EXHIBIT 99-(b)(17)
FIRST AMENDMENT TO AND
WAIVER OF CREDIT AGREEMENT
FIRST AMENDMENT TO AND WAIVER OF CREDIT AGREEMENT (the "Amendment"),
dated as of April 18, 2001 by and among CORNERSTONE REALTY INCOME TRUST, INC., a
Virginia corporation ("Cornerstone"), CRIT-NC, LLC, a Virginia limited liability
company ("CRIT-NC" and, together with Cornerstone, the "Companies" and each a
"Company"), FIRST UNION NATIONAL BANK (the "Lender") and FIRST UNION NATIONAL
BANK, as administrative agent for the Lender (in such capacity, the
"Administrative Agent").
STATEMENT OF PURPOSE
WHEREAS, the Companies, the Lender and the Administrative Agent are
parties to a Credit Agreement dated as of December 12, 2000 (the "Credit
Agreement"); and
WHEREAS, the prospective redemption by Cornerstone of its preferred
stock will create an Event of Default as more particularly set forth below; and
WHEREAS, the Companies have requested, and the Administrative Agent and
the Lender have agreed, that said Event of Default be waived; and
WHEREAS, the parties hereto wish to amend the Credit Agreement as more
specifically provided herein; and
WHEREAS, subject to and upon the terms and conditions herein set forth,
the Lender and the Administrative Agent are willing to continue to make
available to the Companies the credit facilities provided for in the Credit
Agreement;
NOW, THEREFORE, in consideration of the premises and agreements
contained herein, and for good and valuable consideration, the receipt and
sufficiency of which are acknowledged by the parties hereto, the parties hereto
hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined shall
have the respective meanings provided to such terms in the Credit Agreement, as
amended hereby.
2. Amendments to the Credit Agreement.
a. The definition of the term "Aggregate Commitment" contained in Section 1.1 of
the Credit Agreement is hereby deleted in its entirety and the following
definition is hereby substituted in lieu thereof:
"`Aggregate Commitment' means the aggregate amount of the Lenders'
Commitments hereunder, as such amount may be reduced or modified at any
time or from time to time pursuant to the terms hereof. During the
Overline Period,
the Aggregate Commitment shall be $100,000,000, and at all times
thereafter the Aggregate Commitment shall be $50,000,000."
b. The following definitions of the terms "Overline
Commitment," "Overline Period," "Overline Termination Date" and "Permanent
Commitment" are hereby added to Section 1.1 of the Credit Agreement in the
appropriate alphabetical order:
"`Overline Commitment' shall mean $50,000,000."
"`Overline Period' shall mean that period from April 18, 2001 through
and including the Overline Termination Date."
"`Overline Termination Date' shall mean the earlier of (i) October 15,
2001 and (ii) the date on which the Borrowers shall repay the
outstanding principal amount of all Loans in excess of the Permanent
Commitment, together with all accrued and unpaid interest thereon, in
full."
"`Permanent Commitment' shall mean $50,000,000."
c. The following sentence is hereby added as a new sentence to
the end of Section 2.1 of the Credit Agreement:
"Provided, however, that notwithstanding anything to the contrary
contained in this Section 2.1 or elsewhere in this Agreement, any and
all Loans borrowed by the Borrowers in excess of the Permanent
Commitment under the Overline Commitment (i) shall be made available to
the Borrowers by the Lenders on April 18, 2001 and on no other date;
(ii) may be repaid by the Borrowers to the Lenders prior to the
Overline Termination Date subject to the terms and conditions hereof
(provided, that if such repayment requires the repayment of any LIBOR
Rate Loan, such repayment may be made only on the last day of the then
current Interest Period applicable thereto unless such repayment is
accompanied by any amount required to be paid pursuant to Section 4.9
hereof), but any amount so repaid may not be reborrowed by the
Borrowers; and (iii) must be repaid in full to the Lenders on the
Overline Termination Date."
d. Section 2.3(a) of the Credit Agreement is hereby deleted in
its entirety and the following paragraph is hereby substituted in lieu thereof:
"(a) Repayment of Loans. The Borrowers shall repay (i) the outstanding
principal amount of all Loans in excess of the Permanent Commitment in
full, with all accrued but unpaid interest thereon, on or prior to the
Overline Termination Date, and (ii) the outstanding principal amount of
all Loans under the Permanent Commitment in full, with all accrued but
unpaid interest thereon, on the Termination Date."
e. Section 2.7 of the Credit Agreement is hereby deleted in
its entirety and the following paragraph is hereby substituted in lieu thereof:
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"SECTION 2.7 Use of Proceeds. The Borrowers shall use the proceeds of
the Loans for working capital and general corporate purposes, including
(a) to finance the acquisition of apartment properties, (b) to finance
the rehabilitation of apartment properties, and (c) during the Overline
Period, to finance the cash tender component of Cornerstone's
redemption of its capital stock; provided, however, that the Overline
Commitment shall not be used for the purposes stated in subsections (a)
and (b) above."
f. The following sentence is hereby added as the last sentence
of Section 4.1(c) of the Credit Agreement:
"Notwithstanding anything to the contrary which may be set forth above
in this Section 4.1(c) or elsewhere in this Agreement, the Applicable
Margin with respect to LIBOR Rate Loans shall be 1.20% at all times
during the Overline Period."
g. The following paragraph is hereby added as a new Section
4.3(d) to the Credit Agreement:
"(d) Overline Repayment Fee. On the Overline Termination Date, the
Borrowers shall pay to the Administrative Agent, for the account of the
Lenders, a non-refundable overline termination fee at a rate equal to
0.50% of the Overline Commitment, such overline termination fee to be
distributed by the Administrative Agent to the Lenders pro rata in
accordance with the Lenders' respective Commitment Percentages;
provided, however, that notwithstanding the foregoing, the Borrowers
shall not owe the overline termination fee provided for herein in the
event the Borrowers repay in full the outstanding principal amount of
the Loans in excess of the Permanent Commitment with the proceeds of
Debt in the nature of a conduit-type financing or financings issued to
the Borrowers by First Union National Bank."
h. Section 9.3 of the Credit Agreement is hereby deleted in
its entirety and the following paragraph is hereby substituted in lieu thereof:
"SECTION 9.3 Minimum Shareholder's Equity. As of any fiscal quarter
end, permit Shareholder's Equity to be less than the sum of (a)
$350,000,000 plus (b) seventy-five percent (75%) of the Net Equity
Proceeds from any equity offering after April 18, 2001."
i. Schedule 1.1(a) to the Credit Agreement is hereby deleted
in its entirety and the form of Schedule 1.1(a) attached as ANNEX I hereto shall
be substituted in lieu thereof for all purposes.
3. Waiver of Certain Terms of the Credit Agreement.
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(a) The provisions of Section 10.8 of the Credit Agreement are
waived to the extent, and only to the extent, necessary to acknowledge the
prospective redemption in full by Cornerstone of its outstanding shares of
preferred capital stock represented by the Series A Convertible Preferred
Shares. The Administrative Agent and the Lender hereby specifically waive that
certain Event of Default which would otherwise arise under the provisions of
Section 11.1(d) of the Credit Agreement by reason of such stock redemption.
(b) The waiver set forth above is to be strictly construed and
limited by the conditions specified herein. Said waiver is specific and limited
and shall not constitute an amendment of the Credit Agreement, or a
modification, acceptance or waiver of any other provisions of the Credit
Agreement or any other document, instrument or agreement entered into in
connection therewith, or any right to a further modification, acceptance or
waiver of the provisions referred to therein or any other provisions.
4. This Amendment shall become effective as of the date hereof,
provided that the Administrative Agent shall have received by such date the
following items:
a. A copy of this Amendment executed by the Companies, the
Lender and the Administrative Agent (whether such parties shall have
signed the same or different copies);
b. An amended and restated Note of even date herewith in form
and substance satisfactory to the Administrative Agent, made by the
Companies payable to the order of the Lender;
c. Certificates of even date herewith signed by an authorized
officer of each of the Companies and attested to by an authorized
officer of each of the Companies certifying that (i) the organizational
documents and resolutions of such Company previously delivered to the
Administrative Agent remain in full force and effect except as provided
therein, (ii) such Company remains in good standing, (iii) all
representations and warranties of such Company previously made to the
Administrative Agent and the Lender remain true, complete and accurate,
and (iv) no Event of Default or Default has occurred and is continuing
(other than such Events of Default as may have been waived hereby);
d. Resolutions of each of the Companies authorizing the
execution of this Amendment and the Note referred to in subsection b.
above; and
e. Payment to the Administrative Agent, for the benefit of the
Lender, of a one-time non-refundable overline commitment fee in the
amount of $125,000.
5. This Amendment is limited and, except as set forth herein, shall not
constitute a modification, acceptance or waiver of any other provision of the
Credit Agreement, or any other document or instrument entered into in connection
therewith.
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6. This Amendment may be executed in any number of counterparts by the
different parties hereto on separate counterparts, each of which counterparts
when executed and delivered shall be an original, but all of which together
shall constitute one and the same instrument. A complete set of counterparts
shall be lodged with the Companies and the Administrative Agent.
7. This Amendment and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by the laws of the
State of North Carolina.
8. From and after the date hereof, all references in the Credit
Agreement, and any other document or instrument entered into in connection
therewith, to the Credit Agreement shall be deemed to be references to the
Credit Agreement as amended hereby.
9. EACH OF THE LENDER, THE ADMINISTRATIVE AGENT AND EACH OF THE
COMPANIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AMENDMENT AND ANY AGREEMENT, DOCUMENT OR INSTRUMENT
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY RELATING HERETO OR THERETO. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
THE LENDER AND THE ADMINISTRATIVE AGENT TO ENTER INTO THIS AMENDMENT.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and sealed as of the day and year first above written.
CORNERSTONE REALTY INCOME TRUST,
INC., a Virginia corporation
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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Title Director, Chief Financial Oficer and Secretary
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CRIT-NC, LLC, a Virginia limited liability
company
By: CORNERSTONE REALTY INCOME
TRUST, INC., a Virginia corporation, its
sole Member/Manager
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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Title Director, Chief Financial Officer and Secretary
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FIRST UNION NATIONAL BANK, a national
banking association, as Administrative Agent and as
sole Lender
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title Vice President
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ANNEX I
SCHEDULE 1.1(a)
TO
CREDIT AGREEMENT
DATED AS OF DECEMBER 12, 2000
BY AND AMONG CORNERSTONE REALTY INCOME TRUST, INC., CRIT-NC, LLC,
FIRST UNION NATIONAL BANK AS ADMINISTRATIVE
AGENT AND THE LENDERS PARTY THERETO
LENDERS AND COMMITMENTS
LENDER COMMITMENT PERCENTAGE
------ ---------- ----------
First Union National Bank (i) During Overline Period, $100,000,000; 100.00%
One First ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇ (ii) at all times thereafter, $50,000,000
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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