Exhibit 10.9
RENEWAL, EXTENSION, MODIFICATION AND
AMENDMENT AGREEMENT
THIS RENEWAL, EXTENSION, MODIFICATION AND AMENDMENT
AGREEMENT (this "Agreement") is dated effective as of February
26, 1997. The parties hereto are AMERICAN INDUSTRIAL PROPERTIES
REIT (formerly known as Xxxxxxxx Xxxx Real Estate Investors)
("Borrower"), whose address is 0000 Xxxxx Xxxxxxxx, Xxxxx 000,
Xxxxxx, Xxxxx 00000-0000, Attention: Xx. Xxxxxxx Xxxxxxx, and
USAA REAL ESTATE COMPANY ("Lender"), whose address is 8000 Xxxxxx
X. XxXxxxxxx Xxxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxx 00000,
Attention: Mr. T. Xxxxxxx Xxxxxx.
RECITALS:
Borrower executed and delivered to The Manufacturers Life
Insurance Company (the "Original Note Holder"): (i) a promissory
note dated February 27, 1992 ("Note A"), in the original
principal sum of Twenty-Three Million Two Hundred Sixty-One
Thousand Three Hundred Seventeen and 66/100 Dollars
($23,261,317.66) bearing interest on the unpaid balance thereof
at the rate or rates therein stated, with a final stated maturity
of November 27, 1997, and (ii) a promissory note dated February
27, 1992 ("Note B"), in the original principal sum of Nineteen
Million One Hundred Forty-Three Thousand Six Hundred Forty-Six
and 92/100 Dollars ($19,143,646.92), bearing interest on the
unpaid balance thereof at the rate or rates therein stated, with
a final stated maturity of November 27, 1997.
Note A and Note B were issued pursuant to that certain Note
Purchase Agreement dated February 27, 1992 (the "Note Purchase
Agreement") between Borrower and the Original Note Holder. Note
A and Note B were subsequently assigned by the Original Note
Holder to The Manufacturers Life Insurance Company (U.S.A.) ("MLI
USA"). Note A, Note B and the Note Purchase Agreement were
amended in certain respects pursuant to: (i) that certain
Settlement Agreement (the "Settlement Agreement") dated May 22,
1996, executed by and between Borrower, Patapsco #1 Limited
Partnership, Patapsco #2 Limited Partnership, the Original Note
Holder and MLI USA, and (ii) that certain Option Agreement (the
"Option Agreement") dated May 22, 1996, executed by and between
Borrower, the Original Note Holder and MLI USA. The liens,
security interests and assignments created by all documents and
instruments now or hereafter governing, evidencing, or securing
or otherwise relating to payment of all or any part of the
indebtedness evidenced by Note A and Note B (collectively, the
"Credit Documents") are hereinafter collectively called the
"Liens".
Note A, Note B, the Liens and MLI USA's rights under the
Note Purchase Agreement, the Settlement Agreement and the Option
Agreement were acquired by Lender pursuant to separate Assignment
of Note and Transfer of Liens dated of even effective date
herewith from MLI USA in favor of Lender.
Borrower and Lender now agree to, among other matters
specified herein, renew, extend and rearrange Note A and Note B,
make certain other changes to Note A and Note B, to terminate the
Note Purchase Agreement, the Settlement Agreement and the Option
Agreement and to release the Liens and confirm that they no
longer secure Note A and Note B, as renewed, extended and
rearranged, all as set forth in the succeeding provisions of this
Agreement (which shall control over any conflicting or
inconsistent recitals above).
AGREEMENTS:
In consideration of the premises and the mutual agreements
herein set forth, Borrower and Lender hereby agree as follows:
1. CERTAIN DEFINITIONS. The following words and terms
shall, unless the context otherwise requires, have the meanings
provided below:
(a) "Chapter One" means Chapter One of Title 79, Texas
Revised Civil Statutes, 1925, as amended.
(b) "Ceiling Rate" means, on any day, the maximum
nonusurious rate of interest permitted for that day by
whichever of applicable federal or Texas laws permits the
higher interest rate, stated as a rate per annum. On each
day, if any, that Chapter One establishes the Ceiling Rate,
the Ceiling Rate shall be the "indicated rate ceiling" (as
defined in Chapter One) for that day. Lender may from time
to time, as to current and future balances, implement any
other ceiling permitted under Chapter One by notice to
Borrower, if and to the extent permitted by, Chapter One.
Without notice to Borrower or any other person or entity,
the Ceiling Rate shall automatically fluctuate upward and
downward as and in the amount by which such maximum
nonusurious rate of interest permitted by applicable law
fluctuates.
(c) "Maturity Date" means the amended and extended
maturity date for the Renewal note (as hereinafter
defined), December 31, 2000, as the same may hereafter be
accelerated pursuant to the provisions of the Renewal Note,
any of the other Credit Documents or this Agreement.
(d) "Past Due Rate" means, on any day, a rate per
annum equal to the Ceiling Rate for that day, or only if
applicable law imposes no maximum nonusurious rate of
interest for that day, then the Past Due Rate for that day
shall be a rate per annum equal to eighteen percent (18%)
per annum.
2. NOTE PURCHASE AGREEMENT TERMINATED. Borrower and
Lender hereby agree that Note Purchase Agreement is hereby
terminated and of no continuing force and effect effective as of
the effective date of this agreement.
3. SETTLEMENT AGREEMENT TERMINATED. Borrower and Lender
(Patapsco #1 Limited Partnership and Patapsco #2 Limited
Partnership currently in the process of being dissolved) hereby
agree that the Settlement Agreement is hereby terminated and of
no continuing force and effect effective as of the effective date
of this Agreement.
4. OPTION AGREEMENT TERMINATED. Borrower and Lender
hereby agree that the Option Agreement is hereby terminated and
of no continuing force and effect effective as of the effective
date of this Agreement.
5. AIP PARTNERSHIP INTEREST PLEDGE TERMINATED. Borrower
and Lender hereby agree that the AIP Partnership Interest Pledge
(as defined in the Settlement Agreement) is hereby terminated and
of no continuing force and effect effective as of the effective
date of this Agreement.
6. STOCK PLEDGE AGREEMENT TERMINATED. Borrower and Lender
hereby agree that the Stock Pledge Agreement (as defined in the
Settlement Agreement) is hereby terminated and of no continuing
force and effect effective as of the effective date.
7. BALANCE. Borrower and Lender hereby agree that
notwithstanding the unpaid principal balances of Note A and Note
B reflected in the books and records of MLI USA, the present
unpaid principal balance of Note A is Three Million One Hundred
Seventy-Eight Thousand Five Hundred Twenty-One and 66/100 Dollars
($3,178,521.66) and the present unpaid principal balance of Note
B is Three Million Eight Hundred Sixty-Two Thousand One Hundred
Ninety-Nine and 71/100 Dollars ($3,862,199.71). No amounts
remain unadvanced against Note A or Note B, and Lender shall have
no obligation to make any advances under Note A, Note B or any of
the other Credit Documents.
8. RENEWAL NOTE. To facilitate the administration of Note
A and Note B, Borrower has contemporaneously with the execution
of this Agreement executed a new promissory note (the "Renewal
Note") in favor of Lender in the original principal amount of
Seven Million Forty Thousand Seven Hundred Twenty-One and 37/100
Dollars ($7,040,721.37) in the form attached hereto as Exhibit A
which is given to the full extent thereof in renewal, extension
and rearrangement (but not extinguishment) of the remaining
principal balances Note A and Note B referenced in Paragraph 7
immediately above.
9. LOAN COVENANTS.
(a) Borrower will deliver, or cause to be delivered,
to Lender:
(i) Borrower shall furnish or cause to be
furnished to Lender within five (5) business days after
Borrower is required to file the same with the
Securities and Exchange Commission ("Commission"),
copies of the periodic information, documents and other
reports which Borrower is required to file with the
Commission pursuant to Section 13(a) of the Exchange
Act. If Borrower ceases to be required to file
information, documents and other reports pursuant to
Section 13 of the Exchange Act, it shall remain
obligated to furnish the same information, documents
and reports otherwise required under Section 13(a) of
the Exchange Act to Lender within five (5) business
days after Borrower would have been required to file
the same with the Commission; and
(ii) Borrower shall furnish or cause to be
furnished to Lender, within five (5) business days
after the effective date thereof, copies of any
amendment or modification to its By-Laws and
Declaration of Trust.
(b) Borrower will at all times before the satisfaction
of the Renewal Note maintain and keep in force
substantially similar insurance coverages relating to its
real property assets as maintained by Borrower as of the
date of this Agreement, including but not limited to
liability coverage of at least $2,000,000.00.
(c) Borrower shall pay, when due, all taxes,
assessments and governmental charges or levies imposed upon
it and all claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and any other like person
or entity which, if unpaid, might result in the creation of
a lien upon the income of Borrower or its assets; provided
that items of the foregoing description need not be paid
while being contested in good faith and by appropriate
proceedings.
(d) Borrower shall not make distributions to
shareholders until such time as: (i) the Renewal Note is
satisfied in full; (ii) Borrower obtains the Shareholder
Approval described in Paragraph 10 immediately below; or
(iii) Lender otherwise grants its prior written approval
thereto.
(e) Borrower shall promptly pay and discharge when due
all debts, claims, liabilities and obligations with respect
to any clean-up measures necessary for Borrower to comply
with Applicable Environmental Laws. Borrower hereby
indemnifies and agrees to defend and hold Lender and its
successors and assigns harmless from and against any and
all third party claims, demands, causes of action, loss,
damage, liabilities, costs and expenses (including
reasonable attorneys' fees and court costs) of any and
every kind or character, known or unknown, fixed or
contingent, asserted against or incurred by Lender at any
time and from time to time including, without limitation,
those asserted or arising subsequent to the payment or
other satisfaction of the Renewal Note, by reason of or
arising out of the ownership, construction, occupancy,
operation, use and maintenance of any of Borrower's real
property assets, INCLUDING MATTERS ARISING OUT OF THE
NEGLIGENCE OF LENDER; provided, however this indemnity
shall not apply with respect to matters caused by or
arising out of (i) the gross negligence or willful
misconduct of Lender (it being the express intention of the
parties hereto that Lender shall be indemnified from the
consequences of their negligence; and (ii) the
construction, occupancy, operation, use and maintenance of
Borrower's real property assets by any lessee or party in
possession of any such asset subsequent to the ownership of
such asset by Borrower. The foregoing indemnity and
agreement applies to the violation of any Applicable
Environmental Law prior to the payment or other
satisfaction of the Renewal Note and any act, omission,
event of circumstance existing or occurring on or about
Borrower's real property assets (including without
limitation the presence on such assets or release from such
assets of asbestos or other hazardous substances or solid
waste disposed of or otherwise presenting or released prior
to the payment or other satisfaction of the Renewal Note.
It shall not be a defense to the covenant of Borrower to
indemnify that the act, omission, event or circumstance did
not constitute a violation of any Applicable Environmental
Law at the time of its existence or occurrence. The terms
"hazardous substance" and "release" shall have the meanings
specified in the Superfund Amendments and Reauthorization
Act of 1986 ("XXXX"), and the terms "solid waste" and
"disposed" shall have the meanings specified in the
Resource Conservation and Recovery Act of 1976 ("RCRA");
provided, to the extent that any other applicable laws of
the United States of America or political subdivision
thereof establish a meaning for "hazardous substance",
"release", "solid waste", or "disposed" which is broader
than that specified in either XXXX or RCRA, such broader
meaning shall apply. As used in this Agreement,
"Applicable Environmental Law" shall mean and include the
singular, and "Applicable Environmental Laws" shall mean
and include the collective aggregate of the following: Any
law, statute, ordinance, rule, regulation, order or
determination of any governmental authority or any board of
fire underwriters (or other body exercising similar
functions), or any restrictive covenant or deed restriction
(recorded or otherwise) affecting any of Borrower's real
property assets pertaining to health, safety or the
environment, including, without limitation, all applicable
zoning ordinances and building codes, flood disaster laws
and health, safety or the environment, including without
limitation, the comprehensive Environmental Response,
Compensation, and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, the Superfund
Amendments and Reauthorization Act of 1986, the
Occupational Safety and Health Act and any federal, state
or municipal laws, ordinances, regulations or law which may
now or hereafter require removal of asbestos or other
hazardous wastes from any of Borrower's real property
assets or impose any liability on Lender related to
asbestos or other hazardous wastes in any such assets. The
provisions of this Paragraph 9(e) shall survive the
repayment or conversion of the Renewal Note, and shall
continue thereafter in full force and effect. In the event
of the transfer of the Renewal Note or any portion thereof,
in accordance with this Agreement, Lender or any prior
holder of the Renewal Note and any participants permitted
under this Agreement shall continue to be benefitted by
this indemnity and agreement with respect to the period of
such holding of the Renewal Note.
(f) Borrower shall execute and deliver or cause to be
executed and delivered to Lender upon Lender's reasonable
request such other and further instruments or documents as
in the reasonable judgment of Lender to conform, create,
evidence, preserve or maintain Lender's rights hereunder or
under the Renewal Note, and Borrower shall do all such
additional acts, give such assurances and execute such
instruments as Lender may reasonably require to vest more
completely in and assure to Lender its rights under this
Agreement and the Renewal Note.
10. RECAPITALIZATION PLAN; SHAREHOLDER APPROVAL. Borrower
covenants and agrees to promptly commence and thereafter use
Borrower's best efforts to secure appropriate and required
approval of Borrower's shareholders ("Shareholder Approval") of
the following:
(a) Subject to Shareholder Approval, Borrower hereby
grants Lender the option and right at any time prior to the
Maturity Date upon written notice to Borrower to convert
all or any part of the principal balance of the Renewal
Note into a number of common shares of beneficial interest,
$.10 par value per share, of Borrower (the "Shares")
determined as follows:
P / C = S
where: (i) "P" equals the aggregate principal balance of
the Renewal Note subject to the conversion by Lender;
(ii) "C" equals the applicable conversion price, being
either (x) $2.00 if the conversion occurs on or before
December 31, 1997, or (y) $2.25 if the conversion occurs on
or after January 1, 1998 but before the Maturity Date; and
(iii) "S" equals the applicable number of Shares.
(b) In the event Borrower fails to obtain Shareholder
Approval of the conversion option specified in subparagraph
(a) immediately above on or before June 30, 1997, the
following shall be applicable to the Renewal Note
notwithstanding any contrary provisions contained in this
Agreement:
(i) Commencing July 1, 1997 the unpaid principal
balance of the Renewal Note from time to time
outstanding shall bear interest at the Past Due Rate;
and
(ii) The Maturity Date shall automatically be
amended and accelerated to be October 31, 1997.
(c) Lender and Borrower acknowledge and agree that
upon Lender's conversion of all or a portion of the
principal balance of the Renewal Note into Shares after
Shareholder Approval, Borrower and Lender shall execute a
Registration Rights Agreement relating to the resale of the
applicable Shares. Such Registration Rights Agreement
shall be in substantially the same form as the Registration
Rights Agreement executed by and between Borrower and
Lender dated December 13, 1996, to which reference is
hereby made for all purposes.
11. LIEN RELEASE; MISCELLANEOUS. The Liens are hereby
terminated and released, and no longer continue to secure the
payment of the Renewal Note, and Lender shall execute such other
documents as Borrower shall reasonably request to further
evidence the termination and release of the Liens. To the extent
of any conflict between the Renewal Note or any of the other
Credit Documents (or any earlier modification of any of them) and
this Agreement, this Agreement shall control. This Agreement (a)
shall bind and benefit Borrower, and, except as herein expressly
limited, Lender and their respective heirs, beneficiaries,
administrators, executors, receivers, trustees, successors and
assigns (provided, that Borrower shall not assign its rights
hereunder without the prior written consent of Lender); (b) may
be modified or amended only by a writing signed by each party;
(c) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
APPLICABLE LAWS OF THE STATE OF TEXAS AND THE UNITED STATES OF
AMERICA FROM TIME TO TIME IN EFFECT; (d) may be executed in
several counterparts, and by the parties hereto in separate
counterparts, and each counterpart, when executed and delivered,
shall constitute an original agreement enforceable against all
who signed it without production of or accounting for any other
counterpart, and all separate counterparts shall constitute the
same agreement and (e) embodies the entire agreement and
understanding between the parties with respect to modifications
of instruments provided for herein and supersedes all prior
conflicting or inconsistent agreements, consents and
understandings relating to such subject matter. Borrower
acknowledges and agrees that there are no oral agreements between
Borrower and Lender which have not been incorporated in this
Agreement. If any provision of this Agreement should be
determined by any court of competent jurisdiction to be illegal,
invalid or unenforceable under present or future laws, the
legality, validity and enforceability of the remaining provisions
of this Agreement shall not be affected thereby. Each waiver in
this Agreement is subject to the overriding and controlling rule
that it shall be effective only if and to the extent that (a) it
is not prohibited by applicable law and (b) applicable law
neither provides for nor allows any material sanctions to be
imposed against Lender for having bargained for and obtained it.
Wherever the term "including" or a similar term is used in this
Agreement, it shall be read as if it were "including by way of
example only and without in any way limiting the generality of
the clause or concept referred to." Any exhibits, appendices and
annexes described in this Agreement as being attached to it are
hereby incorporated into it. The headings in this Agreement
shall be accorded no significance in interpreting it.
NOTICE PURSUANT TO TEX. BUS. & COMM. CODE SECT. 26.02
THIS AGREEMENT, THE RENEWAL NOTE AND ALL OTHER CREDIT
DOCUMENTS EXECUTED BY ANY OF THE PARTIES BEFORE OR
SUBSTANTIALLY CONTEMPORANEOUSLY WITH THE EXECUTION HEREOF,
TOGETHER CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTED effective as of the date first set forth above.
BORROWER:
AMERICAN INDUSTRIAL PROPERTIES REIT
By: /s/
LENDER:
USAA REAL ESTATE COMPANY
By: /s/
EXHIBIT 10.10
AMENDMENT NO. 1
to
SHARE PURCHASE AGREEMENT
dated as of December 13, 1996
between
AMERICAN INDUSTRIAL PROPERTIES REIT
and
USAA REAL ESTATE COMPANY
THIS AMENDMENT NO. 1 to the Share Purchase Agreement, dated
as of December 13, 1996 (the "Initial Agreement"), by and between
American Industrial Properties REIT, a Texas real estate
investment trust ("Seller"), and USAA Real Estate Company, a
Delaware corporation ("Buyer"), is hereby made and entered into
effective for all purposes as of December 13, 1996.
RECITALS
WHEREAS, it was and remains the intention of the parties
hereto that Seller not be consolidated with Buyer under U.S.
generally accepted accounting principles and other purposes;
WHEREAS, the Initial Agreement originally executed by the
parties contained in Section 6.2(b) provisions contrary to the
intent of the parties at the time of the execution and delivery
of the Initial Agreement;
AGREEMENT
NOW THEREFORE, in consideration of the premises and the
mutual covenants and agreements set forth in the initial
Agreement and this Amendment No. 1 thereto, and for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. The first sentence of Section 6.2(b) of the Initial
Agreement is hereby amended and restated, and an additional
second sentence is hereby added, to read as follows:
In addition to Buyer's rights under Section 6.2(a), at
any time during the three (3) year period commencing on the
Closing Date, Buyer may, by notice in writing to Seller,
require Seller to increase the number of Trust Managers
from five (5) to seven (7), which initial resulting
vacancies shall be filled only by vote of the shareholders
of Seller and not by the Trust Managers. If a special
meeting of shareholders is called to fill the two (2)
initial resulting vacancies prior to an annual meeting of
shareholders after notice by Buyer pursuant to the first
sentence of this Section 6.2(b), Seller shall nominate each
of the two (2) designees of Buyer as Trust Managers.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed by its duly authorized officers on
this 26th day of February, 1997, but effective for all purposes
as of December 13, 1996.
USAA REAL ESTATE COMPANY
By: /s/
T. Xxxxxxx Xxxxxx
Senior Vice President - Operations
AMERICAN INDUSTRIAL PROPERTIES REIT
By: /s/
Xxxxxxx X. Xxxxxxx
President and Chief Executive Officer
