FOURTH MODIFICATION OF
REVOLVING CREDIT LOAN AND
SECURITY AGREEMENT AND OTHER LOAN DOCUMENTS
THIS LOAN MODIFICATION AGREEMENT (the "MODIFICATION") made this 30th
day of June, 2005 by and among RESOURCE AMERICA, INC. ("RAI"), RESOURCE
PROPERTIES XXIV, INC. ("RPI XXIV"), RESOURCE PROPERTIES XL, INC. ("RPI XL"),
RESOURCE PROPERTIES XXX, INC. ("RPI XXX") and RESOURCE PROPERTIES XXXI, INC.
("RPI XXXI"), each a Delaware corporation (collectively, the "BORROWERS"), and
SOVEREIGN BANK, a federal banking association, having an address of 0000 Xxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 ("BANK" or "LENDER").
BACKGROUND
A. Resource Properties, Inc., which merged into RAI on Xxxx 00, 0000,
XXX XXXX, XXX XL, and Resource Properties 53, Inc. ("RPI 53") (the "ORIGINAL
BORROWERS") and the Bank entered into a certain Revolving Credit Loan and
Security Agreement dated July 27, 1999 (the "ORIGINAL LOAN AGREEMENT") wherein
the Original Borrowers established a line of credit loan facility with the Bank
in the amount of Fifteen Million Dollars ($15,000,000) (the "LOAN").
B. As security for the obligations of Original Borrowers under the Loan
Documents, RPI XL granted to Lender that certain Leasehold Mortgage and Security
Agreement (the "LEASEHOLD MORTGAGE") with regard to the real estate known as
Factors Walk - Phase Two, Savannah, Georgia (the "REAL ESTATE").
C. Original Borrowers, and Bank entered into that certain Modification
of Revolving Credit Loan and Security Agreement dated March 30, 2000 (the "FIRST
MODIFICATION"), whereby, inter alia, the principal amount of the Loan was
increased to Eighteen Million Dollars ($18,000,000).
D. To evidence the revised Loan in the amount of $18,000,000, Original
Borrowers executed and delivered to Bank that certain Replacement Line Note
dated March 30, 2000, in the amount of $18,000,000 (the "NOTE").
E. Original Borrowers, RPI XXX, RPI XXXI, and Bank entered into that
certain Second Modification of Revolving Credit Loan and Security Agreement and
Modification of Other Loan Documents dated April 30, 2002 (the "SECOND
MODIFICATION"), whereby RPI 53 requested that Bank release it from its
obligations under the Loan and release certain collateral related to RPI 53's
obligations (the "RPI 53 COLLATERAL") and then to substitute RPI XXX and RPI
XXXI as additional makers under the Note and add additional collateral owned by
RPI XXX and RPI XXXI to the security for the Loan (the "ADDITIONAL COLLATERAL"),
in accordance with the terms therein.
E. RPI, Original Borrowers RPI XXX, RPI XXXI, RPI XXIV, RPI XL and Bank
entered into that certain Third Modification of Revolving Credit Loan and
Security Agreement dated September 15, 2003 (the "THIRD MODIFICATION") whereby
the term of the Loan was extended until July 27, 2005.
-1-
F. The Note, the Loan Agreement, the Mortgage and all the documents,
instruments and undertakings evidencing or securing the Loan, as modified hereby
and by the First Modification, Second Modification and Third Modification
(collectively, the "OTHER MODIFICATIONS"), are hereinafter collectively referred
to as the "LOAN DOCUMENTS"). All capitalized terms used but not defined herein
shall have the meaning given to such terms in the Loan Agreement.
G. Borrowers have requested that Bank (i) extend the term of the Loan,
(ii) release RPI XXIV from its obligations under the Loan Documents and (iii)
acknowledge that by operation of law, since Resource Properties, Inc., which was
a Borrower, merged into RAI, RAI is now a Borrower under the Loan Documents,
which Bank has agreed to do, on the terms and conditions as more fully set forth
herein.
AGREEMENT
---------
NOW THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Definitions. As used in this Agreement, all capitalized terms shall
have the respective meanings provided therefor herein or, in absence of such
provision, the respective meanings provided therefor in the Loan Documents.
Without limiting the foregoing:
(a) References in the Loan Documents to the "Mortgage" shall mean
and include the Mortgage, as modified by this Agreement and the Other
Modifications.
(b) References in the Loan Documents to the "Loan Agreement" shall
mean and include the Loan Agreement as modified by this Agreement and the Other
Modifications.
(c) References in the Loan Documents to the "Note" shall mean and
include the Note as modified by this Agreement and the Other Modifications.
(d) References in the Loan Documents to the "Loan Documents" shall
mean and include the Loan Documents as modified by this Agreement and the Other
Modifications.
(e) References in the Loan Documents to the Collateral shall mean
and include the Collateral, as defined therein, and any Additional Collateral.
(f) References in the Loan Documents to the terms "Borrowers" shall
mean and include RAI, RPI XXX, RPI XL, and RPI XXXI.
(g) The term "Obligations" as used herein shall mean any and all
Obligations of the Borrowers, or any of them, under the Note, the Mortgage, the
Loan Agreement, the Collateral Documents and any other Loan Document.
-2-
2. Confirmation of Indebtedness.
(a) Borrowers hereby confirm, acknowledge, and agree that as of the
date hereof, the outstanding principal balance of the Note is $0. Borrowers
further acknowledge and agree that the foregoing principal balance from the date
stated is validly and duly owing by Borrowers to Bank.
(b) Borrowers hereby confirm, acknowledge, and agree that as of the
date hereof, the Borrowing Base is $9,668,000.
(c) RAI, RPI XXX, RPI XL, and RPI XXXI (collectively the "REMAINING
BORROWERS") hereby ratify, confirm and acknowledge that (i) the Note, the
Mortgage, and the other Loan Documents are each in full force and effect as of
the date hereof, (ii) the Note, the Mortgage and the other Loan Documents
constitute valid and legally binding obligations of the Remaining Borrowers,
(iii) no event of default, or event which if continuing would constitute an
Event of Default, has occurred under the Loan Documents, and (iv) the Loan
Documents are enforceable against the Remaining Borrowers and its assets in
accordance with their respective terms.
(d) Not by way of limitation of anything herein or in the Loan
Documents, RAI hereby agrees to be bound by the Note, the Loan Agreement and
other Loan Documents, as if it was an original signatory thereto and a Borrower
(as applicable) listed therein, and RAI agrees to comply with all covenants set
forth in the Loan Documents and hereby sets forth its agreement to the remedies
and rights granted to Bank therein.
(e) In order to induce Bank to enter into this Modification, the
Remaining Borrowers hereby reaffirm the various representations and warranties
made by the Original Borrowers in the Loan Documents, as if such representations
and warranties were made as of this date and set forth fully herein. In order to
induce Bank to enter into this Modification, the Remaining Borrowers each hereby
represents and warrants to Bank that all representations and warranties made by
the Original Borrowers in the Loan Documents are hereby made by the Remaining
Borrowers on and as of the date hereof. Not by way of limitation of the
foregoing, Remaining Borrowers hereby further represent and warrant that:
(i) RAI is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, with full
power and authority to execute, deliver and comply with this
Modification and the other Loan Documents, and to carry on its
business as it is now being conducted and is duly licensed or
qualified as a foreign corporation in good standing in each
jurisdiction in which the character or location of the properties
owned by it or the business transacted by it requires such licensing
or qualification.
(ii) The execution and delivery by RAI and the other Borrowers of
this Modification and of the consummation of the transactions
contemplated by the Loan Documents and this Modification and the
fulfillment and compliance with the respective terms, conditions and
-3-
provisions of the Loan Documents: (a) have been duly authorized by
all requisite corporate action of Borrowers, (b) will not conflict
with or result in a breach of, or constitute a default (or might,
upon the passage of time or the giving of notice or both, constitute
a default) under, any of the terms, conditions or provisions of (i)
any applicable statute, law, rule, regulation or ordinance, (ii) any
Borrowers' articles of incorporation or bylaws, (iii) any indenture,
mortgage, loan or credit agreement or instrument to which any of the
Borrowers is a party or by which any of them may be bound or
affected, or (iv) any judgment or order of any court or governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, and (c) will not result in the creation or
imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the property or assets of any of the
Borrowers under the terms or provisions of any such agreement or
instrument, except liens in favor of Bank.
(iii) This Modification has been duly executed by each of the
Remaining Borrowers and delivered to Bank, and this Modification and
other documents and instruments required hereby or executed in
connection herewith constitute legal, valid and binding obligations
of such parties, enforceable in accordance with their respective
terms.
(iv) None of the Remaining Borrowers is in violation of its
respective articles of organization or bylaws, nor is any such party
in default in the performance or observance of any of its respective
obligations, covenants or conditions contained in any indenture or
other agreement creating, evidencing or securing any Indebtedness or
pursuant to which any such Indebtedness is issued, nor is any of the
Remaining Borrowers in violation of or in default under any other
agreement or instrument or any judgment, decree, order, statute,
rule or governmental regulation, applicable to any of them or by
which any of their properties may be bound or affected.
(v) There are no actions, suits or proceedings pending or, to the
best of any of the Remaining Borrowers' knowledge, threatened
against any of the Remaining Borrowers, or any properties of any of
them before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which, if
determined adversely to any Borrower, would have a material adverse
effect on such Remaining Borrower's financial or operating
condition.
(vi) No authorization, consent, approval, license, exemption or any
other action by and no registration, qualification or filing with
any governmental agency or authority is or will be necessary in
connection with the execution, delivery and performance of this
Modification or any other document or instrument required hereby by
any of the Remaining Borrowers.
(vii) On and as of the date of this Modification, to the best of any
of the Remaining Borrowers' knowledge, there has occurred no default
or Event of Default under the Note or any other Loan Document and no
event which with notice or lapse of time or both would, if
unremedied, be a default or Event of Default under the Note or other
Loan Document.
-4-
(f) Each of the Remaining Borrowers hereby ratify and confirm that
it is fully obligated under the Loan Documents and that the Loan Documents
remain in full force and effect as modified hereby. The Loan Documents, AND THE
WARRANTS OF ATTORNEY TO CONFESS JUDGMENT CONTAINED IN THE NOTE AND ANY OF THE
OTHER LOAN DOCUMENTS, extend to and secure the payment of the obligations of the
Remaining Borrowers under the Loan Documents (the "OBLIGATIONS"), as modified by
this Agreement. Each of the Loan Documents remains in full force and effect, as
modified by this Agreement and, along with the Premises and the other
Collateral, AND THE WARRANTS OF ATTORNEY TO CONFESS JUDGMENT CONTAINED IN THE
NOTE AND ANY OF THE OTHER LOAN DOCUMENTS, extend to and continue to evidence and
secure the Obligations as modified by this Agreement and the Loan Documents. To
the extent required in order to achieve the intent of this Agreement, this
Agreement shall be deemed to modify each of the Loan Documents.
(g) BORROWERS HEREBY CONFIRM AND AGREE THAT THEY HAVE NO CLAIM,
CAUSE OF ACTION, DEFENSE, SET-OFF, COUNTERCLAIM OR CHALLENGE OF ANY KIND OR
NATURE WHATSOEVER AGAINST THE PAYMENT OF ANY OF THE SUMS OWING UNDER THE NOTE OR
THE TERMS OF THE OTHER LOAN DOCUMENTS OR THE ENFORCEMENT OR VALIDITY OF THE NOTE
OR THE OTHER LOAN DOCUMENTS, AND DO HEREBY REMISE, RELEASE AND FOREVER DISCHARGE
ANY AND ALL SUCH CLAIMS, CAUSES OF ACTION, DEFENSES, SET-OFFS, COUNTERCLAIMS OR
CHALLENGES.
3. Amendment to Note. Remaining Borrowers and Lender hereby acknowledge
and agree that the term "Borrower" under the Note shall mean all of the
Remaining Borrowers, each of which hereby assumes, on a joint and several basis,
all obligations of "Borrower" thereunder and is otherwise obligated thereunder
as if it were an original signatory thereto. The Remaining Borrowers hereby
agree that they are, or remain, as the case may be, bound by the warrant of
attorney to confess judgment as set forth in the Note. The Remaining Borrowers
hereby confirm that they have agreed to be bound by the foregoing after
receiving advice from counsel of their choosing with regard to the same and
further confirm that their agreement to be so bound is based on a knowing,
voluntary and intelligent decision.
4. Amendment to the Loan Agreement.
(a) The following definitions in the Loan Agreement shall be amended
as indicated below:
(i) The term "Borrower" as defined in the Loan Agreement shall
mean the Remaining Borrowers.
(ii) The term "Expiration Date" in Section 1.1 of the Loan
Agreement shall be July 27, 2006.
-5-
(b) Section 6.1 of the Loan Agreement and Schedule 6.1 referred to
therein are hereby deleted in their entirety.
(c) Section 6.7 of the Loan Agreement and Schedule 6.7 referred to
therein are hereby deleted in their entirety and replaced with the following:
"6.7 LIENS. Borrower shall not create, incur or permit to exist
any mortgage, pledge, encumbrance, lien, security interest or charge
of any kind (including liens or charges upon properties acquired or
to be acquired under conditional sales agreements or other title
retention devices) on any of the Collateral or any other property
securing the obligations of any Obligor to Lender, whether now owned
or hereafter acquired, or upon any income, profits or proceeds
therefrom."
(d) The last two sentences of Section 6.16 of the Loan Agreement and
Schedule 6.16 referred to therein are hereby deleted in their entirety.
5. Conditions Precedent. The obligation of Bank to effect the
modifications and agreements contained herein is subject to the conditions
precedent that:
(a) There has been no material adverse change in the financial or
operating condition of the Remaining Borrowers since the date of the last
submission of financial statements to Bank.
(b) Remaining Borrowers shall have paid Bank's counsel fees incurred
in connection with this Modification.
(c) Bank shall have received all of the following documents, each of
which shall be in form and substance satisfactory to Bank:
(i) Copies, certified in writing by the secretaries or assistant
secretaries of the Remaining Borrowers, of (a) resolutions of
its boards of directors evidencing approval of this Modification
and the other matters contemplated hereby, and (b) each document
evidencing other necessary action and approvals, if any, with
respect to this Modification;
(ii) Written certificates by the secretaries or assistant
secretaries of the Remaining Borrowers as to the names and
signatures of its officers who are authorized to sign this
Modification, and the other documents or certificates to be
executed and delivered by it pursuant hereto;
(iii) Evidence satisfactory to Bank that each of the Remaining
Borrowers' Articles of Incorporation and Bylaws delivered to
Bank on or about July 27, 1999 or April 30, 2002, as applicable,
have not been amended in any way (or if they have been amended,
the nature of such amendment) and are in full force and effect;
-6-
(iv) A fully executed copy of this Modification; and
(v) Good standing certificate with respect to each of the
Remaining Borrower issued by the Secretary of the State of the
State of Delaware;
(vi) A bringdown of the previous title report;
(vii) Such other documents as Bank may reasonably request in
connection with this Modification.
(d) Remaining Borrowers shall have paid to Lender an extension fee
of $________.
(e) Exhibit "B" to the Loan Agreement shall be replaced with Exhibit
"A" attached hereto. Schedules 5.3, 5.4, 5.7, 5.13, 5.18, and 5.22 to the Loan
Agreement shall be replaced with the schedules attached hereto of the same
numbers to reflect the inclusion of RAI as a Borrower.
6. Reaffirmation of Loan Documents, Accommodations and Collateral.
Remaining Borrowers hereby ratify and confirm that each of them is fully
obligated under the Loan Documents and that the Loan Documents remain in full
force and effect as modified hereby. The Mortgage and the other Loan Documents
shall remain in full force and effect and shall be deemed hereby to extend to
and secure the Obligations, including without limitation those created under
this Modification. To the extent required in order to achieve the intent of this
Modification, this Modification shall be deemed to modify each of the Loan
Documents and, along with the Real Estate, collateral, and any other collateral
pledged or granted to Lender as security for the Obligations, or any of them,
extend to and continue to evidence and secure the Loan Documents and the
Obligations as modified by this Modification.
7. Miscellaneous.
(a) Paragraph headings used in this Modification are for convenience
only and shall not affect the construction of this Modification.
(b) From time to time, Remaining Borrowers will execute and deliver
to Bank such additional documents and will provide such additional information
as Bank may reasonably require, to carry out the terms of this Modification.
(c) Remaining Borrowers hereby indemnify, hold harmless, and upon
request will defend Bank and its shareholders, officers, directors, employees,
attorneys and agents, and their respective successors and assigns (collectively,
the "Indemnified Parties") from and against any and all claims and liabilities
to third parties, and will pay and reimburse to the Indemnified Parties all
losses, payments, reasonable costs and expenses associated therewith, or with
Bank's defense (including without limitation reasonable attorneys fees) which
Bank may suffer, incur or be exposed to by reason of or in connection with or
rising out of (i) the transactions evidenced by or referred to in or related to
this Modification or any of the Loan Documents, as modified by this
-7-
Modification; and (ii) any actions or omissions of any one or more of the
Indemnified Parties which conforms with the terms of this Modification or the
Loan Documents, or is in good faith and connected therewith or with the
enforcement thereof; provided, however, that the Indemnified Parties shall not
be indemnified, defended or held harmless for any consequential or indirect
losses or damages, or any losses or damages which were caused by the Indemnified
Parties' willful misconduct or gross negligence. The provisions of this
paragraph shall survive any cancellation, satisfaction, termination or
modification of this Modification, the Note, the Mortgage, any other Loan
Document, and the repayment of the Loan.
(d) This Modification shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
(e) Remaining Borrowers shall pay all costs and expenses of Bank in
connection with the preparation, execution, delivery, administration and
enforcement of this Modification (including title charges and the fees and
out-of-pocket costs of counsel with respect hereto).
(f) This Modification may be signed in counterparts, all of which
when taken together shall constitute one and the same instrument.
(g) REMAINING BORROWERS ACKNOWLEDGE THAT THE NOTE AND OTHER LOAN
DOCUMENTS CONTAIN AUTHORIZATIONS TO CONFESS JUDGMENT AGAINST BORROWERS, THAT AT
THE TIME ORIGINAL BORROWERS EXECUTED THE NOTE AND THE OTHER LOAN DOCUMENTS
BORROWERS CONSULTED, AND IN CONNECTION WITH THE EXECUTION OF THIS MODIFICATION
AND THE EXECUTION OF THE DOCUMENTS AND INSTRUMENTS REQUIRED HEREBY HAVE
CONSULTED LEGAL COUNSEL WITH RESPECT THERETO AND THAT BORROWERS UNDERSTAND (AND
AT THE TIME BORROWERS EXECUTED THE NOTE AND OTHER LOAN DOCUMENTS BORROWERS
UNDERSTOOD) THAT THE EXERCISE BY BANK OF THE AUTHORIZATIONS WILL RESULT IN THE
ENTRY OF A JUDGMENT AGAINST BORROWERS AND THE SALE OR ATTACHMENT OF OR EXECUTION
UPON BORROWERS' PROPERTY (INCLUDING WITHOUT LIMITATION REAL PROPERTY, PERSONAL
PROPERTY AND BANK ACCOUNTS) WITHOUT PRIOR NOTICE OR THE OPPORTUNITY FOR A
HEARING.
SIGNATURE LINES FOLLOW ON NEXT PAGE.
-8-
IN WITNESS WHEREOF, the parties hereto have executed this
Modification as of the date written above.
Witness/Attest: BORROWERS:
RESOURCE AMERICA, INC., a Delaware
corporation
______________________________ By:________________________________
Xxxx X. Xxxxxxx, Senior Vice
President
RESOURCE PROPERTIES XXIV, INC., a
Delaware corporation
______________________________ By:________________________________
Xxxx X. Xxxxxxx, President
RESOURCE PROPERTIES XL, INC., a
Delaware corporation
______________________________ By:________________________________
Xxxx X. Xxxxxxx, President
RESOURCE PROPERTIES XXX, INC., a
Delaware corporation
______________________________ By:________________________________
Xxxx X. Xxxxxxx, President
RESOURCE PROPERTIES XXXI, INC., a
Delaware corporation
______________________________ By:________________________________
Xxxx X. Xxxxxxx, President
-9-
BANK:
SOVEREIGN BANK, a federal banking
association
Attest: ________________________ By:____________________________________
Name:
Title:
-10-
STATE OF :
: SS
COUNTY OF :
BE IT REMEMBERED, that on this _______ day of ___, 2005, personally
came before me, the Subscriber, a Notarial Officer for the State and County
aforesaid, Xxxx X. Xxxxxxx, the Senior Vice President of RESOURCE AMERICA, INC.,
and the President of RESOURCE PROPERTIES XXIV, INC., RESOURCE PROPERTIES XL,
INC., RESOURCE PROPERTIES XXX, INC., and RESOURCE PROPERTIES XXXI, INC., each a
Delaware corporation, each existing under the laws of the State of Delaware,
party to this instrument, known to me personally to be such, and acknowledged
this instrument to be the act and deed of the aforesaid corporations, that the
signature of the officer thereto is in his own proper handwriting, and that his
act of sealing, executing, acknowledging and delivering said instrument was duly
authorized by the aforesaid corporations.
IN WITNESS WHEREOF, I have hereunto set may hand and official seal.
_____________________________
Notary Public
-11-
STATE OF :
: SS
COUNTY OF :
On this _____ day of _________, 2005, before me, a Notary Public,
personally appeared Xxxxxxx X. Xxxxxxxxxx, who acknowledged that he is Vice
President of SOVEREIGN BANK, and that he being authorized to do so as such
officer, executed the foregoing instrument for the purposes therein contained..
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
_____________________________
Notary Public
My Commission Expires:
-12-
