DORAL BANK, FSB REVOLVING LINE OF CREDIT LOAN AGREEMENT
| Exhibit 10.38 |
DORAL
BANK, FSB
February
27, 2009
THIS
REVOLVING LINE OF CREDIT LOAN AGREEMENT (this “Agreement”), made as of the above
date, by and between XXXXXXX LAND & NURSERIES, INC., a Delaware corporation,
having an address at Xxx Xxxxxxxxxxx Xxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000
(“Borrower”), and DORAL BANK, FSB, a Federal savings bank, with an address at
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the “Bank”).
Borrower
and the Bank agree as follows:
1. The Credit
Loan. In reliance on the representations and warranties
contained herein, and upon the fulfillment of all conditions set forth herein
and required by the Bank, the Bank agrees to make advances (each an “Advance”;
collectively, the “Advances”) to Borrower at any time and from time to time on
or after the date hereof to and including the Maturity Date (as hereinafter
defined) or the Extended Maturity Date (as hereinafter defined), as the case may
be, pursuant to that certain Promissory Note, dated the date hereof (the
“Note”), made by Borrower in favor of the Bank, provided that the aggregate
unpaid principal amount of the Advances shall not exceed Ten Million and 00/100
Dollars ($10,000,000.00) (the “Credit Loan”). Notwithstanding
anything contained herein to the contrary, no Advance shall be made if at any
time there is an Event of Default (hereinafter defined) or any event has
occurred which with the passage of time or the giving of notice, or both, would
constitute an Event of Default. All Advances made to Borrower
hereunder shall be payable in full upon demand of the Bank on the Maturity Date
or the Extended Maturity Date, as the case may be. The Credit Loan is
subject to the terms and conditions of this Agreement and the
Note. Each Advance made by the Bank hereunder and each payment of
principal or interest under the Note shall be noted by the Bank on its records
provided that any failure to record any such information on such records shall
not in any manner affect the obligation of the Borrower to make payments of
principal and interest in accordance with the terms of this Agreement or the
Note. Borrower hereby agrees to repay the outstanding Advances under
the Credit Loan together with interest thereon as set forth in Section 2
herein. Proceeds of the Credit Loan are to be used only for general
corporate purposes.
2. Interest Rate and
Payments.
A. During the initial term (the
“Initial Term”):
(i) Commencing
April 1, 2009 and on the first day of each calendar month thereafter up to and
including March 1, 2011, Borrower shall make monthly payments of interest only
on any Advances outstanding under the Credit Loan, calculated at the Applicable
Interest Rate (hereinafter defined), as well as any other sums that may be due
pursuant to the Note, this Agreement or the Mortgage. Said payments,
as and when received by the Bank, shall be applied by it first, to the payment
of any late charges due hereunder; second, to the payment of interest computed
at the Applicable Interest Rate; and the balance, if any, toward the
satisfaction of the outstanding Advances under the Credit Loan; and
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(ii) The
entire outstanding Advances under the Credit Loan, together with all interest
accrued and unpaid thereon calculated at the Applicable Interest Rate and all
other sums due under the Note, this Agreement, the Mortgage or any other
document executed and delivered by Borrower to the Bank in connection with the
Credit Loan (collectively, the “Other Security Documents”), shall be due and
payable on March 1, 2011 (the “Maturity Date”), unless extended in accordance
with Section 6 hereof, or sooner as provided herein.
B. If the Credit Loan is
extended for one (1) additional period of one (1) year (the “Extended Term”) in
accordance with Section 6 hereof:
(i) Commencing
March 1, 2011 and on the first day of each calendar month of the Extended Term
up to and including March 1, 2012, Borrower make monthly payments of interest
only on any Advances outstanding under the Credit Loan, calculated at the
Applicable Interest Rate, as well as any other sums that may be due pursuant to
the Note, this Agreement or the Mortgage. Said payments, as and when
received by the Bank, shall be applied by it first, to the payment of any late
charges due hereunder; second, to the payment of interest computed at the
Applicable Interest Rate; and the balance, if any, toward the satisfaction of
the outstanding Advances under the Credit Loan; and
(ii) The
entire outstanding Advances under the Credit Loan, together with all interest
accrued and unpaid thereon calculated at the Applicable Interest Rate and all
other sums due under the Note, this Agreement, the Mortgage or the Other
Security Documents shall be due and payable on March 1, 2012 (the “Extended
Maturity Date”) or sooner as provided herein.
C. Interest
shall be calculated on the basis of the actual number of days elapsed in a
360-day year.
D. The
term “Applicable Interest Rate” shall mean the Prime Rate (as hereinafter
defined) plus
1.50% per annum, but in no event less than 6.875% per annum. As used
herein, the “Prime Rate” is the rate of interest (or if more than one, the
highest rate of interest) published from time to time by The Wall
Street Journal in the “Money Rates” section, or any equivalent section of
that newspaper, and identified as the “Prime Rate”. Each change in
the interest rate hereunder resulting from a change in the Prime Rate shall
become effective as of the opening of business on the day on which such change
in the Prime Rate is announced. In no event shall the Applicable
Interest Rate exceed the maximum rate permitted by applicable
law. Any payments in excess of such maximum rate permitted by
applicable law shall be deemed a prepayment of outstanding Advances under the
Credit Loan, to be applied in accordance with this Agreement.
3. Prepayments. Borrower
shall have the right to prepay outstanding Advances under the Credit Loan in
whole at any time or in part from time to time, without premium or penalty and
principal amounts repaid may be re-borrowed, in whole or in part, up to the
Credit Loan and subject to the terms of this Agreement. Prepayments
shall be applied first, to the payment of any late charges due hereunder;
second, to the payment of interest computed at the Applicable Interest Rate; and
the balance, if any, toward the outstanding principal balance of the Advances in
the inverse order of their date of advancement. Prepayments shall not
affect the duty of Borrower to pay interest when due or change the amount of
such interest payments and
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shall not
affect or impair the right of the Bank to pursue all remedies available to the
Bank under this Agreement, the Note, the Mortgage or the Other Security
Documents.
4. Notice of
Borrowing. Borrower shall give the Bank two (2) Business Days’
prior notice of its intention to request an Advance under the Credit Loan and
shall deliver to the Bank with respect thereto a written request (a
“Request”). Each Request shall constitute a representation and
warranty by Borrower that (i) no default or Event of Default or event which with
the passing of time or the giving of notice, or both, would constitute a default
has occurred and (ii) the representations and warranties of Borrower under this
Agreement shall be deemed true and correct as of the effective date of such
Advance unless otherwise disclosed to the Bank in writing prior
thereto. If any day on which an Advance is to be made is a day on
which banks in the New York City area are permitted to close, such Advance will
be made on the next succeeding Business Day. A “Business Day” shall
mean a day on which commercial banks are not authorized or required by law to
close in New York, New York.
5. Annual
Fee. Borrower shall pay on each anniversary of the date hereof
the following fee: (i) ½ of one percent (0.50%) of the portion of the Credit
Loan not advanced if the average outstanding Advances of the Credit Loan,
calculated on a twelve (12) month basis for the preceding twelve (12) months, is
equal to or less than fifty percent (50%) of the Credit Loan (calculated as if
the Credit Loan was fully advanced); or (ii) ¼ of 1 percent (0.25%) of the
portion of the Credit Loan not advanced if the average outstanding Advances of
the Credit Loan, calculated on a twelve (12) month basis for the preceding
twelve (12) months, is greater than fifty percent (50%) and less than
seventy-five percent (75%) of the Credit Loan (calculated as if the Credit Loan
was fully advanced); provided, however, if the
average outstanding Advances of the Credit Loan, calculated on a twelve (12)
month basis for the preceding twelve (12) months, is equal to or greater than
seventy-five percent (75%) of the Credit Loan (calculated as if the Credit Loan
was fully advanced), then no such payment shall be due as to the respective
anniversary date. Borrower hereby acknowledges that the Bank shall
pay itself the foregoing fee each anniversary of the date hereof following prior
written notice to Borrower of the amount of such fee.
6. Extension
Option. The Credit Loan shall expire on the Maturity
Date. Notwithstanding the foregoing, Borrower shall have the option
to extend the Credit Loan for one (1) additional period of one (1) year (the
“Extension Option”), but only if: (a) no default exists under this Agreement,
the Note, the Mortgage or the Other Security Documents at the time the Extension
Notice (as hereinafter defined) is given, and on the Maturity Date, (b) in order
to elect the Extension Option, Borrower so elects by written notice (the
“Extension Notice”) to the Bank delivered in accordance with the requirements of
this Agreement not later than thirty (30) nor earlier than ninety (90) days
prior to the Maturity Date, (c) Borrower shall execute all documents the Bank
determines are reasonably necessary to extend the Credit Loan, (d) Borrower
shall obtain and deliver to the Bank, all at the sole cost and expense of
Borrower, an updated title report for the Property, together with a “date down”
title insurance endorsement insuring the security interest of the Mortgage as a
first lien on the Property, (e) there shall be no material adverse change in the
Property or the financial or other condition of Borrower, in each instance
determined by the Bank in its sole discretion, and (f) Borrower shall pay all
costs and expenses incurred in connection with such extension, including, but
not limited to, the Bank’s attorneys’
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fees and
disbursements, title charges and recording fees, and an extension fee equal to
$50,000.00, payable simultaneously with the delivery of the Extension
Notice.
7. Security. The
Credit Loan, together with interest thereon and all other charges and amounts
payable by, and all other obligations of Borrower to the Bank, with respect to
the Property (as hereinafter defined), whenever incurred, direct or indirect,
absolute or contingent shall be secured by the following “Security” which
Borrower agree to provide and maintain:
(a) Windsor
Mortgage. A first priority open-end mortgage and security
agreement, given by Borrower in favor of the Bank, dated the date hereof (the
“Windsor Mortgage”), on Borrower’s right, title and interest in and to (i)
Borrower’s fee estate in certain property located at 00-00 Xxxxxxx Xxxx Xxxxx,
Xxxxxxx, Xxxxxxxxxxx, as more particularly described therein (the “Windsor
Property”), (ii) all land, improvements, furniture, fixtures, equipment, and
other assets (including, without limitation, contracts, contract rights,
accounts, licenses and permits and general intangibles), including all
after-acquired property, owned, or in which Borrower has or obtains any
interest, in connection with the Windsor Property, (iii) all insurance proceeds
and other proceeds therefrom, and (iv) all other assets of Borrower whether now
owned or hereafter acquired and related to the Windsor Property as specified in
the Windsor Mortgage.
(b) Bloomfield
Mortgage. A first priority open-end mortgage and security
agreement, given by Borrower in favor of the Bank, dated the date hereof (the
“Bloomfield Mortgage”; the Windsor Mortgage and the Bloomfield Mortgage shall
collective be referred to herein as the “Mortgage”), on Borrower’s right, title
and interest in and to (i) Borrower’s fee estate in certain property located at
00-00 Xxxxxxx Xxxx Xxxxx and 204, 206, 210, 310, 320, 330 and 000 Xxxx Xxxxxxxx
Xxxx, Xxxxxxxxxx, Xxxxxxxxxxx, as more particularly described therein
(collectively, the “Bloomfield Property”; the Windsor Property and the
Bloomfield Property shall be collectively referred to herein as the “Property”),
(ii) all land, improvements, furniture, fixtures, equipment, and other assets
(including, without limitation, contracts, contract rights, accounts, licenses
and permits and general intangibles), including all after-acquired property,
owned, or in which Borrower has or obtains any interest, in connection with the
Bloomfield Property, (iii) all insurance proceeds and other proceeds therefrom,
and (iv) all other assets of Borrower whether now owned or hereafter acquired
and related to the Bloomfield Property as specified in the Bloomfield
Mortgage.
(c) Assignment of Leases and
Rents-Windsor Property. A first priority collateral assignment
of leases and rents, with respect to all leases, subleases and occupancy rights
of the Windsor Property and all income and profits to be derived from the
operation and leasing of the Windsor Property.
(d) Assignment of Leases and
Rents-Bloomfield Property. A first priority collateral
assignment of leases and rents, with respect to all leases, subleases and
occupancy rights of the Bloomfield Property and all income and profits to be
derived from the operation and leasing of the Bloomfield Property.
(e) Environmental
Indemnification Agreement. An environmental indemnification
agreement with respect to environmental matters from Borrower.
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(f) Assignment of Contracts and
Permits. A collateral assignment of all contracts, including,
but not limited to, development contracts, operating agreements, licenses,
insurance proceeds, management agreements, and other agreements and plans,
specifications and permits affecting the Property from Borrower.
(g) Financing
Statements. Uniform Commercial Code Financing Statements in
favor of the Bank giving notice of a security interest, which Financing
Statements are to be filed in the appropriate public records on or about the
date hereof.
8. Representations and
Warranties. Borrower makes the following representations and warranties, all of
which shall be deemed to be continuing representations and warranties so long as
any part of the Credit Loan is unpaid or as otherwise specifically provided
herein below:
(a) Good Standing and
Authority. Borrower is corporation, duly organized, validly
existing and in good standing under the laws of the State of Delaware, authorized to
do business in the State of Connecticut. Borrower has the power and
authority to transact the business in which it is engaged; is duly licensed or
qualified and in good standing in each jurisdiction in which the conduct of its
business or ownership of property requires such licensing or such qualification;
and has all necessary power and authority to enter into this Agreement and to
execute, deliver and perform this Agreement, the Note, the Mortgage and the
Other Security Documents, all of which have been duly authorized by all proper
and necessary corporate and shareholder action, as appropriate. The
execution and delivery of this Agreement; the Note, the Mortgage and the Other
Security Documents is not and will not be in violation of any agreement to which
Borrower is a party. No consent of any kind is required for Borrower
to enter into or perform this Agreement or to execute and deliver the
Note.
(b) Financial
Condition. Borrower has furnished to the Bank its most current
financial statements, which represent correctly and fairly the results of the
operations and transactions of Borrower and the condition of the Property as of
the dates and for the period referred to therein, and have been prepared in
accordance with generally accepted accounting principles consistently applied
(“GAAP”) during each interval involved and from interval to
interval. From the date hereof through (and including) the one year
anniversary of such date, there have not been any materially adverse changes in
the condition of the Property or in the financial or other condition of Borrower
which has a material adverse impact on Borrower’s ability to perform its
obligations with respect to the Credit Loan, as determined by the Bank in its
reasonable discretion.
(c) Taxes. Borrower
has duly filed all consolidated federal and other tax returns required to be
filed and has duly paid all taxes required by such returns. Borrower
has not received any notice from the Internal Revenue Service or any other
taxing authority proposing additional unpaid taxes.
(d) Litigation. There
are not any actions, suits, proceedings or investigations pending or, to the
knowledge of Borrower, threatened against Borrower or any basis therefor, which,
if adversely determined, would, in any case or in the aggregate, adversely
affect the property, assets, financial condition or business of Borrower or
impair the right of Borrower to carry on its operations, substantially as now
conducted.
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(e) Environmental
Laws. Borrower has performed all of its obligations under, has
obtained all necessary approvals, permits, authorization or other consents
required by, and is not in material violation of, any applicable local, state or
federal health or environmental law, ordinance, rule, regulation or
order.
(f) No Event of
Default. No Event of Default has occurred and no event has
occurred which with the giving of notice or lapse of time or both would
constitute an Event of Default.
(g) Use of
Proceeds. Borrower shall not use any part of the proceeds of
the Credit Loan to purchase or carry any margin stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System or to
extend credit to others for the purpose of purchasing or carrying any margin
stock.
(h) Valid and
Binding. This Agreement, the Note, the Mortgage and the Other
Security Documents constitute legal, valid and binding obligations of Borrower,
and each constitute legal, valid and binding obligations of the parties thereto,
enforceable in accordance with the respective terms thereof, subject to
bankruptcy, insolvency and similar laws of general application affecting the
rights and remedies of creditors and, with respect to the availability of the
remedies of specific enforcement, subject to the discretion of the court before
which any proceeding therefor may be brought.
9. Affirmative
Covenants. So long as any part of the Credit Loan is unpaid,
Borrower shall:
(a) Net Operating
Income. Maintain net operating income of the Property, as
determined in accordance with GAAP, equal to or greater than one hundred
twenty-five percent (125%) of the interest due on the Credit Loan (calculated as
if the Credit Loan was fully advanced), subject to certain adjustments as to the
amount of the Credit Loan, as the case may be, in accordance with the terms and
conditions of Section 16 hereof. If Borrower breaches this covenant
and fails to cure such breach within ninety (90) days after written notice from
Lender, such breach shall constitute an Event of Default.
(b) Future Financial
Statements. Furnish to the Bank all financial statements and
other information, books and records as required in accordance with the terms
and conditions of Section 3.11 of the Mortgage.
(c) Taxes. Promptly
pay and discharge all of its taxes, assessments and other governmental charges
(including any charged or assessed on the issuance of the Note) prior to the
date on which penalties are attached thereto, establish adequate reserves for
the payment of taxes and assessments and make all required withholding and other
tax deposits.
(d) Insurance. As
required in accordance with the terms and conditions of the Mortgage, keep all
of the Property so insurable insured at all times with responsible insurance
carriers against fire, theft and other risks, in coverage, form and amount
satisfactory to the Bank.
(e) Litigation. Promptly
notify the Bank in writing as soon as Borrower has knowledge thereof, of the
institution or filing of any litigation, or governmental or regulatory
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proceeding
against, or investigation of, Borrower: a) the outcome of which may materially
and adversely affect the finances or operations of Borrower, or Borrower’s
ability to fulfill its obligations hereunder, or which involves more than
$250,000.00, unless fully covered by insurance; or b) which questions the
validity of this Agreement, the Note, the Mortgage or the Other Security
Documents, or any action taken pursuant thereto; and furnish or cause to be
furnished to the Bank such information regarding any such matter as the Bank may
request.
(f) Good Standing;
Business. Maintain its corporate existence in good standing
and remain or become duly licensed or qualified and in good standing in each
jurisdiction in which the conduct of its business or ownership of its property
requires such qualification or licensing; and engage only in the business
conducted by it on the date of this Agreement.
10. Negative
Covenants. So long as any part of the Credit Loan is unpaid,
Borrower shall not:
(a) Borrowed
Money. Borrow money, enter into additional loan agreements or
guaranty any loan facilities during the Credit Loan without prior written
consent of the Bank, other than trade payables in the ordinary course of
Borrower’s business which are paid within thirty (30) days of when
due. Notwithstanding the foregoing, Borrower may take on additional
indebtedness unrelated to the Property without the prior written consent of the
Bank provided Borrower is not in default under the Note, this Agreement, the
Mortgage or the Other Security Documents at the time of the initial closing for
such indebtedness. If Borrower is in default under the Note, this
Agreement, the Mortgage or the Other Security Documents, the Bank’s prior
written consent shall be required, which consent can be withheld for any reason
or no reason. Borrower’s breach of the foregoing covenant shall
constitute an Event of Default of this Agreement.
(b) Encumbrances. Create,
incur, assume or suffer to exist any mortgage, lien, security interest, pledge
or other encumbrance on the Property, except in favor of the Bank.
(c) Sale of the
Property. Convey, sell, transfer, lease (except as otherwise
permitted in accordance with the terms of Section 3.7(a) of the Mortgage), or
sell-and-lease-back all or any substantial portion of the Property or Borrower’s
business to any other person, firm or corporation except in the ordinary course
of business and except with respect to the real property located at 00 Xxxxxx
Xxxx, Xxxxxxxxxx, Xxxxxxxxxxx.
11. Event of
Default. The term “Event of Default” as used herein shall mean
an Event of Default as defined in the Mortgage.
12. Remedies. Upon
the happening of one or more Events of Default which continues beyond any
applicable notice, grace or cure periods, the Note shall become immediately due
and payable, without presentation, demand or notice of any kind to Borrower, and
the Bank may pursue any and all remedies provided for hereunder, or under the
Note, the Mortgage or any one or more of the Other Security
Documents.
13. Default
Rate. Upon the occurrence of an Event of Default which
continues beyond any applicable notice, grace or cure periods, the Bank shall be
entitled to receive and
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Borrower
shall pay interest on the entire unpaid principal balance of the Note at a rate
that is the greater of twenty-one percent (21%) per annum or the maximum rate
permitted by applicable law (the “Default Rate”). The Default Rate
shall be computed from the occurrence of the Event of Default until the earlier
of (i) the date upon which the Event of Default is cured or (ii) the date upon
which the outstanding Advances are paid in full. Interest calculated
at the Default Rate shall be added to the balance of the outstanding Advances,
and shall be deemed secured by the Mortgage.
14. Late Payment
Charge. If any monthly installment of principal and interest
is not paid on or prior to the tenth (10th) day
after the date on which it is due, Borrower shall pay to the Bank upon demand an
amount equal to the lesser of five percent (5%) of such unpaid portion of the
outstanding monthly installment of principal and interest then due or the
maximum amount permitted by applicable law, to defray the expense incurred by
the Bank in handling and processing such delinquent payment and to compensate
the Bank for the loss of the use of such delinquent payment, and such amount
shall be secured by the Mortgage and the Other Security Documents.
15. Termination Right;
Continuation of Obligation. Borrower shall have the right at
any time and from time to time upon at least five (5) Business Days’ prior
written notice to the Bank to (i) pay the entire outstanding Advances under the
Credit Loan, together with all interest accrued and unpaid thereon calculated at
the Applicable Interest Rate and all other sums due under the Note, this
Agreement, the Mortgage or the Other Security Documents in order to terminate
the Credit Loan, in which event the Bank will have no further obligation to fund
further Advances, or (ii) permanently reduce the Credit Loan available under
this Agreement to an amount selected by Borrower, subject to the Bank’s prior
written approval and provided the reduced Credit Loan amount shall not exceed
sixty-seven percent (67%) of the then current appraised fair market value of the
Property, on a “leased fee interest” basis, as determined by the Bank in its
sole discretion, in which event the Bank shall have no further obligation to
fund any Advances above the reduced Credit Loan
amount. Notwithstanding the foregoing, no termination of the Credit
Loan and no refusal by the Bank to make future Advances hereunder shall affect
Borrower’s obligations and liabilities hereunder, under the Note, the Mortgage
or the Other Security Documents or the Bank’s rights, powers or remedies with
respect thereto, including, without limitation, the Bank’s rights with respect
to the Property or otherwise arising following such termination. All
of the Bank’s rights, liens and security interests shall continue after any
termination until all obligations of Borrower to the Bank shall have been
finally paid and satisfied in full.
16. Partial Release; Substitute
Property.
(a) Partial
Release. Borrower shall be entitled to a partial release of
the Property from the lien of the Mortgage (a “Partial Release”) provided that
(i) the Credit Loan and the Bank’s commitment to fund the Credit Loan shall be
simultaneously reduced to an amount which shall not exceed sixty-seven percent
(67%) of the then current appraised fair market value of the balance of the
Property which is not to be released from the lien of the Mortgage, on a “leased
fee interest” basis, as determined by the Bank in its sole discretion, and (ii)
the Release Conditions (as defined below) shall be satisfied in all
respects.
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(b) Release
Conditions. It shall be a condition precedent to the Bank’s
obligation to issue and deliver the Partial Release that all of the following
conditions be satisfied as determined by the Bank in its sole discretion
(collectively, the “Release Conditions”): (i) no Event of Default exists under
this Agreement, the Note, the Mortgage or the Other Security Documents which
remains uncured at the time the Release Notice (as hereinafter defined) is
received by the Bank and at the time the Bank issues and delivers the Partial
Release, (ii) Borrower delivers to the Bank a written request for the Partial
Release (the “Release Notice”), (iii) the Bank delivers to the Borrower the
Bank’s written consent to the Partial Release, which consent will not be
unreasonably withheld, (iv) the Bank receives all third party reports as the
Bank reasonably requires in connection with the Partial Release, including,
without limitation, updated appraisals, title reports, surveys, and the like,
each acceptable to the Bank in its sole discretion, (v) Borrower shall execute
and deliver to the Bank all documents and instruments as the Bank or the Bank’s
counsel in their judgment deems necessary to document the Partial Release, which
shall be in form and substance satisfactory to the Bank, and (vi) Borrower pays
all expenses incurred by the Bank in connection with the Partial Release,
including, but not limited to, recording charges, title charges and reasonable
attorneys’ fees. In addition to all of the above, it shall be a
condition precedent to the Bank’s obligation to issue and deliver the Partial
Release that the Bank shall be satisfied that in granting any Partial Release
the balance of the Property shall continue to be subject to the lien of the
Mortgage and will not be affected in any way which, in the sole judgment of the
Bank or the Bank’s counsel, would adversely affect the security position of the
Bank under the Mortgage.
(c) Substitute
Property. Provided that the Substitution Conditions (as
defined below) are satisfied in all respects, Borrower shall be entitled, either
simultaneously or after the Bank issues any Partial Release in accordance with
the terms and conditions of Subsections 16(a) and (b) herein above, to
substitute or add properties owned by the Borrower (each such property a
“Substitute Property”) to the Property securing the Credit Loan, thereby
increasing the Credit Loan (and the Bank’s commitment to fund the Credit Loan)
to an amount which shall not exceed the lesser of (i)
$10,000,000.00; or (ii) 67% of the then current aggregate appraised fair market
value of the Property and each Substitute Property, on a “leased fee interest”
basis, as determined by the Bank in its sole discretion (the “Modified Credit
Loan”).
(d) Substitution
Conditions. It shall be a condition precedent to the Bank’s
obligation to substitute or add any Substitute Property to the Property securing
the Credit Loan that the following conditions be satisfied as determined by the
Bank in its sole discretion (collectively, the “Substitution Conditions”): (i)
no Event of Default exists under this Agreement, the Note, the Mortgage or the
Other Security Documents which remains uncured at the time the Substitution
Notice (as hereinafter defined) is received by the Bank and at the time of the
closing of the Modified Credit Loan, (ii) Borrower delivers to the Bank a
written request to substitute or add the Substitute Property to the Property
securing the Credit Loan (the “Substitution Notice”); (iii) the Bank delivers to
the Borrower the Bank’s written approval of the Substitute Property and the
Modified Credit Loan, including, but not limited to, the Bank’s review of the
Modified Credit Loan and approval from the Bank’s credit department, which
approval may be withheld for any reason or no reason, (iv) the Bank receives all
third party reports as the Bank reasonably requires in connection with the
Substitute Property and the Modified Credit Loan, including, without limitation,
updated appraisals, title reports, surveys which meet the Bank’s survey
requirements previously furnished to Borrower in connection with the original
closing of the Credit Loan, and
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Phase I
Environmental Assessment Reports, and the like, each acceptable to the Bank and
its counsel in their discretion, (v) the Bank receives with respect to each
Substitute Property a mortgagee’s title insurance policy which meets the Bank’s
title insurance requirements, to the satisfaction of the Bank and its counsel,
(vi) Borrower shall execute and deliver to the Bank with respect to each
Substitute Property the following documents and instruments, each in form and
substance satisfactory to the Bank: (a) all documents and instruments as the
Bank or the Bank’s counsel in their judgment deems necessary to provide the Bank
with a first mortgage lien on each Substitute Property, including, but not
limited to, an open-end mortgage and security agreement or a modification of the
Mortgage, each securing the Modified Credit Loan, (b) a first priority
collateral assignment of leases and rents, with respect to all leases, subleases
and occupancy rights of the Substitute Property and all income and profits to be
derived from the operation and leasing of the Substitute Property, (c) one or
more UCC financing statements as the Bank may reasonably require, (d) an
environmental indemnification agreement with respect to environmental matters
with respect to the Substitute Property, and (e) a collateral assignment of all
contracts, including, but not limited to, development contracts, operating
agreements, licenses, insurance proceeds, management agreements, and other
agreements and plans, specifications and permits affecting the Substitute
Property, (vii) Borrower shall deliver to the Bank with respect to each
Substitute Property or in connection with the Modified Credit Loan such other
documents, certificates, opinions and assurances as the Bank or the Bank’s
counsel may request in their sole discretion reasonably exercised, in form and
substance acceptable to the Bank, including, but not limited to, such documents,
certificates, opinions and assurances and requirements that were delivered by
Borrower to the Bank in connection with the original Credit Loan Facility, and
(vii) Borrower pays all expenses incurred by the Bank in connection with the
Substitute Property, the Modified Credit Loan or the foregoing, including, but
not limited to, recording charges, title charges and reasonable attorneys’
fees. In addition to all of the above, it shall be a condition
precedent to the Bank’s obligation to substitute or add any Substitute Property
to the Property securing the Credit Loan that the Bank shall be satisfied that
the Property shall continue to be subject to the lien of the Mortgage and will
not be affected in any way which, in the sole judgment of the Bank, would
adversely affect the security position of the Bank under the
Mortgage.
17. Expenses and Counsel
Fees. Borrower shall reimburse the Bank promptly for all of
its out-of-pocket expenses incurred in connection with this Agreement or the
Credit Loan, including, without limitation, filing fees, recording fees, any
taxes (other than income taxes payable by the Bank) which the Bank may be
required to pay in connection with the execution and delivery of this Agreement,
the Note, the Note and the Other Security Documents. Borrower shall
also pay: (i) all costs and expenses of the Bank (including, without limitation,
reasonable fees and disbursements of counsel) incidental to the preparation and
negotiation of this Agreement and the documents referred to herein, and (ii) all
costs and expenses of the Bank (including, without limitation, fees and
disbursements of counsel) incidental to the protection of the rights of the Bank
hereunder and the enforcement of the Bank’s rights, powers and remedies
hereunder and thereunder, whether by judicial proceedings or otherwise,
including, without limitation, such costs and expenses incurred in the course of
bankruptcy or liquidation proceedings. The obligations of Borrower
hereunder shall survive the termination of this Agreement and the final and
indefeasible payment in full of the outstanding Advances under the Credit
Loan.
10
18. Miscellaneous.
(a) Amendments and
Waivers. No modification, rescission, waiver, release or
amendment of any provision of this Agreement shall be made except by a
written agreement
signed by a duly authorized officer of Borrower and duly authorized officer of
the Bank.
(b) Delays and
Omissions. No delay or omission by the Bank in exercising any
right or remedy hereunder or with respect to the Credit Loan shall operate as a
waiver thereof or of any other right or remedy, and no single or partial
exercise thereof shall preclude any other or further exercise thereof or the
exercise of any other right or remedy. The Bank may remedy any
default by Borrower hereunder or with respect to the Credit Loan in any
reasonable manner without waiving the default remedied and without waiving any
other prior or subsequent default by Borrower, and shall be reimbursed for its
expenses in so remedying such default. All rights and remedies of the
Bank hereunder, under the Note and the Other Security Documents, under any other
agreement and otherwise are cumulative; if any provision of this Agreement is
inconsistent with any provision of any other agreement between the Bank and
Borrower, the provisions of this Agreement shall control.
(c) Successors and
Assigns. Borrower and the Bank as used herein shall include
the legal representatives, successors and assigns of those parties.
(d) Governing
Law. This Agreement shall be construed and interpreted in
accordance with, and governed by, the laws of the State of New York without
regard to its principles of conflicts or choice of laws.
(e) Usury
Law. The Note and this Agreement are subject to the express
condition that at no time shall Borrower be obligated or required to pay
interest on the principal balance due under the Note at a rate which could
subject the Bank to either civil or criminal liability as a result of being in
excess of the maximum interest rate which Borrower is permitted by applicable
law to contract or agree to pay. If by the terms of the Note or this
Agreement, Borrower is at any time required or obligated to pay interest on the
principal balance due hereunder at a rate in excess of such maximum rate, the
Applicable Interest Rate or the Default Rate, as the case may be, shall be
deemed to be immediately reduced to such maximum rate and all previous payments
in excess of the maximum rate shall be deemed to have been payments in reduction
of principal and not on account of the interest due hereunder. All
sums paid or agreed to be paid to the Bank for the use, forbearance, or
detention of the Credit Loan, shall, to the extent permitted by applicable law,
be amortized, prorated, allocated, and spread throughout the full stated term of
the Note until payment in full so that the rate or amount of interest on account
of the outstanding Advances does not exceed the maximum lawful rate of interest
from time to time in effect and applicable to the Credit Loan for so long as the
Advances are outstanding.
(f) Inapplicable
Provisions. If any provision hereof or of any other agreement
made in connection herewith is held to be illegal or unenforceable, such
provision shall be fully severable, and the remaining provisions of the
applicable agreement shall remain in full force and effect and shall not be
affected by such provision’s severance; provided, however, in lieu of
any such provision, there shall be added automatically as a part of the
applicable agreement a legal and enforceable provision as similar in terms to
the severed provision as may be possible.
11
(g) Further
Assurances. At any time and from time to time, upon the
reasonable request of the Bank, Borrower shall execute, deliver and acknowledge,
or cause to be executed, delivered and acknowledged, such other documents or
instruments and do such other acts and things as the Bank may reasonably request
in order to fully effectuate the terms of this Agreement and the Other Security
Documents. The foregoing may include, without limitation, executing
documents to confirm the amount of the Advances outstanding under the Credit
Loan from time to time, and the date and amount of payments made in respect of
the Credit Loan. All such requests shall receive the full cooperation
and compliance by Borrower within seven (7) Business Days of the Bank making
such requests. The failure of Borrower to comply with the obligations
set forth in this Subsection 18(g) shall constitute an Event of
Default.
(h) No
Assignment. The rights and obligations of Borrower under this
Agreement shall not be assigned or delegated, in whole or in part, without the
prior written consent of the Bank, and any purported assignment or delegation
without the prior written consent of the Bank shall be void.
(i) Notices. All
notices requests, reports or other communications (each, a “Notice”) required
hereunder or under the Note or any Other Security Document shall be in writing
and shall be deemed to have been properly given (i) upon delivery, if delivered
in person, (ii) one (1) Business Day after having been deposited for overnight
delivery with any reputable overnight courier service, or (iii) three (3)
Business Days after having been deposited in any post office or mail depository
regularly maintained by the U.S. Postal Service and sent by registered or
certified mail, postage prepaid, return receipt requested, addressed as
follows:
If to
Borrower: Xxxxxxx
Land & Nurseries, Inc.
Xxx Xxxxxxxxxxx Xxxxx, Xxxxx
0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxxxx X.
Xxxxxxxx, President
and Chief Executive Officer
With a
copy
to: Imperial
Nurseries, Inc.
00 Xxxxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxx
00000
Attention: Xx. Xxxxxxx X.
Xxxxxx, Vice
President and Chief Financial Officer
And
Xxxxxx Xxxxxxx LLP
CityPlace
I, 185 Asylum Street
Hartford,
Connecticut 06103-3469
Attention:
Xxxxxx X. Xxxxxxxx, Esq.
If to the
Bank: Doral
Bank, FSB.
000 Xxxxx
Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention:
Mortgage Servicing Department
12
With a
copy
to: Xxxxxxxx
& Worcester LLP
1290 Avenue of the Xxxxxxxx, 00xx
Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X.
Xxxxxxxx, Esq.
or to
such other address as any party may designate for itself by like
notice.
Either
party by notice to the other may designate additional or different addresses for
subsequent notices or communications.
19. Right of
Offset. Upon the occurrence and during the continuance of any
Event of Default, the Bank is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by the Bank to or for the credit
or the account of Borrower against any and all of the obligations of Borrower
now or hereafter existing under this Agreement or the other obligations to the
Bank by Borrower, whether or not the Bank shall have made any demand under this
Agreement or otherwise and even if such obligation may be unmatured upon
reasonable notice to Borrower. The rights of the Bank under this
provision are in addition to any and all other rights and remedies available to
the Bank.
20. No Oral
Modification. This Agreement embodies the entire agreement
and understanding
between Borrower and the Bank and supersede all prior agreements and
understandings relating to the subject matter hereof. Any
modification, amendment or waiver of or with respect to any provision of this
Agreement must be made in a writing signed by both the Bank and Borrower and
their respective successors and, subject to the terms hereof with respect to
Borrower, assigns. This Agreement may not be contradicted by evidence
of prior, contemporaneous or subsequent oral agreements of the parties
hereto. There are no unwritten oral agreements among the
parties. Borrower and the Bank acknowledge that each has had the
benefit of legal counsel of its own choice and has been afforded an opportunity
to review this Agreement and the other loan documents in connection herewith
with its legal counsel and that this Agreement and the other loan documents
shall be consulted as if jointly drafted by Borrower and the Bank.
21. WAIVER OF TRIAL BY
JURY. THE BANK AND BORROWER EACH HEREBY ABSOLUTELY,
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT, ANY OTHER LOAN INSTRUMENTS,
OR ANY OTHER INSTRUMENT OR DOCUMENT EXECUTED OR DELIVERED PURSUANT TO OR
OTHERWISE IN CONNECTION WITH THIS AGREEMENT. BORROWER AND THE BANK
EACH AGREES THAT THE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK CITY,
NEW YORK COUNTY AND THE FEDERAL COURTS LOCATED IN THE SOUTHERN AND EASTERN
DISTRICTS OF NEW YORK, COUNTY OF NEW YORK, HAVE EXCLUSIVE JURISDICTION OVER ANY
ACTIONS AND PROCEEDINGS INVOLVING THIS AGREEMENT OR ANY OTHER AGREEMENT MADE IN
CONNECTION HEREWITH EXCEPT AS
13
SPECIFICALLY
PROVIDED IN SUCH OTHER AGREEMENT AND BORROWER AND THE BANK HEREBY IRREVOCABLY
AND UNCONDITIONALLY AGREES TO SUBMIT TO THE JURISDICTION OF SUCH COURTS FOR
PURPOSES OF ANY SUCH ACTION OR PROCEEDING. BORROWER AND THE BANK EACH
HEREBY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO SERVICE OF PROCESS
PROVIDED THE SAME IS GIVEN IN ACCORDANCE WITH THIS AGREEMENT. FINAL
JUDGMENT IN ANY SUCH PROCEEDING SHALL BE CONCLUSIVE, SUBJECT TO ANY RIGHT OF
APPEAL, AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT.
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14
THE PARTIES HERETO have signed this
Agreement on the date written above.
BORROWER:
XXXXXXX LAND & NURSERIES,
INC.,
a
Delaware corporation
| By: | /s/Xxxxxxx Xxxxxx |
| Name: | Xxxxxxx Xxxxxx |
| Title: | Vice President |
BANK:
DORAL BANK, FSB,
a Federal
savings bank
| By: | /s/Xxxxxxx XxXxxxxxxx |
| Name: | Xxxxxxx XxXxxxxxxx |
| Title: | Senior Vice President and Chief Lending Officer |
