Loan No. 5448
MODIFICATION AGREEMENT
(Unsecured Loan)
THIS MODIFICATION AGREEMENT ("Agreement") dated as of December ___,
2003, is entered into by and between XXXXX FARGO BANK, NATIONAL ASSOCIATION
("Lender"), and AmREIT, a Texas Real Estate Investment Trust ("Borrower").
R E C I T A L S
A. Lender made a revolving loan to Borrower in the maximum
principal amount of TWENTY MILLION AND NO/100THS DOLLARS ($20,000,000.00) (the
"Loan"). The Loan is evidenced by a Revolving Note dated September 4, 2003,
executed by Borrower in favor of Lender, in the maximum principal amount of the
Loan (the "Revolving Note").
B. The Loan is governed by the terms of a Revolving Credit
Agreement (the "Loan Agreement") dated September 4, 2003, executed by Borrower
and Lender, which Loan Agreement, together with the Note, and all other
documents executed in conjunction with the Loan are herein collectively called
the "Loan Documents."
C. By this Agreement Borrower and Lender intend to modify and
amend certain terms and provisions of the Loan Documents.
NOW, THEREFORE, Borrower and Lender agree as follows:
1. DEFINED TERMS. Unless otherwise defined in this Agreement,
capitalized terms used in this Agreement shall have the same meanings as are
ascribed to such terms in the Loan Agreement.
2. DEFINITIONAL CHANGES.
(a) The definition of the term "Commitment" as set forth in
Section 1.1 of the Loan Agreement shall be and hereby is
modified to delete the words "Twenty Million and No/100
Dollars ($20,000,000.00)" and substitute the words "Thirty
Million and No/100 Dollars ($30,000,000.00)" in lieu thereof.
(b) The definition of the term "Operating Property Value" as set
forth in Section 1.1 of the Loan Agreement shall be and hereby
is deleted and the following shall be and hereby is inserted
in lieu thereof:
"Operating Property Value" means, as of a given date and with
respect to any Person, such Person's EBITDA for the fiscal
quarter most recently ended (including the amortized cash
portion of Direct Financing Leases [as defined by GAAP] not
already added back to EBITDA, and excluding Net Operating
Income from any Property not owned by such Person for the
entire fiscal quarter most recently ended and further
excluding EBITDA
derived from sources other than Property) multiplied by 4 and
divided by (i) eight and 75/100 percent (8.75%) for that
portion of EBITDA derived from single-tenant, triple-net
leased Properties or (ii) nine percent (9%) for that portion
of EBITDA derived from multi-tenant Properties, plus the
purchase price of any real property acquired during the fiscal
quarter most recently ended other than real property upon
which construction is then in progress.
(c) The definition of the term "Unencumbered Pool Value" as set
forth in Section 1.1 of the Loan Agreement shall be and hereby
is deleted and the following shall be and hereby is inserted
in lieu thereof:
"Unencumbered Pool Value" means, at any time, the sum of the
following amounts as determined for each Unencumbered Pool
Property: (a) the Net Operating Income of such Unencumbered
Pool Property for the fiscal quarter most recently ended times
(b) 4 and divided by (c) the applicable of (i) eight and
75/100 percent (8.75%) with respect to Net Operating Income
derived from single-tenant, triple-net leased Properties or
(ii) nine percent (9%) with respect to Net Operating Income
derived from multi-tenant Properties. Notwithstanding anything
set forth in this definition to the contrary if an
Unencumbered Pool Property has been owned for less than one
fiscal quarter, then either (i) the purchase price of such
Unencumbered Pool Property, or (ii) the aggregate
developmental and construction cost of such Unencumbered Pool
Property shall be its Unencumbered Pool Value.
3. INCREASE OF COMMITMENT. The Commitment shall be and hereby is
increased from Twenty Million and No/100 Dollars ($20,000,000.00) to Thirty
Million and No/100 Dollars ($30,000,000.00). To evidence such increase in the
Commitment Borrower shall execute and deliver to Lender a First Amended and
Restated Revolving Promissory Note in the form attached to this Agreement as
Exhibit "A" and made a part hereof, which First Amended and Restated Revolving
Promissory Note shall, from and after the date of this Agreement, be deemed the
"Revolving Note" which is defined in and the subject of the Loan Agreement.
Exhibit "A" to this Agreement shall be and hereby is substituted for Exhibit "B"
to the Loan Agreement.
4. UNENCUMBERED POOL PROPERTIES. The provisions of Section 4.3 of
the Loan Agreement shall be and hereby are deleted and the following shall be
and hereby are inserted in lieu thereof:
(a) The aggregate Occupancy Rate of all Unencumbered Pool
Properties, when determined on a combined basis, shall at all
times equal or exceed 90% and no single Unencumbered Pool
Property shall have an Occupancy Rate of less than 80%;
provided however, and subject to the condition that each
achieve an 80% Occupancy Rate by no later than March 9, 2004,
Lender will accept (i) Uptown Plaza, located at 0000-0000
Xxxxxxxxxx Xxxx, Xxxxxxx, Xxxxx 00000, (ii) Lake Woodlands
Plaza, located at 0000 Xxxx Xxxxxxxxx Xxxxx, Xxx Xxxxxxxxx,
Xxxxx 00000 and (iii) the Eckerd's Property located at 0000
Xxxxxxxxxx Xxxx, Xxxxxxx,
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Xxxxx 00000 as Unencumbered Pool Properties at their current
Occupancy Rates which are less than 80%. Any of the Properties
set forth in (i), (ii) or (iii) above which does not achieve
an 80% Occupancy Rate by March 9, 2004, shall be eliminated as
an Unencumbered Pool Property.
(b) A Property shall cease to be an Unencumbered Pool Property if
it shall cease to be an Eligible Property.
(c) If a tenant of an Unencumbered Pool Property, while paying
rent, has not actually occupied the Property for 90 days, such
Tenant's space shall, for the purpose of determining Occupancy
Rate, be deemed unoccupied.
(d) No single-tenant Unencumbered Pool Property (other than those
leased by CVS Corporation and its Subsidiaries ["CVS"]) shall
constitute greater than 10% of the total value of the
Unencumbered Pool Properties, and no single-tenant
Unencumbered Pool Property leased by CVS shall constitute
greater than 15% of the total value of the Unencumbered Pool
Properties.
(e) No multi-tenant Unencumbered Pool Property shall constitute
greater than 15% of the total value of the Unencumbered Pool
Properties.
(f) No single tenant (other than CVS) leasing one or more of the
Unencumbered Pool Properties can be the source of Net
Operating Income which is greater than 10% of the aggregate
Net Operating Income for all Unencumbered Pool Properties, and
CVS shall not be the source of Net Operating Income which is
greater than 15% of the aggregate Net Operating Income for all
Unencumbered Pool Properties.
5. CONCENTRATIONS. The provisions of Section 7.19 of the Loan
Agreement shall be and hereby are deleted and the following shall be and hereby
are inserted in lieu thereof:
At no time shall Borrower and its Subsidiaries, on a
consolidated basis, derive more than 15% of its aggregate Net
Operating Income from any single tenant (other than IHOP Corp.
and its Subsidiaries ["IHOP"]) nor, prior to June 30, 2004,
more than 35% of its aggregate Net Operating Income from IHOP
nor, after June 30, 2004, more than 30% of its aggregate Net
Operating Income from IHOP. Any tenant entities whose
financial reporting is, in accordance with GAAP, consolidated
shall, for the purposes of the foregoing covenant, be deemed a
"single tenant."
6. INDEBTEDNESS COVENANT. The following covenant shall be and
hereby is added as Section 7.20 to the Loan Agreement:
Section 7.20 No Further Unsecured Indebtedness.
Borrower shall not incur any additional Unsecured
Indebtedness without the prior written consent of Lender,
which consent may be granted or withheld in Lender's sole
discretion.
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7. GUARANTORS. The execution of this Agreement is joined in by
AMREIT OPERATING CORPORATION and AMREIT REALTY INVESTMENT CORPORATION, each as a
Guarantor, for the purposes of (i) evidencing Guarantors' consent to the
modifications to the Loan Documents evidenced by this Agreement, (ii) confirming
to Lender that Guarantors' obligations to Lender as set forth in the Guaranty
dated September 4, 2003, executed and delivered by Guarantor to Lender are
ratified and declared to be in full force and effect and that the same are
increased to the full extent of the increase in the Commitment as evidenced by
the First Amended and Restated Revolving Promissory Note which will be executed
and delivered by Borrower pursuant to this Agreement, and (iii) evidencing their
joinder in releasing Lender and waiving claims as set forth in Section 10
hereof.
8. REAFFIRMATIONS. Borrower hereby reaffirms to Lender each of
the representations, warranties, covenants and agreements of Borrower set forth
in the Loan Documents.
9. ENFORCEABLE OBLIGATIONS. Borrower hereby ratifies, affirms,
reaffirms, acknowledges, confirms and agrees that the Loan Documents represent
valid and enforceable obligations of Borrower, and Borrower further acknowledges
that there are no existing claims, defenses, personal or otherwise, or rights of
setoff whatsoever with respect to the Revolving Note, and Borrower further
acknowledges and represents that no event has occurred and no condition exists
which would constitute a default under the Loan Documents or this Agreement,
either with or without notice or lapse of time, or both.
10. RELEASE AND WAIVER OF CLAIMS. IN CONSIDERATION OF (i) THE
MODIFICATION OF CERTAIN PROVISIONS OF THE LOAN DOCUMENTS, AS HEREIN PROVIDED,
AND (ii) THE OTHER BENEFITS RECEIVED BY BORROWER HEREUNDER, BORROWER AND
GUARANTOR, EACH FOR THEMSELVES, HEREBY RELEASE, RELINQUISH AND FOREVER DISCHARGE
LENDER, AS WELL AS ITS PREDECESSORS, SUCCESSORS, ASSIGNS, AGENTS, OFFICERS,
DIRECTORS, EMPLOYEES AND REPRESENTATIVES, OF AND FROM ANY AND ALL CLAIMS,
DEMANDS, ACTIONS AND CAUSES OF ACTION OF ANY AND EVERY KIND OR CHARACTER, PAST
OR PRESENT, WHICH EITHER MAY HAVE AGAINST LENDER AND ITS PREDECESSORS,
SUCCESSORS, ASSIGNS, AGENTS, OFFICERS, DIRECTORS, EMPLOYEES AND REPRESENTATIVES
ARISING OUT OF OR WITH RESPECT TO (a) ANY RIGHT OR POWER TO BRING ANY CLAIM
AGAINST LENDER FOR USURY OR TO PURSUE ANY CAUSE OF ACTION AGAINST LENDER BASED
ON ANY CLAIM OF USURY, AND (b) ANY AND ALL TRANSACTIONS RELATING TO THE LOAN
DOCUMENTS OCCURRING PRIOR TO THE DATE HEREOF, INCLUDING ANY LOSS, COST OR
DAMAGE, OF ANY KIND OR CHARACTER, ARISING OUT OF OR IN ANY WAY CONNECTED WITH OR
IN ANY WAY RESULTING FROM THE ACTS, ACTIONS OR OMISSIONS OF LENDER, AND ITS
PREDECESSORS, SUCCESSORS, ASSIGNS, AGENTS, OFFICERS, DIRECTORS, EMPLOYEES AND
REPRESENTATIVES, INCLUDING ANY BREACH OF FIDUCIARY DUTY, BREACH OF ANY DUTY OF
FAIR DEALING, BREACH OF CONFIDENCE, BREACH OF FUNDING COMMITMENT, UNDUE
INFLUENCE, DURESS, ECONOMIC COERCION, CONFLICT OF INTEREST, NEGLIGENCE, BAD
FAITH, MALPRACTICE, INTENTIONAL OR NEGLIGENT INFLICTION OF MENTAL DISTRESS,
TORTIOUS INTERFERENCE WITH CONTRACTUAL RELATIONS, TORTIOUS INTERFERENCE WITH
CORPORATE GOVERNANCE OR PROSPECTIVE BUSINESS ADVANTAGE, BREACH OF CONTRACT,
DECEPTIVE TRADE PRACTICES, LIBEL, SLANDER OR CONSPIRACY, BUT IN EACH CASE ONLY
TO THE EXTENT PERMITTED BY APPLICABLE LAW.
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11. INCREASE FEE. In consideration of Lender's entering into this
Agreement and increasing the Commitment, Borrower agrees to pay to Lender, upon
the execution of this Agreement, a fee in the amount of $18,750.00.
12. MISCELLANEOUS.
(a) As modified hereby, the provisions of the Loan Documents shall
continue in full force and effect, and the Borrower
acknowledges and reaffirms its liability to Lender thereunder.
In the event of any inconsistency between this Agreement and
the terms of the Loan Documents, this Agreement shall govern.
(b) Borrower hereby agrees to pay all costs and expenses incurred
by Lender in connection with the execution and administration
of this Agreement and the modification of the Loan Documents
including, but not limited to, all reasonable legal fees
incurred by Lender.
(c) Any default by Borrower in the performance of its obligations
herein contained shall constitute a default under the Loan
Documents and shall allow Lender to exercise all of its
remedies set forth in the Loan Documents.
(d) In case any of the provisions of this Agreement shall for any
reason be held to be invalid, illegal or unenforceable, such
invalidity, illegality or unenforceability shall not affect
any other provision hereof, and this Agreement shall be
construed as if such invalid, illegal or unenforceable
provision had never been contained herein.
(e) This Agreement and the Loan Documents shall be governed and
construed according to the laws of the State of Texas (without
regard to any conflict of laws principles) and the applicable
laws of the United States.
(f) This Agreement shall be binding upon and inure to the benefit
of Lender, Borrower and their respective successors, assigns
and legal representatives.
(g) Borrower hereby acknowledges and agrees that it has entered
into this Agreement of its own free will and accord and in
accordance with its own judgment after advice of its own legal
counsel, and states that it has not been induced to enter into
this Agreement by any statement, act or representation of any
kind or character on the part of the parties hereto, except as
expressly set forth in this Agreement.
(h) This Agreement may be executed in multiple counterparts, each
of which shall constitute an original instrument, but all of
which shall constitute one and the same agreement.
(i) ENTIRE AGREEMENT. THIS AGREEMENT, TOGETHER WITH THE LOAN
AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
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SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. THIS INSTRUMENT
MAY BE AMENDED ONLY BY AN INSTRUMENT IN WRITING EXECUTED BY
THE PARTIES HERETO.
IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to
be duly executed as of the date first above written.
"LENDER"
XXXXX FARGO BANK
NATIONAL ASSOCIATION
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
"BORROWER"
AmREIT,
a Texas Real Estate Investment Trust
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
"GUARANTORS"
AMREIT OPERATING CORPORATION,
a Texas corporation
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
AMREIT REALTY INVESTMENT CORPORATION,
a Texas corporation
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
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EXHIBIT "A"
FORM OF FIRST AMENDED AND RESTATED REVOLVING PROMISSORY NOTE
