Exhibit 10.2
SECOND AMENDMENT AND WAIVER TO
CREDIT AGREEMENT
THIS SECOND AMENDMENT AND WAIVER TO
CREDIT AGREEMENT (this “ Agreement ”) is
entered into to be effective as of August 9, 2005, by and
among GMH COMMUNITIES, LP, a Delaware limited partnership
(“ GMH Operating Partnership ”), GMH
COMMUNITIES TRUST, a Maryland real estate investment trust (the
“ Trust ”), each Subsidiary of the Trust
that is a borrower pursuant to Section 2.16 of
the Credit Agreement defined below (individually, a “
Subsidiary Borrower ” and collectively, “
Subsidiary Borrowers ;” GMH Operating
Partnership and Subsidiary Borrowers are individually called a
“ Borrower ” and collectively called
“ Borrowers ”), each lender party to the
Credit Agreement (collectively, the “ Lenders
” and individually, a “ Lender ”),
and BANK OF AMERICA, N.A ., as Administrative Agent, Swing
Line Lender and L/C Issuer.
R
E C I
T A L S
A.
Reference is hereby made to that
certain Credit Agreement dated as of November 8, 2004,
executed by the Trust, Borrowers, the Lenders, and Administrative
Agent (as amended, the “ Credit Agreement
”).
B.
Capitalized terms used herein shall,
unless otherwise indicated, have the respective meanings set forth
in the Credit Agreement.
C.
The Trust, Borrowers, Administrative
Agent, and Lenders desire to waive and modify certain provisions
contained in the Credit Agreement, 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 parties hereto agree as
follows:
1.
Waiver . Trust and Borrowers failed to maintain a
Leverage Ratio equal to or less than sixty percent (60%) as of the
fiscal quarter ending June 30, 2005 (the “ Subject
Period ”) as required by
Section 7.10(e) . Subject to the terms and
conditions set forth herein, Lenders waive compliance with
Section 7.10(e) of the Credit Agreement
solely for the Subject Period. No waiver by Lenders under the
Credit Agreement or any other Loan Document is granted except as
expressly set forth above, and Lenders expressly reserve the right
to require strict compliance with the terms of the Credit Agreement
and the other Loan Documents in all other respects.
2.
Amendments to the Credit
Agreement.
(a)
Section 1.01 of the Credit Agreement is hereby amended to
delete the definition of “ Applicable Rate ” in
its entirety and replace such definition with the
following:
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“ Applicable Rate
” means the following percentages per annum, based upon the
Leverage Ratio as set forth in the most recent Compliance
Certificate received by Administrative Agent pursuant to
Section 6.02(b) :
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Eurodollar
Rate +
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Pricing
Level
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Leverage Ratio
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Letters of
Credit
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Base Rate +
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1
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< 0.45:1
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1.625
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%
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0.75
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%
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2
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>0.45:1 but < 0.50:1
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1.750
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%
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1.00
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%
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3
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>0.50:1 but < 0.55:1
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1.875
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%
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1.25
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%
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4
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>0.55:1 but < 0.60:1
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2.125
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%
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1.50
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%
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5
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>0.60:1
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2.375
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%
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1.75
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%
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Any increase or decrease in the
Applicable Rate resulting from a change in the Leverage Ratio shall
become effective as of the first (1 st ) Business Day
immediately following the date a Compliance Certificate is
delivered pursuant to Section 6.02(b) ; provided
, however , that if a Compliance Certificate is not
delivered when due in accordance with such Section , then
Pricing Level 5 shall apply as of the first (1 st )
Business Day after the date on which such Compliance Certificate
was required to have been delivered until and including the first
(1 st ) Business Day immediately following the date such
Compliance Certificate is actually delivered. The Applicable
Rate in effect from the Second Amendment Effective Date through the
date of delivery of the next Compliance Certificate delivered
pursuant to Section 6.02(b) shall be determined
based upon Pricing Level 4.
(b)
Section 1.01 of the Credit Agreement is hereby amended to
delete the definition of “ Borrowing Base Value
” in its entirety and replace such definition with the
following:
“ Borrowing Base Value
” means the sum of (a) the Unencumbered Asset
Value times sixty percent (60%) plus
(b) Management Cash Flow Value times fifty percent
(50%); provided that (i) the amount of Management Cash
Flow Value included in the calculation of Borrowing Base Value
shall not exceed fifty percent (50%) of Borrowing Base Value, and
(ii) the Unencumbered Asset Value attributable to any single
Unencumbered Property shall not exceed thirty percent (30%) of
Borrowing Base Value.
(c)
Section 1.01 of the Credit Agreement is hereby amended to
delete the definition of “ Leverage Ratio ” in
its entirety and replace such definition with the
following:
“ Leverage Ratio
” means, as of any date of determination, the ratio of
(a) the Total Debt of the Companies to (b) Total
Asset Value.
(d)
Section 1.01 of the Credit Agreement is hereby amended to
delete the definition of “ Liabilities ” in its
entirety.
(e)
Section 1.01 of the Credit Agreement is hereby amended to add
the following definition of “ MAI Appraisal Value
” between the definitions of “ Loan Parties
” and “ Management Cash Flow Value ”
:
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“ MAI Appraisal Value
” means, with respect to any real property, the appraisal
value of such property as determined by written appraisal reports,
in form and substance acceptable to Administrative Agent, meeting
the requirements of the Federal Institutions Reform, Recovery and
Enforcement Act of 1989, prepared by a professional appraiser, who
is a member of the Member Appraisal Institute.
(f)
Section 1.01 of the Credit Agreement is hereby amended to
delete the definition of “ Military Housing EBITDA
” in its entirety and replace such definition with the
following:
“ Military Housing
EBITDA ” means, for any Person for any period, total
Consolidated EBITDA received from fees and returns in respect of
Equity Interests in respect of operating Military Housing Projects,
all as calculated in accordance with GAAP.
(g)
Section 1.01 of the Credit Agreement is hereby amended to
delete the definition of “ NOI Value ” in its
entirety.
(h)
Section 1.01 of the Credit Agreement is hereby amended to add
the following definition of “ Second Amendment Effective
Date ” between the definitions of “ SEC
” and “ Secured Debt ” :
“ Second Amendment
Effective Date ” means August 9, 2005.
(i)
Section 1.01 of the Credit Agreement is hereby amended to
delete the definition of “ Total Asset Value ”
in its entirety and replace such definition with the
following:
“ Total Asset Value
” means the sum of (a) as of any date of
determination, the lesser of (i) the book value of the
Student Housing Projects plus accumulated depreciation on such
Student Housing Projects, as determined on a consolidated basis in
accordance with GAAP, or (ii) the most recent MAI Appraisal
Value of the Student Housing Projects (solely to the extent
available), plus (b) Management Cash Flow Value,
plus (c) the book value of other assets (excluding
owned real estate captured in clause (a) above) owned
by the Companies, as determined on a consolidated basis in
accordance with GAAP; plus (d) GMH Operating
Partnership’s and each Guarantor’s pro rata share of
the book value of assets in joint ventures of such Person that own
student housing properties; provided that, current
assets (as determined in accordance with GAAP) that are incurred in
the normal course of business shall be excluded from Total Asset
Value; provided, further that , Management
Cash Flow Value shall not exceed twenty percent (20%) of Total
Asset Value.
(j)
Section 1.01 of the Credit Agreement is hereby amended to add
the following definition of “ Total Debt ”
between the definitions of “ Total Availability
” and “ Total Outstandings ”:
“ Total Debt ”
means (without duplication), for any Person as of any date,
(a) all Indebtedness of such Person, (b) all other
indebtedness, liabilities, or obligations required by GAAP to be
classified upon such Person’s balance sheet as liabilities,
and (c) such Person’s pro rata share of all Indebtedness
of joint ventures in which such Person owns an Equity Interest that
own student housing properties. Notwithstanding the foregoing, the
current liabilities (as determined in accordance with GAAP) that
are incurred in the normal course of business shall be excluded
from Total Debt.
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(k)
Section 1.01 of the Credit Agreement is hereby amended to
delete the definition of “ Unencumbered Asset Value
” in its entirety and replace such definition with the
following:
“ Unencumbered Asset
Value ” means an amount equal to the lesser of
(a) the sum of (i) the aggregate book value of
Unencumbered Properties plus (ii) accumulated
depreciation of such Unencumbered Properties, as determined on a
consolidated basis in accordance with GAAP, or (b) the most
recent MAI Appraisal Value of the Unencumbered Properties (solely
to the extent available).
(l)
Section 1.01 of the Credit Agreement is hereby amended to
delete the definition of “ Unencumbered Property
Report ” in its entirety and replace such definition with
the following:
“ Unencumbered Property
Report ” means a report in substantially the form of
Exhibit I certified by a Responsible Officer of GMH
Operating Partnership, setting forth in reasonable detail the
Occupancy Rate, Approved Costs, Unencumbered Asset Value, Adjusted
Property NOI, NOI Value, the most recent MAI Appraisal Value of the
Unencumbered Properties, and Capital Expenditure Reserve for the
Unencumbered Properties (individually and in the
aggregate).
(m)
Article VI
of The Credit Agreement is hereby
amended by adding the following Section 6.14
thereto:
6.14
Appraisal Rights
. To the extent Administrative
Agent reasonably determines that a new appraisal is necessary for
any Student Housing Project and provides notice of such
determination to Trust or any Borrower, obtain a new appraisal for
such Student Housing Project for purposes of calculating both the
Unencumbered Asset Value and Total Asset Value; provided
that so long as no Event of Default exists, Administrative Agent
shall not request more than one (1) new appraisal for any
Student Housing Project during any twelve (12) month period.
Each appraiser shall be engaged by Administrative Agent (at
Borrowers’ expense) and all appraisals shall be subject the
review and approval of Administrative Agent.
(n)
Section 7.01(j) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
(j)
Liens securing Indebtedness
permitted under Section 7.03(g) ; provided that
(i) each such transaction is secured by no more than five
(5) assets of the debtor under such transaction
(o)
Section 7.03(f)
of the Credit Agreement is hereby
deleted in its entirety and replaced with the following:
(f)
Recourse Debt (other than the
Obligations) of the Companies (i) to the extent such Recourse
Debt is secured, in an aggregate principal amount not to exceed at
any time outstanding $25,000,000; and (ii) to the extent such
Recourse Debt is unsecured, in an amount not to exceed
$125,000,000, as long as any such unsecured Recourse Debt:
(A) is pari-passu with, or subordinate (on terms reasonably
acceptable to Administrative Agent) to, all other unsecured
Recourse Debt of the Companies, (B) has covenants no more
restrictive than under this Agreement, (C) has a maturity date
that is at least one hundred and eighty (180) days beyond the
Maturity Date, (D) if such debt is suitable for bank
investors, each Lender has had the opportunity
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to participate in such financing,
and (E) shall otherwise be approved by Administrative Agent
(such approval not to be unreasonably withheld).
(p)
Section 7.10(e)
of the Credit Agreement is hereby
deleted in its entirety and replaced with the following:
(e)
Leverage Ratio.
Permit the Leverage Ratio as
of the end of any fiscal quarter of the Trus
