UNITED STATES
SECURITIES AND EXCHANGE COMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 17, 2005
----------------------------------------------------------------
BRT REALTY TRUST
----------------
(Exact name of Registrant as specified in charter)
Massachusetts 001-07172 13-2755856
-----------------------------------------------------------------------
(State or other (Commission file No.) (IRS Employer
jurisdiction of I.D. No.)
incorporation)
60 Cutter Mill Road, Suite 303, Great Neck, New York 11021
--------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 516-466-3100
------------
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On August 17, 2005, we closed on a new revolving credit facility with North Fork
Bank, Valley Bank, Merchants Bank Division and Signature Bank with a maximum
availability of $17 million (the "New Line"). Unless extended by the lenders and
us, the New Line has a maturity date of November 1, 2005, has an interest rate
equal to North Fork Bank's prime rate of interest, plus 1/2%, is secured by
mortgage receivables held by us and the maximum available under the facility is
contingent on the collateral pledged by us from time to time.
The New Line is in addition to our existing revolving credit facility with North
Fork Bank, Valley Bank, Merchants Bank Division and Signature Bank with a
maximum availability of $85 million (the "Existing Line"). In connection with
the New Line, the Existing Line was modified to allow for the New Line and also
to cross-default and cross-collateralize both Lines.
Reference is made to our Form 8-K filed with the Securities and Exchange
Commission on February 17, 2005, which describes our Existing Line.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired. Not Applicable.
(b) Pro Forma Financial Information. Not Applicable.
(c) Exhibits.
10.1 Revolving Credit Agreement, dated as of August 17, 2005, between
BRT Realty Trust and North Fork Bank.
10.2 Secured Promissory Note, dated as of August 17, 2005, by BRT
Realty Trust in favor of North Fork Bank, in the aggregate principal
amount of $17,000,000.
10.3 Modification to Revolving Credit Agreement, dated as of August 17,
2005, between BRT Realty Trust and North Fork Bank.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned officer thereunto duly authorized.
BRT REALTY TRUST
Date: August 17, 2005 By: /s/ Mark H. Lundy
-----------------------------
Mark H. Lundy
Senior Vice President
EXHIBIT 10.1
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT (this ("Agreement") is made as of the 17th
day of August, 2005, between BRT REALTY TRUST, a Massachusetts business trust,
with offices at 60 Cutter Mill Road, Suite 303, Great Neck, New York 10021 (the
"Borrower") and NORTH FORK BANK, a corporation organized under the Banking Law
of the State of New York having its principal offices at 275 Broadhollow Road,
Melville, New York 11747 (the "Lender").
W I T N E S S E T H
WHEREAS, the Borrower or an affiliate of Borrower is and will be the owner
and holder of certain loans set forth on Exhibit A annexed hereto and from time
to time updated as set forth herein and made a part hereof (the "Pledged
Loans"), and the notes evidencing same (the "Pledged Notes"), which notes are or
will be secured by mortgages encumbering real property (the "Pledged
Mortgages"); and
WHEREAS, the Lender has agreed to make available to the Borrower a credit
facility (the "Facility") in the maximum principal amount of SEVENTEEN MILLION
AND 00/100 ($17,000,000.00) DOLLARS (the "Facility Amount"), provided, however,
that any no time shall the outstanding principal balance exceed sixty-five (65%)
percent of the principal due with respect to the Pledged Loans, calculated
exclusive of Defaulted Pledged Loans as defined in paragraph 8 (the "Borrowing
Base"), in lawful money of the United States, to be paid according to a certain
Promissory Note bearing even date herewith (the "Note"), together with any
additional sums due under the terms of the Note and this Agreement.
NOW, THEREFORE, in consideration of ten ($10.00) dollars, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Borrower hereby covenants and agrees with the Lender that:
1. The Borrower will pay the amounts due with respect to the Facility as
provided herein and in the Note.
2. A. The Borrower will keep in effect such insurance with respect to the
Collateral as the Lender may reasonably require and shall pay the premiums for
such insurance as same become due and payable. All policies of insurance (the
"Policies") shall be issued by an insurer acceptable to the Lender. The Borrower
will assign and deliver the Policies to the Lender. Not later than fifteen (15)
days prior to the expiration date of each of the Policies the Borrower will
deliver to the Lender satisfactory evidence of the renewal of each of the
Policies. Sums paid to the Lender by any insurer shall be retained and applied
by the Lender toward payment of the sums due with respect to the Facility in
such priority and proportions as the Lender in its discretion shall deem proper.
If the Lender shall receive and retain such insurance money, the sums due with
respect to the Facility shall be reduced only by the amount thereof received
after expenses of collection and retained by the Lender and actually applied by
the Lender in reduction of the outstanding amount of the Facility. The Lender
shall be entitled, in the event of other insurance and contribution between the
insurers, to receive from the insurance moneys to be paid such an amount as
would have been payable under the policy or policies held for the benefit of the
Lender in case there had been no contribution.
(b) The Borrower shall at all times cause the mortgagors under the Pledged
Mortgages (each a "Mortgagor" and collectively, the "Mortgagors") to keep the
properties encumbered thereby (each, a "Mortgaged Property" and collectively,
the "Mortgaged Properties") insured in accordance with the provisions of the
Pledged Mortgages, and shall provide Lender with evidence of not less than
fifteen (15) days prior to the expiration of such insurance policies, and at
such other times as Lender may reasonably request. In the event that the
Borrower is at any time entitled, pursuant to the provisions of any Pledged
Mortgage, to receive and retain the proceeds of any such insurance policy, such
proceeds shall be received by the Borrower as trustee for the Lender, and paid
to the Lender in reduction of the sums due with respect to the Facility (unless
the Lender shall agree to Substitute Collateral, as provided for in paragraph 8
hereof). If the Lender shall receive and retain such insurance money, the sums
due with respect to the Facility shall be reduced only by the amount thereof
received after reasonable expenses of collection and retained by the Lender and
actually applied by the Lender in reduction of the sums due with respect to the
Facility.
3. The Borrower will cause the Mortgagors to pay all taxes, assessments,
water rates, sewer rents and other charges, including, without limitation, vault
charges and license fees for the use of vaults, chutes and similar areas
adjoining the Mortgaged Properties, now or hereafter levied or assessed against
the Mortgaged Properties (the "Taxes") as same become due and payable. The
Borrower will deliver to the Lender, upon request, evidence satisfactory to the
Lender that the Taxes are not delinquent.
4. In the event that the Borrower shall collect escrow from any Mortgagor
to pay Taxes, insurance premiums, ground rents or any other sums payable by
Mortgagor, or in the event that the Borrower shall require any Mortgagor to
deposit any repair reserve, replacement reserve, leasing commission reserve,
interest reserve or other reserve or escrow of any kind or nature whatsoever in
connection with any Property, the Borrower shall cause all such amounts to be
maintained in one or more accounts with the Lender (except to the extent that
the documents executed in connection with the relevant Pledged Mortgage require
otherwise). In addition, to the extent permitted under the Pledged Mortgages,
the Borrower shall cause all tenant security deposit accounts with respect to
the Mortgaged Properties to be maintained with the Lender.
5. In the event that the Borrower shall receive any condemnation or similar
award with respect to any Mortgaged Property, such award shall be received by
the Borrower as trustee for the Lender, and paid to the Lender in reduction of
the sums due with respect to the Facility to the extent necessary to reduce the
outstanding principal balance of the Facility so that same shall be no more than
the Borrowing Base (unless the Lender shall agree to Substitute Collateral, as
provided for in paragraph 8 hereof). If the Lender shall receive and retain any
such condemnation award, the sums due with respect to the Facility shall be
reduced only by the amount thereof received after reasonable expenses of
collection and retained by the Lender and actually applied by the Lender in
reduction of the sums due with respect to the Facility. The Lender may apply any
such award to the repayment of the sums due with respect to the Facility whether
or not then due and payable.
6. All sums due and payable under the Facility will, at the option of the
Lender, become immediately due and payable, and no further funds will be
advanced under the Facility, in the event of a Change of Control of the Borrower
without the express written consent of the Lender, which may be granted or
withheld in the Lender's sole discretion. For purposes of this paragraph 6, a
"Change in Control" shall mean the occurrence of any event which causes Gould
Investors, L.P. (acting through its general partner, its officers and/or its
employees) to no longer control the management and operation of the Borrower, or
any event which causes the current principals of Gould Investors, L.P. to own,
directly or indirectly, less than 51% of the general partnership interests in
Gould Investors, L.P.
7 No material modifications or amendments shall be made with respect to any
Pledged Note, Pledged Mortgage or any other document executed in connection
therewith ("Other Document") without the express written consent of the Lender,
which may be granted or withheld in the Lender's sole discretion. In addition,
no extensions of the maturity date of any Pledged Loans shall extend such
maturity date beyond six (6) years from the origination thereof without the
express written consent of the Lender, which may be granted or withheld in the
Lender's sole discretion.
8. In the event that a default (other than escrow shortfalls in an amount
not in excess of two (2%) percent of the unpaid principal balance of the Pledged
Loan to which such escrow shortfall relates) shall occur under any Pledged Note,
Pledged Mortgage or any of the Other Documents executed in connection with any
Pledged Loans (after such default, a "Defaulted Pledge Loan"), and such default
shall continue for a period of sixty (60) days, the Defaulted Pledged Mortgage,
together with the Pledged Note and the Other Documents executed in connection
therewith, shall be reassigned to the Borrower and the Borrower shall
simultaneously be required to either (i) repay the principal amount of the
Facility to the extent necessary to cause the outstanding principal balance of
due with respect to the Facility to be less than or equal to the Borrowing Base
or (ii) replace the Defaulted Pledged Loans with a different Pledged Loans of
equivalent or greater comparable value, as determined by the Lender in its sole
discretion, which Pledged Loans shall (A) be secured by a first Pledged Mortgage
held by the Borrower or an affiliate of the Borrower encumbering income
producing properties located in the 48 contiguous continental United States or
the District of Columbia, (B) not be monetarily delinquent (other than escrow
shortages in an amount not in excess of two (2%) percent of the unpaid principal
balance of the Pledged Loan to which such escrow shortfall relates) for more
than sixty (60) days or otherwise in default, (iii) not have a significantly
impaired value (in the reasonable opinion of the Lender) and (iv) not have a
term in excess of three (3) years (the "Substitute Collateral"). The Pledged
Mortgage, Pledged Note and Other Documents with respect to any such Substitute
Collateral shall (i) be prepared on standard forms (the "Forms") which have been
preapproved by the Lender and (ii) be acceptable to Lender in all respects in
its reasonable discretion. Without limiting the generality of the foregoing,
prior to the Lender accepting any such Substitute Collateral, the Lender will
receive (i) the original Pledged Mortgage, Pledged Note and Other Documents with
respect to the Substitute Collateral, along with a written explanation of all
changes that have been made to the Forms in connection with such Substitute
Collateral, which changes shall be subject to review and approval by the Lender
and the Lender's counsel prior to the Lender accepting any such Pledged Loans
for assignment; (ii) an affidavit executed by a knowledgeable representative of
the Borrower, stating that such Pledged Loans or loans being assigned are not in
default, and setting forth the unpaid principal balance thereof; and (iii) an
executed Collateral Assignment with respect to such Substitute Collateral, in
the form annexed hereto as Exhibit B.
9. After request by the Lender, the Borrower, within ten (10) days and at
its expense, will furnish to the Lender a statement, duly acknowledged and
certified, setting forth the principal amount outstanding with respect to the
Facility, the rate of interest thereon, the date installments were last paid,
the offsets or defenses thereto, if any, and that the Note and this Agreement
have not been modified or, if modified, giving particulars of such modification.
10. Any notice, demand, statement, request or consent made hereunder shall
be in writing and will be deemed given when postmarked, addressed and mailed to
the address, as set forth above, of the party to whom such notice is to be
given, or to such other address as the Borrower or the Lender, as the case may
be, shall designate in writing in the manner hereinabove set forth.
11. The Lender shall assign any Pledged Note, Pledged Mortgage and Other
Documents (i) back to the Borrower upon (A) payment to the Lender of an amount
sufficient to reduce the outstanding principal amount outstanding under the
Facility (calculated exclusive of Defaulted Loans) to an amount not less than
the Borrowing Base, plus accrued and unpaid interest thereon or (B) delivery of
Substitute Collateral meeting the requirements of paragraph 8 hereof to the
Lender and the acceptance of same by the Lender or (ii) to or at the direction
of the Mortgagor, upon the payment to the Lender of all amounts due with respect
to the applicable Pledged Loans. The Borrower will pay the Lender's reasonable
expenses in connection with such assignment, including, but not limited to,
recording charges and reasonable attorneys fees.
12. If any law or ordinance is enacted or adopted which imposes a tax,
either directly or indirectly, on the Note, this Agreement or the Facility, the
Borrower will pay such tax with interest and penalties thereon, if any. In the
event that the Lender shall be advised by counsel chosen by it that the payment
of such tax or interest and penalties by the Borrower would be unlawful, taxable
to the Lender or unenforceable or would provide the basis for a defense of
usury, then and in that event the Lender shall have the option, by written
notice of not less than ninety (90) days, to declare all amounts then
outstanding with respect to the Facility immediately due and payable and to
refuse to make any additional advances with respect to the Facility.
13. If at any time the United States of America, any state thereof or any
subdivision of any such state shall require revenue or other stamps to be
affixed to the Note or this Agreement, or shall impose any other tax or charge
on the same, the Borrower will pay for the same with interest and penalties
thereon, if any.
14. The Borrower will keep proper books of records and account with respect
to their operations in accordance with generally accepted accounting principles,
and will furnish to the Lender with annual accounting statements within ninety
(90) days after the end of each calendar year, in form satisfactory to the
Lender, which shall disclose in reasonable detail all earnings and expenses of
the Borrower, certified by independent certified public accountants of
recognized standing satisfactory to the Lender. In addition, the Borrower shall
submit to the Lender within 15 days of the end of each calendar month (a) a
monthly aging report with respect to the Pledged Loans, which aging report shall
be in form and substance satisfactory to the Lender in its sole discretion, (b)
a schedule of any Pledged Loans modified or extended during such month, and a
description of such modification or extension and (c) a description of any
uncured monetary or other material events of default under any of the Pledged
Facility Documents. Additionally, the Borrower will submit to the Lender a
quarterly borrowing base and detailed portfolio information, in the form
previously submitted to and approved by the Lender.
15. The Borrower will observe and perform each and every term to be
observed or performed by the Borrower pursuant to the terms of any agreement or
recorded instrument affecting or pertaining to the Collateral.
16. The Lender shall not make an advance with respect to the Facility
unless and until, with respect to each advance, the Borrower has satisfied the
following conditions precedent:
(a) The Lender shall have received all documents and agreements comprising
the Collateral, including without limitation an assignment of each Pledged
Mortgage and each Pledged Note from the Borrower to the Lender in form annexed
hereto as Exhibit B.
(b) Receipt of Borrowing Notice. The Lender shall have received, no later
than 12:00 noon (New York City time) on the Business Day on which the Loan is
requested to be made hereunder, a borrowing notice (a "Borrowing Notice") from
an authorized officer of Borrower, specifying the amount of the requested
advance, and the date on which it is requested to be made. Each Borrowing Notice
shall be in writing signed by Borrower, shall certify the then outstanding
principal amount of all existing Pledged Loans under the Facility, and certify
that both before and after funding the requested advance, Borrower continues to
be in compliance with the covenants, terms and conditions set forth in the
Agreement.
(c) All of the representations and warranties of Borrower contained herein
and in each other Facility Document shall be true and correct in all material
respects to the same extent as though made on and as of any date of funding each
advance.
(d) No Event of Default or event which upon notice, lapse of time or both,
would constitute an Event of Default shall exist or have occurred or shall
result from the making of the requested advance, and no Event of Default or
event which upon notice, lapse of time or both, would constitute an Event of
Default shall exist or have occurred under or pursuant to that certain Revolving
Credit Agreement dated February 16, 2005 entered into between Borrower and
Lender, securing Borrower's obligations under that certain Secured Promissory
Note dated February 16, 2005 in the principal sum of Eighty Five Million and
00/100 ($85,000,000.00 )Dollars made by Borrower in favor of Lender (the
"$85,000,000.00 Line of Credit Documents").
(e) No law or regulation shall prohibit, and no order, judgment or decree
of any court, arbitrator or governmental authority shall enjoin or restrain, the
Lender from making the requested advance.
(f) After giving effect to the amount of the requested advance, the
aggregate outstanding principal balance under the Facility shall not exceed the
lesser of (x) the Borrowing Base and (y) Facility Amount.
(g) The Borrower shall have paid all of the Lender's reasonable fees and
expenses, including, without limitation, the reasonable legal fees and expenses
of the Lender's counsel incurred in connection with the acceptance, review and
retention of the documents from time to time delivered to the Lender as
Collateral.
17. To secure the Obligations (as hereinafter defined), the Borrower hereby
grants to the Lender a first priority perfected and continuing security interest
in and to the following property of the Borrower now owned or hereafter
acquired, wherever located and of every kind, nature and description, including
but not limited to: (i) all Pledged Loans; (ii) all Supporting Obligations (as
defined under the UCC); (iii) the Pledged Notes assigned or negotiated by
Borrower to the Lender pursuant to this Agreement; (iv) the Pledged Mortgages;
(v) an assignment of each Pledged Mortgage from the Borrower to the Lender in
recordable form but unrecorded, along with the original recorded intervening
assignments (or if the original assignments have not been returned from the
applicable recording office, a copy of the assignments certified by Borrower or
the settlement agent to be a true and complete copy of the original assignment
submitted for recording); (vi) all monies, securities or other property and
deposit accounts of the Borrower held by the Lender or any of its affiliates;
(vii) all books and records relating to the business of the Borrower including
any computer programming data relating to the foregoing; (viii) each of the
Other Documents; (ix) each title policy, title binder or commitment to issue
title insurance insuring the Pledged Mortgages and the lien thereof, (x) each
policy of hazard insurance, rental interruption insurance, boiler insurance,
liability insurance or other forms of insurance now or hereafter issued with
respect to the Mortgaged Properties and improvements encumbered by the Pledged
Mortgages and the proceeds thereof, in which policies and proceeds the Borrower
shall have an interest as a mortgagee or otherwise; (xi) all deposit accounts,
credits, moneys, property or other security of any nature whatsoever now or
hereafter available to the Borrower for application in reduction, in whole or in
part, of the Pledged Loans; (xii) all accessions and additions to, substitutions
and replacements, products and proceeds of each of the foregoing in any form
whatsoever; and (xiii) the Collateral (for the purposes of this subsection
(xiii) only, the term "Collateral" shall have the meaning ascribed to same under
that certain Revolving Line of Credit Agreement dated February 16, 2005, entered
into between Borrower and the Lender) (all of the foregoing being hereinafter
referred to collectively as the "Collateral"). As used in this Agreement,
"Obligations" shall mean all obligations, liabilities and indebtedness of the
Borrower to the Lender, whether now existing or hereafter created, absolute or
contingent, direct or indirect, due or not, whether created directly or acquired
by assignment or otherwise, including without limitation, all obligations,
liabilities, and indebtedness of the Borrower arising under or relating to this
Agreement, the Notes or any other Loan Document, which shall include, without
limitation, all obligations, liabilities and indebtedness of the Borrower with
respect to the principal of and interest on the Loans, and all fees, costs,
expenses and indemnity obligations of the Borrower hereunder, or under any other
Loan Document.
18. The Borrower represents and warrants to the Lender as follows:
(a) The Borrower owns the Collateral free and clear of any lien, security
interest, charge or encumbrance, except such security interest to which the
Lender has consented in writing. No effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is on
file in any recording office, except such as may have been filed in favor of the
Lender relating to this Agreement;
(b) This Agreement creates a valid and perfected first priority security
interest in the Collateral, securing the payment of the Obligations, and all
filings and other actions necessary or desirable to perfect and protect such
security interest have been duly taken;
(c) No authorization, approval or other action by, and no notice to or
filing with, (except for the filing of UCC-l financing statements in appropriate
jurisdictions) any governmental authority or regulatory body is required either
(i) for the grant by the Borrower of the security interest granted hereby or for
the execution, delivery or performance of this Agreement by the Borrower; or
(ii) for the perfection of or the exercise by the Lender of its rights and
remedies hereunder;
(d) The Borrower (i) is a Massachusetts business trust in good standing
under the laws of the Commonwealth of Massachusetts and is duly qualified in all
other jurisdictions wherein the nature of the Borrower's business or the
character of its properties make qualification necessary; (ii) has the power and
authority to carry on its business as now conducted and to own or hold under
lease the assets and properties it purports to own or hold under lease; (iii) is
duly qualified, licensed or registered to transact its business and is in good
standing in every jurisdiction in which failure to be so qualified, licensed or
registered could have a Material Adverse Effect as hereinafter defined; (iv) has
the power and authority to execute and deliver this Agreement, and each of the
other Facility Documents to which it is or will be a party and to perform all
its obligations thereunder; (v) no action by, and no notice to or filing with
(except for the filing of UCC-1 financing statements in appropriate
jurisdictions, and except for the requirement that the Borrower file a Form 8-K
with the Securities and Exchange Commission upon the signing of this Agreement),
any governmental authority or regulatory body is required either for the grant
by the Borrower of the security interest granted hereby or for the execution,
delivery or performance of this Agreement by the Borrower; or for the perfection
of or the exercise by the Lender of its rights and remedies hereunder and (vi)
has its executive office and principal place of business at 60 Cutter Mill Road,
Suite 303, Great Neck, New York 10021.
(e) The execution and delivery by the Borrower of this Agreement, the Note
and each of the other documents and certificates executed in connection herein
on the date hereof or from time to time hereafter, (collectively, the "Facility
Documents") to which it is or will be a party and the performance by the
Borrower of all of its obligations thereunder: (i) will not violate or be in
conflict with (A) any provision of applicable law (including, without
limitation, any applicable usury or similar law) or (B) any order, rule or
regulation of any court or other governmental authority; (ii) will not violate,
be in conflict with, result in a breach of or constitute default (with or
without the giving of notice or the passage of time or both) under any material
instrument, indenture, agreement or other obligation to which it is a party or
by which it or any of its assets and properties is or may be bound or subject;
and (iii) except as specifically contemplated by this Agreement, will not result
in the creation or imposition of any lien, charge or encumbrance of any nature
upon any of its assets and properties. This Agreement and each of the other
Facility Documents to which the Borrower is, or will be a party, when executed
and delivered, will be the legal, valid and binding obligation of the Borrower,
enforceable in accordance with its respective terms and provisions.
(f) There are no actions, suits or proceedings (whether or not purportedly
on behalf of the Borrower) pending or, to the best of the Borrower's knowledge,
threatened or contemplated at law, in equity, in arbitration or before any
authority involving or affecting: (i) the Borrower that, if adversely
determined, could have a material adverse effect; (ii) the Obligations; (iii)
the Collateral; or (iv) this Agreement and the other Facility Documents; nor to
the best of the Borrower's knowledge is it in default with respect to any
judgment, writ, injunction, decree, rule or regulation of any authority, which
default could have or has had a Material Adverse Effect.
(g) Any financial statements of the Borrower provided to the Lender in
connection with this transaction: (i) were prepared in good faith to be accurate
statements of the Borrower's business, (ii) show all indebtedness and other
liabilities, direct or contingent, of the Borrower as of the date thereof
(including, without limitation, liabilities for taxes and material commitments),
and (iii) are complete, accurate and a fair presentation, in all material
respects, of the Borrower's financial condition as of the date thereof and
results of operations for the period covered thereby. Since the date of such
financial statements, no event or events have occurred that individually or in
the aggregate have had a Material Adverse Effect.
(h) Each of the Pledged Notes, the Pledged Mortgages, the Other Security
Documents and each instrument, receivable, document of title, contract and other
intangible included in the Collateral is valid, legally binding and enforceable
in accordance with its respective terms and provisions, does not violate or
conflict with any provision of applicable law, has not been amended or modified
in any material respect or prepaid, and is assignable and has been duly assigned
to the Lender in accordance with the terms hereof; and, to the best of the
Borrower's knowledge, each such instrument or other document was executed by
persons of full age and legal capacity and contains no forgeries or unauthorized
signatures.
(i) No representation or warranty of the Borrower made or contained in this
Agreement or any other Facility Documents and no report, statement, certificate,
schedule or other document or information furnished or to be furnished by or on
behalf of the Borrower in connection with the transactions contemplated by this
Agreement and the other Facility Documents contains or will contain a
misstatement of a material fact or omits or will omit to state a material fact
required to be stated therein in order to make it, in the light of the
circumstances under which made, not misleading.
(j) That, the Borrower will furnish to the Lender from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection herewith and in such form as the Lender may
reasonably request. Exhibit A hereto shall be deemed to be supplemented, updated
and amended, effective upon funding of each Loan, to add each new Pledged Loan
relating thereto, to be part of the Collateral listed thereon. Exhibit A shall
be deemed to be amended automatically and immediately upon the addition to,
substitution or replacement of the Collateral pledged by Borrower hereunder to
Lender, and such addition, substitution or replacement shall be further
evidenced by receipt by the Lender of the monthly summary statements as
described herein in Paragraph 14.
(k) The owners of the property covered by the Pledged Mortgage ("Owners")
are and (at the funding of any new Pledged Loan by Borrower, shall be) the fee
owners of the premises encumbered by the Pledged Mortgages and the obligor under
the Pledged Notes, and notices may be sent to such owners at the addresses set
forth in Exhibit A to this Agreement.
(l) The Pledged Mortgages constitute a valid and enforceable lien covering
the Premises.
(m) There are no defenses, counterclaims, set-offs, rights of recoupment,
abatements or other claims or determinations of any nature whatsoever with
respect to the Pledged Notes, the Pledged Mortgages or the indebtedness
evidenced and secured thereby or with respect to any other instruments or
documents evidencing, securing or guaranteeing payment of the Pledged Loans, the
Other Documents and all of the provisions of the Pledged Notes, the Pledged
Mortgages and the Other Documents are in full force and effect.
(n) There are no defaults existing under the Pledged Notes, the Pledged
Mortgages or the Other Documents, which have remained uncured for a period of
more than sixty (60) days.
(o) No condemnation or eminent domain proceedings have been commenced with
respect to the Mortgaged Properties and no such condemnation or eminent domain
proceedings are about to be commenced.
(p) The Pledged Notes, the Pledged Mortgages and the Other Documents and
the provisions thereof have not been amended, modified or altered in any manner
whatsoever.
(q) The Borrower knows of no fact or circumstance which would affect the
enforceability, validity or priority of the Pledged Notes, the Pledged Mortgages
or the Other Security Documents, other than those facts or circumstances set
forth in the title policies, if any, insuring the Pledged Mortgages and the lien
thereof or which would affect the ability of the Owner(s) and any other person
or parties liable under the Pledged Notes, the Pledged Mortgages and the Other
Security Documents to continue to perform and observe the terms, covenants and
provisions of the Pledged Notes, the Pledged Mortgages and any Other Security
Documents. The Borrower represents and warrants that as of the date hereof, the
aggregate unpaid principal balance of the Pledged Notes is Twenty Million and
00/100 ($20,000,000.00) Dollars.
19. The Borrower covenants and agrees that, from the date hereof and until
the Obligations have been fully paid and satisfied, unless the Lender shall
consent otherwise in a writing signed by the Lender:
(a) Borrower shall monitor and remain in compliance with the Borrowing Base
limitations set forth in this Agreement.
(b) Upon request of the Lender, from time to time, the Borrower shall
permit representatives designated by the Lender to (i) have access to the
premises of the Borrower, the books and records of the Borrower and the
Collateral, (ii) make copies of, or excerpts from, those books and records and
(iii) discuss the Collateral or the accounts, assets, business, operations,
properties or condition, financial or otherwise, of the Borrower with its
officers, directors, employees and accountants. The Lender agrees to keep such
documents confidential and shall not disclose any such information except: (w)
pursuant to court order; (x) as required by any regulatory agency; (y) in
connection with any action or proceeding to enforce its rights in connection
with the Facility Documents or otherwise; or (z) to any assignee or participant
in the Pledged Loans or the Facility.
(c) The Borrower shall defend and enforce its right, title and interest in
and to any portion of (i) the Collateral, or (ii) its assets and properties the
loss of which could have a Material Adverse Effect, and the Borrower, at its
sole expense, shall defend the Lender's right, title and interest in and to the
Collateral, each against all manner of claims and demands on a timely basis to
the full extent permitted by applicable law.
(d) The Borrower shall not, without the prior written approval of the
Lender, directly or indirectly consolidate or merge with or acquire control of
any other person or entity or offer or agree to do so.
(e) The Borrower shall execute and deliver, upon the Lender's written
request, any reasonable notice, statement, instrument, document, agreement or
other papers and/or to perform any act reasonably requested by the Lender which
may be necessary to create, perfect, preserve, validate or otherwise protect any
security interest granted pursuant hereto or to enable the Lender to exercise
and enforce its rights hereunder or with respect to such security interest.
(f) The Borrower will furnish to the Lender from time to time statements
and schedules further identifying and describing the Collateral and such other
reports in connection herewith and such other documents and information with
respect to any Pledged Loan, all in such form as the Lender may reasonably
request. The Borrower further agrees to provide the Lender with such information
as the Lender may from time to time request with respect to the location of any
of its respective places of business. In addition, the Lender will be notified
promptly in writing of any change in its legal name, its jurisdiction or form of
organization, or the location of any office where records concerning any of the
accounts that constitute a portion of the Collateral are maintained or of a
change in location of the Borrower's principal place of business.
(g) The Borrower shall notify the Lender of the occurrence of any material
default under the Pledged Notes and/or the Pledged Mortgages or of the
occurrence of any event, which but for the passage of time or the giving of
notice or both, would constitute a material default under the Pledged Notes
and/or the Pledged Mortgages, on the same day that the Borrower shall first be
given notice of or shall first become aware of the occurrence of any such
default or event and the Borrower shall immediately upon request by the Lender
give any notice which shall be required to cause any such event to constitute a
default under the Pledged Notes and/or the Pledged Mortgages (any such default
or event being hereinafter referred to as a "Collateral Event of Default").
(h) The Borrower shall not, without the prior consent of the Lender, enter
into any agreement, which shall materially adversely affect the Collateral or
which shall release from the lien of the Pledged Mortgages any portion of the
property presently covered thereby or which shall release any party, now or
hereafter liable or guaranteeing the payment of any portion of the indebtedness
evidenced and secured by the Pledged Notes and the Pledged Mortgages or
performance of the terms, covenants and provisions of the Pledged Notes, the
Pledged Mortgages or the Other Documents or which shall release any other
security of any nature whatsoever, now or hereafter, held by the Borrower for
the payment of any portion of the indebtedness evidenced and secured by the
Pledged Notes and the Pledged Mortgages.
(i) At all times throughout the term hereof, the Borrower shall maintain
cash or readily marketable securities in an aggregate amount of not less than
Twenty Million Four Hundred Thousand and 00/100 ($20,400,000.00) Dollars.
(j) The Borrower shall maintain a Debt Service Coverage Ratio of not less
than 1.65:1.00 at the end of each fiscal quarter. "Debt Service Coverage Ratio"
shall mean, for any four fiscal period, the ratio of (a) net income, plus to the
extent deducted in determining net income, the sum of (A) interest expense, and
(B) all depreciation and amortization expenses or charges to (b) the sum of (i)
interest expense plus (ii) the scheduled installments of principal on all
indebtedness (including capital leases) having a final maturity of one year or
more from the date of incurrence thereof and the outstanding principal amount of
the Pledged Loans. All of the foregoing categories shall be determined with
respect to the Borrower in accordance with generally accepted accounting
principles applied on a consistent basis and shall be calculated (without
duplication) over the four fiscal quarters then most recently ended.
(k) Borrower shall not permit at any time its ratio of shareholder equity
to indebtedness for borrowed money, determined in accordance with generally
accepted accounting principles applied on a consistent basis, to be less than
1.30:1.00.
(l) Borrower shall deliver to the Lender within in ten days of Lender's
request a certificate certifying the Borrower's compliance with the covenants
set forth in the preceding clauses (i), (j) and (k), which certification shall
show the quantitative computation of the financial covenants set forth in those
clauses.
20. The outstanding amount due with respect to the Facility, together with
all accrued and unpaid interest thereon and all other sums due in connection
therewith, shall become due, and the Lender shall have no obligation to make any
further advances with respect to the Facility, at the option of the Lender upon
any one or more of the following events (each, an "Event of Default"):
(a) if any payment due hereunder is not paid within ten (10) days after the
same is due;
(b) Intentionally omitted;
(c) if the Policies are not kept in full force and effect or if the
Policies are not assigned and delivered to the Lender upon request;
(d) if the Borrower does not furnish a statement, in the manner provided
herein, of the amount then due and owing with respect to the Facility and the
offsets or defenses thereto, if any;
(e) if without the consent of the Lender any material modification,
amendment or extension is made to any of the Pledged Notes, the Pledged
Mortgages and/or the Other Documents;
(f) if, within ninety (90) days of the occurrence a Collateral Event of
Default, the Borrower shall not have complied with the provisions of paragraph 9
hereof.
(g) if any covenant, representation or warranty of the Borrower or of any
person (a "Guarantor") guaranteeing payment of the sums due with respect to the
Facility or any portion thereof or the performance by the Borrower of any of the
terms, this Agreement or the Note made herein or in any such guaranty or in any
certificate, report, financial statement or other instrument furnished in
connection with the making of the Note, this Agreement or any such guaranty,
shall prove false or misleading in any material respect;
(h) if the Borrower or any guarantor shall make an assignment for the
benefit of creditors;
(i) if a receiver, liquidator or trustee of the Borrower or of any
guarantor shall be appointed or if the Borrower or any guarantor shall be
adjudicated a bankrupt or insolvent or if any petition for bankruptcy,
reorganization or arrangement pursuant to the Federal Bankruptcy Code or any
similar federal or state statute shall be filed by or against the Borrower or
any guarantor or if any proceeding for the dissolution or liquidation of the
Borrower or of any guarantor shall be instituted and, if such appointment,
adjudication, petition or proceeding was involuntary and not consented to by the
Borrower or such guarantor, upon the same not being discharged, stayed or
dismissed within ninety (90) days;
(j) if the Borrower does not reimburse the Lender upon demand for all
reasonable expenses incurred in remedying any default of the Borrower hereunder
or in appearing in, defending or bringing any action or proceeding to protect
the Lender's interest in the Collateral, including reasonable attorneys' fees,
with interest as provided herein;
(k) the Borrower shall fail to comply with the requirements of paragraph
19(i), (j) or (k) hereof or if for fifteen (15) days after notice from the
Lender the Borrower shall continue to be in default under any other covenant of
the Borrower hereunder or under the Note (not covered by any other clause of
this paragraph 20);
(l) if, after a default thereunder, the Lender elects to enforce its rights
under the Note or any instrument which may be held by the Lender as additional
security for the repayment of the sums due with respect to the Facility; or
(m) if an Event of Default shall exist or have occurred under or pursuant
to the $85,000,000.00 Line of Credit Documents. By executing this Agreement, the
Borrower agrees that an Event of Default hereunder shall be deemed an Event of
Default under the $85,000,000.00 Line of Credit Documents.
21. Upon the occurrence of an Event of Default, the Lender shall have all
of the rights and remedies provided to a secured party by the Uniform Commercial
Code in effect in New York State at that time. The Lender shall also have the
right to set-off against any sums owed to the Lender and reduce to the Lender's
immediate possession any and all amounts, balances, proceeds and funds held by
the Lender on any account of the Borrower or its affiliates maintained by the
Lender. Furthermore, in any such event, to the extent permitted under applicable
law, full power and authority are hereby given to the Lender to sell, assign,
and deliver the whole of the Collateral or any part thereof, at any time at any
broker's board, or at public or private sale, at the Lender's option, and no
delay on the Lender's part in exercising any power of sale or any other rights
or options hereunder, shall constitute a waiver thereof, or limit or impair the
Lender's right to take any action or to exercise any power of sale or any other
rights hereunder, without notice or demand, or prejudice the Lender's rights as
against the Borrower in any respect. In addition thereto, the Borrower further
agrees that (a) written notice mailed to the Borrower at its regular address
given ten (10) days prior to the date of public sale of any of the Collateral
subject to the security interest created herein or prior to the date after which
private sale or any other disposition of said Collateral will be made shall
constitute reasonable notice; (b) in the event of the sale or other disposition
of any such Collateral the Lender may apply the proceeds of any such sale or
disposition to the satisfaction of the Lender's reasonable attorneys' fees,
legal expenses, and other reasonable costs and expenses incurred in connection
with the Lender's taking, re-taking, holding, preparing for sale, and selling of
the Collateral; (c) without precluding any other methods of sale, the sale of
Collateral shall have been made in a commercially reasonable manner if, among
other ways, it is conducted in conformity with reasonable commercial practices
of creditors disposing of similar property; (d) the Lender may require the
Borrower to assemble the Collateral, taking all necessary or appropriate action
to preserve and keep it in good condition and make the Collateral available to
the Lender at a place and time convenient to all parties, all at the expense of
the Borrower; (e) the Lender shall have the right to: (i) prohibit the Borrower
from taking any action otherwise permitted by this Agreement and the other
Facility Documents; (ii) notify each of the Owners, mortgagors, obligors,
lessees, custodians and other parties with respect to or interested in any item
of the Collateral of the Lender's interest therein or of any action proposed to
be taken with respect thereto, and direct one or more of those parties to make
all payments, distributions and proceeds otherwise payable to the Borrower with
respect thereto directly to the Lender or its order until notified by the Lender
that all the Obligations have been fully paid and satisfied; (iii) receive and
retain all payments, distributions and proceeds of any kind with respect to any
and all of the Collateral; (iv) take any action with respect to the offer, sale,
lease or other disposition, and delivery of the whole of, or from time to time
any one or more items of, the Collateral, including, without limitation: (A) to
sell, assign, lease or otherwise dispose of the whole of, or from time to time
any part of, the Collateral, for cash, credit or any other asset or property,
for immediate or future delivery, and for such consideration and upon such terms
and subject to such conditions as the Lender in its sole and absolute discretion
may determine, and the Lender may purchase (the consideration for which may
consist in part of cancellation of indebtedness) or any other person may
purchase the whole or any one or more items of the Collateral so sold free and
clear of any and all rights, powers, privileges, remedies and interest of the
Borrower (which the Borrower has expressly waived); or (B) to postpone or
adjourn any such auction, sale or other disposition or cause the same to be
postponed or adjourned from time to time to a subsequent time and place or
abandon or cause the abandonment of the same, all without any advertisement or
other notice thereof; (v) transfer or cause the transfer of the ownership of all
or any part of the Collateral to its own name and have such transfer recorded in
any jurisdiction(s) and publicized in any manner deemed appropriate by the
Lender; and (vi) in addition to, and not by way of limitation of, any of the
rights specified above, exercise or enforce any and all provisions of applicable
law, whether as a secured party in possession of collateral or otherwise; (f)
the Lender shall collect the cash proceeds received from any sale or other
disposition or from any other source in connection with such collection and sale
or disposition of Collateral and apply the same in accordance with the terms and
provisions of this Agreement; (g) any funds received from or on behalf of the
Borrower (whether pursuant to the terms and provisions of this Agreement or
otherwise) by the Lender and in the event any of the Pledged Notes are repaid to
the Borrower, any funds received by the Lender as a result thereof, shall be
applied to the following items in such manner and order as the Lender may
determine in its sole and absolute discretion: (i) the payment to or
reimbursement of the Lender for any expenses for which it is entitled to be paid
or reimbursed pursuant to any of the provisions of this Agreement and the other
Facility Documents (including reasonable attorneys' disbursements, expenses and
fees); (ii) the payment of accrued and unpaid interest on the Obligations; (iii)
the payment of the outstanding principal on the Obligations; (iv) the
establishment or maintenance of any cash collateral required or permitted under
this Agreement or any other Facility Documents; and (v) the payment in full of
all other Obligations under this Agreement and the other Facility Documents. In
the event any funds remain after satisfaction in full of the Obligations, then
the remainder shall be returned to the Borrower, subject, however, to any rights
or interest the Lender may have therein under any other instrument, agreement or
document or applicable law. All advances and payments made pursuant to this
Agreement and the other Facility Documents may be recorded by the Lender, and
such records shall be presumptive as to the existence and amounts thereof; (h)
if the amount of all proceeds received with respect to any liquidation of the
Collateral that shall be applied to payment of the Obligations shall be
insufficient to pay and satisfy all of the Obligations in full, the Borrower
acknowledges that it shall remain liable for any deficiency, together with
interest thereon and costs of collection thereof (including reasonable
attorneys' disbursements, expenses and fees), in accordance with the terms and
provisions of this Agreement and the other Facility Documents; (i) the Borrower
hereby expressly waives, to the extent such waiver is permitted by applicable
law, any and all rights, powers, privileges, remedies and interest accorded to
it now or at any time in the future under applicable law respecting (y)
counterclaim, set-off, recoupment, abatement, reduction, and other claims and
determinations against the Lender and any other person, and (z) notice,
appraisal, evaluation, stay, extension, moratorium, marshaling of assets,
exemption and equity of redemption, provided, however, that none of the terms
and provisions of this Agreement and the other Facility Documents are intended
to confer upon the Lender any right, power, privilege, remedy or interest not
permissible under applicable law notwithstanding the foregoing waivers; and (j)
the rights, powers, privileges, remedies and interest conferred upon the Lender
in respect of the Collateral by this Agreement, the other Facility Documents and
applicable law are solely to enable the Lender to protect and preserve the
Collateral, as well as to realize upon it in accordance with the Agreement and
the other Facility Documents, all in such manner as the Lender in its discretion
may elect, and shall not impose upon the Lender any duty or other obligation to
exercise or enforce any such right, power, privilege, remedy or interest. Any
exercise or other enforcement of any such right, power, privilege, remedy or
interest, if undertaken by the Lender, in its discretion, may be delayed,
discontinued or otherwise not pursued or exhausted for any reason whatsoever
(whether intentionally or otherwise). Without limiting the generality of the
foregoing, the Lender shall be under no duty or obligation to protect or
preserve any of the Collateral, perform any obligation or duty of the Borrower
under any of the Collateral, or take any action to mitigate or otherwise reduce
any damage or other loss or to otherwise collect, exercise or enforce any claim,
right or other interest arising under or with respect to the Collateral.
22. After the occurrence of an Event of Default, which shall then be
uncured or unremedied, the Lender shall have the unconditional right to notify
Owners of the security interest granted and assigned by the Borrower to the
Lender pursuant to this Agreement and to direct Owners to make all payments of
sums due or hereafter becoming due pursuant to the Pledged Notes and/or the
Pledged Mortgages directly to the Lender. The Borrower shall, upon request by
the Lender, sign and consent to all notices and directions given by the Lender
to Owners pursuant to this paragraph. The Lender's cost of collection and
enforcement, including reasonable attorneys' fees and out-of-pocket expenses,
shall be borne solely by the Borrower. Such costs of collection and enforcement
shall be paid by the Borrower to the Lender, on demand, and shall be secured by
this Agreement and the other Facility Documents. The Lender shall have the
unconditional right, at its option, to apply all sums received by the Lender
pursuant to this paragraph against the payment of sums outstanding with respect
to the Facility in such priority and proportions as the Lender, in its
discretion, shall deem proper. The balance of any sums held by the Lender, if
any, after payment of the outstanding Loans in full shall be paid over to the
Borrower by the Lender.
23. The Lender is authorized, at the Lender's option, and is hereby
irrevocably designated as attorney-in-fact with full power of substitution, as
the Borrower's true and lawful attorney-in- fact with full irrevocable power and
authority in the place and stead of the Borrower and in the name of the Borrower
or in the Lender's own name, and the Borrower hereby gives the Lender the power
and right, on behalf of the Borrower, without notice to or assent by the
Borrower to do the following:
(a) File any financing statements or amendments thereto in any jurisdiction
the Lender deems appropriate with respect to any of the Collateral; and the
Borrower agrees to reimburse the Lender for the reasonable expense of any such
filing, including reasonable attorneys' fees.
(b) After the occurrence of an Event of Default, which shall then be
uncured or unremedied, ask, demand, collect, sue for, recover, receive,
compound, and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral;
(c) receive, endorse and collect any drafts or other instruments,
documents, chattel paper or other evidence of indebtedness, supporting
obligations or letters of credit or other installment made payable to the
Borrower in connection with any of the Collateral and to credit to the account
of the Borrower with the proceeds thereof;
(d) After the occurrence of an Event of Default, which shall then be
uncured or unremedied, file any claims or take any action or institute any
proceeding which the Lender deems necessary, including, but not limited to, a
foreclosure proceeding or desirable for the collection of any Collateral or
otherwise to enforce or protect its rights with respect to the Collateral,
including but not limited to any notification to any account debtors of the
Borrower;
(e) to pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against the Collateral, to effect
any repairs insurance called for by the terms of this Agreement and to pay all
or any part of the premiums therefor and the costs thereof; and
(f) After the occurrence of an Event of Default, which shall then be
uncured or unremedied, (A) to direct any party liable for any payment under any
of the Collateral to make payment of any and all moneys due, and to become due
thereunder, directly to the Lender or as the Lender shall direct; (B) to receive
payment of and receipt for any and all moneys, claims and other amounts due, and
to become due at any time, in respect of or arising out of any Collateral; (C)
to sign and indorse any invoices, assignments, verifications and notices in
connection with accounts and other documents constituting or relating to the
Collateral; (D) to commence and prosecute any suits, actions or proceedings at
law or in equity in any court of competent jurisdiction to collect the
Collateral or any part thereof and to enforce any other right in respect of any
Collateral; (E) to defend any suit, action or proceeding brought against the
Borrower with respect to any Collateral; (F) to settle, compromise or adjust any
suit, action or proceeding described above and, in connection therewith, to give
such discharges or releases as the Lender may deem appropriate; (G) to license
or, to the extent permitted by an applicable license, sublicense, whether
general, special or otherwise, and whether on an exclusive or non-exclusive
basis, any patent or trademark, throughout the world for such term or terms, on
such conditions, and in such manner, as the Lender shall in the Lender's sole
discretion determine; and (H) generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though the Lender were the absolute owner thereof for all
purposes, and to do, at the Lender's option and the Borrower's expense, at any
time, or from time to time, all acts and things which the Lender reasonably
deems necessary to protect, preserve or realize upon the Collateral and the
Lender's lien therein, in order to effect the intent of this Agreement, all as
fully and effectively as the Borrower might do.
(i) The Borrower hereby ratifies, to the extent permitted by law, all that
the attorneys acting pursuant to this paragraph shall lawfully, and in good
faith do or cause to be done by virtue hereof. The power of attorney granted
pursuant to this paragraph 23 is a power coupled with an interest and shall be
irrevocable until the Obligations are indefeasibly paid in full.
(ii) The powers conferred on the Lender hereunder are solely to protect the
Lender's interest in the Collateral and shall not impose any duty upon the
Lender to exercise any such powers. The Lender shall be accountable only for
amounts that the Lender actually receives as a result of the exercise of such
powers and neither the Lender nor any of its officers, directors, employees or
agents shall be responsible to the Borrower for any act or failure to act,
except for the Lender's own gross negligence or willful misconduct.
(iii) The Borrower also authorizes the Lender, at any time and from time to
time upon an Event of Default (i) to communicate in the Lender's own name with
any party to any contract with regard to the assignment of the right, title and
interest of the Borrower in and under the contracts hereunder and other matters
relating thereto, and (ii) to execute, in connection with the sale provided for
in this Agreement, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
24. Upon the occurrence of an Event of Default and upon the Lender
exercising its option to declare all sums due with respect to the Facility
immediately due and payable by reason thereof, the Borrower will pay, from the
date of that event, interest at the rate of 24% per annum (the "Default Rate").
Notwithstanding anything contained in this paragraph 24 to the contrary, except
for items set forth in paragraph 26, Lender shall provide Borrower with thirty
(30) days written notice of defaults hereunder prior to the imposition of the
default rate set forth 5above.
25. If the Borrower fails to make any payment or to do any act as herein
provided, the Lender may, but without any obligation to do so and without notice
to or demand on the Borrower and without releasing the Borrower from any
obligation hereunder, make or do the same in such manner and to such extent as
the Lender may deem necessary to protect the security hereof, the Lender being
authorized to appear in, defend or bring any action or proceeding to protect its
interests in the Mortgaged Property or collect the sums due with respect to the
Facility. The cost and expense thereof (including reasonable attorneys' fees),
with interest as provided in this paragraph, shall be due from Borrower upon
demand made by the Lender. All such costs and expenses incurred by the Lender in
remedying such default or in appearing in, defending or bringing any such action
or proceeding shall be paid with interest at the Default Rate for the period
after notice from the Lender that such cost or expense was incurred to the date
of payment to the Lender. All such costs and expenses incurred by the Lender
pursuant to the terms hereof, with interest, shall be deemed to be secured by
the Collateral.
26. The failure of the Lender to insist upon strict performance of any term
of the Note or this Agreement shall not be deemed to be a waiver of any term of
the Note or this Agreement. The Borrower shall not be relieved of the Borrower's
obligations hereunder by reason of (a) the failure of the Lender to comply with
any request of the Borrower or any guarantor to take any action to enforce any
of the provisions hereof or of the Note, (b) the release, regardless of
consideration, of the whole or any part of the Collateral, or (c) any agreement
or stipulation by the Lender extending the time of payment or otherwise
modifying or supplementing the terms of the Note or this Agreement. The Lender
may resort for the payment of sums outstanding with respect to the Facility to
any other security held by the Lender in such order and manner as the Lender, in
its discretion, may elect. The rights of the Lender under this Agreement shall
be separate, distinct and cumulative and none shall be given effect to the
exclusion of the others. No act of the Lender shall be construed as an election
to proceed under any one provision herein to the exclusion of any other
provision.
27. If the Borrower consists of more than one person, the obligations and
liabilities of each such person hereunder shall be joint and several.
28. The terms of the Note and this Agreement shall be construed by the laws
of the State of New York.
29. Intentionally Omitted Prior to Execution.
30. If any term, covenant or condition of the Note or this Agreement is
held to be invalid, illegal or unenforceable in any respect, the Note and this
Agreement shall be construed without such provision.
31. This Agreement may be executed in any number of duplicate originals and
each such duplicate original shall be deemed to constitute but one and the same
instrument.
32. Unless the context clearly indicates a contrary intent or unless
otherwise specifically provided herein, words used in this Agreement shall be
used interchangeably in singular or plural form. The word "Lender" shall mean
"the Lender or any subsequent holder of the Note". The word "person" shall
include an individual, corporation, partnership, limited liability company,
trust, unincorporated association, government, governmental authority or other
entity. The word "Collateral" shall include any portion of the Collateral or
interest therein. The words "Mortgaged Property" shall include any portion of
the Mortgaged Property or interest therein. The word "Loans" shall mean the
principal with interest thereon and all other sums due pursuant to the Note and
secured by this Agreement. Whenever the context may require, any pronouns used
herein shall include the corresponding masculine, feminine or neuter forms and
the singular form of nouns and pronouns shall include the plural and vice versa.
All references in this Agreement to the Collateral Assignments shall be deemed
to refer to such Collateral Assignments as are now or shall be from time to time
in the possession of the Lender. All references in this Agreement to Pledged
Notes, the Pledged Mortgages and the Other Documents shall be deemed to refer to
such Pledged Notes, Pledged Mortgages and Other Documents as are now or shall be
from time to time in the possession of the Lender. All references in this
Agreement to Loans shall be deemed to refer to such Loans evidenced and secured
by those Pledged Notes, Pledged Mortgages and Other Documents as are now or
shall be from time to time in the possession of the Lender.
33. This Agreement cannot be changed orally but only in writing by the
person to be charged.
34. The Borrower hereby agrees that upon its failure to pay all sums due
and owing with respect to the Facility on the maturity date the Borrower will
pay to the Lender interest on the then unpaid principal at the Default Rate from
the maturity date and until the actual receipt and collection of all sums due
and owing with respect to the Facility by the Lender. This paragraph, however,
shall not be construed as an agreement or privilege to extend this Agreement,
nor as a waiver of any other right or remedy accruing to the Lender by reason of
any such default.
35. The Borrower hereby waives the right to assert a counterclaim other
than a compulsory counterclaim in any action or proceeding brought against it by
the Lender and waives trial by jury in any action or proceeding brought by
either party hereto against the other or in any counterclaim asserted by the
Lender against the Borrower on any matters whatsoever arising out of or in any
way connected with the Note, this Agreement or the Facility.
36. This Agreement is subject to the express condition that at no time
shall the Borrower be obligated or required to pay interest on the principal
balance due hereunder at a rate which could subject the Lender to either civil
or criminal liability as a result of being in excess of the maximum interest
rate which the Borrower is permitted by law to contract or agree to pay. If by
the terms of this Agreement or the Note the Borrower is at any time required or
obligated to pay interest on the principal balance due hereunder at a rate in
excess of such maximum rate, the rate of interest under this Agreement and/or
the Note shall be deemed to be immediately reduced to such maximum rate and all
previous payments in excess of the maximum rate shall be deemed to have been
payments toward the reduction of principal and not to the interest due
hereunder.
(THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)
IN WITNESS WHEREOF, this Agreement has been duly executed by the Borrower
and the Lender as of the date first above written.
BRT REALTY TRUST
By: /s/ Mark H. Lundy
-------------------------------------
Mark H. Lundy, Senior Vice President
NORTH FORK BANK
By: /s/ Matt Vega
-------------------------------------
Matt Vega, Senior Vice President
STATE OF NEW YORK )
)ss.:
COUNTY OF SUFFOLK )
On the ___ day of August, 2005, before me, the undersigned, personally
appeared Mark H. Lundy, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person on behalf of which the individual acted, executed the instrument.
----------------------------------
Notary Public
STATE OF NEW YORK )
)ss.:
COUNTY OF SUFFOLK )
On the ___ day of August, 2005, before me, the undersigned, personally
appeared Matt Vega, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person on behalf of which the individual acted, executed the instrument.
-----------------------------------
Notary Public
EXHIBIT A
SCHEDULE OF COLLATERAL
----------------------
Address Original Current
------- -------- -------
Principal Principal
--------- ---------
Balance Balance
------- -------
75 Market Street $4,000,000.00 $4,000,000.00
77-79 Market Street
Newark, New Jersey
2709-2739 South Ridgewood Ave. $16,000,000.00 $16,000,000.00
South Daytona Beach, Florida
EXHIBIT B
FORM OF COLLATERAL ASSIGNMENT
COLLATERAL ASSIGNMENT OF MORTGAGE
KNOW THAT, , a , having an
---------------------- ---------------------
address at 60 Cutter Mill Road, Suite 303, Great Neck, New York 10021
("Assignor"), in consideration of Ten ($10.00) Dollars paid by NORTH FORK BANK,
a corporation organized under the Banking Law of the State of New York having
its principal offices at 275 Broadhollow Road, Melville, New York 11747 (the
"Assignee"), hereby assigns unto the Assignee all of its right, title and
interest in and to the mortgage set forth on Schedule B annexed hereto and made
a part hereof, the mortgage secured thereby, and all other documents executed in
connection therewith
Covering premises known as and more particularly
-------------------------------
described by Schedule A annexed hereto
TOGETHER with the bonds or notes or obligations described in said mortgages and
the moneys due and to grow due thereon with the interest; TO HAVE AND TO HOLD
the same unto the Assignee and its successors and assigns forever.
This assignment is made without recourse to the Assignor in any event.
This assignment is not subject to section 275 of the Real Property Law because
it is an assignment within the secondary mortgage market.
This is a collateral assignment, intended to secure repayment of that certain
Promissory Note made by Assignor in favor of Assignee of even date herewith in
the principal amount of SEVENTEEN MILLION AND 00/100 ($17,000,000.00) DOLLARS,
and is given pursuant to the provisions of that certain Revolving Credit
Agreement dated August , 2005 between Assignor and Assignee.
-------
IN WITNESS WHEREOF, the Assignor has duly executed this Assignment this
-------
day of , 200 .
---- --
----------------------------
----------------------------
By:
STATE OF NEW YORK )
)ss.:
COUNTY OF )
On the day of , 200 , before me, the undersigned, personally
----- ---- --
appeared , personally known to me or proved to me on the
--------------------
basis of satisfactory evidence to be the individual whose name is subscribed to
the within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person on behalf of which the individual acted, executed the instrument.
-------------------------------
Notary Public
SCHEDULE A
SCHEDULE B
-------------------
TO
NORTH FORK BANK
===============================================================
COLLATERAL ASSIGNMENT OF MORTGAGE
===============================================================
Premises:
The within premises lie in
Block , Lot
in County
--------
Record and Return to:
Stark, Amron, Liner & Narotsky, LLP
7 Penn Plaza, Suite 600
New York, New York 10001
REVOLVING CREDIT AGREEMENT
--------------------------
=====================================================================
BRT REALTY TRUST
- to -
NORTH FORK BANK
=====================================================================
Stark, Amron, Liner & Narotsky, LLP
7 Penn Plaza, Suite 600
New York, New York 10001
EXHIBIT 10.2
NORTH FORK BANK
SECURED PROMISSORY NOTE
BORROWER: BRT REALTY TRUST
PRINCIPAL: $17,000,000.00 Date: As of August 17, 2005
--------------------------------------------------------------------
PROMISE TO PAY: The undersigned Borrower, jointly and severally if more than one
signer, does hereby promise to pay to the order of NORTH FORK BANK (the "Bank")
at its offices at 275 Broadhollow Road, Melville, New York 11747, or at any of
its branches, the sum of Seventeen Million and 00/100 ($17,000,000.00) DOLLARS
or the aggregate unpaid principal amount of all advances made to the Borrower by
the Bank, whichever is less, plus interest thereon, from the date hereof in the
manner set forth below.
RATE AND PAYMENT: The unpaid principal balance hereunder shall bear interest at
the rate of the Bank's Prime Rate plus one half of one (1/2%) percent per annum,
adjusted monthly, subject to increase or reduction as hereinafter provided (the
"Interest Rate"). Interest shall be payable monthly beginning on September 1,
2005 and on the 1st day of each month thereafter until November 1, 2005, when
all unpaid principal and interest shall be due in full, unless the term hereof
is extended as hereinafter provided.
Until the Debt, as defined in that certain Revolving Credit Agreement between
Borrower and Bank dated of even date herewith (the "Agreement"), has been repaid
in full, the Borrower agrees to maintain its account (account #6224002938) with
the Bank. Borrower hereby unconditionally and irrevocably authorizes the Bank to
automatically debit from such account any and all payments due hereunder and
unconditionally warrant and represent to Bank that Borrower shall, until the
Debt has been repaid in full, maintain sufficient funds in such account to pay
same. If no funds are available in such account, the Borrower hereby authorizes
Bank to debit any such payment due from any other account or accounts [other
than tenant security deposit accounts and escrow accounts in connection with the
Collateral (as defined in the Agreement)] maintained by Borrower with the Bank,
provided, however, Bank's authorization to debit such accounts is limited to the
amounts due under this Promissory Note and/or the other documents executed in
connection herewith.
Payments shall be applied first to interest on unpaid principal balances to the
date payment is received by the Bank and then to reduction of principal. If the
Interest Rate is based on the Bank's announced Prime Rate, the Interest Rate
shall change when the Prime Rate changes and nothing herein shall prevent the
Bank from loaning money at less than prime on such terms and conditions as it
deems advisable. Interest shall be calculated on the basis of a 360 day year and
shall be collected based upon actual number of days elapsed.
GRID NOTE: This is the promissory note referenced to in the Agreement and shall
be governed by the terms thereof. The Borrower may borrow, repay in whole or in
part on a revolving basis aggregate amounts up to Seventeen Million and 00/100
($17,000,000.00) Dollars, subject to the provisions of the Agreement. The date
and amount of each advance made and each payment of principal received by the
Bank hereunder shall be recorded and entered on the books and records of the
Bank, which shall, in absence of manifest error, be presumptive evidence as to
the outstanding principal amount due hereunder; provided, however, that the
failure to record any advance or repayment shall not limit or otherwise affect
the obligation of Borrower under this Note.
PREPAYMENT: Prepayment in whole or in part may be made at any time without
penalty. Prepayment must be made in the event and to the extent that the
outstanding amount hereunder exceeds sixty-five (65%) percent of the principal
amount of the Collateral. During the Term hereof, any funds so prepaid may be
re-advanced pursuant to the terms hereof.
DEFAULT INTEREST RATE: The unpaid principal sum under this Note shall bear
interest at a rate equal to twenty four (24%) percent on and after the
occurrence of any event of default hereunder or under the Agreement, beyond
applicable notice, grace and cure periods, if any and until the entire principal
sum hereof has been fully paid, both before and after the entry of any judgment
with respect to such event, but in no event shall the rate either before or
after the occurrence of an event of default exceed the highest rate of interest,
if any, permitted under applicable New York or Federal Law.
SECURITY: This Note is secured by the Collateral (as defined in the Agreement).
RIGHT OF OFFSET: If any payment is not made on time, or if the entire balance
becomes due and payable and is not paid, all or part of the amount due may be
offset out of any account or other property which the Borrower has at the Bank
or any affiliate of the Bank without prior notice or demand. This provision is
in addition to any not in limitation of any of the Bank's rights by statute or
at common law.
LATE CHARGES: Borrower will pay a charge of four (4%) percent of any amount
which cannot be debited from its account due to insufficient balances on the
Debit Date, as liquidated damages for failure to make timely payment and such
late charge shall be secured by the Collateral.
DEFAULT: The Bank may decline to make advances and/or may declare the entire
unpaid balance of the Note due and payable on the happening of any default
hereunder or under the Agreement or any of the other documents executed in
connection therewith.
ADVANCES: All advance requests must be in writing and must be made no less than
three (3) business days in advance of the date that the funds are to be
disbursed. No advance will be made if such advance will cause the amount then
outstanding under this Note to exceed sixty-five (65%) percent of the
outstanding principal balance of the Mortgages (as defined in the Agreement)
then pledged as Collateral for the repayment of the sums advance hereunder,
provided that none of the loans secured by such Mortgages are monetarily
delinquent (other than minor escrow shortages) for more than sixty (60) days or
are otherwise in material default. The Bank shall make any requested advance to
the Borrower on the third (3rd) business day after such request is received,
notwithstanding that the Bank may not have received the funds required to be
transferred to the Bank by Valley National Bank and/or Signature Bank (the
"Participants") in accordance with the provisions of that certain Participation
Agreement of even date herewith between the Bank and the Participants.
Notwithstanding the foregoing, however, in no event shall the Bank be required
to advance in excess of Five Million and 00/100 ($5,000,000.00) Dollars of its
own funds hereunder, and to the extent that any advance by the Bank on behalf of
any Participant would cause the Bank to have advanced more than Five Million and
00/100 ($5,000,000.00) Dollars, the Bank shall not be required to make such
advance until it shall have received the necessary funds from the Participants.
NO ORAL MODIFICATIONS. This Note may not be changed or terminated orally.
IN WITNESS WHEREOF, the Borrower has signed this Note as of the 17th day of
August, 2005.
BRT Realty Trust
By: /s/ Mark H. Lundy
-------------------------------------
Mark H. Lundy, Senior Vice President
STATE OF NEW YORK )
)ss.:
COUNTY OF SUFFOLK )
On the day of August, 2005, before me, the undersigned, personally
------
appeared Mark H. Lundy, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person on behalf of which the individual acted, executed the instrument.
--------------------------------
Notary Public
SECURED PROMISSORY NOTE
-----------------------
=========================================================================
BRT REALTY TRUST
- to -
NORTH FORK BANK
=======================================================================
Stark, Amron & Liner, LLP
7 Penn Plaza, Suite 600
New York, New York 10001
EXHIBIT 10.3
MODIFICATION TO
REVOLVING CREDIT AGREEMENT
THIS MODIFICATION TO REVOLVING CREDIT AGREEMENT (this ("Modification") is
made as of the 17th day of August, 2005, between BRT REALTY TRUST, a
Massachusetts business trust, with offices at 60 Cutter Mill Road, Suite 303,
Great Neck, New York 10021 (the "Borrower") and NORTH FORK BANK, a corporation
organized under the Banking Law of the State of New York having its principal
offices at 275 Broadhollow Road, Melville, New York 11747 (the "Lender").
W I T N E S S E T H
WHEREAS, on February 16, 2005, the Lender made a revolving line of credit
available to Borrower in the maximum principal amount of Eighty Five Million and
00/100 ($85,000,000.00) Dollars (the "$85,000,000.00 Credit Line"), which credit
line was evidenced by a Promissory Note in said amount, and governed and secured
by, inter alia, a Revolving Credit Agreement (the "$85,000,000.00 Revolving
Credit Agreement");
WHEREAS, on the date hereof, the Lender has agreed to make a revolving line
of credit available to Borrower in the maximum principal amount of Seventeen
Million and 00/100 ($17,000,000.00) Dollars (the "$17,000,000.00 Credit Line"),
which credit line was evidenced by a Promissory Note in said amount, and
governed and secured by, inter alia, a Revolving Credit Agreement (the
"$17,000,000.00 Revolving Credit Agreement");
WHEREAS, as a condition to making the $17,000,000.00 Credit Line available
to the Borrower, the Lender has required that the Borrower modify the
$85,000,000.00 Revolving Credit Agreement in accordance with the terms hereof;
NOW, THEREFORE, in consideration of the ten ($10.00) dollars, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Borrower hereby covenants and agrees with the Lender that:
1. The recitals above are incorporated herein by reference.
2. Paragraph 17 of the $85,000,000.00 Revolving Credit Agreement is hereby
modified to reflect that the term Collateral shall also include the "Collateral"
pledged to the Lender under the $17,000,000.00 Revolving Credit Agreement.
3. Paragraph 16 of the $85,000,000.00 Revolving Credit Agreement is hereby
modified by adding the following subsection (f) at the end thereof:
"(f) No Event of Default shall exist or have occurred under or pursuant to
that certain Revolving Credit Agreement dated August 17, 2005 entered into
between Borrower and Lender, securing Borrower's obligations under that certain
Secured Promissory Note dated August 17, 2005 in the principal sum of Seventeen
Million and 00/100 ($17,000,000.00) Dollars made by Borrower in favor of Lender
(collectively, the "$17,000,000.00 Line of Credit Documents")."
4. Paragraph 18 of the $85,000,000.00 Revolving Credit Agreement is hereby
modified by adding the following subsection (m) at the end thereof:
"(m) if an Event of Default shall exist or have occurred under or pursuant
to the $17,000,000.00 Line of Credit Documents. By executing this Agreement, the
Borrower agrees that an Event of Default hereunder shall be deemed an Event of
Default under the $17,000,000.00 Line of Credit Documents."
5. The terms of this Modification shall be construed by the laws of the
State of New York.
6. This Modification may be executed in any number of duplicate originals
and each such duplicate original shall be deemed to constitute but one and the
same instrument.
7. This Modification cannot be changed orally but only in writing by the
person to be charged.
8. Except as modified herein, all of the terms, covenants and conditions of
the $85,000,000.00 Revolving Credit Agreement shall remain in full force and
effect.
(THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)
IN WITNESS WHEREOF, this Modification has been duly executed by the
Borrower and the Lender as of the date first above written.
BRT REALTY TRUST
By: /s/ Mark H. Lundy
-------------------------------
Mark H. Lundy, Senior Vice President
NORTH FORK BANK
By: /s/ Matt Vega
--------------------------------
Matt Vega, Senior Vice President
STATE OF NEW YORK )
)ss.:
COUNTY OF )
On the ____ day of August, 2005, before me, the undersigned, personally
appeared Mark H. Lundy, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person on behalf of which the individual acted, executed the instrument.
----------------------------
Notary Public
STATE OF NEW YORK )
)ss.:
COUNTY OF SUFFOLK )
On the ____ day of August, 2005, before me, the undersigned, personally
appeared Matt Vega, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person on behalf of which the individual acted, executed the instrument.
--------------------------------
Notary Public
MODIFICATION TO
REVOLVING CREDIT AGREEMENT
BRT REALTY TRUST
- and -
NORTH FORK BANK
Stark, Amron & Liner, LLP
7 Penn Plaza, Suite 600
New York, New York 10001