1
FIRST AMENDMENT TO
REVOLVING CREDIT AGREEMENT
AND GUARANTY
THIS FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT AND
GUARANTY (this "Amendment") made this 13th day of December, 1996,
by and among STORAGE TRUST PROPERTIES, L. P., a Delaware limited
partnership ("Borrower"), STORAGE TRUST REALTY, a Maryland real
estate investment trust ( Guarantor ), THE FIRST NATIONAL BANK OF
BOSTON, individually ("FNBB"), BANK OF AMERICA ILLINOIS ( BOA ),
DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES, as successor
to Dresdner Bank AG Chicago and Grand Cayman Branches
( Dresdner ), NBD BANK ( NBD ), SIGNET BANK ( Signet ) and KEY
BANK, as successor to Society National Bank ( Key ; XXXX, XXX,
Xxxxxxxx, XXX, Signet and Key are hereinafter referred to
collectively as the Banks ), and THE FIRST NATIONAL BANK OF
BOSTON, as Agent (the "Agent").
W I T N E S E T H:
WHEREAS, Borrower, Agent and the Banks (or their
predecessors-in-interest) entered into that certain Revolving
Credit Agreement dated January 25, 1996 (the "Credit Agreement");
and
WHEREAS, Guarantor has executed and delivered to the Agent
and the Banks that certain Unconditional Guaranty of Payment and
Performance dated January 25, 1996 (the Guaranty ); and
WHEREAS, Borrower has requested that Agent and the Banks
modify and amend certain terms and provisions of the Credit
Agreement and the Guaranty;
NOW, THEREFORE, for and in consideration of the sum of TEN
and NO/100 DOLLARS ($10.00), and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto do hereby covenant and agree as
follows:
1. Definitions. All the terms used herein which are not
otherwise defined herein shall have the meanings set forth in the
Credit Agreement.
2. Modification of the Credit Agreement. Borrower, Banks
and Agent do hereby modify and amend the Credit Agreement as
follows:
(a) By deleting in their entirety the definitions of
the following terms appearing in Sect. 1.1 of the Credit Agreement:
Assignment of Leases and Rents , Assignment of Management
Agreement and Subordination , Eligible Real Estate , Eligible
Real Estate Qualification Documents , Indemnity Agreement ,
Management Agreements , Mortgaged Property or Mortgaged
Properties , Secured Asset Value , Secured Debt Service
Coverage Amount , Security Deeds , Security Documents and
Service Agreement ;
(b) By deleting in their entirety the definitions of
the terms Applicable Margin , Borrowing Base , Debt Service ,
Debt Service Coverage Amount , Funds Available for
Distribution , Loan Documents , Pro Forma Principal Payments
and Rent Roll appearing in Sect. 1.1 of the Credit Agreement, and
inserting in lieu thereof the following:
Actual Scheduled Principal Payments. For any
period, the sum of all scheduled or mandatory principal
payments due and payable during such period with
respect to all Indebtedness of the Borrower excluding
any balloon payments due upon maturity of any
Indebtedness.
Applicable Margin. On any date that the lower of
the Implied Ratings issued from time to time by either
of the Rating Agencies for the Borrower or the
Guarantor is an Investment Grade Rating, the applicable
margin set forth below based on the lower of the
Implied Ratings issued by either of the Rating Agencies
for the Borrower or the Guarantor and the type of the
Loan:
Rating Base Rate Loans LIBOR
Rate Loans
A/A2 or better 0% 1.25%
BBB+/Baa1 to A-/A3 0% 1.30%
BBB/Baa2 0% 1.40%
BBB-/Baa3 0% 1.50%
provided, however, that on any date that the lower of
the Implied Ratings for the Borrower or the Guarantor
is not an Investment Grade Rating or neither the
Borrower nor the Guarantor has obtained a rating from
either of the Rating Agencies, the Applicable Margin
for Base Rate Loans shall be 0.00% and the Applicable
Margin for LIBOR Rate Loans shall be 1.625%. In the
event of any change in an Implied Rating of either the
Borrower or the Guarantor by either of the Rating
Agencies or if either the Borrower s or the Guarantor's
Implied Rating shall cease at any time to be an
Investment Grade Rating by either of the Rating
Agencies (but subject to the provisions within the
definition of the term "Investment Grade Rating"), such
change shall effect a change in the Applicable Margin
on the first Business Day after the Rating Notice Date.
It is the intention of the parties that if either the
Borrower or the Guarantor shall only obtain an
Investment Grade Rating from one of the Rating Agencies
without seeking an Investment Grade Rating from the
other of the Rating Agencies, the Borrower shall be
entitled to the benefit of the rate reductions
described above (it being the intent of the parties
that the Borrower shall be entitled to the benefit of
the rate reductions described above if only one of the
Borrower or the Guarantor obtains an Investment Grade
Rating); provided that if one of the Borrower or the
Guarantor shall have obtained an Investment Grade
Rating from both of the Rating Agencies, the lower of
the two ratings (or the loss of the Investment Grade
Rating from one of the Rating Agencies thereafter),
shall control; and provided further that if only one of
the Borrower or the Guarantor shall have obtained an
Investment Grade Rating from one of the Rating
Agencies, the loss of the Investment Grade Rating from
such Rating Agency shall control. It is further the
intention of the parties that if both the Borrower and
the Guarantor shall have obtained an Investment Grade
Rating from one or both of the Rating Agencies, the
lowest of any of such ratings (or the loss of the
Investment Grade Rating from either Rating Agency
thereafter as to either the Borrower or the Guarantor),
shall control.
Borrowing Base. The Borrowing Base shall be the
amount which is the lesser of (a) the maximum amount
which, when added to the total outstanding balance of
all unsecured Indebtedness of the Borrower and its
Subsidiaries (including the Loans), would not exceed
forty-five percent (45%) of the aggregate Asset Value
of the Unencumbered Operating Properties, and (b) the
maximum amount which, when added to the total
outstanding balance of all unsecured Indebtedness of
the Borrower and its Subsidiaries (including the
Loans), would not exceed the Debt Service Coverage
Amount for the Unencumbered Operating Properties.
Debt Service. For any period, the sum of all
interest (including capitalized interest) and the
Actual Scheduled Principal Payments that are due and
payable during such period.
Debt Service Coverage Amount. At any time
determined by Agent, an amount equal to the maximum
principal loan amount which, when bearing interest at a
rate per annum equal to the then-current annual yield
on ten (10) year obligations issued by the United
States Treasury most recently prior to the date of
determination plus two and one-fourth percent (2.25%)
and payable based on a twenty year mortgage style
amortization schedule (expressed as a mortgage constant
percentage), could be paid by the monthly principal and
interest payment amount resulting from dividing (x) the
quotient obtained by dividing an amount equal to
(i) the sum of (A) the aggregate Operating Cash Flow
from the Unencumbered Operating Properties for the
preceding two (2) fiscal quarters multiplied by two
(2), minus (B) the Capital Improvement Reserve, by
(ii) 2.00, by (y) 12. An example of the calculation of
the Debt Service Coverage Amount is set forth in
Schedule 2 attached hereto. In the event that the
Borrower shall have owned a property within the
Unencumbered Operating Properties for less than two (2)
consecutive fiscal quarters, then for the purposes of
performing such calculation, the Operating Cash Flow
with respect to such property shall be annualized in
such manner as the Agent shall reasonably determine.
Funds Available for Distribution. With respect to
any Person for any fiscal period, an amount equal to
Funds from Operations minus the Actual Scheduled
Principal Payments for such period minus the Capital
Improvement Reserve.
Loan Documents. This Agreement, the Notes, the
Guaranty and all other documents, instruments or
agreements now or hereafter executed or delivered by or
on behalf of the Borrower or the Guarantor evidencing
or securing the Loans.
Rent Roll. A report prepared by the Borrower
showing for each Unencumbered Operating Property its
location, Net Rentable Area, occupancy status, rent and
other information in substantially the form presented
to the Banks prior to the date hereof or in such other
form as may have been approved by the Agent, such
approval not to be unreasonably withheld. ;
(c) By deleting the words Guarantor has an Investment
Grade Rating from either of the Rating Agencies or a rating of
BBB- or better from Duff & Xxxxxx Credit Rating Company
appearing in the seventh (7th) and eighth (8th) lines of Sect. 2.2 of
the Credit Agreement and inserting in lieu thereof the words
Borrower or Guarantor has an Investment Grade Rating from either
of the Rating Agencies ;
(d) By deleting Sect. 2.8(b)(i) of the Credit Agreement in
its entirety, and inserting in lieu thereof the following:
(i) Investment Grade Rating. The Borrower or the
Guarantor shall have obtained an Investment Grade
Rating from either or both of the Rating Agencies,
which continues in full force and effect as to any such
rating obtained prior to the Maturity Date (it being
understood that if either the Borrower or the Guarantor
shall have obtained an Investment Grade Rating from
either or both of the Rating Agencies and any such
Implied Rating as to the Borrower or the Guarantor
ceases to be an Investment Grade Rating by either of
the Rating Agencies at the time required by Sect. 2.8(b),
then Borrower shall not be entitled to an extension of
the Maturity Date pursuant to Sect. 2.8(b)(i). ;
(e) By deleting the words (or Mortgaged Properties,
if applicable) appearing in the second (2nd) and third (3rd)
lines of Sect. 7.4(h) of the Credit Agreement;
(f) By renumbering Sect. 7.4(i) of the Credit Agreement as
Sect. 7.4(j), and inserting the following paragraph as new Sect.
7.4(i) of the Credit Agreement:
(i) Not later than five (5) Business Days after
the Borrower receives notice of the same from the
Rating Agency or otherwise learns of the same, notice
of a Rating Notice as to the Borrower; and ;
(g) By inserting the following sentence at the end of
Sect. 7.4 of the Credit Agreement:
Notwithstanding the foregoing, unless otherwise
requested by the Agent or the Majority Banks, Borrower
shall not be required to deliver the balance sheets,
statements or other matters required by Sect. 7.4(a) or
Sect. 7.4(b) to the extent the same are incorporated in the
balance sheets, statements and other matters delivered
to the Banks by the Guarantor as and when required by
the Guaranty. ;
(h) By deleting the word and number four (4)
appearing in the sixth (6th) line of Sect. 7.14(b) of the Credit
Agreement, and inserting in lieu thereof the word and number two
(2) ;
(i) By inserting the following as new Sect. 7.16 of the
Credit Agreement:
7.16. More Restrictive Agreements. Should the
Borrower or the Guarantor or any of their respective
Subsidiaries enter into or modify any agreements or
documents pertaining to any existing or future
Indebtedness permitted by Sect. 8.1(h), which agreements or
documents include covenants (whether affirmative or
negative), warranties, defaults or events of default
(or any other provision which may have the same
practical effect as any of the foregoing) which are
individually or in the aggregate more restrictive
against the Borrower, the Guarantor or their respective
Subsidiaries than those set forth herein or in any of
the other Loan Documents, the Borrower shall promptly
notify the Agent and, if requested by the Agent or the
Majority Banks, the Borrower, the Agent, and the Banks
shall promptly amend this Agreement and the other Loan
Documents to include some or all of such more
restrictive provisions as determined by the Agent or
the Majority Banks in their sole discretion, and the
Borrower shall cause the Guarantor to consent to such
amendment. ;
(j) By deleting Sect. 8.1(h) of the Credit Agreement in its
entirety, and inserting in lieu thereof the following:
(h) subject to the provisions of Sect. 9, unsecured
subordinated debt or senior unsecured long-term debt of
the Borrower and its Subsidiaries (which senior
unsecured long term debt of the Borrower may rank pari
passu with the Obligations), provided that (i) the
aggregate outstanding principal amount of such
Indebtedness shall not exceed forty-five percent (45%)
of Shareholder's Equity, and (ii) at the time such
Indebtedness is issued the scheduled maturity date of
such Indebtedness is not sooner than 180 days after the
Maturity Date (after giving effect to any extension of
the Maturity Date which may have been requested by the
Borrower prior to the issuance of such Indebtedness or
approved by the Banks, whether or not the same has
become effective), and provided further that neither
the Borrower nor any of its Subsidiaries shall incur
any of the Indebtedness described in this Sect. 8.1(h)
unless it shall have provided to the Banks (A) prior
written notice of the proposed issuance of such
Indebtedness, a statement that no Default or Event of
Default exists and a certificate that the Borrower will
be in compliance with its covenants referred to therein
after giving effect to such incurrence, (B) evidence
reasonably satisfactory to the Agent that the Rating
Agency has been advised of the issuance of such
Indebtedness within five (5) days of such issuance, and
(C) upon the request of Agent, evidence that the annual
rating maintenance fee has been paid to the Rating
Agency; and ;
(k) By deleting Sect. 8.7 of the Credit Agreement in its
entirety, and inserting in lieu thereof the following:
"Sect. 8.7 Distributions. The Borrower will not pay
any Distribution to the partners of the Borrower if
such Distribution is in excess of the greater of the
amount which, when added to the amount of all other
Distributions paid in the same fiscal quarter and the
preceding fiscal quarter would exceed (i) ninety
percent (90%) of its Funds from Operations for the two
(2) consecutive fiscal quarters ending prior to the
quarter in which such Distribution is paid, or
(ii) ninety-five percent (95%) of its Funds Available
for Distribution for the two (2) consecutive fiscal
quarters ending prior to the quarter in which such
Distribution is paid. The foregoing limitation on
Distributions shall not preclude the Borrower from
paying Distributions to the Guarantor in an amount
equal to the minimum Distributions required under the
Code to maintain the REIT Status of the Guarantor. ;
(l) By deleting the word four appearing in the
twelfth (12th) line of Sect. 8.9 of the Credit Agreement, and
inserting in lieu thereof the word two ;
(m) By deleting Sect. 9.1 of the Credit Agreement in its
entirety, and inserting in lieu thereof the following:
Sect. 9.1 Liabilities to Assets Ratio. The Borrower
will not, at the end of any fiscal quarter, permit the
ratio of Consolidated Total Liabilities to Consolidated
Total Assets of the Borrower to exceed 0.45 to 1. ;
(n) By deleting Sect. 9.2 of the Credit Agreement in its
entirety, and inserting in lieu thereof the following:
Sect. 9.2 Debt Coverage. The Borrower will not, at
the end of any fiscal quarter, permit the Funds from
Operations plus interest expense of the Borrower and
its Subsidiaries for such quarter and the preceding
quarter (treated as a single accounting period) (the
Test Period ) to be less than 2.50 times the Debt
Service for the Test Period. ;
(o) By deleting Sect. 9.3 of the Credit Agreement in its
entirety, and inserting in lieu thereof the following:
Sect. 9.3 Fixed Charge Coverage. The Borrower will
not, at the end of any fiscal quarter, permit the sum
equal to (a) Funds from Operations plus (b) interest
expense minus (c) the Capital Improvement Reserve minus
(d) the minimum Distributions required under the Code
to maintain the REIT Status of the Guarantor minus
(e) the Actual Scheduled Principal Payments for the
Test Period, to be less than 1.25 times the interest
expense of the Borrower and its Subsidiaries (including
capitalized interest) for the Test Period. ;
(p) By deleting Sect. 15(g) of the Credit Agreement in its
entirety, and by deleting the words including, without
limitation, the cost of reviewing the Eligible Real Estate
Qualification Documents pursuant to Sect. 2.8(b) appearing in 15(c)
and in the penultimate sentence of 15;
(q) By deleting Paragraph 2 of Exhibit D to the
Credit Agreement in its entirety, and inserting in lieu thereof
the following:
2. Investment Grade Rating. Borrower or
Guarantor has obtained an Investment Grade Rating from
either of the Rating Agencies, which continues in full
force and effect as required by 2.8(b)(i) of the
Credit Agreement. ;
(r) By deleting Schedule 2 attached to the Credit
Agreement in its entirety, and inserting in lieu thereof Schedule
2 attached to this Amendment; and
(s) By deleting Schedule 3 attached to the Credit
Agreement in its entirety.
3. Modification of the Guaranty. Guarantor, the Banks and
the Agent do hereby modify and amend the Guaranty as follows:
(a) By deleting Paragraph 11(b) of the Guaranty in its
entirety and inserting in lieu thereof the following:
(b) Guarantor will have as its sole business
purpose being the sole general partner of the Borrower
and will own no assets other than its general
partnership interest in the Borrower, Short-term
Investments, its ownership of the stock of the
corporate general partners of Subsidiaries of the
Borrower and other assets (such as prepaid insurance)
reasonably necessary for the operation of Guarantor s
business in the ordinary course of business consistent
with the terms of this Guaranty and the other Loan
Documents; and
(b) By deleting Paragraph 11(o) of the Guaranty in its
entirety and inserting in lieu thereof the following:
(o) Guarantor shall not pay any Distribution to
the shareholders of the Guarantor if such Distribution
is in excess of the amount which, when added to the
amount of all other Distributions paid in the same
fiscal quarter and the preceding fiscal quarter will
exceed (i) ninety percent (90%) of its Funds from
Operations for the two (2) consecutive fiscal quarters
ending prior to the quarter in which such Distribution
is paid, or (ii) ninety-five percent (95%) of its Funds
Available for Distribution for the two (2) consecutive
fiscal quarters ending prior to the quarter in which
such Distribution is paid. The foregoing limitation on
Distributions shall not preclude the Guarantor from
paying Distributions necessary to maintain its REIT
Status; and .
4. Fees. In consideration of the execution of this
Amendment by the Banks, the Borrower has contemporaneously with
the execution hereof paid to Agent for the account of the Banks a
modification fee in the amount of $75,000.00, which fee is fully
earned and non-refundable under any circumstances. Such fee
shall be allocated among the Banks in accordance with their
respective Commitment Percentages.
5. References to Credit Agreement and Guaranty. All
references in the Loan Documents to the Credit Agreement or the
Guaranty shall be deemed a reference to the Credit Agreement or
the Guaranty, as applicable, as modified and amended herein.
6. Consent of Guarantor. By execution of this Amendment,
Guarantor hereby expressly consents to the modifications and
amendments relating to the Credit Agreement as set forth herein,
and Guarantor hereby acknowledges, represents and agrees that the
Guaranty remains in full force and effect and constitutes the
valid and legally binding obligation of Guarantor, enforceable
against Guarantor in accordance with its terms, and that the
execution and delivery of this Amendment does not constitute, and
shall not be deemed to constitute, a release, waiver or
satisfaction of Guarantor s obligations under the Guaranty.
7. No Default. By execution hereof, the Borrower and
Guarantor certify that the Borrower and Guarantor are and will be
in compliance with all covenants under the Loan Documents after
the execution and delivery of this Amendment, and that no Default
or Event of Default has occurred and is continuing except with
respect to which a waiver has been obtained in accordance with
the terms of the Credit Agreement.
8. Waiver of Claims. Borrower and Guarantor acknowledge,
represent and agree that Borrower and Guarantor have no defenses,
setoffs, claims, counterclaims or causes of action of any kind or
nature whatsoever with respect to the Loan Documents, the
administration or funding of the Loans or with respect to any
acts or omissions of Agent or any of the Banks, or any past or
present officers, agents or employees of Agent or any of the
Banks, and each of Borrower and Guarantor does hereby expressly
waive, release and relinquish any and all such defenses, setoffs,
claims, counterclaims and causes of action, if any.
9. Guaranty of Debt by Guarantor. Notwithstanding the
terms of the Guaranty, the Banks hereby consent to the
indebtedness evidenced by the guaranty by the Guarantor of the
obligations of the Borrower with respect to the senior notes of
the Borrower to be issued in a principal amount not exceeding
$100,000,000.00 within six (6) months of the date hereof pursuant
to a private debt placement with Xxxxxx Brothers acting as lead
placement agent.
10. Ratification. Except as hereinabove set forth, all
terms, covenants and provisions of the Credit Agreement and the
Guaranty remain unaltered and in full force and effect, and the
parties hereto do hereby expressly ratify and confirm the Credit
Agreement and the Guaranty as modified and amended herein.
Nothing in this Amendment shall be deemed or construed to
constitute, and there has not otherwise occurred, a novation,
cancellation, satisfaction, release, extinguishment or
substitution of the indebtedness evidenced by the Notes or the
other obligations of Borrower and Guarantor under the Loan
Documents.
11. Counterparts. This Amendment may be executed in any
number of counterparts which shall together constitute but one
and the same agreement.
12. Miscellaneous. This Amendment shall be construed and
enforced in accordance with the laws of the Commonwealth of
Massachusetts. This Amendment shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
permitted successors, successors-in-title and assigns as provided
in the Credit Agreement and the Guaranty.
IN WITNESS WHEREOF, the parties hereto have hereto set their
hands and affixed their seals as of the day and year first above
written.
BORROWER:
STORAGE TRUST PROPERTIES, L.P., a
Delaware limited partnership, by its
sole general partner
By: Storage Trust Realty, a Maryland
real estate investment trust
By:__________________________________
Name:
Title:
[SEAL]
GUARANTOR:
STORAGE TRUST REALTY, a Maryland real
estate investment trust
By:
_____________________________________
Name:
Title:
[SEAL]
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent
By:_______________________________________
Xxxxxxx X. Xxxxxxx, Director
[BANK SEAL]
BANK OF AMERICA ILLINOIS
By:_______________________________________
Title:
[BANK SEAL]
DRESDNER BANK, AG New York and Grand
Cayman Branches
By:_______________________________________
Title:
Attest:____________________________________
Title:
[BANK SEAL]
KEY BANK
By:_______________________________________
Title:
[BANK SEAL]
NBD BANK
By:_______________________________________
Title:
[BANK SEAL]
SIGNET BANK
By:_______________________________________
Title:
[BANK SEAL]
