|
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
- 1 -
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
- 2 -
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.
- 3 -
(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:
- 4 -
(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
- 5 -
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 .
- 6 -
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."
- 7 -
(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 f
|
