Exhibit 10.3
AMENDMENT NO. 2
to
Amended and Restated Credit Agreement
dated as of September 26, 2000
This AMENDMENT NO. 2 to Amended and Restated Credit Agreement is made
and entered into as of September 27, 2002 (this "Amendment") by and among SUMMIT
PROPERTIES PARTNERSHIP, L.P., a Delaware limited partnership (the "Borrower"),
SUMMIT PROPERTIES, INC., a Maryland corporation (the "Parent Guarantor"), the
financial institutions party to the Credit Agreement (hereinafter defined) from
time to time (the "Lenders"), WACHOVIA BANK. NATIONAL ASSOCIATION, formerly
known as First Union National Bank ("Wachovia"), as Administrative Agent (in
such capacity, the "Administrative Agent") for the Lenders, WACHOVIA SECURITIES,
INC., successor to First Union Securities, Inc., as Sole Lead Arranger and Book
Manager (in such capacity, the "Arranger"), Wachovia, as Syndication Agent for
the Lenders (in such capacity, the "Syndication Agent"), and BANK OF AMERICA,
N.A., as Documentation Agent for the Lenders (in such capacity, the
"Documentation Agent").
PRELIMINARY STATEMENT
The Borrower, the Parent Guarantor, the Lenders, the Administrative
Agent, the Arranger, the Syndication Agent and the Documentation Agent are
parties to an Amended and Restated Credit Agreement, dated as of September 26,
2000, as amended by Amendment No. 1 thereto, dated July 6, 2001 (such Amended
and Restated Credit Agreement, as from time to time amended, modified,
supplemented or restated, being herein known as the "Credit Agreement").
The Borrower has requested that the Administrative Agent and the
Lenders make certain amendments to the Credit Agreement, and the Lenders have
agreed to do so, upon and subject to the terms, conditions and provisions of
this Amendment.
NOW, THEREFORE, in consideration of the Credit Agreement, the Advances
made by the Lenders and outstanding thereunder, the mutual promises hereinafter
set forth and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
Section 1. Cross References and Definitions.
(a) Reference is made to the Credit Agreement. Upon and after the
effectiveness of this Amendment as provided in Section 4 hereof, all references
to the Credit Agreement in the Credit Agreement or in any other Loan Document
shall mean the Credit Agreement as amended by this Amendment. Except as
expressly provided in this Amendment, the execution and delivery of this
Amendment does not, and will not, amend, modify or supplement any provision of
or constitute a consent to or a waiver of any noncompliance with the provisions
of the Credit Agreement and, except as specifically provided in this Amendment,
the Credit Agreement shall remain in full force and effect.
(b) Capitalized terms used in this Amendment without definition shall
have the meanings ascribed to such terms in the Credit Agreement.
Section 2. Amendments to Credit Agreement. Effective as provided in
Section 4, the Loan Agreement is hereby amended as follows:
(a) The definition of "CAPITALIZATION RATE" in Section 1.2, CERTAIN
DEFINED TERMS, is amended by deleting the figure "9.00%" and by substituting in
lieu thereof the figure "8.50%."
(b) The definitions of the terms "ELIGIBLE STABILIZED UNENCUMBERED
PROPERTY," "ELIGIBLE UNENCUMBERED CONDOMINIUM PROPERTY," and "ELIGIBLE
UNSTABILIZED UNENCUMBERED PROPERTY" are amended NUNC PRO TUNC from the Closing
Date through (but not after) the date that the Borrower and the Parent Guarantor
comply with the requirements of Section 9 of this Amendment, by deleting the
terms "Subsidiary Guarantor" contained in each such defined term and by
substituting in lieu thereof the term "Subsidiary."
(c) The definition of "IMPLIED CAPITALIZATION VALUE" in Section 1.2,
CERTAIN DEFINED TERMS, is amended by deleting clause (a) and by substituting the
following in lieu thereof:
"(a) the sum of: (i) in the case of Stabilized Properties
acquired during such Fiscal Quarter, 100% of the costs basis of such
Stabilized Properties as of the end of such Fiscal Quarter; and
(ii) in the case of Stabilized Properties that have
been owned for one, two or three consecutive Fiscal Quarters then
ending, the product of (x) the Borrower's Consolidated EBITDA from such
Stabilized Properties for the Fiscal Quarter then ending (provided, in
the event any Property has been sold in such Fiscal Quarters, the
Borrower's Consolidated EBITDA from each such Property shall not be
included in the calculation of this clause (a)(ii)(x)), annualized
(i.e. multiplied by four (4)), less Replacement Reserves for such
Stabilized Properties divided by (y) the Capitalization Rate; and
(iii) in the case of Stabilized Properties that have
been owned for at least four consecutive Fiscal Quarters, the product
of (x) the Borrower's Consolidated EBITDA from such Stabilized
Properties for the four consecutive Fiscal Quarters then ending
(provided, in the event any Property has been sold in such Fiscal
Quarters, the Borrower's Consolidated EBITDA from each such Property
shall not be included in the calculation of this clause (a)(iii)(x))
less Replacement Reserves for such Stabilized Properties divided by (y)
the Capitalization Rate;"
(d) The definition of "REPLACEMENT RESERVES" in Section 1.2, CERTAIN
DEFINED TERMS, is amended in its entirety to read as follows:
"REPLACEMENT RESERVES" means, with respect to any Completed
Property of any Person for any period, an allowance for a normal level
of recurring capital expenditures and lease commissions equal to $225
multiplied by (i) in the case such Completed Property is owned by the
Borrower or a Subsidiary of the Borrower, the number of apartment units
on such Completed Property and (ii) in the case such Completed Property
is owned by an Unconsolidated Joint Venture of the Borrower, the
product of (x) the Borrower's pro-rata beneficial interest in such
2
Unconsolidated Joint Venture and (y) the number of apartment units on
such Completed Property.
(e) The definition of "UNENCUMBERED ASSET VALUE" in Section 1.2,
CERTAIN DEFINED TERMS, is amended as follows:
(i) By deleting clause (a)(i) and by substituting the
following in lieu thereof:
"(i) (A) the difference between (x) (1) in the case of
Eligible Stabilized Unencumbered Property that has been owned for one,
two or three consecutive Fiscal Quarters then ending, the Net Operating
Income for such Eligible Stabilized Unencumbered Property for the
Fiscal Quarter then ending, annualized (i.e. multiplied by four (4)),
and (2) in the case of Eligible Stabilized Unencumbered Property that
has been owned for at least four consecutive Fiscal Quarters then
ending, the Net Operating Income for such Eligible Stabilized
Unencumbered Property for the four consecutive Fiscal Quarters then
ending, less (y) the applicable Replacement Reserves for each such
Eligible Stabilized Unencumbered Property divided by (B) the
Capitalization Rate; plus"
(ii) By deleting clause (b) and by substituting the following
in lieu thereof:
"(b) with respect to any Eligible Stabilized Unencumbered
Property acquired during such Fiscal Quarter, 100% of the costs basis
of such Eligible Stabilized Unencumbered Property as of the end of such
Fiscal Quarter."
(f) The definition of "UNENCUMBERED JV ASSET VALUE" in Section 1.2,
CERTAIN DEFINED TERMS, is amended as follows:
(i) By deleting clause (a)(i) and by substituting the
following in lieu thereof:
"(i) (A) the difference between (x) (1) in the case of
Eligible Stabilized JV Unencumbered Property that has been owned for
one, two or three consecutive Fiscal Quarters then ending, the
Borrower's beneficial interest in the Net Operating Income for each
Eligible Stabilized JV Unencumbered Property for the Fiscal Quarter
then ending, annualized (i.e. multiplied by four (4)), and (2) in the
case of Eligible Stabilized JV Unencumbered Property that has been
owned for at least four consecutive Fiscal Quarters then ending, the
Borrower's beneficial interest in the Net Operating Income for each
Eligible Stabilized JV Unencumbered Property for the four consecutive
Fiscal Quarters then ending, less (y) the Borrower's beneficial
interest of the applicable Replacement Reserves for each such Eligible
Stabilized JV Unencumbered Property divided by (B) the Capitalization
Rate; plus"
(ii) By deleting clause (b) and by substituting the following
in lieu thereof:
"(b) with respect to any Eligible Stabilized JV Unencumbered
Property acquired during such Fiscal Quarter, 100% of the Borrower's
3
beneficial interest in the costs basis of such Eligible Stabilized JV
Unencumbered Property as of the end of such Fiscal Quarter."
(g) Section 9.2(b), DIVIDENDS, is amended in its entirety to read as
follows:
"(b) DIVIDENDS. Pay Dividends on any class of its capital
stock or equity interests, as applicable, and make any other
distribution or payment on account of or in redemption, retirement or
purchase of such, capital stock or equity interest; provided, however,
so long as no Event of Default has occurred and is continuing under
Section 10.1(a) hereof, (a) each of the Parent Guarantor and the
Borrower may pay Dividends in respect of its preferred equity and (b)
each of the Borrower and the Parent Guarantor may pay Dividends
(excluding from such calculation Dividends in respect of the Parent
Guarantors' and the Borrower's preferred equity) as long as such
Dividends in any period of four consecutive Fiscal Quarters do not
exceed the following amounts: (i) from and after the effective date of
this Amendment through and including December 31, 2003, 100% of the
Consolidated Funds From Operations of the Parent Guarantor for such
period of four consecutive Fiscal Quarters, or such greater amount as
may be required to maintain REIT status, and (ii) from and after
December 31, 2003, 95% of the Consolidated Funds From Operations of the
Parent Guarantor for such period of four consecutive Fiscal Quarters,
or such greater amount as may be required to maintain REIT status."
(h) Section 9.3(c), SECURED TOTAL FUNDED DEBT TO IMPLIED CAPITALIZATION
VALUE, is amended by deleting the figure ".40:1.0" and substituting in lieu
thereof the figure ".35:1.0."
(i) Section 9.3(g), DEVELOPMENT RATIO, is amended by deleting the
figure ".25:1.0" and substituting in lieu thereof the figure ".20:1.0."
Section 3. References to First Union National Bank. Effective April 1,
2002, Wachovia Bank, N.A. merged into First Union National Bank, and First Union
National Bank, the survivor of such merger, changed its name to Wachovia Bank,
National Association. Wherever in the Credit Agreement or any of the other Loan
Documents, reference is made to "First Union National Bank" or "Wachovia Bank,
N.A.," such reference shall be deemed to be a reference to "Wachovia Bank,
National Association."
Section 4. Conditions to Effectiveness of Amendment. This Amendment
shall become effective as of the first date on which (1) the Administrative
Agent shall have charged to the Borrower's loan account with each Lender
consenting to this Amendment the principal sum equal to such consenting Lender's
Commitment times 0.10%, and (2) the Administrative Agent shall have received:
(a) counterparts of this Amendment in sufficient copies for each Lender
and the Borrower, duly executed and delivered by the Borrower, the Parent
Guarantor, the Administrative Agent, the Arranger, the Syndication Agent, the
Documentation Agent and the Majority Lenders;
4
(b) a Consent and Confirmation of Guarantors duly executed and
delivered by each of the Subsidiary Guarantors; and
(c) such other documents and instruments as the Administrative Agent or
the Lenders may reasonably request.
Section 5. Representations and Warranties. Each Loan Party hereby makes
the following representations and warranties to the Administrative Agent and the
Lenders:
(a) After giving effect to this Amendment, each Loan Party is in
compliance with all of the terms and provisions set forth in the Credit
Agreement and in the other Loan Documents to be observed or performed by such
Loan Party, and no Event of Default exists;
(b) The execution and delivery of this Amendment have been duly
authorized by all necessary action of each Loan Party; and
(c) All of the representations and warranties made by each Loan Party
in the Credit Agreement are true and correct on and as of the date hereof,
except for (i) representations and warranties that speak as of a specified
earlier date and which remain true and correct in all material respects as of
such earlier date and (ii) changes in facts and circumstances permitted by the
terms of the Credit Agreement.
Section 6. Expenses. The Loan Parties agree to pay or reimburse on
demand all costs and expenses, including fees and disbursements of counsel,
incurred by the Administrative Agent in connection with the negotiation,
preparation, execution and delivery of this Amendment.
Section 7. Governing Law. This Amendment shall be construed in
accordance with, and governed by, the laws of the State of North Carolina.
Section 8. Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and shall be binding
upon all parties and their respective successors and assigns and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed signature page of any party hereto by facsimile transmission shall be
effective as delivery of a manually executed counterpart thereof.
Section 9. Subsidiary Guaranty. By no later than November 14, 2002, the
Borrower and the Parent Guarantor shall have caused all Subsidiaries that the
Borrower and the Parent Guarantor elect to become Subsidiary Guarantors to
execute and deliver to the Administrative Agent, for the benefit of the Lenders,
a Subsidiary Guarantee, and to provide to the Administrative Agent such
documents and certificates as are required by Section 9.1(p)(i) of the Loan
Agreement in connection with such Subsidiary Guarantee.
[signatures on following pages]
5
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers in several counterparts as of the
date first above written.
BORROWER:
SUMMIT PROPERTIES PARTNERSHIP, L.P., doing
business in North Carolina as Summit
Properties Partnership, Limited Partnership,
as Borrower
By: SUMMIT PROPERTIES INC., doing business
in North Carolina as Summit Properties
Real Estate, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Executive Vice President
PARENT GUARANTOR:
SUMMIT PROPERTIES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Executive Vice President
WACHOVIA BANK, NATIONAL ASSOCIATION, as
Administrative Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
WACHOVIA SECURITIES, INC., as Arranger
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
S-1
WACHOVIA BANK, NATIONAL ASSOCIATION, as
Syndication Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
BANK OF AMERICA., N.A., as Documentation Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice Pesident
S-2
The Lenders:
WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
S-3
The Lenders:
BANK OF AMERICA, N.A.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
S-4
The Lenders:
AMSOUTH BANK
By: /s/ ▇▇▇▇▇ Coffee
-------------------------------------
Name: ▇▇▇▇▇ Coffee
Title: Vice President
S-5
The Lenders:
CHEVY CHASE BANK
By: /s/ ▇. ▇▇▇▇▇▇ ▇'▇▇▇▇▇, III
------------------------------------------
Name: ▇. ▇▇▇▇▇▇ ▇'▇▇▇▇▇, III
Title: Vice President
S-6
The Lenders:
SOUTHTRUST BANK
By: /s/ ▇▇▇ ▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇▇▇▇
Title: Assistant Vice President
S-7
The Lenders:
CITIZENS BANK OF RHODE ISLAND
By:
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
S-8
The Lenders:
EASTERN BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
S-9