Exhibit 10.1
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT
AGREEMENT (this “Second Amendment”) is dated as of
the 21st day of June, 2007, among COLONIAL REALTY LIMITED
PARTNERSHIP (“Borrower”), COLONIAL PROPERTIES
TRUST , an Alabama Trust (the “Guarantor”),
WACHOVIA BANK, NATIONAL ASSOCIATION , as Administrative
Agent (the “Agent”), BANK OF AMERICA, N.A., as
Syndication Agent, WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Co-Documentation Agent, CITICORP NORTH AMERICA, INC., as
Co-Documentation Agent, AMSOUTH BANK, as Co-Documentation
Agent, PNC BANK, NATIONAL ASSOCIATION, as Co-Senior Managing
Agent, and U.S. BANK NATIONAL ASSOCIATION , as Co-Senior
Managing Agent, and the lenders a party hereto (collectively, the
“Lenders”).
W I T
N E S S E T H:
WHEREAS , the Borrower, the
Agent and the Lenders executed and delivered that certain Credit
Agreement, dated as of March 22, 2005, as amended by that
certain First Amendment to Credit Agreement dated June 2, 2006
among the Borrower, the Guarantor, the Agent and the Lenders (the
“Credit Agreement”);
WHEREAS , the Borrower has
requested, and the Agent and the Lenders have agreed to, certain
amendments to the Credit Agreement, subject to the terms and
conditions hereof;
NOW, THEREFORE , for and in
consideration of the above premises and other good and valuable
consideration, the receipt and sufficiency of which hereby is
acknowledged by the parties hereto, the Borrower, the Guarantor,
the Agent and the Lenders hereby covenant and agree as
follows:
1.
Definitions . Unless otherwise specifically defined herein,
each term used herein which is defined in the Credit Agreement
shall have the meaning assigned to such term in the Credit
Agreement. Each reference to “hereof”,
“hereunder”, “herein” and
“hereby” and each other similar reference and each
reference to “this Agreement” and each other similar
reference contained in the Credit Agreement shall from and after
the date hereof refer to the Credit Agreement as amended
hereby.
2.
Modification of the Credit Agreement . The Borrower, the
Agent and the Lenders do hereby modify and amend the Credit
Agreement as follows:
(a)
By deleting in their entirety the
defined terms Extension Fee, Extension Request, Funds From
Operations, Interest Coverage Ratio, Tax Exempt Financed
Properties, Unencumbered Interest Coverage Ratio and Unsecured
Interest Expense in Section 1.1 of the Credit Agreement;
(b)
By adding the following new defined
terms to Section 1.1 of the Credit Agreement in the
appropriate alphabetical order:
““ Merchant
Development Strategy ” means development of residential,
multifamily, retail and office Properties for the specific purpose
of property sale to generate gains.;
“ Reverse Conversion
Value ” has the meaning set forth in the definition of
Residential Unit for Sale Value.”;
(c)
By deleting in its entirety the
definition of Applicable Margin in Section 1.1 of the Credit
Agreement and inserting the following in lieu thereof:
““ Applicable
Margin ” means at any time the percentage rate per annum
set forth below in the Base Rate Margin column with respect to Base
Rate Loans and the LIBOR Margin/Revolving Loans column with respect
to Revolving Loans that are LIBOR Loans determined based upon the
Credit Rating of Borrower:
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| Pricing Level |
|
Base Rate Margin |
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LIBOR Margin/ |
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Revolving Loans |
|
Pricing Level
1
|
|
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[0.00%] |
|
|
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0.325 |
% |
|
Pricing Level
2
|
|
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[0.00%] |
|
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0.400 |
% |
|
Pricing Level
3
|
|
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[0.00%] |
|
|
|
0.475 |
% |
|
Pricing Level
4
|
|
|
[0.00%] |
|
|
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0.750 |
% |
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Pricing Level
5
|
|
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0.25% |
|
|
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1.050 |
% |
As of the
Agreement Date, the Applicable Margin is determined based on
Pricing Level 4. Any issuance, change or withdrawal of a Credit
Rating or other circumstance that would result in a change to a
different Pricing Level shall effect a change in the Applicable
Margin, as applicable, on each Performance Pricing Determination
Date (provided that each change in the Applicable Margin as a
result of a change in the Credit Rating shall be effective only for
Loans (including Conversions or Continuations) which are made on or
after the date of the relevant Performance Pricing Determination
Date).”;
(d)
By deleting in its entirety the
definition of Capitalization Rate in Section 1.1 of the Credit
Agreement and inserting the following in lieu thereof:
““ Capitalization
Rate ” means 6.75% for multifamily Properties, 8.00% for
retail Properties, and 8.25% for office Properties.”;
(e)
By deleting in its entirety the last
sentence of the definition of EBITDA in Section 1.1 of the
Credit Agreement and inserting the following in lieu thereof:
“When calculating Fixed Charge Coverage Ratio, up to 15% of
EBITDA may include income, gain, or loss in any case (net of any
associated ordinary income or capital gains taxes) realized on the
sale of any portion of a Residential Unit for Sale Property, office
Property and retail Properties all in accordance Borrower’s
on-going Merchant Development Strategy.”;
(f)
By deleting in its entirety the
defined term Facility Fee in Section 1.1 of the Credit
Agreement, and inserting in lieu thereof the following:
2
““ Facility Fee
” means the per annum percentage in the table set forth below
corresponding to the Pricing Level at which the “Applicable
Margin” is determined in accordance with the definition
thereof:
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Pricing Level |
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Applicable Facility Fee
Percentage |
|
Pricing Level
1
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|
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0.100 |
% |
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Pricing Level
2
|
|
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0.125 |
% |
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Pricing Level
3
|
|
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0.150 |
% |
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Pricing Level
4
|
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0.175 |
% |
|
Pricing Level
5
|
|
|
0.200 |
% |
Changes in the Facility Fee resulting
from a change in a Pricing Level shall become effective as of the
Performance Pricing Determination Date.”;
(g)
By deleting the reference to
“$25,000,000” from the definition of L/C Commitment
Amount in Section 1.1 of the Credit Agreement, and inserting
in lieu thereof “$30,000,000”;
(h)
By deleting the phrases “the
Interest Coverage Ratio” and “and the Unencumbered
Interest Coverage Ratio” from the last sentence of the
definition of Net Operating Income or NOI in Section 1.1 of the
Credit Agreement;
(i)
By (i) deleting the reference to
“seven and one half percent (7.50%)” in the defined
term Residential Unit for Sale Value in Section 1.1 of the
Credit Agreement and inserting in lieu thereof “six and three
quarters percent (6.75%)” and (ii) inserting the
following at the end of the second sentence of such defined
term:
“except that after the
expiration of the applicable period and at which point no
Residential Unit for Sale Value would be attributable to such
converted condominium Property, Residential Unit for Sale Value may
include (without duplication) an amount equal to the Net Operating
Income attributable to such converted condominium property for the
most recently ended four (4) fiscal quarter period, divided by
six and three quarters percent (6.75%) (the “Reverse
Conversion Value”)”;
(j)
By deleting the date
“March 22, 2008” in the defined term Revolving
Loan Termination Date in Section 1.1 of the Credit Agreement,
and inserting in lieu thereof “June 21,
2012”;
(k)
By deleting the reference to
“$40,000,000” from the definition of Swingline
Commitment in Section 1.1 of the Credit Agreement and
inserting in lieu thereof “$50,000,000”;
3
(l)
By adding the following language to
the end of clause (f) in the defined term Total Asset Value in
Section 1.1 of the Credit Agreement: “(except to the
extent the Reverse Conversion Value shall exceed two and one half
percent (2.50%) of Total Asset Value, such excess shall be
excluded)”;
(m)
By deleting in its entirety the
second sentence from the definition of Total Commitment in
Section 1.1 of the Credit Agreement and inserting in lieu
thereof the following: “As of June 21, 2007, the Total
Commitment (including the Swingline Commitment) is $500,000,000,
subject to increase upon an increase of the Revolving Loan
Commitment in accordance with the provisions of
Section 2.16.”;
(n)
By adding the phrase
“(including the Reserve Conversion Value)” immediately
following the reference to “Residential Units for Sale
Value” in clause (d) of the defined term Unencumbered
Asset Value in Section 1.1 of the Credit
Agreement”;
(o)
By deleting in its entirety the
defined term Unencumbered Leverage Ratio” in Section 1.1
of the Credit Agreement, and inserting in lieu thereof the
following:
““ Unencumbered
Leverage Ratio ” means the ratio (expressed as a
percentage) of (a) the Unsecured Debt of the Obligors and
their Subsidiaries as of the date of determination to (b) the
Unencumbered Asset Value as of such date of
determination.”;
(p)
By deleting the reference to
$150,000,000 in Section 2.16(a) of the Credit Agreement, and
inserting in lieu thereof “$200,000,000”;
(q)
By deleting in their entirety
Sections 2.18 and 3.6(d) of the Credit Agreement, and
inserting in lieu thereof “Intentionally
omitted”;
(r)
By deleting in its entirety each
reference to the phrase “and an unaudited statement of Funds
from Operations” in Sections 8.1(a), 8.1(b), 8.2(a) and
8.2(b) of the Credit Agreement.
(s)
By deleting in its entirety the
penultimate sentence of Section 8.2(a) of the Credit
Agreement.
(t)
By deleting in their entirety clauses
(a) through (g) of Section 9.1 of the Credit
Agreement, and inserting in lieu thereof the following:
“(a)
the Secured Debt to Total Asset Value
Ratio to exceed forty percent (40%) at any time;
(b) the
Fixed Charge Coverage Ratio to be less than 1.50:1.00 at any
time;
(c) the
Debt to Total Asset Value Ratio to exceed sixty percent (60%) at
any time; provided that, in connection with a portfolio acquisition
of Properties otherwise permitted under this Credit Agreement, the
Debt to Total Asset Value Ratio may increase to sixty-five percent
(65%) for a period not to exceed the four (4) consecutive
fiscal quarters ending immediately following the closing of such
acquisition;
4
(d) the
Unencumbered Leverage Ratio to exceed sixty-two and one half
percent (62.5%) at any time; and
(e) the
Adjusted Total Asset Value directly or indirectly owned by the
Borrower and the Guarantors to be less than ninety percent (90%) of
the Adjusted Total Asset Value.”;
&n
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