EXHIBIT 10(l)
FIRST AMENDED AND RESTATED REIMBURSEMENT AGREEMENT
This FIRST AMENDED AND RESTATED REIMBURSEMENT AGREEMENT (the "Agreement")
is entered into and shall be effective as of August 1, 1994, by and among Saul
Centers, Inc., Saul Holdings Limited Partnership, Saul Subsidiary I Limited
Partnership, Saul Subsidiary II Limited Partnership, Avenel Executive Park Phase
II, Inc., Franklin Property Company, Westminster Investing Corporation, Van Ness
Square Corporation, Dearborn Corporation, and the B. F. Saul Real Estate
Investment Trust (collectively the "Parties" and each individually a "Party").
WITNESSETH:
WHEREAS, the Parties (other than Saul Subsidiary I Limited Partnership) are
partners in one or more of Saul Holdings Limited Partnership, Saul Subsidiary I
Limited Partnership and Saul Subsidiary II Limited Partnership (collectively,
the "Partnerships") and have made capital contributions to the Partnerships.
WHEREAS, the Partnerships have issued recourse indebtedness.
WHEREAS, one or more of the Parties have entered or will enter into
agreements whereby they have guaranteed all or part of one or more of the
Partnerships' indebtedness.
WHEREAS, Saul Centers, Inc., as general partner of each of Saul Holdings
Limited Partnership and Saul Subsidiary II Limited Partnership, is liable for
the recourse debts of such Partnerships as a matter of law.
WHEREAS, Saul Centers, Inc. is liable for the $128 million recourse
mortgage note of Saul Subsidiary I Limited Partnership pursuant to an
Unconditional Guaranty dated August 1, 1994 and Saul Centers, Inc. has agreed to
indemnify Saul QRS, Inc. for its liability, as general partner, with respect to
the $128 million recourse mortgage note of Saul Subsidiary I Limited Partnership
pursuant to an Indemnity Agreement dated August 1, 1994.
WHEREAS, the Parties entered into that certain Reimbursement Agreement
dated August 26, 1993, as amended from time to time (the "Reimbursement
Agreement").
WHEREAS, pursuant to Section 10 of the Reimbursement Agreement, the Parties
executed the First Amendment to Reimbursement Agreement on April 15, 1994, and
the Second Amendment to Reimbursement Agreement on May 26, 1994.
WHEREAS, the Parties intend that the Reimbursement Agreement, as amended
and restated by this Agreement, be effective as of the date hereof.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
of the Parties hereto, and of other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties, intending legally
to be bound, hereby agree as follows:
Section 1. DEFINED TERMS. The following defined terms used in this
Agreement shall have the meanings specified below. Any terms not defined in
this Agreement shall have the meanings ascribed to them in the Partnership
Agreements.
"Business Day" means any day on which banking institutions are permitted to
be open for business in Maryland.
"Guarantor" means any Party which is liable for all or part of one or more
Loans by guarantee, indemnity or similar agreement.
"Loan" means any recourse or other indebtedness of any of the Partnerships,
whether now in existence or hereafter incurred, for which any of the Parties is
liable, either as Guarantor or pursuant to any obligation imposed by law. To
the extent any specific Loan is referred to in this Agreement, it is the intent
of the Parties that such reference include any other indebtedness of the
Partnerships to the extent that the proceeds of such indebtedness are used to
refinance such Loan.
"Partnership Agreements" means, collectively, the First Amended and
Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership,
the First Amended and Restated Limited Partnership Agreement of Saul Subsidiary
I Limited Partnership, and the First Amended and Restated Limited Partnership
Agreement of Saul Subsidiary II Limited Partnership, including any amendments
and restatements of or successors to such agreements.
"Paying Party" means, with respect to a given Loan or Loans of a
Partnership, any Party that is a partner of the Partnership (or a partner of
such partner), or a Guarantor of all or a portion of the Partnership's Loan or
Loans, that (i) pays to the lender all or part of the amount owed by such
Partnership on the Loan or Loans, either pursuant to such Party's obligations
under a guarantee, indemnity or similar agreement or pursuant to any obligation
imposed by law, or (ii) pays to any other Party or to a partner of the
Partnership any amount with respect to all or a portion of the Partnership's
Loan or Loans pursuant to a guarantee, indemnity or similar agreement or
pursuant to any obligation imposed by law.
"Prime" means the rate of interest which is equal to the rate published
from time to time in THE WALL STREET JOURNAL, or any successor publication, as
the "prime rate."
"Reimbursement Limit" means, with respect to each Reimbursing Party listed
on the following table, the amount so indicated on such table.
Reimbursing Party Reimbursement Limit
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Avenel Executive Park, Phase II, Inc. $4,640,810
B.F. Saul Real Estate Investment Trust $44,712,755
Dearborn Corporation $66,117,575
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"Reimbursement Obligation" means, with respect to a given Reimbursing
Party, the maximum amount of payments such Party may be obligated to reimburse
to one or more Paying Parties pursuant to Sections 2 and 3 of this Agreement.
"Reimbursement Percentage" means, with respect to a given Reimbursing
Party, the percentage so indicated on the following table.
Reimbursing Party Reimbursement Percentage
----------------- ------------------------
Avenel Executive Park Phase II, Inc. 3.33%
B.F. Saul Real Estate Investment Trust 32.13%
Dearborn Corporation 47.50%
Franklin Property Company 0.35%
Van Ness Square Corporation 0.71%
Westminster Investing Corporation 15.98%
"Reimbursing Parties" means, collectively, Avenel Executive Park Phase II,
Inc., B.F. Saul Real Estate Investment Trust, Dearborn Corporation, Franklin
Property Company, Van Ness Square Corporation and Westminster Investing
Corporation.
Section 2. REIMBURSEMENT OF PAYING PARTIES. Subject to the terms hereof,
the Reimbursing Parties agree to reimburse each Paying Party in an amount equal
to the amount paid by the Paying Party with respect to any Loan.
Section 3. ALLOCATION OF REIMBURSEMENT OBLIGATIONS. The Reimbursing
Parties shall allocate the obligation to make a reimbursement payment to a
Paying Party in the following manner:
A. Franklin Property Company shall reimburse (i) all payments
made by any Paying Party with respect to the $37,000,000
Loan made by First National Bank of Chicago to Saul Holdings
Limited Partnership to the extent that the sum of such
payments does not exceed $18,900,000, and (ii) all payments
made by any Paying Party with respect to the $128,000,000
Loan to Saul Subsidiary I Limited Partnership to the extent
that the sum of such payments does not exceed $5,445,750
($5,445,750 representing the sum of the amounts deposited in
the Environmental Escrow and Olney Ground Lease Sub-Accounts
upon the closing of the $128,000,000 Loan to Saul Subsidiary
I Limited Partnership).
B. Westminster Investing Corporation shall reimburse all
payments made by any Paying Party with respect to the
$40,000,000 Loan made by Wells Fargo to Saul Subsidiary II
Limited Partnership to the extent that the sum of such
payments does not exceed $34,464,250.
C. Except as otherwise provided in this Agreement, the
Reimbursing Parties shall reimburse all other payments made
by Paying Parties with respect to the Loans in proportion to
their respective Reimbursement Percentages.
D. Notwithstanding Section 3-C, above, the Reimbursement
Obligations of Avenel Executive Park Phase II, Inc., B.F.
Saul Real Estate Investment
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Trust and Dearborn Corporation shall not exceed their
respective Reimbursement Limits.
E. To the extent any payments made by Paying Parties with
respect to the Loans are not reimbursed by certain
Reimbursing Parties because of the limitation set forth in
Section 3-D, above, such payments shall be reimbursed by the
Reimbursing Parties not subject to a Reimbursement Limit
(Franklin Property Company, Van Ness Square Corporation and
Westminster Investing Corporation) in proportion to their
respective Reimbursement Percentages.
Section 4. METHOD OF PAYMENT. Any reimbursement payments required
pursuant to this Agreement shall be due not later than ten (10) business days
after the day on which the Paying Party pays a lender, other Party or partner of
a Partnership with respect to a Loan. Such reimbursement payments shall be made
in lawful money of the United States of America and in immediately available
funds, or by certified cashier's check.
All reimbursement payments under this Agreement shall be made without
counterclaim, setoff, condition or qualification and free and clear of and
without deduction or withholding for or by reason of any present or future
taxes, levies, imposts, deductions or charges of any nature whatsoever.
Section 5. LATE PAYMENTS. If the amount of any reimbursement payment
hereunder is not paid to a Paying Party when due, such payment shall bear
interest (computed on the basis of a 360-day-year and the actual number of days
elapsed) from the due date thereof until paid in full at a rate per annum equal
to Prime plus 1 percent, payable on demand.
Notwithstanding any other provision in this Section to the contrary, if any
sum becomes payable pursuant to this Agreement on a day which is not a Business
Day, the date for payment thereof shall automatically be extended, without
penalty, to the next succeeding Business Day, and such extended time shall not
be included in the computation of interest.
Section 6. RIGHTS TO RESULTING NONRECOURSE LOANS. If and to the extent a
Reimbursing Party reimburses a Paying Party, the Reimbursing Party shall
automatically and immediately succeed to all rights accruing to the Paying Party
with respect to any nonrecourse obligation which arose pursuant to Section 4.2
of the respective Partnership Agreement (or any successor provision) by reason
of the Paying Party's payment (or any portion thereof) which the Reimbursing
Party has reimbursed.
Section 7. RECOURSE OBLIGATION. The foregoing Reimbursement Obligation
shall be a recourse obligation of each Reimbursing Party and shall survive the
dissolution of any of the Partnerships and/or the retirement, incompetency,
insolvency, bankruptcy, or withdrawal of any Party.
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Section 8. NOT A CAPITAL CONTRIBUTION. No amount paid hereunder shall be
treated as a capital contribution pursuant to any of the Partnership Agreements.
Section 9. INTENT OF THE PARTIES. It is the intent and understanding of
the undersigned that one consequence of this Agreement will be that, for
purposes of the determination under Section 1.752-2 of the Income Tax
Regulations (or any successor provision), each Reimbursing Party will bear the
economic risk of loss with respect to the Loans to the extent of their
Reimbursement Obligation. It is the intent of the undersigned that the
provisions of this Reimbursement Agreement be interpreted consistently
therewith.
Section 10. AMENDMENT. This Agreement may be amended from time to time
only by the unanimous written consent of all Parties.
Section 11. APPLICABLE LAW. This Agreement shall be construed in
accordance with and governed by the laws of the State of Maryland, without
regard to the principles of conflicts of laws.
Section 12. ADDRESSES AND NOTICE. All notices, requests, demands and
other communications hereunder to a Party shall be in writing and shall be
deemed to have been duly given if delivered by hand or if sent by certified
mail, return receipt requested, properly addressed and postage prepaid, or
transmitted by commercial overnight courier to the Party at the address set
forth below or at such other address as the Party shall notify the other Parties
in writing:
8401 Connecticut Avenue
Chevy Chase, Maryland 20815
Such communications shall be deemed sufficiently given, served, sent or
received for all purposes at such time as delivered to the addressee (with the
return receipt or delivery receipt being deemed conclusive evidence of such
delivery) or at such other time as delivery is refused by the addressee upon
presentation.
Section 13. IDENTIFICATION OF LENDERS. The identification of lenders with
respect to certain Loans in Sections 3-A and 3-B of this Agreement is solely for
the convenience of the Parties. Therefore, it is the intent of the Parties that
Sections 3-A and 3-B continue to apply to such Loans, or a refinancing of such
Loans, or refinancing of any refinancing, regardless of whether or not any of
the lenders should transfer (through a participation or otherwise) all or a
portion of their interest in any one or more of such Loans.
Section 14. NO THIRD PARTY BENEFICIARIES. The Parties intend that the
rights and obligations set forth in this Agreement shall be the rights and
obligations of the Parties and that no third party shall have, or be deemed to
have or receive, any benefit from this Agreement.
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IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the
day first set forth.
SAUL CENTERS, INC., a Maryland
corporation
By: /s/ B. Francis Saul
----------------------------
Name: B. Francis Saul II
Title: Chairman
SAUL HOLDINGS LIMITED PARTNERSHIP,
a Maryland limited partnership
By: SAUL CENTERS, INC., a Maryland
corporation, as sole general
partner
By: /s/ B. Francis Saul
---------------------------
Name: B. Francis Saul II
Title: Chairman
SAUL SUBSIDIARY I LIMITED PARTNER-
SHIP, a Maryland limited partner-
ship
By: SAUL QRS, INC., a Maryland
corporation, as sole general
partner
By: /s/ B. Francis Saul
---------------------------
Name: B. Francis Saul II
Title: Chairman
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SAUL SUBSIDIARY II LIMITED PARTNER-
SHIP, a Maryland limited partner-
ship
By: SAUL CENTERS, INC., a Maryland
corporation, as sole general
partner
By: /s/ B. Francis Saul
---------------------------
Name: B. Francis Saul II
Title: Chairman
AVENEL EXECUTIVE PARK PHASE II,
INC., a Maryland corporation
By: /s/ Philip D. Caraci
---------------------------
Name: Philip D. Caraci
Title: President
FRANKLIN PROPERTY COMPANY, a
Maryland corporation
By: /s/ Philip D. Caraci
---------------------------
Name: Philip D. Caraci
Title: President
WESTMINSTER INVESTING CORPORATION,
a New York corporation
By: /s/ B. Francis Saul
---------------------------
Name: B. Francis Saul II
Title: President
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VAN NESS SQUARE CORPORATION, a
Maryland corporation
By: /s/ B. Francis Saul
---------------------------
Name: B. Francis Saul II
Title: Chairman
DEARBORN CORPORATION, a Delaware
corporation
By: /s/ Philip D. Caraci
---------------------------
Name: Philip D. Caraci
Title: President
B.F. SAUL REAL ESTATE INVESTMENT
TRUST, a Maryland unincorporated
business trust
By: /s/ B. Francis Saul
---------------------------
Name: B. Francis Saul II
Title: Chairman
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