Exhibit 10.3
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is made and entered into as of the 16th day of
October, 1998 by and among CORNERSTONE REALTY INCOME TRUST, INC., a corporation
organized under the laws of the Commonwealth of Virginia, ("Cornerstone") and
CRIT-NC, LLC, a limited liability company organized under the laws of the
Commonwealth of Virginia ("CRIT-NC" and together with Cornerstone, the
"Borrowers") and FIRST UNION NATIONAL BANK, a national banking association (the
Bank).
STATEMENT OF PURPOSE
The Borrowers have requested and the Bank has agreed to extend certain
credit facilities to the Borrowers on the terms and conditions of this Credit
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
1. Revolving Credit Loans. Subject to the terms and conditions of this Credit
Agreement, Bank agrees to make Loans to the Borrowers on a joint and several
basis from time to time from the date hereof through the Termination Date as
requested by Cornerstone on behalf of the Borrowers in accordance with the terms
of this Credit Agreement.
2. Incorporation by Reference. All of the terms, conditions and provisions of
that certain Credit Agreement dated as of October 30, 1997 by and among
Cornerstone Realty Income Trust, Inc., each Additional Borrower that may become
party thereto, the lenders who are or may become parties to that Agreement and
the Bank as agent for such lenders, as said Agreement may be amended, restated,
supplemented or otherwise modified from time to time including, without
limitation, by that certain Joinder Agreement dated as of December 31, 1997 by
and among Cornerstone Realty Income Trust, Inc., CRIT-NC, LLC, the lenders party
to said Credit Agreement and Bank as agent (collectively "Original Credit
Agreement") are hereby incorporated by reference and govern the credit facility
provided hereby except as otherwise set forth below. Capitalized terms not
defined in this Credit Agreement shall have the meanings attributed to them in
the Original Credit Agreement except as otherwise expressly provided for herein.
Notwithstanding the foregoing, the following provisions of the Original Credit
Agreement are hereby modified with respect to the facility which is provided by
this Credit Agreement (but not with respect to the credit facility being
provided under Original Credit Agreement):
(a) For purposes of this Credit Agreement, the "Maturity Date" means
February 28, 1999 and is not subject to any extension.
(b) The term "Termination Date" for purposes of this Credit Agreement shall
be determined based on using the Maturity Date specified in subparagraph (a) of
this Paragraph 2 above and not the Maturity Date as defined in the Original
Credit Agreement.
(c) The term "Aggregate Commitment" for purposes of this Credit Agreement
shall be Twenty-Five Million Dollars ($25,000,000) and is not subject to any
increase.
(d) "Loan" for purposes of the Credit Agreement means any revolving loan
made to any Borrower pursuant to Paragraph 1 above and all such Loans,
collectively, as the context requires.
(e) The parties acknowledge that Bank does not have L/C Obligations under
this Credit Agreement.
(f) The parties acknowledge that the Original Credit Agreement is an
agented multi-lender facility and that the credit facility being provided under
this Credit Agreement is being provided solely by Bank in its capacity as lender
and that all requirement for voting, consents or waivers among lenders and all
provisions relating to Bank's role as Agent under the Original Credit Agreement
will not apply to this Agreement and that all decisions, consents, waivers or
other actions required to be made or given by the Lenders under the Original
Credit Agreement will, for purposes of this Credit Agreement, be made solely by
Bank.
(g) For purposes of this Credit Agreement, the six-month Interest Period
with respect to each LIBOR Rate Loan will not be available under this Credit
Agreement.
(h) For purposes of the Credit Agreement, it is acknowledged that there is
only one Note which is the Revolving Credit Note being executed by Borrowers of
even date herewith to the order of Bank and any amendments and modifications
thereto, any substitutes therefor, and any replacements, restatements, renewals
or extensions thereof, in whole or in part, a copy of which is attached hereto
as Exhibit A.
(i) The parties acknowledge that some or all of the proceeds of the Loan
may be contributed by Cornerstone to Cornerstone Partners, L.P., a Virginia
limited partnership (the "Partnership"), in which Cornerstone shall serve as
sole general partner with an effective economic interest of more than 88%. The
parties further acknowledge that the actions required to be taken by Section
8.17 of the Original Credit Agreement with respect to the Partnership will be
taken after the date of this Credit Agreement.
3. Reaffirmation. Borrowers hereby reaffirm that all representations and
warranties contained in the Original Credit Agreement are true and correct as of
the date hereof, and Borrowers hereby further certify and confirm to Bank that
no Event of Default under the Original Credit Agreement and that no Default
under the Original Credit Agreement is currently in existence.
IN WITNESS WHEREOF, the undersigned hereby causes this Credit Agreement to
be executed and delivered as of the date first above written.
BORROWERS:
[CORPORATE SEAL] CORNERSTONE REALTY INCOME TRUST, INC.
By:/s/ X.X. Xxxxxxx
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Name: X.X. Xxxxxxx
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Title: Chief Financial Officer
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CRIT-NC, LLC
[CORPORATE SEAL] By: Cornerstone Realty Income Trust, Inc., its sole
member/manager
By:/s/ X.X. Xxxxxxx
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Name: X.X. Xxxxxxx
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Title: Chief Financial Officer
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BANK:
FIRST UNION NATIONAL BANK
By:/s/ Xxxx X. Xxxxxxxx
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Name: Xxxx X. Xxxxxxxx
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Title: Director
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