EXHIBIT (B)(1)
MASTER LOAN AGREEMENT
This Loan Agreement dated effective February 26, 1999, is by and between
AMREP SOUTHWEST, INC. ("Borrower"), a New Mexico corporation, and NORWEST BANK
NEW MEXICO, N.A. ("Bank"), a state banking corporation.
This Agreement is made and executed upon the terms and conditions
contained or referenced herein. All previous, new, or future loans or financial
accommodations by the Bank to the Borrower are subject to this Agreement.
Borrower understands and agrees that:
(a) In granting, renewing, or extending any Loan, the Bank is
relying upon Borrower's representations, warranties, and
agreements as set forth in this Agreement;
(b) The granting, renewing, or extending of any Loan by the Bank
shall at all times be subject to the Bank's sole judgment and
discretion; and
(c) All such Loans shall be and shall remain subject to the terms of
this Agreement. This Agreement shall continue to be in full
force and effect between the parties until all Loans by the Bank
to the Borrower, including all extensions, renewals,
replacements, substitutions, and modifications thereof are paid
in full.
(d) MAXIMUM AGGREGATE OUTSTANDING BALANCE. Notwithstanding any
provision of this Agreement or any Related Document to the
contrary, Lender has no obligation to make any advances, draws,
loan or loans to Borrower in excess of $19,516,241, in the
aggregate maximum principal amount.
(e) PRIOR AGREEMENTS REPLACED. This Agreement replaces all existing
agreements, commitments, and loan agreements between the
Borrower and the Bank including the Master Loan Agreement dated
effective July 12, 1996, and all amendments to that prior loan
agreement.
(f) EXISTING NOTES AND REQUESTED FINANCING. The Borrower has
requested that the Bank increase, extend, or modify certain
existing notes and commitments as described in Section I,
paragraph 1.14 below.
SECTION I - DEFINITIONS.
As used in this Agreement, the following terms shall have the respective
meanings indicated:
1.01 AGREEMENT means this Master Loan Agreement.
1.02 BANK means Norwest Bank New Mexico, N.A. and its successors and
assigns.
1.03 BORROWER means Amrep Southwest, Inc., a New Mexico corporation
and its successors and assigns.
1.04 BORROWER'S RESOLUTIONS means the resolutions duly adopted by the
Board of Directors of the Borrower dated April 29, 1998, authorizing execution
and delivery of the Loan Documents, a copy of which is attached as EXHIBIT 1.04.
1.05 BUSINESS DAY means a day when the Bank is open for business.
1.06 CLOSING DATE means February 26, 1999.
1.07 COLLATERAL means all collateral, liens, assignments, mortgages,
security interests, and other rights, presently in connection with the Loan, or
hereafter, created or signed by or in favor of Borrower to the Bank in order to
secure performance and/or repayment of the Loan.
1.08 COLLATERAL DOCUMENTS means any and all documents executed by or
on behalf of the Borrower, any guarantor, or any party having any right, title
or interest in any Collateral which evidences, grants, creates, assigns, or
perfects any interest in the Collateral in favor of Bank.
1.09 GOVERNMENTAL AUTHORITY means the United States of America; the
State of New Mexico; any political subdivision of any of the foregoing and any
agency, department, commission, board, bureau or instrumentality of any of them
which now or hereafter exercises jurisdiction over the Borrower.
1.10 GUARANTY means the Commercial Guaranty of Borrower's parent
company Amrep Corp., an Oklahoma corporation, in the form attached as
EXHIBIT 1.10.
1.11 LOAN(S) means all indebtedness of the Borrower to the Bank, when
advanced pursuant to the terms of this Agreement or otherwise, and including the
Note(s).
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1.12 LOAN DOCUMENTS means this Agreement, the Notes, all Collateral
Documents, and all other liens, lien interests, and instruments (and including
all exhibits thereto), executed pursuant hereto or in connection with or as
security for the payment of the Obligations or for performance of the Borrower's
obligations under this Agreement, or for both such payment and performance and
all renewals, extensions, modifications and amendments of any of the foregoing.
1.13 LOAN FEES means the loan fees payable by Borrower to Bank at
closing, plus Bank's attorneys' fees and costs and other fees incurred by the
Bank in initiating and/or enforcing its rights under the Loan Documents.
1.14 NOTE(S) collectively means all notes existing, executed in
conjunction with the closing or hereafter executed and delivered by the Borrower
to the Bank together with all extensions, amendments, modifications, revisions,
replacements, and substitutions thereof permitted by the Bank, including but not
limited to:
(a) The Construction Note dated February 26, 1999, in the maximum
principal amount of $4,500,000, with a present principal balance
of approximately $4,434,519, maturing November 30, 1999, a copy
of which is attached as EXHIBIT 1.14(A).
(b) The Amortizing Term Loan dated July 12, 1996, in the original
principal amount of $1,191,290.37, with a present principal
balance of approximately $473,764, maturing July 12, 2000, a
copy of which is attached as EXHIBIT 1.14(B);
(c) The Off Site Development Note dated February 26, 1999, in the
maximum principal amount of $5,000,000, maturing February 28,
2001, a copy of which is attached as EXHIBIT 1.14(C);
(d) The On Site Development Line consisting of individual Notes for
Phases IV and VI with a combined maximum principal balance of
$1,525,406:
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ONSITE DEVELOPMENT NOTES MAXIMUM
PRINCIPAL
AMOUNT
Phase IV, maturing March 15, 1999 $ 125,656.00
Phase VI, maturing August 26, 1999 $1,399.750.00
A copy of the On Site Development Notes for Phases IV and VI are
attached as EXHIBITS 1.14(D)(IV)AND(VI) respectively.
(e) The Estates Development Note dated July 26, 1996, in the
original principal amount of $2,000,000, with a present
principal balance of approximately $479,084, maturing October
31, 1999, a copy of which is attached as EXHIBIT 1.14(E).
(f) The Letter of Credit dated October 21, 1998, in the maximum
principal amount of $100,000.00, expiring October 31, 1999, in
favor of HOW Insurance Company, a copy of which is attached as
EXHIBIT 1.14(F).
(g) The Commerce Center Note dated April 29, 1998 in the original
principal amount of $8,220,000, with a present committed
principal balance of approximately $7,427,987, and a current
outstanding principal balance of approximately $2,269,317,
maturing April 29, 2000, a copy of which is attached as EXHIBIT
1.14(G).
(h) The Letter of Credit in favor of Cumberland Casualty & Surety
Company dated February 10, 1999, in the maximum principal amount
of $10,000, expiring February 4, 2000, a copy of which is
attached as EXHIBIT 1.14(H).
1.15 OBLIGATIONS means all obligations of the Borrower:
(a) To pay the principal of, and interest on all Loan(s), each Note
and any Renewal Note in accordance with their respective terms,
now existing or existing in the future, and to all other
indebtedness of Borrower to the Bank. The term "indebtedness"
means and includes without limitation all loans, notes,
obligations, debts, and liabilities of the Borrower to the Bank,
as well as all claims by the Bank against the Borrower pursuant
to any Loan Document; whether now or hereafter existing,
voluntary or involuntary, due or not due, absolute or
contingent, liquidated or unliquidated; where the Borrower may
be liable individually or jointly with others; where the
Borrower may be obligated as a guarantor, surety or otherwise.
(b) To reimburse the Bank, on demand, for all of the Bank's
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expenses and costs, including the reasonable fees and expenses
of its counsel, in connection with maintenance and protection of
any Collateral, the initiation, amendment, modification or
enforcement of the Loan Documents and any documents evidencing
or relating to a Renewal Note, including, without limitation,
any proceeding brought or threatened to enforce payment of any
of the Obligations, if the Bank prevails against the Borrower in
litigation to enforce such payment.
1.16 ORGANIZATIONAL DOCUMENTS means copies of the current Articles of
Incorporation and Bylaws of the Borrower and all amendments thereto, and
evidence satisfactory to the Bank that the Borrower is a corporation in good
standing in the State of New Mexico.
1.17 PERSON means any individual, partnership, corporation or other
business entity or organization.
1.18 RENEWAL NOTE means any promissory note executed and delivered by
the Borrower to the Bank in connection with a renewal, extension, modification,
amendment, revision, replacement or substitution of any Note described or
referenced in this Agreement.
SECTION II - THE LOANS.
2.01 THE LOAN. The Notes listed as Exhibits in Section 1.14 are, at
closing, the only Notes outstanding to the Bank from the Borrower and no other
notes, loans, extensions of credit or advances are to be made except advances on
certain of the Notes as described in this Agreement, including the exhibits.
2.02 SECURITY FOR PAYMENT AND PERFORMANCE. The Collateral is given to
secure the Loans and is and will be used as security for any and all other
obligations of Borrower to the Bank, whether now existing or hereafter arising.
Repayment and performance of the Obligations is secured by the Collateral
Documents, including, but not limited to the following:
(a) Real Estate Mortgage dated December 3, 1986, recorded January
16, 1987 as Document No. 95245 in the Office of the County
Clerk, ▇▇▇▇▇▇▇▇ County, New Mexico, including all subsequent
re-recordings, modifications, amendments, and restatements;
(b) Real Estate Mortgage dated December 5, 1991 recorded
December 10, 1991 as Document No. 79064 in the Office of
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the County Clerk, ▇▇▇▇▇▇▇▇ County, New Mexico, including the
Supplemental Agreement to Mortgage and all modifications,
amendments, and restatements to mortgage subsequently filed;
(c) Real Estate Mortgage dated December 5, 1991 recorded
December 10, 1991 as Document No. 79063 in the Office of the
County Clerk, ▇▇▇▇▇▇▇▇ County, New Mexico, including the
Supplemental Agreement to Mortgage and all modifications,
amendments, and restatements to mortgage subsequently filed;
(d) Real Estate Mortgage dated December 10, 1993 and recorded
December 15, 1993 as Document No. 27300 in the Office of the
County Clerk, ▇▇▇▇▇▇▇▇ County, State of New Mexico, including
all modifications, amendments, and restatements to mortgage
subsequently filed;
(e) The Commercial Guaranty of Amrep Corp., a copy of which is
attached as EXHIBIT 1.10 as limited by the letter effective
February 26, 1999, from the Bank to Guarantor, a copy of which
is attached as EXHIBIT 1.10(A) ; and
(f) All other Collateral now or hereafter assigned, pledged,
mortgaged or granted to the Bank to secure repayment of the
Loan.
2.03 RIGHT OF SETOFF. Collateral includes the Bank's right of set-off
against any balance or share belonging to Borrower of any deposit or other
account with the Bank, notwithstanding any other security for the Loans.
2.04 COLLATERAL; DEFICIENCY. All security held by the Bank under the
terms of this Agreement and the other Loan Documents shall be available as
Collateral for the Loans and may be applied to satisfy the Borrower's
Obligations and to otherwise perform its duties and obligations under the Loan
Documents. The Borrower shall remain liable for any deficiency remaining after
such application.
2.05 INTEREST ON THE NOTES. Interest shall accrue at the rate
specified in the Note. The Bank may, at its option, calculate and charge
interest as though each payment is made on the payment due date with principal
reductions effective as of the date of receipt.
2.06 REPAYMENT OF THE NOTES. Each Note shall be due and payable on
the dates specified in the Note and in accordance with the terms thereof. All
payments shall be paid directly to the Bank in immediately available funds. Upon
any Event of Default, the Bank may charge any deposit account of Borrower for
all or any part of the Obligations due or declared due. The records maintained
by the Bank shall be deemed to be evidence of the date of and amount of each
payment on the Note and the other Obligations. Upon an
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Event of Default payments may be applied to any Note(s) in such amounts and in
such order or priority as the Bank deems necessary.
2.07 RENEWALS, EXTENSIONS, ADDITIONAL LOANS. Each Note, Line, and
Letter of Credit referenced in this Agreement contains its own repayment terms
and maturity. Borrower acknowledges the enforceability of such specific terms
and acknowledges that there is no agreement, representation, or assurance by the
Bank that a renewal, extension, or modification of any note or loan, if such
request is made by the Borrower, would be considered or approved by the Bank.
Should Borrower, at any future date, request the renewal, extension, or
modification of any note or loan, the decision whether to grant or allow such
request shall be at the Bank's sole discretion, the Bank has no obligation or
duty to the Borrower to grant such request(s) if made, and shall have no
liability to the Borrower or to any other person if it declines, for any reason,
to approve any such request. This Agreement shall apply to and shall control as
to any subsequent renewal, extension, modification, note, loan, or other
extension of credit by the Bank to the Borrower, unless specific contrary
language, referencing that this Agreement does not apply, is contained in such
subsequent note.
SECTION III - COLLATERAL REQUIREMENTS; DISBURSEMENT PROCEDURES; RELEASE
PROVISIONS; PAYMENTS.
3.01 Provided no Event of Default exists, disbursement shall be
governed by the applicable referenced exhibit which also require the Borrower to
maintain minimum collateral requirements, entitle Borrower to release of
collateral and require Borrower to make payment on the Loans:
(a) EXHIBIT 3.01(A) - Disbursement Procedures, $4,500,000
Construction Note;
(b) EXHIBIT 3.01(B) - No Exhibit
(c) EXHIBIT 3.01(C) - Disbursement Procedures, $5,000,000 Off Site
Development Note;
(d) EXHIBIT 3.01(D) - Disbursement Procedure, $1,399,750, On Site
Development Note Phases IV and VI;
(e) EXHIBIT 3.01(E) - Disbursement Procedures, $2,000,000 Estates
Development Note.
(f) EXHIBIT 3.01(F) - $100,000 Letter of Credit No. S061302 shall be
governed by the terms of such Letter of Credit and any
replacement thereof;
(g) EXHIBIT 3.01(G) - Disbursement Procedures, $8,220,000 Commerce
Center Development Note
(h) EXHIBIT 3.01(H) -$10,000 Letter of Credit No. S061419
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shall be governed by the terms of such Letter of Credit and any
replacement thereof; and
3.02 CESSATION OF ADVANCES. Notwithstanding any of the foregoing, any
agreement to fund or make advances under any Note or any commitment to make any
additional Loan to Borrower, whether under this Agreement or under any other
agreement, the Bank shall have no obligation to make or fund advances under any
Note nor to fund any other commitment if:
(a) Borrower or any Guarantor is in default under the terms of this
Agreement, any Loan Document, or any other agreement that
Borrower or Guarantor has with the Bank;
(b) Borrower or Guarantor becomes insolvent, files a petition in
bankruptcy or similar proceedings, or is adjudged a bankrupt;
(c) There occurs a material adverse change in Borrower's financial
condition, in the financial condition of any Guarantor, or in
the value of any Collateral securing any Loan;
(d) Any Guarantor seeks, claims or otherwise attempts to limit,
modify or revoke the legal enforceability of Guarantor's
guaranty of the Loan or any other loan with the Bank;
(e) The Bank receives any stop notice pursuant to the Stop Notice
Act or any lien, in excess of $50,000, is filed by any
subcontractor or supplier on any real property which is
Collateral for this Loan; or
(f) The Bank in good ▇▇▇▇▇ ▇▇▇▇▇ itself insecure even though no
Event of Default shall have occurred. Any election or agreement
by the Bank to fund any advance or disbursement despite any of
the foregoing shall not operate to waive, limit, or modify this
provision, nor create any obligation or duty upon the Bank to
honor any other concurrent or subsequent funding requests
occurring during an Event of Default.
SECTION IV. COVENANTS, REPRESENTATIONS, REQUIREMENTS, AND RESTRICTIONS.
The Borrower represents, warrants, covenants and agrees that:
4.01 CORPORATE STATUS. The Borrower is a duly organized and validly
existing corporation in good standing and duly authorized to carry on its
business in the State of New Mexico as now conducted and to enter into and
perform its obligations under this Agreement and each of the Loan Documents.
4.02 MAINTENANCE OF STATUS. The Borrower will maintain its existence
as a corporation which is duly authorized to do business in the State of New
Mexico, will comply with all statutes and rules
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and regulations applicable to its organization and existence and its business in
New Mexico or elsewhere, and will maintain its properties and other assets in
good condition.
4.03 DUE AUTHORIZATION. The execution, delivery and performance by
the Borrower of the Loan Documents have been duly authorized by all necessary
corporate action by the Borrower and its Board of Directors.
4.04 VALIDITY AND BINDING EFFECT. The Loan Documents have been duly
and validly executed, issued and delivered by the Borrower and constitute valid
and legally binding obligations of the Borrower, enforceable in accordance with
their terms except as may be limited by bankruptcy, insolvency, reorganization
or other similar laws related to or affecting enforcement of creditors' rights.
4.05 COMPLIANCE. The execution and delivery by the Borrower of the
Loan Documents and compliance by the Borrower with the terms thereof will not
violate (i) any law or regulation, including but not limited to any securities
law or regulation, (ii) Borrower's Organizational Documents or (iii) any other
instrument or agreement binding upon the Borrower.
4.06 IMPOSITIONS. The Borrower will comply with all legal
requirements and will pay all taxes, assessments, governmental charges and other
obligations which, if unpaid, might become a lien against the Borrower's
property, except liabilities being contested in good faith and against which, if
requested by the Bank, the Borrower will set up reserves to satisfy such
obligations as they become due.
4.07 EXPENSES. The Borrower will pay on behalf of the Bank or
reimburse the Bank directly for all reasonable out-of-pocket expenses incurred
by the Bank after closing in connection with the Loan, including but not limited
to, charges and disbursements of legal counsel for the Bank and other Loan Fees.
4.08 ACCURACY OF REPRESENTATIONS. No certificate, statement,
document, financial or other information delivered by or on behalf of Borrower
to the Bank in connection herewith or in connection with the Loan contains any
untrue statement of a material fact or fails to state any material fact
necessary to keep such information from being misleading. Borrower represents
and warrants all financial and other information hereafter furnished to the Bank
will be materially accurate and complete and acknowledges that such information
will be submitted to the Bank with the intent that the Bank will rely upon such
information.
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4.09 FINANCIAL INFORMATION, RATIOS, AND OTHER INFORMATION. So long as
any Loans remain outstanding, the Borrower will furnish, or cause to be
furnished, to the Bank financial information at such frequency and in form as
required by the Bank and will observe the following requirements:
(a) Quarterly Form 10-Q reports filed by Amrep Corporation pursuant
to the Securities Exchange Act of 1934. Said reports to be
provided within 15 days after their filing with the Securities
Exchange Commission.
(b) Annual Form 10-K reports filed by Amrep Corporation pursuant to
the Securities Exchange Act of 1934. Said reports to be provided
within 15 days after their filing with the Securities Exchange
Commission.
(c) Annual consolidated financial statements of Amrep Corporation,
audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and Company or other national
accounting firm acceptable to the Bank, within 15 days after
Amrep Corporation's receipt of said financial statement.
(d) Quarterly consolidating financial statements and such supporting
documentation as Bank may require of AMREP Corporation and all
subsidiaries, within 60 days after the end of each fiscal
quarter.
(e) Quarterly financial statements of the Borrower and such
supporting documentation as the Bank may require, within 60 days
after the end of each fiscal quarter.
(f) Annual financial statements and such supporting documentation as
the Bank may require of the Borrower within 120 days of
Borrower's fiscal year-end.
(g) Such other financial and other information as the Bank may
reasonably require.
(h) Borrower and/or Guarantor shall perform, observe, and comply
with the provisions contained in EXHIBIT 4.09(H).
4.10 COLLATERAL TITLE, LIENS. Borrower shall, at its own expense,
take any and all actions necessary to remove any encumbrances or clouds upon
title to the Collateral, except those agreed to in writing by the Bank; and
Borrower shall keep the Collateral free and clear of such encumbrances or clouds
upon title, except those agreed to in writing by the Bank.
4.11 SOLVENCY. The Borrower is solvent, and has no actual knowledge
that there are any proceedings, pending or threatened against it, which could
materially adversely affect its financial
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condition or its ability to timely perform all Obligations, nor are there any
governmental or any judicial proceedings of any kind pending or threatened
against it except as disclosed to the Bank in writing prior to closing.
4.12 NO MISREPRESENTATION. No certificate, statement, information or
documents delivered by or on behalf of the Borrower or any guarantor, to the
Bank in connection with this Agreement or in connection with the Loan contains
any untrue statement of a material fact or fails to state any material fact
necessary to keep the statements contained in this Agreement from being
misleading.
4.13 COLLATERAL FREE AND CLEAR. The Collateral is free and clear of
any adverse liens, restrictions or limitations including any restriction from
transfer except those that have been disclosed to the Bank in writing prior to
closing.
4.14 NOTICE TO BANK OF ADVERSE CLAIMS. The Borrower will promptly
notify the Bank of (i) any litigation or any claim or controversy which might be
the subject of litigation against the Borrower affecting any of the Collateral,
if such litigation or potential litigation might, in the event of an unfavorable
outcome, have a material adverse effect on such entity's financial condition or
on the Bank's lien or security interest in the Collateral or might cause an
Event of Default; (ii) any material adverse change in the financial condition or
business of the Borrower; (iii) any other matter which in the opinion of the
Borrower might materially adversely affect the financial condition of the
Borrower; and/or (iv) the occurrence of any Event of Default.
4.15 RECORDS. The Borrower will keep accurate records, in accordance
with generally accepted accounting principles, of all its transactions so that
at any time, and from time to time, its true and complete financial condition
may be readily determined and, at the Bank's reasonable request, make such
records available for the Bank's inspection and permit the Bank to make and
retain copies thereof.
4.16 PAYMENT OF WAGES. The Borrower shall pay all wages and payroll
taxes (federal, state and local) as they become due and shall comply with all
applicable federal, state and local labor laws.
4.17 FURTHER ASSURANCES. Throughout the term of the Loan, Borrower
and any guarantor shall take whatever action is deemed by the Bank to be
reasonably necessary to preserve and/or protect the Bank's lien on the
Collateral, including, without limitation, executing additional documents.
4.18 NO ASSIGNMENT. The Borrower may not without the Bank's prior
written consent , assign the Loan ,the Loan proceeds or the Borrower's rights
under the Loan Documents. Any such assignment without such consent shall be
void.
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4.19 HAZARDOUS SUBSTANCES. The terms "hazardous substance",
"disposal", "release", and "threatened release", as used in this Agreement,
shall have the same meanings as set forth in the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section
9601, ET SEQ. ("CERCLA"), the Superfund Amendments and Reauthorization Act of
1986, Pub. L. No. 99-499 ("▇▇▇▇"), the Hazardous Materials Transportation Act,
49 U.S.C. Section 1801, ET SEQ., the Resource Conservation and Recovery Act, 49
U.S.C. Section 6901, ET SEQ., or other applicable state or Federal laws, rules,
or regulations adopted pursuant to any of the foregoing. Except as disclosed to
and acknowledged by the Bank in writing, Borrower represents and warrants that:
(a) During the period of Borrower's ownership of the Collateral,
there has been no use, generation, manufacture, storage,
treatment, disposal, release or threatened release of any
hazardous waste or substance by any person on, under, or about
any of the Collateral.
(b) Borrower has no knowledge of, or reason to believe that there
has been:
(i) any use, generation, manufacture, storage, treatment,
disposal, release, or threatened release of any
hazardous waste or substance by any prior owners or
occupants of any of the Collateral, or
(ii) any actual or threatened litigation or claims of any
kind by any person relating to such matters.
(c) Neither Borrower nor any tenant, contractor, agent or other
authorized user of any of the Collateral shall use, generate,
manufacture, store, treat, dispose of, or release any hazardous
waste or substance on, under, or about any of the Collateral.
Borrower authorizes the Bank and its agents to enter upon the
Collateral to make such inspections and tests as the Bank may
deem appropriate to determine compliance of the Collateral with
this section of the Agreement. Any inspections or tests made by
the Bank shall be for the Bank's purposes only and shall not be
construed to create any responsibility or liability on the part
of the Bank to Borrower or to any other person.
Borrower hereby:
(i) releases and waives any future claims against the Bank
for indemnity or contribution in the event Borrower
becomes liable for cleanup or other costs (excluding any
cost incurred due to any hazard caused by the Bank, its
successors,
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or assigns) under any such laws, and
(ii) agrees to indemnify and hold harmless the Bank against
any and all claims, losses, liabilities, damages,
penalties, and expenses which the Bank may directly or
indirectly sustain or suffer resulting from a breach of
this section of the Agreement or as a consequence of any
use, generation, manufacture, storage, disposal, release
or threatened release occurring prior to Borrower's
ownership or interest in the Collateral, whether or not
the same was or should have been known to Borrower.
The provisions of this section of the Agreement, including the
obligation to indemnify, shall survive the payment of the indebtedness and the
satisfaction of this Agreement and shall not be affected by the Bank's
acquisition of any interest in any of the Collateral, whether by foreclosure or
otherwise.
4.20 INSURANCE. Maintain fire and other risk insurance, public
liability insurance, and such other insurance as the Bank may require with
respect to Borrower's properties and operations, in form, amounts, coverages and
with insurance companies reasonably acceptable to the Bank. Borrower, upon
request of the Bank, will deliver to the Bank from time to time the policies or
certificates of insurance in form satisfactory to the Bank, including
stipulations that coverages will not be cancelled or diminished without at least
ten (10) days' prior written notice to the Bank. In connection with all policies
covering assets in which the Bank holds or is offered a security interest for
the Loans, Borrower will provide the Bank with such loss payable or other
endorsements as Lender may require.
4.21 NOTIFICATION OF ADDITIONAL DEBT TO BORROWERS. The Borrower shall
notify the Bank in writing within ten (10) business days of incurring any new
indebtedness in excess of $1,000,000, individually or in the aggregate,
including any written or other contractual commitment to loan the Borrower such
amount(s).
4.22 YEAR 2000 COMPLIANCE (Y2K). The Borrower shall take all action
that may be necessary or desirable, or that Bank may reasonably request, in
order to ensure that the Borrower, its affiliates, and all customers, suppliers,
and vendors that are material to the Borrower's business, become Year 2000
Compliant on or before August 1, 1999. Such acts shall include, without
limitation, (i) performing a comprehensive inventory, review and assessment of
all the Borrower's systems and adopting a detailed plan, with itemized budget
and timetable, for the remediation, monitoring and testing of such systems, and
(ii) making a detailed inquiry of all material customers, suppliers and vendors
to ascertain whether such entities are aware of the need to be Year 2000
Compliant and are taking all appropriate steps to become Year
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2000 Compliant on a timely basis. Borrower shall, promptly upon request, provide
to Bank such certifications or other evidence of Borrower's compliance with the
terms of this section as Bank may from time to time reasonably require.
SECTION V - CLOSING CONDITIONS; TITLE INSURANCE.
5.01 CONDITIONS PRECEDENT TO CLOSING. The Bank shall not be obligated
to close the Loan unless all of the following conditions shall be satisfied at
the time of such advance, or current compliance with such condition shall have
been waived in writing by the Bank and unless all warranties were substantially
true, correct and accurate at the time made and remain so through closing;
(a) THE LOAN DOCUMENTS AND OTHER ITEMS. The Bank shall have received
original, properly executed Loan Documents and other documents
or items, including:
(1) This Agreement;
(2) The Notes, Exhibits 1.14(a-h);
(3) The Borrower's Resolution;
(4) The Collateral Documents described in Section II.
(b) NO DEFAULT. There shall be no Event of Default under any
existing Notes or any Loan Documents.
(c) NO POTENTIAL DEFAULT. No event shall have occurred which, with
notice or lapse of time or both, would constitute an Event of
Default under any Loan Documents, unless such potential default
shall have been cured to the satisfaction of Bank prior to the
ripening of such potential default into actual default.
(d) FULFILLMENT OF CONDITIONS. The Borrower shall have satisfied all
conditions for the advance and the Borrower shall be in current
compliance with all of its covenants, agreements and obligations
under any Loan Documents.
5.02 TITLE INSURANCE. The Bank, in addition to any
requirements necessary to any disbursement or advance allowed under this
Agreement (and any Exhibit) may require, prior to any advance or disbursement,
ALTA Mortgagee's policies of title insurance,
14
insuring a first lien position on the Mortgages referenced in Section II,
including policy endorsements insuring all advances under the Loan. Such
coverage shall include, as necessary, coverage for the revolving or multiple
advance Obligations contemplated in this Agreement.
SECTION VI - DEFAULT AND REMEDIES.
6.01 EVENTS OF DEFAULT. Each of the following shall constitute an
Event of Default under this Agreement:
(a) DEFAULT ON INDEBTEDNESS - Failure of Borrower to make any
payment on any Note within five (5) days of the date due.
(b) OTHER DEFAULTS - Failure of Borrower to comply with or to
perform any other terms, obligations, requirements,
restrictions, covenants or conditions contained in this
Agreement or in any Note or any Loan Document, or failure of
Borrower to comply with or to perform any other term,
obligation, covenant or condition contained in any other
agreement between Bank and Borrower (other than payment of a
monetary amount required on any Note), or between the Borrower
and any other creditor or lender, within fifteen (15) days of
the date due unless such failure cannot reasonably be cured
within fifteen days, Borrower is diligently pursuing the cure,
and neither timely repayment of the Loan nor the value, security
or marketability of the Collateral is impaired.
(c) FALSE STATEMENTS - Any warranty, representation, or statement
made or furnished to Bank by or on behalf of Borrower or any
Guarantor under this Agreement or the Related Documents is false
or misleading in any material respect, either now or at the time
made or furnished.
(d) DEFECTIVE COLLATERALIZATION - This Agreement or any of the
Related Documents ceases to be in full force and effect
(including failure of any collateral document to create a valid
and perfected security interest or lien) at any time and for any
reason.
(e) INSOLVENCY - The dissolution or termination of Borrower's
existence as a going business, insolvency, appointment of a
receiver for any part of Borrower's property, any assignment for
the benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower.
15
(f) CREDITOR PROCEEDINGS - Commencement of any collection action,
collection suit, garnishment, attachment, levy, or foreclosure,
whether by judicial process, self-help, repossession, or other
method, by any creditor of Borrower or of the Guarantor seeking
to collect an amount or claim in excess of $100,000.00 or
seeking to foreclose or execute against or place a lien upon the
Collateral. The Borrower shall give the Bank written notice of
the occurrence of any such claim or action; such event shall not
be an Event of Default if the Borrower has provided the Bank
with information, assurances, or other necessary protection by
which the Bank can reasonably determine that such claim against
the Borrower or Guarantor does not impair timely repayment of
the Loan, nor impair the Collateral.
(g) STOP NOTICES OR LIEN CLAIMS - The Bank receives any stop notice
pursuant to the Stop Notice Act or any lien, in excess of
$50,000, is filed by any subcontractor or supplier on any real
property which is Collateral for this Loan.
(h) EVENTS AFFECTING GUARANTOR - Any of the preceding events occurs
with respect to the Guarantor.
(i) INSECURITY - Bank, in good faith, deems itself insecure.
6.02 REMEDIES UPON DEFAULT. Upon the occurrence of any Event of
Default, the Bank may forthwith or at any time during such default or events,
without notice to the Borrower declare, the unpaid balance of the Obligations,
including all principal and all interest then accrued, to be immediately due and
payable; and the Obligations shall become and be immediately due and payable
without presentment, notice of protest or other notice of dishonor or of any
other kind of notice whatsoever, including, without limitation, notice of
default, notice of intent to accelerate and notice of acceleration, all of which
are hereby expressly waived by Borrower; and the Bank may immediately enforce
its rights under the Loan Documents; and may exercise all rights available to it
in law or equity including all rights available under this Agreement or under
the other Loan Documents.
SECTION VII - MISCELLANEOUS.
7.01 EXECUTION AND FORM OF DOCUMENTS. Each written instrument
required by this Agreement or any of the other Loan Documents to be furnished to
the Bank shall be duly executed by the person or persons specified (or where no
particular person is specified, by such person as the Bank shall require), duly
acknowledged where required by the Bank and, in the case of affidavits and
similar sworn instruments, duly sworn to and subscribed before a notary public
duly authorized to act in the premises by Governmental Authority; shall be
furnished to the Bank in one or more copies as required by the Bank; shall be in
such
16
form and of such substance as shall be effective, in the judgment of the Bank,
to accomplish the results intended by such instrument; and shall in all respects
be in form and substance satisfactory to the Bank and to its legal counsel.
7.02 FORM OF EVIDENCE OF FACTS. Where evidence of the existence or
nonexistence of any fact is required by this Agreement or any of the other Loan
Documents to be furnished to the Bank, such evidence shall in all respects be in
form and substance reasonably satisfactory to the Bank, and the duty to furnish
such evidence shall not be considered satisfied until the Bank shall have
acknowledged, in writing, that it is satisfied therewith; provided that, if the
Bank fails to so acknowledge within sixty (60) days after receipt of such
evidence, it shall be deemed to be satisfied therewith.
7.03 ASSIGNMENT OF LOAN PROCEEDS. Borrower hereby irrevocably assigns
to the Bank and grants a security interest to the Bank in and to its right,
title and interest in (a) all Loan proceeds held by the Bank, whether or not
disbursed and (b) all funds deposited by the Borrower with the Bank either under
this Agreement or otherwise.
7.04 SEVERABILITY. If any item, term or provision contained in the
Loan Documents is in conflict, or may hereafter be held to be in conflict with
the laws of the United States or the State of New Mexico, as applicable, or any
political subdivision of any of them, then only the documents containing such
provision shall be affected and it shall be affected only as to such particular
item, term or provision and shall in all other respects remain in full force and
effect.
7.05 NO WAIVER. No course of dealing between the Bank and the
Borrower or any guarantor, or any delay on the part of the Bank in exercising
any rights hereunder or under the Loan Documents shall operate as a waiver of
any rights of the Bank, except to the extent, if any, expressly waived in
writing by the Bank.
7.06 SURVIVAL. All covenants, agreements, representations and
warranties made by the Borrower in the Loan Documents and in any certificates or
other documents or instruments delivered pursuant to this Agreement shall
survive the making by the Bank of the Loan and the execution and delivery of the
Loan Documents, and shall continue in full force and effect until the
Obligations are paid in full.
7.07 NOTICES. Any notice, request or other communication required or
permitted to be given hereunder shall be given in writing by hand delivery,
facsimile transmission, delivery by commercial courier or by depositing the same
in the United States Mail, postage prepaid, addressed to the respective parties
as follows:
If to the Borrower: Amrep Southwest, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
17
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇, President
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
If to the Bank: Norwest Bank New Mexico, N.A.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President
7.08 MODIFICATION. This Agreement shall not be changed orally or by
course of conduct or dealing but shall be changed only by agreement in writing
signed by all parties hereto.
7.09 COUNTERPARTS. This Agreement may be executed simultaneously in
any number of counterparts, each of which, when so executed and delivered, shall
be an original, but such counterparts shall together constitute one and the same
instrument.
7.10 BINDING EFFECT. This Agreement shall be binding upon the Bank,
the Borrower and its successors, assigns, heirs and personal representatives.
7.11 NO PARTNERSHIP OR JOINT VENTURE. Notwithstanding anything to the
contrary in the Loan Documents, and notwithstanding any action the Bank takes
pursuant to the Loan Documents, the Bank and the Borrower shall not be deemed to
be engaged in a partnership or joint venture, nor shall the Bank be deemed to be
an agent or principal of the Borrower.
7.12 ASSIGNMENT BY THE BANK. The Loan Documents, and the Loan
contemplated thereby, may be placed, participated, assigned and/or serviced by
the Bank and/or its successors and assigns, and in connection with any of the
foregoing, the Bank may receive servicing, brokerage or other fees. Any such
placement, participation, assignment or servicing shall be at the Bank's sole
option; and the Bank and its successors and assigns shall have no obligations to
disclose to the Borrower the receipt, or contemplated receipt, of any such fees,
nor shall the Borrower have any claim or right to the same. In the event the
Bank sells or transfers its entire interest in the Loan and the Loan Documents,
the Bank or such purchaser or assignee will notify the Borrower of such event
within 30 days.
7.13 RELATION TO OTHER DOCUMENTS. The provisions of this Agreement
are not intended to supersede the provisions of the other Loan Documents except
as stated hereinabove, but should be construed as supplemental thereto. However,
except as specifically provided herein, if there is any inconsistency between
the provisions of this Agreement and the other Loan Documents, this Agreement
shall control any conflicting language or provision
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deemed modified to comport with this Agreement.
7.14 JURISDICTION. Borrower hereby irrevocably agrees that any legal
action or proceedings against the Borrower with respect to this Agreement may be
brought in the courts of the State of New Mexico or in the U.S. District Court
for the District of New Mexico. Borrower hereby consents and attorns to the
jurisdiction of such courts and further consents to the personal jurisdiction of
any court located within Bernalillo County, New Mexico, with respect to any
lawsuit to enforce the obligations of Borrower under this Agreement. This
provision shall not limit the right of the Bank to bring such action or
proceedings against the Borrower in the courts of such other states or
jurisdictions where the Borrower may be subject to jurisdiction.
7.15 GOVERNING LAW. This Agreement and the Loan Documents have been
negotiated, executed and delivered solely within the State of New Mexico. The
rights and obligations of the parties under this Agreement and under each of the
Loan Documents shall be governed by and construed and interpreted in accordance
with the laws of the State of New Mexico.
BORROWER: AMREP SOUTHWEST, INC.
By:
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇, President
BANK: NORWEST BANK NEW MEXICO, N.A.
By:
-------------------------------------
▇▇▇ ▇. ▇▇▇▇▇,
Executive Vice President
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EXHIBITS:
1.04 Corporate Resolution to Borrower dated April 29, 1998
1.10 Commercial Guaranty of Borrower's parent company AMREP Corp.
1.10(a) Letter effective February 26, 1999, from the Bank to Guarantor
1.14(a) Construction Note in the amount of $4,500,000.00
1.14(b) Amortizing Term Loan in the original principal amount of
$1,191,290.37
1.14(c) Off Site Development Note in the amount of $5,000,000.00
1.14(d)IV Onsite Development Note, Phase IV
1.14(d)VI Onsite Development Note, Phase VI
1.14(e) Estates Development Note in the original principal amount of
$2,000,000.00
1.14(f) Letter of Credit Note in the amount of $100,000.00
1.14(g) Commerce Center Note in the original principal amount of
$8,220,000.
1.14(h) $10,000.00 Letter of Credit
3.01(a) Disbursement Procedure, $4,500,000.00 Construction Note
3.01(c) Disbursement Procedure, $5,000,000.00 Off Site Development Note
3.01(d) Disbursement Procedure, Phase IV and VI On Site Development Note
3.01(e) Disbursement Procedure, $2,000,000.00 Estates Development Note
3.01(f) $100,000.00 Letter of Credit
3.01(g) Disbursement Procedure, $8,220,000 Commerce Center Development
Note
3.01(h) $10,000.00 Letter of Credit
4.09(h) Financial Ratios and Restrictions.
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