SEVENTH MODIFICATION
OF
REVOLVING CREDIT LOAN
AND
SECURITY AGREEMENT AND OTHER
LOAN DOCUMENTS
THIS LOAN MODIFICATION AGREEMENT (this “
Modification ”) made this 24th day of
July, 2006 by and among RESOURCE AMERICA, INC. (
“RAI” ), RESOURCE PROPERTIES XXX, INC.
(“ RPI XXX ” ),
RESOURCE PROPERTIES XLI, INC. ( “RPI
XLI” ) and RESOURCE CAPITAL INVESTOR, INC. (
“RCI” ), each a Delaware corporation
(collectively, the “ Borrowers ”), and
SOVEREIGN BANK, a federal banking association, having an address of
1500 Market Street, Suite 1420, Philadelphia, Pennsylvania 19102
(“ Bank ” or “
Lender ”).
BACKGROUND
A. Resource Properties, Inc., which merged into
RAI on June 29, 2005, RESOUCE PROPERTIES XXIV, INC. (“
RPI XXIV ”), RESOURCE PROPERTIES XL, INC.
(“ RPI XL ”), and Resource Properties
53, Inc. (“ RPI 53 ”) (the “
Original Borrowers ”) and Bank entered into
a certain Revolving Credit Loan and Security Agreement dated July
27, 1999 (the “ Loan Agreement ”)
wherein the Original Borrowers established a line of credit loan
facility with Bank in the amount of Fifteen Million Dollars
($15,000,000) (the “ Loan
”).
B. As security for the obligations of Original
Borrowers under the Loan Documents, RPI XL granted to Lender that
certain Leasehold Mortgage and Security Agreement (the “
Leasehold Mortgage ”) with regard to the
real estate known as Factors Walk - Phase Two, Savannah, Georgia
(the “ Savannah Real
Estate ”).
C. Original Borrowers, and Bank entered into that
certain Modification of Revolving Credit Loan and Security
Agreement dated March 30, 2000 (the “ First
Modification ”), whereby, inter alia , the
principal amount of the Loan was increased to Eighteen Million
Dollars ($18,000,000).
D. To evidence the revised Loan in the amount of
$18,000,000, Original Borrowers executed and delivered to Bank that
certain Replacement Line Note dated March 30, 2000, in the amount
of $18,000,000 (the “ Note
”).
E. Original Borrowers, RPI XXX, Resource
Properties XXXI, Inc. (“RPI XXXI”), and Bank entered
into that certain Second Modification of Revolving Credit Loan and
Security Agreement and Modification of Other Loan Documents dated
April 30, 2002 (the “ Second Modification
”), whereby RPI 53 requested that Bank release it from its
obligations under the Loan and release certain collateral related
to RPI 53’s obligations and then to substitute RPI XXX and
RPI XXXI as additional makers under the Note and add additional
collateral owned by RPI XXX and RPI XXXI to the security for the
Loan, in accordance with the terms therein.
F. Original Borrowers, RPI XXX, RPI XXXI, and Bank
entered into that certain Third Modification of Revolving Credit
Loan and Security Agreement dated September
15, 2003 (the “ Third
Modification ”) whereby the term of the Loan was
extended until July 27, 2005.
G. Original Borrowers, RAI, RPI XXX, RPI XXXI and
Bank entered into that certain Fourth Modification of Revolving
Credit Loan and Security Agreement and Other Loan Documents dated
June 30, 2005 (the “ Fourth Modification
”) whereby (i) the term of the Loan was extended, (ii) RPI
XXIV was released from its obligations under the Loan Documents and
(iii) there was an acknowledgement that by operation of law, since
Resource Properties, Inc., which was a Borrower under the Loan
Documents, merged into RAI, RAI is now a Borrower under the Loan
Documents
H. RAI, RPI XXIV, RPI XL, RPI XXX, RPI XXXI and
Bank entered into that Fifth Modification of Revolving Credit Loan
and Security Agreement and Other Loan Documents dated September 29,
2005 (the “ Fifth Modification ”)
whereby Bank (i) accepted as additional Collateral for the Loan the
property known as Wharf Lots 4 and 5 and located at Bull and River
Streets, Savannah, Chatham County, Georgia (the
“Georgia Property” ), which is owned
by RPI XXIV pursuant to that certain Deed to Secure Debt,
Assignment of Rents and Security Agreement dated September 29, 2005
from RPI XXIV in favor of Lender (the “Georgia
Mortgage” ), and (ii) acknowledged RPI XXIV as a
Borrower under the Loan Documents as if it had never been released
in accordance with the terms of the Fourth Modification, which Bank
agreed to do, on the terms and conditions as more fully set forth
in the Fifth Modification. In connection with the Fifth
Modification, an Allonge to Replacement Line Note, dated September
29, 2005, was given by RAI, RPI 53, RPI XXIV AND RPI XL (the
“ First Allonge ”).
I. RAI, RPI XXIV, RPI XL, RPI XXX and Bank entered
into that Sixth Modification of Revolving Credit Loan and Security
Agreement and Other Loan Documents dated March 30, 2006 (the
“ Sixth Modification ”) whereby Bank
agreed to (i) accept and acknowledge RPI XLI as a Borrower under
the Loan Documents, (ii) accept as additional Collateral for the
Loan a collateral assignment by RAI of all of its right title and
interest in and to RPI XLI’s stock (the “RPI
XLI Shares” ), and (iii) release RPI XXXI as a
Borrower under the Loan Documents.
J. On April 6, 2006, Bank released the collateral
pledged by RPI XXX which consisted of a collateral assignment of a
$3,400,000 loan.
K. Borrowers have now requested that Bank: (i)
accept and acknowledge RCI as a Borrower under the Loan Documents;
(ii) accept as additional Collateral for the Loan a collateral
assignment by RCI of all of its right title and interest in and to
700,000 shares of Resource Capital Corp., a Maryland corporation
(the “RCC Shares” ); (iii) revise the
amount of the Loan to $14,000,000; (iv) extend the maturity date of
the Loan; (v) accept as further additional Collateral for the Loan,
a collateral assignment of (A) a loan from RPI XXX to Uman Realty,
LLC, a New Jersey limited liability company (
“Uman” ) in the amount of
$2,800,000.00 (the “Headhouse Loan” ),
which is secured by a first mortgage on the real property located
in Philadelphia, PA known as Headhouse Piers 3 & 5 (the “
Headhouse Loan ”) and (B) all notes,
documents, instruments and agreements evidencing and/or securing
such loan (the “Headhouse Loan
Documents” ); (vi) release the lien of the Georgia
Mortgage on the Georgia Property (each
as defined in this Modification), and the
Leashold Mortgage on the Savannah Real Estate; and (vii) release RP
XL and RP XXIV as Borrowers, which Bank has agreed to do on the
terms and conditions as more fully set forth herein.
L. To evidence the collateral assignment of the
RCC Shares, Bank and RCI, contemporaneously with the execution
hereof, are entering into that certain Pledge and Security
Agreement of even date herewith (the “RCI Pledge
Agreement” ) and that certain Securities Account
Sole Control Agreement among RCI, Lender, Credit Suisse Securities
(USA) LLC and Pershing LLC (the “ Control
Agreement ”).
M. To evidence the collateral assignment of the
Headhouse Loan, Bank and RPI XXX contemporaneously with the
execution hereof, are entering into that certain Collateral
Assignment of Note, Mortgage and Other Loan Documents (the “
Headhouse Loan Assignment ”) with respect to
the collateral assignment of the Headhouse Loan.
N. In connection with this Modification, an
Allonge to Replacement Line Note, dated of even date hereof, shall
be given by Borrowers to Lender (the “ Second
Allonge ”). The Note, the Loan Agreement, the RCI
Pledge Agreement, the Headhouse Loan Assignment and the Headhouse
Loan Documents and all other documents, instruments and
undertakings evidencing and/or securing the Loan, (as modified
hereby and by the First Modification, Second Modification, Third
Modification, Fourth Modification, the Fifth Modification and the
Sixth Modification (collectively, the “ Other
Modifications ” and this Modification) and all
documents instruments and agreement executed and delivered to
Lender in connection with the Other Modifications and this
Modification are hereinafter collectively referred to as the
“ Loan Documents ”). All capitalized
terms used but not defined herein shall have the meaning given to
such terms in the Loan Agreement.
AGREEMENT
NOW THEREFORE, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. Definitions . As used in this Modification, all capitalized
terms shall have the respective meanings provided therefor herein
or, in absence of such provision, the respective meanings provided
therefor in the Loan Documents. Without limiting the
foregoing:
(a) References in the Loan Documents to the
“Loan Agreement” shall mean and include the Loan
Agreement as modified by this Modification and the Other
Modifications.
(b) References in the Loan Documents to the
“Note” or the ”Line Note” shall mean and
include the Note as modified by this Modification, the First
Allonge, the Second Allonge, any other allonges to the Note and the
Other Modifications.
(c) References in the Loan Documents to the
“Loan Documents” shall mean and include the Loan
Documents, as defined therein, all as modified by this Modification
and the Other Modifications.
(d) References in the Loan Documents to the terms
“Borrowers” shall mean and include RAI, RPI XXX, RPI
XLI and RCI.
(e) References in the Loan Documents to the amount
of the “Loan” or the “Line” or the
“Line of Credit” being in an amount of up to
$18,000,000.00, pursuant to the Modifications, shall be replaced
with “$14,000,000.00”.
(f) The term “Obligations” as used
herein shall mean any and all Obligations of the Borrowers, or any
of them, under the Note, the Loan Agreement, the Collateral
Documents, the RCI Pledge Agreement and any other Loan Document, as
modified by this Modification and the Other
Modifications.
2. Confirmation of Indebtedness
.
(a) Borrowers hereby confirm, acknowledge, and
agree that as of the date hereof, the outstanding principal balance
of the Note is $0. Borrowers further acknowledge and agree that the
foregoing principal balance from the date stated is validly and
duly owing by Borrowers to Bank.
(b) Borrowers hereby confirm, acknowledge, and
agree that as of the date hereof, the Borrowing Base, when adding
in the value of the RCC Shares and Headhouse Loan as Collateral
under the Loan Agreement and removing the Georgia Property and the
Savannah Real Estate as Collateral, is $13,545,000.00.
(c) Borrowers hereby ratify, confirm and
acknowledge that (i) the Note, the Collateral Documents, and the
other Loan Documents are each in full force and effect as of the
date hereof, (ii) the Note, the Collateral Documents and the other
Loan Documents constitute valid and legally binding obligations of
the Borrowers, (iii) no event of default, or event which if
continuing would constitute an Event of Default, has occurred under
the Loan Documents, and (iv) the Loan Documents are enforceable
against the Borrowers and its assets in accordance with their
respective terms.
(d) Not by way of limitation of anything herein or
in the Loan Documents, RCI hereby agrees to be bound by the Note,
the Loan Agreement and other Loan Documents, as if it were an
original party thereto and a Borrower under the Loan Documents
listed therein, and RCI agrees to comply with all covenants set
forth in the Loan Documents and hereby set forth their agreement to
the remedies and rights granted to Bank therein.
(e) In order to induce Bank to enter into this
Modification, the Borrowers hereby reaffirm the various
representations and warranties made by the Original Borrowers in
the Loan Documents, as if such representations and warranties were
made by each of the Borrowers as of this date, and set forth fully
herein, except as such representations and warranties may be
otherwise modified by the updated Schedules and Exhibits attached
hereto. In order to induce Bank to enter into this Modification,
the Borrowers each hereby represent and warrant to Bank that all
representations and warranties made by the Original Borrowers in
the Loan Documents are hereby made by the Borrowers on and as of
the date hereof. Not by way of limitation of the foregoing, the
Borrowers hereby further represent and warrant that:
(i) RCI is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, with full power and authority to execute, deliver and
comply with this Modification and the RCI Pledge Agreement, and to
carry on its respective business as it is now being conducted and
is duly licensed or qualified as a foreign corporation in good
standing in each jurisdiction in which the character or location of
the properties owned by it or the business transacted by it
requires such licensing or qualification;
(ii) The execution and delivery by RCI of this
Modification and the RCI Pledge Agreement and the other Borrowers
of this Modification and the consummation of the transactions
contemplated by the Loan Documents and this Modification and the
fulfillment and compliance with the respective terms, conditions
and provisions of the Loan Documents: (a) have been duly authorized
by all requisite corporate action of all of the Borrowers, (b) will
not conflict with or result in a breach of, or constitute a default
(or might, upon the passage of time or the giving of notice or
both, constitute a default) under, any of the terms, conditions or
provisions of (i) any applicable statute, law, rule, regulation or
ordinance, (ii) any Borrowers’ articles of incorporation or
bylaws, (iii) any indenture, mortgage, loan or credit agreement or
instrument to which any of the Borrowers is a party or by which any
of them may be bound or affected, or (iv) any judgment or order of
any court or governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, and (c) will not
result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the property or
assets of any of the Borrowers under the terms or provisions of any
such agreement or instrument, except liens in favor of
Bank;
(iii) This Modification has been duly executed and
delivered to Bank by each of the Borrowers, and the RCI Pledge
Agreement and Headhouse Loan Assignment have been duly executed and
delivered by RCI and RPI XXX, respectively and this Modification
and other documents and instruments required hereby or executed in
connection herewith constitute legal, valid and binding obligations
of such parties, enforceable in accordance with their respective
terms;
(iv) None of the Borrowers is in violation of its
respective articles of organization or bylaws, nor is any such
party in default in the performance or observance of any of its
respective obligations, covenants or conditions contained in any
indenture or other agreement creating, evidencing or securing any
Indebtedness or pursuant to which any such Indebtedness is issued,
nor is any of the Borrowers in violation of or in default under any
other agreement or instrument or any judgment, decree, order,
statute, rule or governmental regulation, applicable to any of them
or by which any of their properties may be bound or
affected;
(v) There are no actions, suits or proceedings
pending or, to the best of any of the Borrowers’ knowledge,
threatened against any of the Borrowers, or any properties of any
of them before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign,
which, if determined adversely to any of the Borrowers, would have
a material adverse effect on such Borrower’s financial or
operating condition;
(vi) No authorization, consent, approval, license,
exemption or any other action by and no registration, qualification
or filing with any governmental agency or
authority is or
will be necessary in connection with the execution, delivery and
performance of this Modification or any other document or
instrument required hereby by any of the Borrowers;
(vii) RCI is the sole owner of the RCC Shares and has
full right an authority to pledge the RCC Shares to Lender as
contemplated hereby. The RCC Shares are and will be owned by RCI
free of any pledge, mortgage, hypothecation, lien, charge,
encumbrance, or security interest in such instruments or the
proceeds thereof, except such as are granted under the RCI Pledge
Agreement;
(viii) With respect to the Headhouse Loan: (i) the
Headhouse Loan Documents are in full force and effect; (ii) Uman is
the borrower thereunder and has no claim, cause of action, defense,
set-off, counterclaim or challenge of any kind or nature whatsoever
against the payment of any of the sums owing under the Headhouse
Loan Documents or the enforcement or validity of the Headhouse Loan
Documents; (iii) the Headhouse Loan Documents are in full force and
effect and there are no defaults thereunder; (iv) the outstanding
principal balance thereunder, as of the date hereof, is $2,800,000;
and (v) all representations and warranties of RPI XXX under the
Headhouse Loan Assignment are true, correct and complete, in all
material respects;
(ix) On and as of the date of this Modification, to
the best of any of the Borrowers’ knowledge, there exists no
default or Event of Default under the Note, or any other Loan
Document and no event which with notice or lapse of time or both
would, if unremedied, be a default or Event of Default under the
Note, or any other Loan Document.
(f) Each of the Borrowers hereby ratify and confirm
that it is fully obligated under the Loan Documents and that the
Loan Documents remain in full force and effect as modified hereby.
The Loan Documents, AND THE WARRANTS OF ATTORNEY TO
CONFESS JUDGMENT CONTAINED IN THE NOTE, AND ANY OF THE OTHER LOAN
DOCUMENTS , extend to and secure the payment of the
obligations of the Borrowers under the Loan Documents (the
“Obligations” ), as modified by this
Modification and the Other Modifications. Each of the Loan
Documents remains in full force and effect, as modified by this
Modification and the Other Modifications and, along with the
Premises and the other Collateral, AND THE WARRANTS OF
ATTORNEY TO CONFESS JUDGMENT CONTAINED IN THE NOTE, AND ANY OF THE
OTHER LOAN DOCUMENTS , extend to and continue to
evidence and secure the Obligations and the Loan Documents, each as
modified by this Modification and the Other Modifications. To the
extent required in order to achieve the intent of this
Modification, this Modification shall be deemed to modify each of
the Loan Documents.
(g)
BORROWERS HEREBY CONFIRM AND
AGREE THAT THEY HAVE NO CLAIM, CAUSE OF ACTION, DEFENSE, SET-OFF,
COUNTERCLAIM OR CHALLENGE OF ANY KIND OR NATURE WHATSOEVER AGAINST
THE PAYMENT OF ANY OF THE SUMS OWING UNDER THE NOTE, OR THE TERMS
OF THE OTHER LOAN DOCUMENTS OR THE ENFORCEMENT OR VALIDITY OF THE
NOTE, OR THE OTHER LOAN DOCUMENTS, AND DO HEREBY REMISE, RELEASE
AND FOREVER DISCHARGE ANY AND ALL SUCH CLAIMS, CAUSES OF ACTION,
DEFENSES, SET-OFFS, COUNTERCLAIMS OR CHALLENGES
.
3. Amendment to Note . Borrowers and Lender hereby acknowledge and
agree that the term “Borrower” under the Note shall
mean all of the Borrowers, each of which hereby assumes, on a joint
and several basis , all obligations of
“Borrower” thereunder and is otherwise obligated
thereunder as if it were an original signatory thereto. Borrowers
and Lender also agree that the face amount of the Note shall be
$14,000,000.00. BORROWERS HEREBY AGREE THAT THEY ARE, OR
REMAIN, AS THE CASE MAY BE, BOUND BY THE WARRANT OF ATTORNEY TO
CONFESS JUDGMENT AS SET FORTH IN THE NOTE. THE BORROWERS HEREBY
CONFIRM THAT THEY HAVE AGREED TO BE BOUND BY THE FOREGOING AFTER
RECEIVING ADVICE FROM COUNSEL OF THEIR CHOOSING WITH REGARD TO THE
SAME AND FURTHER CONFIRM THAT THEIR AGREEMENT TO BE SO BOUND IS
BASED ON A KNOWING, VOLUNTARY AND INTELLIGENT DECISION
.
4. Amendment to the Loan Agreement
.
(a) The following definitions in the Loan Agreement
shall be amended as indicated below:
(i)
The term “Borrower” as
defined in the Loan Agreement shall mean the Borrowers;
(ii)
The term “Loan
Documents” as defined in the Loan Agreement and the other
Loan Documents shall be expanded to include the RCI Pledge
Agreement and the Headhouse Loan Assignment, and shall no longer
include the Georgia Mortgage or the Leasehold Mortgage;
(iii)
The term “Collateral”
and/or “Substitute Collateral” as defined in the Loan
Agreement shall be expanded to include the RCC Shares and Headhouse
Loan, and shall no longer include the Georgia Property and the
Savannah Real Estate, consequently, Exhibit “A” shall
be amended to include the RCI Pledge Agreement and the Headhouse
Loan Assignment and exclude the Georgia Mortgage and the Leasehold
Mortgage.
(iv)
Replace the definition of
“Collateral Documents” with the following:
“ “Collateral Documents”
means the Assigned Loan Documents and all documents, instruments
and agreements evidencing the pledge, assignment or granting of any
security interest in and to any of the Real Estate, the RPI XLI
Shares, the RCC Shares or any other Collateral and/or Substitute
Collateral evidencing, securing and/or otherwise relating to the
Line, including without limitation those documents and instruments
set forth on Exhibit “A” attached hereto and made
a part hereof, as the same may be amended from time to time in
accordance with the terms hereof.”
(v) Replace the definition of “Substitute
Collateral” with the following:
“ “Substitute Collateral”
means all of the (a) real property or notes, mortgages and other
documents and instruments, evidencing and/or securing a commercial
mortgage loan (or a participation interest therein) of which a
Borrower is the owner (all as more fully described in Section 4.1
herein), where Bank shall have received an Appraisal of the real
property subject to such loan and such other reports (including
environmental reports), surveys, and information relating thereto
as Bank may request, and (b) such other real or personal property
as Bank may accept from a Borrower as collateral for the
obligations of Borrower hereunder and under the other Loan
Documents, where such Substitute Collateral is evidenced by
mortgages, assignments, deeds of trust, mortgages, pledge
agreements and other documents, instruments and agreements as my be
resonbaly required by Bank. Upon the delivery of Substitute
Collateral to Bank and the acceptance thereof by Bank, all such
documents and instruments shall constitute Collateral Documents
(and Exhibit “A” shall be amended accordingly) and
the real property, if any, to which they relate shall constitute
Real Estate and Collateral and the personal property, if any to
which they relate, if any, shall constitute Collateral (and
Exhibits “A” and “B” shall be amended
accordingly).
(b)
The amout of the Loan is hereby
changed to $14,000,000.00 and therefore, the amount of the
“Line of Credit” or the “Loan”, as
referenced in the Loan Agreement and the other Loan Documents is
hereby changed to $14,000,000.00.
(c)
The following definitions shall be
added to the Loan Agreement :
““Assigned Loan
Documents̶
