MODIFICATION OF REVOLVING CREDIT
LOAN AND SECURITY AGREEMENT
MODIFICATION made as of March 30, 2000 by and between RESOURCE
PROPERTIES, INC., RESOURCE PROPERTIES 53, INC., RESOURCE PROPERTIES XXIV, INC.,
and RESOURCE PROPERTIES XL, INC. (collectively, "Borrower") and SOVEREIGN BANK
("Bank").
BACKGROUND
A. Pursuant to a Revolving Credit Loan and Security Agreement dated
July 27, 1999 between Borrower and Bank (the "Loan Agreement"), Bank has
extended a revolving line of credit to Borrower in an amount not to exceed
$15,000,000 outstanding at any time (the "Line"), all on the terms and
conditions more fully set forth therein.
B. Borrower's obligation to repay the Line is evidenced by Borrower's
$15,000,000 Line Note dated July 27, 1999 (the "Line Note") and is secured by
those assignments of notes and mortgages and other collateral documents referred
to on Exhibit "A" attached hereto ("Assignment Documents"), all as more fully
set forth in the Loan Agreement.
C. Borrower has now requested that Bank increase the amount of the Line
to $18,000,000 and make certain other amendments to the Loan Agreement which
Bank has agreed to do, all on the terms and conditions set forth herein.
D. All capitalized terms used but not defined herein shall have the
meaning given to such terms in the Loan Agreement.
AGREEMENTS
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Amendments to Loan Agreement. Effective as of the date of this
Modification:
(a) The figure "Fifteen Million Dollars ($15,000,000)" appearing
in Section 1.1 of the Loan Agreement is deleted and the figure "Eighteen
Million Dollars ($18,000,000)" substituted in its place.
(b) The last sentence of Section 1.1 of the Loan Agreement is
deleted in its entirety and the following substituted in its place:
"Borrower's obligation to repay advances under the Line shall be
evidenced by Borrower's promissory note (the "Replacement Note")
in the face amount of Eighteen Million Dollars ($18,000,000)."
(c) The first sentence of Section 1.4 of the Loan Agreement is
deleted in its entirety and the following substituted in its place:
"Notwithstanding anything contained herein to the contrary, but
subject to the provision of Section 4.4(b) herein, the aggregate
outstanding principal balance of the Line shall not exceed at any
time the sum of (i) fifty percent (50%) of the Appraised Value of
the Real Estate known as "Factor's Walk" (Phases One and Two),
plus (ii) sixty percent (60%) of the Appraised Value of the Real
Estate known as 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
("Borrowing Base").
(d) The figure "$40,000,000" appearing in Section 7.1 of the
Loan Agreement is deleted and the figure "$60,000,000" is substituted in its
place.
(e) Section 7.2 of the Loan Agreement is deleted in its entirety
and the following substituted in its place:
"Borrower shall maintain a ratio of consolidated Net Operating
Income, calculated on an annualized basis, to the greater of (i)
actual interest paid or payable on the Line during the period of
calculation or (ii) $2,022,721, of not less than 1.35 to 1.0.
2. Amendments to All Documents. All references in any of the Loan
Agreement, the Assignment Documents, or any other document or instrument
executed and delivered in connection with the Line (collectively, the "Loan
Documents") to the "Line Note" shall be deemed to be references to the
"Replacement Note" and all references to the "Line" shall be deemed to be
references to the Line, as amended and increased hereby.
3. Conditions Precedent. The obligation of Bank to effect the
modifications and agreements set forth herein is subject to the conditions
precedent that:
(a) There has been no material adverse change in the Collateral
or in the financial or operating condition of Borrower since July 27, 1999.
(b) Bank shall have received payment of its $15,000 commitment
fee.
(c) Bank shall have received all of the following documents, each
of which shall be in form and substance satisfactory to Bank:
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(i) A Promissory Note in the principal amount of the Line, as
amended and increased hereby, payable to the order of Bank, dated the date of
this Modification (the "Replacement Note"). The Replacement Note shall be the
Replacement Note referred to in the Loan Agreement, as amended hereby, and shall
supercede and replace, but not extinguish Borrower's liability under or create a
novation of, the Line Note.
(ii) Copies, certified in writing by the secretaries or
assistant secretaries of Borrower, of (x) resolutions of its boards of directors
evidencing approval of this Modification, the Replacement Note and the other
matters contemplated hereby, and (ii) each document evidencing other necessary
action and approvals, if any, with respect to this Modification and the
Replacement Note.
(ii) Written certificates by the secretaries or assistant
secretaries of Borrower as to the names and signatures of its officers who are
authorized to sign this Modification, the Replacement Note, and the other
documents or certificates to be executed and delivered by it pursuant hereto.
(iii) Evidence satisfactory to Bank that Borrower's
Certificates of Incorporation and Bylaws delivered to Bank on July 27, 1999 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.
(iv) Good standing certificates for Borrower from the states
of Delaware and Pennsylvania each dated not more than 20 days prior to the date
hereof.
(v) A favorable opinion of independent counsel for Borrower
as to the matters mentioned in Paragraphs 4 (a), (b), and (c) herein and as to
such other matters as Bank may reasonably request.
(vi) Such other documents and instruments as Bank may request
under the terms of this Modification or otherwise.
4. Representations and Warranties.
(a) The execution and delivery by Borrower of this Modification
and the Replacement Note, the consummation of the transactions contemplated by
this Modification and the Replacement Note and the fulfillment and compliance
with the respective terms, conditions and provisions of this Modification and
the Replacement Note: (x) have been duly authorized by all requisite corporate
action by Borrower, (y) 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)
Borrower's Certificate of Incorporation or Bylaws,
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(iii) any indenture, mortgage, loan or credit agreement or instrument to which
Borrower is a party or by which it 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 (z) 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 Borrower under the
terms or provisions of any such agreement or instrument, except liens in favor
of Bank.
(b) This Modification and the Replacement Note have been duly executed
by Borrower and delivered to Bank and constitute legal, valid and binding
obligations of Borrower, enforceable in accordance with their terms.
(c) No consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of Borrower is
required in connection with the execution, delivery or performance by Borrower
of this Modification or the Replacement Note or the consummation of the
transactions contemplated thereby.
(d) On and as of the date of this Modification, there has occurred no
Event of Default or any event which with notice or lapse of time or both would,
if unremedied, be an Event of Default.
(e) The representations and warranties made by Borrower to Bank in the
Loan Documents are true and correct as though made on and as of the date of this
Modification.
(f) The Loan Documents are in full force and effect. The principal
amount due under the Line Note is $15,000,000 and all interest under
the Line Note has been paid in fu1l through March 15, 2000. Borrow has no
defense, set-off, or counterclaim to its performance under any Loan Document.
5. Miscellaneous.
(a) Except as expressly set forth herein, the terms and conditions of
the Loan Documents (INCLUDING WITHOUT LIMITATION THE CONFESSIONS OF JUDGMENT
CONTAINED THEREIN) are ratified and confirmed, shall remain in full force and
effect and shall secure all of Borrower's liabilities to Bank under the Line
Note, as amended, increased and replaced by the Replacement Note and this
Modification.
(b) This Modification shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
(c) Borrower shall pay on demand all costs and expenses of Bank in
connection with the preparation, execution, delivery, administration and
enforcement of this
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Modification (including title charges and the fees and out-of-pocket costs of
counsel with respect hereto). The agreement set forth in this paragraph 5(c)
shall survive the repayment of the Replacement Note.
(d) Paragraph headings used in this Modification are for convenience
only and shall not affect the construction of this Modification.
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(e) This Modification may be signed in counterparts, all of which when
taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Modification as
of the date written above.
ATTEST: RESOURCE PROPERTIES, INC.
_______________________________ By: /s/Xxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
ATTEST: RESOURCE PROPERTIES 53, INC.
_______________________________ By: /s/Xxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
ATTEST: RESOURCE PROPERTIES XXIV, INC.
_______________________________ By: /s/Xxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
ATTEST: RESOURCE PROPERTIES XL, INC.
_______________________________ By: /s/Xxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
SOVEREIGN BANK
By: /s/Xxxxxxx X. Xxxxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
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EXHIBIT A
ASSIGNMENT DOCUMENTS
1. Assignment of Note, Deed to Secured Debt and Other Loan Documents
dated July 27, 1999 from Xxxxxxx Xxxxxx Financial, Inc. to Sovereign Bank.
2. Acknowledgment of Guaranty Agreement and Assignment of Documents
dated July 27, 1999 between Xxxxxxx Xxxxxx Financial, Inc. and Sovereign Bank.
3. Bond Pledge Agreement dated July 27, 1999 between Resource
Properties XXIV, Inc. and Sovereign Bank.
4 . Subordination of Participation Agreement dated July 27, 1999 among
Resource Properties XXIV, Inc., Xxxxxxx Associates, and Sovereign Bank.
5. Deed to Secured Debt (Leasehold) dated July 27, 1999 between
Resource Properties XL, Inc. and Sovereign Bank.
6. Assignment of Mortgage Note, Mortgage and Other Loan Documents dated
July 27, 1999 from Resource Properties 53, Inc. to Sovereign Bank.
7. All other documents, agreements and assignments and other
instruments executed and delivered in connection with the Line not otherwise
listed herein.
