EXHIBIT 10.78
AMENDMENT NO. 4
TO CREDIT AGREEMENT
This AMENDMENT NO. 4 TO CREDIT AGREEMENT (this "Amendment No. 4") is made
and entered into as of the 8 day of September, 2005 by and among HOME
PROPERTIES, L.P., f/k/a Home Properties of New York, L.P. (the "Borrower"), the
LENDERS party hereto 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 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.
D. The Borrower, the Administrative Agent, M&T, CBRI and CCB entered
into Amendment No. 2 to Credit Agreement, dated as of September 1, 2002
("Amendment No. 2") pursuant to which certain further amendments to the 1999
Credit Agreement as amended by Amendment No. 1 were made.
E. On April 1, 2003, M&T assigned to Comerica Bank ("CB") a portion of
its Commitment which constituted 17.39130435% of all Commitments and loans
previously made pursuant thereto.
F. The Borrower, the Administrative Agent, M&T, CBRI , CCB and CB
entered into Amendment No. 3 to Credit Agreement, dated as of April 1, 2004
("Amendment No. 3") pursuant to which certain further amendments to the 1999
Credit Agreement as amended by Amendment No. 1 and Amendment No. 2 were made.
The 1999 Credit Agreement as amended by Amendment Xx. 0, Xxxxxxxxx Xx. 0,
Xxxxxxxxx Xx. 0 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."
F. 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 Xx. 0, Xxxxxxxxx Xx. 0 and Amendment No. 3
are hereinafter restated with any further modification or amendments made by
this Amendment No. 4.
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. This
Amendment No. 4 is a cumulative amendment entirely replacing and restating
previous amendments. Any capitalized terms used herein without definition shall
have the meaning set forth in the Credit Agreement.
2. Amendment Effective Date. This Amendment No. 4 shall be effective on the
later of September 8, 2005 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. 4 from the Lenders, the Borrower and the
Company and the fully executed Notes dated as of the date hereof from the
Borrower.
2.2 The Administrative Agent shall have received an opinion of counsel to
the Borrower and the Company acceptable to it in its sole discretion and such
other certificates, instruments and other writings pertaining to the Borrower
and the Company 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. 4 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:
3.1 Section 1.01 of the Credit Agreement is hereby amended to amend and
restate in their respective entireties the definitions of "Alternate Base Rate,"
"Applicable Eurodollar Margin," "Borrower," "Capital Expenditure Reserve
Amount," "Commitment," "Company," "Fixed Charges," "Maturity Date," "Management
Company," "Maximum Availability," "Prime Rate," "Required Lenders," "Statutory
Reserve Rate," "Total Property Value," "Total Value," and "Type" to read as
follows:
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"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+ 62.5 basis points
BBB 75.0 basis points
BBB- 87.5 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) 62.5 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.
"Borrower" means Home Properties, L.P., a New York limited
partnership.
"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 $140,000,000. Provided that no Event of Default under the
Credit Agreement has occurred, the Borrower may request on or before
September 1, 2007 that the Lenders increase the aggregate amount of the
Lenders' Commitments to an amount not exceeding $190,000,000. No increase
will be effective unless a Lender gives its written consent to increase its
Commitment and a new Note in the increased amount of such Lender's
Commitment is executed in favor of the Lender and delivered to the
Administrative Agent for the account of such Lender. The decision of a
Lender to increase its Commitment will be in its sole and absolute
discretion.
"Company" means Home Properties, Inc., a Maryland corporation.
"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, or
preferred partnership units, as the case may be. The Lenders acknowledge
that certain convertible preferred issues were previously excluded from
this definition and agree to review, at the request of the Borrower, any
future convertible preferred issues for similar consideration.
"Management Company" means Home Properties Management, Inc. and Home
Properties Resident Services, Inc., both Maryland corporations of which
100% 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, 2008, unless (i) the Borrower
advises the Administrative Agent on or before June 1, 2008 in writing of
its desire to extend the Maturity Date and pays the Administrative Agent
for the account of each Lender an extension fee (the "Extension Fee") equal
to 0.08% of each Lender's Commitment 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, 2009. Upon payment, the
Extension Fee shall be fully earned and non-refundable.
"Maximum Availability" means the aggregate amount of the Lenders'
Commitments.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by Manufacturers and Traders Trust Company as its prime
rate in effect at its principal office; each change in the Prime Rate shall
be effective from and including the date such change is publicly announced
as being effective.
"Required Lenders" means, at any time, Lenders having Revolving Credit
Exposures and unused Commitments representing at least 51% of the sum of
the total Revolving Credit Exposures and unused Commitments at such time.
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is
the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board to which the Administrative
Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation
D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. The Statutory Reserve Rate shall
be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"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 7.75% 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.
"Total Value" means, as of any date, the sum of (i) Total Property
Value for all Eligible Projects; (ii) an amount equal to 75% of all
investments in notes secured by mortgages on the Property of any Person
(including Affiliates); (iii) unrestricted Permitted Investments of the
Consolidated Businesses; (iv) an amount equal to 75% of Book Value of
undeveloped land and Projects on which construction is in progress, up to a
maximum of 10% of Total Value before including the amount of Total Value
derived from this clause (iv); and (v) Borrower's pro rata share of
investments in Real Property not constituting Eligible Projects, valued at
the lower of cost or the value specified in clauses (i) through (v) above.
"Type" when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
3.2 Section 1.01 of the Credit Agreement is further amended (i) to delete
in their respective entireties the following definitions: "Adjusted EBITDA,"
"Assessment Rate," "Base CD Rate," "Money Market," "Money Market Loan Maturity
Date," "Money Market Rate," "Restricted Payment" and "Three-Month Secondary CD
Rate" and (ii) to insert the following new definitions:
"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+ 12.5 basis points
BBB 15.0 basis points
BBB- 17.5 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) 12.5 basis points if the Rating is above
BBB+; or (ii) 25 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.
"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 7.75%;
(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 75% of Book Value of undeveloped land and Projects on which
construction is in progress, up to a maximum of 10% of Total Unencumbered
Value before including the amount of Total Unencumbered Value derived from
this clause (iii). 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.
3.3 Section 2.02 and Section 2.03 of the Credit Agreement are hereby
deleted in their respective entireties and replaced with the following:
SECTION 2.02 Loans and Borrowings.
(a) Each Loan shall be made as part of a Borrowing consisting of Loans made
by the Lenders ratably in accordance with their respective Commitments. The
failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder, provided that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender's failure to make Loans as required.
(b) Subject to Section 2.12, each Borrowing shall be comprised entirely of
ABR Loans or Eurodollar Loans as the Borrower may request in accordance
herewith. Each Lender at its option may make any Eurodollar Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar Loan,
such Loan shall be in an aggregate amount that is not less than $2,500,000 and
$250,000 increments in excess thereof. At the time that each ABR Loan is made,
such Borrowing shall be in an aggregate amount that is an integral multiple of $
100,000 and not less than $ 1,000,000; provided that an ABR Loan may be in an
aggregate amount that is equal to the entire unused balance of the total
Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.04(e). Borrowings of more than one
Type may be outstanding at the same time; provided that there shall not at any
time be more than a total of ten Eurodollar Loans outstanding.
(d) Notwithstanding anything herein to the contrary, at no time shall the
aggregate Revolving Credit Exposure be greater than the Maximum Availability.
(e) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.
SECTION 2.03. Requests for Borrowings. To request a Borrowing, the Borrower
shall notify the Administrative Agent of such request by telephone (a) in the
case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time,
three Business Days before the date of the proposed Borrowing or (b) in the case
of an ABR Borrowing, not later than 11:00 a.m., New York City time, one Business
Day before the date of the proposed Borrowing; provided that any such notice of
an ABR Borrowing to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.04(e) may be given not later than 10:00 a.m., New York
City time, on the date of the proposed Borrowing. Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request in the form
of Exhibit D-1 attached hereto, or such other form approved by the
Administrative Agent, and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.05.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be a Eurodollar Borrowing with an Interest Period of one month's
duration. If no Interest Period is specified with respect to any requested
Eurodollar Borrowing, then the Borrower shall be deemed to have selected an
Interest Period of one month's duration. Promptly following receipt of a
Borrowing Request in accordance with this Section, the Administrative Agent
shall advise each Lender of the details thereof and of the amount of such
Lender's Loan to be made as part of the requested Borrowing.
3.4 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 $20,000,000
3.5 Section 2.06 of the Credit Agreement is hereby deleted in its entirety
and replaced with the following:
SECTION 2.06. Interest Elections.
(a) Each Loan initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Loan, shall have an initial
Interest Period as specified in such Borrowing Request. Thereafter, the Borrower
may elect to convert such Loan to a different Type or to continue such Loan and,
in the case of a Eurodollar Loan, may elect Interest Periods therefor, all as
provided in this Section. The Borrower may elect different options with respect
to different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower shall notify
the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing
(in which case the information to be specified pursuant to clauses (iii)
and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv)if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term "Interest
Period."
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election Request
with respect to a Eurodollar Loan prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Loan shall be converted to a Eurodollar
Loan with an Interest Period of one month's duration. Notwithstanding any
contrary provision hereof, if an Event of Default has occurred and is continuing
and the Administrative Agent, at the request of the Required Lenders, so
notifies the Borrower, then, so long as an Event of Default is continuing (i) no
outstanding Loan may be converted to or continued as a Eurodollar Loan and (ii)
unless repaid, each Eurodollar Loan shall be converted to an ABR Loan at the end
of the Interest Period applicable thereto.
3.6 Section 2.09(b) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
(b) The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Loan, not later than 11:00 a.m., New York City time,
three Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Loan, not later than 11:00 a.m., New York City time, one
Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each Borrowing or portion thereof to be prepaid; provided that, if a notice of
prepayment is given in connection with a conditional notice of termination of
the Commitments as contemplated by Section 2.07, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.07. Promptly following receipt of any such notice relating to a Loan,
the Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Loan shall be in an amount that would be permitted in
the case of an advance of a Loan of the same Type as provided in Section 2.02.
Each prepayment of a Loan shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.11.
3.7 Section 2.10 and Section 2.11 of the Credit Agreement are hereby
deleted in their respective entireties and replaced with the following:
SECTION 2.10. Fees.
(a) On the date of this Amendment No. 4, Borrower shall pay to the
Administrative Agent for the account of each Lender a commitment fee equal to
0.125% of each Lender's Commitment, which shall be fully earned and
non-refundable.
(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.
(c) Upon the issuance of each Letter of Credit, the Borrower agrees to pay
to the Lender an issuance fee. If the requested Letter of Credit is for a
duration of one year, the issuance fee shall be equal to .9% of the face amount
of the Letter of Credit, which Letter of Credit fee shall also be due on each
anniversary date of the issuance of the Letter of Credit (or any extension or
renewal thereof), so long as the Letter of Credit (or any extension or renewal
thereof), remains outstanding. If the requested Letter of Credit is for a
duration of less than one year, the issuance fee shall be equal to .9%,
pro-rated to the nearest 1/12 of a year, of the face amount of the Letter of
Credit. Notwithstanding the above, in no case shall the issuance fee be less
than the greater of $400.00 or1/2% of the face amount of the Letter of Credit.
Upon the issuance of each Letter of Credit (and upon each anniversary thereof so
long as the Letter of Credit remains outstanding), the issuance fee shall be
payable in full and shall be fully earned and non-refundable. Borrower shall
also pay to the Lender the Lender's standard fees with respect to the amendment,
renewal or extension of any Letter of Credit and processing of drawings
thereunder.
(d) The Borrower agrees to pay to the Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.
(e) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
facility fees and participation fees, to the Lenders. Fees paid shall not be
refundable under any circumstances. Upon its receipt of fees to which the
Lenders are entitled, the Administrative Agent shall promptly remit such fees to
the Lenders as provided herein.
SECTION 2.11. Interest.
(a) The Loans comprising each ABR Borrowing shall bear interest at the
Alternate Base Rate, which rates are subject to change without notice to the
Borrower as specified in the definition of Alternate Base Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest at
the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus
the Applicable Eurodollar Margin.
(c) [intentionally omitted].
(d) Notwithstanding the foregoing, if any principal of or interest on any
Loan or any fee or other amount payable by the Borrower hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section.
(e) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for the immediately preceding calendar month and upon
termination of the Commitments; provided that (i) interest on any Eurodollar
Loan shall be paid at the end of each Interest Period but in no event less
frequently than every three months, (ii) interest accrued pursuant to paragraph
(d) of this Section 2.11 shall be payable on demand, (iii) in the event of any
repayment or prepayment of any Loan, accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment
and (iv) in the event of any conversion of any Eurodollar Loan prior to the end
of the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.
(f) All interest hereunder shall be computed on the basis of a year of 360
days, except that interest computed by reference to the Alternate Base Rate
shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable Alternate
Base Rate, Adjusted LIBO Rate and Money Market Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.
3.8 Section 5.08(a) and Section 5.08(g) of the Credit Agreement are hereby
deleted in their respective entireties and replaced with the following:
(a) Acquisition of residential housing Projects similar to and consistent
with the types of Projects owned and/or operated by the Borrower on the
Effective Date.
(g) Working capital needs of the Borrower.
3.9 Section 6.01 of the Credit Agreement is hereby deleted in its entirety
and replaced with the following:
SECTION 6.01.
(a) Indebtedness and Other Financial Covenants. Neither the Borrower nor
any of its Subsidiaries shall directly or indirectly create, incur, assume or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness, except that the Borrower and/or its Subsidiaries may create,
incur, assume or otherwise become or remain directly or indirectly liable with
respect to any Indebtedness to the extent that Total Outstanding Indebtedness,
would not exceed (i) 62.5% of Total Value, or (ii) in the case of Secured
Indebtedness of the Consolidated Businesses, 60% of Total Value, or (iii) in the
case of Recourse Secured Indebtedness of the Consolidated Businesses, 35% of
Total Value, or (iv) in the case of Adjusted Recourse Secured Indebtedness,
12.5% of Total Value. Notwithstanding anything to the contrary herein contained,
in no event shall (x) the aggregate amount of completion guarantees with respect
to Projects at any time exceed 15% of Total Value and (y) the aggregate amount
of Low Income Housing Credit Program Guarantees at any time exceed $11 million.
(b) Minimum Equity Value. The Equity Value shall at no time be less than
$270,800,000.00, plus an amount equal to 85% of all Net Offering Proceeds
received by the Company after July 6, 1998.
(c) Minimum Consolidated Interest Coverage Ratio. As of the first day of
each calendar quarter for the immediately preceding four consecutive calendar
quarters, the ratio of EBITDA to Total Interest Expense for such period shall
not be less than 2.0 to 1.0.
(d) Minimum Unsecured Interest Coverage Ratio. As of the first day of each
calendar quarter for the immediately preceding four consecutive calendar
quarters, the ratio of Adjusted Unencumbered NOI to Unsecured Interest Expense
shall not be less than 1.65 to 1.0.
(e) 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.
(f) Minimum Fixed Charge Coverage Ratio. As of the first day of each
calendar quarter for the immediately preceding four consecutive calendar
quarters, the ratio of Adjusted NOI to Fixed Charges shall not be less than 1.6
to 1.0.
(g) Maximum Availability. The Revolving Credit Exposure shall not at any
time exceed the Maximum Availability. If at any time the Revolving Credit
Exposure exceeds the Maximum Availability, the Borrower shall immediately prepay
a portion of the Loan in an amount equal to such excess as provided for in
Section 2.09(d).
(h) 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. Borrower will include a schedule of occupancy levels of Unencumbered
Eligible Projects within its Quarterly Compliance Certificates.
3.10 Section 9.01 of the Credit Agreement is hereby deleted in its entirety
and replaced with the following:
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail, return receipt requested, or sent by telecopy, as follows:
(a) if to the Borrower, to it at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx
00000, Attn: Xxxxx X. Xxxxxxx (Telecopy No. 585-232-3147), with a copy to the
Borrower at the same address, Attention: Xxxxxx X. Xxxx (Telecopy No.
585-232-3147);
(b) if to the Administrative Agent, to Manufacturers and Traders Trust
Company, 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000, Attn: Xx. Xxxx Xxxxxxx,
Vice President, Telecopy No. 000-000-0000;
(c) if to the Issuing Bank, to Manufacturers and Traders Trust Company, 000
Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000, Attn: Xx. Xxxx Xxxxxxx, Vice President;
Telecopy No. 000-000-0000 and
(d) if to any other Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
3.11 Section 9.02(b) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the prior written consent of the Required Lenders;
provided that no such agreement shall (i) increase the Commitment of any Lender
without the written consent of such Lender or, except as is otherwise set forth
in this Agreement, increase the aggregate amount of the Lenders' Commitments
without the written consent of all Lenders, (ii) change the principal amount of
any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce
any fees payable hereunder, without the written consent of each Lender affected
thereby, (iii) postpone the scheduled date of payment of the principal amount of
any Loan or LC Disbursement, or any interest thereon, or any fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender affected thereby, (iv) change Section 2.16(b) or (c) in a
manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (v) release any stock or any other
material collateral that may now or hereafter secure amounts owing under this
Agreement or (vi) change any of the provisions of this Section or the definition
of "Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender, provided further that no such agreement shall amend,
modify or otherwise affect the rights or duties of the Administrative Agent or
the Issuing Bank hereunder without the prior written consent of the
Administrative Agent or the Issuing Bank, as the case may be.
3.12 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,
each such schedule being as of the Effective Date unless otherwise specified in
such schedule.
4. Representations and Warranties. In order to induce the Administrative
Agent and the Lenders to enter into this Amendment No. 4, the Borrower
represents and warrants to the Administrative Agent and the Lenders as follows:
4.1 The execution, delivery and performance by Borrower of this Amendment
No. 4 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.
4.2 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. 4.
4.3 This Amendment No. 4 has been duly executed and delivered by the
Borrower. This Amendment No. 4 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.
4.4 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.
4.5 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.
4.6 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. 4.
6. Entire Agreement. This Amendment No. 4 as it amends the 1999 Credit
Agreement 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. 4 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. 4 may be changed, modified, waived or canceled orally or
otherwise, except as provided in the Credit Agreement. Upon the Effective Date,
Amendment No. 3 shall be superceded and replaced by this Amendment No. 4.
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. 4.
8. Counterparts. This Amendment No. 4 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. 4 is governed by New York law. Any
litigation involving this Amendment No. 4, 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. 4 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. 4 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 Company. Home Properties, Inc., f/k/a 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. 4 all as of the day and year first
above written.
HOME PROPERTIES, L.P.
By: Home Properties, 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/ Xxxxxx X. Xxxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Vice President
COMERICA BANK
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Vice President
The undersigned by its execution and delivery hereof (a) consents and
agrees to the Amendment No. 4 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. 4. This Consent
shall be governed by, and construed in accordance with, the laws of the State of
New York.
Home Properties, Inc.
By: /s/ Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title: Vice President
