ADDENDUM TO AMENDED AND
RESTATED BUSINESS LOAN AGREEMENT
(Line of Credit with Letter of Credit Advances)
This Addendum to Amended and Restated Business Loan Agreement
("Addendum") is an integral part of the Amended and Restated Business Loan
Agreement ("Agreement") executed by Borrower, and each and all of the terms,
conditions, provisions and agreements set forth in the Agreement are
incorporated by this reference into this Addendum.
I. LOAN
Under those terms and conditions set forth in the Agreement and in
this Addendum, and provided there shall exist no Event of Default, Bank agrees
from time to time, at Borrower's request, to provide Borrower with Advances or
Credit Advances in an aggregate amount up to but not to exceed the lesser of
the sum of FIVE MILLION and NO/100 DOLLARS ($5,000,000.00). On such terms and
conditions as set forth herein, the Advances and Credit Advances may be
outstanding as Prime advances or LIBOR Advances. There shall be no more than a
total of five (5) LIBOR Advances outstanding at any time.
II. NOTE
The Loan shall be signified by Borrower's execution and delivery to
Bank of a promissory note to Bank's order in the amount of the Loan (the
"Note").
III. EXPIRATION OF BANK'S COMMITMENT
Bank's obligation to make any Advance or Credit Advance under the Loan
and Note shall automatically (a) cease and terminate upon the maturity date
stated in the Note, and (b) suspend or terminate (at Bank's option), upon the
occurrence of any Event of Default unless Bank in writing agrees to waive said
Event of Default. No subsequent Advance by Bank shall be construed as a waiver
by Bank of the benefit of this provision, nor shall Bank be estopped thereby
to refuse any subsequent Borrower Advance request. All principal amounts
outstanding on any Advance or Credit Advance are immediately payable on the
Due Date stated in the Note or at the election of Bank after the occurrence of
any Event of Default and following the expiration of any applicable cure
period.
IV. ADVANCE PROCEDURE
Subject to Paragraphs I and III above, Borrower may request a Prime
Advance on any day the Bank is open for business and Bank will promptly make
the Prime Advance available to Borrower by crediting Borrower's general
deposit account number 0000-00000-0 in the amount requested, or in such other
manner as borrower shall request in writing, unless the requested prime
Advance, when aggregated with all prior unpaid Advances and all outstanding
Credit advances, would exceed the Loan amount.
Subject to Paragraphs I and III above, Borrower may give Bank written
or telegraphic notice (effective upon receipt) of any requested LIBOR Advance,
at least three (3) Business Days before each LIBOR Advance, specifying (1) the
date of such LIBOR Advance; (2) the amount of such LIBOR Advance which amount
shall be at least $250,000.00; and (3) the fact that the Advance requested is
a LIBOR Advance. Upon the fulfillment of all applicable conditions, the Bank
will make such LIBOR Advance available to Borrower by crediting Borrower's
general deposit account number 0000-00000-0 in the amount requested, or in
such other manner as Borrower shall request in writing unless the requested
LIBOR Advance, when aggregated with all prior unpaid Advances
and all outstanding Credit Advances would exceed the Loan amount or the
Interest Period requested is longer than the time period remaining to the Due
Date of the Note.
All notices for LIBOR Advances shall be irrevocable and shall be given
no later than 1:00 P.M. Eastern Standard Time on the day which is three (3)
Business Days before such LIBOR Advance. Absent a written or telegraphic
notice secured by Bank to the contrary, interest on all Advances shall accrue
at the Prime Rate.
V. CREDIT ADVANCE PROCEDURE
Subject to Paragraph I and III above, Credit Advances will be made to
Borrower by Bank's issuance of a commercial or standby Letter of Credit, with
such beneficiary and with such Letter of Credit draft instructions as Borrower
shall specify and as are customary in Borrower's business and acceptable to
Bank. Advances and Credit Advances available to Borrower under the Loan shall
be automatically reduced by the amount of Bank's aggregate obligation under
all Letters of Credit issued and outstanding from time to time, and in no
event shall the total of unpaid Advances and open and outstanding Credit
Advances at any time exceed the lesser of the Loan. Credit Advances shall be
made only under the following terms and conditions:
A. Each Letter of Credit request shall be made by submitting to Bank, on
forms supplied by Bank, a Letter of Credit application (the
"Application"), fully executed and completed to Bank's satisfaction.
Borrower acknowledges and agrees that each Letter of Credit issued by
Bank for the account of Borrower is subject to all terms and
conditions set forth in the Application including, without limitation,
the grant to Bank of a security interest in such collateral as is
identified in the Agreement and/or in the Application.
B. Borrower shall pay to Bank, for each Letter of Credit issued by Bank
for the account of Borrower, One (1%) Percent per annum of the face
amount thereof, and all other fees, charges, and expenses specified in
Bank's international department standard fee schedule then in effect
including, without limitation, issuance fees, payment fees, amendment
fees, non-utilization fees, communication and delivery expenses, and
any and all costs and expenses, including reasonable attorneys' fees,
incurred by Bank in defending any suit or claim brought against the
Bank by any Letter of Credit beneficiary. For each Letter of Credit
draft received and paid by Bank, Borrower's obligation to immediately
put Bank in good funds shall be funded by an Advance under the Note to
the extent unpaid Advances and other open and outstanding Credit
Advances do not exceed the lesser of the Loan, otherwise Borrower
shall immediately pay Bank the entire amount of any Letter of Credit
draft paid by Bank;
C. Any Letter of Credit issued by Bank shall have an expiry date of not
more than twelve (12) months after the issue date.
VI. CONVERSIONS AND RENEWALS
The Borrower may elect from time to time to convert all or a part of
one type of Advance into another type of Advance or to renew all or a part of
an Advance by giving the Bank notice at least One (1) Business Day before the
conversion into a Prime Advance, or at least three (3) Business Days before
the conversion into or renewal of a LIBOR Advance, specifying (1) the renewal
or conversion date; (2) the amount of the Advance to be converted or renewed;
and (3) in the case of conversions, the type of Advance to be converted into;
provided that LIBOR Advances can be converted only on the last day of the
Interest period for such LIBOR Advance. All notices given under this Section V
shall be irrevocable and shall be given not later than 1:00 P.M. (Eastern
Standard Time) on the day which is not less than the number of Business Days
specified above for such notice. If the Borrower shall fail to give the Bank
the notice as specified above for the renewal or conversion of a LIBOR Advance
prior to the end of the Interest period with respect thereto, such LIBOR
Advance shall automatically be converted into a Prime Advance on the last day
of the Interest period for such Advance.
VII. INTEREST
A. The Borrower shall pay interest to the Bank on the outstanding and
unpaid principal amount of the Advances made under this Agreement at a
rate per annum as follows:
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(1) For a Prime Advance at a rate equal to the Prime Rate;
(2) For a LIBOR Advance at a rate equal to the LIBOR
Interest Rate plus Two and One-Quarter (2.25%) percent.
Any change in the interest rate based on the Prime Rate
resulting from a change in the Prime Rate shall be effective as
of the opening of business on the day on which such change in
the Prime rate become effective.
Interest on each Prime Advance and LIBOR Advance shall
be calculated on the basis of a year of 360 days for the actual
number of days elapsed.
B. Interest on all principal amounts advanced by Bank from time to time
and unpaid by Borrower shall be paid on the 1st day of October, 1996,
and the first day of each month hereafter, unless in connection with
any LIBOR Advance some other periodic payment thereof is agreed to by
Bank.
C. Any principal amount not paid when due (at maturity, by acceleration
or otherwise) shall bear interest thereafter until paid in full,
payable on demand, at a rate per annum equal to:
(1) For each Prime Advance at a rate equal to the Prime Rate
plus Two (2%) Percent;
(2) For each LIBOR Advance at a rate equal to the LIBOR
Interest Rate plus Four and One-Quarter (4.25%) Percent
from the time of default in payment of principal until
the end of the then current Interest Period therefore,
and thereafter at a rate equal to the Prime Rate plus
Two (2%) Percent.
XIII. PREPAYMENTS
The Borrower may prepay any Prime Advances made under the Note at any
time. LIBOR Advances may be prepaid, in full or in part, only on the last day
of the Interest Period for such Advance.
IX. EVENTS OF DEFAULT
The occurrence of any of the following events shall constitute an
Event of Default under this Addendum:
A. Any Event of Default under the Agreement of which this Addendum
is a part;
B. Any Borrower breach of any provision or agreement in this Addendum;
C. Any representation or warranty made under this Addendum is or becomes
false or misleading in any material respect;
D. The aggregate unpaid principal amount of all Advances and Bank
obligations under all open Credit Advances exceeds the amount of the
Note.
X. REMEDIES ON DEFAULT
Upon the occurrence of any Event of Default under this Addendum, Bank
shall have all remedies as are provided by law or by the Agreement, the Note,
the Application, or any mortgage, security or other collateral agreement.
XI. DEFINITIONS
The following terms used in this Addendum shall have the following
meanings:
A. "Advance" or "Advances" shall mean a loan or loans of money from Bank
to Borrower.
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B. "Business Day" means a day on which the Commercial Loan Department of
the Bank is open for normal business transactions and, if the
applicable day relates to a LIBOR Advance, Interest period or notice
with respect to a LIBOR Advance, "Business Day" means a day on which
dealings in U.S. Dollar currency are carried on in the London
interbank market.
C. "Credit Advance" shall mean the Bank's liability, direct or
contingent, for or arising under any Letter of Credit issued by Bank.
D. "Interest Period" means the period commencing with, and including, the
date the LIBOR Advance is made or continued as, or converted into a
LIBOR Advance which bears interest determined with reference to LIBOR,
and ending on the calendar day which numerically corresponds to such
date one (1) calendar months thereafter; provided, however, that:
(a) If there exists no numerically corresponding calendar day in
such month, such Interest period shall end on the last Business
Day in that month; and,
(b) No Interest period may extend beyond the Due Date in the Line
of Credit Note; and
(c) If an Interest Period would end on a day that is not a Business
Day, such Interest period shall be extended to the next
Business Day unless such Business Day would fall in the next
calendar month, in which event such Interest Period shall end
on the immediately preceding Business Day.
E. "Letter of Credit" shall have the meaning ascribed to such term under
Article 5 of the Michigan Uniform Commercial Code, as amended from
time to time, as supplemented by the Uniform Customs and Practice for
Documentary Credits, ICC Publication 500, as amended from time to
time.
F. "LIBOR Advance" means any Advance when and to the extent that the
interest rate therefor is determined by reference to the LIBOR
Interest Rate.
G. "LIBOR Interest Rate" means (A) the London Interbank Offered Rate,
determined for any Interest period as the arithmetic mean, expressed
as a decimal truncated to the nearest one-hundredth of a percent, of
interbank per annum rates offered by major banks in the London, United
Kingdom market at 11:00 p.m. London Time two (2) Business days
immediately preceding the commencement of the Interest period for
immediately available U.S. dollar denominated deposits delivered on
the first day of the Interest Period for the number of days comprised
therein, as referenced and reported by one of the following sources,
selected by Bank on an availability basis in descending order of
priority: (1) the Dow Xxxxx Telerate System "LIBO Page" report of such
interest rates as determined by Xxxxxx'x news Service; (2) the Dow
Xxxxx Telerate System "Page 3750" report of such interest rate as
determined by the British Bankers Association; or (3) The Wall Street
Journal, Midwest Edition, report of such interest rate; or (4) any
other generally accepted authoritative source as Bank may reference
(the "Unadjusted LIBOR"); (B) AS ADJUSTED for the LIBOR Reserve, if
any, in accordance with the formula:
LIBOR Interest Rate = Unadjusted LIBOR
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1 - LIBOR Reserve
LIBOR Interest Rate, as so determined, will be the fixed rate of
interest relative to any LIBOR Advance for each calendar day of such
Interest Period. Bank's determination of LIBOR Interest Rate from time
to time will be conclusive and binding on Borrower in the absence of
manifest error.
H. "LIBOR Reserve" means a per annum rate, expressed as a decimal
truncated to the nearest one-hundredth of a percent, equal to the
maximum aggregate percentage, if any, in effect two (2) Business Days
prior to the first day of such Interest Period, specified by
regulations issued from time to time by the Board of Governors of the
Federal Reserve System, or any successor agency, for determining
reserve requirements (including all basic, emergency, supplemental,
marginal and other reserves and taking into account any transitional
adjustments or other scheduled changes in reserve requirements
applicable to "Eurocurrency Liabilities", as currently defined in
Regulation D of the Board of Governors
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of the Federal Reserve system. For purposes of this definition, every
LIBOR Advance will be deemed a "Eurocurrency Liability" as defined in
said Regulation D.
I. "Prime Advance" means any Advance when and to the extent that the
interest rate therefor is determined by reference to the Prime Rate.
J. "Prime Rate" means the variable rate of interest announced by the Bank
from time to time as its prime or base commercial lending rate, which
rate is not intended to be the lowest rate of interest charged by the
Bank to its borrowers.
IN WITNESS WHEREOF, the parties have executed this Addendum as of this
21st day of September, 1996.
BORROWER
AGREE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Agree Realty Corporation,
a Maryland corporation
Its: General Partner
By: /s/ Xxxxxxx X. Agree
---------------------------------
Xxxxxxx X. Agree
Its: President
BANK
MICHIGAN NATIONAL BANK,
a national banking association
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx
Its: Vice President
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AGREEMENT OF GUARANTOR
By executing this Addendum, Guarantor: (1) acknowledges and agrees
that Guarantor has completely read and understands this Addendum; (2) consents
to all provisions of this Addendum relating to Borrower; (3) agrees to
promptly furnish Bank at least annually with such financial information
concerning Guarantor as Bank shall reasonably request; (4) agrees to all
portions of this Addendum which apply to Guarantor; (5) acknowledges and
agrees that this Addendum has been freely executed without duress and after an
opportunity was provided Guarantor for review of the Business Loan Agreement,
this Addendum and the Guaranty by legal counsel of Guarantor's choice; and (6)
that Bank has provided Guarantor with a copy of the Business Loan Agreement,
this Addendum, the Guaranty, and such other agreements concerning Borrower as
Guarantor has requested.
GUARANTOR:
AGREE REALTY CORPORATION,
a Maryland corporation
By:/s/ Xxxxxxx X. Agree
---------------------------------
Xxxxxxx X. Agree
Its: President
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