Exhibit 10.4
FIRST AMENDMENT TO REVOLVING
CREDIT AGREEMENT
THIS FIRST AMENDMENT TO REVOLVING
CREDIT AGREEMENT (this “ Amendment ”) is made as
of December 11, 2006, among RAIT INVESTMENT TRUST, a Maryland
trust (“RAIT”), RAIT PARTNERSHIP, L.P., a Delaware
limited partnership (“ RAIT OP ”), and RAIT
ASSET HOLDINGS, LLC, a Delaware limited liability company (“
RAIT SPE ”) (RAIT, RAIT OP and RAIT SPE are
hereinafter referred to individually as a “ Borrower
” and collectively as the “ Borrowers ”),
KEYBANK NATIONAL ASSOCIATION, as Administrative Agent (the “
Administrative Agent ”), and the LENDERS party to this
Amendment (the “ Lenders ”).
WITNESSETH
:
WHEREAS, capitalized terms used in
this Amendment without definition have the meanings provided
therefor in that certain Revolving Credit Agreement dated as of
October 24, 2005, by and among the Borrowers, the
Administrative Agent and the Lenders (the “ Credit
Agreement ”); and
WHEREAS, the Borrowers have
requested that the Administrative Agent and the Lenders agree to
amend, and to waive certain provisions of, the Credit Agreement,
and the Administrative Agent and the Lenders have agreed to amend,
and to waive certain provisions of, the Credit Agreement, on, and
subject to, the terms and conditions set forth herein,
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Borrowers, the Administrative Agent and
the Lenders agree as follows:
1. Amendments to Credit
Agreement . As of the Effective Date (as hereinafter defined),
the Credit Agreement is hereby amended as follows:
(a) The following definitions are
hereby added to Section 1.1 of the Credit Agreement in the
proper alphabetical sequence:
“ Excluded Subsidiary
” means any Consolidated Subsidiary (other than a Borrower)
whose Debt consists solely of Debt issued or incurred pursuant to a
securitization transaction, provided in each case such Debt is not
Recourse Debt of the Borrowers or Taberna.
“ Excluded Debt ”
means Debt issued or incurred by a Borrower or a Subsidiary of a
Borrower pursuant to any loan or warehouse facility provided that
such Debt is not Recourse Debt of the Borrowers or
Taberna.”
“ Taberna ” means
Taberna Realty Finance Trust, a Maryland real estate investment
trust. Upon the occurrence of the Taberna Closing Date, Taberna
shall be a Subsidiary of RAIT and a Consolidated Party.
“ Taberna Acquisition
” means the acquisition by RAIT of all of the Capital Stock
of Taberna (excluding certain shares of Capital Stock which will be
retained by Persons not affiliated with the Borrowers for the
purpose of compliance with REIT regulations) by means of a merger
by and between a Subsidiary of RAIT and Taberna.
“ Taberna Closing Date
” means the date on which the closing of the Taberna
Acquisition occurs.
(b) The definition of
“Adjusted Earnings” in Section 1.1 of the Credit
Agreement is hereby amended by changing the phrase “Net
Income” therein to “REIT taxable income of the
Consolidated Parties calculated in accordance with the Code, before
giving effect to the dividends paid deduction”.
(c) The definition of
“Borrowing Base Availability” in Section 1.1 of
the Credit Agreement is hereby amended by changing the phrase in
clause (y)(ii) thereof from “2:00 to 1:00” to
“1.50 to 1.00.”
(d) The definition of
“EBITDA” in Section 1.1 of the Credit Agreement is
hereby amended by adding the following phrase at the end thereof:
“ All amounts determined in clauses (i) through and
including (v) shall be determined (i) as if all Excluded
Subsidiaries were not included in the Consolidated Parties and were
instead accounted for using the equity method of accounting and
(ii) all Interest Expense relating to Excluded Debt and all
income relating to assets securing Excluded Debt were not included
and were instead accounted for using the equity method of
accounting.”
(e) The definition of
“Interest Expense” in Section 1.1 of the Credit
Agreement is hereby amended by adding the following phrase at the
end thereof: “; and provided further, that, on and after the
Taberna Closing Date, for the purposes of calculating the Interest
Coverage Ratio under 5.8(b) and the Fixed Charge Coverage Ratio
under 5.8(c), “Interest Expense” shall not include any
interest expense relating to any Excluded Subsidiary or Excluded
Debt.”
(f) The definition of “Fixed
Charge Coverage Ratio” in Section 1.1 of the Credit
Agreement is hereby amended by adding the following phrase at the
end thereof: “All amounts determined in clauses
(a) through and including (b) shall be determined as if
(i) all Excluded Subsidiaries were not included in the
Consolidated Parties and were instead accounted for using the
equity method of accounting and (ii) all Excluded Debt and
assets securing Excluded Debt were not included and were instead
accounted for using the equity method of accounting.
(g) The definition of “Secured
Debt” in Section 1.1 of the Credit Agreement is hereby
deleted in its entirety.
(h) The definition of “Total
Assets” in Section 1.1 of the Credit Agreement is hereby
amended by adding the following phrase at the end thereof: “;
and provided further, that, on and after the Taberna Closing Date,
for the purposes of calculating the Leverage Ratio under
Section 5.8(a), Total Assets (i) shall be determined as
if the assets
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of Excluded Subsidiaries or assets
securing Excluded Debt were not included in the Total Assets and
(ii) shall include investments of the Consolidated Parties in
such Excluded Subsidiaries and assets securing Excluded Debt using
the equity method of accounting.”
(i) The definition of “Total
Liabilities” in Section 1.1 of the Credit Agreement is
hereby amended by adding the following phrase at the end thereof:
“; and provided further, that, on and after the Taberna
Closing Date, for the purposes of calculating the Leverage Ratio
under Section 5.8(a), Total Liabilities (i) shall be
determined as if all Debt of the Excluded Subsidiaries and Excluded
Debt were not included in the Total Liabilities and (ii) shall
not include Debt constituting subordinated debentures or trust
preferred securities (“TruPS”) issued by Borrowers or
Taberna or a Wholly-Owned Subsidiary of Taberna that are approved
by the Administrative Agent in its discretion.”
(j) The definition of
“Unsecured Debt” in Section 1.1 of the Credit
Agreement is hereby deleted in its entirety.
(k) Section 2.18 of the Credit
Agreement is hereby amended by changing the phrase in clause
(a) thereof from “$80,000,000” to
“$165,000,000”.
(l) Section 5.8(a) of the
Credit Agreement is hereby amended and restated in its entirety to
read as follows: “(a) Leverage Ratio . At all times
the Leverage Ratio will be less than or equal to sixty percent
(60%).”
(m) Section 5.8(d) of the
Credit Agreement is hereby amended and restated to read as follows:
“[Reserved]”.
(n) Section 5.8(e) of the
Credit Agreement is hereby amended and restated to read as follows:
“(e) Recourse Debt to Total Assets . At all times, the
ratio of (i) the Debt of the Consolidated Parties that is
Recourse Debt to RAIT or RAIT OP to (ii) the Consolidated
Tangible Net Worth of the Consolidated Parties shall be less than
or equal to 0.35 to 1.00.”
(o) Section 5.8(f) of the
Credit Agreement is hereby amended and restated to read as follows:
“[Reserved]”.
(p) Section 5.8(g) of the
Credit Agreement is hereby amended by changing the phrase
“$500,000,000.00” in clause (i) thereof to
“85% of tangible Net Worth on the Effective
Date”.
(q) Section 5.8(j) of the
Credit Agreement is hereby amended by changing the phrase
“Net Income” therein to “REIT ta
