REVOLVING CREDIT LOAN AND SECURITY AGREEMENT
By and Between
RESOURCE PROPERTIES, INC.
RESOURCE PROPERTIES 53, INC.
RESOURCE PROPERTIES XXIV, INC.
RESOURCE PROPERTIES XL, INC.
and
SOVEREIGN BANK
Dated: July 27, 1999
LOAN AND SECURITY AGREEMENT
THIS REVOLVING CREDIT LOAN AND SECURITY AGREEMENT (the "Agreement") is
made effective the 27th day of July, 1999, by and between RESOURCE PROPERTIES,
INC. ("Resource, Inc."), RESOURCE PROPERTIES 53, INC. ("Resource 53"), RESOURCE
PROPERTIES XXIV, INC. ("Resource XXIV") and RESOURCE PROPERTIES XL, INC.
("Resource XL") (collectively, "Borrower") and SOVEREIGN BANK ("Bank").
BACKGROUND
A. Borrower has requested that Bank extend a line of credit to
Borrower, which Bank is willing to do on the terms set forth herein.
B. As evidenced by Borrower's Guaranty and Suretyship Agreement of even
date herewith (the "Guaranty"), Borrower has guaranteed and become surety for
all obligations of Resource America, Inc. ("Resource America") to Bank arising
under or in connection with the $5,000,000 revolving line of credit from Bank to
Resource America extended concurrently herewith (the "Resource America Loan")
pursuant to the Revolving Credit Loan Agreement of even date herewith between
Bank and Resource America.
C. Capitalized terms not otherwise defined herein will have the
following meanings:
"Accounting Terms". As used in this Agreement, or any certificate,
report or other document made or delivered pursuant to this Agreement,
accounting terms not defined elsewhere in this Agreement shall have the
respective meanings given to them under GAAP.
"Affiliate", as to any Person, means each other Person that directly or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the Person in question.
"Appraisal" means as an appraisal performed by an appraiser approved
by Bank and in form and substance satisfactory to Bank. Bank reserves the right
to make reasonable adjustments in the assumptions and other variables used in
such appraisals in order to conform to the policies of Bank, which adjustments
may result in a change in the appraised value.
"Appraised Value" the fair market value of each property constituting
or proposed to constitute Real Estate as shown by an Appraisal of such property.
"Bank Indebtedness" shall mean all, obligations and Indebtedness of
Borrower to Bank, whether now or hereafter owing or existing, including, without
limitation, all
obligations under the Loan Documents, all obligations to reimburse Bank for
payments made by Bank pursuant to any letter of credit issued for the account or
benefit of Borrower by Bank, all other obligations or undertakings now or
hereafter made by or for the benefit of Borrower to or for the benefit of Bank
under any other agreement, promissory note or undertaking now existing or
hereafter entered into by Borrower with Bank, including, without limitation, all
obligations of Borrower to Bank under any guaranty or surety agreement
(including without limitation the Guaranty and Suretyship Agreement of even date
herewith pursuant to which Borrower guarantees and becomes surety to Bank for
all obligations of Resource America, Inc. to Bank arising under or in connection
with the Resource America Loan and all obligations of Borrower to immediately
pay to Bank the amount of any overdraft on any deposit account maintained with
Bank, together with all interest and other sums payable in connection with any
of the foregoing.
"Bonds" has the meaning given to such term in Section 4.1(f) herein.
"Borrowing Base" has the meaning given to such term in Section 1.4
herein.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in Pennsylvania are authorized by law to close.
"Collateral" has the meaning given to such term in Section 4.1 herein.
"Collateral Document Default" has the meaning given to such term in
Section 4.4 herein.
"Collateral Documents" means as to each property constituting or
proposed to constitute Real Estate all of the notes, mortgages, agreements,
participation agreements and certificates, and other documents and instruments
evidencing, securing and/or otherwise relating to the loans and/or
participations secured by or otherwise relating to Real Estate, including
without limitation those documents and instruments set forth on Exhibit "A"
attached hereto and made a part hereof, as the same may be amended from time to
time in accordance with the terms hereof.
"Corporation" means a corporation, partnership, trust, unincorporated
organization, association or joint stock company.
"CRFI" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Financial, Inc.
"Default Rate" has the meaning given to such term in Section 2.2
herein.
"Debt Service Coverage Ratio" means the ratio of (i) Borrower's
consolidated Net Operating Income, calculated on an annualized basis, to (ii)
the annual interest payments due
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on the Line, calculated as if the full amount of the Line was disbursed and
outstanding on such date, at the interest rate in effect on such date.
"Deferred Compensation Plan" means any plan described in Section 3(3)
of ERISA or any other plan or arrangement under which Borrower or any ERISA
Affiliate may become obligated to pay deferred, bonus, incentive, or other
compensation or health, life, medical, dental, or other welfare benefits,
excluding only any fully insured major medical, hospital, or dental program for
which Borrower or such ERISA Affiliate has no obligation other than the payment
of premiums.
"Deposit Accounts" has the meaning given to such term in Section 5.22
herein.
"Depository Agreements" has the meaning given to such term in Section
10.1(i) herein.
"Environmental Affiliate" means Borrower and any other Person for whom
Borrower at any time has any liability (contingent or otherwise) with respect to
any claims arising out of the failure of Borrower or such Person to comply with
all applicable Environmental Requirements.
"Environmental Cleanup Site" means any location which is listed or
proposed for listing on the National Priorities List, on CERCLIS or on any
similar state list of sites requiring investigation or cleanup, or which is the
subject of any pending or threatened action, suit, proceeding or investigation
related to or arising from any alleged violation of any Environmental
Requirements.
"Environmental Requirements" means any and all applicable federal,
state or local laws, statutes, ordinances, regulations or standards,
administrative or court orders or decrees, common law doctrines or private
agreements, relating to (i) pollution or protection of the environment and
natural resources, (ii) exposure of employees or other persons to Special
Materials, (iii) protection of the public health and welfare from the effects of
Special Materials and their products, by-products, wastes, emissions, discharges
or releases, and (iv) regulation, licensing, approval or authorization of the
manufacture, generation, use, formulation, packaging, labeling, transporting,
distributing, handling, storing or disposing of any Special Materials.
"Equity" means Borrower's consolidated equity, as shown on its
financial statements submitted to Bank in accordance with Section 8 herein.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and all rules or regulations issued in connection therewith.
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"ERISA Affiliate" means each trade or business (whether or not
incorporated) that, together with Borrower, would be treated as a single
employer under Section 4001(b)(1) of ERISA or Section 414(b) or 414(c) of the
Internal Revenue Code.
"Event of Default" means each of the events specified in Section 12.1.
"Expiration Date" has the meaning given to such term in Section 1.1
herein.
"GAAP" means generally accepted accounting principles in the United
States of America, in effect from time to time, consistently applied and
maintained.
"Guaranty" has the meaning given to such term in the Background Section
hereto.
"Indebtedness", as applied to a Person, means:
(a) all items (except items of capital stock or of surplus)
which in accordance with GAAP would be included in determining total
liabilities as shown on the liability side of a balance sheet of such
Person as at the date as of which Indebtedness is to be determined;
(b) to the extent not included in the foregoing, all
indebtedness, obligations, and liabilities secured by any mortgage,
pledge, lien, conditional sale or other title retention agreement or
other security interest to which any property or asset owned or held by
such Person is subject, whether or not the indebtedness, obligations or
liabilities secured thereby shall have been assumed by such Person; and
(c) to the extent not included in the foregoing, all
indebtedness, obligations and liabilities of others which such Person
has directly or indirectly guaranteed, endorsed (other than for
collection or deposit in the ordinary course of business), sold with
recourse, or agreed (contingently or otherwise) to purchase or
repurchase or otherwise acquire or in respect of which such Person has
agreed to supply or advance funds (whether by way of loan, stock
purchase, capital contribution or otherwise) or otherwise to become
directly or indirectly liable.
Notwithstanding the foregoing, the term "Indebtedness" shall not
include any amounts which are non-recourse to Borrower (other than usual and
customary carveouts).
"Leasehold Mortgage" has the meaning given to such term in Section
10.1(j) herein.
"Line" has the meaning given to such term in Section 1.1 herein.
"Line Note" has the meaning given to such term in Section 1.1 herein.
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"Line Request" has the meaning given to such term in Section 1.3
herein.
"Loan Documents" means this Agreement, the Line Note, the Assignments
and other pledge and transfer documents referred to in Section 10.1 hereof, the
Leasehold Mortgage and all other documents, executed or delivered by Borrower
pursuant to this Agreement, as they may be amended from time to time.
"Multiemployer Plan" means a plan described in Section 3(37) or
4001(a)(3) of ERISA or Section 414 of the Internal Revenue Code of 1986, as
amended from time to time, which cover employees of Borrower or any ERISA
Affiliate.
"Net Operating Income" means Borrower's consolidated gross revenues
less expenses (excluding depreciation, interest and amortization).
"Obligor" means each maker, mortgagor, guarantor, or other obligor
under or with respect to any Collateral Document.
"Participation Seller" means each seller to Borrower of a participation
interest in and to any Collateral Documents.
"Payments" has the meaning given to such term in Section 4.1 herein.
"Person" means an individual, a Corporation or a government or any
agency or subdivision thereof, or any other entity.
"Potential Default" means the occurrence of any event which with the
giving of notice or passage of time or both, without would constitute an Event
of Default.
"Prime Rate" means the Wall Street Journal Prime Rate as established
from time to time.
"Real Estate" means those parcels of real property (i) which relate to
the loans and/or participations evidenced by the Collateral Documents, and/or
(ii) subject to the Leasehold Mortgage, together with the improvements thereon,
including without limitation the real property listed on Exhibit "B" attached
hereto, as the same may be amended from time to time in accordance with the
provisions hereof.
"Resource America Loan" has the meaning given to such term in the
Background Section hereto.
"Special Materials" means any and all materials which, under
Environmental Requirements, require special handling in use, generation,
collection, storage, treatment or
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disposal, or payment of costs associated with responding to the lawful
directives of any court or agency of competent jurisdiction. Special Materials
shall include, without limitation: (i) any flammable substance, explosive,
radioactive material, hazardous material, hazardous waste, toxic substance,
solid waste, pollutant, contaminant or any related material, raw material,
substance, product or by-product of any substance specified in or regulated or
otherwise affected by any Environmental Requirements (including but not limited
to any "hazardous substance" as defined in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended or any similar state
or local law), (ii) any toxic chemical or other substance from or related to
industrial, commercial or institutional activities, and (iii) asbestos,
gasoline, diesel fuel, motor oil, waste and used oil, heating oil and other
petroleum products or compounds, polychlorinated biphenyls, radon, urea
formaldehyde and lead-containing materials.
"Subsidiary" means a Corporation (a) which is organized under the laws
of the United States or any state thereof, or any other county or jurisdiction,
(b) which conducts substantially all of its business and has substantially all
of its assets within the United States, and (c) of which more than fifty percent
(50%) of its outstanding voting stock of every class (or other voting equity
interest) is owned by Borrower or one or more of its Subsidiaries.
"Substitute Collateral" means notes, mortgages and other documents and
instruments, evidencing and or securing a commercial mortgage loan (or a
participation interest therein) of which Resource 53 or Resource XXIV is the
owner (all as more fully described in Section 4.1 herein), where Bank shall
have received an Appraisal of the real property subject to such loan and such
other reports (including environmental reports), surveys, and information
relating thereto as Bank may request. Upon the delivery of Substitute Collateral
to Bank and the acceptance thereof by Bank, all such documents and instruments
shall constitute Collateral Documents (and Exhibit "A" shall be amended
accordingly) and the real property to which they relate shall constitute Real
Estate (and Exhibit "B" shall be amended accordingly).
NOW, THEREFORE, in consideration of the terms and conditions contained
herein, and of any extensions of credit now or hereafter made to or for the
benefit of Borrower by Bank, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. THE LINE: USE OF PROCEEDS.
1.1 Line of Credit. Bank will establish for Borrower for and during the
period from the date hereof and until July 27, 2001 (the "Expiration Date"),
subject to the terms and conditions hereof (including without limitation the
Borrowing Base set forth in Section 1.4 herein), a revolving line of credit (the
"Line") pursuant to which Bank will from time to time make loans to Borrower in
an aggregate outstanding principal amount not to exceed at any time Fifteen
Million Dollars ($15,000,000). Within the limits of the Line, Borrower may
borrow, repay and reborrow under the Line. The Line shall be subject to all
terms and
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conditions set forth in all of the Loan Documents which terms and conditions are
incorporated herein. Borrower's obligation to repay advances under the Line
shall be evidenced by Borrower's promissory note (the "Line Note") in the face
amount of Fifteen Million Dollars ($15,000,000), dated the date of this
Agreement, payable to the order of Bank, and otherwise in form and substance
satisfactory to Bank.
1.2 Use of Proceeds. Borrower agrees to use advances under the Line (i)
to acquire commercial real estate or an interest therein, (ii) to fund loans
secured by commercial real estate, (iii) to purchase loans secured by commercial
real estate, or an interest therein, and (iv) to reduce indebtedness secured by
senior liens on property which Borrower owns or holds a loan or an interest in a
loan, and for no other purpose (including without limitation, the payment of
dividends to Borrower's shareholders, or for working capital).
1.3 Advances of the Line. Borrower shall give Bank not less than 3
Business Days prior written notice of a proposed advance of the Line (each a
"Line Request"). Each Line Request shall (i) state the use of the proceeds of
the Line being requested (including the real estate project to which such use
relates), (ii) contain a description of the economics of such real estate
project, and (iii) contain such other information as Bank may request in the
exercise of its reasonable discretion. Provided that all of the conditions
precedent to Bank making such advance have occurred, and provided further that
the making of such advance will not cause Borrower to be in default of the
covenants and conditions set forth in this Agreement (including without
limitation Sections 7.1 and 7.2 herein), Bank shall make the proceeds of such
advance available to Borrower by crediting the amount thereof to Resource,
Inc.'s deposit account with Bank.
1.4 Borrowing Base. Notwithstanding anything contained herein to the
contrary, but subject to the provisions of Section 4.4(b) herein, the aggregate
outstanding principal balance of the Line shall not exceed at any time fifty
percent (50%) of the Appraised Value of the Real Estate ("Borrowing Base").
Borrower shall from time to time repay an aggregate amount of principal of the
Line Note equal to the amount, if any by which the aggregate then unpaid
principal balance of the Line Note exceeds the limits stated in the previous
sentence.
2. INTEREST RATE.
2.1 Interest on the Line. Interest on the unpaid outstanding principal
balance of the Line will accrue from the date of advance until final payment
thereof at a per annum rate equal to the Prime Rate in effect from time to time
(such interest rate to change immediately upon any change in the Prime Rate).
2.2 Default Interest. From the maturity of the obligations evidenced by
the Line Note, as well as upon the occurrence of an Event of Default, the
outstanding principal balance and all other sums due hereunder and under the
Line Note shall bear interest at a rate which is
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four percent (4%) in excess of the non-default rate otherwise set forth herein
("Default Rate"). Notwithstanding the provisions of 42 Pa. C.S. ss. 8101 to the
contrary, the Default Rate shall apply to all sums evidenced by the Line Note as
set forth above, including after entry of a judgment or judgments against
Borrower, and said judgment or judgments shall bear interest at the Default Rate
until satisfied in full.
2.3 Calculation. Interest will be computed on the basis of a year of
360 days and paid for the actual number of days elapsed.
2.4 Limitation of Interest to Maximum Lawful Rate. In no event will
the rate of interest payable hereunder exceed the maximum rate of interest
permitted to be charged by applicable law (including the choice of law rules)
and any interest paid in excess of the permitted rate will be refunded to
Borrower. Such refund will be made by application of the excessive amount of
interest paid against any sums outstanding hereunder and will be applied in such
order as Bank may determine. If the excessive amount of interest paid exceeds
the sums outstanding, the portion exceeding the sums outstanding will be
refunded in cash by Bank. Any such crediting or refunding will not cure or waive
any default by Borrower. Borrower agrees, however, that in determining whether
or not any interest payable hereunder exceeds the highest rate permitted by law,
any non-principal payment, including without limitation prepayment fees and late
charges, will be deemed to the extent permitted by law to be an expense, fee,
premium or penalty rather than interest.
3. PAYMENTS AND FEES.
3.1 Interest Payments on the Line. Borrower will pay interest on the
outstanding principal balance of the Line monthly, on the first day of each
calendar month commencing on August 1, 1999.
3.2 Principal Payments on the Line. Borrower will pay the outstanding
principal balance of the Line, together with any accrued and unpaid interest
thereon, and any other sums due pursuant to the terms hereof, on the Expiration
Date.
3.3 Commitment Fee. Borrower shall pay to Bank a commitment fee of One
Hundred Fifty Thousand Dollars ($150,000) to be paid upon the execution of this
Agreement.
3.4 Late Charge. In the event that Borrower fails to pay any principal,
interest or other fees or expenses payable hereunder for a period of at least
ten (10) days after the same shall become due, in addition to paying such sums,
Borrower will pay to Bank a late charge equal to four percent (4%), of such past
due payment as compensation for the expenses incident to such past due payment.
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3.5 Payment Method. Borrower irrevocably authorizes Bank to debit all
payments required to be made by Borrower hereunder or otherwise under the Line,
on the date due, from any deposit account maintained by Borrower with Bank
(other than escrow funds owned legally by Borrower but held in escrow for the
beneficial interest of another Person). Otherwise, Borrower will be obligated to
make such payments directly to Bank. All payments are to be made in immediately
available funds. If Bank accepts payment in any other form, such payment shall
not be deemed to have been made until the funds comprising such payment have
actually been received by or made available to Bank.
3.6 Application of Payments. Prior to the occurrence of an Event of
Default, any and all payments on account of the Line will be applied first, to
any amounts due to Bank pursuant to the Loan Documents, other than principal and
interest on the Line; second, to accrued interest due under the Line; and third,
to outstanding principal under the Line. Following the occurrence of an Event of
Default, any and all payments on account of the Line will be applied to accrued
and unpaid interest, outstanding principal and other sums due hereunder or under
the Loan Documents, in such order as Bank, in its discretion, elects. If
Borrower makes a payment or payments and such payment or payments, or any part
thereof, are subsequently invalidated, declared to be fraudulent or
preferential, set aside or are required to be repaid to a trustee, receiver, or
any other person under any bankruptcy act, state or federal law, common law or
equitable cause, then to the extent of such payment or payments, the obligations
or part thereof hereunder intended to be satisfied shall be revived and
continued in full force and effect as if said payment or payments had not been
made.
3.7 Loan Account. Bank will open and maintain on its books a loan
account with respect to advances made, repayments, prepayments, the computation
and payment of interest and fees and the computation and final payment of all
other amounts due and sums paid to Bank under this Agreement. Except in the case
of manifest error in computation, such account will be conclusive and binding on
the Borrower as to the amount at any time due to Bank from Borrower under this
Agreement or the Note.
3.8 Indemnity: Loss of Margin. Borrower will indemnify Bank against any
loss or expense which Bank sustains or incurs as a consequence of an Event of
Default, including, without limitation, any failure of Borrower to pay when due
(at maturity, by acceleration or otherwise) any principal, interest, fee or any
other amount due under this Agreement or the other Loan Documents. If Bank
sustains or incurs any such loss or expense it will from time to time notify
Borrower in writing of the amount determined in good faith by the Bank to be
necessary to indemnify Bank for the loss or expense. Such amount will be due and
payable by Borrower to Bank within ten (10) days after presentation by Bank of a
statement setting forth a brief explanation of and Bank's calculation of such
amount, which statement shall be conclusively deemed correct absent manifest
error. Any amount payable to the Bank under this Section will bear interest at
the default rate payable under the Line from the due date until paid, both
before and after judgment.
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In the event that any present or future law, rule, regulation, treaty
or official directive or the interpretation or application thereof by any
central bank, monetary authority or governmental authority, or the compliance
with any guideline or request of any central bank, monetary authority or
governmental authority (whether or not having the force of law):
(a) subjects Bank to any tax with respect to any amounts
payable under this Agreement or the other Loan Documents by Borrower or
otherwise with respect to the transactions contemplated under this
Agreement or the other Loan Documents (except for taxes on the overall
net income and/or revenues of Bank imposed by the United States of
America, the Commonwealth of Pennsylvania, or any political subdivision
of either of them); or
(b) imposes, modifies or deems applicable any deposit
insurance, reserve, special deposit, capital maintenance, capital
adequacy, or similar requirement against assets held by, or deposits in
or for the account of, or loans or advances or commitment to make loans
or advances by, the Bank; or
(c) imposes upon Bank any other condition with respect to
advances or extensions of credit or the commitment to make advances or
extensions of credit under this Agreement,
and the result of any of the foregoing is to increase the costs of
Bank, reduce the income receivable by or return on equity of Bank or
impose any expense upon Bank with respect to any advances or extensions
of credit or commitments to make advances or extensions of credit under
this Agreement, Bank shall so notify Borrower in writing. Borrower
agrees to pay Bank the amount of such increase in cost, reduction in
income, reduced return on equity or capital, or additional expense
within ten (10) days after presentation by Bank of a statement
concerning such increase in cost, reduction in income, reduced return
on equity or capital, or additional expense. Such statement shall set
forth a brief explanation of the amount and Bank's calculation of the
amount (in determining such amount the Bank may use any reasonable
averaging and attribution methods), which statement shall be
conclusively deemed correct absent manifest error. If the amount set
forth in such statement is not paid within ten (10) days after such
presentation of such statement, interest will be payable on the unpaid
amount at the default rate payable under the Line from the due date
until paid, both before and after judgment.
3.9 Extension of Expiration Date. On or before August 31 of each year
commencing on August 31, 2000, Bank will notify Borrower that (i) it has elected
to extend the Expiration Date then in effect by twelve (12) months, or (ii) it
will not extend the Expiration Date then in effect. A failure by Bank to send
any such notice shall be deemed to be an election by Bank not to extend the
Expiration Date then in effect. In the event Bank determines in the exercise of
its sole discretion that it will extend the Expiration Date then in effect,
Borrower shall, at least five (5) days prior to the then current Expiration Date
pay to
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Bank an extension fee of Seventy Five Thousand Dollars ($75,000). If Borrower
shall fail to pay such extension fee to Bank as and when required, Bank's
election to extend the Expiration Date shall be deemed to be canceled and shall
be null and void and of no further force or effect and the Expiration Date then
in effect shall continue as if Bank had not provided any notice of election to
extend.
4. COLLATERAL.
4.1 Assignment and Security Interest. As security for the performance
of this Agreement and the payment of the Line Note and as security for the
performance of the Guaranty and the payment of the Resource America Loan, and
all other liabilities of Borrower to Bank (whether absolute or contingent,
matured or unmatured, direct or indirect, sole, joint, several or joint and
several, similar or dissimilar, related or unrelated, due or to become due or
heretofore or hereafter contracted or acquired), Borrower hereby pledges,
assigns, transfers and sets over to Bank and grants to Bank a security interest
in all of Borrower's right, title and interest and to the following (the
"Collateral"):
(a) all of Borrower's powers, privileges and other benefits
under the Collateral Documents;
(b) the immediate right to receive and collect all sums
payable to or receivable by Borrower under or pursuant to the
provisions of the Collateral Documents, whether as principal, interest,
casualty or insurance payments, or otherwise ("Payments");
(c) the right to make all waivers and agreements, to give all
notices, consents and releases, and to take all action upon the
happening of a Collateral Document Default;
(d) the right to do any and all other things whatsoever which
Borrower is or may become entitled to do under the Collateral
Documents, including without limitation all rights to be substituted as
a creditor in any bankruptcy proceeding affecting any Obligor,
Collateral Documents, or Real Estate, with full voting rights, the
right to receive dividends, and the right to participate in the
administration of any plan, whether in liquidation or reorganization,
and the right to take any and all actions that Borrower may be entitled
to take as a participant under any Collateral Document. In further of
the foregoing assignment, Borrower hereby irrevocably authorizes and
empowers Bank, in its own name or in the name of its nominee, or in the
name of Borrower or as its attorney, to ask, demand, ▇▇▇ for, collect
and receive any and all Payments to which Borrower is or may become
entitled under any Collateral Documents and to enforce compliance by
any Obligor, or any maker, mortgagor, or other party thereto, with all
of the terms and provisions thereof;
(e) All Deposit Accounts maintained by either Resource 53,
Resource XXIV, and/or Resource XL, together with all cash deposited in
the same; and
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(f) The $5,800,000 Downtown Development Authority for the City
of Savannah Variable Rate Industrial Development Revenue Bonds
(Factor's Walk Partners Project) Series 1985 (the "Bonds") held of
record by the Depository Trust Company, as nominee for the beneficial
owner, Resource XXIV, together with all proceeds of the foregoing.
4.2 Representations Regarding Collateral. Borrower represents and
warrants that:
(a) Borrower has full right and title (either as owner of the
Collateral Documents or a participation interest in and to the
Collateral Documents) to the Collateral Documents, free from any lien,
security interest, encumbrance or other right, title and interest of
any other person or entity, other than a $875,000 undivided Senior
Participation in the Bonds and the Collateral Documents relating to the
Real Estate known as Factor's Walk Phase One (as such Collateral
Documents are more fully described on Exhibit "A") held by ▇▇▇▇▇▇▇
Associates, which Senior Participation is being subordinated to the
lien of Bank, all as more fully set forth in the Subordination
Agreement referred to in Section 10.1(j) herein.
(b) Borrower has not made any currently effective assignment
of any interest in the Collateral Documents other than to Bank pursuant
to this Agreement.
(c) No Obligor or Participation Seller has any set-off,
defense or counterclaim to any of its obligations under any Collateral
Document (as the same may have been modified by any forbearance
agreement relating thereto).
(d) Subject to the provisions of any forbearance agreement
relating thereto, all Collateral Documents are in full force and effect
with respect to the payment obligations arising under them.
(e) Except as may be specifically provided in the Collateral
Documents, no Payments have been collected, anticipated, waived,
released, discounted or otherwise discharged or compromised except in
accordance with their regularly scheduled payment dates.
(f) There is only one original note evidencing each loan to
which the Collateral Documents relate, if applicable, only one original
deed-in-lieu of foreclosure relating to any loans to which the
Collateral Documents relate, and, if applicable, only one Participation
Certificate evidencing participation interests comprising a portion of
the Collateral, all of which, to the extent applicable, have been
delivered to Bank.
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(g) Resource XXIV is the record and beneficial owner of, and
has legal title to the Bonds. The Bonds are and will remain, free and
clear of all pledges, liens, security interests and other encumbrances
and restrictions whatsoever.
(h) The pledge and assignment to Bank of the Bonds creates a
valid first lien on and a first perfected security interest in the
Bonds and the proceeds thereof, subject to no prior pledge, lien,
mortgage, security interest, or encumbrance or to any agreement
purporting to grant to any third party a security interest in the
property or assets of Resource XXIV which would include the Bonds.
4.3 Covenants Regarding Collateral. So long as the Line Note remains
unpaid or Bank has any commitment under the Line, without the prior written
consent of Bank, which consent shall not be unreasonably withheld or delayed:
(a) Borrower shall not obtain any other loans or other
financing secured by an encumbrance, lien, mortgage, security interest
or other interest in any of the Collateral, or assign, sell, transfer
(voluntarily or by operation of law), or otherwise dispose of any
interest in any of the Collateral or the Real Estate.
(b) Borrower shall receive or collect monthly (or otherwise if
so provided by the terms of the Collateral Documents) payment of
principal and interest pursuant to and in accordance with the terms and
conditions of the Collateral Documents.
(c) Prior to the occurrence of an Event or Default, Borrower
shall not alter, amend, extend, cancel or otherwise change any terms or
conditions of the Collateral Documents if as a result thereof there
would occur an Event of Default or Potential Default. Following the
occurrence of an Event of Default, Borrower shall not alter, amend,
cancel or otherwise change any provision of the Collateral Documents.
(d) In the event Borrower goes into possession of any of the
Real Estate, should Bank thereafter decide to go into possession
pursuant to this Agreement, Borrower shall immediately vacate the
affected Real Estate and perform whatever acts or execute whatever
documents required by Bank, in its sole discretion, to expedite Bank's
possession of the affected Real Estate.
(e) Borrower shall keep accurate and complete records of
Payments and the Collateral Documents and shall furnish Bank with such
information as Bank may request, including without limitations, the
information required by Section 8 herein.
(f) Following the occurrence of an Event of Default Borrower,
shall not exercise any right or remedy granted under any of the
Collateral Documents without the prior written consent of Bank.
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(g) Following the occurrence of an Event of Default, Borrower
shall not (i) waive, excuse, condone or in any manner release or
discharge any obligation, covenant or agreement of any Obligor under
any Collateral Document; (ii) cancel, terminate or permit the surrender
of any Collateral Document; or (iii) solicit or accept any prepayment
of monies under any Collateral Document.
(h) Borrower shall not release or terminate any of its
interest in, to or under any Collateral Document.
(i) Borrower shall not propose or consent to any plan of
reorganization or liquidation in any proceeding in the United States
Bankruptcy Court with regard to any Collateral Documents, Real Estate,
or Obligor.
4.4 Default Under Collateral Documents.
(a) Borrower shall give Bank written notice of the occurrence
of an event of default or a default under the terms of any Collateral
Document ("Collateral Document Default") within five (5) Business Days
after becoming aware of a Collateral Document Default, specifying the
loan to which such Collateral Document Default relates, the nature of
the Collateral Document Default, and such other information as Bank may
request. Notwithstanding the provisions of Section 12.1(p) herein,
provided that Bank receives evidence satisfactory to it that,
notwithstanding a Collateral Document Default, (i) Borrower remains in
compliance with the covenants set forth in Sections 7.1 and 7.2 herein,
and (ii) Borrower maintains a Debt Service Coverage Ratio of not less
than 3.0 to 1, such Collateral Document Default shall not constitute an
Event of Default hereunder.
(b) Following the occurrence and during the continuation of
any Collateral Document Default, (i) Borrower will provide Bank with
such information relating thereto and to the Collateral Documents and
Real Estate to which such Collateral Document Default relates as Bank
may request, and (ii) Bank may at any time declare that the Real Estate
to which such Collateral Document Default relates has become ineligible
for the purposes of calculating the Borrowing Base and that the fair
market value of such Real Estate shall no longer constitute a portion
of the Appraised Value for the purposes of calculating the Borrowing
Base. In the event of any such declaration by Bank, Borrower shall,
within ninety (90) days thereafter, but subject to the immediately
following sentence, either (x) repay the outstanding principal amount
of the Line in an amount equal to the amount by which the then unpaid
principal balance of the Line exceeds the Borrowing Base (after taking
into account the exclusion of the Appraised Value of such Real Estate),
or (y) in lieu of such repayment, deliver to Bank Substitute Collateral
where the Appraised Value of the Real Estate to which such Substitute
Collateral relates, when added to the Appraised Value of all other Real
Estate then constituting eligible Collateral, will cause the then
outstanding principal balance of the Line to be in compliance with the
Borrowing Base. Any such delivery of Substitute Collateral
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shall be accompanied by all such financing statement amendments and other
documents and instruments as Bank may require to reflect its security interest
in and to the Substitute Collateral (including without limitation appropriate
amendments to Exhibits "A" and "B" hereto). Notwithstanding the foregoing to the
contrary, if the applicable Obligor cures the Collateral Document Default to the
satisfaction of Bank within such ninety (90) - day period, the Appraised Value
of the Real Estate to which such Collateral Document Default relates shall once
again be included for the purposes of calculating the Borrowing Base and
Borrower shall not be required to make any repayment of the Line or to deliver
Substitute Collateral to Bank with respect to such Collateral Document Default.
4.5 Release of Collateral. Borrower shall provide Bank with at least
ten (10) Business Days prior written notice of any proposed repayment in full of
any Collateral Documents in connection with which the Collateral Documents will
be released, or of any other requested release of the Collateral Documents, to
the extent Borrower shall receive the same and otherwise as much prior written
notice as is possible. Provided that Borrower shall either (x) repay the
outstanding principal amount of the Line in an amount equal to the amount by
which the then unpaid principal balance of the Line exceeds the Borrowing Base
(after taking into account the exclusion of the Appraised Value of the Real
Estate to which such release will relate), or (y) in lieu of such repayment,
deliver to Bank Substitute Collateral where the Appraised Value of the Real
Estate to which such Substitute Collateral relates, when added to the Appraised
Value of all other Real Estate that will remain following such release, will
cause the then outstanding principal balance of the Line to be in compliance
with the Borrowing Base, Bank shall, upon receipt of such repayment or
Substitute Collateral, release its lien on the applicable Collateral Documents.
4.6 Power of Attorney. Each Borrower does hereby appoint and constitute
Bank as such Borrower's true and lawful attorney, irrevocably, such appointment
to be coupled with an interest, with full power (in the name of Borrower or
otherwise), (a) to ask, require, demand, receive, compound and give acquittance
for any and all Payments due and to become due under or arising out of any
Collateral Document to which such Borrower is or may be come entitled, (b) to
enforce compliance by any Obligor with all of the terms and provisions of any
Collateral Document, (c) to endorse any checks or other instruments or orders in
connection therewith, and (d) to file any claims or take any action or
institute any proceedings which Bank may deem to be necessary or advisable in
the premises.
4.7 Collateral Document Remedies. Upon the occurrence of an Event of
Default, Bank shall have, but shall not be limited to, the following rights, in
addition to the rights accorded by the Uniform Commercial Code, as amended from
time to time, and at law or in equity, each of which may be exercised at any
time:
(a) to declare by written notice to Borrower that Borrower's
interest in the Collateral Documents shall terminate and be of no
further force or effect, that Bank shall have
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all right, title and interest in and to the Collateral Documents, and
that Bank shall have the sole right to exercise any and all rights and
remedies provided in or arising out of the Collateral Documents;
(b) to require Borrower to deliver originals and/or copies of
all Collateral Documents to Bank, together with all other information
relating to the Collateral Documents, the Real Estate, or the loans
pertaining thereto, as Borrower shall maintain (including without
limitation accounting records).
(c) to transfer all or any part of the Collateral Documents
into the name of Bank or its nominee;
(d) to demand and be entitled to (by notice to the Obligors or
any management company or trustee holding and/or collecting the same)
all Payments;
(e) to release any or all Collateral Documents;
(f) to endorse any Collateral Documents or the proceeds
thereof in the name of Borrower;
(g) to sell all or any part of the Collateral Documents upon
any exchange or at public or private sale, at Bank's option, at any
time or times, following advertisement in the generally accepted manner
for material of the same type as the Collateral, upon five (5) days
prior written notice of the time of any private sale or the time and
place of any public sale, and, at any such sale, Bank or its nominee
shall have the right to become the purchaser thereof;
(h) to accept in settlement for any Collateral Document a sum
less than the face value without notice to Borrower;
(i) to demand and be entitled to all rents under all leases or
rental agreements with respect to any Real Estate, to the extent
permitted by the Collateral Documents; and/or
(j) to do any and all acts, including, but not limited to,
executing, signing, acknowledging, sealing and delivering any
agreement, contract, modification, rescission, note, deed, check,
receipt, conveyancing instrument, release, discharge, or document of
any kind whatsoever in the name, place and stead of Borrower, as
attorney in fact, in furtherance of the remedies afforded Bank herein,
under the Uniform Commercial Code, as amended from time to time, at law
or in equity. Borrower agrees that the rights and powers specified
above are irrevocable and coupled with an interest.
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4.8 Cumulative Remedies. All rights and remedies granted herein or in
the Collateral Documents or otherwise available to Bank shall be cumulative and
concurrent and may be pursued singly, successively, or together at Bank's sole
option, and may be exercised from time to time and as often as occasion therefor
shall occur until the Line and all other amounts due hereunder, are paid in
full; and the failure to exercise any such right or remedy shall in no event be
construed as a waiver or release of same by Bank. Bank may resort to any
security it holds in such order and manner as Bank sees fit.
4.8 Nonlimitation of Bank's Rights under Note and Collateral Documents.
Nothing contained herein shall prejudice or be construed to prejudice the right
of Bank to commence and prosecute, or to prevent Bank from commencing and
prosecuting, any action which it may deem advisable or which it may be entitled
to commence and prosecute for the foreclosure of the Note and the Collateral
Documents and any of them, or to prejudice any other rights of Bank.
4.9 Nonassumption of Liability by Bank. Bank does not by the execution
and acceptance of this Agreement or by making demand or collecting monies under
the Note, the Collateral Documents or any lease or rental agreement with respect
to any of the Real Estate, assume any liability or become liable in any manner
whatsoever for the performance of any of the terms and conditions thereof,
unless and until Bank shall expressly assume such obligations by a writing to
the Obligors instructing them to make Payments directly to Bank, it being
understood and agreed that notice to such Obligors to make Payments to a lockbox
shall not be deemed to be such an express assumption; nor shall Bank be liable
for any act, offsets or defenses which Borrower or any such Obligor may have
against each other. Nothing contained in this Section 4.9 shall be deemed to
relieve Bank from any obligations arising out of its gross negligence or willful
misconduct.
4.10 Bank's Discretion. The Collateral Documents shall be dealt with
and enforced by Bank in its sole discretion. In the course of its administration
of the Collateral Documents, Bank may, without notice to Borrower, use its
discretion with respect to the exercising, or refraining from, any rights or
actions which may be vested in it or which it may be entitled to take or assert
under law or by agreement with Borrower or otherwise.
4.11 Release. Bank shall not be liable to Borrower for any action taken
or omitted or for errors in judgment. Bank does not assume or warrant and shall
have no responsibility or liability (express or implied) for the collectability,
enforceability, genuineness or validity of the Collateral Documents; or the
financial condition or legal status of any Obligor.
4.12 General. The above-described security interests, assignments, and
liens shall not be rendered void by the fact that no Bank Indebtedness exists as
of any particular date, but shall continue in full force and effect until the
Bank Indebtedness has been repaid, Bank has no agreement or commitment
outstanding pursuant to which Bank may extend credit to or on
-17-
behalf of Borrower and Bank has executed termination statements or releases with
respect thereto. IT IS THE EXPRESS INTENT OF THE BORROWER THAT ALL OF THE
COLLATERAL SHALL SECURE NOT ONLY THE OBLIGATIONS UNDER THE LOAN DOCUMENTS, BUT
ALSO ALL OTHER PRESENT AND FUTURE OBLIGATIONS OF BORROWER TO BANK, INCLUDING
WITHOUT LIMITATION THE GUARANTY.
4.13 Additional Documents and Future Actions. Borrower will, at its
sole cost, take such actions and provide Bank from time to time with such
agreements, financing statements and additional instruments, documents or
information as the Bank may in its reasonable discretion deem necessary or
advisable to perfect, protect, maintain or enforce the security interests in the
Collateral, to permit Bank to protect or enforce its interest in the Collateral,
or to carry out the terms of the Loan Documents. Each Borrower hereby authorizes
and appoints Bank as its attorney-in-fact, with full power of substitution, to
take such actions as Bank may deem advisable to protect the Collateral and its
interests thereon and its rights hereunder, to execute on such Borrower's behalf
and file at such Borrower's expense financing statements and assignments, and
amendments thereto, in those public offices deemed necessary or appropriate by
Bank to establish, maintain and protect a continuously perfected security
interest in the Collateral, and to execute on such Borrower's behalf such other
documents and notices as Bank may deem advisable to protect the Collateral and
its interests therein and its rights hereunder. Such power being coupled with an
interest is irrevocable. Each Borrower irrevocably authorizes the filing of a
carbon, photographic or other copy of this Agreement, or of a financing
statement, as a financing statement and agrees that such filing is sufficient as
a financing statement.
5. REPRESENTATIONS AND WARRANTIES. Borrower, each as applicable to it,
represents and warrants as follows:
5.1 Valid Organization, Good Standing and Qualification. Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, with full power and authority to execute, deliver and
comply with the Loan Documents, and to carry on its business as it is now being
conducted and is duly licensed or qualified as a foreign corporation in good
standing under the laws of each jurisdiction in which the character or location
of the properties owned by it or the business transacted by it requires such
licensing or qualification.
5.2 Licenses. Borrower has all licenses, registrations, approvals and
other authority as may be necessary to enable it to own and operate its business
and perform all services and business which it has agreed to perform in any
state, municipality or other jurisdiction.
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5.3 Ownership Interests. The ownership of all stock, debentures,
options, warrants, bonds and other securities (debt and equity) of Borrower, and
all pledges, proxies, voting trusts, powers of attorney and other agreements
affecting the ownership or voting rights of said interests is as set forth on
Schedule 5.3 attached hereto.
5.4 Subsidiaries. Except as set forth on Schedule 5.4 attached hereto,
Borrower does not own any shares of stock or other equity interests in any
Person, directly or indirectly (by any Subsidiary or otherwise).
5.5 Financial Statements. Borrower has furnished to Bank the audited
consolidated financial statements of Borrower, certified without qualification
by independent public accountants as of September 30, 1998 and all management
and comment letters from such accountants in connection therewith, and its
internally prepared interim financial statements as of March 31, 1999. Such
financial statements of Borrower (together with the related notes and comments),
are correct and complete, fairly present the financial condition and the assets
and liabilities of Borrower at such date, and have been prepared in accordance
with GAAP. With respect to the interim statements, such statements are subject
to year-end adjustment and any accompanying footnotes.
5.6 No Material Adverse Change in Financial Condition. There has been
no material adverse change in the financial condition of Borrower since
September 30, 1998.
5.7 Pending Litigation or Proceedings. Except as set forth on Schedule
5.7 attached hereto, there are no judgments outstanding or actions, suits or
proceedings pending or, to the best of Borrower's knowledge, threatened against
or affecting Borrower, at law or in equity or before or by any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign.
5.8 Due Authorization: No Legal Restrictions. The execution and
delivery by Borrower of the Loan Documents, the consummation of the transactions
contemplated by the Loan Documents and the fulfillment and compliance with the
respective terms, conditions and provisions of the Loan Documents: (a) have been
duly authorized by all requisite corporate action by Borrower, (b) will not
conflict with or result in a breach of, or constitute a default (or might, upon
the passage of time or the giving of notice or both, constitute a default)
under, any of the terms, conditions or provisions of (i) any applicable statute,
law, rule, regulation or ordinance, (ii) Borrower's Certificate of Incorporation
or Bylaws, (iii) any indenture, mortgage, loan or credit agreement or instrument
to which Borrower is a party or by which it may be bound or affected, or (iv)
any judgment or order of any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, and (c) will not
result in the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the property or assets of Borrower under the terms
or provisions of any such agreement or instrument, except liens in favor of
Bank.
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5.9 Enforceability. The Loan Documents have been duly executed by
Borrower and delivered to Bank and constitute legal, valid and binding
obligations of Borrower, enforceable in accordance with their terms.
5.10 No Default Under Other Obligations, Orders or Governmental
Regulations. Borrower is not in violation of its Certificate of Incorporation or
Bylaws or in default in the performance or observance of any of its obligations,
covenants or conditions contained in any indenture or other agreement creating,
evidencing or securing any Indebtedness or pursuant to which any such
Indebtedness is issued, nor is Borrower in violation of or in default under any
other agreement or instrument or any judgment, decree, order, statute, rule or
governmental regulation, applicable to it or by which its properties may be
bound or affected.
5.11 Governmental Consents. No consent, approval or authorization of or
designation, declaration or filing with any governmental authority on the part
of Borrower is required in connection with the execution, delivery or
performance by Borrower of the Loan Documents or the consummation of the
transactions contemplated thereby.
5.12 Taxes. Borrower has filed all tax returns which it is required to
file and has paid, or made provision for the payment of, all taxes which have or
may have become due pursuant to such returns or pursuant to any assessment
received by them. Such tax returns are complete and accurate in all respects.
Borrower does not know of any proposed additional assessment or basis for any
assessment of additional taxes.
5.13 Addresses. During the past five (5) years, Borrower has not been
known by any names (including tradenames) other than those set forth in Schedule
5.13 attached hereto and has been located at any addresses other than those set
forth on Schedule 5.13 attached hereto. Borrower's books and records pertaining
to the Collateral will at all times be located at the addresses set forth on
Schedule 5.13; or such other location determined by Borrower after prior notice
to Bank and delivery to Bank of any items requested by Bank to maintain
perfection and priority of Bank's security interests and access to Borrower'
books and records. Schedule 5.13 identifies the chief executive office of each
Borrower.
5.14 Current Compliance. Borrower is currently in compliance with all
of the terms and conditions of the Loan Documents.
5.15 Deferred Compensation Plans. Neither Borrower nor any ERISA
Affiliate has ever been a participant in or has in any way provided or
maintained, any Deferred Compensation Plan for the benefit of Borrower's or any
ERISA Affiliate's employees, or has ever contributed to a Multiemployer Plan.
5.16 Leases and Contracts. Borrower has complied with the provisions of
all material leases, contracts or commitments of any kind to which it is a party
and is not in
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default thereunder. No other party is in default under any such leases,
contracts or other commitments and no event has occurred which, but for the
giving of notice or the passage of time or both, would constitute an event of
default thereunder.
5.17 Contingent Liabilities. There are no suretyship agreements,
guarantees or other contingent liabilities of Borrower which are not disclosed
by the financial statements mentioned in Section 5.5 herein.
5.18 Encumbrances. The property and assets of Borrower are not subject
to any lien, encumbrance or security interest except as set forth on Exhibit
5.18 attached.
5.19 Securities Act. Borrower has not, directly or through any agent,
offered the Line Note or any part thereof or any similar security for sale to,
or solicited offers to buy the same from, or otherwise approached or negotiated
in respect thereof with, anyone other than Bank so as to bring the issue or sale
of the Line Note or any part thereof within the provisions of Section 5 of the
Securities ▇▇▇ ▇▇▇▇, as amended.
5.20 Disclosure. Neither this Agreement, nor the schedules attached to
this Agreement, nor the financial statements referred to in this Agreement, nor
any certificate, statement, report or other document furnished or to be
furnished by Borrower to Bank in connection with this Agreement, contain any
untrue statement of a material fact, or omit to state any material fact
necessary in order to make the statements contained in any of the foregoing not
misleading. Borrower has disclosed to Bank in writing every fact that materially
and adversely affects the business or financial condition of Borrower or its
ability to perform its obligations under this Agreement, the Line Note, or any
other documents or instruments required hereby.
5.21 Margin Stock. Borrower is not engaged in, nor does it have as one
of its substantial activities, the business of extending or obtaining credit for
the purpose of purchasing or carrying "margin stock" (as that term is defined in
Regulation U, G, T, or X of the Board of Governors of the Federal Reserve
System) and no proceeds of any advance of the Line will be used for such purpose
of for the purpose of purchasing or carrying any shares of margin stock.
5.22 Bank Accounts. Other than the bank accounts set forth on Schedule
5.22 attached (the "Deposit Accounts"), Neither Resource 53, Resource XXIV, nor
Resource XL maintains any accounts with any bank or other financial institution.
6. GENERAL COVENANTS. So long as the Line Note remains unpaid or Bank has
any obligation hereunder with respect to the Line, unless Bank otherwise
consents in writing, which consent shall not be unreasonably withheld or
delayed:
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6.1 Limitation on Indebtedness. Borrower shall not have at any time
outstanding to any Person other than Bank, any Indebtedness for borrowed money
or any outstanding letters of credit, except:
(a) current accounts payable incurred in the ordinary course
of Borrower's business, accrued expenses and other current items
arising out of transactions (other than borrowings) in the ordinary
course of Borrower's business;
(b) existing Indebtedness for borrowed money described on
Schedule 6.1; and
(c) future Indebtedness incurred in connection with individual
project financing, and excluding specifically lines of credit or loans
relating to a pool of collateral.
6.2 Intentionally Deleted.
6.3 Guaranties. Borrower shall not, directly or indirectly, guarantee,
endorse (other than for collection or deposit in the ordinary course of
business), discount, sell with recourse or for less than the face value or agree
(contingently or otherwise) to purchase or repurchase or otherwise acquire, or
otherwise become directly or indirectly liable for, or agree (contingently or
otherwise) to supply or advance funds (whether by loan, stock purchase, capital
contribution or otherwise) in respect of, any Indebtedness, obligations or
liabilities of any Person other than an Affiliate.
6.4 Disposition of Assets. Borrower shall not sell, lease, transfer or
otherwise dispose of (i) all or substantially all of its property or assets, or
(ii) any material portion of its property or assets unless, in the case of (ii)
herein, following any such sale, lease, transfer or other disposition, Borrower
shall be in compliance with the covenants contained in Sections 7.1 and 7.2
herein calculated as of the date immediately following such sale, lease,
transfer or other disposition.
6.5 Intentionally Deleted.
6.6 Taxes: Claims for Labor and Materials. Borrower will pay or cause
to be paid when due all taxes, assessments, governmental charges or levies
imposed upon it or its income, profits, payroll or any property belonging to it,
including without limitation all withholding taxes, and all claims for labor,
materials and supplies which, if unpaid, might become a lien or charge upon any
of its properties or assets.
6.7 Liens. Borrower shall not create, incur or permit to exist any
mortgage, pledge, encumbrance, lien, security interest or charge of any kind
(including liens or charges upon properties acquired or to be acquired under
conditional sales agreements or other title retention
-22-
devices) on its property or assets, whether now owned or hereafter acquired, or
upon any income, profits or proceeds therefrom, except:
(a) Security interests and other liens held by Bank;
(b) Liens incurred or deposits made in the ordinary course of
business (i) in connection with worker's compensation, unemployment
insurance, social security and other like laws or (ii) to secure the
performance of statutory obligations, not incurred in connection with
either (A) the borrowing of money or (B) the deferred purchase price of
goods or inventory;
(c) Encumbrances consisting of zoning restrictions, easements,
restrictions on the use of real property or minor irregularities of
title thereto, none of which impairs the use of such property by that
Obligor in the operation of its business; or
(d) Liens and security interests listed on Schedule 6.7
attached hereto.
(e) Liens and security interests securing Indebtedness
permitted by Section 6.1 herein.
Borrower shall not enter into any agreement with any other Person which
shall prohibit Borrower from granting, creating or suffering to exist, or
otherwise restrict in any way (whether by covenant, by identifying such event as
a default under such agreement or otherwise) the ability of Borrower to grant,
create or suffer to exist, any lien, security interest or other charge or
encumbrance upon or with respect to any of its assets in favor of the Bank.
6.8 Existence: Approvals: Qualification; Business Operations:
Compliance with Laws. Borrower (a) will obtain, preserve and keep in full force
and effect its separate corporate existence and all rights, licenses,
registrations and franchises necessary to the proper conduct of its business or
affairs; (b) will qualify and remain qualified as a foreign corporation, in each
jurisdiction in which the character or location of the properties owned by it or
the business transacted by it requires such qualification; (c) will continue to
operate its business as presently operated and will not engage in any new
businesses without the prior written consent of Bank; and (d) will comply with
the requirements of all applicable laws and all rules, regulations (including
environmental regulations) and orders of regulatory agencies and authorities
having jurisdiction over it.
6.9 Maintenance of Properties. Borrower will maintain, preserve,
protect and keep or cause to be maintained, preserved, protected and kept its
real and personal property used or useful in the conduct of its business in good
working order and condition, reasonable wear and tear excepted, and will pay and
discharge when due the cost of repairs to and maintenance of the same.
-23-
6.10 Insurance. Borrower will carry adequate insurance issued by an
insurer acceptable to Bank, in amounts acceptable to Bank (at least adequate to
comply with any co-insurance provisions) and against all such liability and
hazards as are usually carried by entities engaged in the same or a similar
business similarly situated or as may be required by Bank, and shall cause Bank
to be named as loss payee (with a lender's loss payable endorsement) with
respect to all personal property, and additional insured with respect to all
liability insurance, as its interests may appear with thirty (30) days' notice
to be given Bank by the insurance carrier prior to cancellation or material
modification of such insurance coverage.
Borrower shall cause to be delivered to Bank the insurance policies
therefor or in the alternative, evidence of insurance, and at least thirty (30)
business days prior to the expiration of any such insurance, additional policies
or duplicates thereof or in the alternative, evidence of insurance evidencing
the renewal of such insurance and payment of the premiums therefor. Borrower
shall direct all insurers that in the event of any loss thereunder or the
cancellation of any insurance policy, the insurers shall make payments for such
loss and pay all return or unearned premiums directly to Bank and not to
Borrower and Bank jointly.
Borrower shall not take out any insurance without having Bank named as
loss payee or additional insured thereon.
6.11 Inspections; Examinations. Borrower hereby irrevocably authorizes
and directs all accountants and auditors employed by Borrower at any time to
exhibit and deliver to Bank copies of any and all of Borrower's financial
statements, or other accounting records of any sort in the accountant's or
auditor's possession and copies of all reports submitted to Borrower by such
accountants or auditors, including management letters, "comment" letters and
audit reports, and to disclose to Bank any information they may have concerning
Borrower's financial status and business operations. Borrower further authorizes
all federal, state and municipal authorities to furnish to Bank copies of
reports or examinations relating to any Borrower, whether made by Borrower or
otherwise.
The officers of Bank, or such Persons as any of them may designate, may
visit and inspect any of the properties of Borrower, examine (either by Bank's
employees or by independent accountants) any of the Collateral or other assets
of Borrower, including the books of account of Borrower, and discuss the
affairs, finances and accounts of Borrower with its officers and with its
independent accountants, at such times as Bank may desire.
6.12 Default Under Other Indebtedness. Borrower shall not permit any
of its material Indebtedness to be in default. If any Indebtedness of Borrower
is declared or becomes due and payable before its expressed maturity by reason
of default or otherwise or to the knowledge of Borrower, the holder of any such
Indebtedness shall have the right (or upon the giving of notice or the passage
of time, or both, shall have the right) to declare such
-24-
Indebtedness to be so due and payable, Borrower will immediately give Bank
written notice of such declaration, acceleration or right of declaration.
6.13 Deferred Compensation Plans. Neither Borrower nor any ERISA
Affiliate shall become a participant in, or in any way provide or maintain, any
Deferred Compensation Plan for the benefit of any or Borrower's or any ERISA
Affiliates' employees, or shall contribute to any Multiemployer Plan, without
giving Bank prior written notice of such action and executing such related
amendments to this Agreement as Bank may request.
6.14 Bank Accounts. As additional compensation to Bank, and in
consideration of the rate of interest being charged by Bank to Borrower,
Borrower will maintain deposit accounts with Bank, including without limitation
the Loan Account referred to in Section 3.7 herein.
6.15 Maintenance of Management. Borrower will cause its business to be
continuously managed by its present management or such other persons (serving in
such management positions) as may be reasonably satisfactory to Bank.
6.16 Transactions with Affiliates. Borrower shall not enter into or
conduct any transaction with any Affiliate except on terms that would be usual
and customary in a similar transaction between Persons not affiliated with each
other and except as disclosed to Bank. Borrower shall not make any loans or
extensions of credit to any of its Affiliates, shareholders, directors or
officers, except for the existing loans described in Schedule 6.16 attached
hereto. Borrower will cause all of its Indebtedness at any time owed to its
Affiliates (other than JeffBanks, Inc. and its respective subsidiaries),
shareholders, directors and officers to be subordinated in all respects to all
present and future Bank Indebtedness and will not make any payments thereon,
except as approved by Bank in writing.
6.17 Restriction on Stock Transfer. Resource, Inc. shall not, and shall
not permit its sole shareholder to, directly or indirectly, issue, transfer,
sell or otherwise dispose of, or part with control of, or permit the transfer
of, any shares of the capital stock of Resource, Inc. or of Resource 53,
Resource XXIV, or Resource XL as a result of which Resource America, Inc. shall
cease to own, legally and beneficially, 100% of all outstanding stock of
Resource, Inc., and/or Resource, Inc. shall cease to own, legally and
beneficially, 100% of all outstanding stock of any of Resource 53, Resource
XXIV, and Resource XL.
6.18 Name or Address Change. Borrower shall not change its name or
address except upon thirty (30) days prior written notice to Bank and delivery
to Bank of any items requested by Bank to maintain perfection and priority of
Bank's security interests and access to Borrower's books and records.
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6.19 Notices. Borrower will promptly notify Bank of (a) any action or
proceeding brought against Borrower wherein such action or proceeding would, if
determined adversely to Borrower result in liability of Borrower in excess of
$25,000 individually, or $50,000 in the aggregate, (b) the occurrence of any
Event of Default, (c) any fact, condition or event which, with the giving of
notice or the passage of time or both, could become an Event of Default, (d) the
failure of Borrower to observe any of its undertakings under the Loan Documents,
or (e) any material adverse change in the assets, business, operations or
financial condition of Borrower.
6.20 Material Adverse Contracts. Borrower shall not become or be a
party to any contract or agreement which has a materially adverse impact on
Borrower's ability to perform under this Agreement or any other agreement with
Bank to which Borrower is a party.
6.21 Appraisals. Bank shall have the right, in the exercise of its
reasonable discretion, and/or as required by any applicable governmental
authority, at Borrower's cost and expense, to obtain additional or updated
Appraisals on any or all of the Real Estate.
6.22 Bank Accounts.
(a) Except as otherwise permitted herein, neither Resource 53, Resource
XXIV, nor Resource XL shall open or maintain any bank accounts with respect to
the Collateral, the Collateral Documents or the Real Estate other than the
Deposit Accounts and bank accounts maintained with Bank. Each of Resource 53,
Resource XXIV, and Resource XL shall deposit or cause to be deposited into the
Deposit Accounts or such other accounts as may be maintained with Bank from time
to the time the rentals and other income from the Real Estate and all other
Payments. Any income received with respect to the balance from time to time
standing to the credit of the Deposit Accounts and any other deposit accounts
maintained with Bank, including any interest, shall remain, or be deposited in
the Deposit Accounts or such other accounts.
(b) All right, title and interest in and to the cash amounts on deposit
from time to time in the Deposit Accounts shall vest in Bank, shall constitute
part of the Collateral hereunder and shall not constitute payment of the Bank
Indebtedness until applied thereto as hereinafter provided. Each of Resource 53,
Resource XXIV, and Resource XL shall as promptly as possible deposit the
proceeds of any Collateral and all payments received by it into the Deposit
Accounts. Until so deposited, all such proceeds shall be held in trust by
Resource 53, Resource XXIV, and/or Resource XL for and as the property of Bank
and shall not be commingled with any other funds or property of either of them.
The balance from time to time standing to the credit of the Deposit Accounts
shall, except as set forth in subsection (c) below, be distributed to Resource
53, Resource XXIV, and/or Resource XL in accordance with the provisions of the
Depository Agreements.
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(c) If an Event of Default shall have occurred and Bank shall have
given notice to Resource 53, Resource XXIV, and/or Resource XL of its intent to
exercise exclusive control over the Deposit Accounts, then (i) Resource 53,
Resource XXIV, and/or Resource XL, as applicable, shall instruct all Obligors
and other Persons obligated in respect of any Collateral Documents or Real
Estate to make all payments in respect of the Collateral Documents, and shall
use its best efforts to cause them to do so, directly to the Deposit Accounts,
and (ii) neither Resource 53, Resource XXIV, nor Resource XL shall be entitled
to receive any distribution from the Deposit Accounts.
7. FINANCIAL COVENANTS. So long as the Line Note remains unpaid or Bank
has any obligation hereunder with respect to the Line:
7.1 Equity. Borrower shall maintain Equity of not less than $40,000,000
at September 30, 1999 and at each September 30 thereafter.
7.2 Collateral Debt Service Coverage Ratio. Borrower shall maintain a
ratio of (a) Net Operating Income generated by the Real Estate, and calculated
on an annualized basis, to (b) the greater of (i) actual interest payments made
with respect to the Line for the annual period in question, or (ii) $1,505,592.
7.3 Changes to Financial Covenants. Bank may condition any extension of
the Expiration Date upon revision of the foregoing financial covenants, as Bank
in its reasonable discretion may require prior to the date that Bank must give
Borrower notice of extension.
8. ACCOUNTING RECORDS, REPORTS AND FINANCIAL STATEMENTS. Borrower will
maintain books of record and account in which full, correct and current entries
in accordance with GAAP will be made of all of its dealings, business and
affairs, and Borrower will deliver to Bank the following:
8.1 Annual Statements. As soon as available and in any event within
ninety (90) days after the end of each fiscal year of Borrower, the audited
consolidated (a) income and retained earnings statements of Borrower for such
fiscal year, (b) balance sheet of Borrower as at the end of such fiscal year,
and (c) statement of cash flow of Borrower for such fiscal year, all setting
forth in comparative form the corresponding figures as at the end of the
previous fiscal year, all in reasonable detail, including all supporting
schedules and comments. The foregoing statements and balance sheets shall be
prepared in accordance with GAAP and shall be audited by independent certified
public accountants of recognized standing acceptable to Bank in the reasonable
exercise of its discretion with respect to which such accountants shall deliver
their unqualified opinion.
8.2 Annual Property Statements. As soon as available and in any event
within sixty (60) days after the end of each calendar year, rent rolls and
operating statements for each
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property constituting a portion of the Real Estate, including without limitation
a portfolio summary relating to the Real Estate in the form approved by Bank.
8.3 Quarterly Statements. As soon as available and in any event within
forty five (45) days after the close of each fiscal quarter of Borrower, (a) the
consolidated income and retained earnings statements of Borrower for such
quarter, (b) the consolidated balance sheet of Borrower as of the end of such
quarter, (c) the consolidated statement of cash flow of Borrower for such
quarter, and (d) a portfolio summary of each property constituting the Real
Estate, all setting forth in comparative form the corresponding figures as at
the end of the corresponding quarter of the previous fiscal year (if applicable)
all in reasonable detail, subject to year end adjustments and certified by the
chief financial officer of Borrower to be accurate and to have been prepared in
accordance with GAAP.
8.4 Quarterly Property Statements. As soon as available and in any
event within thirty (30) days after the end of each fiscal quarter of Borrower,
rent rolls and operating statements for each property constituting a portion of
the Real Estate, including without limitation a portfolio summary relating to
the Real Estate in the form approved by Bank.
8.5 Requested Information. With reasonable promptness, all such other
data and information in respect of the condition, operation and affairs of
Borrower as Bank may reasonably request from time to time.
8.6 Compliance Certificates. Together with the annual statements
required by Section 8.1 above, a certificate of the chief financial officer of
Borrower: (a) stating that Borrower has observed, performed and complied with
each and every undertaking contained herein, (b) setting forth the information
and computations (in sufficient detail) required in order to establish whether
Borrower was operating in compliance with the financial covenants in Sections
7.1 and 7.2 of this Agreement, and (c) certifying that as of the date of such
certification, there does not exist any Event of Default or any occurrence or
state of affairs which with the giving of notice, passage of time or both would
constitute an Event of Default.
8.7 Accountant's Certificate. Together with the annual statements
required by Section 8.1, a report of the independent public accountants who
render an opinion with respect to the financial statements referred to therein,
stating that they have reviewed the terms of this Agreement and that in making
the examinations necessary to their certification mentioned in Section 8.1, they
have reviewed the accounts and condition of Borrower during the accounting
period covered by their certificate and that such review did not disclose the
existence of any condition or event which constitutes an Event of Default or a
Potential Default (or that such conditions or events existed, describing them).
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9. ENVIRONMENTAL REPRESENTATIONS AND COVENANTS.
9.1 Representations. Borrower, to the best of its knowledge after due
investigation, including without limitation a review of environmental reports
previously furnished to Bank, represents to Bank as follows: (a) Borrower is in
compliance with all Environmental Requirements and Borrower has no knowledge of
any circumstances which may prevent or interfere with such compliance in the
future; (b) Borrower has all licenses, permits, approvals and authorizations
required under applicable Environmental Requirements; (c) there are no pending
or threatened claims against any Borrower or any Obligor related to the failure
to comply with any Environmental Requirements, or any facts or circumstances
which could give rise to such a claim; (d) no facility or property now or
previously owned, operated or leased by any Obligor is an Environmental Cleanup
Site; (e) there are no liens or claims for cost reimbursement outstanding or
threatened against Borrower or any Obligor or any of their assets (including
without limitation the Real Estate), or any facts or circumstances which could
give rise to such a lien or claim; and (f) there are no facts or circumstances
which, under the provisions of any Environmental Requirements, could restrict
the use, occupancy or transferability of any of the Collateral or any of the
Real Estate.
9.2 Real Property. Borrower represents and warrants to Bank that there
are no Special Materials presently located on or, to the best of its knowledge,
near any Real Estate except for Special Materials which are and have at all
times been treated, stored, transported, handled and disposed of in compliance
with all Environmental Requirements. Borrower represents to Bank that the Real
Estate is not now being used nor, to the best of its knowledge, has it ever been
used in the past for activities involving Special Materials, including but not
limited to the use, generation, collection, storage, treatment, or disposal of
any Special Materials except for Special Materials which are and have at all
times been treated, stored, transported, handled and disposed of in compliance
with all Environmental Requirements.
9.3 Covenant Regarding Compliance. Borrower shall take or cause all
Obligors to take, at Borrower's and such Obligor's sole expense, such actions as
may be necessary to comply with all Environmental Requirements, as hereinafter
defined. If Borrower or any such Obligor shall fail to take such action, Bank
may make advances or payments towards performance or satisfaction of the same
but shall be under no obligation to do so. All sums so advanced or paid,
including all sums advanced or paid by Bank in connection with any judicial or
administrative investigation or proceeding relating thereto, including, without
limitation, attorney's fees, fines, or other penalty payments, shall be at once
repayable by Borrower and all sums so advanced or paid shall become a part of
the Bank Indebtedness.
Borrower shall cause all Obligors to maintain all licenses, permits,
approvals and authorizations required under applicable Environmental
Requirements. In connection with off-site treatment, storage, handling,
transportation or disposal of Special Materials, Borrower shall cause all
Obligors to conduct such activities only at facilities and with carriers who
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operate in compliance with all Environmental Requirements and will obtain
certificates of compliance or disposal from all contractors retained in
connection with such activities.
9.4 Notices. In the event Borrower becomes aware of any past, present
or future facts or circumstances which have given rise or could give rise to a
claim against any Borrower or any Obligor related to a failure to comply with
any Environmental Requirements, Borrower will promptly give Bank notice thereof,
together with a written statement of an officer of Borrower setting forth the
details thereof and the action with respect thereto taken or proposed to be
taken with respect thereto.
9.5 Indemnity. Borrower agrees to indemnify, defend and hold harmless
Bank, its parents, subsidiaries, successors and assigns, and any officer,
director, shareholder, employee, Affiliate or agent of Bank, for all loss,
liability, damage, cost and expenses, including, without limitation, attorney's
fees and disbursements (including the reasonable allocated cost of in-house
counsel and staff) arising from or related to (a) the release of any Special
Materials at any Real Estate, (b) the release of any Special Materials treated,
stored, transported, handled, generated or disposed of by or on behalf of
Borrower at any third party owned site, failed to comply with all Environmental
Requirements, and (c) the breach by Borrower of any representation or covenant
in this Section 9.
9.6 Testing. Bank shall have the right from time to time to designate
such persons ("Environmental Consultants") as Bank may select to visit, inspect,
examine and test any or all of the Real Estate, for the purpose of investigating
compliance with Environmental Requirements, any actual or potential claims
related thereto, and any condition which could result in potential liability,
cost or expenses to the Bank. Borrower will permit, and will use its best
efforts to cause all Obligors to permit, such Environmental Consultants to have
access to the Real Estate and all books, records and reports related to
compliance by the Environmental Affiliates with all Environmental Requirements.
Borrower will supply, and will use its best efforts to cause all Obligors to
supply, Bank or the Environmental Consultants with all information, records,
correspondence, audits, reviews and materials related to compliance by Borrower
and such Obligors with all Environmental Requirements and will make available to
Bank or the Environmental Consultants appropriate personnel employed by or
consultants retained by Borrower or such Obligors having knowledge of such
matters.
The cost of such visits, inspections, examination and tests shall be
borne by the Borrower. In the event Bank pays such costs, such sums shall be at
once repayable by Borrower and all sums so advanced or paid by Bank shall become
part of the Bank Indebtedness. Notwithstanding the foregoing, the Bank shall
have no obligation to perform any tests, examinations or inspections or to
monitor the compliance of the Real Property with all Environmental Requirements.
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9.7 Survival. The representations and covenants of Borrower contained
in this Section 9, including without limitation the indemnification obligation
of Borrower, shall survive the occurrence of any event whatsoever, including the
payment of the Bank Indebtedness or any investigation by or knowledge of Bank.
10. CONDITIONS OF CLOSING. The obligation of Bank to make available the
Line is subject to the performance by Borrower of all of its agreements to be
performed hereunder and to the following further conditions:
10.1 Documents. Bank shall have received on or before the date hereof
all of the following, in form and substance satisfactory to Bank:
(a) The Line Note.
(b) UCC-1 Financing Statements and UCC-3 Financing Statement
Assignments to be filed in such offices as may be required by Bank.
(c) All original Collateral Documents so marked on Exhibit "A"
(d) An Assignment (or other appropriate transfer document) in
recordable form, with respect to all Collateral Documents so marked on
Exhibit "A".
(e) Endorsement Allonges to the Notes so marked on Exhibit
"A".
(f) An Agreement pursuant to which Resource XXIV pledges the
Bonds to Bank.
(g) A Notification and Control Agreement relating to the Bonds
executed by the Depository Trust Corporation and any other financial
intermediary in whose name or for whom the Depository Trust Corporation
holds the Bonds as nominee.
(h) An Assignment in recordable form with respect to the
Collateral Documents more fully set forth on Exhibit "A" relating to
the Real Estate known as "Factors Walk-Phase One", from CRFI.
(i) An Acknowledgment of Guaranty and Assignment of Loan
Documents from CRFI to Bank.
(j) An agreement pursuant to which ▇▇▇▇▇▇▇ Associates
subordinates its $875,000 undivided Senior Participation in the Bonds
and the Collateral Documents relating to the Real Estate known as
Factor's Walk-Phase One (as such Collateral Documents are more fully
described on Exhibit "A"), to Bank's lien and security interest set
forth herein and in the other Loan Documents.
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(k) A Leasehold Mortgage and Security Agreement from Resource
XL relating to the Real Estate known as Factors Walk-Phase Two (the
"Leasehold Mortgage").
(1) A leasehold mortgagee title insurance policy naming Bank
as mortgagee with insurance coverage in the amount of $4,750,000.
(m) Endorsement to (i) mortgagee title insurance policy No.
B1970495 issued by Title Insurance Company of Minnesota (now known as
Old Republic National Title Insurance Company, and (ii) mortgagee title
insurance policy No. 401-632213 issued by Commonwealth Land Title
Insurance Company, both naming Bank as assignee of the insured
mortgages.
(n) A Line Request.
(o) An Acknowledgment of Confessions of Judgment.
(p) All such estoppel certificates and agreements (i) from
Obligors regarding the payment of Payments to Bank, and (ii) from the
ground lessor and ground sublessor under the Lease and Sublease
relating to the Lease which is the subject of the Leasehold Mortgage,
as Bank may request.
(q) Insurance Certificates evidencing hazard, liability, and
such other insurance as Bank may require with respect to (i) Borrower,
and (ii) each Obligor and the Real Property, each naming Bank as
additional insured or mortgagee, as the case may be, as its interests
may appear.
(r) Agreements in form and substance satisfactory to Bank (the
"Depository Agreements") which shall grant Bank exclusive control over
the Deposit Accounts and which shall contain such acknowledgments and
waivers from the depository institution as Bank may request.
(s) Copies, certified in writing by the secretaries or
assistant secretaries of Borrower, of (i) resolutions of its boards of
directors evidencing approval of this Agreement, the Line Note, and the
other matters contemplated hereby, and (ii) each document evidencing
other necessary action and approvals, if any with respect to this
Agreement and the Line Note.
(t) Written certificates by the secretaries or assistant
secretaries of Borrower as to the names and signatures of its officers
who are authorized to sign this Agreement, the Line Note, and the other
documents or certificates to be executed and delivered by it pursuant
hereto. Bank may conclusively rely on such certificates until it
receives further certificates by the secretaries or assistant
secretaries of Borrower amending the prior certificate.
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(u) Copies of Borrower's Certificates of Incorporation and
Bylaws, including all amendments thereto, accompanied by a written
certificate of the secretaries or assistant secretaries of Borrower as
to the authenticity and completeness of such copies.
(v) Good standing certificates for Borrower from the states of
Delaware and Pennsylvania each dated not more than 20 days prior to the
date hereof.
(w) A favorable opinion of independent counsel for Borrower as
to the matters mentioned in Sections 5.1, 5.2, 5.7, 5.8, 5.9, 5.10, and
5.11 herein and as to such other matters as Bank may reasonably
request.
(x) Such additional documents and instruments as Bank may
request.
10.2 Representations and Warranties. All representations and warranties
of Borrower set forth in the Loan Documents will be true at and as of the date
hereof.
10.3 No Default. No condition or event shall exist or have occurred
which would constitute an Event of Default or a Potential Default.
10.4 Environmental Matters. Bank shall have received a report from an
environmental consultant or engineer acceptable to Bank, satisfactory in form
and substance to Bank as to such environmental matters pertaining to the Real
Estate as Bank may require.
10.5 Appraisals. Bank shall have received an appraisal from an
appraiser acceptable to Bank, satisfactory in form and substance to Bank at all
or such portion of the Real Estate as Bank may require.
10.6 Additional Documents. Copies of record searches (including UCC
searches and judgments, suits, tax and other lien searches) confirming that Bank
has a first priority security interest in the Collateral, acceptable to Bank,
shall have been delivered to Bank.
10.7 No Material Adverse Change. Bank shall have received evidence
satisfactory to it that no material adverse change has occurred with respect to
Borrower since September 30, 1998.
10.8 Commitment Fee. Borrower shall have paid to Bank in full the
commitment fee referred to in Section 3.3 herein.
10.9 Other Documents. Such other documents and instruments as Bank may
reasonably request.
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11. CERTAIN CONDITIONS TO SUBSEQUENT ADVANCES. Subsequent advances
shall be conditioned upon the following conditions and each Line Request shall
constitute a representation by Borrower to Bank that each condition has been
met or satisfied:
11.1 Representations and Warranties. All representations and warranties
of Borrower contained herein or in the Loan Documents shall be true at and as of
the date of such advance as if made on such date, and each Line Request shall
constitute reaffirmation by Borrower that such representations and warranties
are then true.
11.2 No Default. No condition or event shall exist or have occurred at
or as of the date of such advance which would constitute an Event of Default
hereunder or a Potential Default.
11.3 Other Requirements. Bank shall have received all certificates,
authorizations, affidavits, schedules and other documents which are provided for
hereunder or under the Loan Documents, or which Bank may reasonably request.
12. DEFAULT AND REMEDIES.
12.1 Events of Default. The occurrence of any one or more of the
following events shall constitute an Event or Events of Default hereunder:
(a) The failure of Borrower to pay any amount of principal or
interest on the Line Note when due, or any fee or other sums payable
hereunder and the continuation of such failure for five (5) Business
Days following notice thereof from Bank, or the failure to pay any
other Bank Indebtedness on the date on which such payment is due,
whether on demand, at the stated maturity or due date thereof, or by
reason of any requirement for the prepayment thereof, by acceleration
or otherwise;
(b) The failure of Borrower to duly perform or observe any
obligation, covenant or agreement on its part contained herein or in
any other Loan Document not otherwise specifically constituting an
Event of Default under this Section 12.1 and such failure continues
unremedied for a period of thirty (30) days after the earlier of (i)
notice from Bank to Borrower of the existence of such failure, or (ii)
any officer or principal of Borrower knows or should have known of the
existence of such failure, provided that, in the event such failure is
incapable of remedy or consists of a default of any of the financial
covenants in Sections 7.1 or 7.2 herein, or was willfully caused or
permitted by Borrower shall not be entitled to any notice or grace
hereunder;
(c) The failure of Borrower to pay any Indebtedness for
borrowed money due to any third Person or the existence of any other
event of default under any loan, security
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agreement, mortgage or other agreement pertaining thereto binding
Borrower after the expiration of any notice and/or grace periods
permitted in such documents;
(d) The failure of Borrower to pay or perform any other
obligation to Bank under any other agreement or note or otherwise
arising, whether or not related to this Agreement, after the expiration
of any notice and/or grace periods, if any, permitted in such
documents;
(e) The adjudication of Borrower as a bankrupt or insolvent,
or the entry of an Order for Relief for Borrower or the entry of an
order appointing a receiver or trustee for Borrower of any of its
property or approving a petition seeking reorganization or other
similar relief under the bankruptcy or other similar laws of the United
States or any state or any other competent jurisdiction;
(f) A proceeding under any bankruptcy, reorganization,
arrangement of debt, insolvency, readjustment of debt or receivership
law is filed by or (unless dismissed within 75 days) against Borrower
or Borrower makes an assignment for the benefit of creditors, or
Borrower takes any action to authorize any of the foregoing;
(g) The suspension of the operation of Borrower's present
business, or Borrower becoming unable to meet its debts as they mature,
or the admission in writing by Borrower to such effect, or Borrower
calling any meeting of all or any material portion of its creditors for
the purpose of debt restructure;
(h) All or any part of the Collateral or the assets of
Borrower are attached, seized, subjected to a writ or distress warrant,
or levied upon, or come within the possession or control of any
receiver, trustee, custodian or assignee for the benefit of creditors;
(i) The entry of a final judgment for the payment of money
against Borrower which, within ten (10) days after such entry, shall
not have been discharged or execution thereof stayed pending appeal or
shall not have been discharged within five (5) days after the
expiration of any such stay;
(j) Any representation or warranty of Borrower in any of the
Loan Documents is discovered to be untrue in any material respect or
any statement, certificate or data furnished by Borrower pursuant
hereto is discovered to be untrue in any material respect as of the
date as of which the facts therein set forth are stated or certified;
(k) Borrower voluntarily or involuntarily dissolves or is
dissolved, terminates or is terminated;
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(1) Borrower is enjoined, restrained, or in any way prevented
by the order of any court or any administrative or regulatory agency,
the effect of which order restricts an Obligor from conducting all or
any material part of its business;
(m) A breach by Borrower occurs under any material agreement,
document or instrument, whether heretofore, now or hereafter existing
between Borrower and any other Person;
(n) A material and adverse change occurs in Borrower's
operations, management or financial condition or in the value of the
Collateral;
(o) The loss, suspension, revocation or failure to renew any
license or permit now held or hereafter acquired by Borrower, which
loss, suspension, revocation or failure to renew might have a material
adverse effect on the business profits, assets or financial condition
of Borrower;
(p) Subject to Section 4.4 herein, the occurrence of a
Collateral Document Default; or
(q) The occurrence of an Event of Default under (and as
defined in) the Resource America Loan.
12.2 Remedies. At the option of the Bank, upon the occurrence of an
Event of Default, or at any time thereafter:
(a) The entire unpaid principal of the Line, all other Bank
Indebtedness, or any part thereof, all interest accrued thereon, all
fees due hereunder and all other obligations of Borrower to Bank
hereunder or under any other agreement, note or otherwise arising will
become immediately due and payable without any further demand or
notice;
(b) The Line will immediately terminate and the Borrower will
receive no further extensions of credit thereunder;
(e) Bank may increase the interest rate on the Line to the
Default Rate, without notice;
(d) Bank may exercise all of the rights and remedies set forth
in Section 4 herein.
(e) Bank may enter the premises occupied by Borrower and take
possession of the Collateral and any records relating thereto; and/or
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(f) Bank may exercise each and every right and remedy granted
to it under the Loan Documents, under the Uniform Commercial Code and
under any other applicable law or at equity.
If an Event of Default occurs under Section 12.1(e) or (f), all Bank
Indebtedness shall become immediately due and payable.
12.3 Sale or Other Disposition of Collateral. The sale or other
disposition of the Collateral, or any part thereof, by Bank after an Event of
Default may be for cash, credit or any combination thereof, and Bank may
purchase all or any part of the Collateral at public or, if permitted by law,
private sale, and in lieu of actual payment of such purchase price, may set-off
the amount of such purchase price against the Bank Indebtedness then owing. Any
sales of the Collateral may be adjourned from time to time with or without
notice. Bank shall have the right to conduct such sales at Borrower's premises,
at Borrower's expense, or elsewhere, on such occasion or occasions as Bank may
see fit. Any notice required to be given by Bank of a sale or other disposition
or other intended action by Bank with respect to any of the Collateral which is
deposited in the United States mail, postage prepaid and duly addressed to
Borrower at the address specified in Section 13.1 below, at least five (5)
business days prior to such proposed action, shall constitute fair and
reasonable notice to Borrower of any such action. The net proceeds realized by
Bank upon any such sale or other disposition, after deduction for the expenses
of holding, preparing for sale, selling or otherwise disposing of the Collateral
incurred by Bank in connection therewith and all other costs and expenses
related thereto including attorney fees, shall be applied in such order as Bank,
in its sole discretion, elects, toward satisfaction of the Bank Indebtedness.
Bank shall account to Borrower for any surplus realized upon such sale or other
disposition, and Borrower shall remain liable for any deficiency. The
commencement of any action, legal or equitable, or the rendering of any judgment
or decree for any deficiency shall not affect Bank's security interest in the
Collateral. Borrower agrees that Bank has no obligation to preserve rights to
the Collateral against any other parties. Bank shall be under no obligation to
▇▇▇▇▇▇▇▇ any assets in favor of Borrower or any other party or against or in
payment of any or all of the Bank Indebtedness.
12.4 Set-Off. Without limiting the rights of Bank under applicable
law, Bank has and may exercise a right of set-off, a lien against and a security
interest in all property of Borrower now or at any time in Bank's possession in
any capacity whatsoever, including but not limited to any balance of any
deposit, trust or agency account, or any other bank account with Bank, as
security for all Bank Indebtedness. At any time and from time to time following
the occurrence of an Event of Default or a Potential Default, or Bank may
without notice or demand, set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by Bank to or for the credit of Borrower against
any or all of the Bank Indebtedness and Borrower's obligations under the Loan
Documents.
-37-
If any bank account of Borrower with Bank is attached or otherwise
liened or levied upon by any third party, Bank need not await the running of any
applicable grace period hereunder, but Bank shall have and be deemed to have the
immediate right of set-off and may apply the funds or amount thus set-off
against Borrower's obligations to the Bank.
12.5 Delay or Omission Not Waiver. Neither the failure nor any delay on
the part of Bank to exercise any right, remedy, power or privilege under the
Loan Documents upon the occurrence of any Event of Default or otherwise shall
operate as a waiver thereof or impair any such right, remedy, power or
privilege. No waiver of any Event of Default shall affect any later Event of
Default or shall impair any rights of Bank. No single, partial or full exercise
of any rights, remedies, powers and privileges by the Bank shall preclude
further or other exercise thereof. No course of dealing between Bank and
Borrower shall operate as or be deemed to constitute a waiver of Bank's rights
under the Loan Documents or affect the duties or obligations of Borrower.
12.6 Remedies Cumulative; Consents. The rights, remedies, powers and
privileges provided for herein shall not be deemed exclusive, but shall be
cumulative and shall be in addition to all other rights, remedies, powers and
privileges in Bank's favor at law or in equity. Whenever the Bank's consent or
approval is required or permitted, such consent or approval shall be at the sole
and absolute discretion of Bank.
12.7 Certain Fees, Costs, Expenses and Expenditures. Borrower agrees to
pay on demand all costs and expenses of Bank, including without limitation:
(a) all costs and expenses in connection with the preparation,
review, negotiation, execution, delivery and administration of the Loan
Documents, and the other documents to be delivered in connection
therewith, or any amendments, extensions and increases to any of the
foregoing (including, without limitation, attorney's fees and expenses,
and the cost of appraisals and reappraisals of Collateral), and the
cost of periodic lien searches and tax clearance certificates, as Bank
deems advisable;
(b) all losses, costs and expenses in connection with the
enforcement, protection and preservation of the Bank's rights or
remedies under the Loan Documents, or any other agreement relating to
any Bank Indebtedness, or in connection with legal advice relating to
the rights or responsibilities of Bank (including without limitation
court costs, attorney's fees and expenses of accountants and
appraisers); and
(c) any and all stamp and other taxes payable or determined to
be payable in connection with the execution and delivery of the Loan
Documents, and all liabilities to which Bank may become subject as the
result of delay in paying or omission to pay such taxes.
-38-
In the event Borrower shall fail to pay taxes, insurance, assessments,
costs or expenses which it is required to pay hereunder, or fails to keep the
Collateral free from security interests or lien (except as expressly permitted
herein), or fails to maintain or repair the Collateral as required hereby, or
otherwise breaches any obligations under the Loan Documents, Bank in its
discretion, may make expenditures for such purposes and the amount so expended
(including attorney's fees and expenses, filing fees and other charges) shall be
payable by Borrower on demand and shall constitute part of the Bank
Indebtedness.
With respect to any amount required to be paid by Borrower under this
Section, in the event Borrower fails to pay such amount on demand, Borrower
shall also pay to Bank interest thereon at the Default Rate. Borrower's
obligations under this Section shall survive termination of this Agreement.
12.8 Time is of the Essence. Time is of the essence in Borrower's
performance of their obligations under the Loan Documents.
13. COMMUNICATIONS AND NOTICES.
13.1 Communications and Notices. All notices, requests and other
communications made or given in connection with the Loan Documents shall be in
writing and, unless receipt is stated herein to be required, shall be deemed to
have been validly given if delivered personally to the individual or division or
department to whose attention notices to a party are to be addressed, or by
private carrier, or registered or certified mail, return receipt requested, or
by telecopy with the original forwarded by first-class mail, in all cases, with
charges prepaid, addressed as follows, until some other address (or individual
or division or department for attention) shall have been designated by notice
given by one party to the other:
To Borrower:
Resource Properties, Inc.
Resource Properties 53, Inc.
Resource Properties XXIV, Inc.
Resource Properties XL, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Facsimile Number: ▇▇▇-▇▇▇-▇▇▇▇
-39-
With a copy to:
Ledgewood Law Firm
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esquire
Facsimile Number: 215-735-2513
To Bank:
Sovereign Bank
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Facsimile Number: ▇▇▇-▇▇▇-▇▇▇▇
14. WAIVERS.
14.1 Waivers. In connection with any proceedings under the Loan
Documents, including without limitation any action by Bank in replevin,
foreclosure or other court process or in connection with any other action
related to the Loan Documents or the transactions contemplated hereunder,
Borrower waives:
(a) all errors, defects and imperfections in such proceedings;
(b) all benefits under any present or future laws exempting
any property, real or personal, or any part of any proceeds thereof
from attachment, levy or sale under execution, or providing for any
stay of execution to be issued on any judgment recovered under any of
the Loan Documents or in any replevin or foreclosure proceeding, or
otherwise providing for any valuation, appraisal or exemption;
(c) all rights to inquisition on any real estate, which real
estate may be levied upon pursuant to a judgment obtained under any of
the Loan Documents and sold upon any writ of execution issued thereon
in whole or in part, in any order desired by Bank;
(d) presentment for payment, demand, notice of demand, notice
of non-payment, protest and notice of protest of any of the Loan
Documents, including the Line Note;
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(e) any requirement for bonds, security or sureties required
by statute, court rule or otherwise;
(f) any demand for possession of Collateral prior to
commencement of any suit; and
(g) all rights to claim or recover attorney's fees and costs
in the event that Borrower is successful in any action to remove,
suspend or enforce a judgment entered by confession.
14.2 Forbearance, Bank may release, compromise, forbear with respect
to, waive, suspend, extend or renew any of the terms of the Loan Documents,
without notice to Borrower.
14.3 Limitation on Liability. Borrower shall be responsible for and
Bank is hereby released from any claim or liability in connection with:
(a) Safekeeping any Collateral;
(b) Any loss or damage to any Collateral;
(c) Any diminution in value of the Collateral; or
(d) Any act or default of another Person.
Bank shall only be liable for any act or omission on its part
constituting willful misconduct. In the event that Bank breaches its required
standard of conduct, Borrower agrees that Bank's liability shall be only for
direct damages suffered and shall not extend to consequential or incidental
damages. In the event Borrower brings suit against Bank in connection with the
transactions contemplated hereunder and Bank is found not to be liable, Borrower
will indemnify and hold Bank harmless from all costs and expenses, including
attorney's fees, incurred by Bank in connection with such suit. This Agreement
is not intended to obligate Bank to take any action with respect to the
Collateral or to incur expenses or perform any obligation or duty of Borrower.
15. SUBMISSION TO JURISDICTION.
15.1 Submission to Jurisdiction. Borrower hereby consents to the
exclusive jurisdiction of any state or federal court located within the
Commonwealth of Pennsylvania, and irrevocably agrees that, subject to the Bank's
election, all actions or proceedings relating to the Loan Documents or the
transactions contemplated hereunder shall be litigated in such courts, and
Borrower waives any objection which they may have based on lack of personal
-41-
jurisdiction, improper venue or forum non conveniens to the conduct of any
proceeding in any such court and waives personal service of any and all process
upon it, and consents that all such service of process be made by mail or
messenger directed to it at the address set forth in Section 13.1. Borrower
hereby irrevocably appoints any officer, trustee, or partner of either of them
as their agent for the purpose of accepting service of any process within the
Commonwealth of Pennsylvania. Nothing contained in this Section 15.1 shall
affect the right of Bank to serve legal process in any other manner permitted by
law or affect the right of Bank to bring any action or proceeding against
Borrower or its property in the courts of any other jurisdiction.
16. MISCELLANEOUS.
16.1 Brokers. The transaction contemplated hereunder was brought about
and entered into by Bank and Borrower acting as principals and without any
brokers, agents or finders being the effective procuring cause hereof. Borrower
represents to Bank that Borrower has not committed Bank to the payment of any
brokerage fee or commission in connection with this transaction. Whether any
such claim is made against Bank by any broker, finder or agent or any other
Person, Borrower agrees to indemnify, defend and hold Bank harmless against any
such claim, at Borrower's own cost and expense, including Bank's attorneys'
fees. Borrower further agrees that until any such claim or demand is adjudicated
in Bank's favor, the amount claimed and/or demanded shall be deemed part of the
Bank Indebtedness secured by the Collateral.
16.2 No Joint Venture. Nothing contained herein is intended to permit
or authorize Borrower to make any contract on behalf of Bank, nor shall this
Agreement be construed as creating a partnership, joint venture or making Bank
an investor in Borrower.
16.3 Survival. All covenants, agreements, representations and
warranties made by Borrower in the Loan Documents or made by or on its behalf in
connection with the transactions contemplated here shall be true at all times
this Agreement is in effect and shall survive the execution and delivery of the
Loan Documents, any investigation at any time made by Bank or on its behalf and
the making by Bank of the loans or advances to Borrower. All statements
contained in any certificate, statement or other document delivered by or on
behalf of Borrower pursuant hereto or in connection with the transactions
contemplated hereunder shall be deemed representations and warranties by
Borrower.
16.4 No Assignment by Borrower. Borrower may not assign any of its
rights hereunder without the prior written consent of Bank, and Bank shall not
be required to lend hereunder except to Borrower as it presently exists.
16.5 Assignment or Sale by Bank. Bank may sell, assign or participate
all or a portion of its interest in the Loan Documents and in connection
therewith may make available
-42-
to any prospective purchaser, assignee or participant any information relative
to Borrower in its possession.
16.6 Binding Effect. This Agreement and all rights and powers granted
hereby will bind and inure to the benefit of the parties hereto and their
respective permitted successors and assigns.
16.7 Severability. The provisions of this Agreement and all other Loan
Documents are deemed to be severable, and the invalidity or unenforceability of
any provision shall not affect or impair the remaining provisions which shall
continue in full force and effect.
16.8 No Third Party Beneficiaries. The rights and benefits of this
Agreement and the Loan Documents shall not inure to the benefit of any third
party.
16.9 Modifications. No modification of this Agreement or any of the
Loan Documents shall be binding or enforceable unless in writing and signed by
or on behalf of the party against whom enforcement is sought.
16.10 Holidays. If the day provided herein for the payment of any
amount or the taking of any action falls on a Saturday, Sunday or public holiday
at the place for payment or action, then the due date for such payment or action
will be the next succeeding Business Day.
16.11 Law Governing. This Agreement has been made, executed and
delivered in the Commonwealth of Pennsylvania and will be construed in
accordance with and governed by the laws of such Commonwealth.
16.12 Integration. The Loan Documents shall be construed as integrated
and complementary of each other, and as augmenting and not restricting Bank's
rights, powers, remedies and security. The Loan Documents contain the entire
understanding of the parties thereto with respect to the matters contained
therein and supercede all prior agreements and understandings between the
parties with respect to the subject matter thereof and do not require parol or
extrinsic evidence in order to reflect the intent of the parties. In the event
of any inconsistency between the terms of this Agreement and the terms of the
other Loan Documents, the terms of this Agreement shall prevail.
16.13 Exhibits and Schedules. All exhibits and schedules attached
hereto are hereby made a part of this Agreement.
16.14 Headings. The headings of the Articles, Sections, paragraphs and
clauses of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part of this Agreement.
-43-
16.15 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
16.16 Waiver of Right to Trial by Jury. BORROWER AND BANK WAIVE ANY
RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a)
ARISING UNDER ANY OF THE LOAN DOCUMENTS OR (b) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF BORROWER OR BANK WITH RESPECT TO ANY OF
THE LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. BORROWER AND BANK AGREE AND
CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF BORROWER AND BANK TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY. BORROWER ACKNOWLEDGES THAT IT HAS HAD THE OPPORTUNITY TO CONSULT
WITH COUNSEL REGARDING THIS SECTION, THAT IT FULLY UNDERSTANDS ITS TERMS,
CONTENT AND EFFECT, AND THAT IT VOLUNTARILY AND KNOWINGLY AGREES TO THE TERMS OF
THIS SECTION.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
RESOURCE PROPERTIES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
RESOURCE PROPERTIES 53, INC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
RESOURCE PROPERTIES XXIV, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
RESOURCE PROPERTIES XL, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
SOVEREIGN BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
-45-
SCHEDULES
Schedule 5.3 Ownership Interests, Pledges, etc. of Borrower
Schedule 5.4 Stock owned by Borrower
Schedule 5.7 Pending or Threatened Litigation or Proceedings Against or
Affecting Borrower
Schedule 5.13 Names (including tradenames) and Addresses of Borrower,
identifying chief executive office
Schedule 5.18 Liens and Encumbrances
Schedule 5.22 Permitted Bank Accounts (including name and address of
depository bank)
Schedule 6.1 Permitted Indebtedness for Borrowed Money
Schedule 6.7 Permitted Liens and Security Interests
Schedule 6.16 Permitted Loans to Affiliates, Shareholders, Officers or
Directors
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o - To be Assigned of Record
* - Originals to be Delivered at Closing
Exhibit A
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
* 1. $17,459,600 Mortgage Note dated January 25, 1980 by American
National Bank and Trust Company of Chicago, not personally,
but as Trustee under Trust Agreement number 42220 to Banco Mortgage
Company, as assigned as follows:
February 6, 1980: Banco Mortgage Company to Illinois Housing
Development Authority
September 10, 1982: Illinois Housing Development Authority to Banco
Mortgage Company
September 10, 1982: Banco Mortgage Company to Government National
Mortgage Association
January 16, 1987: Government National Mortgage Association to Secretary
of Housing and Urban Development
June 27, 1996: Secretary of Housing and Urban Development to
Multifamily Mortgage Trust 1996-1
August 5, 1996: Multifamily Mortgage Trust 1996-1 to ALI Inc.
August 7, 1997: ALI Inc. to Sasco 1997-N1 LLC
September 23, 1998: Sasco 1997-Nl LLC to Resource Properties 53, Inc.
*o 2. $17,459,600 Mortgage dated January 25, 1980 by American National Bank
& Trust Company of Chicago, not personally, but as Trustee under Trust
Agreement Number 42220 to Banco Mortgage Company, recorded as document
number 25350099 on February 5, 1980 in the office of the Recorder of
Deeds of ▇▇▇▇ County, Illinois, as modified by modification dated
September 1, 1982 and recorded September 9, 1982 as document number
26346078, and as assigned as follows:
Assigned to Illinois Housing Development Authority by assignment dated
February 6, 1980 and recorded February 6, 1980 as document number
25352586
Assigned to Banco Mortgage Company by assignment dated September 10,
1982 and recorded September 13, 1982 as document number 26349507
Assigned to Government National Mortgage Association by assignment
dated September 10, 1982 and recorded September 13, 1982 as document
number 26349508
Assigned to Secretary of Housing and Urban Development by assignment
dated January 16, 1987 and recorded January 23, 1987 as document number
87046503
Assigned to Multifamily Mortgage Trust 1996-1 by assignment dated June
27, 1996 and recorded July 2, 1996 as document number 96509324
Assigned to ALI, Inc. by assignment dated August 5, 1996 and recorded
August 12, 1996 as document number 96615677
Assigned to ▇▇▇▇▇ 1997-N1 LLC by assignment dated August 7, 1997 and
recorded August 22, 1997 as document number 97619411
Assigned to Resource Properties 53, Inc. by assignment dated September
23, 1998 and recorded October 2, 1998 as document number 98884939
*o 3. Security Agreement (Chattel Mortgage) dated January 25, 1980 by
American National Bank & Trust Company of Chicago, not personally, but
as Trustee under Trust Agreement Number 42220 to Banco Mortgage Company
as assigned as follows:
Assigned by Banco Mortgage Company to Illinois Housing Development
Authority by assignment dated February 6, 1980
Assigned by Illinois Housing Development Authority to Banco Mortgage
Company by assignment dated September 10, 1982
Assigned by Banco Mortgage Company to Government National Mortgage
Association by assignment dated September 10, 1982
-48-
Assigned by Government National Mortgage Association to Secretary of
Housing & Urban Development by assignment dated January 16, 1987
Assigned by Secretary of Housing & Urban Development to Multifamily
Mortgage Trust 1996-1 by assignment dated June 27, 1996
Assigned by Multifamily Mortgage Trust 1996-1 to ALI, Inc. by
assignment dated August 5, 1996
Assigned by ALI, Inc. to ▇▇▇▇▇ 1997-1 LLC by assignment dated August 7,
1997
Assigned by ▇▇▇▇▇ 1997-N1 LLC to Resource Properties 53, Inc. by
assignment dated September 23, 1998
*o 4. Security Agreement (Chattel Mortgage) dated January 25, 1980 by ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Partnership to Banco Mortgage Company and assigned as
follows:
Assigned by Banco Mortgage Company to Illinois Housing Development
Authority by assignment dated February 6, 1980
Assigned by Illinois Housing Development Authority to Banco Mortgage
Company by assignment dated September 10, 1982
Assigned by Banco Mortgage Company to Government National Mortgage
Association by assignment dated September 10, 1982
Assigned by Government National Mortgage Association to Secretary of
Housing & Urban Development by assignment dated January 16, 1987
Assigned by Secretary of Housing & Urban Development to Multifamily
Mortgage Trust 1996-1 by assignment dated June 27, 1996
Assigned by Multifamily Mortgage Trust 1996-1 to ALI, Inc. by
assignment dated August 5, 1996
Assigned by ALI, Inc. to ▇▇▇▇▇ 1997-1 LLC by assignment dated August 7,
1997
Assigned by ▇▇▇▇▇ 1997-N1 LLC to Resource Properties 53, Inc. by
assignment dated September 23, 1998
-49-
5. Regulatory Agreement for Insured Multifamily Housing Projects
between American National Bank & Trust Company of Chicago, not
personally, but as Trustee under Trust Number 42220, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ Partnership and the Secretary of Housing & Urban Development
dated January 25, 1980, recorded as document number 25350100 on
February 5, 1980 with the ▇▇▇▇ County Recorder of Deeds, as amended
March 6, 1984 and recorded March 6, 1984 with the ▇▇▇▇ County Recorder
of Deeds as document number 26994557, and as partially released by a
Partial Release of Regulatory Agreement dated February 5, 1980 and
recorded July 2, 1996 with the ▇▇▇▇ County Recorder of Deeds as
document number 96509325.
6. Title Insurance Policy Number 401-632213 issued by Commonwealth Land
Title Insurance Company dated February 6, 1980, name of insured: Banco
Mortgage Company, an Iowa corporation, and/or the Secretary of Housing
and Urban Development of Washington, D.C., and their respective
successors or assigns as their interest may appear.
7. Provisional Holding Arrangement dated September 24, 1993 with an
effective date of October 1, 1993 between 1212 South Michigan
Partnership, American Land Trust, Trustee under Trust Number 42220 and
the Secretary for Housing & Urban Development.
8. Non-Performing Loan Purchase Agreement between ▇▇▇▇▇ 1997-N1 LLC and
Resource Properties, Inc. dated July 29, 1998, as assigned by
assignment of Non-Performing Loan Purchase Agreement between Resource
Properties, Inc. and Resource Properties 53, Inc. dated September 9,
1998.
9. Fidelity National Title Insurance Company Title Policy Number
5412-1177380 dated October 2, 1998 in the amount of $17,250,000 issued
by Prairie Title Services, Inc. to Resource Properties 53, Inc., a
Delaware corporation, its respective successors and assigns as their
interest may appear.
10. Survey prepared by National Survey Service, Inc. prepared March 27,
1970, last revised September 25, 1998.
11. All other documents, agreements, assignments and other instruments
executed and delivered in connection with the Loan not otherwise
listed herein.
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o - To be Assigned of Record
* - Originals to be Delivered at Closing
Factor's Walk Partners
A. PHASE ONE
1. Revised commitment dated as of May 17, 1985 between Household
Finance Corporation and Factor's Walk Partners.
* 2. Promissory Note dated as of August 9, 1985, as amended and restated
in its entirety on July 7, 1995 made by Factor's Walk Partners in favor of
Household Finance Corporation in the original principal amount of $6,272,000,
and assigned on December 30, 1996 to Eastern Bancorporation, Inc. and as
modified as follows:
a. Modification Agreement dated as of July 7, 1995
b. First Amendment to Modification Agreement dated as of December 30,
1996
*o 3. Deed to Secured Debt, Assignment of Rents and Security Agreement
dated as of August 9, 1985 made by Factor's Walk Partners in favor of Household
Finance Corporation, recorded August 9, 1985 in Deed Book 127R, page 310 and
assigned to Eastern Bancorporation, Inc. pursuant to an Assignment of Note, Deed
to Secure Debt and Other Loan Documents dated as of December 30, 1996 and
recorded in the office of the Recorder of Deeds of Chatham County, Georgia in
Book 183-T, page 150.
*o 4. Security Agreement dated as of August 9, 1985 made by Factor's Walk
Partners in favor of Household Finance Corporation, as assigned to Eastern
Bancorporation, Inc. pursuant to an Assignment of Note, Deed to Secure Debt and
Other Loan Documents dated as of December 30, 1996 and recorded February 14,
1997 in the office of the Recorder of Deeds of Chatham County, Georgia in Book
183-T, page 150.
*o 5. Assignment of Contracts, Plans and Specifications dated as of
August 9, 1985 made by Factor's Walk Partners in favor of Household Finance
Corporation, as assigned to Eastern Bancorporation, Inc. pursuant to an
Assignment of Note, Deed to Secure Debt and Other Loan Documents dated as of
December 30, 1996 and recorded February 14, 1997 in the office of the Recorder
of Deeds of Chatham County, Georgia in Book 183-T, page 150.
*o 6. Loan and Reimbursement Agreement dated August 9, 1985, as amended
July 7, 1995 between and among Factor's Walk Partners, ▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇ and
Household
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Finance Corporation, as assigned to Eastern Bancorporation, Inc. pursuant to an
Assignment of Note, Deed to Secure Debt and Other Loan Documents dated as of
December 30, 1996 and recorded February 14, 1997 in the office of the Recorder
of Deeds of Chatham County, Georgia in Book 183-T, page 150.
*o 7. Pledge and Security Agreement dated as of August 9, 1995 made by
Factor's Walk Partners in favor of Household Finance Corporation, as assigned to
Eastern Bancorporation, Inc. pursuant to an Assignment of Note, Deed to Secure
Debt and Other Loan Documents dated as of December 30, 1996 and recorded
February 14, 1997 in the office of the Recorder of Deeds of Chatham County,
Georgia in Book 183-T, page 150.
*o 8. Escrow Agreement dated as of August 9, 1985 between Factor's Walk
Partners, Household Finance Corporation and Mellon Bank, N.A., as assigned to
Eastern Bancorporation, Inc. pursuant to an Assignment of Note, Deed to Secure
Debt and Other Loan Documents dated as of December 30, 1996 and recorded
February 14, 1997 in the office of the Recorder of Deeds of Chatham County,
Georgia in Book 183-T, page 150.
9. Title Insurance Policy No. B1970495 issued by Minnesota Title
Insurance Company (now known as Old Republic National Title Insurance Company)
dated August 9, 1985, named of insured: Household Finance Corporation, a
Delaware corporation.
*o 10. Assignment of Note, Deed to Secure Debt and Other Loan Documents by
and between Household Finance Corporation and Eastern Bancorporation, Inc.
recorded with the Recorder of Deeds of Chatham County, Georgia on February 14,
1997 in Book 183-T, page 150.
11. Assignment and Assumption Agreement dated as of December 30, 1996
by and between Household Finance Corporation and Eastern Bancorporation, Inc.
12. Assignment and Assumption of Guaranty Agreement dated December 30,
1996 from Household Finance Corporation to Eastern Bancorporation, Inc.
* 13. Guaranty Agreement dated as of August 1, 1985 of Household Finance
Corporation to Mellon Bank, N.A. relating to the Bonds, as amended July 7, 1995.
* 14. Guaranty from ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ to Household Finance Corporation
of the indebtedness of Factor's Walk Partners under the $6,272,700 Mortgage
Note.
15. Acknowledgment of Guaranty Agreement and Limitation on Recourse
from Resource Properties XXIV, Inc. to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Financial, Inc. (formerly
known as Eastern Bancorporation, Inc.).
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16. All other documents, agreements and assignments and other
instruments executed and delivered in connection with the Loan not otherwise
listed herein.
B. PHASE TWO:
1. Amended and Restated Lease dated November 1, 1996 between The ▇▇▇▇▇▇
Trust, as owner, and ▇▇▇▇▇▇ Holdings, L.L.C., as tenant, together with a
Memorandum of Lease recorded with the Chatham County, Georgia Recorder of Deeds
on November 6, 1997 in Book 189B, page 253.
2. Sublease dated November 15, 1995 between ▇▇▇▇▇▇ Holdings, L.L.C., as
sub-landlord and Factor's Walk Partners, as sub-tenant, together with a
Memorandum of Sublease recorded in the Chatham County, Georgia Recorder of Deeds
on November 6, 1997 in Book 189B, page 255.
3. Assignment of Sublease from Factor's Walk Partners to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Group (Limited), L.P. dated September 23, 1997 and recorded with the Chatham
County, Georgia Recorder of Deeds on November 6, 1997 in Book 189-B, at page
259.
4. Assignment made as of March 5, 1999 by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Group
(Limited), L.P. to Resource Properties XL, Inc. and recorded ______ with the
Chatham County, Georgia Recorder of Deeds in Book ____, at page ______.
5. Tri-Party Agreement dated June 19, 1997 among The ▇▇▇▇▇▇ Trust,
▇▇▇▇▇▇ Holdings, L.L.C., and Factor's Walk Partners together with a Memorandum
of Tri-Party Agreement recorded with the Chatham County, Georgia Recorder of
Deeds on November 6, 1997 in Book 189B, page 256.
6. Agreement dated March ____, 1999 among The ▇▇▇▇▇▇ Trust, Resource
Properties XL, Inc. and Factor's Walk Partners.
7. All other documents, agreements, assignments and other instruments
executed and delivered in connection with the Loan not otherwise listed herein.
-▇▇-
▇▇▇▇▇▇▇ "▇"
▇▇▇▇ ▇▇▇▇▇▇
1 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Obligor: American National Bank & Trust
Company of Chicago, as Trustee under
Trust No. 42220
Beneficial Owner: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Partnership
2. ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Obligor: Factor's Walk Partners
3. ▇▇▇-▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Obligor: Resource Properties XL, Inc.
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SCHEDULE 5.3
Ownership Interests of Borrower
The Borrower is the sole owner of Downtown Development Authority For The City of
Savannah Variable Rate Industrial Development Revenue Bonds.
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SCHEDULE 5.4
Stock owned by Borrower
100% of all issued and outstanding stock of:
1. Resource Properties II, Inc. through Resource Properties 53, Inc.
2. W.S. Mortgage Acquisition, Inc.
3. RAI Financial, Inc.
4. Resource Commercial Mortgages, Inc.
5. Rancho Investments, Inc.
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SCHEDULE 5.7
Pending Litigation or Proceedings Against Borrower
NONE
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SCHEDULE 5.13
Names and Addresses of Borrower
Resource Properties, Inc.
Resource Properties XXIV, Inc.
Resource Properties XL, Inc.
Resource Properties 53, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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SCHEDULE 5.18
Liens and Encumbrances
The property and assets of the Borrower are subject to an $875,000 loan made by
▇▇▇▇▇▇▇ Associates.
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SCHEDULE 5.22
Permitted Bank Accounts
Jefferson Bank
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
1. Resource Properties, Inc.
5159-00590
2. Resource Properties, Inc.
43-79934
3. Resource Properties XXIV, Inc.
7500-66150
4. Resource Properties XL, Inc.
42-73834
5. Resource Properties 53, Inc.
43-08638
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SCHEDULE 6.1
Permitted Indebtedness
Borrower's existing indebtedness is as follows:
Resource Properties XXIV, Inc. $875,000 loan from ▇▇▇▇▇▇▇ Associates
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SCHEDULE 6.7
Permitted Liens and Security Interests
Borrower's liens and security interests are as follows:
Resource Properties XXIV, Inc. $875,000 loan from ▇▇▇▇▇▇▇ Associates
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SCHEDULE 6.16
Transactions with Affiliates
Borrower's indebtedness with affiliates consists of an $875,000 loan from
▇▇▇▇▇▇▇ Associates.
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