Exhibit 10.6
LOAN AGREEMENT
This Loan Agreement, dated as of May 31, 2003 (the "AGREEMENT"), is between
BCP Funding, LLC, a Delaware limited liability company ("LENDER"), and Boston
Capital Real Estate Investment Trust, Inc., a Maryland corporation ("BORROWER").
Certain terms in this Agreement shall have the meanings set forth in EXHIBIT A
attached hereto.
RECITALS
WHEREAS, Lender has agreed to make loans available to Borrower (the "LINE
OF CREDIT") for the purpose of financing investments by the Borrower in
multi-family residential apartment complexes;
NOW THEREFORE, in consideration of the recitals and of the representations,
warranties, covenants and conditions set forth below, and for valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
the parties, the parties agree as follows:
1. CREDIT FACILITY AND INTEREST
1.1 LOANS. Upon the terms and subject to the conditions of this
Agreement, and in reliance upon the representations, warranties and
covenants of Borrower made herein, Lender agrees to make loans ("LOANS",
each a "LOAN") to Borrower at Borrower's request from time to time prior to
the end of the Advance Period, PROVIDED that the maximum aggregate
principal amount of all Loans shall not exceed the Maximum Amount, and
PROVIDED, FURTHER, that at the time Borrower requests a Loan, and after
giving effect to the making or issuance thereof, there has not occurred and
is not continuing any Default or Event of Default. All requests for Loans
shall be in such form and shall contain such information as may be
reasonably required by Lender. The Obligations on account of the Loans
shall be evidenced by a promissory note (the "NOTE") substantially in the
form of EXHIBIT 1.1 attached hereto. Each advance of a Loan shall be
specifically for the purposes contemplated herein and shall be subject to
all conditions specified in Sections 4 and 5.1 through 5.3 below. This
Agreement is not a revolving credit agreement and Borrower may not reborrow
principal amounts repaid.
1.3 INTEREST. The Loans shall bear interest as follows:
(a) BASE INTEREST. Interest shall accrue in arrears on the
outstanding principal balance of the Loans at an annual rate of 9.5% ("BASE
INTEREST"), and shall be due and payable with respect to each calendar
quarter (the "Current Quarter") as soon as practicable after, and in any
event within 30 days of, the close of the Current Quarter to the extent of
Cash Available for Debt Service for the Current Quarter and to the extent
not paid shall accrue and be added to principal and shall thereafter bear
Base Interest as set forth above. All outstanding principal and accrued
Base Interest shall be due and payable on the Maturity Date.
(b) BONUS INTEREST. In addition to Base Interest, Borrower shall
pay Lender additional interest on the outstanding principal balance of the
Loans at an annual rate of 5.3% ("BONUS INTEREST"), which shall be due and
payable with respect to the Current Quarter within 30 days of the close of
the Current Quarter to the extent of Cash Available for Debt Service for
the Current Quarter only after payment of Base Interest for the Current
Quarter. Bonus Interest which is unpaid shall accrue without further
interest and shall not be added to the outstanding principal balance of the
Loans or be considered in calculating Base Interest. Accrued Bonus Interest
shall be payable quarterly solely from Cash Available for Debt Service for
the Current Quarter only after payment of Base Interest and Bonus Interest
for the Current Quarter. Anything to the contrary herein notwithstanding,
the aggregate Bonus Interest payable under this Agreement shall in no event
exceed the Cash Available for Debt Service on or before the Maturity Date
after payment of all accrued Base Interest, and any Accrued Bonus Interest
which is not paid from Cash Available for Debt Service on or before the
Maturity Date shall not be due or payable.
(c) DEFAULT INTEREST. If an Event of Default shall occur, then
at the option of Lender the unpaid principal balance of the Loans shall
bear interest, to the maximum extent permitted by law, compounded monthly
at an interest rate equal to the Default Rate in effect on the day such
Event of Default occurs, until all then existing Events of Default are
cured or waived.
Except as otherwise stated in this Agreement, all interest and fees, if any,
will be computed on the basis of a 365-day year for the actual number of days
elapsed. Each quarterly payment of interest shall be accompanied by a statement
setting forth the determination of Cash Available for Debt Service for the
Current Quarter with respect to which such payment was made, which statement
shall be certified to be true, correct and complete by the Borrower to its best
knowledge.
1.4 REPAYMENT TERMS. Borrower shall repay all amounts advanced and
outstanding under this Line of Credit as follows:
(a) Borrower shall pay all outstanding principal and all accrued
Base Interest not later than the Maturity Date.
(b) Borrower may prepay amounts advanced and outstanding under
this Line of Credit, at any time, without premium or penalty.
1.5 PREPAYMENTS AND RELEASE OF PROPERTY INVESTMENTS. Upon the initial or
any subsequent closing of the initial public offering of shares in Borrower and
at the written election of the Borrower, the Lender shall release its security
interest in a portion of the Collateral constituting Borrower's interest in a
Property Investment, including without limitation Borrower's interest in the
Ownership Company through which it holds a Property Investment, as more
particularly set forth in the Security Agreement, upon repayment of all Loans,
including any Prior Loans, made with respect to such Property Investment
together with any accrued and unpaid Base Interest thereon, provided that there
has not occurred and is not then continuing any Default or Event of Default;
provided, however, that the Jacksonville Portfolio must be included
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in the first such release. Any cash receipts of Borrower from any Property
Investment which is released pursuant this paragraph (a "RELEASED PROPERTY
INVESTMENT") shall not be taken into account in determining Cash Available for
Debt Service from and after the date of such release.
1.6 SUBORDINATION. The Lender, for itself, its successors and assigns
and each successor holder of the Note or any interest in the Loans by its
acceptance thereof, covenants and agrees, that notwithstanding any other
provision of this Agreement or the Note, the payment of the principal of and
interest on each and all of the Loans shall be subordinated in right of payment,
to the extent and in the manner hereinafter set forth, to the prior payment in
full of all Senior Debt (as hereinafter defined) at anytime outstanding. The
provisions of this Section 1.6 shall constitute a continuing representation to
all Persons who, in reliance upon such provisions, become the holders of or
continue to hold Senior Debt, and such provisions are made for the benefit of
the holders of Senior Debt, and such holders are hereby made obligees hereunder
the same as if their names were written herein as such, and they or any of them
may proceed to enforce such provisions against the Lender or against the holder
of any Loan without the necessity of joining the Borrower as a party.
(a) PAYMENT OF SENIOR DEBT. In the event of any insolvency or
bankruptcy proceedings, or any receivership, liquidation, reorganization or
other similar proceedings in connection therewith, relative to the Borrower
or to its property, or, in the event of any proceedings for voluntary
liquidation, dissolution or other winding up of the Borrower or
distribution or marshalling of its assets or any composition with creditors
of the Borrower, whether or not involving insolvency or bankruptcy, then
and in any such event all Senior Debt shall be paid in full before any
payment or distribution of any character, whether in cash, securities or
other property, shall be made on account of the Loans; and any such payment
or distribution, except securities which are subordinated, and junior in
right of payment to the payment of all Senior Debt then outstanding in
terms of substantially the same tenor as this Section 1.6, which would, but
for the provisions hereof, be payable or deliverable in respect of the
Loans shall be paid or delivered directly to the holders of Senior Debt (or
their duly authorized representatives), in the proportions in which they
hold the same, until all Senior Debt shall have been paid in full, and
every holder of the Note or any interest in the Loans by its acceptance
thereof designates and appoints the holder or holders of Senior Debt (and
their duly authorized representatives) as his or its agents and
attorneys-in-fact to demand, xxx for, collect and receive such Senior Debt
holder's ratable share of all such payments and distributions and to file
any necessary proof of claim therefor and to take all such other action
(including the right to vote such Senior Debt holder's ratable share of the
Loans), in the name of the holders of the Note or any interest in the Loans
or otherwise, as such Senior Debt holders (or their authorized
representatives) may determine to be necessary or appropriate for the
enforcement of this Section 1.6. The Lender and each successor holder of
the Note or any interest in the Loans by its or his acceptance thereof
agrees to execute, at the request of the Borrower, a separate agreement
with any holder of Senior Debt on the terms set forth in this Section 1.6,
and to take all such other action as such holder or such holder's
representative may request in order to enable such holder to enforce all
claims upon or in respect of such holder's ratable share of the Loans.
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(b) NO PAYMENT ON LOANS UNDER CERTAIN CONDITIONS. In the event
that:
(i) any default occurs in the payment of the principal
of or interest on any Senior Debt and during the continuance
of such default for a period up to 120 days and thereafter
if judicial proceedings shall have been instituted with
respect to such defaulted payment, or (if a shorter period)
until such payment has been made or such default has been
cured or waived in writing by such holder of Senior Debt; or
(ii) the maturity of any Senior Debt is accelerated by
any holder thereof because of a default with respect thereto
and until such acceleration has been rescinded or said
Senior Debt has been paid;
then and during the continuance of either of such events no payment of
principal or interest on the Loans shall be made by the Borrower or
accepted by any holder of the Loans who has received notice from the
Borrower or from a holder of Senior Debt of either of such events.
(c) PAYMENTS HELD IN TRUST. In case any payment or distribution
shall be paid or delivered to any holder of the Note or any interest in the
Loans before all Senior Debt shall have been paid in full, in violation or
contravention of the terms of this subordination, such payment or
distribution shall be held in trust for and paid and delivered ratably to
the holders of Senior Debt (or their duly authorized representatives),
until all Senior Debt shall have been paid in full.
(d) SUBROGATION. Subject to the payment in full of all Senior
Debt and until the Loans shall be paid in full, any holder of the Note or
any interest in the Loans shall be subrogated to the rights of the holders
of Senior Debt (to the extent of payments or distributions previously made
to such holders of Senior Debt pursuant to the provisions of subsections
(a) and (c) of this Section 1.6) to receive payments or distributions of
assets of the Borrower applicable to the Senior Debt. No such payments or
distributions applicable to the Senior Debt shall, as between the Borrower
and its creditors, other than the holders of Senior Debt and the holders of
the Loans, be deemed to be a payment by the Borrower to or on account of
the Loans; and for the purposes of such subrogation, no payments or
distributions to the holders of Senior Debt to which the holders of the
Loans would be entitled except for the provisions of this Section 1.6
shall, as between the Borrower and its creditors, other than the holders of
Senior Debt and the holders of the Loans, be deemed to be a payment by the
Borrower to or on account of the Senior Debt.
(e) SCOPE OF SECTION. The provisions of this Section 1.6 are
intended solely for the purpose of defining the relative rights of the
holder of the Note or any interest in the Loans, on the one hand, and the
holders of the Senior Debt, on the other hand. Nothing contained in this
Section 1.6 or elsewhere in this Agreement or the Note is intended to or
shall impair, as between the Borrower, its creditors other than the holders
of Senior Debt, and the holder of the Note or any interest in the Loans,
the obligation of the Borrower, which is unconditional and absolute, to pay
to the holder of the Note or any interest in the Loans the principal of and
interest on the Loans as and when the same shall
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become due and payable in accordance with the terms thereof, or to affect
the relative rights of the holder of the Note or any interest in the Loans
and creditors of the Borrower other than the holders of the Senior Debt,
nor shall anything herein or therein prevent the holder of the Note or any
interest in the Loan from accepting any payment with respect to such Loan
or exercising all remedies otherwise permitted by applicable law upon
default under such Loan, subject to the rights, if any, under this Section
1.6 of the holders of Senior Debt in respect of cash, property or
securities of the Borrower received by the holder of the Note or any
interest in the Loans.
(f) SURVIVAL OF RIGHTS. The right of any present or future
holder of Senior Debt to enforce subordination of the Loans pursuant to the
provisions of this Section 1.6 shall not at any time be prejudiced or
impaired by any act or failure to act on the part of the Borrower or any
such holder of Senior Debt, including without limitation: any forbearance,
waiver, consent, compromise, amendment, extension, renewal, or taking or
release of security of or in respect of any Senior Debt or by noncompliance
by the Borrower with the terms of such subordination regardless of any
knowledge thereof such holder may have or otherwise be charged with.
(g) AMENDMENT OR WAIVER. The provisions of this Section 1.6 may
not be amended or waived in any manner which is detrimental to any Senior
Debt without the consent of the holders of all then existing Senior Debt.
(h) SENIOR DEBT DEFINED. The term "SENIOR DEBT" shall mean (i)
all Indebtedness of the Borrower for money borrowed from banks or other
institutional lenders, including any extension or renewals thereof, whether
outstanding on the date hereof or thereafter created or incurred, which is
not by its terms subordinate and junior to or on a parity with the Loans
and which is permitted hereby at the time it is created or incurred, and
(ii) all guaranties by the Borrower which are not by their terms
subordinate and junior to or on a parity with the Loans and which are
permitted hereby at the time they are made, of Indebtedness of any
Subsidiary if such Indebtedness would have been Senior Debt pursuant to the
provisions of clause (i) of this sentence had it been Indebtedness of the
Borrower. In making any loans which are (or the guaranties of which are)
intended to be Senior Debt, the lenders or purchasers shall be entitled to
rely as to the fact that such Indebtedness or guaranty is permitted hereby
upon a certificate by the Borrower's President or Treasurer purporting to
show such Indebtedness or guaranty will not result in the Borrower's
failure to comply with the provisions of Section 7 hereof as of the date of
the loan or guarantee.
1.7. AMENDMENT AND RESTATEMENT OF CERTAIN PRIOR LOANS. This Agreement
supersedes and replaces in their entirety all Prior Loan Agreements from and
after the date hereof with respect to the Prior Loans, and it is the intention
of the parties that the Prior Loans be treated for all purposes as made pursuant
to this Agreement as if this Agreement had been in effect on the dates the Prior
Loans were made, provided that no Prior Loan shall be treated as being in
default as of the date hereof and defaults under the Prior Loan Agreements, if
any, existing on the date hereof are hereby waived. The parties hereto
acknowledge and agree, however, that (i) this Agreement and all other loan
documents executed and delivered herewith do not constitute a novation, payment
and reborrowing or termination of the Prior Loans under the Prior Loan
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Agreements as in effect prior to the date hereof, (ii) such Prior Loans are in
all respects continuing with only the terms being modified as provided in this
Agreement and the other loan documents, and (iii) all references in the other
the Prior Loan Agreements to this Agreement shall be deemed to refer without
further amendment to this Agreement.
2. FEES [INTENTIONALLY OMITTED].
3. COLLATERAL
3.1 SECURED LINE OF CREDIT. The Line of Credit shall be secured by the
security interests described in the Security Agreement of even date herewith
between Borrower and Lender (the "LENDER SECURITY AGREEMENT") and the Pledge
Agreement of even date herewith, between Borrower's parent company and Lender,
pursuant to which Borrower and Borrower's parent company assigns and grants
rights and interests in the Collateral described and as defined therein (the
"COLLATERAL").
3.2 INVESTMENT SECURITIES. At such time as there exists an Event of
Default, Lender may transfer any equity interests which it holds as Collateral
into its name or that of its nominee and may receive the income and any
distributions thereon and hold the same as Collateral for Borrower's obligations
hereunder, or apply the same to any such obligation.
4. CONDITIONS
4.1 GENERAL CONDITIONS. Before Lender shall be committed to extend any
credit to Borrower under this Agreement, Lender must receive and approve (in its
unrestricted discretion) any documents and other items it may require as
conditions precedent to this Agreement, including, without limitation, those
items listed on the Closing Checklist attached hereto as EXHIBIT 4.1.
4.2 SPECIFIC APPROVALS. Before Lender shall be committed to extend any
credit to Borrower under this Agreement to fund an acquisition by Borrower of a
proposed investment in an apartment complex (a "PROPERTY INVESTMENT," provided
that such term shall not include any Released Property Investment), Borrower
shall prepare or cause to be prepared a term sheet for each proposed Property
Investment and shall submit the same for review to Lender. Borrower shall
furnish any other information reasonably requested by Lender. Borrower may
furnish Lender various tables and charts illustrating the potential results of
operations of a proposed Property Investment under various scenarios and various
hypothetical sale scenarios. Lender acknowledges any such illustrations would be
based upon assumptions as to future events which cannot be predicted with any
degree of certainty and based upon assumptions as to the future furnished by
third party development partners in Property Investments. There is no assurance
that the assumptions will be shown to be correct. Actual results will usually
vary and the variances may be material. Lender shall, in its sole and absolute
discretion, notify Borrower of its approval of a proposed Property Investment
within 10 days; provided, however, that Lender shall be under no obligation to
approve any particular proposed Property Investment.
Borrower expressly agrees and acknowledges that Property Investments,
loans, financings or other financial transactions under or contemplated by this
Agreement shall
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comply with the precepts of Islamic Xxxxx'ah as interpreted by Lender as
Borrower receives notice of such precepts from time to time. Upon any such
notification, Lender and Borrower shall cooperate in good faith and implement
such precepts in such manner as shall give effect to such precepts while
preserving the existing benefit of its bargain for each of Lender, Borrower, and
any other participant in Property Investments and minimizing disruption of the
existing relationships, agreements and arrangements among such parties. Lender,
after consultation with, and consideration by, its Xxxxx'ah Committee, has the
sole discretion to approve or disapprove the implementation of such precepts and
matters affected by such precepts, even if such decisions could have an adverse
effect on Borrower or any other participant in Property Investments, provided
the implementation of such precepts does not adversely effect the economic
relationship of Lender, Borrower and any other participant in Property
Investments, deprive the Borrower or any other participant in Property
Investments of the benefit of its bargain, or cause the Borrower and any other
participant in Property Investments to incur additional material obligations or
liabilities, and such approval or disapproval by Lender shall not be
unreasonably withheld, delayed or conditioned.
5. DISBURSEMENTS, PAYMENTS AND COSTS
5.1 REQUESTS FOR LOANS. Each request for a Loan shall be sent to Lender
at least three (3) Business Days prior to the date on which the Loan is
requested to be made and shall be made in writing in the form attached hereto as
EXHIBIT 5.1. Borrower shall make requests for Loans only with respect to
Property Investments approved by Lender in accordance with Section 4.2.
5.2 AUTHORIZED SIGNERS. Borrower authorizes either (a) Xxxxxxx X.
Xxxxxxxxx, President, or (b) Xxxx X. Xxxx, Senior Vice President, to sign all
Loan requests and other documents in connection with the administration of the
Loan. Borrower represents and warrants to Lender that the following signatures
are specimen signatures of the persons named in the preceding sentence:
NAME SIGNATURE
Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Xxxx X. Xxxx
----------------------------------------
5.3 DISBURSEMENT OF LOAN. Each Loan made by Lender will be:
(a) deposited into Borrower's account as specified to Agent in
writing;
(b) made in immediately available funds; and
(c) entered into the Loan Account kept by Lender relating to the
Loan (which shall be presumed correct in the absence of manifest error).
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5.4 PAYMENTS. Each payment by Borrower will be to Lender at Lender's
address shown below its signature hereto (or such other place as Lender may from
time specify in writing) in lawful currency of the United States of America, in
immediately available funds, without counterclaim or setoff and free and clear
of, and without any deduction or withholding for, any taxes or other payments.
All payments shall be applied first to the payment of all fees, expenses and
other amounts due to Lender (excluding principal and interest), then to accrued
interest, and the balance on account of outstanding principal; provided,
however, that during the continuation of an Event of Default, payments will be
applied to the obligations of Borrower to Lender as Lender determines in its
unrestricted discretion. If any payment hereunder becomes due on a day which is
not a Business Day, the due date of such payment shall be extended to the next
succeeding Business Day, and such extension of time shall be included in
computing interest and fees in connection with such payment.
6. REPRESENTATIONS AND WARRANTIES
When Borrower signs this Agreement, and on a continuing basis until Lender
is repaid in full, Borrower makes the following representations and warranties:
6.1 ORGANIZATION OF BORROWER. Borrower is a corporation duly formed and
existing under the laws of Maryland.
6.2 AUTHORIZATION. This Agreement, and any instrument or agreement
required hereunder or contemplated hereby, are within Borrower's powers, have
been duly authorized, and do not conflict with its charter or other governing
documents.
6.3 ENFORCEABLE AGREEMENT. This Agreement is a legal, valid and binding
agreement of Borrower, enforceable against Borrower in accordance with its
terms, and any instrument or agreement required hereunder, when executed and
delivered, will be similarly legal, valid, binding and enforceable; except to
the extent that enforceability may be limited by applicable Bankruptcy,
insolvency or other similar laws of general application relating to or affecting
the enforcement of creditors' rights from time to time in effect and by general
principles of equity.
6.4 GOOD STANDING. In each state in which Borrower does business, it is
properly licensed and qualified, in good standing, and, where required, in
compliance with fictitious name statutes.
6.5 NO CONFLICTS. This Agreement does not conflict with any law,
agreement, legal requirement or obligation to which Borrower is a party or by
which Borrower is bound.
6.6 FINANCIAL INFORMATION. To the best of Borrower's knowledge, all
financial information of the Borrower provided to Lender is true in all material
respects.
6.7 LAWSUITS. There is no lawsuit, tax claim or other dispute pending
or, to the best of Borrower's knowledge, threatened against Borrower which, if
lost, would impair Borrower's financial condition or ability to repay the Line
of Credit.
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6.8 NO EVENT OF DEFAULT. There is no event which is, or with notice or
lapse of time or both would be, an Event of Default under this Agreement.
6.9 LOCATION OF BORROWER. Borrower's place of business (or, if Borrower
has more than one place of business, its chief executive office) is located at
the address listed under Borrower's signature on this Agreement.
6.10 BORROWER NOT A "FOREIGN PERSON." Borrower is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986
(the "Code"), as amended from time to time.
7. COVENANTS
Borrower agrees, so long as credit is available under this Agreement and
until Lender is repaid in full:
7.1 FINANCIAL INFORMATION. To provide the following financial
information and statements and such additional information as requested by
Lender from time to time:
(a) As soon as available but in no event more than 180 days
after Borrower's fiscal year end, Borrower's annual consolidated financial
statements. These financial statements which need not be audited must
include a balance sheet, income statement, changes in financial position
and cash flow statement.
(b) A quarterly unaudited balance sheet and income statement for
Borrower, and such information as Lender may reasonably request, in no
event more than 60 days following every fiscal quarter.
(c) Within five business days after the delivery thereof to the
Borrower, copies of any and all reports delivered by Subsidiaries of
Borrower with respect to Property Investments.
(d) Such other information respecting the operations, activities
and financial conditions of Borrower as Lender may from time to time
reasonably request.
7.2 NOTICES TO LENDER. To promptly notify Lender in writing of:
(a) any action, suit or proceeding instituted or threatened
against Borrower, or arising out of or relating to any loan or investment
activity, in or before any court, governmental or administrative body,
agency, board or commission or any adverse regulatory action taken or, to
the best of Borrower's knowledge, proposed to be taken by any governmental
body or agency against Borrower which could materially adversely affect the
Loans or Borrower;
(b) any substantial dispute between Borrower or any government
authority;
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(c) any material adverse change in Borrower's, or to Borrower's
knowledge, any Property Investment's condition (financial or otherwise) or
operations; and
(d) any change in Borrower's name, legal structure, jurisdiction
of formation, or principal place of business.
7.3 BOOKS AND RECORDS. Borrower must maintain books and records adequate
to provide the information specified herein, and retain such books and records
and copies of the reports and statements for a period of at least four (4) years
after repayment of the Obligations. Borrower shall make such books and records
available for inspection or audit by Lender and its agents and representatives
at reasonable times upon three (3) Business Days' notice, during normal business
hours, for such matters as, without limitation, documentation, loan and tax
credit compliance monitoring.
7.4 AUDITS. To allow Lender and its agents to inspect Borrower's
properties and examine, audit, and make copies of books and records at any
reasonable time. If any of Borrower's properties, books or records is in the
possession of a third party, Borrower authorizes that third party to permit
Lender or its agents to have access to perform inspections or audits and to
respond to Lender's requests for information concerning such properties, books
and records at any reasonable time.
7.5 COMPLIANCE WITH LAWS. To comply with all laws (including any
fictitious name statute and, including, without limitation, laws regarding
payment of taxes), regulations and orders of any government body with authority
over Borrower's business.
7.6 COOPERATION. To take any action reasonably requested by Lender to
carry out the intent of this Agreement.
7.7 INSURANCE. To maintain and keep in force and in adequate amounts
such insurance as is customary and usual for similarly situated companies in its
business and as Lender may reasonably require from time to time.
7.8 LIMITATION ON INDEBTEDNESS. Except with the prior written consent of
Lender, Borrower will not create, incur, assume or suffer to exist, or in any
manner become or be liable directly or indirectly with respect to, any
Indebtedness except:
(a) Borrower's obligations hereunder and as contemplated hereby;
(b) Indebtedness for borrowed money existing on the date of this
Agreement, listed and described, but only to the extent so listed and
described on, EXHIBIT 7.8 attached hereto;
(c) Indebtedness for the purchase price of capital assets or
investments in partnerships, or other indebtedness, if, and solely to the
extent, approved by Lender in its unrestricted discretion;
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(d) Indebtedness for taxes, assessments or governmental charges
to the extent that payment therefor shall at the time not be due and
payable; and
(e) Indebtedness on open account for the purchase of services,
materials and supplies incurred by Borrower in the ordinary course of
business (not as a result of borrowing), so long as all of such open
account indebtedness shall be paid promptly and discharged when due or in
conformity with customary trade terms and practices, except for any such
open account Indebtedness which is being contested in good faith by
Borrower, as to which adequate reserves required by GAAP have been
established and are being maintained and as to which no encumbrance has
been placed on any property of Borrower.
7.9 ADDITIONAL NEGATIVE COVENANTS. Not to, without Lender's prior
written consent (which may be withheld in Lender's unrestricted discretion):
(a) consent to any Sale or Refinancing or any other transfer,
sale, assignment, encumbrance or pledge of any Property Investment;
(b) amend or modify the documents relating to any Property
Investment in a manner which could adversely affect Lender;
(d) permit any change in control of the Property Investment;
7.10 USE OF PROCEEDS. Borrower will use the proceeds of the Loans solely
for the purpose of making Property Investments approved by Lender.
8. EVENTS OF DEFAULT
EVENTS OF DEFAULT. Borrower will be deemed to be in default under this
Agreement upon the occurrence of any of the following events ("EVENTS OF
DEFAULT"):
8.1 FAILURE TO PAY. Borrower fails to make a payment within ten (10)
Business Days after the due date under this Agreement.
8.2 FALSE INFORMATION. Any representation or warranty made in this
Agreement or any security agreement required under this Agreement, or in any
report, certificate, financial statement or instrument furnished by Borrower in
connection herewith or therewith will prove to have been false or misleading
when made in any material respect.
8.3 PERFECTED LIEN. Borrower takes any action, or fails to take any
action, which results in Lender's failure to have a valid, binding and
enforceable perfected security interest in or lien on any property covered by
any security agreement required under this Agreement or such security interest
or lien fails to be prior to the rights and interests of others.
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8.4 MATERIAL ADVERSE CHANGE. Any material adverse change occurs in
Borrower's condition (financial or otherwise) or result of operations of
Borrower or in Borrower's business that may reasonably result in (or with the
passage of time may reasonably cause) its inability to repay the Loans.
8.5 BANKRUPTCY. Borrower files a Bankruptcy petition, a Bankruptcy
petition is filed against Borrower, or Borrower makes a general assignment for
the benefit of creditors. The default will be deemed cured if any Bankruptcy
petition filed against Borrower is dismissed within a period of sixty (60) days
after the filing; provided, however, that Lender will not be obligated to make
any Loan or extend any additional credit to Borrower during that period.
8.6 RECEIVERS. A receiver or similar official is appointed for
Borrower's business, or the business is terminated.
8.7 OTHER BREACH UNDER AGREEMENT. Borrower fails to comply with any
provision contained in this Agreement other than those provisions elsewhere
referred to in this Section and, with respect to any such failure which is
curable, does not cure that failure within a period of thirty (30) consecutive
days after written notice from Lender.
9. REMEDIES
If an Event of Default exists:
9.1 At the option of Lender, Lender may, by written notice to Borrower,
declare the Loans and any and all other Indebtedness of Borrower to Lender in
connection with this Agreement (including interest, costs and expenses),
forthwith to be due and payable, whether or not the Loans or the other
indebtedness will be otherwise due and payable and whether or not Lender will
have initiated any other action for the collection of the Loans, and whereupon
the Loans and/or such other indebtedness will become due and payable without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived by Borrower.
9.2 Lender may, in any order or priority as it may determine in its
unrestricted discretion, pursue any and all remedies available at law or in
equity for the collection of the Loans and enforcement of the provisions hereof,
subject to Section 12 hereof.
9.3 No course of dealing on the part of Lender or any delay or failure
on the part of Lender to exercise any right, power or remedy will operate as a
waiver thereof or otherwise prejudice Lender's rights, powers and remedies.
9.4 If Borrower becomes the subject of any Bankruptcy or other
insolvency proceeding, all of Borrower's obligations under this Agreement shall
automatically become immediately due and payable upon the filing of the petition
commencing such proceeding, all without notice of default, presentment or demand
for payment, protest or notice of nonpayment or dishonor, or other notices or
demands of any kind or character. Upon the occurrence of any other Event of
Default, all of Borrower's obligations under this Agreement may become
immediately due and payable without notice of default, presentment or demand for
payment,
12
protest or notice of nonpayment or dishonor, or other notices or demands of any
kind or character, all at Lender's option, exercisable in its unrestricted
discretion.
9.5 Lender shall have the right in its unrestricted discretion to
exercise its remedies under the Lender Security Agreement and take possession of
any of the Collateral not already in its possession, whether in person, by agent
or by court-appointed receiver, and to take any and all actions which Lender in
Lender's unrestricted discretion may consider necessary and appropriate to
protect Lender's security and to preserve Lender's rights under this Agreement,
including entering into, enforcing, modifying or canceling any contractual
arrangements, all on such terms and conditions as Lender may consider proper. If
Lender exercises any of the rights or remedies provided in this Section 9.5,
that exercise shall not make Lender, or cause Lender to be deemed to be, a
partner or joint venturer of any of Borrower or Borrower's affiliated entities.
All sums which are expended by Lender in connection with taking possession of
the Collateral and any actions to protect Lender's security or to preserve
Lender's rights under this Agreement shall be considered to be an additional
Loan bearing interest at the Default Rate and shall be secured by the
Collateral.
10. ENFORCING THIS AGREEMENT; MISCELLANEOUS
10.1 MASSACHUSETTS LAW. This Agreement is governed by, and shall be
interpreted in accordance with the laws of the Commonwealth of Massachusetts
(excluding its laws applicable to conflicts or choice of law).
10.2 SEVERABILITY; WAIVERS. If any part of this Agreement is not
enforceable, the rest of the Agreement shall nonetheless be and remain
enforceable. Lender retains all rights, even if it makes a Loan after a Default
or an Event of Default. If Lender waives a Default or Event of Default, it may
enforce any and all later Defaults and Event of Defaults. Any consent or waiver
under this Agreement must be in writing.
10.3 COSTS AND EXPENSES. Borrower shall pay on demand all reasonable
expenses of Lender in connection with the preparation, administration (including
any out-of-pocket expenses, and expenses of examinations or audits contemplated
by Section 7.3 and 7.4 hereof, but excluding internal costs and expenses of
Lender typically incurred by financial institutions in the ordinary course of
administering loans of the type contemplated by this Agreement), default,
collection (after the occurrence and during the continuation of an Event of
Default), waiver or amendment of loan terms, or in connection with Lender's
exercise, preservation or enforcement of any of its rights, remedies or options
hereunder, including, without limitation, fees of outside legal counsel,
accounting, consulting, brokerage or other similar professional fees or
expenses, and any fees or expenses associated with travel or other costs
relating to any appraisals or examinations conducted in connection with the
Loans or any collateral therefor, and the amount of all such expenses shall,
until paid, bear interest at the rate applicable to principal hereunder
(including any applicable Default Rate) and be an obligation secured by the
Collateral.
10.4 COMPLIANCE WITH USURY LAWS. All agreements between Borrower and
Lender are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount paid or agreed to be paid to
Lender for the use or the forbearance of the indebtedness evidenced
13
hereby exceed the maximum permissible under applicable law. As used herein, the
term "applicable law" shall mean the law in effect as of the date hereof,
PROVIDED, HOWEVER, that in the event there is a change in the law which results
in a higher permissible rate of interest, then this Agreement shall be governed
by such new law as of its effective date. In this regard, it is expressly agreed
that it is the intent of Borrower and Lender in the execution and delivery
hereof to contract in strict compliance with the laws of the Commonwealth of
Massachusetts from time to time in effect. If, under or from any circumstances
whatsoever, fulfillment of any provision hereof at the time performance of such
provision shall be due, shall involve transcending the limit of validity
prescribed by applicable law, then the obligation to be fulfilled shall
automatically be reduced to the limit of such validity, and if under or from any
circumstances whatsoever Lender should ever receive as interest an amount which
would exceed the highest lawful rate, such amount which would be excessive
interest shall be applied to the reduction of the principal balance evidenced
hereby and not to the payment of interest. This provision shall control every
other provision of all agreements between Borrower and Lender.
10.5 [Intentionally omitted]
10.6 REPLACEMENT DOCUMENTATION. Upon receipt of an affidavit of an
officer of Lender as to the loss, theft, destruction or mutilation hereof, the
Note or the Lender Security Agreement, and, in the case of any such loss, theft,
destruction or mutilation, upon surrender and cancellation thereof, the Borrower
will issue, in lieu thereof, a replacement thereof of like tenor.
10.7 SETOFF. Borrower hereby grants to Lender a lien, security interest
and right of setoff as security for all Obligations to Lender, whether now
existing or hereafter arising, upon and against all deposits, credits and
Collateral, now or hereafter in the possession, custody, safekeeping or control
of Lender or any entity under the control of Lender, or in transit to any of
them. At any time, without demand or notice, Lender may set off the same or any
part thereof and apply the same to any liability or obligation of Borrower even
though unmatured and regardless of the adequacy of any other collateral securing
the Obligations. ANY AND ALL RIGHTS TO REQUIRE AGENT OR ANY LENDER TO EXERCISE
ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE
LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS,
CREDITS OR OTHER PROPERTY OF A BORROWER OR GUARANTOR, ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED.
10.8 CONTINUING OBLIGATION; ASSIGNMENT; SURVIVAL
10.8.1 CONTINUING OBLIGATION; ASSIGNMENT; SURVIVAL. Each of this
Agreement and the Lender Security Agreement is a continuing obligation and
shall be binding upon and inure to the benefit of and be enforceable by the
parties hereto and their respective successors, transferees and assigns;
provided that Borrower may not assign or delegate all or any part of this
Agreement or the Lender Security Agreement without the prior written
consent of Lender, which consent may be withheld in Lender's unrestricted
discretion. Lender shall have the unrestricted right at any time or from
time to time, and without each Borrower's consent, to assign all or any
portion of its rights and obligations hereunder to one or more assignees
(each, an "Assignee"), and Borrower agrees that it shall execute, or cause
to be executed, such documents, including without limitation,
14
amendments to this Agreement and to any other documents, instruments and
agreements executed in connection herewith as Lender shall reasonably deem
necessary to effect the foregoing. In connection with any such assignment,
Borrower shall not be liable for any costs and expenses incurred by Lender
or any Assignee. Upon the execution and delivery of appropriate assignment
documentation, amendments and any other documentation required by Lender in
connection with such assignment, and the payment by Assignee of the
purchase price agreed to by the assigning Lender, such Assignee shall be a
party to this Agreement and shall have all of the rights and obligations of
Lender hereunder (and under any and all other guaranties, documents,
instruments and agreements executed in connection herewith) to the extent
that such rights and obligations have been assigned by Lender pursuant to
the assignment documentation between Lender and such Assignee, the
assigning Lender shall be released from its obligations hereunder and
thereunder to a corresponding extent. Lender may furnish any information
concerning Borrower in its possession from time to time to prospective
Assignees. All representations and warranties of Borrower contained herein
shall survive the making of this Agreement. All covenants and agreements of
Borrower contained herein shall continue in full force and effect from and
after the date hereof until payment and performance in full of all
Borrower's obligations hereunder. The agreements and obligations of
Borrower pursuant to Sections 11.1 and 12.1 shall survive the termination
of this Agreement.
10.8.2 LENDER AS AGENT. Notwithstanding Lender's unrestricted right
to assign all or any portion of its rights and obligations hereunder, as
set forth in paragraph 10.8 above, so long as any Obligations under this
Agreement remain outstanding, Lender shall continue to administer the
Loans, for itself or for its assigns, pursuant to the terms set forth
herein, Borrower shall continue to repay all amounts advanced and
outstanding hereunder to Lender in accordance with the provisions set forth
in Section 1.4 hereof and any notices given under this Agreement shall
continue to be given to Lender in accordance with Section 10.11 hereof.
10.9 PARTICIPATIONS. Lender shall have the unrestricted right at any time
and from time to time, and without the consent of or notice to Borrower or any
guarantor, to grant to one or more Lender, or other financial institutions (each
a "Participant") participating interests in Lender's obligation to lend
hereunder and/or any or all of the Loans held by Lender hereunder. In the event
of any such grant by Lender of a participating interest to a Participant,
whether or not upon notice to Borrower, Lender shall remain responsible for the
performance of its obligations hereunder and Borrower shall continue to deal
solely and directly with Lender in connection with Lender's rights and
obligations hereunder. Lender may furnish any information concerning Borrower in
its possession from time to time to prospective Participants, provided that
Lender shall require any such prospective Participant to agree in writing to
maintain the confidentiality of such information.
10.10 ONE AGREEMENT. This Agreement (including, without limitation, the
Exhibits hereto), the Note, the Lender Security Agreement and any related
security or other agreements executed and delivered in connection with this
Agreement, collectively:
15
(a) represent the sum of the understandings and agreements
between Lender and Borrower concerning this credit (provided that Lender
may be a party to intercreditor or other agreements with other lenders or
participants);
(b) replace any prior oral or written agreements between Lender
and Borrower concerning this credit; and
(c) are intended by Lender and Borrower as the final, complete
and exclusive statement of the terms agreed to by them concerning this
credit.
In the event of any conflict between this Agreement, the Note and the Lender
Security Agreement or other agreements executed and delivered in connection with
this Agreement, this Agreement will prevail.
10.11 NOTICES. All notices given under this Agreement must be in writing
and be given by personal delivery, overnight receipted courier (such as Federal
Express) or by certified United States mail, postage prepaid, return receipt
requested, sent to the party at its address appearing below its signature.
Notices are effective upon receipt or when proper delivery is refused. Addresses
for notice may be changed by any party by notice to any other party in
accordance with this Section. Service of any notice on Borrower is effective
service for all purposes, including service on its affiliates.
10.12 HEADINGS. Article and Section headings are for reference only and
shall not affect the interpretation or meaning of any provisions of this
Agreement.
10.13 EXHIBITS. All Exhibits to this Agreement are incorporated herein by
this reference and are expressly made part of this Agreement.
10.14 COUNTERPARTS. This Agreement may be executed in as many counterparts
as necessary or convenient, and by the different parties on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same agreement.
11. INDEMNITY
11.1 INDEMNIFICATION. Borrower agrees to indemnify, defend and hold
harmless Lender from and against any and all damages and expenses (including,
without limitation, reasonable attorneys fees and court costs) imposed upon or
incurred by Lender as a result of, in connection with or arising from any of the
following:
(a) any breach or default in performance by Borrower of any
covenant, agreement or obligation to be performed pursuant to this
Agreement which materially impairs the Collateral or Lender's priority
interest in the Collateral; and
(b) any breach of any warranty or inaccuracy in any
representation or warranty contained in this Agreement.
16
12. LIMITED RECOURSE
12.1 LIMITED RECOURSE.
(a) Subject to the provisions of this Section, Lender will
neither seek or obtain a judgment against Borrower for payment of principal
or interest under this Agreement and its sole recourse against Borrower for
any default in the payment of principal and interest is limited to the
Collateral. Nothing in this Agreement restricts Lender's recourse against
the Collateral pursuant to the Lender Security Agreement.
(b) The limitation of liability set forth in this Section will
be deemed void and have no force or effect if Borrower attempts to
materially delay any action or claim by Lender of or on the Lender Security
Agreement, the Collateral or any other collateral for the Loans that Lender
is then entitled to take by reason of any Event of Default.
(c) The limitation of liability set forth in this Section will
not prejudice or affect the rights of Lender to:
(i) Name Borrower as a party defendant in any action,
proceeding, reference or arbitration, subject to the limitations
of this Section; or
(ii) Assert any unpaid amounts on the Loans as a defense
or offset to or against any claim or cause of action made or
alleged against Lender by Borrower, any of its stockholders or
joint venturers or any guarantor in connection with the Loans; or
(iii) Seek full recourse against the Collateral; or
(iv) Collect or recover from Borrower any damages (such
as, without limitation, loss of principal or interest), awards,
costs or expenses incurred by Lender as a result of any encumbrance
on the Collateral granted or consented to by Borrower without
Lender's prior written consent, which consent Lender may withhold in
its unrestricted discretion; or
(v) Exercise self-help remedies such as setoff or
foreclosure against or sale of any collateral or security; or
(vi) Collect or recover an amount from Borrower equal to
any sums of any type that are misapplied; or
(vii) Enforce and collect or recover all sums owing under
any indemnity by Borrower or any other party, any guaranties and
agreements, and any similar rights to payment and performance
executed or granted by Borrower or any other party in connection
with the Loans; or
17
(viii) Enforce any agreement of Borrower or any other party
specifically stating that it is not subject to the limitation of
liability contained in this Section; or
(ix) Recover any expenses, damages (such as, without
limitation, loss of principal or interest) or costs, including
reasonable attorneys' fees (including the allocated costs for
services of in-house counsel), that Lender may incur because of (a)
any act or omission of Borrower that diminishes or threatens to
diminish or the value of the Collateral, or (b) any act or omission
of that impairs Lender's ability to exercise any rights or pursue
any remedies with respect to the Collateral, or (c) any act or
omission of Borrower which results in Lender's failure to have a
valid, binding and enforceable perfected security interest in or
lien on any property covered by any security agreement contemplated
by this Agreement or such security interest fails to be prior to the
rights and interests of others, or (d) Borrower's fraud, willful
misrepresentation, misapplication of funds or waste or intentional
damage of or to any collateral for the Loan.
(d) Nothing contained in this Section impairs the validity of
any of any security agreement contemplated by this Agreement, or any lien
or security interest created or perfected by any of them or any lien or
security interest created or perfected by any of them.
13. WAIVER OF JURY TRIAL
BORROWER AND LENDER MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED
HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE NOTE OR
ANY OTHER CREDIT DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR
ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF LENDER RELATING TO THE
ADMINISTRATION OF THE LOANS OR ENFORCEMENT OF THE LOAN DOCUMENTS. EXCEPT AS
PROHIBITED BY LAW, BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. BORROWER
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF LENDER HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT
FOR LENDER TO ENTER INTO THIS AGREEMENT.
[signatures appear on next page]
18
This Agreement is executed as of the date stated at the top of the first page.
BORROWER
BOSTON CAPITAL REAL ESTATE
INVESTMENT TRUST, INC.
By: /s/ XXXXXXX X. XXXXXXXXX
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
Address where notices to
Borrower are to be sent:
c/o Boston Capital Corporation
Xxx Xxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxx X. Xxxx
LENDER
BCP FUNDING, LLC
By: /s/ XXXXXXX X. XXXXXXXXX
------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President and Treasurer of
Boston Capital Partners II Corporation,
sole General Partner of Boston Capital
Companion Limited Partnership, Sole
Member
Address where notices to
Borrower are to be sent:
c/o Boston Capital Corporation
Xxx Xxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxxxxx
19
20
EXHIBIT "A" to Loan Agreement
dated as of May 31, 2003
between BCP Funding LLC, as
Lender and Boston Capital Real
Estate Investment Trust, Inc.,
as Borrower
DEFINED TERMS
As used in the Loan Agreement to which this EXHIBIT A is attached, the
following terms shall have the following meanings:
"Advance Period" means the period ending October 15, 2003.
"BUSINESS DAY" means any day other than a Saturday, Sunday or legal holiday
in the Commonwealth of Massachusetts.
"CASH AVAILABLE FOR DEBT SERVICE" means for any period of time all of the
gross operating receipts actually received by Borrower from the Ownership
Companies derived from the operation of the Property Investments during such
period less operating expenses of Borrower, provided that no fees to Affiliates
of Borrower shall be deducted; provided further that any cash receipts of
Borrower from any Released Property Investment shall not be included and the
operating expenses of Borrower shall be ratably allocated among Property
Investments and any Released Property Investments.
"DEFAULT" means any act, omission, occurrence or circumstance that, with
either the passage of time, the giving of notice, or both, will become an Event
of Default.
"DEFAULT RATE" means, the lesser of (a) 12% per annum or (b) the maximum
rate of interest which may be charged or collected in accordance with applicable
law.
"GAAP" means generally accepted accounting principles and practices as set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession. GAAP shall be consistently applied from one
accounting period to another.
"INDEBTEDNESS" with respect to any Person means and includes, without
duplication (i) all items which, in accordance with GAAP, would be liabilities
on the balance sheet of such Person, but excluding anything in the nature of
capital stock or other equity, surplus capital and retained earnings, (ii) the
face amount of all Banker's acceptances and of all drafts drawn under all
Banker's acceptances and of all letters of credit issued by Lender for the
account of such Person and, without duplication, all drafts drawn thereunder,
(iii) the total amount of all indebtedness secured by any encumbrance to which
any property or asset of such Person is subject, whether or not the indebtedness
secured thereby shall have been assumed, and (iv) the total amount of all
indebtedness and obligations of others which such Person has directly or
indirectly guaranteed, endorsed (otherwise than for collection or deposit in the
ordinary course of business), discounted with recourse or agreed (contingently
or otherwise) to purchase or repurchase or otherwise acquire, including, without
limitation, any agreement (a) to provide or supply funds to such other Person to
maintain working capital, equity capital, net worth or solvency, or (b)
otherwise to assure or hold harmless such other Person against loss in respect
of its obligations.
"MATURITY DATE" means May 31, 2004, provided that Borrower may extend the
Maturity Date for one additional period of six months upon written notice to
Lender prior to May 31, 2004, provided no Default otherwise exists.
"MAXIMUM AMOUNT" means $60,000,000.
"OBLIGATIONS" means any and all of the payment and performance obligations
and liabilities of Borrower to Lender, existing on the date of this Agreement or
arising thereafter, direct or indirect, absolute or contingent, matured or
unmatured, liquidated or unliquidated, or secured or unsecured.
"OWNERSHIP COMPANIES" means each of the limited partnerships or limited
liability companies, whether or not wholly owned by Borrower, through which
Borrower owns or has an interest in, directly or indirectly, a Property
Investment.
"PERSON" means an individual, estate, corporation, partnership, limited
liability company, association, joint stock company, trust, unincorporated
organization or other entity.
"PRIOR LOAN AGREEMENTS" means all promissory notes, agreements, documents
or other instruments evidencing or securing the Prior Loans.
"PRIOR LOANS" means the following advances made by Lender and its
Affiliates to Borrower and its Affiliates with respect to the acquisition of the
following Property Investments prior to the date of this Agreement:
PROPERTY INVESTMENT DATE OF ADVANCE AMOUNT OF ADVANCE
------------------- --------------- -----------------
Seattle Portfolio 12/9/2002 $ 350,000
Seattle Portfolio 12/12/2002 $ 8,975,982
Jacksonville Portfolio 4/17/2003 442,115
Jacksonville Portfolio 5/2/2003 250,000
Jacksonville Portfolio 5/12/2003 707,480
Jacksonville Portfolio 5/20/2003 12,445,023
Jacksonville Portfolio 5/28/2003 11,109,448
Portland Portfolio 5/2/2003 450,000
Portland Portfolio 5/28/2003 21,866,617
"LOAN ACCOUNT" means the account on the books of Lender in which will be
recorded Loans made by Lender to Borrower pursuant to this Agreement, payments
made on such Loans and other appropriate debits and credits as contemplated by
this Agreement.
"SALE OR REFINANCING" means any sale or refinancing transaction by the
Borrower or a Subsidiary not in the ordinary course of its business, including,
without limitation, sales, exchanges or other dispositions of all or any portion
of any Property Investments, condemnations, recoveries of damage awards and
insurance proceeds (other than business or rental interruption insurance
proceeds) with respect to any Property Investments, or any refinancing of any
Property Investments.
A-2
"SUBSIDIARY" means any Person of which the Borrower (or other specified
Person) shall at the time, directly or indirectly through one or more of its
Subsidiaries, (a) own at least 50% of the outstanding capital stock (or other
shares of beneficial interest) entitled to vote generally, (b) hold at least 50%
of the partnership, joint venture or similar interests or (c) be a general
partner or joint venturer.
A-3
EXHIBIT "1.1"to
Loan Agreement
dated as of May 31, 2003
between BCP Funding LLC, as
Lender and Boston Capital Real
Estate Investment Trust, Inc.,
as
FORM OF LOAN NOTE
PROMISSORY NOTE
$60,000,000 Boston,
Massachusetts
May 31, 2003
FOR VALUE RECEIVED, the undersigned (the "Borrower") absolutely and
unconditionally promises to pay to BCP Funding, LLC (the "Lender") as Lender
under the Agreement (as hereinafter defined), the principal amount of Sixty
Million and 00/100 Dollars ($60,000,000) or such lesser amount as shall be
outstanding from time to time under the Agreement, together with interest on the
unpaid principal amount hereof until paid in full in accordance with the
Agreement, plus additional amounts as specified in the Agreement.
The entire unpaid principal of this Note together with any accrued interest
shall be payable on the dates specified in the Agreement.
All payments under this Note shall be made to Lender at Xxx Xxxxxx Xxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000-0000 (or at such other place as the Lender may
designate from time to time in writing) in lawful money of the United States of
America in federal or other immediately available funds. Borrower may prepay
this Note in whole or in part at any time without premium or penalty, except as
provided for in the Agreement.
This Note is issued pursuant to, is entitled to the benefits of, and is
subject to the provisions of a certain
Loan Agreement (herein, as the same may
from time to time be amended, restated or extended, referred to as the
"Agreement"), and the obligations and indebtedness of Borrower hereunder are
secured pursuant to the terms of that certain Security Agreement (the "Security
Agreement"), each of even date herewith between the undersigned and Lender, but
neither this reference to the Agreement or the Security Agreement, nor any
provision thereof, shall affect or impair the absolute and unconditional
obligation of the undersigned maker of this Note to pay the principal of and
interest on this Note as herein provided.
Upon an Event of Default, as defined in the Agreement, the aggregate unpaid
balance of principal plus accrued interest may become or may be declared to be
due and payable in the manner and with the effect provided in the Agreement.
The maker of this Note hereby waives presentment, demand, notice of
dishonor, protest and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note.
WITNESS the execution of this Note under seal on the date written above.
BOSTON CAPITAL REAL ESTATE
INVESTMENT TRUST, INC.
By:
--------------------
Name:
Title:
EXHIBIT "5.1"to Loan Agreement
dated as of May 31, 2003
between BCP Funding LLC, as
Lender and Boston Capital Real
Estate Investment Trust, Inc.,
as Borrower
FORM OF LOAN REQUEST
LINE OF CREDIT REVOLVING LOAN REQUEST
To: BCP Funding LLC
From: Boston Capital Real Estate Investment Trust, Inc.
Date:
Date Loan to be Disbursed:
Amount:
Wiring Instructions:
Pursuant to the Loan Agreement, dated May 31, 2003 ("Loan Agreement") executed
between Borrower and you, Borrower hereby requests the above-mentioned Loan to
be made by you as instructed herein.
All capitalized terms used herein shall have the meanings defined in the Loan
Agreement.
By its authorized signature below, Borrower hereby represents, warrants and
certifies to Lender that:
1. There is currently outstanding no Default or Event of Default.
[Signatures appear on next page]
BOSTON CAPITAL REAL ESTATE
INVESTMENT TRUST, INC.
By:
----------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title:
EXHIBIT "4.1"to Loan Agreement
dated as of as of May 31, 2003
between BCP Funding LLC, as
Lender and Boston Capital Real
Estate Investment Trust, Inc.,
as Borrower
[XXXXX PEABODY LOGO]
XXXXX XXXXXXX LLP
ATTORNEYS AT LAW
CLOSING CHECKLIST
Last Updated: May 31, 2003
RESPONSIBLE
OPERATIVE DOCUMENTS: PARTY STATUS/COMMENTS
1. Loan Agreement NP
Exhibit A to Loan Agreement - Defined Terms;
Exhibit 1.1 to Loan Agreement - Form of Loan Note
Exhibit 4.1 to Loan Agreement - Closing Checklist
Exhibit 5.1 to Loan Agreement - Line of Credit Loan
Request
Exhibit 7.8 to Loan Agreement - Indebtedness
2. Loan Note (Exhibit 1.1 to Loan Agreement) NP
3. Pledge Agreement (LLC/LP Interests) NP
4. Unconditional Guaranty (Limited Recourse) NP
5 Pledge Agreement (REIT Shares) NP
6. UCC-1 Financing Statements: NP
EXHIBIT "7.8" to Loan Agreement
dated as of May 31, 2003
between BCP Funding LLC, as
Lender and Boston Capital Real
Estate Investment Trust, Inc.,
as Borrower
INDEBTEDNESS
1. The Prior Loans.
2. Obligations as "key principal" under the Mortgage Loans relating to
Property Investments for purposes of incurring obligations for the
so-called "non-recourse carve outs" under said loans.
