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AMENDMENT NO. 1 TO FINANCING AGREEMENTS
March 5, 1997
Congress Financial Corporation (New England)
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Gentlemen:
Congress Financial Corporation (New England) ("Lender")
and Xxxxxxxx'x Inc. ("Borrower"), have entered into certain
financing arrangements pursuant to the Loan and Security
Agreement, dated May 6, 1996, between Lender and Borrower, (as
amended, the "Loan Agreement"; and together with agreements,
documents and instruments at any time executed and/or
delivered in connection therewith or related thereto, as the
same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced,
collectively, the "Financing Agreements").
Borrower has requested (i) certain amendments to the
Financing Agreements and (ii) that Lender forbear from
exercising its rights as a result of certain Events of Default
that have occurred and are continuing, and Lender is willing
to agree to such amendments and to forbear from exercising its
rights and remedies with respect to such Events of Default,
subject to the terms and conditions contained herein. By this
Amendment, Lender and Borrower desire and intend to evidence
such amendments.
In consideration of the foregoing, and the respective
agreements and covenants contained herein, the parties hereto
agree as follows:
1. Definitions.
(a) Additional Definitions. As used herein and in
the other Financing Agreements, the following terms shall have
the respective meanings given to them below and the Loan
Agreement shall be deemed and is hereby amended to include
each of the following definitions:
(i) "Additional Premises" shall mean the
real property owned by GRS Realty and listed on Exhibit A
annexed hereto plus all fixtures thereon.
(ii) "Existing Credit Facility" shall mean
the aggregate amount of the Revolving Loans and Letter of
Credit Accommodation from time to time available to Borrower
pursuant to the Lending Formulas as calculated by Lender.
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(iii) "Existing Defaults" shall mean the
Events of Default that have occurred and which are described
in the letter dated February 13, 1997 addressed to Borrower
from Lender, a copy of which is attached hereto as Exhibit B.
(iv) "Forbearance Termination Date" shall
have the meaning ascribed to such term in paragraph 6(a)
hereof.
(v) "GDI" shall mean GDI Company, Inc., an
Oregon corporation, and its successors and assigns.
(vi) "GDI Agreements" shall mean the Loan
Agreement, dated on or about the date hereof, between GDI, as
lender, and GDI's Borrowers, as borrowers, together with all
notes, guaranties, mortgages, deeds of trust, security
agreements, and other agreements, documents and instruments to
which any GDI's Borrowers are a party executed or delivered at
any time pursuant thereto or in connection therewith, as the
same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
(vii) "GDI's Borrowers" shall mean Borrower,
GRS Realty and GRS Holding Company, Inc.
(viii) "GRS Realty" shall mean GRS Realty
Company, Inc., a Delaware corporation, and its successors and
assigns.
(ix) "Junior Participation Agreement" shall
mean the Junior Participation Agreement, dated of even date
herewith, between R & R and Lender.
(x) "Lending Formulas" shall mean the
lending formulas set forth in Sections 2.1(a)(i) and (ii) and
Section 2.2 of the Loan Agreement, without giving effect to
this Amendment and the Supplemental Credit Facility, as the
same now exist or may hereafter be adjusted by Lender pursuant
to the Loan Agreement.
(xi) " R & R" shall mean R & R Vista, a
general partnership organized under the laws of the state of
Oregon, and its successors and assigns.
(xii) "Standby Letter of Credit" shall mean
the Irrevocable Standby Letter of Credit, dated of even date
herewith, issued by Xxxxx Fargo Bank for the account of R & R
and for the benefit of Lender in the original face amount of
$10,000,000.
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(xiii) "Supplemental Credit Facility" shall
have the meaning ascribed to such term in paragraph 8(a)
hereof.
(xiv) "Supplemental Credit Facility
Termination Date" shall mean the earlier of (A) the date on
which Lender elects to cease making loans or extending Letter
of Credit Accommodations pursuant to Section 10.2(d) of the
Loan Agreement, subject to Section 6 hereof, or (B) the
termination of the Junior Participation Agreement, or (C)
March 5, 1998.
(xv) "Supplemental Obligations" shall mean
all Obligations now and hereafter owed by Borrower to Lender
pursuant to the Supplemental Credit Facility, including, but
not limited to, principal, interest, fees, costs, expenses and
other charges with respect thereto.
(b) Interpretation. For purposes of this
Amendment, unless otherwise defined herein, all capitalized
terms used herein shall have the respective meanings assigned
to such terms in the Loan Agreement.
2. Acknowledgment of Obligations. Each of Borrower and
Guarantors hereby acknowledges, confirms and agrees that as of
the close of business on March 4, 1997, Borrower is indebted
to Lender in respect of the Revolving Loans in the principal
amount of $12,667,010. All such Loans, together with interest
accrued and accruing thereon, and costs, expenses and other
charges now or hereafter payable by Borrower to Lender, are
unconditionally owing by Borrower to Lender, without offset,
defense or counterclaim of any kind, nature or description
whatsoever. Each of Guarantors acknowledges, confirms and
agrees that the obligations, liabilities and indebtedness of
each of them to Lender for the payment and performance of the
Obligations pursuant to their respective guarantees are
unconditionally owing to Lender without offset, defense or
counterclaim of any kind, nature or description whatsoever.
3. Acknowledgment of Security Interests. Each of
Borrower and Guarantors hereby acknowledges, confirms and
agrees that Lender has and shall continue to have valid,
enforceable and perfected liens upon and security interests in
the Collateral heretofore granted to Lender pursuant to the
Financing Agreements or otherwise granted to or held by
Lender.
4. Binding Effect of Documents. Each of Borrower and
Guarantors hereby acknowledges, confirms and agrees that:
(a) each of the Financing Agreements to which it is a party
has been duly executed and delivered to Lender by Borrower or
Guarantors, as the case may be, and each is in full force and
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effect as of the date hereof, (b) the agreements and
obligations of Borrower or Guarantors contained in such
documents constitute the legal, valid and binding obligations
of Borrower or Guarantors, as the case may be, enforceable
against it in accordance with their respective terms and
Borrower and Guarantors have no valid defense to the
enforcement of such obligations, and (c) Lender is and shall
be entitled to the rights, remedies and benefits provided for
in the Financing Agreements.
5. Acknowledgment of Default. Each of Borrower and
Guarantors hereby acknowledges and agrees that the Existing
Defaults have occurred and are continuing, each of which
constitutes an Event of Default and entitles Lender to
exercise its rights and remedies under the Financing
Agreements, applicable law or otherwise. Lender has not
waived, presently does not intend to waive and may never waive
such Existing Defaults and nothing contained herein or the
transactions contemplated hereby shall be deemed to constitute
any such waiver. Each of Borrowers and Guarantors hereby
acknowledges and agrees that Lender has the right to declare
the Obligations to be immediately due and payable under the
terms of the Financing Agreements.
6. Forbearance.
(a) In reliance upon the representations,
warranties and covenants of Borrower and Guarantors contained
in this Agreement, and subject to the terms and conditions of
this Agreement and any documents or instruments executed in
connection herewith, Lender agrees to forbear from exercising
its rights and remedies under the Financing Agreements,
applicable law or otherwise, with respect to the Existing
Defaults until the earliest of the following dates (the
earliest of such dates being referred to herein as the
"Forbearance Termination Date"):
(i) the ninety-first (91st) day after the
date hereof,
(ii) the occurrence of any Draw Event (as
such term is defined in the Junior Participation Agreement),
or
(iii) the date of the occurrence of any Event
of Default, other than (A) the Existing Defaults, (B) the
Existing Defaults of a continuing nature, or (C) the calling
of a meeting of creditors of Borrower,
(b) Upon the Forbearance Termination Date, the
agreement of Lender to forbear shall automatically and without
further action terminate and be of no force and effect, it
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being understood and agreed that the effect of such
termination will be to permit Lender to exercise such rights
and remedies immediately, including, but not limited to, (i)
ceasing to make any further Loans or provide any further
Letter of Credit Accommodations and (ii) the acceleration of
the Obligations; in either case without any further notice,
passage of time or forbearance of any kind.
(c) Each of Borrower and Guarantors agrees that at
any time on or after the Forbearance Termination Date, Lender
shall have the right to terminate any provision of the Loan
Agreement relating to future Loans or Letter of Credit
Accommodations by Lender to Borrower. No termination of the
Loan Agreement or any provision thereof shall relieve or
discharge any of Borrower or Guarantors of their duties,
covenants and obligations under the Loan Agreement and the
other Financing Agreements until all Obligations have been
finally paid in full.
7. No Other Waivers; Reservation of Rights.
(a) Lender has not waived, is not by this Agreement
waiving, and has no intention of waiving, any Events of
Default which may be continuing on the date hereof or any
Events of Default which may occur after the date hereof
(whether the same or similar to the Existing Defaults or
otherwise), and except as expressly set forth in Section 6
hereof, Lender has not agreed to forbear with respect to any
of its rights or remedies concerning any Events of Default
(other than the Existing Defaults), which may have occurred or
are continuing as of the date hereof or which may occur after
the date hereof.
(b) Subject to Section 6 above, Lender reserves the
right, in its discretion, to exercise any or all of its rights
and remedies under the Loan Agreement and the other Financing
Agreements as a result of any Events of Default which may be
continuing on the date hereof or any Event of Default which
may occur after the date hereof, and Lender has not waived any
of such rights or remedies, and nothing in this Agreement, and
no delay on its part in exercising any such rights or
remedies, should be construed as a waiver of any such rights
or remedies.
8. Supplemental Loans.
(a) In addition to the Existing Credit Facility,
subject to the terms and conditions of the Loan Agreement
other than the Lending Formulas, Lender shall make additional
Revolving Loans and extend additional Letter of Credit
Accommodations in such amounts as Borrower may request in an
aggregate amount outstanding at any time of up to the
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aggregate amount of (the "Supplemental Credit Facility"): (i)
the outstanding and undrawn face amount of the Standby Letter
of Credit or (ii) the aggregate outstanding amount of the
Junior Participation.
(b) Except in Lender's discretion, Borrower shall
not have any right to obtain any Loans and Letter of Credit
Accommodations pursuant to the Supplemental Credit Facility at
any time on or after the Supplemental Credit Facility
Termination Date. The Supplemental Obligations shall be
secured by all Collateral.
(c) All outstanding and unpaid Supplemental
Obligations shall automatically, without notice or demand, be
absolutely and unconditionally due and payable and Borrower
shall pay to Lender in cash or other immediately available
funds all such Supplemental Obligations on the earlier of the
Supplemental Credit Facility Termination Date or the
occurrence of an Event of Default.
(d) The outstanding amount of the Supplemental
Obligations shall be included in the "Obligations" as defined
in the Loan Agreement.
9. Lending Formulas. Lender hereby agrees not to
change the Lending Formulas in effect under the Loan Agreement
as of the effective date hereof for a period of sixty (60)
days from the effective date hereof, provided, that, no Draw
Event (as such term is defined in the Junior Participation
Agreement) has occurred.
10. Availability Reserves. Notwithstanding anything to
the contrary contained in the Loan Agreement, and subject to
Lender's continuing right to establish and revise Availability
Reserves pursuant thereto, Lender hereby agrees to provide
Borrower with two (2) days' prior written notice of the
establishment of and/or the revision to any Availability
Reserve at any time prior to the sixty-first (61st) day from
the date hereof.
11. Interest Rate.
(a) Section 1.38 of the Loan agreement is hereby
amended as follows:
(i) all references to "one (1.00%) percent"
shall be deleted in their entirety and replaced with "one and
one-half (1.50%) percent";
(ii) all references to "two and three-
quarters (2.75%) percent" shall be deleted in their entirety
and replaced with "three and one-quarter (3.25%) percent";
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(iii) all references to "three (3%) percent"
shall be deleted in their entirety and replaced with "three
and one-half (3.5%) percent".
(b) Notwithstanding anything to the contrary
contained in paragraph 10(a) above, Borrower shall pay to
Lender interest on the Supplemental Obligations at a rate of
one (1.00%) percent per annum in excess of the Prime Rate.
12. Permitted Indebtedness. Section 9.9 of the Loan
Agreement is hereby amended by adding the following new
subsection (h) at the end thereof:
"(h) obligations or indebtedness arising under
the GDI Agreements (as in effect on the date
hereof); provided, that, (i) Borrower may only make
regularly scheduled payments of principal and
interest in respect of such indebtedness evidenced
by the GDI Agreements (as in effect from the date
hereof) and repayments of such indebtedness out of
the proceeds of any collateral pledged by GRS Realty
to secure such indebtedness, (ii) Borrower shall
not, directly or indirectly, (A) amend, modify,
alter or change the terms of such indebtedness or
any agreement, document or instrument related
thereto in any manner which would be less favorable
to Borrower than with respect to the terms and
conditions thereof as in effect on the date hereof,
or (B) redeem, retire, defease, purchase or
otherwise acquire such indebtedness, or set aside or
otherwise deposit or invest any sums for such
purpose, and (iii) Borrower shall furnish to Lender
all notices or demands in connection with such
indebtedness either received by Borrower or on its
behalf, promptly after the receipt thereof, or sent
by Borrower or on its behalf, concurrently with the
sending thereof, as the case may be."
13. Permitted Encumbrances. Section 9.8 of the Loan
Agreement is hereby amended by adding the following new
subsection (h) at the end thereof:
"(h) liens and security interests in all of the
real property owned by GRS Realty pursuant to the
GDI Agreements."
14. Supplemental Loan and Forbearance Fee. In
consideration of the amendments and forbearance set forth
herein, Borrower shall pay to Lender, or Lender at its option
shall charge the account of Borrower maintained by Lender, a
supplemental loan and forbearance fee in the amount of
$10,000, which fee is fully earned and payable as of the date
hereof.
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15. Representations, Warranties and Covenants.
(a) Borrower hereby agrees to cause GRS Realty, and
GRS Realty hereby agrees, to deliver to Lender, in form and
substance satisfactory to Lender, within ten (10) days from
the date hereof, a limited guarantee of payment by GRS Realty
of all Obligations secured by the Additional Premises as
described in the mortgages and/or deeds of trust executed by
GRS Realty in favor of Lender in form and substance
satisfactory to Lender.
(b) Borrower hereby agrees to cause GDI, and GDI
hereby agrees, to deliver to Lender, in form and substance
satisfactory to Lender, within ten (10) days from the date
hereof, mortgagee waivers executed by GDI in favor of Lender
with respect to the real property owned by GRS Realty and
pledged to GDI.
(c) Borrower hereby agrees to deliver to Lender, in
form and substance satisfactory to Lender, within ten (10)
days from the date hereof, a promissory note in the original
principal amount of $10,000,000 executed by Borrower in favor
of Lender.
(d) In addition to the continuing representations,
warranties and covenants heretofore or hereafter made by
Borrower to Lender pursuant to the Financing Agreements,
Borrower hereby represents, warrants and covenants with and to
Lender that this Amendment has been duly executed and
delivered by Borrower and is in full force and effect as of
the date hereof, and the agreements and obligations of
Borrower contained herein constitute legal, valid and binding
obligations of Borrower enforceable against Borrower in
accordance with their respective terms. These
representations, warranties and covenants are continuing and
shall survive the execution and delivery hereof and shall be
incorporated into and made a part of the Financing Agreements.
16. Conditions Precedent. The effectiveness of the
other terms and provisions contained herein shall only become
effective upon the satisfaction of the following additional
conditions precedent:
(a) Lender shall have received an original of this
Amendment, duly authorized, executed and delivered by Borrower
and consented to by each of the guarantors of the Obligations
and GDI and R & R;
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(b) Lender shall have received an original of the
Junior Participation Agreement, duly authorized, executed and
delivered by R & R;
(c) Lender shall have received the original Standby
Letter of Credit; and
(d) Lender shall have received true, correct and
complete copies of the GDI Agreements, duly authorized,
executed and delivered by the parties thereto.
17. Effect of this Amendment. Except as specifically
modified pursuant hereto, no other changes or modifications to
the Financing Agreements are intended or implied and in all
other respects the Financing Agreements are hereby
specifically ratified, restated and confirmed by all parties
hereto as of the effective date hereof. To the extent of any
conflict between the terms of this Amendment and the other
Financing Agreements, the terms of this Amendment shall
control. Lender has not waived and is not by this Amendment
waiving and has no intention of waiving, any Event of Default
which may have occurred prior to the date hereof, or may be
continuing on the date hereof or any Event of Default which
may occur after the date hereof, and Lender reserves the
right, in its discretion, to exercise any or all of its rights
and remedies arising under the terms of the Financing
Agreements as a result of any Event of Default which may have
occurred prior to the date hereof, or is continuing on the
date hereof or any Event of Default which may occur after the
date hereof, subject to the forbearance of rights and remedies
described in Section 6 hereof with respect to the Existing
Defaults.
18. Further Assurances. The parties hereto shall
execute and deliver such additional documents and take such
additional action as may be requested by Lender to effectuate
the provisions and purposes of this Amendment.
19. Governing Law. The validity, construction and
effect of this Agreement shall be governed by the laws of the
Commonwealth of Massachusetts.
20. Binding Effect. This Amendment shall be binding
upon and inure to the benefit of each of the parties hereto
and their respective successors and assigns.
21. Counterparts. This Amendment may be executed in any
number of counterparts, but all of such counterparts shall
together constitute but one and the same agreement. In making
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proof of this Amendment, it shall not be necessary to produce
or account for more than one counterpart thereof signed by
each of the parties hereto.
Very truly yours,
XXXXXXXX'X INC.
By:_______________________
Title:____________________
AGREED:
CONGRESS FINANCIAL CORPORATION
(NEW ENGLAND)
By: __________________________
Title: _______________________
[SIGNATURES CONTINUE ON NEXT PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
CONSENTED TO:
R & R VISTA
By: _________________________
Title: ______________________
GDI COMPANY, INC.
By: __________________________
Title: _______________________
GRS REALTY COMPANY, INC.
By: _________________________
Title: ______________________
BACON STREET, INC.
CONTRACTORS' WAREHOUSE, INC.
XXXXX FINANCIAL CORPORATION
P.D.I., INC.
By: _________________________
Title: ______________________
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EXHIBIT A
Pledged GRS Properties
North Highland, CA (Sacramento)
Framingham, MA
Malden, MA
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EXHIBIT B
Existing Defaults
[See letter annexed hereto]
