LINE OF CREDIT AND LETTER OF CREDIT AGREEMENT
REDACTED – AS
FILED
[Portions of this Exhibit
have been omitted pursuant
to a Request for
Confidential Treatment]
BRACKETS “[ ]*” ARE USED TO
INDICATE WHERE A PORTION OF THIS EXHIBIT HAS BEEN
OMITTED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS. A COMPLETE COPY OF THIS EXHIBIT, CONTAINING ALL
OF THE OMITTED PORTIONS, HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION TOGETHER WITH THE REQUEST FOR CONFIDENTIAL
TREATMENT.
This Line
of Credit and Letter of Credit Agreement ("Agreement"), dated as of the 14th day
of March, 2003, by and between HARDY CREDIT CO., a Pennsylvania limited
partnership ("Borrower"),
AND
UNITED
BANK, INC., a West Virginia banking corporation ("Bank").
WITNESSETH:
WHEREAS,
Borrower has requested Bank to extend a revolving line of credit to Borrower in
the principal amount not to exceed TEN MILLION and 00/100 DOLLARS
($10,000,000.00) to use for certain purposes as set forth herein;
and
WHEREAS,
Borrower has requested Bank to issue on its behalf an irrevocable standby letter
of credit in the amount not to exceed FIVE MILLION and 00/100 DOLLARS
($5,000,000.00) to a beneficiary designated by Borrower for its benefit;
and
WHEREAS,
Bank is willing to extend such credit pursuant to the terms and conditions. set
forth herein, and that separate application and agreement for letter of credit
dated of even date herewith (the "Letter of Credit Agreement").
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants herein
contained and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE
I
DEFINITIONS
1.01 Certain Definitions.
In addition to other words and terms defined elsewhere in this Agreement, the
following words and terms shall have the following meanings, respectively,
unless the context otherwise clearly requires:
"Affiliate"
shall mean any Person which directly or indirectly controls, or is controlled
by, or is under common control with. Borrower, and far each individual who is an
Affiliate within the meaning of the foregoing, any other individual related to
such Affiliate by consanguinity within the third degree or in a step or adoptive
relationship within such third degree or related by affinity with such Affiliate
or any such individual and any Person directly or indirectly controlled by any
of the foregoing. The term "control" means the possession, directly or
indirectly, or the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of' voting securities or
partnership interests, by contract or otherwise.
"Agreement"
shall mean this Line of Credit and Letter of Credit Agreement, as amended,
modified or supplemented from time to time.
"Bank"
shall mean United Bank, Inc., a West Virginia banking corporation, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Borrower"
shall mean Hardy Credit Co., a Pennsylvania limited partnership, having its
principal place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
"Borrower's
General Partner" shall mean its sole general partner, Maggie's Management, LLC,
a Pennsylvania limited liability company.
"Business
Day" shall mean any day other than a Saturday, Sunday, public holiday under the
laws of the State of West Virginia, or other day on which banking institutions
are authorized or obligated to close in Morgantown, West Virginia.
"Closing"
shall mean the satisfaction of all requirements set forth in this Agreement by
the Borrower, including those set forth in Article IV hereof.
"Closing
Date" shall mean the date of Closing.
"Code"
shall mean the Internal Revenue Code of 1986 as amended rules, regulations,
decisions and other official interpretations in connection
therewith.
"Collateral
Assignment of Notes and Documents" shall mean that certain master assignment of
the notes and all related documents pertaining to the Purchased Loans given by
Borrower to Bank as required by Section 4.11 hereof.
"Collateral
Property Disposition" shall mean the foreclosure, transfer or other disposition
of property securing a Purchased Loan, or another event obligating Borrower to
release a document or security instrument securing a Purchased
Loan.
"Commitment"
shall mean that certain commitment letter agreement dated March 5, 2003, by and
between Bank and Borrower.
"Consent
and Subordination Agreement" shall mean that subordination. attornment and
non-disturbance agreement given by Tenant as required by Section 4.09
hereof.
2
"Debt"
shall mean collectively (A) all Indebtedness, whether of principal, interest,
fees, expenses or otherwise, of Borrower to Bank, whether now existing Or
hereafter incurred including, but not limited to, future loans and advances, if
any, under this Agreement, and the Loan Documents, as the same may from time to
time be amended, together with any and all extensions, renewals, refinancings or
refundings thereof in whole or in part; (13) all other obligations for the
repayment of borrowed money. whether of principal, interest, lees, expenses or
otherwise, of Borrower to Bank, now existing or hereafter incurred, whether
under letters or advances of credit. lines of credit, other financing
arrangements or otherwise (including, but not limited to, any obligations
arising as a result of any overdrafts), whether or not related to this Agreement
or the Notes, whether or not contemplated by Bank or Borrower on the date hereof
and whether direct, indirect, matured or contingent, joint or several, or
otherwise, together with any and all extensions, renewals, refinancings or
refundings thereof in whole or in part; (C) all costs and expenses including,
without limitation, to the extent permitted by law, reasonable attorneys' fees
and legal expenses, incurred by Bank in the collection of any of the
Indebtedness referred to in clauses (A) or (B) above, and amounts due and owing
to Bank under this Agreement; and (D) any advances made by Bank for the
maintenance, preservation, protection or enforcement of, or realization upon,
any property or assets now or hereafter made subject to a mortgage, pledge, lien
or security interest granted pursuant hereto or pursuant to this Agreement, or
the Loan Documents or pursuant to any agreement, instrument or note relating to
any of the Debt including, without limitation, advances for taxes, insurance,
repairs and the like.
"ERISA"
shall mean the Employee Retirement Income Security Act of 1974, as in effect
from time to time. •
"ERISA
Affiliate' shall mean a Person which is under control by Borrower within the
meaning of Section 414(b) or (c) of the Code.
"Event of
Default" shall mean any of the Events of Default described in Section
7.01.
"Expiration
Date" shall mean September 14, 2004, unless extended and renewed as required and
provided by Section 2.01(c) hereof
"Fixtures"
shall mean all personal property now or hereafter owned by Borrower and now or
hereafter affixed to, incorporated into or to be incorporated into, or used or
useful in connection with, the Real Property or any part thereof, all
replacements thereof, additions thereto and substitutions therefor.
"GAAP"
shall mean generally accepted accounting principles (as such principles may
change from time to time) applied on a consistent basis (except for changes in
application in which Borrower's or Tenant's, as the case may be, independent
certified public accountants (concur).
"Improvements"
shall mean all buildings and related improvements and amenities on the
Land.
"Indebtedness"
shall mean (i) all obligations for borrowed money (including, without
limitation, all notes payable and drafts accepted representing extensions of
credit, all obligations evidenced by bonds, debentures, notes or similar
instruments. all obligations on which interest charges are customarily paid, all
obligations under conditional sale or other title retention agreements and all
obligations issued or assumed as full or partial payment lb,- property, whether
or not any such notes. drafts or obligations are obligations for borrowed
money), (ii) all obligations secured by any mortgage, lien, pledge, charge or
security interest or encumbrance existing on property owned or acquired subject
thereto, whether or not the obligations secured thereby shall have been assumed.
(iii) all obligations to repay amounts drawn down by beneficiaries of letters of
credit, (iv) all indebtedness and other obligations for the payment or purchase
of which Borrower has agreed contingently or otherwise to advance or supply
funds and (v) indebtedness represented by obligations under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP and the amount of such indebtedness shall be the capitalized amount of such
obligations determined in accordance with such principles.
3
"Land"
shall mean those certain twenty-four (24), or more, tracts or parcels of land
identified in EXHIBIT A attached hereto, and all appurtenances
thereto.
"Law"
shall mean any law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, order, injunction, writ, decree or award of any
Official Body.
"Lease"
shall mean that certain master lease agreement dated January 1, 1990, entered
into between ▇▇▇▇▇▇-▇▇▇▇▇ Real Estate, Inc., now ▇▇▇▇▇▇ ▇▇▇▇▇, as lessor, and
Tenant as lessee, as the same pertains to the Real Property, which has been or
will be transferred from ▇▇▇▇▇▇ ▇▇▇▇▇ to Borrower, and as the same may be
supplemented or amended from time to time.
"Lease
Assignments" shall mean those assignments of leases and rents: given by Borrower
to Bank as required by Section 4.05 hereof, as the same may be supplemented or
amended from time to time.
"Letter
of Credit" shall mean that certain irrevocable standby letter of credit issued
or to be issued by Bank as requested by Borrower pursuant to this Agreement and
the Letter of Credit Agreement, in the amount not to exceed $5,000,000 and made
available to [REDACTED –
CONFIDENTIAL TREATMENT REQUESTED]* and/or its designees, successors and
assigns, as beneficiary, and as more particularly set forth in Section 2.01(b)
hereof.
"Letter
of Credit Agreement" shall mean that certain application and agreement for
letter of credit given by Borrower to Bank as required by Section 4.18 hereof,
as the same may be supplemented or amended from time to time.
"[REDACTED – CONFIDENTIAL TREATMENT
REQUESTED]*" shall mean [REDACTED – CONFIDENTIAL TREATMENT
REQUESTED]*.
"[REDACTED – CONFIDENTIAL TREATMENT
REQUESTED]* Agreement" shall mean that certain agreement dated December
31, 2002, by and between [REDACTED – CONFIDENTIAL TREATMENT
REQUESTED]*, Borrower and Tenant, as amended, modified or supplemented
from time to time.
"Lien"
shall mean any mortgage, deed of trust, pledge, lien, security interest, charge
or other encumbrance or security arrangement of any nature whatsoever including,
but not limited to, any conditional sale or title retention arrangement, and any
assignment, deposit arrangement or lease intended as, or having the effect of,
security.
"Loan" or
"Loans" shall mean the loans, represented by Loan Advances, made by Bank to
Borrower or to Borrower's beneficiary pursuant to the Line of Credit, and as
otherwise advanced for the benefit of Borrower under this Agreement and as
further set forth in Section 2.01 hereof.
"Loan
Account" shall mean that as set forth in Section 2.10 hereof.
"Loan
Advances" shall mean advances on account of the Line of Credit or Letter of
Credit Note made by the Bank from time to time pursuant to this
Agreement.
4
"Loan
Document" or "Loan Documents" shall mean singularly or collectively, as the
context may require, (i) the Commitment, (ii) this Agreement, (iii) the Notes,
(iv) the Mortgages, (v) the Lease Assignments, (vi) the Collateral Assignment bf
Notes and Documents, (vii) the Reserve Fund Account Assignment).and any and all
other documents, instruments, certificates and agreements executed and/or
delivered in connection with this Agreement, as any of they may be amended,
modified, extended or supplemented from time to time.
"Mortgages"
shall mean those credit line deeds of trust or open-end mortgages given by
Borrower to Bank as required by Section 4.04 hereof, as they may be amended, •
modified, extended or supplemented from time to time.
"Mortgage
Loan" or "Mortgage Loans" shall mean those mortgage loans:-originated as part of
[REDACTED – CONFIDENTIAL
TREATMENT REQUESTED]*'s Enhanced Builder Direct Lending Program with
Tenant.
"Note" or
"Notes" shall mean the promissory notes of Borrower executed and delivered to
Bank under this Agreement, or any note executed and delivered pursuant to this
Agreement, together with all 'extensions, renewals, refinancings or refundings
in whole or part and as further set forth in Section 2.02 hereof.
"Office",
when used in connection with Bank, shall mean its designated office located at
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other office or
offices as Bank may designate from time to time.
"Official
Body" shall mean any government or political subdivision or any agency,
authority, bureau, central bank, commission, department or instrumentality or
either, or any court, tribunal. grand jury or arbitrator, in each case whether
foreign or domestic.
"PBGC"
shall mean the Pension Benefit Guaranty Corporation.
"Person"
shall mean an individual, corporation, partnership, limited partnership, limited
liability company, joint venture, trust, or unincorporated organization, or a
government or any agency or political subdivision thereof.
"▇▇▇▇▇▇
▇▇▇▇▇" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇ Limited Partnership, a Pennsylvania limited
partnership.
"Plan"
shall mean any plan, including single employer, multiple employer and
multiemployer plans, subject to Title IV of ERISA and established or maintained
for persons including employees or former employees of Borrower or
Affiliates.
"Potential
Default" shall mean any event or condition which with notice or passage of time
or any combination of the foregoing would constitute an Event of
Default.
"Prime
Rate" shall mean the sole or highest rate which is published as the prime rate
in the "Money Rates" column in The Wall Street Journal. If such source for any
reason becomes unavailable, the Bank shall designate another index that it
determines to be reasonably equivalent to the prime rate published in The Wall
Street Journal.
"Purchased
Loan" or "Purchased Loans" shall mean those certain Mortgage Loans purchased by
the Borrower pursuant to the [REDACTED – CONFIDENTIAL TREATMENT
REQUESTED]* Agreement.
"Real
Property" shall mean the Land, the Improvements and the
Fixtures.
5
"Reportable
Event" shall mean any of the events set forth in Section 4043.(b) of ERISA or
the Regulations thereunder, except any such event as to which the provision for
thirty (30) days notice to PBGC is waived under applicable
regulations.
"Request
for Advance" shall mean a statement of the Borrower, in a form acceptable to
Bank, setting forth the amount of the Loan Advance being requested and
containing such other information as is required by Bank and, by Section 2.04
hereof.
"Reserve
Fund Account" shall mean the interest bearing deposit account No. 700;700605 in
the name of Borrower held with Community Bank. N.A.
"Reserve
Fund Account Assignment" shall mean the assignment of the Reserve Fund Account
given by Borrower to Bank as required by Section 4.12 hereof.
"Termination
Event" shall mean (i) a Reportable Event, (ii) the termination of a Single
Employer Plan, or the treatment of a Single Employer Plan amendment as a
termination or such Plan under Section 4041 of ERISA, or the filing of a notice
of intent to terminate a Single Employer Plan, or (iii) the institution of
proceedings to terminate a Single Employer Plan by the PBGC under Section 4042
of ERISA, or (iv) the appointment of a trustee to administer any Single Employer
Plan.
"Tenant"
shall mean 84 Lumber Company, a Pennsylvania limited partnership, having its
principal office located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇-▇▇▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
"Tenant's
General Partner" shall mean Tenants sole general partner. Hardy Holdings, LLC, a
Pennsylvania limited liability company.
"UCC"
shall mean the Uniform Commercial Code that is in -effect on the date of this
Agreement and as amended from time to time, of the state or states having
jurisdiction with respect to all or any portion of the Collateral granted or
assigned to Bank from time to time under or in connection with this Agreement
and the other Loan Documents.
ARTICLE
II
THE LINE OF CREDIT AND
LETTER OF CREDIT
2.01 Commitments.
(a) The Line of Credit.
Subject to the terms and conditions and relying upon the representations and
warranties in this Agreement and the other Loan Documents, Bank agrees to make a
revolving line of credit available to Borrower in the aggregate original
principal amount not to exceed TEN MILLION and 00/100 DOLLARS ($10,000,000.00)
("Line of Credit") at the Closing, the proceeds of which will be advanced to
Borrower from time to time during the period commencing on the date of Closing
and ending September 14, 2004, in accordance with and subject to the conditions,
requirements and limitations set forth in this Agreement. Upon repayment of any
amount of principal or interest on the Line of Credit by Borrower, Borrower may
reborrow hereunder: Reborrowing privileges may be suspended by Bank prior to the
Expiration Date if an Event of Default or Potential Default
exists.
6
(b) The Letter of Credit.
Subject to the terms and conditions and relying upon the representations and
warranties in this Agreement and the other Loan Documents, Bank agrees to issue
an irrevocable standby letter of credit in the aggregate amount not to exceed:
FIVE MILLION and 00/100 DOLLARS ($5,000,000.00) to a beneficiary designated by
Borrower for its benefit ("Letter of Credit"), at the Closing, the proceeds of
which will be advanced as set forth in the Letter of Credit and Letter of Credit
Agreement from time to time during the period commencing on the issuance of the
Letter of Credit and ending September 14. 2004, in accordance with and subject
to the conditions_ requirements and limitations set forth in this Agreement.
Upon repayment of any amount of principal or interest on the Note and Letter of
Credit Agreement evidencing the Borrower's obligations to repay amounts drawn
down by the beneficiaries of the Letter of Credit, Borrower may not reborrow
hereunder.
(c) Term of Agreement.
Bank's commitments under this Agreement will expire on the then current
Expiration Date, unless Bank, after a review of (i) Borrower's and Tenant's
financial statements and (ii) Borrower's performance under this Agreement,
elects to renew its commitments by one or more additional 12 month periods. In
the event Bank elects riot to renew this Agreement, Bank must give written
notice to Borrower at least six months before the Expiration Date of the then
current term. If no notice is given at least six months before the Expiration
Date of the then current term, this Agreement will he renewed and the Expiration
Date shall be automatically extended an additional 12 months, on the same terms
and conditions hereof I-however, Borrower's and Tenant's representations,
warranties and agreements shall remain in full force and effect so long as any
Debt is outstanding. Borrower shall have the right to terminate the line of
credit and the letter of credit if Borrower gives Bank Notice of its intention
to terminate the line of credit or the letter of credit at least 6 months prior
to the original expiration or any renewal thereof. If Borrower or Lender does
not give Notice or termination on or before; 6 months prior to the expiration of
the original term or any renewal thereof then I Lender is automatically required
to issue a new Letter of Credit based upon a new application and agreement for
Letter of Credit. In the event this Agreement is extended more than three times,
the Bank may request that Borrower comply with "due diligence" requests as then
customary for the Bank to extend credit of this nature.
2.02 Notes. The obligation
of Borrower to repay the unpaid principal amount of the Line of Credit made to
it by Bank, and to repay the amounts drawn down by the beneficiaries of the
Letter of Credit, and to pay interest thereon, shall be evidenced in part by the
Notes of • Borrower, dated of even date herewith. The executed Notes shall be
delivered by Borrower to Bank at the Closing.
2.03. Interest Rates;
Usury.
(a) Line of Credit Interest
Rate. The unpaid principal amounts advanced on the Line of Credit shall
bear interest for each day until due at a fluctuating rate per annum (computed
on the basis of a year of 360 days for actual days elapsed) for each day at the
Prime Rate less one-half of one percent (.50%), in effect from time to time per
annum (the "Rate-''), such Rate to change automatically from time to time
effective as of the effective date of each change in the Prime Rate.
-
7
(b) Letter of Credit Interest
Rate. The unpaid principal amounts on the Note evidencing the Borrower's
obligations to repay the amounts drawn down by the beneficiaries of the Letter
of Credit ("Letter of Credit Note") shall bear interest for each day until due
at a fluctuating rate per annum (computed on the basis of a year of 360 days for
actual days elapsed) for each day at the Prime Rate in effect from time to time
per annum (the "Rate"), such Rate to change automatically from time to time
effective as of the effective date of each change in the Prime
Rate.
(c) Interest After Maturity or
Default. Usury. After the principal amount of any part of the Debt,
accrued interest thereon, or any fees or any other sums payable hereunder. shall
become due and remain unpaid (whether at maturity, upon the occurrence of an
Event of Default, by acceleration or otherwise), the amount thereof shall
thereafter until paid in full bear interest at a fluctuating rate per annum
(based on a year of 360 days for actual number of clays elapsed) which shall be
four and one-half percent (4.5%) above the then current Prime Rate. or such
other default rate set forth in the Notes. such interest rates to be adjusted
daily to reflect changes in the Prime Rate and each adjustment shall be
effective on the day the change occurs.
(d) Interest Rate Set by
Law. In the event the rates of interest provided for in subsections (a)
and (b) above or either of them are finally determined by any Official Body to
exceed the maximum rate of interest permitted by any applicable usury or similar
Laws. their or its application shall be suspended and there shall be charged
instead the maximum rate of interest permitted by such Laws. If any payment of
interest or in the nature of interest would cause the foregoing interest rate
limitation to be exceeded, then such excess payment will be credited as a
payment of principal, unless Borrower notifies Bank in writing to return the
excess payment to Borrower.
2.04 Loan
Advances.
(a) Request for Advances under
Line of Credit. Not less than 2 Business Days prior to the
making of each Loan Advance, the Borrower shall submit to Bank a Request for
Advance, a form of which is attached hereto as EXHIBIT B, together with the
Notes and Documents, as defined and more particularly set forth in the
Collateral Assignment of Notes and Documents. The Bank shall not be required to
make Loan Advances more frequently than once each month and such monthly Loan
Advance shall not be less than $50,000. Each Request for Advance and each
receipt of the Loan Advance requested thereby shall constitute a certification
by the Borrower that the representations and warranties contained in Article SIT
hereof are true and correct on the date of such Request for Advance or such
receipt, as the case may be.
(b) Loan Advances for Letter of
Credit. Loan Advances made under the Letter of Credit Note shall be made
simultaneously with the Bank's payment made under the Letter of Credit, or as
otherwise set forth in the Letter of Credit Agreement.
(c) Borrowing Limitations on
Line of Credit. Loan Advances on the Line of Credit shall be made only to
finance the funding costs of (i) purchasing the Mortgage Loans as required by
the [REDACTED – CONFIDENTIAL
TREATMENT REQUESTED]* Agreement, (ii) funding advances made by Borrower
under the Purchased Loans not yet fully funded, (iii) refund Borrower for the
Purchased Loans purchased by Borrower with its own funds, and (iv) pay accrued
interest on the Line of Credit. The Borrower shall be entitled upon appropriate
certification to draw no more than the actual amount needed for such purposes,
not to exceed $10,000,000 at any one time.
8
(d) Borrowing Limitations on
Letter of Credit Note. Loan Advances made by Bank on the Letter of Credit
Note shall be made only to repay the amounts drawn down by the beneficiaries of
the Letter of Credit. and as otherwise-set forth herein, in the aggregate amount
not to exceed $5,000,000.
(e) Payment of Loan
Advances. Loan Advances shall' be wired to the Borrower's account as
directed by Borrower.
2.05 Principal and Interests
Payments. Commencing on the 15th of the month following the first Loan
Advance on the Line of Credit and each month thereafter during the term of the
Line of Credit, Borrower shall make monthly payments of interest in the amount
sufficient to pay the accrued interest on the Line of Credit. Loan Advances made
pertaining, to a Purchased Loan shall be repaid in full within 2 business days
of the earlier of: (i ) the Collateral Property Disposition, or (ii) the payment
in full of the Purchased Loan. If not sooner paid, the Line of Credit, all
unpaid accrued interest and all other sums and costs incurred by Bank pursuant
to this Agreement, the Notes or the making of the Loan Advances hereunder, shall
be due and payable on the Expiration Date, without notice, presentment or
demand. All amounts outstanding on the Line of Credit Note shall be due and
payable on demand, and if not demanded accrued interest thereon shall be payable
monthly on the 15th day of each month.
2.06 Optional Prepayments.
Borrower shall have the right, at its option, to prepay the principal, interest
or other amounts due from Borrower under this Agreement or under the Notes in
whole or in part at any time.
2.07 Payments. All
payments to be made in respect of principal, interest or other amounts due from
Borrower under this Agreement or under the Notes shall be payable on or before
2:00 o'clock p.m., Morgantown, West Virginia, time, on the day when due without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived, and an action therefor shall immediately accrue. Such payments
shah be made to Bank at its Office in U.S. dollar funds immediately available at
such Office without setoff, counterclaim or other deduction Of any nature. Bank
may, in its discretion, deduct such payments from any Borrower's demand or
deposit accounts with Bank, or the Reserve Find Account, on the due date. All
such payments shall be applied at the option of Bank to accrued and unpaid
interest, outstanding principal and other sums dues under this Agreement in such
order as Bank, in its sole discretion, shall elect.
2.08 Commitment & Renewal
Fees. For the. Line of Credit, Borrower shall pay to Bank a
non-refundable commitment fee in the amount of one-quarter of one percent
(.25%).of the Line of Credit amount, equal to $25,000. Each time this Agreement
is renewed for the Line of Credit, if any, and the Expiration Date extended,
Borrower shall pay Bank a non-refundable. renewal fee in the amount of one-tenth
of one percent (.10%) of the Line of Credit amount equal to $10,000. For the
Letter of Credit, Borrower shall pay to Bank a non-refundable commitment fee in
the amount of one and one-half of one percent (1.5%) of the Letter of Credit
amount,, equal to $75,000. Each time this Agreement is renewed for the Letter of
Credit, if any, and the Expiration Date extended, Borrower shall pay Bank a
non-refundable renewal fee in the amount of one percent (1 %) of the Line of
Credit amount, equal to $50.000.
9
2.09 Indemnity. Borrower
shall indemnify Bank against any loss or expense. which Bank has sustained or
incurred as a consequence of any default. by Borrower in the performance or
observance of any covenant or condition contained in this Agreement; or. under
the Notes including, without limitation, any failure of Borrower to pay when due
(by demand, upon maturity or otherwise) any principal, interest, commitment fees
or any other amount due hereunder or under any Note. If Bank sustains or incurs
any such loss or out-of-pocket expense, it shall from time to time notify
Borrower of the amount determined in good faith by Bank (which determination
shall be conclusive) to be necessary to indemnify Bank for such loss or expense.
Such amount shall be due and payable by Borrower to Bank ten (10) Business Days
after such notice is given and. shall bear interest at the rate of the Prime
Rate then in effect plus three percent (3%) per annum (based on a year of 360
days for actual number of days elapsed) from the due date until paid (before and
after judgment).
2.10 Loan Account. Bank
shall open and maintain on its books a loan account (the “Loan Account") with
respect to repayments, prepayments, the computation and payment of interest and
commitment fees, if any, and the computation and final payment of all other
amounts due and sums paid to Bank hereunder. Except in the case of manifest
error in computation, the Loan Account shall be conclusive and binding on
Borrower as to the amount at any time due to Bank from Borrower
hereunder.
2.11 Late Charge. Upon the
occurrence of an Event of Default with respect to the payment of any installment
of interest or principal on either Note for more than ten (10) days after the
said installment becomes due, in addition to making a payment of the installment
due, Borrower shall pay to Bank a late charge in an amount equal to the greater
of (A) Twenty Five and 00/100 Dollars ($25.00) or (B) five percent (5%) of any
such-overdue installment.
2.12 Financing Statements.
Not Applicable and Intentionally Left Blank.
2.13 Collateral. The Notes
and all obligations of Borrower hereunder shall be secured by the Mortgages, the
Lease Assignments, the Collateral Assignment of Notes and Documents, the Reserve
Fund Account Assignment, and any and all other Loan Documents executed and
recorded with respect thereto.
ARTICLE
III
REPRESENTATIONS AND
WARRANTIES
Borrower
hereby represents and warrants to Bank that:
3.01 Organization and
Qualification. Except as set forth in Schedule 3.01, Borrower. and Tenant
arc limited partnerships duly organized, validly existing and in good standing
under the laws of their jurisdiction Of organization, and are duly qualified or
licensed to do business as a limited partnership, and are in good standing in
all jurisdictions in which the ownership of their respective properties or the
nature of their activities or both make such qualification or licensing
necessary. Borrower's and Tenant's-General Partners are limited liability
companies duly organized, validly existing and in good standing under the laws
of their jurisdiction of organization, and are duly qualified or licensed to do
business as a limited partnership, and are in good standing in all jurisdictions
in which the ownership of their respective properties or the nature of their
activities or both make such qualification or licensing
necessary.
10
3.02 Authority; Power to Carry on
Business: Licenses. Borrower and Tenant, and their respective Managers
and their officers, as the case may be, have the power and authority to execute,
deliver and perform the Loan Documents to which they are a party, to make the
borrowing provided for herein, and to perform their respective obligations
hereunder and under the other Loan Documents. All such action has been duly and
validly authorized by all necessary limited partnership and company proceedings
on their respective parts. Borrower and Tenant have all requisite power and
authority to own and operate-their respective properties and to carry on their
businesses as now conducted and as presently planned to be conducted. Borrower
and Tenant have all licenses, permits, consents and governmental approvals or
authorizations necessary to carry on their respective businesses as now
conducted.
3.03 Execution and Binding
Effect. The Loan Documents have been duly and validly executed and
delivered by the parties thereto and. to the extent they are a party thereto,
constitute legal, valid and binding obligations of Borrower and Tenant
enforceable in accordance with the terms hereof and thereof
3.04 Authorizations and
Filings. No authorization, consent, approval, license, exemption or other
action by, and no registration, qualification, designation, declaration or
filing with, any Official Body is or will be necessary or advisable in
connection with the execution and delivery of the Loan Documents, the
consummation of the transactions herein or therein contemplated, and the
performance of or compliance with the terms and conditions hereof or
thereof.
3.05 Absence of Conflicts.
Neither the execution and delivery of the Loan Documents, the consummation of
the transactions herein or therein contemplated, nor the performance of or
compliance with the terms and conditions hereof or thereof will (a) violate any
Law or any regulation; order, writ, injunction, or decree of any court or
governmental instrumentality or agency, (b) conflict with or result in a breach
'of or a default under the limited partnership of Borrower or Tenant or any
agreement or instrument to which Borrower or Tenant is a party or by which their
properties (now owned or hereafter acquired) may be subject or bound or, (c)
result in the creation or imposition of any Lien, charge or encumbrance upon any
property (now owned or hereafter acquired) of Borrower or the
Tenant.
3.06 Ownership and
Control. Schedule 3.06 to this Agreement states, as of the CIO-sing Date,
the general and limited partners of Borrower and their respective partnership
interests in Borrower.
3.07 Managers of Borrower;
Business. Schedule 3.07 to this
Agreement states as of the Closing Date the officers and managers of Borrower.
In addition, Schedule
3.07 to this: Agreement describes the business of Borrower as presently
conducted and as presently planned to be conducted.
3.08 Financial
Information. The financial information provided by Borrower and Tenant to
Bank as of the Closing Date is accurate and complete and has been prepared in
accordance with GAAP consistently applied. There has been no adverse change in
the financial condition, assets, properties, management, operations or business
of Borrower or Tenant since the date of such information. Borrower and Tenant
have made full and true disclosure of all pertinent financial and other
information in connection with the transactions contemplated
hereby.
11
3.09 No Event of Default;
Compliance with Instruments. No event has occurred and is continuing and
no condition exists which constitutes an Event of Default or Potential Default.
Neither Tenant nor Borrower is in violation of (i) any term of any limited
partnership agreement nor ( ii) any agreement or instrument to which they are a
party or by which they or any of their properties (now acquired or hereinafter
acquired) may he subject or bound.
3.10 Litigation. There is
no pending, contemplated or threatened proceeding by or hell re any Official
Body against or affecting Borrower or Tenant. which, if adversely
decided,
would
have a material adverse effect on the financial condition, assets, properties,
management, operations or business of Borrower or Tenant or on the ability of
Borrower or Tenant to perform their obligations under the Loan
Documents.
3.11 Subsidiaries. Not
Applicable and Intentionally Left Blank.
3.12 Pension and Employee Benefit
Plan Matters. The provisions of all deferred compensation,
benefit, pension, profit sharing and other plans, if any, of Borrower which are
subject to ERISA (the "Plans") comply in all respects with the requirements of
ERISA. The Plans have not incurred any "accumulated funding deficiency" within
the meaning of Section 302 of ERISA, if applicable, or Section 412 of the Code
with respect to the most recent plan year ending on or prior to the date hereof,
and Borrower and its ERISA Affiliates have not incurred any liability on account
of an "accumulated funding deficiency" with respect to the Plans. All
contributions to the Plans required with respect to all plan years ending on or
prior to the date hereof have been made, and the pro rata portion of the
contribution. with respect to the plan year in which the date hereof falls has
been accrued on Borrower's financial statements. The funding method used in
connection with the Plans is acceptable under ERISA and the actuarial
assumptions used in connection with funding the Plans, in the aggregate, are
reasonable. No liability to PDGC has been incurred with respect to the Plans
(except for the premium liability under Section 4007(a) of ERISA) nor has any
event or circumstances occurred in connection with the Plans which would result
in any liability to the PBGC on the part of Borrower or its ERISA Affiliates. No
Reportable Event, within the meaning of Section 4043 of ERISA, -has occurred
with. respect to the Plans, nor have the Plans been terminated in accordance
with the procedures set forth in Sections 404! or 4042 of ERISA or by operation
of law. All premium payments with respect to the Plans to PBGC required as of
the date hereof have been made. • Borrower, its ERISA Affiliates, and to the
best knowledge of Borrower and its ERISA Affiliates, any "party in interest"
within the meaning of Section 3(14) of ERISA, have not engaged in any
"prohibited transaction" within the meaning of Section 406(a) or (b) of ERISA or
of Section 4975(c) of the Code, the occurrence of which would subject Borrower
or its ERISA Affiliates to any liability or any tax which may be imposed by
Section 4975 of the Code or Section 502(i) of ERISA. with respect to a Plan. No
legal action involving a Plan is-pending or threatened against Borrower or any
of the fiduciaries of a Plan. The Plans have received determination letters from
the Internal Revenue Service to the effect that each Plan is qualified under
Section 401(a) of the Code and nothing has occurred since the receipt or the
latest determination -letters with respect to each Plan to adversely affect its
continued qualification. Borrower and its ERISA Affiliates, have, for all
periods ending on or prior to the date hereof, administered the Plans and each .
"employee welfare benefit plan", maintained by them, in all material respects in
compliance with the reporting and disclosure requirements applicable thereto
under ERISA, the Code or any other federal. state or local law. Borrower and its
ERISA Affiliates do not contribute to a. multiemployer pension plan, as such
term is defined in Section 3(37) of ERISA on behalf of any of their
employees.
12
3.13 Title to
Property. Burrower has. or will have prior to Closing, good
and marketable title in fee simple to all of the real property purported to be
owned by it and good and marketable title to all other property purported to be
owned by it which is securing the Line u Credit and Letter of Credit and that is
otherwise reflected in the most recent financial statements referred to in
Section 3.08 or submitted pursuant to Section 5.01, subject only to Liens no
forbidden by Section 6.01 hereof.
3.14 Contracts. Not
Applicable and Intentionally Left Blank.
3.15 Use of Proceeds. The
proceeds of the Line of Credit and Letter of Credit Note shall be used solely
for the purposes set forth in 2.04.
3.16 Taxes. All tax
returns required to be filed by Borrower and Tenant have been properly prepared,
executed and filed. All taxes, assessments, fees and other governmental charges
upon Borrower and Tenant or upon any of their respective properties, income,
sales or franchises which are due and payable have been paid, The reserves and
provisions for taxes on the books of Borrower and Tenant are adequate for all
open years and for their current fiscal period. Neither Borrower nor Tenant
knows of any proposed additional assessment or basis for any material assessment
for additional taxes (whether or not reserved against). The federal income tax
liabilities of Borrower and Tenant have been finally determined by the Internal
Revenue Service, or the time for audit has expired for all fiscal periods ending
on or prior to December 3 1, 1992, and all such liabilities (including all
deficiencies assessed following audit) have been satisfied.
3.17 No Material Adverse
Change. Since the date of the most recent .financial statements referred
to in Section 3.08, there has been no material adverse change in the financial
condition, assets, properties, management, operations or business of Borrower or
Tenant.
3.18 Regulations U and X.
Borrower will make no borrowing hereunder for the purpose of buying or carrying
any "margin stock", as such term is used in Regulation U of the Board of
Governors of the Federal Reserve System, as amended from time to time. Borrower
owns no "margin stock". Borrower is not engaged in the business of extending
credit to others for such purpose, and no part of the proceeds of any borrowing
hereunder will be used to purchase or carry any "margin stock" or to extend
credit to others for the purpose of purchasing or carrying any "margin stock' in
contravention of regulations U and X.
13
3.19 Compliance with Laws.
The conduct by Borrower of its business as it is presently conducted does not
violate any provision of any Law or, if such conduct does not violate. a Law,
such violation would not, together with all other such violations, have a
material adverse effect on the financial condition or results of operations of
Borrower, and Borrower has obtained all permits, licenses. consents and
approvals of all Official Bodies or other third parties, including all consents
and approvals, if any, under the Laws designed to protect the environment, which
are required to conduct its business as it is presently conducted.
3.20 Licenses,
Franchises. Borrower owns or possesses al I of the patents,
trademarks, service patents narks, tradenames, copyrights, licenses, franchises,
permits and rights with respect to the foregoing necessary to own and operate
its properties and to carry on its business as presently conducted without
conflict with the rights of others. No individual patent or patent license is of
material importance to its business and there is no reason to anticipate any
material liability to Borrower in respect of any claim of infringement of any
thereof.
3.21 Environmental
Matters.
(a) Borrower
and Tenant warrants and represents that the Borrower, Tenant and Borrower's
predecessor, ▇▇▇▇▇▇ ▇▇▇▇▇, are not aware of any circumstances which would result
in any material obligation binding upon Borrower, Tenant or ▇▇▇▇▇▇ ▇▇▇▇▇ under
any Environmental Laws to investigate or remediate any Hazardous Substances in,
on or under any parcel of the Real Property.
(b) Borrower,
Tenant and ▇▇▇▇▇▇ ▇▇▇▇▇ will execute and deliver to Bank a separate
environmental indemnity agreement of even date herewith, whereby,, among other
things, they will indemnify and hold Bank harmless, pursuant to the terms of an
from and against, and reimburse the Bank with respect to, any and all claims,
demands, causes of action, losses, damages, liabilities, costs and expenses
(including reasonable attorneys' fees and court costs) of any and every kind and
character, known or unknown, fixed or contingent, out-of-pocket or
consequential, asserted against Bank at any time and from time to time by reason
of or arising out of any violation of any Environmental Laws.
3.22 First Lien Mortgages.
The Liens on the Real Property granted to Bank by the Mortgages constitutes and
will continue first liens, and all such action as is necessary or advisable to
establish such rights of Bank has been taken or will be taken at or prior to the
time, required for such purpose and there will be upon execution and delivery of
the Loan Documents no necessity of any further action in order to preserve,
protect and continue such rights, and such Liens, are and will continue to be
superior and prior to the rights of all third parties existing-on the date of
this Agreement or arising. after the date of this Agreement whether by Lien or
otherwise, to the full extent provided by Law. All recording fees and other
expenses in connection with each such action shall be paid by Borrower and Bank
shall be reimbursed by Borrower liar any such lees and expenses incurred by
Bank.
3.23 Solvency. After
giving effect to the consummation of all the transactions contemplated hereby,
Borrower (a) shall be able to pay its debts as they become due, (b) shall have
funds and capital sufficient to carry on its business and all businesses in
which it is about to engage and, (c) shall own property having a value both at
fair valuation and at fair saleable value in the ordinary course of Borrower's
business greater than the amount required to pay its debts as they become due.
Borrower shall not be rendered insolvent by the execution and delivery of this
Agreement, the borrowing hereunder and/or the consummation of any transactions
contemplated herein.
14
3.24 Accurate and Complete
Disclosure, Continuing. Representations and Warranties. No
representation or warranty made by Borrower or Tenant under this Agreement or
any Loan Document and no statement made by Borrower or Tenant in any financial
statement (furnished pursuant to Sections 3.08 or 5.01 or otherwise),
certificate, report, exhibit or document furnished by Borrower or Tenant to Bank
pursuant to or in connection with this Agreement is false or misleading in any
material respect (including by omission of material information necessary to
make such representation, warranty or statement not misleading). Borrower has
disclosed, and has caused Tenant to disclose, to Bank in writing every fact
which materially and adversely affects, or would materially and adversely
affect, the financial condition, assets, properties, management, operations or
business of Borrower or Tenant or the ability of Borrower or Tenant to perform
their obligations under the Loan Documents. The representations and warranties
are to survive the delivery of the Loan Documents and the making of the Loan
Advances hereunder until the Notes are paid in full and released.
ARTICLE
IV
CONDITIONS OF
LENDING
The obligation of Bank to enter into
this Agreement and to make any Loan hereunder is subject to the accuracy, as of
the date hereof, of the representations and warranties contained in the Loan
Documents, to the performance by Borrower and Tenant of their obligations to be
performed hereunder and thereunder on or before the Closing Date, and to the
satisfaction of the following further conditions:
4.01 Representations and
Warranties. Events of Default and Potential Defaults. The representations
and warranties contained in Article III shall be true on and as of the date of
Closing and each Loan Advance, with the same effect as though made on and as of
such date. On the date of the Closing, no Event of Default and no Potential
Default shall have occurred and be continuing or exist.
4.02 Proceedings and
Incumbency. On the Closing Date, there shall have been delivered to Bank,
a certificate in form and substance reasonably satisfactory to Bank, dated the
Closing Date and signed on behalf of Borrower and Tenant, by their respective
general partners, certifying as to (a) true copies of the limited partnership of
Borrower and Tenant as in effect on such date, (b) true copies of all limited
partnership actions taken by Borrower and Tenant relative to the transactions
contemplated by this Agreement, and (c) the names. true signatures and
incumbency of all of the managers and officers of Borrower's General -Partner
and tenant's General Partner authorized to execute and deliver the Loan
Documents to which Borrower and Tenant is a party. Bank may conclusively rely on
such certificate.
4.03 Loan
Documents. On the Closing Date, the Loan. Documents shall have
been executed and delivered to Bank and shall be in effect and all filings and
recordings contemplated thereby shall have been made. Borrower and Tenant shall
also deliver such other instruments, documents and certificates as Bank or its
counsel shall reasonably require.
15
4.04 Mortgages. There
shall have been executed and delivered to Bank the Mortgages, which shall be a
first lien on the Borrower's fee simple estate in the Real Property and shall
create in favor of Bank a first and prior perfected security interest in the
Fixtures, together with evidence satisfactory to Bank and counsel for Bank that
the Mortgages have been recorded and filed in the appropriate public offices and
are in first lien position and in proper form.
4.05 Lease Assignments.
There shall have been executed and delivered to Bank hearse Assignments,
pursuant to which the Borrower shall have assigned to Bank, as collateral, all
the right, title and interest of the Borrower in and to the Lease, together with
evidence satisfactory to Bank and counsel for Bank that the Lease Assignments
have been recorded and filed in the appropriate public offices immediately after
the Mortgages.
4.06 Title Opinion and/or
Insurance. There shall have been delivered a preliminary title opinion Or
title insurance commitment on each parcel of the Real Property evidencing a
minimum of 60 years of the title history to such property has been researched by
a qualified lawyer or title agent, respectively, and opining or insuring,
respectively, that the current record title owner is ▇▇▇▇▇▇ ▇▇▇▇▇ or Borrower,
which has good and marketable title, free and clear of all liens, except the
current year's real estate taxes not' yet due and payable, and that such
property is subject to exceptions (i.e. covenants, restrictions and rights of
way) that do not adversely affect the fair market value of such property and are
acceptable to Bank. After the Mortgages are recorded, and prior to having an
obligation to make Loan Advances hereunder, Borrower shall deliver to Bank an
updated title opinion, updated title insurance commitment or final title
insurance policy on each parcel of the Real Property opining or insuring,
respectively, that Borrower is the. record title owner, that the Mortgages have
been recorded and are in first lien position, that no other changes in the title
have occurred, and that all requirements to issue such final title opinion or
title insurance have been satisfied, which may include but not be limited to
proper deeds being recorded, premiums for the title insurance being paid and
limited partnership and other charter documents being recorded in the
appropriate public offices.
4.07 Agreements Affecting the
Premises. There shall have been delivered a copy of any and all
agreements, understandings, covenants and restrictions, except those for utility
right of ways, with or relating to the Real Property, its owners or tenants,
affecting the Borrower as owner, successor, or successor or the Tenant as lessee
under the Lease.
4.08 Lease. Borrower shall
have furnished to Bank an executed copy of the Lease, which shall contain terms
and conditions acceptable to Bank and evidences that the rental payments.
received by Borrower from the Tenant pertaining to the Real Properly equals at
least $3.000..000 annually.
4.09 Consent & Subordination
Agreements. There shall have been executed and delivered to Bank an
subordination, attornment and non-disturbance agreement, pursuant to which the
Tenant has acknowledged, consented and agreed to, among other things
(i)subordinate the Lease to the Mortgages and Lease Assignment, (ii) attorn to
Bank or any purchaser at a sale of the Real Property under the Mortgages, and
(iii) be bound by the Lease Assignment, and (iv) not terminate the Lease as to
any of the Real Property while any amounts are due by Borrower to Bank
hereunder, except under certain conditions to be set forth
therein.
16
4.10 Appraisals. Bank
shall have received appraisals. prepared by an appraiser and in such form and
detail as shall be satisfactory to Bank, showing a combined aggregate fair
market value lilt the Real Property or not less than $20,000,000.
4.11 Collateral Assignment of
Notes and Documents. There shall have been executed and delivered to Bank
the Collateral Assignment of Notes and Documents pursuant to which Borrower
shall have assigned, with recourse. and granted to Bank firs/ lien security
interests under the UCC, all of the notes, security instruments and related
documents (as more particularly described in the [REDACTED – CONFIDENTIAL TREATMENT
REQUESTED]* Agreement) evidencing, securing or otherwise pertaining to
the Purchased Loans on which a Loan Advance is requested by Borrower to be made
or has been made, which will, among other things, require Borrower to forward to
Bank the original Purchased Loan note and related documents with the initial
Request for Advance on the Line of Credit in regard to such note, but will not
require the recording of the assignment of the recorded instrument securing such
note ,until an Event of Default exists.
4.12 Reserve Fund Account
Assignment. There shall have been executed and delivered to Bank evidence
of the deposit by Borrower of $1,000,000 into the Reserve Fund held with the
Bank and/or a participating bank, and an assignment of the Reserve Fund Account,
pursuant to which Borrower assigned to Bank the Reserve Fund Account, and a
satisfactory acknowledgement from the bank at which the Reserve Fund is being
held.
4.13 Opinions of Counsel.
Bank shall have received favorable written opinions of counsel for the Borrower
and Tenant dated the Closing Date and in form and substance satisfactory to
Bank.
4.14 Certificates of Insurance or
Evidence of Sufficient Reserves if Self-Insured. Bank shall
have received such certificates of insurance, or evidence of sufficient reserves
if self insured, as Bank may require, in form and substance satisfactory to
Bank, from insurers satisfactory to Bank evidencing the fulfillment of the
requirements of Section 5.02 hereof.
4.15 Net Worth & Affiliate
Debt. There shall have been delivered to Bank evidence that Borrower's
combined Affiliate debt and net worth is at least $31,800,000, that Borrower's
net worth is at least $1,800,000, and that the Affiliate debt has been
subordinated to the Line of Credit and Letter of Credit Note on or before the
Closing Date.
4.16 [REDACTED
– CONFIDENTIAL TREATMENT REQUESTED]* Policies. There
shall have been delivered to Bank a copy of [REDACTED – CONFIDENTIAL TREATMENT
REQUESTED]*'s credit and collection policies and underwriting criteria
pertaining to the Mortgage Loans, and an agreement from [REDACTED – CONFIDENTIAL TREATMENT
REQUESTED]* that the same will not be modified without the prior written
consent of the Bank, which will not be unreasonably withheld, and that Bank
shall be permitted to audit an adequate sample of the Mortgage. Loans during the
term of the Line of Credit and the Letter of Credit.
17
4.17 [REDACTED
– CONFIDENTIAL TREATMENT REQUESTED]* Agreement. A copy of
the [REDACTED – CONFIDENTIAL
TREATMENT REQUESTED]* Agreement and an agreement from [REDACTED – CONFIDENTIAL TREATMENT
REQUESTED]* that the [REDACTED – CONFIDENTIAL TREATMENT
REQUESTED]* Agreement will not be modified without the prior written
consent of Bank. which will not be unreasonably withheld and responded to within
15 days as provided for in said agreement.
4.18 Letter of Credit
Agreement. There shall have been executed and delivered to Bank the
Letter of Credit Agreement, pursuant to which Borrower shall have made
application for the Letter of Credit, and agreed to various other terms and
conditions applicable to the Letter of Credit which may or may not be set forth
expressly herein, and is hereby incorporated herein for all pertinent purposes
by this reference.
4.19 Details. Proceedings and
Documents. On the Closing Date, all legal details and proceedings in
connection with the transactions contemplated by this Agreement shall be
reasonably satisfactory to Bank and its counsel and Bank shall have received and
shall receive from time to time all such counterpart originals or certified or
other copies of such documents and proceedings in connection with such
transactions, in form and substance satisfactory to Bank, as Bank may from time
to time request.
4.20 Other Documents and
Conditions. On or before the Closing Date, such other documents and
conditions as may be required to be submitted to Bank by the terms of this
Agreement or any Loan Document or set forth on the Closing Checklist with
respect to the transactions contemplated by this Agreement.
4.21 Fees and Expenses.
Borrower shall have paid all fees and charges required for the Closing and
related to the Closing, including legal fees, commitment fees, closing costs,
filing, recording and notary fees and any other similar matters pertinent to the
Closing.
ARTICLE
V
AFFIRMATIVE
COVENANTS
Borrower
covenants and agrees with Bank as follows: 5.01. Reporting and Information
Requirements.
5.01 Reporting and Information
Requirements.
(a) Federal Tax Returns.
Borrower shall annually furnish to Bank as soon as practicable, and in any event
on or before October 15, the federal tax returns, of Borrower and Tenant,
including all schedules and attachments filed with such
returns.
18
(b) Annual Financial
Statements. As soon as practicable, and in any event within 120 days
after the close of each fiscal year of Borrower and Tenant, Borrower shall
furnish to Bank statements of income for such fiscal year, a balance sheet as of
the close of such fiscal year and a statement of cash flow for such fiscal year,
and notes to. each, all in reasonable detail, setting forth in comparative form
the corresponding figures for the preceding fiscal year • (except for Borrower's
2002 statements), with such income statements, balance sheets and cash flow
statements to be audited by independent certified public accountants selected by
Borrower and Tenant, respectively, and satisfactory to Bank. The certificate or
report of such accountant shall be free of exceptions or qualifications not
acceptable to Bank and shall in any event contain a written statement of such
accountant substantially to the effect that (i) such accountant prepared such
financial statements in accordance with GAAP and (ii) such financial statements
present fairly the financial position as of the dates indicated and the results
of its operations and changes in financial position for the periods indicated in
accordance with GAAP applied on a basis consistent with that of the preceding
fiscal year.
(c) Quarterly Reports. As
soon as practicable, and in any event within 45 days of the close of each
calendar month, Borrower shall furnish to Bank statements of income, retained
earnings and changes in financial position for Borrower and Tenant for such
period to the end. of such period, and a balance sheet as of the close of such
period, and notes to the corresponding figures for the same period or as of the
same date during the preceding period (except for the balance sheet, which shall
set forth in comparative form the corresponding statements and balance sheet as
of the prior fiscal year end), with such statements and balance sheet to be
certified by the Chief Financial Officer or Manager of Borrower and Tenant as
presenting fairly the financial position of Borrower and Tenant as of the end of
such period and the results of its operations and the changes in its financial
position for such period, in conformity with GAAP applied in a manner consistent
with that of the most recent audited financial statements furnished to
Bank.
(d) Compliance
Certificate. Within 45 days after the end of each quarter of the calendar
year during the term of this Agreement, Borrower shall deliver to Bank a
certificate dated as of the end of such quarter, signed on behalf of Borrower by
its chief financial officer stating that as of the date thereof no Event of
Default or Potential Default to which Borrower is aware has occurred and is
continuing or exists, or if an Event of Default or Potential Default has
occurred and is continuing or exists, specifying in detail the nature and period
of existence thereof and any action taken or contemplated to be taken by
Borrower.
(e) Other Quarterly
Reports. Within 30 days of the end of each calendar quarter: (i) detailed
listing of all fees paid by [REDACTED – CONFIDENTIAL TREATMENT
REQUESTED]* to Borrower pertaining to Mortgage Loans,-(ii) summary of
fees deposited to Reserve Fund Account, (iii) delinquency report from [REDACTED – CONFIDENTIAL TREATMENT
REQUESTED]* on all outstanding Mortgage Loans, (iv) status summary from
Borrower on Purchased Loans,. (v) report of rents paid and rents receivable
pertaining to the Leases, and (vi) aging of Loan . Advances made to Borrower
hereunder.
(f)
Notice of Event of
Default. Promptly upon becoming aware of any Event of Default or
Potential Default, Borrower shall give Bank notice thereof, together with a
written statement of Borrower setting forth the details thereof and any action
taken or contemplated to be taken by Borrower.
(g) Notice of Material Adverse
Change. Promptly upon becoming aware thereof, Borrower shall give Bank
notice with respect to any material adverse change in the financial condition,
assets, properties, management, operations or business-of-Borrower or
Tenant.
19
(h) Notice of
Proceedings. Promptly upon becoming aware thereof, Borrower shall give
Bank notice of the commencement, existence or threat of all proceedings by or
before any Official Body against or affecting Borrower or Tenant which, if
adversely decided, would have an adverse effect on the financial condition,
assets, properties, management, operations or business of Borrower or
Tenant.
(i)
Visitation. Upon
receipt of reasonable notice, and so long as not to interfere with operations of
the Tenant. Borrower shall permit such persons as Bank may designate to visit
and inspect any of its properties to examine the books and records relevant
thereto and take copies and extracts therefrom, and to discuss Borrower's
affairs with each of its agents, employees and independent accountants at such
times and as often as Bank may reasonably request, at Bank's expense. Borrower
hereby authorizes such agents, employees and independent accountants to discuss
with Bank the affairs of Borrower, all at Bank's expense.
(j)
Further Information.
Borrower will promptly furnish, or cause Tenant to furnish, to Bank such other
information, in such form, as Bank may reasonably request from time to
time.
5.02 Insurance. Borrower
shall maintain, and require Tenant to maintain, with financially sound and
reputable insurers, general liability insurance with-respect to its properties
and businesses, against such liabilities, casualties and contingencies and of
such types and in such amounts as is satisfactory to Bank and as is customary in
the case of entities engaged in the same or a similar business or having similar
properties in the same geographic area (including, if required by Bank, flood
insurance). Borrower agrees to provide Bank with thirty (30) days advance notice
of the termination of, any such policy of insurance.
5.03 Maintenance of
Properties. Borrower shall maintain or cause to be maintained in good
repair, working order and condition the properties now or hereafter owned,
leased or otherwise possessed by it and shall make or cause to be made all
needful and proper repairs, renewals, replacements and improvements thereto so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times.
5.04 Payment of
Liabilities. Borrower shall pay or discharge:
(a) prior
to the date on which penalties attach thereto, all taxes, assessments and other
governmental charges or levies imposed upon it or any of its properties or
income;
(b) on
or prior to the date when due, all lawful claims of materialmen, mechanics,
carriers, warehousemen, landlords and other like persons which, if unpaid, might
result in the creation of a Lien upon any such properties;
(c) on
or prior to the date when due, all other lawful claims which. if unpaid, might
result in the creation of a Lien upon any such properties; and
(d) all
other liabilities so that they are not in default, in the ordinary course of
Borrower's business.
20
5.05 Financial Accounting
Practices. Borrower shall make and keep books, records and accounts
which, in reasonable detail, accurately and fairly reflect its transactions and
the dispositions of its assets and maintain a system of internal accounting
controls sufficient to provide reasonable assurances that (a) transactions are
executed in accordance with management's general or specific authorization. (b)
transactions are recorded as necessary (i) to permit preparation of financial
statements in conformity with (MAP and (ii) to maintain accountability for
assets, (c) access to assets is permitted only in accordance with management's
general or specific authorization, and (d) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
5.06 Compliance with Laws.
Borrower shall comply with all applicable Laws, in all material
respects.
5.07 Continuation of and Change
in Business. Borrower shall continue to engage in the business and
activities that it is presently engaged in. Borrower shall not engage in any
other business or activities without obtaining the prior written consent of
Bank.
5.08 Use of Proceeds.
Borrower will use the proceeds of the Line of Credit and Letter of Credit Note
for the purposes set forth in Section 3.15 hereof
5.09 Lien Searches. Bank
may, but shall not be obligated to, conduct lien searches of Borrower and its
assets and properties, in its sole discretion, may determine be
necessary.
5.10 Further Assurances.
At any time and from time to time, upon Bank's request, Borrower shall, and
shall cause the Tenant to, make, execute and deliver, or cause to be made,
executed and delivered, to •Bank and where appropriate shall cause to be
recorded or filed, and from time to time thereafter to be re-recorded and
reified at such time and in such offices and places as shall be deemed
reasonably desirable by Bank, any and all such other Loan Documents,
certificates and other documents as Bank may consider necessary or desirable in
order to effectuate, complete or perfect and to continue and preserve the
obligations of Borrower hereunder under the Notes and the Loan Documents and the
Liens created thereby. Upon any failure by Borrower or the Tenant to do so, Bank
may make, execute, record, file, re-record or refile any and each such Loan
Document, instrument, certificate and document for and in the name of
Borrower.
5.11 Wages and Withholding
Taxes. Borrower shall pay when due all wages and other compensation and
all withholding taxes. Borrower shall create and fund a reserve for all
withholding taxes for wages and other compensation which has been paid but as to
which the taxes are not yet due. If such wages and other compensation -are not
paid when due and/or if such withholding taxes are not paid when due and/or a
funded reserve is not created for withholding taxes which are owing for wages
and other compensation which have been paid but as to which the taxes are not
yet due, Bank may, but is not obligated to pay Borrower's wage, compensation
and/or withholding tax liabilities and add such amounts so paid to the principal
amounts due under Section 2.01 of this Agreement.
5.12 Preservation of
Existence. Borrower shall maintain its limited partnership existence,
rights and franchises in full force and effect in its jurisdictions of
organization. Borrower shall qualify and remain qualified as a foreign limited
partnership in each jurisdiction in which failure to receive or retain such
qualification would have a material adverse effect on the financial conditions,
assets, properties, management. operations or business of
Borrower.
21
5.13 [REDACTED
– CONFIDENTIAL TREATMENT REQUESTED]* Agreement. Borrower
shall comply with all of the terms and conditions of the [REDACTED – CONFIDENTIAL TREATMENT
REQUESTED]* Agreement and shall service the Purchased Loans in a
commercially reasonable manner. Borrower shall notify Bank immediately if
Borrower fails to comply with such terms and conditions or receives notification
from [REDACTED – CONFIDENTIAL
TREATMENT REQUESTED]* that Borrower is in default of the [REDACTED – CONFIDENTIAL TREATMENT
REQUESTED]* Agreement or otherwise is unable or unwilling to service all
or a part of the Purchased Loans in conformance with all applicable
requirements. -Borrower agrees that it will not amend, modify or otherwise alter
the [REDACTED – CONFIDENTIAL
TREATMENT REQUESTED]* Agreement, without the prior written consent of
Bank, which consent may not be unreasonably withheld and must be responded to
within 15 days.
5.14 Borrower's Collection
Policies. Within 90 days of closing, Borrower shall deliver to Bank a
copy of the Borrower's policies and procedures pertaining to collection of and
foreclosure on the Purchased Loans.
5.15 Reserve Fund Account.
Borrower agrees to deposit in the Reserve Fund Account all amounts received by
Borrower as referral or other fees from [REDACTED – CONFIDENTIAL TREATMENT
REQUESTED]*, pursuant to the [REDACTED – CONFIDENTIAL TREATMENT
REQUESTED]* Agreement, for the referral of the Mortgage Loans, and
further agrees to maintain a minimum balance of $1,000,000 therein. Provided no
Event of Default or Potential Default exists, the Reserve Fund Account may be
used by Borrower to: (i) reduce the principal and accrued interest on the Line
of Credit when there is a deficiency in the amount received from the Collateral
Property Disposition to repay the Loan Advances made pertaining to the Purchased
Loan secured thereby, (ii) pay expenses of Borrower incurred as a direct result
of the Purchased Loans, and (iii) for such other permitted purposes as set forth
in Section 9.3 of the [REDACTED
– CONFIDENTIAL TREATMENT REQUESTED]* Agreement.
5.16 Final Title
Reports. Borrower agrees to deliver final title reports to the
Bank within 60 days of Closing from attorneys opining that the Mortgages
securing the Bank are in first lien priority position and title to such property
is in the Borrower's name, and that no other changes in the title has occurred
since the date of such preliminary title report, together with the original
recorded Mortgages and Lease Assignments.
5.17 Replacement Real
Property. Borrower agrees to pledge and mortgage a replacement parcel of
real property with the same or greater value with a lease satisfactory to Bank
within 90 days after the closing of a facility on the Real Property, and shall
provide notice of such closing within 10 days thereafter.
5.18 Affiliate Debt & Net
Worth. Borrower agrees to maintain combined Affiliate Debt and minimum
net worth of at least $31,800,000, and maintain a minimum net worth of at least
$1,800,000.
22
ARTICLE
VI
NEGATIVE
COVENANTS
Borrower
covenants to Bank as follows:
6.01 Liens. Without the
prior written consent of Bank. Borrower shall not at any time create, incur,
assume or suffer to exist any Lien on or against any assets of Borrower or agree
or become liable to do so except:
(a) Liens
in favor of Bank:
(b) Liens
existing or anticipated on the date hereof and listed as follows:
None;
(c) Liens
arising from taxes, assessments, charges, levies or claims that are not yet due,
that remain payable without penalty;
(d) Deposits
or pledges to secure workers' compensation, unemployment -insurance, old age
benefits or other social security obligations, or in connection with or to
secure the performance of bids, tenders; trade contracts or leases, or to secure
statutory obligations, or stay, surety or appeal bonds, or other pledges or
deposits of like-nature and all in the ordinary course of business in an
aggregate amount of less than $100,000.00; and
(e) Zoning
restrictions, easements, minor restrictions on the use of real property, and
other minor Liens that do not secure the payment of money or, the performance of
an obligation and that do not in the aggregate materially detract from the value
of a property or asset to, or materially impair its use in the business of
Borrower; and
6.02 Indebtedness. Without
the prior written consent of Bank, Borrower shall not at any time create, incur,
assume or suffer to exist any Indebtedness except:
(a) Indebtedness
under this Agreement, the Notes or any other Loan Documents;
(b) Indebtedness
existing or anticipated on the date hereof as follows: See (e)
below;
(c) Current
accounts payable, accrued expenses and other current items arising out of
transactions (other than borrowings) in the ordinary course of
business;
(d) Indebtedness
representing, inter-party or related party indebtedness which has been
subordinated to the Line of Credit and Letter of-Credit,
(e) Such
other Indebtedness as shown on Borrower's most recent financial statement
presented to the Bank; and
(f) rent
received in advance.
6.03 Guarantees and Contingent
Liabilities. Without the prior written consent of Bank, Borrower shall
not at any time, directly or indirectly, assume, guarantee, endorse or otherwise
agree, become or remain directly or contingently liable upon or with respect to
any obligation or liability of any other Person.
23
6.04 Loans and
Investments. Not Applicable and Intentionally Left Blank.
6.05 Dispositions of
Assets. Borrower shall not sell, pledge, assign, lease, abandon or
otherwise transfer or dispose of, voluntarily or involuntarily (any of the
foregoing being referred to in this section 6.05 as a "transaction" and any
series of related transactions constituting but a single transaction), the
assets of Borrower, without the prior written consent of Bank, except for
transactions which do not cause the Borrower to violate Section 5.18
hereof.
6.06 Self-Dealings. Not
Applicable and Intentionally Left Blank.
6.07 Transactions Outside the
Ordinary Course of Business. Borrower shall not enter into any
transaction outside the ordinary course of its businesses without the prior
Written consent of Bank.
6.08 Capital Distributions and
Dividends. Borrower shall not declare, make, pay or agree, become or
remain liable to make or pay, any dividends or other distribution of any nature
(whether in cash, property, securities or other-wise) on account of or in
respect of any partnership interests of Borrower if an Event of Default or
Potential Event of Default exists.
6.09 Continuation of or Change in
Business. Borrower shall continue to engage in its business substantially
as is currently undertaken, and Borrower shall not engage in any other
business.
6.10 Limitation on Modification
of [REDACTED
– CONFIDENTIAL TREATMENT REQUESTED]* Agreement and Lease.
Borrower shall not change or modify or otherwise amend the [REDACTED – CONFIDENTIAL TREATMENT
REQUESTED]* Agreement or the Lease without the prior written consent of
Bank, which consent shall not be unreasonably withheld and responded-to within
15 days of receipt.
6.11 Merger.
Consolidation. Business Acquisitions. Borrower shall not merge or agree to merge
with or into or consolidate with or into any other Person without the prior
written: consent of Bank.
6.12 Margin Stock.
Borrower will not use the proceeds of any Loan, directly or indirectly, to
purchase any "margin stock" (within the meaning or Regulations U, G, T or X of
the Board of Governors of the Federal Reserve System) or to extend credit to
others for purpose of purchasing or carrying, directly or indirectly, any margin
stock.
6.13 No Liens on
Collateral. Borrower shall not incur, create, assume or permit to exist,
any Lien on all or any of the collateral assigned to Bank pursuant to this
Agreement or any other Loan Document as security for the Line of Credit or
Letter of Credit Note, without the prior written consent of Bank.
6.14 Change in
Control. Borrower will not permit a Change in Control (as
defined below), without the prior written consent of the Bank, which consent
will not be unreasonably withheld. A Change of Control shall mean any one or
more of the following: (i ) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇; individually or in the
Trusts (as defined below) shall own (beneficially or of record) less than 51 %
of the membership interests in Borrower's General Partner, or (ii) at any time a
combination of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇, Borrower's General Partner or the Trusts
shall fail to have the right to receive 80% or more of all distributions made by
Borrower, including without limitation liquidating distributions. or (iii)
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇. individually or in the Trusts, shall fail to have the
right to receive 80% or more of all distributions made by the Tenant, including
without limitation liquidating distributions. The Trusts shall mean any ,
revocable or irrevocable trusts for which ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇ is a trustee or
created.
24
ARTICLE
VII
DEFAULTS
7.01 Events of Default. An
Event of Default shall mean the occurrence or existence of one or more of the
following events or conditions (whatever the reason for such Event of Default
and whether voluntary, involuntary or effected by operation of
law):
(a) Borrower
shall fail to pay when due principal or interest on either Note, any commitment
or renewal fee, any amount payable pursuant to this Agreement or any other
amount due hereunder or under any agreement with Bank, and such default shall
continue ten (10) consecutive days; or
(b) Any
representation or warrant), made by Borrower or Tenant under this Agreement or
the Loan Documents or any statement made by Borrower or Tenant in any financial
statement, certificate, report, exhibit or document furnished by Borrower or
Tenant to Bank pursuant to this Agreement or the other Loan Documents shall
prove to have been false or misleading in any material respect as of the time
when made; or •
(c) Borrower
or Tenant shall default in the performance or observance of: any covenant
contained in Article V or Article VI hereof and such default shall continue
thirty (30) consecutive days; or
(d) Borrower
or Tenant shall default in the performance or observance of any other covenant,
agreement or duty under the Loan Documents or under the Lease, and such default
shall continue thirty (30) consecutive days after receipt of written notice by
Borrower-from Bank of such default; or -
(e) Borrower
or Tenant, or any of them, (i) shall default (as principal or guarantor or other
surety) in any payment of principal of or interest on any obligation for
borrowed money in excess of $100,000 beyond any period of grace with respect
thereto or, if such obligation or obligations is or are payable or repayable on
demand, shall fail to pay or repay such obligation or obligations when demanded
or (ii) shall default in the observance of any covenant, term or condition
contained in any agreement or instrument by which such obligation or obligations
is or are created, secured or evidenced if the effect of Such default is to
cause, or to permit the holder or holders of such obligation or obligations (.or
a trustee or agent on behalf of such holder or holders) to cause, all or part of
such obligation or obligations to become due before its or their otherwise
stated maturity; or
(f)
One or more
judgments for the payment of money in excess of an amount that would materially
adversely affect the financial condition shall have been entered against
Borrower or Tenant which judgment or judgments shall have remained undischarged
and unstayed for a period of thirty (30) consecutive days; or
25
(g) A
writ or warrant of attachment, garnishment, execution, distraint or similar
process shall have been issued against Borrower or Tenant which shall have
remained undischarged and unstayed for a period of thirty (30) consecutive days;
or
(h) Bank
shall have determined (which determination shall be conclusive) that a material
adverse change has. occurred in the financial condition, assets, properties,
management, operations or business of Borrower or Tenant or that the prospect of
payment or performance of any covenant, agreement or duty under this Agreement,
or the other Loan Documents is impaired or that Bank is insecure;
or
(i)
The death, incarceration, or incapacitation
of any guarantor, if any; or A proceeding shall have been instituted in respect
of Borrower or Tenant:
(j)
The death, incarceration or incapacitation
of any guarantor, if any; or
(i)
seeking to have an order for relief entered in
respect of any Borrower or Tenant or seeking a declaration or entailing a
finding that Borrower or Tenant is insolvent or a similar declaration or
finding, or seeking dissolution, winding-up, charter revocation or forfeiture,
liquidation, reorganization, arrangement, adjustment, composition or other
similar relief with respect to Borrower or Tenant, their assets or their: debts
under any law relating to bankruptcy, insolvency, relief of debtors-or
protection of creditors, termination of legal entities or any other similar law
now or hereafter in effect, or
(ii) seeking
appointment of a receiver, trustee, custodian, liquidator, assignnee,
sequestrator or other similar official for Borrower or Tenant or for all or any
substantial part of their property; or
(iii) any
such proceedings shall result in the entry, making or grant of any such order
for relief, declaration, funding, relief, or appointment, or such proceeding
shall remain undismissed and unstayed for a period of thirty (30) days or more;
or
(k) Borrower
or Tenant shall become insolvent, shall become generally unable to pay their
debts as they become due, shall voluntarily suspend transaction of their
business, shall make a general assignment for the benefit of creditors, shall
institute a proceeding described in Section 7.01j(ii) or shall consent to any
such order for relief declaration, finding or relief described therein_ shall
institute a proceeding described in Section 7.01j(ii) or shall consent to any
such appointment or to the taking of possession by any such official of all or
any substantial part of its property whether or not any proceeding is
instituted, shall dissolve, wind-up or liquidate itself or any substantial part
of its property. Or shall take any action in furtherance of any of the
foregoing: or
(l) (1) (i)
a Termination Event with respect to a Plan shall occur, (ii) any person shall
engage in any prohibited transaction involving any Plan, (iii) an accumulated
funding deficiency, whether or not waived, shall exist with respect to any Plan,
(iv) Borrower or any ERISA Affiliate shall be in "Default" (as defined in
section 4219(c)(5) of ERISA) with respect to payments due to a multiemployer
plan resulting from Borrower's or any ERISA Affiliate's complete or partial
withdrawal (as described in section 4203 or 4205 of ERISA) from such Plan, or
(v) any other event or condition shall occur or exist with respect to a Single
Employer Plan, except that no such event or condition shall constitute an Event
of Default if it, together with all other events or conditions at the time
existing, would not subject Borrower or Tenant to any tax, penalty, debt or
liability which, alone or in the aggregate, would have a materially adverse
effect on Borrower.
26
(m) The
Lease has been terminated for any reason, except as provided for in Section 5.17
hereof.
7.02 Consequences of an Event of
Default. Bank may demand the unpaid principal amount of the Notes,
interest accrued thereon and all other amounts owing by Borrower hereunder or
under the Notes or other Loan Documents to be immediately due and payable
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived, and an action therefor shall immediately
accrue.
7.03 Set-Off. If the
unpaid principal amount of the Notes, interest accrued thereon or other amount
owing by Borrower hereunder or under either Note shall have become due and
payable (by demand or otherwise), Bank and the holder of any participation in
the Line of Credit or Letter of Credit Note shall each have the right, in
addition to all other rights and remedies available to it, without notice to
Borrower, to set off against and to appropriate and apply to such due and
payable amounts any Debt owing to, and any other funds held in any manner for
the account of, Borrower by Bank or by such holder, including, without
limitation, all funds in all deposit accounts (whether time or demand,
general-or special, provisionally credited or finally credited, or otherwise)
now or hereafter maintained by any Borrower with Bank or such holder. Borrower
hereby consents to and confirms the foregoing arrangements and confirms each
Bank's rights and such holder's rights of banker's lien and set-off. Nothing in
this Agreement shall be deemed a waiver or prohibition of or restriction on any
of Bank's rights or any such holder's rights of banker's lien or
set-off.
7.04 Other Remedies. If
one or more Events of Default shall occur, then Bank. in addition to any and all
other rights and remedies which Bank may then have hereunder, under the UCC, or
under any other instrument, or which Bank may have at Law or in equity or
otherwise, may, at its option: (i) in the name of Borrower. or otherwise,
demand, collect, receive and receipt for, compound. -Compromise_ settle and give
acquittance for, and prosecute and discontinue any suits or proceedings in
respect loan), or all of the collateral securing the Line of Credit or Letter of
Credit Note (such collateral being referred to for purposes of Sections 7.04 and
7.05 hereunder as the "Collateral"); (ii) take any action which Bank may deem
necessary or desirable in order to realize on the Collateral, including, the
power to perform any contract. endorse in the name of Borrower without recourse
to Borrower any checks, drafts, notes or other instruments or documents received
in payment of or on account of the collateral:, (iii) enter upon the premises
where any of the Collateral not in the possession of Bank is located and take
possession thereof and remove the same, with or without judicial process; (iv)
reduce their claim to judgment or foreclosure or otherwise enforce the security
interests herein granted and assigned, in whole or in part, by any available
judicial procedure; (v) after notification, if any, provided for herein, sell,
lease, or otherwise dispose of, at the office of Bank, on the premises of
Borrower, or elsewhere, all or any part of the Collateral, in its then condition
or following any commercially reasonable preparation or processing, and any such
sale or other disposition may be as a unit or in parcels, by public or private
proceedings, and by way of One or more contracts (it being agreed that the sale
of any part of Collateral shall not exhaust Banks power of sale, but sales may
be made from time to time, and at any time, until all the Collateral has been
sold or until all of Borrower's Indebtedness to Bank has been fully paid and
performed), and at any such sale it shall not be necessary to exhibit any of the
Collateral; (vi) at its discretion, retain the Collateral in satisfaction of the
Line of Credit or Letter of Credit Note whenever the circumstances are such that
Bank is entitled to do so under the Code or otherwise', or (vii) exercise any
and all other rights, remedies and privileges Bank may have under this Agreement
or under the Loan Documents.
27
7.05 Non-Assumption of
Liability. Nothing herein contained shall relieve Borrower from
performing any covenant, agreement or obligation on the part of Borrower to be
performed under or in respect to any of the Collateral (including rights to the
Purchased Loans) or from any liability to any party or parties having an
interest therein or impose any liability on Bank for the acts or omissions of
Borrower in connection with any of the Collateral. Bank shall not assume or
become liable for, nor shall it be deemed or construed to have assumed or become
liable for any obligation of Borrower with respect to any of the Collateral, or
otherwise, by reason of the grant to Bank of security interests in the
Collateral.
ARTICLE
VIII
MISCELLANEOUS
8.01 Business Days. Except
as otherwise provided herein, whenever any payment or action to be made or taken
hereunder or under the Notes shall be stated to be due on a day which is not a
Business Day, such payment or action shall be made or taken on the next
following Business Day and such extension of time shall be included in computing
interest or fees, if any, in connection with such payment or
action.
8.02 Records. The unpaid
principal amount of the Notes, the unpaid interest accrued thereon, the interest
rate or rates applicable to such unpaid principal amount, the duration of such
applicability and the accrued and unpaid commitment fee shall at all times be
ascertained from the records of Bank which shall be conclusive absent manifest
error.
8.03 Amendments and
Waivers. Bank and Borrower, acting together. may from time to time enter
into agreements amending. modifying or supplementing this Agreement or the Notes
or any other documents or instruments pursuant to or in connection herewith or
changing the rights of Bank or of Borrower hereunder or thereunder, and Bank may
from time to time grant waivers or consents to a departure from the due
performance of the obligations of Borrower hereunder or thereunder. Any such
agreement, waiver or consent must be in writing and shall be effective only to
the extent specifically set forth in such writing. In the ease of any such
waiver or consent relating to any provision hereof, any Event of Default or
Potential Default so waived or consented to shall be deemed to be cured and not
continuing, but no such waiver or consent shall extend to any other or
subsequent Event of Default or Potential Default or impair any right consequent
thereto.
8.04 No Implied Waiver,
Cumulative Remedies. No course of dealing and no delay or failure of Bank
in exercising any right, power or privilege under this Agreement, the Note, the
Loan Documents or any other documents or instruments pursuant to or
in-connection herewith shall affect any other or further exercise thereof or
exercise of any other right, power or privilege except as and to the extent that
the assertion of any such right, power or privilege shall be barred by an
applicable statute of limitations; nor shall any single or partial exercise of
any such right, power or privilege or any abandonment or discontinuance of steps
to enforce such a right, power or privilege preclude any other exercise thereof
or of any other right, power or privilege. The • rights and remedies of Bank
under this Agreement, the Notes or any other documents or instruments pursuant
to or in connection herewith are cumulative and not exclusive of any rights or
remedies which Bank would otherwise have.
28
8.05 Notices. All notices,
requests, demands, directions and other communications (collectively "notices")
under the provisions of this Agreement or the Notes shall be in writing
(including telexed communication) unless otherwise expressly permitted hereunder
and shall be sent by first-class or first-class express mail, or by telex with
confirmation in writing mailed. first-class, in all cases with charges prepaid,
and any such properly given notice shall be effective when received. All notices
shall be sent to the party in question at the address stated in Section 1.01 or
in accordance with the last unrevoked written direction from such party to the
other parties.
8.06 Expenses: Taxes. Attorneys'
Fees. Borrower agrees to pay or cause to be paid and to save Bank
harmless against liability for the payment of all reasonable out-of-pocket
expenses including, but not limited to fees and expenses of counsel for Bank.
incurred by Bank from time to time (i) arising in connection with the
preparation, execution, delivery and performance of this Agreement, the Notes,
and any documents, instruments or transactions pursuant to or in connection
herewith, (ii) relating to any requested amendments, waivers or consents to this
Agreement, the Notes or any such documents or instruments and, (iii) arising in
connection with Bank's enforcement or preservation of rights under this
Agreement the Notes or any Such documents or instruments including, but not
limited to, such expenses as may be incurred by Bank in the collection of an
outstanding Note. Borrower agrees to pay all stamp_ document, transfer,
recording or filing taxes or tees and similar impositions now or hereafter
determined by Bank to be payable in connection with this Agreement, the Notes or
any other documents, instruments or transactions pursuant to or in connection
herewith, and Borrower agrees to save Bank harmless from and against any and all
present or future claims, liabilities or losses with respect to or resulting
from any omission to pay or delay in paying any such taxes, fees or impositions.
In the event of a determination adversely to Borrower of any action at law or
suit in equity in relation to this Agreement, the Notes or any Loan Document
Borrower will pay, in addition to all other sums which Borrower may be required
to pay, a reasonable sum for attorney's fees incurred by Bank or the holder of
such Notes in connection with such action or suit. All payments due from
Borrower under this Section 8.06 shall be added to and become part of the Line
of Credit or Letter of Credit Note until paid in full.
8.07 Severability. The
provisions of this Agreement are intended to be severable. If any provision of
this Agreement shall be held invalid or unenforceable in whole or in part in any
jurisdiction such provision shall, as to such jurisdiction, be ineffective to
the extent of such invalidity or unenforceability without in any manner
affecting the validity or enforceability thereof in any other jurisdiction or
the remaining provisions hereof in any jurisdiction.
8.08 Governing Law. This
Agreement shall be deemed to be a contract under the laws of the State of West.
Virginia, and for all purposes shall be governed by and construed and enforced
in accordance with the laws of said State, without regard to the principles of
conflicts of laws thereof.
29
8.09 Prior Understandings.
This Agreement supersedes all prior understandings and agreements, whether
written or oral, among the parties relating to the transactions provided for
herein.
8.10 Duration; Survival.
All representations and warranties of Borrower and Tenant contained herein or
made in connection herewith shall survive the making of and shall not be waived
by the execution and delivery of this Agreement or the Note, any investigation
by Bank, or the making of any Loan and Bank may hereby rely upon same.
Notwithstanding termination of this Agreement or an Event of Default, all
covenants and agreements of Borrower shall continue in full force and effect
from an after the date of this Agreement so long as it—may-borrow hereunder and
until payment in full of the Note, interest thereon, commitment fees and all
other obligations of Borrower under this Agreement or the Note. Without
limitation, it is understood that all obligations of Borrower to make payments
to or indemnify Bank shall survive the payment in full of the Notes and of all
other obligations of Borrower thereunder and hereunder.
8.11 Counterparts. This
Agreement may be executed in any number of counterparts and by the different
parties hereto on separate counterparts each of which, when so executed. shall
be deemed an original, but all such counterparts shall constitute but one and
the same instrument.
8.12 Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of
Bank, Borrower and its successors and assigns, except that Borrower may not
assign or transfer any of its right§ hereunder without the prior written consent
of Batik. Except to the extent otherwise required by the context of this
Agreement, the word —Bank" where used in this Agreement shall mean and include
any holder of a Note originally issued to Bank, and each such holder of a Note
shall be bound by and have the benefits of this Agreement the same as if such
holder-had been 11 signatory hereto.
8.13 Participation.
Without notice to Borrower, Bank may participate, sell or assign all or part of
the credit facilities evidenced by the Notes and, at any time and from time to
time, all information on Borrower may he provided to any potential purchaser of
or participant in the Notes, any governmental authority, Bank's auditory and
professional advisors. any person or entity which in the ordinary course of its
business makes credit reference inquiries, and as may be necessary or advisable
for the preservation of Bank's rights.
8.14 Condemnation Matters.
To the extent that any condemnation does not affect the rental payment to
Borrower from Tenant, and does not affect the normal operation of Tenant, then
all condemnation proceeds shall be the sole property of Borrower. If, however,
the rental -payment is modified Borrower shall be required to replace the
subject property within ninety (90) days of the final disposition of the
condemnation proceeds.
8.15 Jurisdiction: Waiver of
Trial by Jury. Borrower and Tenant acknowledge and unconditionally and
irrevocably agree and consent:
30
(a) To
the jurisdiction of and to venue in the Circuit Court of Monongalia County, West
Virginia, and to the jurisdiction of and venue in any federal court sitting in
the Northern District of the State of West Virginia, for, with respect to, or
concerning any suit, action, or other legal proceeding pertaining to or in any
way or manner concerning, arising out of, or relating to the collection or
enforcement of the Line of Credit or Letter of Credit Note, any of Lender's
rights, remedies, or recourses with respect to the Line of Credit or Letter of
Credit Note, this Agreement, or any provision or provisions of any other Loan
Document; and
(b) That
service of any court paper, including, without limitation, any process,
complaint, subpoena, answer, reply, response, motion, order, or notice, may be
effected on Borrower or Guarantors, by mail, addressed and mailed as provided
herein or in such other manner as may be provided under applicable laws or rules
of the State of West Virginia or the Northern District of the State of West
Virginia. However, nothing contained herein shall prevent or limit Lender from
bringing or instituting any suit, action, or other legal proceeding or
exercising any of its rights, remedies, or recourses against any security for
the Line of Credit or Letter of Credit Note or against Borrower or Guarantors,
or any property of Borrower or Guarantors, within any other state or
jurisdiction. Initiating, bringing, or instituting any such suit, action, or
proceeding in any other state or jurisdiction shall in no way or manner
constitute a waiver or release of the provision and agreement herein that the
laws of the State of West Virginia shall govern the validity of this Agreement,
the construction of its terms, and the interpretation of the rights, powers,
duties, and obligations of the parties upon whom this Agreement shall be binding
or the submission by Borrower and Guarantors, to personal jurisdiction within
the State of West Virginia. The means and manner of obtaining personal
jurisdiction and perfecting service of process contained herein are not intended
to be and shall not be construed to be exclusive, but are and shall be
cumulative and in addition to all other means and manner of obtaining personal
jurisdiction and perfecting service of process as now or hereafter provided by
the laws of the State o I. West Virginia or the Northern District of the State
of West Virginia.
(c) BY
EXECUTION OF THIS AGREEMENT, BORROWER AND TENANT MUTUALLY, KNOWINGLY, WILLINGLY,
AND VOLUNTARILY WAIVE AND RELEASE ANY AND ALL RIGHTS TO TRIAL BY JURY, AND
NEITHER SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY
OTHER ACTION OR LITIGATION PROCEEDING BASED UPON OR ARISING OUT OF THE LINE OF
CREDIT OR LETTER OF CREDIT TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT. BORROWER AND TENANT FURTHER WAIVE AND RELEASE ANY AND ALL
RIGHTS TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL HAS NOT BEEN WAIVED. THIS SUBPARAGRAPH AND
THE PROVISIONS HEREIN CONTAINED CONSTITUTE AN IRREVOCABLE WAIVER AND
RELEASE.
IN
WITNESS WHEREOF, the parties, have caused this Agreement to be duly and properly
executed as of the date first above written.
31
| HARDY CREDIT CO. | |
|
By:
MAGGIE'S MANAGEMENT, LLC
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Its:
General Partner
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By:
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
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Its:
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Assistant
Vice President
|
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UNITED
BANK, INC.
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By:
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
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|
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Title:
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Executive
Vice-President
|
▇▇
▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇:
▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇:
The foregoing instrument was
acknowledged this 14th day of March, 2003, by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the
ASSISTANT VICE PRESIDENT of MAGGIE'S MANAGEMENT, LLC, Pennsylvania limited
liability company, the sole general partner of HARDY CREDIT CO., a Pennsylvania
limited partnership, for and on behalf of said limited liability company and
limited partnership, before me,
My commission expires:
|
|
STATE OF
WEST VIRGINIA:
COUNTY OF
MONONGALIA:
The foregoing instrument was
acknowledged this 14th day of March, 2003, by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an EXECUTIVE
VICE PRESIDENT, of UNITED BANK, INC., a West Virginia banking corporation, for
and on behalf of said corporation, before me,
My commission expires:
|
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The
Tenant hereby represents, warrants and covenants to Bank that (i) the
representations and warranties contained in Article III herein which are
applicable to it are true and correct ,and (ii) that it
shall be bound by the covenants contained herein which are applicable to
Tenant.
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Tenant:
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84
LUMBER COMPANY
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By:
HARDY HOLDINGS, LLC
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Its:
General Partner
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By:
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ Its: Assistant
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Vice
President
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STATE OF
WEST VIRGINIA:
COUNTY OF
MONONGALIA:
The
foregoing instrument was acknowledged this 14th day of March, 2003, by
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the ASSISTANT VICE PRESIDENT of HARDY HOLDINGS, LLC, a
Pennsylvania limited liability company, the general partner of 84 LUMBER
COMPANY, a Pennsylvania limited partnership, for and on behalf of said limited
liability company and limited
partnerships
before me,
My commission expires:
|
|
ATTACHMENTS
TO LINE OF CREDIT AGREEMENT
EXHIBIT
A
IDENTIFICATION
& DESCRIPTION OF REAL PROPERTY
EXHIBIT
B
FORM
REQUEST FOR ADVANCE
SCHEDULE
3.01. QUALIFICATION
SCHEDULES
3.06
OWNERSHIP
AND CONTROL
SCHEDULE
3.01
QUALIFICATION
Except for:
1. Borrower's General
Partner Authorization in Texas
2. Borrower — Authorization
in Ohio
SCHEDULES
3.06 AND 3.07
OWNERSHIP AND CONTROL OF
BORROWER
I, ▇▇▇ ▇▇▇▇▇▇▇, having been duly chosen
as Assistant Vice President and duly qualified and authorized do hereby certify
as to the ownership and control of Borrower (the "Borrower"), as
follows:
(A) General
Partnership Interests:
Maggies Management LLC
(B) Limited
Partnership Interests:
1998 Irrevocable Trust for ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
(C) Manager: The
following person named below are the duly qualified and acting
manager(s)
of the General Partner:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
The
business of Borrower as presently conducted and as presently planned to be
conducted is described as follows:
|
1.
|
Lending
money to contractors, mostly secured. by First Mortgages, or actual
ownership of property by Hardy Credit
Co.
|
2. Owning
Properties leased to 84 Lumber
3. Duties
under [REDACTED – CONFIDENTIAL
TREATMENT REQUESTED]* Assessment
|
HARDY
CREDIT CO.
|
|
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By:
MAGGIE'S MANAGEMENT, LLC
|
|
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Its:
General Partner
|
|
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By:
|
|
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
|
|
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Its:
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Assistant
Vice President
|
EXHIBIT
A
SEE ATTACHED DESCRIPTION OF
THE LOCATIONS OF REAL PROPERTY
EXHIBIT
B
FORM REQUEST FOR
ADVANCE