Exhibit 10.75
LOAN AGREEMENT
Dated as of
August 29, 1997
between
DALLAS PARKWAY PROPERTIES, INCORPORATED
"BORROWER"
and
NATIONAL OPERATING, L.P.
"LENDER"
LOAN AGREEMENT
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THIS LOAN AGREEMENT, dated as of August 29, 1997, is made and entered into
between DALLAS PARKWAY PROPERTIES INCORPORATED, a Texas corporation (the
"Borrower") and NATIONAL OPERATING, L.P., a Delaware limited partnership (the
"Lender").
WITNESSETH:
WHEREAS, the Borrower has applied to Lender for a certain loan (the "Loan")
in the principal amount of TWO MILLION EIGHT HUNDRED THOUSAND and N0/100 DOLLARS
($2,800,000) to be evidenced by Borrower's Secured Promissory Note payable to
the order of the Lender and dated as of even date herewith (the "Note"). Lender
is willing to make the Loan to the Borrower upon the terms and conditions herein
set forth and upon Borrower's granting in favor of Lender a continuing and
continuous deed of trust, Lien, assignment, pledge of and security interest in
certain of its real and personal property, all as more particularly described
and defined in the Security Instruments as collateral and security for all
indebtedness incurred pursuant to the Loan.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, receipt of which is
acknowledged by the parties hereto, the parties agree, as follows:
ARTICLE I
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CERTAIN DEFINITIONS
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When used herein, the following terms shall have the following meanings:
1.1 "Applicable Rate" shall mean the Note Rate, as defined in that
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certain Secured Promissory Note executed by Borrower in favor of Lender of even
date herewith.
1.2 "Business Day" shall mean a day other than a Saturday, Sunday or a
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day upon which lenders in the State of Texas are closed to business generally.
1.3 "CERCLA" shall mean the Comprehensive Environmental Response,
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Compensation and Liability Act of 1980, as amended, together with all
regulations and rulings promulgated with respect thereto.
1.4 "Closing Date" shall mean August 29, 1997.
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1.5 "Collateral" shall have the meaning assigned to that term in Article
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III of this Agreement.
1.6 "Deed of Trust" shall mean the Deed of Trust described in Section 3.1
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hereof.
1.7 "Default Rate" shall mean the lesser of (i) eighteen percent (18%) per
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annum, or (ii) the Highest Lawful Rate allowed by applicable state or federal
law.
1.8 "Dollar". "Dollars" and the symbol "$" shall mean lawful money of
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the United States of America.
1.9 "Environmental Laws" shall mean Laws, including without limitation
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federal, state or local Laws, ordinances, rules, regulations, interpretations
and orders of courts or administrative agencies or authorities relating to
pollution or protection of the environment (including, without limitation,
ambient air, surface water, groundwater, land surface and subsurface strata),
including without limitation CERCLA, ▇▇▇▇, RCRA, HSWA, OPA, HMTA, TSCA and other
Laws relating to (i) Polluting Substances or (ii) the manufacture, processing,
distribution, use, treatment, handling, storage, disposal or transportation of
Polluting Substances.
1.10 "ERISA" shall mean the Federal Employee Retirement Income Security
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Act of 1974, as amended, together with all regulations and rulings promulgated
with respect thereto.
1.11 "Event of Default" shall mean any of the events specified in Section
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8.1 of this Agreement, and "Default" shall mean any event, which together with
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any lapse of time or giving of any notice, or both, would constitute an Event of
Default.
1.12 "Exit Fee" shall mean the amount of two percent (2%) of the original
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balance of the Note payable in accordance with the terms of this Agreement and
the Note.
1.13 "GAAP" means all applicable generally accepted accounting principals
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of the Accounting Principals Board of the American Institute of Certified Public
Accountants and the Financial Accounting Standards Board which are applicable
during the term of this Agreement.
1.14 "Guarantor" means any person or entity, including, but not limited to
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Polyphase Corporation who is guaranteeing payment of the Indebtedness.
1.15 "Highest Lawful Rate" means the maximum rate or amount of interest
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which Lender is allowed to contract for charge, take, reserve or receive under
Applicable Law.
1.16 "HMTA" shall mean the Hazardous Materials Transportation Act, as
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amended, together with all regulations and rulings promulgated with respect
thereto.
1.17 "HSWA" shall mean the Hazardous and Solid Waste Amendments of 1984,
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as amended, together with all regulations and rulings promulgated with respect
thereto.
1.18 "Indebtedness" shall mean and include any and all: (i) indebtedness,
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obligations and liabilities of the Borrower to the Lender incurred or which may
be incurred or purportedly incurred hereafter pursuant to the terms of this
Agreement or any of the other Loan Papers, and any extensions, renewals,
substitutions, amendments and increases in amount thereof, including such
amounts as may be evidenced by the Note and all lawful interest, service fees,
commitment fees, Origination Fee, Exit Fee and other charges, and all reasonable
costs and expenses incurred in connection with the preparation, filing and
recording of the Loan Papers, including attorneys fees; (ii) all reasonable
costs and expenses, including attorneys' fees, paid or incurred by the Lender in
enforcing or attempting to enforce collection of any Indebtedness and in
enforcing or realizing upon or attempting to enforce or realize upon any
collateral or security for any Indebtedness and in protecting and preserving the
Lender's interest in the Indebtedness or any collateral or security for any
Indebtedness in any bankruptcy or reorganization proceeding, including interest
on all sums so expended by the Lender accruing from the date upon which such
expenditures are made until paid, at an annual rate equal to the Default Rate or
the rate provided in any of the applicable Loan Papers; (iii) sums expended by
the Lender in curing any Event of Default or default of the Borrower under the
terms of this Agreement, the other Loan Papers or any other security agreement
or other writing evidencing or securing the payment of the Note together with
interest on all sums so expended by the Lender accruing from the date upon which
such expenditures are made until paid, at an annual rate equal to the Default
Rate or the rate provided in any of the applicable Loan Papers; and (iv) all
"Indebtedness" or "Secured Indebtedness" as said terms are defined in each of
the Loan Papers.
1.19 "Laws" shall mean all statutes, laws, ordinances, regulations,
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orders, writs, injunctions, or decrees of the United States, any state or
commonwealth, any municipality, any foreign country, any territory or
possession, or any Tribunal.
1.20 "Lien" shall mean any mortgage, pledge, security interest,
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encumbrance, Lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement, any
lease in the nature thereof, and the filing of or agreement to give any
financing statement or other similar form of public notice under the Laws of any
jurisdiction).
1.20 "Lien Notice" shall mean notice received or obtained by the Lender or
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knowledge obtained by the Lender of any Lien being claimed (whether valid or
not) by any Person, other than the Lender or a trustee on behalf of the Lender,
with respect to the Mortgaged Property.
1.22 "Loan" shall mean that certain loan of $2,800,000 from Lender to
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Borrower described in this Agreement.
1.23 "Loan Papers" shall mean this Agreement, the Note, the Security
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LOAN AGREEMENT -- PAGE 4
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Instruments, Borrower's Affidavit, Notice of Final Agreement, all of even date
herewith executed by Borrower in connection with the Loan, and all other
documents instruments and certificates executed and delivered to the Lender by
the Borrower pursuant to the terms of this Agreement.
1.24 "Maturity Date" shall mean August 1, 1999, or such date as the Loan
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matures by acceleration or otherwise in accordance with the terms and provisions
of this Agreement.
1.25 "Note Rate" shall mean fourteen percent (14%) per annum.
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1.26 "Notes" shall mean the Secured Promissory Note described in Section
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2.2 of this Agreement, together with each and every extension, renewal,
modification, replacement, substitution, rearrangement and change in form
thereof which may be from time to time and for any term or terms effected.
1.27 "Official Body" shall mean any government or political Subdivision or
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any agency, authority, bureau, central Lender, commission, department or
instrumentality of either, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.
1.28 "Origination Fee" shall mean the sum of one and one half percent
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(1.5%) of the original principal balance of the Note, payable as provided
herein.
1.29 "Person" shall mean and include an individual, a partnership, a joint
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venture, a corporation, a trust, an unincorporated organization, and a
government or any department, agency or political subdivision thereof
1.30 "Polluting Substances" shall mean all pollutants, contaminants,
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chemicals or industrial, toxic or hazardous substances or wastes and shall
include, without limitation, any flammable explosives, radioactive materials,
oil, hazardous materials, hazardous or solid wastes, hazardous or toxic
substances or related materials defined in CERCLA/▇▇▇▇, RCRA/HSWA and in the
HMTA; provided, in the event either CERCLA/▇▇▇▇, RCRA/HSWA or HMTA is amended so
as to broaden the meaning of any term defined thereby, such broader meaning
shall apply subsequent to the effective date of such amendment and, provided
further, to the extent that the Laws of any State or other Tribunal establish a
meaning for "hazardous substance, "hazardous" specified in CERCLA/▇▇▇▇,
RCRA/HSWA, or HMTA, such broader meaning shall apply.
1.31 "Property" shall mean the property conveyed pursuant to the Deed of
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Trust.
1.32 "▇▇▇▇" shall mean the Superfund Amendments and Reauthorization Act
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of 1987, as amended, together with all regulations and rulings promulgated with
respect thereto, "Security Instruments" shall mean the Deed of Trust of even
date herewith,
executed by Borrower in favor of Lender and all other financing statements,
mortgages, deeds of trust, assignments, security agreements, documents or
writings of any and all amendments and supplements thereto, granting, conveying,
assigning, transferring or in any manner providing the Lender with a security
interest or mortgage Lien in any property as security for the repayment of all
or any part of the Indebtedness.
1.33 "Security Instruments" shall mean the Deed of Trust and all other
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financing statements, mortgages, deeds of trust, assignments, security
agreements, documents or writings of any and all amendments and supplements
thereto, granting, conveying, assigning, transferring or in any manner providing
the Lender with a security interest or mortgage Lien in any property as security
for the repayment of all or any part of the Indebtedness.
1.34 "Taxes" shall mean all taxes, assessments, fees, or other charges or
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levies from time to time or at any time imposed by any Laws or by any Tribunal.
1.35 "Tribunal" shall mean any municipal, state, commonwealth, Federal,
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foreign, territorial or other sovereign, governmental entity, governmental
department, court, commission, board, bureau, agency or instrumentality.
1.36 "TSCA" shall mean the Toxic Substances Control Act, as amended,
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together with all regulations and rulings promulgated with respect thereto.
ARTICLE II
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2.1 Loan. The Lender agrees, upon the terms and subject to the
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conditions hereinafter set forth, to make the Loan to the Borrower from the
Closing Date until the Maturity Date, or until such later date as the Lender
shall have extended the Loan in writing unless its Loan shall be sooner
terminated pursuant to the provisions of this Agreement or any of the Loan
Papers.
2.2 Origination Fee. On or before the Closing Date, Borrower shall pay
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the Origination Fee to Lender.
2.3 Note. On the Closing Date the Borrower shall execute and deliver to
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the order of the Lender the Note in the principal amount of $2,800,000
(referred to as the "Note"). The Note shall be dated as of the Closing Date,
and shall bear interest payable monthly on the 1st day of every month commencing
September 1, 1997, on unpaid balances of principal from time to time
outstanding. After maturity (whether by acceleration or otherwise) the Note
shall bear interest at the Default Rate, payable on demand. Interest shall be
calculated on the basis of a year of 360 days, but assessed for the actual
number of days elapsed in each accrual period.
2.4 Prepayment of the Note. Borrower may pay the principal sum of this
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Note in full or in part at any time by paying the principal sum, all interest
accrued on the
principal sum to the date of payment and the Exit Fee allocable to such
principal sum.
2.5 Interest. The outstanding principal balance of the Note, from time to
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time, remaining unpaid shall bear interest which shall be computed on the number
of days actually elapsed, but computed as though each year consisted of 360 days
from the date of the Note until maturity at an annual rate equal to the Note
Rate.
2.6 Principal and Interest. The principal and interest of the Note will
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be payable as follows:
(a) commencing on September 1, 1997, and continuing on the same day of
each successive month thereafter through and including July 1, 1999,
interest on the total outstanding principal balance shall be payable as it
accrues; and
(b) all remaining unpaid principal and all accrued but unpaid interest
shall be due and payable in full on the Maturity Date.
2.7 Exit Fee. Borrower also agrees to pay the Exit Fee on the Maturity
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Date; provided, however, if Borrower prepays any portion of the principal amount
due under the Note, the Exit Fee allocable to such prepaid amount shall be due
at the time of prepayment.
ARTICLE III
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SECURITY
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3.1 Collateral. The repayment of the Indebtedness shall be secured by a
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first and prior mortgage Lien, deed of trust and security interest, subject to
matters in existence and which have been disclosed in writing to Lender as of
the date hereof, in and to all of the portions of the property owned or
hereafter acquired by the Borrower, which has been granted to the Lender,
pursuant to the terms of the Deed of Trust, dated as of even date herewith and,
only insofar as Borrower's legal and equitable ownership interests in such
mortgaged property are concerned, together with all proceeds and products of the
items or types of collateral described in this Article III, including without
limitation, insurance proceeds and all cash, money, deposits and accounts of
Borrower at any time in the possession or control of the Lender (the collateral
described herein and in the Security Instruments being collectively referred to
as the "Collateral").
ARTICLE IV
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CONDITIONS TO LOAN
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4.1 Conditions Precedent. The obligation of the Lender to make the Loan
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is subject to the satisfaction of all of the following conditions on or prior to
the Closing Date
(in addition to the other terms and conditions set forth herein):
(a) No Default. On the Closing Date, there shall exist no Event of
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Default or an event which would be an Event of Default if the applicable cure
period has expired.
(b) Representations and Warranties. The representations, warranties
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and covenants set forth in Article VI shall be true and correct on and as
of the Closing Date, with the same effect as though made on and as of the
Closing Date.
(c) Loan Papers/Security Instruments. The Borrower and Guarantor
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(where applicable) shall have delivered to the Lender this Loan Agreement,
the Secured Promissory Note, Deed of Trust, Guaranty, Borrower's Affidavit
and, Notice of Final Agreement, each appropriately executed by the
appropriate parties and, where applicable, in form and acknowledged to the
satisfaction of the Lender and dated as of the Closing Date, together with
such financing statements, and other documents as shall be necessary and
appropriate to perfect the Lender's mortgage Liens, pledge and security
interests in the Collateral covered by said Security Instruments.
(d) Title to Mortgaged Properties. Borrower shall have provided the
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Lender with evidence satisfactory to the Lender and its legal counsel that
Borrower has valid title to the mortgaged property(ies) and Collateral and
a Lender's policy of title insurance acceptable to Lender.
(e) Survey. Lender shall have received a survey of the Property
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described in the Deed of Trust satisfactory to Lender and certified to
Lender.
(f) Resolutions/Certificates. The Lender shall have received (i)
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copies of the Articles of Incorporation and all amendments thereto and the
by-laws and all amendments thereto of Borrower and Guarantor, as the case
may be, accompanied by a certificate issued by the secretary or an
assistant secretary of Borrower and Guarantor, to the effect that each such
copy is correct and complete; (ii) certificates of incumbency and
signatures of all officers of Borrower and Guarantor who are authorized to
execute Loan Papers on behalf of the Borrower, executed by its secretary;
and (iii) copies of resolutions approving the Loan Papers and authorizing
the transactions contemplated herein and therein, duly adopted by the board
of directors of Borrower, executed by the secretary or an assistant
secretary of Borrower and Guarantor, to the effect that such copies are
true and correct copies of resolutions duly adopted at a meeting or by
unanimous consent of the board of directors of Borrower and Guarantor and
that such resolutions constitute all the resolutions adopted with respect
to such transactions, have not been amended, modified, or revoked in any
respect, and are in full force and effect as of the date of such
certificate.
(g) Good Standing/Insurance. The Lender shall have received (i)
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certificates dated as of a recent date from the Secretary of State or other
appropriate governmental authority evidencing the existence or
qualification and good standing of Borrower and Guarantor in all
jurisdictions covered by the mortgaged properties where such qualification
is required and where failure to be qualified or in good standing could
reasonably be expected to have-a material adverse effect, and (ii)
certificates evidencing the insurance maintained by the Borrower and
Guarantor in compliance with applicable provisions of this Agreement.
(h) Opinion of Borrower's and Guarantor's Counsel. The Lender shall
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have received from Borrower's and Guarantor's counsel, a favorable closing
opinion addressed to the Lender, satisfactory in form and substance to the
Lender and its counsel.
(i) Origination Fee. The Lender shall have received the Origination
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Fee.
(j) Lender shall have received a rent roll for the Property certified
by the Borrower.
ARTICLE V
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COVENANTS
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The Borrower covenants and agrees with the Lender that from the date hereof
and so long as this Agreement is in effect (by extension, amendment or
otherwise) and until payment in full of all Indebtedness and the performance of
all other obligations of the Borrower under this Agreement, unless the Lender
shall otherwise consent in writing:
5.1 Payment of Taxes and Claims. The Borrower will pay and discharge or
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cause to be paid and discharged all Taxes imposed upon the income or profits of
the Borrower or upon the property, real, personal or mixed, or upon any part
thereof, belonging to Borrower before the same shall be in default, and all
lawful claims for labor, rentals, materials and supplies which, if unpaid, might
become a Lien upon its property or any part thereof, provided however, that the
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Borrower shall not be required to pay and discharge or cause to be paid or
discharged any such Tax, assessment or claim so long as the validity thereof
shall be contested in good faith by appropriate proceedings, and adequate book
reserves shall be established with respect thereto, and the Borrower shall pay
such Tax, charge or claim before any property subject thereto shall become
subject to execution.
5.2 Maintenance of Corporate Existence. The Borrower will do or cause to
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be done all things necessary to preserve and keep in full force and effect its
corporate
existence, rights and franchises and will continue to conduct and operate
Borrower's business substantially as being conducted and operated presently.
5.3 Preservation of Property. Borrower will at all times maintain,
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preserve and protect all of Borrower's properties which are used or useful in
the conduct of Borrower's business whether owned in fee or otherwise, or leased,
in good repair and operating condition; from time to time make, or cause to be
made, all needful and proper repairs, renewals, replacements, betterments and
improvements thereto so that the business carried on in correction therewith may
be properly and advantageously conducted at all times; and comply with all
material leases to which it is a party or under which it occupies property so as
to prevent any material loss or forfeiture thereunder.
5.4 Insurance. Borrower will keep adequately insured by financially sound
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and reputable insurers Borrower's equipment, motor vehicles, and all other
property of a character usually insured by businesses engaged in the same or
similar businesses, including the Collateral. If required by the Security
Instruments, any insurance policies covering the Collateral shall be endorsed to
provide for payment of losses to the Lender as its interest may appear, to
provide that such policies may not be canceled, reduced or affected in any
manner for any reason without thirty (30) days prior notice to the Lender, and
to provide for any other matters which the Lender may reasonably require; and
such insurance shall be against fire, casualty and any other hazards normally
insured against and shall be in the amount of the full value (less a reasonable
deductible) of the property insured. Borrower shall at all times maintain
adequate insurance by financially sound and reputable insurers, including
without limitation, the following coverages: (i) insurance against damage to
persons and property including comprehensive general liability, worker's
compensation and automobile liability.
5.5 Compliance with Applicable Laws. Borrower will comply with the
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requirements of all Applicable Laws and orders of any Tribunal and obtain any
licenses, permits, franchises or other governmental authorizations necessary to
the ownership of Borrower's properties or to the conduct of Borrower's business.
5.6 Environmental Covenants. Borrower will immediately notify the Lender
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of and provide the Lender with copies of any notifications of discharges or
releases or threatened releases or discharges of a Polluting Substance on, upon,
into or from the Collateral which are given or required to be given by or on
behalf of the Borrower to any federal, state or local Tribunal, and such copies
of notifications shall be delivered to the Lender at the same time as they are
delivered to the Tribunal. Borrower further agrees promptly to undertake and
diligently pursue to completion any appropriate and legally required or
authorized remedial containment and cleanup action in the event of any release
or discharge or threatened release or discharge of a Polluting Substance on,
upon, into or from the Collateral. At all times while owning and operating the
Collateral, the Borrower will maintain and retain complete and accurate records
of all releases, discharges or other disposal Of Polluting Substances on, onto,
into or from the
Collateral, including, without limitation, records of the quantity and type of
any Polluting Substances disposed of on or off the Collateral.
5.7 Environmental Indemnities. Borrower hereby agrees to indemnify,
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defend and hold harmless the Lender and each of its officers, directors,
employees, members, agents, consultants, attorneys, contractors and each of its
affiliates, successors or assigns, or transferees from and against, and
reimburse said Persons in full with respect to, any and all loss, liability,
damage, fines, penalties, costs and expenses, of every kind and character,
including reasonable attorneys' fees and court costs, known or unknown, fixed or
contingent, occasioned by or associated with any claims, demands, causes of
action, suits and/or enforcement actions, including any administrative or
judicial proceedings, and any remedial, removal or response actions ever
asserted, threatened, instituted or requested by any Persons, including any
Tribunal, arising out of or related to: (a) the breach of any representation or
warranty of Borrower contained in Section 6.5 set forth herein; (b) the failure
of Borrower to perform any of its covenants contained in Section 5.5 or 5.6
hereunder; (c) the ownership, construction, occupancy, operation, use of the
Collateral prior to the earlier of the date on which (i) the Indebtedness and
obligations secured hereby have been paid and performed in full and the Security
Instruments have been released, or (ii) the Collateral has been sold by Lender
following Lender's ownership of the Collateral by way of foreclosure of the
Liens granted pursuant hereto, deed in lieu of such foreclosure or otherwise
(the "Release Date").
The indemnities contained in this Section 5.7 apply, without limitation, to
any violation on or before the Release Date of any Environmental Law and any
liability or obligation relating to the environmental conditions on, under or
about the property constituting any part of the Collateral on or prior to the
Release Date (including, without limitation: (a) the presence on, upon or in the
Collateral or release, discharge or threatened release on, upon or from the
Collateral of any Polluting Substances generated, used, stored, treated,
disposed of or otherwise released prior to the Release Date, and (b) any and all
damage to real or personal property and/or harm or injury including wrongful
death, to persons alleged to have resulted from such release of any Polluting
Substances regardless of whether the act, omission, event or circumstances
constituted a violation of any Environmental Law at the time of its existence or
occurrence). The term "release" shall have the meaning specified in CERCLA/▇▇▇▇
and the terms "stored," "treated" and "disposed" shall have the meanings
specified in RCRA/HSWA; provided, however, any broader meanings of such terms
provided by applicable laws of the State of Texas shall apply.
The provisions of this Section 5.7 shall be in addition to any other
obligations and liabilities Borrower may have to the Lender at common law and
shall survive the Release Date and shall continue thereafter in full force and
effect.
The Lender agrees that in the event that such claim, suit or enforcement
action is asserted or threatened in writing or instituted against it or any of
its officers, employers, agents or contractors or any such remedial, removal or
response action is requested of it
or any of its officers, employees, agents or contractors for which the Lender
may desire indemnity or defense hereunder, the Lender shall give written
notification thereof to the Borrower.
Notwithstanding anything to the contrary stated herein, the indemnities
created by this Section 5.7 shall only apply to losses, liabilities, damages,
fines, penalties, costs and expenses actually incurred by the Lender as a result
of claims, demands, actions, suits or proceedings brought by Persons who are not
the beneficiaries of any such indemnity. The Lender shall act as the exclusive
agent for all indemnified Persons under this Section 5. 7. With respect to any
claims or demands made by such indemnified Persons, the Lender shall notify the
Borrower within thirty (30) days after the Lender's receipt of a writing
advising the Lender of such claim or demand. Such notice shall identify (i)
when such claim or demand was first made, (ii) the identity of the Person making
it, (iii) the indemnified Person, and (iv) the substance of such claim or
demand. Failure by the Lender to so notify the Borrower within said thirty (30)
day period shall reduce the amount of the Borrower's obligations and liabilities
under this Section 5.7 by an amount equal to any damages or losses suffered by
the Borrower resulting from any prejudice caused the Borrower by such delay in
notification from the Lender. Upon receipt of such notice, the Borrower shall
have the exclusive right and obligation to contest, defend, negotiate or settle
any such claim or demand through counsel of its own selection (but reasonably
satisfactory to the Lender) and solely at Borrower's own cost, risk and expense;
provided, that the Lender, at its own cost and expense shall have the right to
participate in any such contest, defense, negotiations or settlement. The
settlement of any claim or demand hereunder by the Borrower may be made only
upon the prior approval of the Lender of the terms of the settlement.
5.8 Business and Financial Information. Promptly furnish to Lender from
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time to time such information regarding the business and affairs and financial
condition of Borrower as the Lender may reasonably request, and will furnish
Lender:
5.8.1 Quarterly Financial Statements. Within forty-five (45) days
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after the close of each quarter of each fiscal year of Borrower and
Guarantor, two (2) copies of the balance sheet of Borrower and Guarantor as
at the close of such period, and two (2) copies of the statement of income
of Borrower and Guarantor setting forth the figures for such fiscal quarter
period as well as year to date figures, all prepared in a manner accurately
presenting the financial condition of Borrower and Guarantor and certified
as complete and correct by an authorized officer of Borrower and Guarantor;
5.8.2 Annual Financial Statements. Within forty-five (45) days after
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the close of each fiscal year of Borrower: (i) two (2) copies of the
balance sheets of Borrower and Guarantor as of the end of such fiscal year
and two (2) copies of the statement of income of Borrower and Guarantor for
such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all prepared on the basis of GAAP,
consistently applied, and in such detail as Lender
may reasonably request, and certified as complete and correct by an
authorized officer;
5.8.3 Insurance. Upon the request of Lender, Borrower will furnish
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Lender copies of its insurance policies;
5.8.4 Notice of Default. Immediately upon becoming aware of the
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existence of any condition or event which constitutes, or with notice or
lapse of time (or both) would constitute an Event of Default under this
Agreement, a written notice specifying the nature and period of existence
thereof and what action is being taken or is proposed to be taken with
respect thereto;
5.8.5 Notice of Claimed Default. Immediately upon becoming aware
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that any Person has given notice or taken any other action with respect to
a claimed material default under any indenture, mortgage, deed of trust,
promissory note, loan agreement, note agreement or any other agreement or
undertaking to which Borrower or Guarantor is a party other than those
disclosed on Exhibit B, a notice specifying the notice given or action
taken by such Person and the nature of the claimed material default and
what action Borrower or Guarantor is taking or proposes to take with
respect thereto;
5.8.6 Litigation. Immediately upon becoming aware of any action,
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suit or proceeding pending or threatened against or affecting Borrower or
Guarantor in any court or before any arbitrator or governmental authority
which if adversely determined could materially or adversely affect its
property, business, operation or condition, financial or otherwise other
than those disclosed on Exhibit A, a notice specifying the nature thereof
and what action is being taken or is proposed to be taken with respect
thereto;
5.8.7 Tenants. Upon request of Lender, a list of Borrower's
-------
Tenants and the terms of any leases in effect on the real property securing
the Indebtedness;
5.8.8 Adverse Change. Immediately upon becoming aware of any adverse
--------------
change in the condition, financial or otherwise, of Borrower since the date
of Closing.; and
5.8.9 Other. Such other statement or statements, list of property
-----
and accounts, budgets, forecasts or reports with respect to Borrower as
Lender may request, including, but not limited to Borrower's Form 10-K for
the 1996 fiscal year of Borrower filed with the United States Securities
and Exchange Commission.
5.9 Certificate. Every ninety (90) days that the Loan is outstanding,
-----------
there shall be furnished to Lender a certificate signed by an authorized officer
stating: (i) that
a review of the activities of Borrower has been made with a view to determining
whether Borrower has fulfilled all of Borrower's obligations under this
Agreement, the Note and all other Loan Papers; and (ii) that Borrower has
fulfilled all of Borrower's obligations under this Agreement, the Note and all
other Loan Papers and Security Instruments and that all representations and
warranties made and therein continue to be true and correct (or specifying the
nature of any change), or if an Event of Default shall be in existence,
specifying any default in the nature and status thereof.
5.10 Inspection. Borrower will keep complete and accurate books and
----------
records with respect to the Collateral and its other properties, business and
operations and will permit employees and representatives of the Lender, upon
reasonable notice, to audit, inspect and examine the same and to make copies
thereof and extracts therefrom during normal business hours. All such records
shall be at all times kept and maintained at the principal offices of Borrower
in Dallas, Texas. Upon any default or Event of Default of the Borrower, it will
surrender all of such records relating to the Collateral to the Lender upon
receipt of any request therefor from the Lender.
5.11 Maintenance of Employee Benefit Plans. The Borrower will maintain
-------------------------------------
each employee benefit plan and/or pension plan as to which Borrower may have any
liability or responsibility in compliance with ERISA and all other Laws
applicable thereto.
5.12 Limitation on Liens. Borrower will not create or suffer to exist any
-------------------
Lien upon any of its property or assets except (i) Liens in favor of the Lender
securing the Indebtedness; (ii) Liens arising in the ordinary course of business
for sums not due or sums being contested in good faith and by appropriate
proceedings and not involving any deposits, advances, borrowed money or the
deferred purchase price of property or services; and (iii) Liens permitted to
exist under the terms of any of the Security Instruments.
5.13 Disposition/Negative Pledge re Encumbrance of Collateral. Borrower
--------------------------------------------------------
will not sell or encumber any of the Collateral without first obtaining the
Lender's written consent thereto and Borrower will not sell, transfer, scrap or
otherwise dispose of or mortgage, pledge, grant a security interest in or
otherwise encumber any of the Collateral.
5.14 Other Agreements. Borrower will not enter into or permit to exist
----------------
any agreement (i) which would cause an Event of Default or a default hereunder;
or (ii) which contains any provision which would be violated or breached by the
performance of Borrower's obligations hereunder or under any of the other Loan
Papers.
5.15 Name and Other Changes. Borrower shall not change its name, fiscal
----------------------
year and/or accounting method except as required by GAAP.
5.16 Leases. During the term of the Loan or any renewal or extension
------
thereof, Borrower will not lease any of the real property which serves as
security for the
Indebtedness other than on a month to month basis without the prior written
consent of Lender.
ARTICLE VI
----------
REPRESENTATIONS AND WARRANTIES
------------------------------
To induce the Lender to enter into this Agreement and to make the
Loans to the Borrower under the provisions hereof, and in consideration thereof,
the Borrower and Guarantor represent, warrant and covenant as follows:
6.1 Litigation. Except as set forth on Exhibit A attached hereto, there
---------- ---------
is no action, suit, investigation or proceeding threatened or pending before any
Tribunal against or affecting Borrower or Guarantor or any properties or rights
of Borrower or Guarantor, which, if adversely determined, would result in a
liability of greater than $25,000 or would otherwise result in any adverse
change in the business or condition, financial or otherwise, of Borrower or
Guarantor. Borrower or Guarantor is not in default with respect to any
judgment, order, writ, injunction, decree, rule or regulation of any Tribunal.
6.2 Conflicting Agreements and Other Matters. Except as set forth on
----------------------------------------
Exhibit B attached hereto, neither Borrower nor Guarantor is in default in the
performance of any material obligation, covenant, or condition in any agreement
to which they are a party or by which they are bound. Borrower or Guarantor is
not a party to any contract or agreement which materially and adversely affects
its business, property or assets, or financial condition. Borrower or Guarantor
is not a party to or otherwise subject to any contract or agreement which
restricts or otherwise affects the right or ability of the Borrower or Guarantor
to execute the Loan Papers or the performance of any of their respective terms.
Neither the execution nor delivery of any of the Loan Papers, nor fulfillment of
nor compliance with their respective terms and provisions will conflict with, or
result in a breach of the terms, conditions or provisions of, or constitute a
default under, or result in any violation of, or result in the creation of any
Lien (except those created by the Loan Papers) upon any of the properties or
assets of the Borrower or Guarantor pursuant to, or require any consent,
approval or other action by or any notice to or filing with any Tribunal (other
than routine filings after the Closing Date with the Securities and Exchange
Commission, any securities exchange and/or state blue sky authorities) pursuant
to any award of any arbitrator, or any agreement, instrument or Law to which the
Borrower or Guarantor is subject.
6.3 Financial Statements. The financial statements of Borrower and
--------------------
Guarantor furnished to the Lender show all material liabilities, direct and
contingent, and fairly present the financial condition of the Borrower and
Guarantor as at date thereof and the results of its operations for the periods
then ended, and since such date there has been no material adverse change in the
business, financial condition or operations of the Borrower or Guarantor.
6.4 Title to Properties; Authority. Borrower has full power, authority
------------------------------
and legal right to own and operate the properties which it now owns and
operates, and to carry on the lines of business in which it is now engaged, and
has indefeasible title to the Property subject to no Lien of any kind except
Liens permitted by this Agreement. Borrower has full power, authority and legal
right to execute and deliver and to perform and observe the provisions of this
Agreement and the other Loan Papers.
6.5 Environmental Representations.
-----------------------------
(a) Borrower is not subject to any liability or obligation relating to (i)
the environmental conditions on, under or about the Collateral, including,
without limitation, the soil and ground water conditions at the location of any
of the Property, or (ii) the use, management, handling, transport, treatment,
generation, storage, disposal, release or discharge of any Polluting Substance;
(b) Borrower has not obtained and is not required to obtain or make
application for any permits, licenses or similar authorizations to construct,
occupy, operate or use any buildings, improvements, facilities, fixtures and
equipment forming a part of the Collateral by reason of any Environmental Laws;
(c) Borrower has taken all reasonable steps necessary to determine and has
determined that no Polluting Substances have been disposed of or otherwise
released on, onto, into, or from the Collateral (the term "release" shall have
the meanings specified in CERCLA/▇▇▇▇, and the term "disposal" or "disposed"
shall have the meanings specified in RCRA/HSWA; provided, in the event either
CERCLA/▇▇▇▇ or RCRA/HSWA is amended so as to broaden the meaning of any term
defined thereby, such broader meaning shall apply subsequent to the effective
date of such amendment and provided further, to the extent that the laws of any
State or Tribunal establish a meaning for "release," "disposal" or "disposed"
which is broader than that specified in CERCLA/▇▇▇▇, RCRA/HSWA or other
Environmental Laws, such broader meaning shall apply); and
(d) To the best of Borrower's knowledge, there are no PCB's or asbestos-
containing materials, whether in the nature of thermal insulation products Such
as pipe boiler or breech coverings, wraps or blankets or sprayed-on or troweled-
on products in, on or upon the Collateral.
6.6 Purposes. Borrower is not engaged principally, or as one of its
--------
important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System)and no part of the proceeds of
any borrowing hereunder will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any margin
stock. If requested by the Lender, the Borrower will furnish to the Lender a
statement in conformity with the requirements of Federal
Reserve Form U-1, referred to in Regulation U, to the foregoing effect. Neither
the Borrower nor any agent acting on its behalf has taken or will take any
action which might cause this Agreement or the Note to violate any regulation of
the Board of Governors of the Federal Reserve System (including Regulations G,
T, U and X) or to violate any Securities Laws, state or federal, in each case as
in effect now or as the same may hereafter be in effect.
6.7 Compliance with Applicable Laws. In all reasonable and in all
-------------------------------
material respects, the Borrower is in compliance with all Laws, ordinances,
rules, regulations and other legal requirements applicable to it and the
businesses conducted thereby, the violation of which could or would have a
material adverse effect on its business condition, financial or otherwise.
6.8 Possession of Franchises, Licenses. Borrower possesses all
----------------------------------
franchises, certificates, licenses, permits, registrations, approvals and other
authorizations from governmental political subdivisions or regulatory
authorities, free from burdensome restrictions, that are necessary in any
material respect for the ownership, maintenance and operation of its properties
and assets, and Borrower is not in violation of any thereof in any material
respect.
6.9 Leases. To the best of Borrower's knowledge, Borrower enjoys peaceful
------
and undisturbed possession of all leases to which it is a party.
6.10 Taxes. Borrower and Guarantor has filed all federal, state and other
-----
income tax returns which are required to be filed and have paid all Taxes, as
shown on said returns, and all Taxes due or payable without returns and all
assessments received to the extent that such Taxes or assessments have become
due. All Tax liabilities of the Borrower are adequately provided for on the
books of the Borrower, including any interest or penalties. No income tax
liability of a material nature has been asserted by taxing authorities for Taxes
in excess of those already paid.
6.11 Disclosure. Neither this Agreement nor any other Loan Paper or
----------
writing furnished to the Lender by or on behalf of the Borrower and Guarantor in
connection herewith contains any untrue statement of a material fact nor do such
Loan Papers and writings, taken as a whole, omit to state a material fact
necessary in order to make the statements contained herein and therein not
misleading. There is no fact known to Borrower and not reflected in the
financial statements provided to the Lender which adversely affects its assets
or in the future may materially adversely affect the business, property, or
assets, or financial condition of Borrower which has not been set forth in this
Agreement, in the Loan Papers or in other documents furnished to the Lender by
or on behalf of the Borrower prior to the date hereof in connection with the
transactions contemplated hereby.
6.12 ERISA. Since the effective date of Title IV of ERISA, no Reportable
-----
Event has occurred with respect to any Plan. For the purposes of this section
the term
"Reportable Event" shall mean an event described in Section 4043(b) of ERISA.
For the purposes hereof the term "Plan" shall mean any plan subject to Title IV
of ERISA and maintained for employees of Borrower, or of any member of a
controlled group of corporations, as the term "controlled group of corporations"
is defined in Section 1563 of the Internal Revenue Code of 1986, as amended (the
"Code"), of which Borrower is a part. Each Plan established or maintained by
Borrower is in material compliance with the applicable provisions of ERISA, and
the Borrower has filed all reports required by ERISA and the Code to be filed
with respect to each Plan. Borrower has met all requirements with respect to
funding Plans imposed by ERISA or the Code. Since the effective date of Title IV
of ERISA, there have not been any nor are there now existing any events or
conditions that would permit any Plan to be terminated under circumstances which
would cause the Lien provided under Section 4068 of ERISA to attach to the
assets of Borrower. The value of each Plan's benefits guaranteed under Title IV
of ERISA on the date hereof does not exceed the value of such Plan's assets
allocable to such benefits on the date hereof.
6.13 Ownership of Collateral. The Borrower hereby represents, warrants
-----------------------
and covenants that as of the date of this Agreement the Borrower owns legal and
equitable title to the Collateral, subject to existing Liens which have been
disclosed in writing to Lender as of the date of this Loan Agreement.
6.14 Dividends. Outside of the ordinary course of its business, neither
---------
the Borrower nor Guarantor will not declare, pay or become obligated to declare
or pay any cash or Polyphase stock dividend on any class of its capital stock
now or hereafter outstanding, make any distribution of cash or property to
holders of any shares of such stock, or redeem, retire, purchase or otherwise
acquire, directly or indirectly, any shares of any class of its capital stock
now or hereafter outstanding.
ARTICLE VII
-----------
EVENTS OF DEFAULT
------------------
7.1 Events of Default. If any one or more of the following events
-----------------
(herein called "Events of Default") shall occur and be continuing for any reason
whatsoever (and whether such occurrence shall be voluntary or involuntary or
come about or be effected by operation of Law or otherwise):
(a) The Borrower shall fail to make any scheduled monthly payment on the
Note on the due date thereof, or fail to pay the Note after the same shall
become due and payable (whether by extension, renewal, acceleration, maturity or
otherwise); provided, however, prior to declaring a Default under this Section
7.1(a), Lender shall give Borrower five (5) days prior written notice of
payment default, unless one (1) such payment default notice has been given by
the Lender hereunder to Borrower during the term of the Note, in which event no
prior notice to Lender's election to declare a Default is necessary; or
(b) Any representation or warranty of the Borrower made herein or in any
writing furnished in connection with or pursuant to any of the Loan Papers shall
have been false or misleading in any material respect on the date when made; or
(c) Borrower shall fail to duly observe, perform or comply with any
covenant, agreement or term contained in this Agreement or any of the Loan
Papers; or
(d) Borrower shall default in the payment of principal or of interest on
any other obligation for money borrowed or received as an advance (or any
obligation under any conditional sale or other title retention agreement, or any
obligation issued or assumed as full or partial payment for property whether or
not secured by purchase money Lien, or any obligation under notes payable or
drafts accepted representing extensions of credit) beyond any grace period
provided with respect thereto, or shall default in the performance of any other
agreement, term or condition contained in any agreement under which such
obligation is created (or if any other default under any such agreement shall
occur and be continuing beyond any period of grace provided with respect
thereto) if the effect of such default is to cause, or to permit the holder or
holders of such obligation (or a trustee on behalf of such holder or holders) to
cause such obligation to become due prior to its date of maturity; or
(e) Any of the following: (i) Borrower shall be unable to pay its
respective debts as they mature, or Borrower shall make an assignment for the
benefit of creditors or admit in writing its inability to pay its debts
generally as they become due or fail generally to pay its debts as they mature;
or (ii) an order, judgment or decree is entered adjudicating Borrower insolvent
or an order for relief under the United States bankruptcy Code is entered with
respect to Borrower; or (iii) Borrower shall petition or apply to any Tribunal
for the appointment of a trustee, receiver, custodian or liquidator of Borrower
or of any substantial part of the assets of Borrower or shall commence any
proceedings relating to Borrower under any bankruptcy, reorganization,
compromise, arrangement, insolvency, readjustment of debts, dissolution, or
liquidation Law of any jurisdiction, whether now or hereafter in effect; or (iv)
any such petition or application shall be filed, or any such proceedings shall
be commenced, against Borrower and Borrower by any act shall indicate its
approval thereof, consent thereto or acquiescence therein, or an order, judgment
or decree shall be entered appointing any such trustee, receiver, custodian or
liquidator, or approving the petition in any such proceedings, and such order,
judgment or decree shall remain unstayed and in effect for more than fifteen
(15) days; or (vi) Borrower shall fail to make timely payment or deposit of any
amount of tax required to be withheld by Borrower and paid to or deposited to or
to the credit of the United States of America pursuant to the provisions of the
Internal Revenue Code of 1986, as amended, in respect of any and all wages and
salaries paid to employees of Borrower; or
(f) Any final judgment on the merits for the payment of money in an
amount in excess of $25,000 shall be outstanding against Borrower, and such
judgment shall remain unstayed and in effect and unpaid for more than fifteen
(15) days; or
(g) Any Reportable Event described in Section 6.12 hereof which the Lender
determines might constitute grounds for the termination of a Plan therein
described or for the appointment by the appropriate United States District Court
of a trustee to administer any such Plan shall have occurred and be continuing
fifteen (15) days after written notice to such effect shall have been given to
Borrower by the Lender, or any such Plan shall be terminated, or a trustee shall
be appointed by an appropriate United States District Court to administer any
such Plan or the Pension Benefit Guaranty Corporation shall institute
proceedings to terminate any such Plan or to appoint a trustee to administer any
such Plan; or
(h) Any default or event of default under any of the other Loan Papers,
including (without limitation) the Security Instruments; or
(i) Any representation or warranty of Borrower contained in this Agreement
or any of the Loan Papers is or becomes untrue.
7.2 Remedies. Upon the occurrence of any Event of Default referred to in
--------
Sections 7.1(a), or 7.1(b) hereof, the Indebtedness shall immediately and
automatically be due and payable without notice of any kind. Upon the
occurrence of any other Event of Default, the Lender will not as a result of
such Event of Default accelerate the Indebtedness or exercise its rights
pursuant to the terms of the Loan Papers, unless such Event of Default is not
cured to the satisfaction of Lender within twenty (20) days after Lender
provides Borrower with written notice that such Event of Default exists.
Thereafter, without prejudice to any right or remedy of the Lender under this
Agreement or the Loan Papers or Applicable Law or any other instrument or
document delivered in connection herewith, the Lender may declare the Loan
terminated and declare the Note and the other Indebtedness, or any part thereof,
to be forthwith due and payable, whereupon the Note and the other Indebtedness,
or such portion as is designated by the Lender shall forthwith become due and
payable, without presentment, demand, notice or protest of any kind, all of
which are hereby expressly waived by the Borrower. No delay or omission on the
part of the Lender in exercising any power or right hereunder or under the Note,
the Loan Papers or under Applicable Law shall impair such right or power or be
construed to be a waiver of any default or any acquiescence therein, nor shall
any single or partial exercise by the Lender of any such power or right preclude
other or further exercise thereof or the exercise of any other such power or
right by the Lender. In the event that all or part of the Indebtedness becomes
or is declared to be forthwith due and payable as herein provided, the Lender
shall have the right to set off the amount of all the Indebtedness of the
Borrower owing to the Lender against, and shall have a Lien upon and security
interest in, all property of the Borrower in the Lender's possession at or
subsequent to such default, regardless of the capacity in which the Lender
possesses such property, including but not limited to any balance or share of
any deposit, demand, collection or agency account. At any time after the
occurrence of any Event of Default, the Lender may, at its option, cause an
audit of any and/or all of the books, records and documents of the Borrower to
be made by auditors
satisfactory to the Lender at the expense of the Borrower. The Lender also shall
have, and may exercise, each and every right and remedy granted to it for
default under the terms of the other Loan Papers.
ARTICLE VIII
------------
MISCELLANEOUS
-------------
8. Notices. Unless otherwise provided herein, all notices, requests,
-------
consents and demands shall be in writing and shall be either hand-delivered (by
courier or otherwise), forwarded by facsimile or mailed by certified mail,
postage prepaid, to the respective addresses specified below, or, as to any
party, to such other address as may be designated by it in written notice to the
other parties:
If to the Borrower, to:
Dallas Parkway Properties, Incorporated
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile Number (▇▇▇) ▇▇▇-▇▇▇▇
If to the Lender, to:
National Operating, L.P.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile Number (▇▇▇)▇▇▇-▇▇▇▇
All notices, requests, consents and demands hereunder will be effective when
hand-delivered by the Lender to the applicable notice address of the Borrower or
when mailed by certified mail, postage prepaid, addressed as aforesaid by either
party hereto.
8.2 Place of Payment. All sums payable hereunder shall be paid in
----------------
immediately available funds to the Lender, at the offices of its agent at ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or at such other place as
the Lender shall notify the Borrower in writing. If any interest, principal or
other payment falls due on a date other than a Business Day, then (unless
otherwise provided herein) such due date shall be extended to the next
succeeding Business Day, and such extension of time will in such case be
included in computing interest, if any, in connection with such payment.
8.3 Survival of Agreements. All covenants, agreements, representations
----------------------
and warranties made herein shall survive the execution and the delivery of Loan
Papers. All
statements contained in any certificate or other instrument delivered by the
Borrower hereunder shall be deemed to constitute representations and warranties
by the Borrower.
8.4 Parties in Interest. All covenants, agreements and obligations
-------------------
contained in this Agreement shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto, except that the
Borrower may not assign its rights or obligations hereunder without the prior
written consent of the Lender.
8.5 Governing Law. This Agreement and the Note shall be deemed to have
-------------
been made or incurred under the laws of the State of Texas and shall be
construed and enforced in accordance with and governed by the laws of Texas,
except to the extent that federal laws may apply.
8.6 VENUE: SERVICE OF PROCESS. BORROWER, FOR ITSELF, ITS SUCCESSORS AND
-------------------------
ASSIGNS, HEREBY (A) IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE
STATE AND FEDERAL COURTS OF THE STATE OF TEXAS AND AGREES AND CONSENTS THAT
SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL PROCEEDING ARISING OUT OF OR
IN CONNECTION WITH THE LOAN PAPERS AND THE INDEBTEDNESS BY SERVICE OF PROCESS AS
PROVIDED BY TEXAS LAW, (B) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY LITIGATION ARISING OUT OF OR IN CONNECTION WITH THE LOAN PAPERS AND THE
INDEBTEDNESS BROUGHT IN DISTRICT COURTS OF DALLAS COUNTY, TEXAS, OR IN THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, DALLAS
DIVISION, (C) IRREVOCABLY WAIVES ANY CLAIMS THAT ANY LITIGATION BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (D) IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
LITIGATION BY THE MAILING OF COPIES THEREOF BY CERTIFIED MAIL, RETURN- RECEIPT
REQUESTED, POSTAGE PRE, PAID, TO SUCH BORROWER AT ITS ADDRESS SET FORTH HEREIN,
AND (E) IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING AGAINST LENDER ARISING OUT
OF OR IN CONNECTION WITH THE LOAN PAPERS OR THE INDEBTEDNESS SHALL BE BROUGHT IN
THE DISTRICT COURTS OF DALLAS COUNTY, TEXAS, OR IN THE UNITED STATES DISTRICT
COURT FOR THE NORTHERN DISTRICT OF TEXAS, DALLAS DIVISION, NOTHING HEREIN SHALL
AFFECT THE RIGHT OF LENDER TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST BORROWER IN ANY JURISDICTION OR TO SERVE PROCESS IN ANY MANNER PERMITTED
BY APPLICABLE LAW.
8.7 Maximum Interest Rate. Any provision herein, or in any document
---------------------
securing this Loan Agreement, or in any other document executed or delivered in
connection herewith, or in any other agreement or commitment, whether
written or oral, express or implied, to the contrary notwithstanding, neither
Lender nor any holder of this Loan Agreement shall ever be entitled to receive
or collect, nor may amounts
received hereunder be credited, in such a manner that Lender or any holder
hereof would be paid, as interest, a sum greater than the maximum amount
permitted by applicable law to be charged to the person, partnership, firm or
corporation primarily obligated to pay the Indebtedness at the time in question
(hereinafter called the "Maximum Rate"). If any construction of this Loan
Agreement or any document securing the Indebtedness, or any and all other
papers, agreements or commitments, shall indicate a different right given to
Lender or any holder thereof to ask for, demand or receive any larger sum as
interest, such is a mistake in calculation or wording which this clause shall
override and control, it being the intention of the parties that this Loan
Agreement, and all other instruments securing the payment of the Indebtedness or
executed or delivered in connection herewith, shall in all things comply with
applicable law and that proper adjustments shall automatically be made
accordingly. If Lender or any holder hereof ever receives, collects or applies
as interest any sum in excess of the Maximum Rate, such excess amount shall be
applied to the reduction of the unpaid principal balance of the Indebtedness,
and if the Indebtedness is paid in full, any remaining excess shall be paid to
Borrower. In determining whether the interest paid or payable, under any
specific contingency or other consideration, exceeds the Maximum Rate, Borrower
and Lender or any holder of this Indebtedness shall, to the maximum extent
permitted under applicable law, characterize any nonprincipal payment as an
expense or fee rather than as interest, exclude voluntary prepayments and the
effects thereof, and "allocate and spread" the total amount of interest
throughout the entire term of the Indebtedness so that the interest rate is
uniform throughout the entire term of this Indebtedness; provided, that if the
Indebtedness is paid and performed in full prior to the end of the full
contemplated term hereof, and if the interest received for the actual period of
existence thereof exceeds the interest permitted at the Maximum Rate, Lender or
any holder hereof shall refund to Borrower the amount of such excess including
other consideration, or credit the amount of such excess or other consideration
against the ,aggregate unpaid principal balance of all advances made by Lender
or any holder hereof under this Loan Agreement at the time in question.
8.8 No Waiver; Cumulative Remedies. No failure to exercise, and no delay
------------------------------
in exercising, on the part of the Lender, any right, power or privilege
hereunder or under any other Loan Paper or applicable Law shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege of the Lender. The rights and remedies herein provided are cumulative
and not exclusive of any other rights or remedies provided by ally other
instrument or by law. No amendment, modification or waiver of any provision of
this Agreement or any other Loan Paper shall be effective unless the same shall
be in writing and signed by the Lender. No notice to or demand on the Borrower
in any case shall entitle the Borrower to any other or further notice or demand
in similar or other circumstances.
8.9 Costs. The Borrower agrees to pay to the Lender on demand all costs,
-----
fees and expenses incurred or accrued by the Lender in connection with the
preparation, execution, closing, delivery, filing, recording and administration
of this Agreement, the Note, the Security Instruments and the other Loan Papers,
or any amendment, waiver,
consent, modification, renewal or extension thereto or thereof, or any
enforcement thereof In any action to enforce or construe the provisions of this
Agreement or any of the Loan Papers, the prevailing party shall be entitled to
recover its reasonable attorneys' fees and all costs and expenses related
thereto.
8.10 Entirety and Amendments. THIS AGREEMENT REPRESENTS THE FINAL
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AGREEMENT BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. This Agreement embodies the entire agreement between the Borrower and
Lender and supersedes all prior proposals, agreements and understandings
relating to the subject matter hereof. Borrower certifies that it is relying on
no representation, warranty, covenant or agreement except for those set forth
herein and the other Loan Papers of even date herewith. This Agreement may be
amended, or the provisions hereof waived, only by an instrument in writing
executed jointly by an authorized officer of Borrower and Lender, and
supplemented only by documents delivered or to be delivered in accordance with
the express terms hereof.
8.11 Headings. The article and section headings of this Agreement are for
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convenience of reference only and shall not constitute a part of the text hereof
nor alter or otherwise affect the meaning hereof.
8.12 Severability. The unenforceability or invalidity as determined by a
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Tribunal of competent jurisdiction, of any provision or provisions of this
Agreement shall not render unenforceable or invalid any other provision or
provisions hereof.
8.13 Exceptions to Covenants. The Borrower shall not be deemed to be
-----------------------
permitted to take any action or fail to take any action which is permitted as an
exception to any of the covenants contained herein or which is within the
permissible limits of any of the covenants contained herein if Such action or
omission would result in the breach of any other covenant contained herein.
8.14 Counterparts. This Agreement may be executed in any number of
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counterparts, all of which taken together shall constitute one and the same
instrument.
8.15 Waivers. No course of dealing nor any failure or delay by Lender or
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its officers, directors, employees, agents, representatives, or attorneys with
respect to exercising any Right of Lender hereunder shall operate as a waiver
thereof.
8.16 Incorporation of Exhibits/Schedules. The Exhibits annexed to this
-----------------------------------
Agreement are incorporated herein and shall be considered a part of this
Agreement for all purposes.
8.17 Further Cooperation. After the Closing Date, Borrower shall execute
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and deliver or cause to be executed and delivered, from time to time, such
further instruments and shall take such other actions as Lender may reasonably
request to
perfect and or continue Lender's security interests in the Collateral and to
accomplish fully the terms and intent of this Agreement.
8.18 WAIVER OF JURY. BORROWER FULLY, VOLUNTARILY AND EXPRESSLY WAIVES ANY
--------------
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS AGREEMENT, THE NOTE, THE DEED OF TRUST, OTHER SECURITY
INSTRUMENTS OR LOAN PAPERS OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED (OR WHICH MAY IN THE FUTURE BE DELIVERED) IN CONNECTION
HEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AGREEMENT. BORROWER AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY. BORROWER ACKNOWLEDGES THAT THIS
WAIVER IS CONSPICUOUS.
8.19 DTPA WAIVER. TO THE EXTENT APPLICABLE TO THE TRANSACTION
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CONTEMPLATED IN THIS AGREEMENT OR IN THE LOAN PAPERS OR ANY PORTION THEREOF,
BORROWER WAIVES TO THE MAXIMUM EXTENT PERMITTED BY LAW THE PROVISIONS OF THE
TEXAS DECEPTIVE TRADE PRACTICES ACT, CHAPTER XVII, SUBCHAPTER B, SECTION 17.41
THROUGH 17.63 INCLUSIVE, TEXAS BUSINESS AND COMMERCE CODE. IN CONNECTION WITH
SUCH WAIVER, BORROWER HEREBY REPRESENTS AND WARRANTS TO LENDER THAT (A) BORROWER
HAS ASSETS OF FIVE MILLION AND NO/100 DOLLARS ($5,000,000) OR MORE ACCORDING TO
ITS MOST RECENT FINANCIAL STATEMENT, (B) HAS KNOWLEDGE AND EXPERIENCE IN
FINANCIAL AND BUSINESS MATTERS THAT ENABLE IT TO EVALUATE THE MERITS AND RISKS
OF THE TRANSACTION CONTEMPLATED HEREBY, (C) IS NOT IN A SIGNIFICANTLY DISPARATE
BARGAINING POSITION WITH LENDER, AND (D) IS NOT A "CONSUMER" PURSUANT TO THE
TERMS OF THE TEXAS DECEPTIVE TRADE PRACTICES ACT. BORROWER ACKNOWLEDGES THAT
THIS WAIVER IS CONSPICUOUS.
8.20 Brokerage Commission. Borrower will pay a brokerage commission to
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Stockbridge Corporation pursuant to separate agreement. Borrower indemnifies
and holds Lender harmless for any other claim for commission or fee in
connection with this transaction.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Dallas, Texas, effective as of the day and year
first above written.
BORROWER:
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DALLAS PARKWAY PROPERTIES, INCORPORATED,
a Texas corporation
By:
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Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: President
LENDER:
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NATIONAL OPERATING, L.P.,
a Delaware limited partnership
By: Syntek Asset Management, L.P.,
a Delaware Limited Partnership,
General Partner
By: Syntek Asset Management, Inc.
a Texas Corporation,
General Partner
By:
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
EXHIBIT A
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LITIGATION
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EXHIBIT "B"
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LIST OF DEFAULTS UNDER AGREEMENTS