AMENDMENT NUMBER TWO TO FIRST AMENDED AND
RESTATED ASSUMPTION, EXTENSION AND LOAN AGREEMENT
This Amendment Number Two to First Amended and Restated
Assumption, Extension and Loan Agreement (the "Amendment") is
made as of October 21, 1996 by and among Fleet National Bank, a
national banking association with a place of business at 000
Xxxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 00000 (the
"Lender"), Xxxxxx X. Xxxxxxxxx, individual, with a place of
business at 000 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxxx 00000 (the
"Sponsor"), Xxxx Centers Limited Partnership, a Delaware limited
partnership, with a place of business at 000 Xxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxxxx 00000 (the "Borrower"), and Xxxx Centers
Trust, a Maryland real estate investment trust, with a place of
business at 000 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxxx 00000 (the
"REIT"). Capitalized terms used in this Amendment shall have the
same meaning as set forth in the Loan Agreement (hereinafter
defined) unless they are otherwise defined in this Amendment.
Other capitalized terms not contained in the Loan Agreement shall
have the meanings as set forth herein.
WITNESSETH THAT:
WHEREAS, Lender, Borrower, REIT and Sponsor entered into
that First Amended and Restated Assumption, Extension and Loan
Agreement dated as of May 30, 1995, as amended by Amendment
Number One to First Amended and Restated Assumption Extension and
Loan Agreement dated as of December 6, 1995 (the "Loan Agreement"
and collectively with this Amendment, the "Agreement") which
established a so-called revolving line of credit subject to the
terms of the Loan Agreement and the Consolidated Revolving Credit
Note;
WHEREAS, Borrower has requested the release of three (3)
Mortgaged Properties as security for the Loan in exchange for a
payment to Lender of principal in the amount of $8,105,000 and of
accrued interest and for certain modifications to the Loan
Agreement;
WHEREAS, Borrower has paid $8,105,000 to Lender and Lender
has agreed to release Northside Mall, Dothan, Alabama, Midway
Plaza, Opelika, Alabama and Cloud Springs Plaza (Park Plaza),
Fort Oglethorpe, Georgia, as security for the Loan and this
amendment sets forth Modifications of the Loan Agreement agreed
upon by the parties hereto;
NOW, THEREFORE, the parties hereto, in consideration of Ten
Dollars ($10.00) and other valuable consideration paid, the
receipt and sufficiency of which is hereby acknowledged by each,
hereby act and agree as follows:
1. Amendments.
(a) Section 3 of the Loan Agreement entitled "Maximum Loan
Amounts; Revolving Line of Credit Loan" is hereby amended by
striking therefrom the words "$25,000,000 (the "Maximum Loan
Amount") and substituting therefor the words "$12,000,000 (the
"Maximum Loan Amount").
(b) Section 4.6 of the Loan Agreement entitled "Borrowing
Base" is hereby stricken in its entirely and the following is
substituted therefor:
"4.6 Borrowing Base. As used herein, the term "Borrowing Base"
shall mean, as of any date, the lesser of: (a) an amount equal
to forty percent (40%) of the aggregate Fair Market Value as of
such date of the Mortgaged Properties, or, (b) an amount which,
if it were the Outstanding Principal of the Loan as of such date
(including any SBLC's which may be outstanding), would make
Annualized Operating Income (defined in Section 8.11.1 below) as
of such date equal to Projected Debt Service (defined in Section
8.11.4 below) multiplied by 2.25."
(c) Section 5.4 of the Loan Agreement entitled "Certain
Rights" is hereby amended by adding the following paragraph
thereto:
"Sponsor hereby subordinates to the Secured Obligation his
interest in that certain note or notes executed by REIT (and/or
entities controlled by REIT) in the aggregate approximate amount
of $3,030,427 and subordinates as to principal to the prior
payment of the Secured Obligations and REIT hereby agrees not to
make, and Sponsor hereby agrees not to accept, any payments of
principal under said note(s) until all the Secured Obligations
under the Agreement have been paid in full and REIT shall make,
and Sponsor shall accept, no other payments of interest, fees, or
of any other kind under said note(s) if the ratio of (i)
Distributions to shareholders of REIT (including Distributions to
any minority interests) to (ii) Funds from Operations as
currently defined by NAREIT (without adding back to net income
any amortization of deferred financing costs for purposes of this
subordination), shall have exceeded 90% for the quarter most
recently ended, provided, however, notwithstanding the foregoing,
that REIT may pay, and Sponsor may accept, payments of interest
under the note(s) if there exists no defaults by Borrower, REIT
or Sponsor under the Agreement. Said Note in favor of Sponsor
shall be included in calculations of Funded Debt under the
Agreement."
(d) Sections 8.11, 8.11.1 and 8.11.2, entitled "Mortgaged
Property Debt Service Coverage" "Annualized Operating Income" and
"Eligible Revenues", respectively, of the Loan Agreement are
hereby stricken in their entirety and the following are
substituted therefor:
"8.11 Mortgaged Property Debt Service Coverage. Annualized
Operating Income shall be calculated as of the end of each fiscal
quarter and shall at times be equal to or greater than 225% of
Projected Debt Service."
8.11.1 Annualized Operating Income. As used herein, the term
"Annualized Operating Income" as of any date shall mean the
excess, if any, of (i) Eligible Revenues as of such date, less
(ii) Defined Operating Expenses as of such date, annualized by
multiplying the difference by a factor of four.
8.11.2 Eligible Revenues, Etc. As used herein,
(a) the term "Eligible Revenues" as of any date shall mean for
the fiscal quarter ending on such date the sum of (i) Base Rents,
(ii) Percentage Rents, and (iii) Operating Expense Reimbursements
from leases of any portion of the Mortgaged Properties recognized
in accordance with GAAP consistently applied, (but not including
any gains or losses on the sale of assets).
(b) "Base Rents" for the most recently ended fiscal quarter
shall mean the base or minimum fixed rent payments due to the
Borrower during such quarter under any leases of any portion of
the Mortgaged Properties.
(c) "Percentage Rents" from a Mortgaged Property as of any date
shall mean the aggregate of the lowest amount of percentage or
overage rents, net of any operating expense set-offs or other
allowances and accrued in accordance with GAAP consistently
applied.
(d) "Operating Expense Reimbursements" as of any date shall mean
the portion of Defined Operating Expenses as of such date which
are due the Borrower."
(e) Subsection 8.11.3 is hereby amended by striking
therefrom the words "Midway Property 201,976 sq. ft." and
"Northside Property 372,151 sq. ft."
(f) Subsection 8.13 of the Loan Agreement entitled "Funded
Debt to Total Market Capitalization" is hereby amended by
striking therefor the words "sixty percent (60%) and substituting
therefor the words "seventy percent (70%)":
(g) The Loan Agreement is hereby amended by adding thereto
a new Subsection 8.13.1 as follows:
"8.13.1 Funded Debt to Restated Value. The Funded Debt of the
REIT and its Subsidiaries on a consolidated basis shall not at
any time exceed seventy percent (70%) of the Restated Value.
As used herein, "Restated Value" means, as of any date, the
hypothetical value of all shopping center properties owned by the
REIT and its Subsidiaries calculated in accordance with the
following formula:
(i) Annualize the net operating income reported by REIT in its
Consolidated Income Statement contained in its Form 10-Q (10-K)
filed with the SEC for the most recent calendar quarter by
multiplying such net operating income by four (4);
(ii) Adjust this annualized net operating income by subtracting
therefrom an amount equal to seven cents ($.07) per square foot
(based on the total Leasable Area Square Feet listed in the
REIT's most recent Form 10K filed with the SEC, adjusted to
reflect the leasable area of any properties acquired, sold or put
into service from the date of such Form 10K through the end of
the calendar quarter covered by the Form 10K referenced in clause
(i) above; and
(iii) Capitalize this adjusted annualized net operating income
using a capitalization rate equal to 10.29%."
(h) Subsection 8.14 of the Loan Agreement entitled
"Tangible Net Worth" is hereby amended by striking therefrom the
amount "$65,000,000" and substituting therefor the amount
$50,000,000".
(i) Subsection 8.15 of the Loan Agreement entitled
"Liquidity" is hereby amended by striking therefrom the amount of
$2,500,000" and by substituting therefor the amount of $500,000".
(j) Subsection 10.2 of the Loan Agreement entitled "Liens"
is hereby amended by striking therefrom the following words:
"provided, however, that the REIT Group shall at all times
maintain Unencumbered Real Estate with Annualized Operating
Income in excess of $2,500,000".
(k) Subsection 10.2.1 of the Loan Agreement is hereby
stricken in its entirety.
(l) Subsection 10.3 of the Loan Agreement entitled
"Distributions" is hereby stricken in its entirety and the
following substituted therefor:
"10.3 Distributions. The REIT shall not make any
Distribution unless it shall have given the Lender at least ten
(10) days prior written notice thereof identifying such
Distribution, the amount thereof and the Person or persons to
whom it is to be made. Distributions, including Distributions to
the owner(s) of operating partnership units of the Borrower, may
not exceed 115% of Funds from Operation in any one fiscal quarter
or 105% of Funds from Operation for any four consecutive
quarters. As used herein, "Funds from Operations" shall be
defined in accordance with the recommendations of the National
Association of Real Estate Investment Trusts ("NAREIT"); provided
however, that in addition to any other adjustments recommended by
NAREIT, amortization of deferred financing costs shall be added
back to net income to arrive at Funds from Operations for
purposes of this covenant."
(m) Subsection 12.1 of the Loan Agreement entitled
"Valuation" is hereby stricken in its entirety and the following
is substituted therefor:
"12.1 Valuation. In connection with the execution of this
Amendment the Lender has caused to be prepared and has accepted
appraisals of each of the Base Mortgaged Properties. The fair
market value of each Base Mortgaged Property as so determined as
of the valuation dated in each such appraisal is as follows:
Mortgaged Property Value
Wesmark Property $ 4,800,000
Searstown Property $ 3,650,000
Northwood Property $28,000,000
The Borrower hereby agrees that such fair market value shall
constitute the "Fair Market Values" of the Base Mortgaged
Properties for all purposes of the Loan Documents unless and
until modified as herein set forth."
(n) Section 16 of the Loan Agreement entitled "Definitions"
is hereby amended by adding after the definition "Rentable Space
8.11.3" the following definition: "Restated Value Section
8.13.1."
(o) Section 16 of the Loan Agreement entitled "Definitions"
is hereby further amended by striking therefrom the definition of
"Base Mortgaged Property" and by substituting therefor the
following:
"Base Mortgaged Property" shall mean each of the Northwood
Property, Searstown Property and Wesmark Property."
(p) Section 16 of the Loan Agreement entitled "Definitions"
is hereby further amended by striking the list of properties
included in the definition of Unencumbered Real Estate in its
entirety and by substituting therefor the following list:
"Normandale Mall, Montgomery, AL
Xxxxxxxx Plaza, Xxxxxx-Xxxxx, PA
Xxxxxxxx Plaza, Newberry SC
Manahawkin Center, Manahawkin, NJ (exclusive of K-Mart)."
2. Payments. At the time of the execution of this Amendment,
the Borrower shall pay to the Lender any current or previously
outstanding legal, appraisal and title insurance fees, costs or
expenses.
3. Representations and Warranties. To induce Lender to enter
into this Amendment, the Borrower, REIT and Sponsor represent and
warrant to Lender as follows:
(a) The information set forth in this Amendment is true and
correct.
(b) The Borrower, REIT and Sponsor have full power, authority
and legal right to execute and deliver this Amendment, and this
Amendment constitutes the valid and binding obligation of
Borrower, REIT and Sponsor, enforceable against them in
accordance with its terms.
(c) None of the Borrower, the REIT or the Sponsor has any
charge, claim, demand, plea or setoff upon, for or against the
Agreement or any of the Loan Documents. The Outstanding
Principal of the Loan as of the date hereof is $11,895,000, and
such sum remains due and payable in accordance with the terms and
provisions of the Agreement and other Loan Documents.
(d) If the effect of the amendments contained in this Amendment
are taken into account, no Default exists under the Agreement or
any other Loan Document.
(e) The execution, delivery and performance of this Amendment
has been duly authorized by all requisite partnership or trust
action on the part of the Borrower and the REIT, as the case may
be, and will not violate any partnership documents of the
Borrower or trust documents of the REIT or any provision of any
law or any order of any tribunal, and will not conflict with,
result in a breach of or constitute a default under any mortgage,
security agreement, loan or other credit agreement, or any other
agreement or instrument to which the Borrower or the REIT or the
Sponsor is a party, or result in the imposition of any Lien upon
the assets of the Borrower, the REIT or the Sponsor except as
contemplated by this Amendment.
4. Effectiveness of Loan Documents. Except as specifically
amended by this Amendment, the Loan Agreement and the other Loan
Documents remain unmodified and in full force and effect.
References in any of the Loan Documents to the Loan Agreement
shall hereafter be deemed to mean and refer to the Loan Agreement
as amended by this Amendment.
5. Miscellaneous.
(a) This Amendment constitutes the entire understanding among
the Borrower, the REIT, the Sponsor and the Lender concerning the
modification of the Loan Agreement. All prior and
contemporaneous negotiations and understandings are merged in
this Amendment.
(b) The captions preceding the sections of this Amendment are
for convenience of reference only. They are not a part of this
Agreement and shall not be considered in construing its meaning
or effect.
(c) The Borrower, the REIT and the Sponsor shall pay the
attorneys' fees and costs incurred by Lender in connection with
the modification of the Loan Agreement evidenced by this
Amendment.
(d) This Amendment shall be construed in accordance with the
laws of the State of Rhode Island as provided in Section 20 of
the Loan Agreement, and shall be binding upon the parties hereto
and their respective heirs, personal representatives, successors
and assigns.
IN WITNESS WHEREOF, the parties hereof have caused this
Amendment to be duly executed as a sealed instrument the day and
year first above written.
FLEET NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President
XXXX CENTERS LIMITED PARTNERSHIP
By: /s/ Xxxxxx Xxxx
Name: Xxxxxx Xxxx
Title: Senior Vice President and
Chief Financial Officer
XXXX CENTERS TRUST
By: /s/ Xxxxxx xxxx
Name: Xxxxxx Xxxx
Title: Senior Vice President and
Chief Financial Officer
/s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
