York
and Grand Cayman Branches $20,000,000 0 16% 0
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Comerica Bank $10,000,000 0 8% 0
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Totals $125,000,000 $100,000,000 100% 100%
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Distribution of the Ravinia Release Prepayment among the Lenders
Commitment Amount O/S Amount of O/S Balance
Amt prior to % prior to prior to Pay-down After
Amendment Amendment Amendment or Pay-off Amendment
Fleet Bank 35,000,000 28% 31,920,000 17,420,000 14,500,000
Xxxxx Fargo 40,000,000 32% 36,480,000 21,980,000 14,500,000
Commerzbank 20,000,000 16% 18,240,000 18,240,000
Compass Bank 20,000,000 16% 18,240,000 18,240,000
Comerica Bank 10,000,000 8% 9,120,000 9,120,000
----------------- ----------------------------------- -----------------
125,000,000 114,000,000 85,000,000 29,000,000
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