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Exhibit 10.79
AMENDMENT TO NOTE AGREEMENT
THIS AMENDMENT TO NOTE AGREEMENT, dated as of September 30, 1997 (this
"Amendment"), is by and between AMBASSADOR II, L.P., a limited partnership duly
organized and validly existing under the laws of the State of Delaware (the
"Borrower"), and NOMURA ASSET CAPITAL CORPORATION, a corporation organized
under the laws of the State of Delaware (together with its successors and
assigns, the "Lender").
RECITALS
WHEREAS, the Borrower and the Lender entered into that certain Note
Agreement dated as of June 22, 1997, as amended by that certain letter
agreement dated as of June 26, 1997 between the Borrower and the Lender (as
amended, the "Note Agreement"), pursuant to which the Lender agreed to make to
the Borrower a series of loans, under the guarantee of the Guarantors and under
the terms and conditions thereof, in an aggregate principal amount not
exceeding $75,000,000 at any one time outstanding; and
WHEREAS, the Borrower and the Lender desire to amend the Note Agreement as
set forth in this Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Defined Terms. Capitalized terms not defined herein shall have the
meanings ascribed to such terms in the Note Agreement. The term "this
Agreement" as used in the Note Agreement shall mean the Note Agreement as
amended by this Amendment.
2. Amendment to Section 1.01 of the Note Agreement. Section 1.01 of the
Note Agreement is hereby amended as follows:
(a) The definitions of "Ambassador Debt Service" and "Ambassador Debt
Service Ratio" are hereby deleted in their entirety and the following is
inserted in lieu thereof:
">Ambassador Debt Service= shall mean, for any period for
Ambassador and its Consolidated Subsidiaries, the sum (determined
on a consolidated basis in accordance with GAAP and without
duplication) of the following: (a) all payments of principal of
Indebtedness (other than payments of principal due on the maturity
date of a loan) of Ambassador and its Consolidated Subsidiaries
scheduled to be made during such period plus (b) all Interest
Expense payable by Ambassador and its
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Consolidated Subsidiaries during such period.
">Ambassador Debt Service Ratio= shall mean, as to any date of
determination on or after the Closing Date, the ratio of (A)
Ambassador Cash Flow for the twelve month period ending on the last
day of the calendar quarter most recently ended prior to such date
of determination to (B) Ambassador Debt Service for such period."
(b) The definition of "Assignments" is hereby amended by adding the
following clause at the end thereof before the ".":
", as the same shall be modified and supplemented and in effect
from time to time."
(c) The definitions of "Debt Service Ratio," "LP Debt Service" and
"LP Debt Service Ratio" are hereby deleted in their entirety and the following
is inserted in lieu thereof:
"Debt Service Ratio" shall mean with respect to the Borrower as to
any date of determination on or after the Closing Date, the ratio
of (A) the aggregate Cash Flow of all of the Collateral Properties
for the twelve month period ending on the last day of the calendar
month ending on or most recently ended prior to such date of
determination to (B) Debt Service of the Borrower for such period.
Notwithstanding the foregoing, Cash Flow with respect to an
Additional Property shall be included in such calculations from the
date of the Approval Notice with respect to such Additional
Property only, but, once so included, shall include Cash Flow with
respect to such Additional Property for the same period used for
the other Collateral Properties, provided, however, that (i) if,
with respect to any Collateral Property, such twelve month period
includes a period of more than three months prior to the Borrower's
ownership of such Collateral Property, Cash Flow shall include the
Borrower's predecessor's cash flow with respect to such Collateral
Property (which cash flow (a) shall be certified to the best
knowledge of a senior financial officer of the Borrower and
evidenced by such supporting information as reasonably requested by
the Lender) and (b) shall be adjusted to reflect the amount, if
any, that the Borrower has demonstrated, in the Lender's sole
discretion, is appropriate to reflect reductions in Property
Expenses which the Borrower expects to achieve as a result of
increased efficiency of operation of such Collateral Property or
otherwise), and (ii) if, with respect to any Collateral Property,
such twelve month period includes a period of three months or less
prior to the Borrower's ownership of such Collateral Property, Cash
Flow for such Collateral
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Property shall be annualized for the full twelve month period based
on the operating results during Borrower's period of ownership, as
determined by the Lender in its sole discretion.
>LP Debt Service= shall mean, for any period for the Operating
Partnership and its Consolidated Subsidiaries, the sum (determined
on a consolidated basis in accordance with GAAP and without
duplication) of the following: (a) all payments of principal of
Indebtedness (other than payments of principal due on the maturity
date of a loan) of the Operating Partnership and its Consolidated
Subsidiaries scheduled to be made during such period plus (b) all
Interest Expense payable by the Operating Partnership and its
Consolidated Subsidiaries during such period.
>LP Debt Service Ratio= shall mean, as to any date of determination
on or after the Closing Date, the ratio of (A) LP Cash Flow for the
twelve month period ending on the last day of the calendar quarter
ending on or most recently ended prior to such date of
determination to (B) LP Debt Service for such period."
(d) The definition of "Maturity Date" is hereby deleted in its
entirety and the following is inserted in lieu thereof:
">Maturity Date=" shall mean December 31, 1998, or such earlier
date resulting from acceleration."
(e) The definition of "Revolving Credit Termination Date" is hereby
deleted in its entirety and the following is inserted in lieu thereof:
">Revolving Credit Termination Date= shall mean December 15, 1998,
or, if earlier, the Maturity Date."
(f) The definition of "Security Agreement" is hereby deleted in its
entirety and the following is inserted in lieu thereof:
">Security Agreement= shall mean that certain Amended and Restated
Security Agreement, dated as of September 30, 1997, between the
Borrower and the Lender, as modified and supplemented and in effect
from time to time."
(g) The following is hereby inserted after the definition of
"Excess Cash Flow":
">Exit Fee= shall have the meaning assigned to such term in Section
3.03."
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3. Amendment to Section 2.03 of the Note Agreement. Section 2.03
of the Note Agreement is hereby amended by adding the following to the end of
the first sentence thereof before the ".":
"and plus an Exit Fee calculated on the amount of such prepayment."
4. Amendment to Section 2.06 of the Note Agreement. Section 2.06
of the Note Agreement is hereby deleted in its entirety and the following is
inserted in lieu thereof:
"2.06 Optional Prepayments. Subject to Section 4.04, the Borrower
shall have the right to prepay Mortgage Loans at any time or from
time to time (including, without limitation, in connection with a
Release as set forth in Section 2.09), provided that: (1) the
Borrower shall give the Lender notice of each such prepayment as
provided in Section 4.05; (2) in addition to paying the principal
amount specified in the notice of prepayment, the Borrower shall
pay an Exit Fee calculated on the principal amount prepaid (unless
the Mortgage Loans are being prepaid pursuant to Sections 5.01,
5.02 or 5.03), plus any amounts payable under Section 5.04 in
connection with such prepayment; and (3) the Borrower shall pay
interest on the principal amount prepaid, accrued to the date of
prepayment, on the prepayment date."
5. Amendment to Section 2.07 of the Note Agreement. Section 2.07
of the Note Agreement is hereby amended by adding the following to the end of
such Section before the ".":
", and together with each such prepayment of principal, the
Borrower shall pay to the Lender an Exit Fee calculated on the
principal amount so prepaid."
6. Amendment to Section 2.09 of the Note Agreement. Clause (b) of
Section 2.09 of the Note Agreement is hereby amended by adding the following to
the end of such clause before the ";": "and an Exit Fee calculated on the
amount so prepaid".
7. Amendment to Section 3 of the Note Agreement. Section 3.01 of
the Note Agreement is hereby amended by adding the following to the end of such
Section:
"Together with such payment of the outstanding principal amount of
the Mortgage Loans on the Maturity Date, the Borrower will pay to
the Lender an Exit Fee calculated on such outstanding principal
amount."
The following is hereby inserted as Section 3.03:
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"3.03 Exit Fee. Together with all payments of principal (except
payments of principal pursuant to Sections 5.01, 5.02 and 5.03),
the Borrower shall pay to the Lender an exit fee (the "Exit Fee")
calculated as follows: (a) with respect to a repayment of
principal made on or before June 30, 1998, an amount equal to 1% of
the aggregate principal amount of the Mortgage Loans being repaid
or (b) with respect to any repayment made on or after July 1, 1998,
an amount equal to 1.5% of the aggregate principal amount of the
Mortgage Loans being repaid."
8. Amendment to Section 4.01 of the Note Agreement. Section
4.01(a) of the Note Agreement is hereby amended by adding the following after
"other amounts": "including, but not limited to, any Exit Fee".
9. Amendment to Section 4.05 of the Note Agreement. The third
sentence of Section 4.05 of the Note Agreement is hereby amended by adding after
"(subject to Section 4.04)," the following: "the amount of the Exit Fee, which
shall be subject to the Lender's confirmation".
10. Amendment to Section 6.02 of the Note Agreement. Section 6.02
of the Note Agreement is hereby amended by adding the following to the end of
such Section:
"(j) For each Collateral Property, Borrower shall have, in
accordance with the Security Agreement, established a Collateral
Account with a Collateral Bank (as such terms are defined in the
Security Agreement) and shall have executed and delivered, and
caused the related Collateral Bank to execute and deliver, an
agreement in the form attached as Exhibit B to the Security
Agreement, along with related UCC-1 Financing Statements, all in
form and substance reasonably satisfactory to the Lender.
Notwithstanding anything contained herein or in the Security
Agreement to the contrary, in the event the Borrower requests a
Mortgage Loan (not in connection without an Addition) pursuant to
the terms hereof and satisfies all other conditions precedent to
the making of such Mortgage Loan pursuant to the terms hereof
before October 30, 1997, the Borrower shall not be required to
satisfy the terms and conditions of this clause (j) or Section
4.01(a)(i) of the Security Agreement with respect only to the
Initial Properties and the Cedar Creek Property in order to obtain
such Mortgage Loan, provided, however, that the foregoing shall not
constitute a waiver of the Borrower's obligations under the
provisions of this clause (j) with respect to any other Mortgage
Loan or any Addition or a waiver of any of the Borrower's
obligations under Section 4.01 of the Security
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Agreement."
11. Amendment to Section 7.02 of the Note Agreement. Section 7.02
of the Note Agreement is hereby amended by adding the following at the end of
such Section:
"The statement of operations of the Borrower for the trailing
twelve month period ended on July 31, 1997 heretofore furnished to
Lender fairly presents the results of operations for the period
ended July 31, 1997 all in accordance with reasonable financial
projection methodology and based upon reasonable assumptions, it
being understood that any such projections and assumptions are not
to be viewed as facts to the extent that they relate to future
events and that actual results may differ from those projected
therein. The Borrower did not have on said date any material
contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any
unfavorable commitments, except as referred to or reflected or
provided for in said balance sheet as at said date and except to
the extent not required to be so disclosed under GAAP. Since July
31, 1997, there has been no material adverse change in the
financial condition, operations or business of the Borrower from
that set forth in said financial statements as at said date."
12. Amendment to Section 8.01 of the Note Agreement. The following
is added as Section 8.01(b) of the Note Agreement:
"(b) as soon as available and in any event by April 30, 1998,
consolidated statements of income, retained earnings and changes in
financial position (or of cash flow, as the case may be) of the
Borrower and its Consolidated Subsidiaries for the year ending
December 31, 1997 and the related consolidated balance sheet as at
December 31, 1997, setting forth in each case in comparative form
the corresponding consolidated figures for the preceding fiscal
year, and accompanied by an opinion thereon of independent
certified public accountants of recognized national standing
acceptable to the Lender in its sole discretion, which opinion
shall state that said consolidated financial statements fairly
present the consolidated financial condition and results of
operations of the Borrower and its Consolidated Subsidiaries as at
the end of, and for, such fiscal year;".
In the last paragraph of Section 8.01, "or (b)" is hereby inserted after
"paragraph (a)" and "or fiscal year" is hereby inserted at the end of such
paragraph before the ".".
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13. Amendment to Section 9 of the Note Agreement. Clause (c) of Section 9
of the Note Agreement is hereby amended by adding the following to the end of
such clause before the ";": ", including, but not limited to, those documents,
financial information, rent rolls and certificates furnished in connection with
that certain Amendment to Note Agreement dated as of September 30, 1997".
Clause (d)(1) of Section 9 of the Note Agreement is hereby amended by inserting
", 8.01(b)" after
"Sections 8.01(a)".
14. Defaults; Representations. The Borrower hereby certifies that (a) as
of the date of this Amendment, there exists no Event of Default, Default or
breach of the Borrower's obligations, covenants, representations and warranties
under the Note Agreement (as hereby amended) (except for any default or breach
that has been waived by the Lender in the letter dated August 22, 1997), and
the execution and delivery of this Amendment shall not cause or create any such
Event of Default, Default or breach, (b) except for representations and
warranties expressly made or deemed made as of a specific date which shall be
expressly stated to be true and correct on and as of such date and except as
disclosed in the certificate provided by an officer of Ambassador II, Inc., to
Lender on or before the execution of this Amendment, the representations and
warranties made by the Borrower in Section 7 of the Note Agreement (as hereby
amended) and in the other Basic Documents (as amended) and made by each
Guarantor in Section 3 of each Guarantee Agreement (as amended) and in the
other Basic Documents (as amended) and made by Ambassador in Section 2 of the
REIT Agreement (as amended) are true and complete in all material respects on
and as of the date of this Amendment with the same force and effect as if made
on and as of this Amendment, and (c) as of the date hereof, the Borrower has no
cause of action at law or in equity against the Lender (including, without
limitation, any offset, defense, deduction or counterclaim) with respect to the
Note Agreement or the other Basic Documents (as the same have been amended).
15. Ratification. As modified by this Amendment, the Note Agreement shall
remain in full force and effect and is hereby ratified and confirmed by the
parties.
16. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.
17. Conflict. To the extent that any terms and provisions of this
Amendment conflict with the terms and provisions of the Note Agreement, this
Amendment shall govern and control.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.
BORROWER:
AMBASSADOR II, L.P.
By: Ambassador II, Inc.,
its General Partner
By:
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Name:
Title:
Address for Notices:
00 Xxxx Xxxxxx Xxxxx, Xxxxx
0000
Xxxxxxx, Xxxxxxxx 00000
Attention: President
Telecopier No.: (312) 917-
0910
with a copy to:
Xxxxxxxxx Traurig Xxxxxxx
Xxxxxx Xxxxx & Xxxxxxx
One Commerce Square, Suite
2050
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000
Attention: Xxxxxx Xxxxx
Xxxxxx, Esq.
Telecopier No: (000) 000-0000
LENDER:
NOMURA ASSET CAPITAL CORPORATION
By:
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Xxxx Xxxxx
Vice President
Address for Notices:
2 World Financial Xxxxxx
Xxxxxxxx X
Xxx Xxxx, Xxx Xxxx 00000
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Attention: Xxxxxx XxXxxx
Telecopier No.: (212) 667-
1206
and
Attention: Xxxxx Xxxx
Telecopy No.: (000) 000-0000
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