Exhibit 10.2
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is made as of the 22nd day of April,
1994 by and between AGREE LIMITED PARTNERSHIP, a Delaware limited
partnership, whose address is 31850 Northwestern Highway, Farmington Hills,
Michigan 48334 (hereinafter referred to as "Borrower") and NATIONWIDE
LIFE INSURANCE COMPANY, an Ohio corporation, whose address is One
Nationwide Plaza, Columbus, Ohio 43216, Attention: Real Estate
Investments (hereinafter referred to as "Lender").
W I T N E S S E T H:
The following is a recital of facts underlying this Agreement:
A. Rapids Associates, Marshall Plaza Phase Two, Petoskey Town Center
and Charlevoix Commons, Michigan co-partnerships (collectively, the
"Original Borrower") heretofore borrowed the sum of Twenty-Four Million
Four Hundred Eighty Thousand Dollars ($24,480,000) (the "Loan") from
Lender, as evidenced by a promissory note ("Original Note") dated February
18, 1991 in the original principal amount of the Loan.
B. To secure repayment of the Loan together with all interest and
charges of whatever nature to become due thereunder, the Original Borrower
executed and delivered to Lender a Mortgage and Security Agreement (the
"Mortgage") and an Assignment of Leases, Rents and Profits (the
"Assignment"), each dated February 18, 1991 and recorded in the Offices of
the Registers of Deeds of Calhoun, Mecosta, Charlevoix and Emmet Counties,
Michigan, and various other documents were executed by the Original
Borrower, the Lender or Richard Agree and Edward Rosenberg ("Agree and
Rosenberg") including, without limitation, certain guaranties. The
Mortgage, the Assignment and such other documents (excluding any Mortgage
Note) are hereinafter collectively referred to as the "Loan Documents".
C. On or about November 12, 1990, the Lender made a loan (the
"Wisconsin Loan") to Shawano Plaza, Plymouth Commons and Chippewa Commons,
Michigan co-partnerships (collectively, the "Wisconsin Original Borrower"),
which Wisconsin Loan was cross-collateralized and cross-defaulted with the
Loan.
D. The Property (as that term is defined in the Mortgage) has been
conveyed by the Original Borrower to the Borrower.
E. Lender has agreed to accept partial prepayment of the Loan and
the Wisconsin Loan and to restructure the Loan and the Wisconsin Loan as
set forth in the letters to Lender from Agree and Rosenberg on behalf of
the Original Borrower and the Wisconsin Original Borrower dated March 2,
1994 and April 19, 1994, copies of which are attached hereto as Exhibit A-1,
and in the letter from the Lender to Agree and Rosenberg dated March 17,
1994, a copy of which is attached hereto as Exhibit A-2. The parties hereto
are entering into this Agreement for the purpose of stating certain terms
and conditions of the restructured Loan.
NOW THEREFORE, in consideration of the mutual covenants and conditions
stated herein and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, Borrower, Lender, Agree and
Rosenberg agree as follows:
1. Concurrently herewith, Borrower has partially prepaid the Loan
such that the principal balance thereof has been reduced to Nineteen
Million One Hundred Fifty Thousand and 00/100 Dollars ($19,150,000.00) and,
to evidence the reduced Loan, has executed and delivered to Lender a
Mortgage Note (the "New Note") in such amount in substitution and complete
replacement for the Original Note. The Lender and Borrower have executed
amendments to the Mortgage and Assignment which reflect the replacement of
the Original Note by the New Note. The parties hereto agree that all
references in the other Loan Documents to the Original Note shall hereafter
be deemed to refer to the New Note. Agree and Rosenberg specifically agree
and confirm that the Indemnity dated February 18, 1991, executed by them for
the benefit of the Lender remains in full force and effect with respect to
the restructured Loan as evidenced by the New Note and that any Guaranty
executed by them for the benefit of the Lender and not released by the
Lender prior hereto remains in full force and effect with respect to the
restructured Loan as evidenced by the New Note.
2. Lender hereby consents to the conveyance of the Property (as that
term is defined in the Mortgage) to the Borrower, an entity whose owners
are those persons described in Exhibit A-1 hereto and who hold the
respective interests described in Exhibit A-1. The conveyance is subject to
the Mortgage, Assignment and other Loan Documents and nothing herein shall
be deemed to be a release, discharge or modification of any liability of
Agree and Rosenberg thereunder. Nothing herein shall be deemed to be a
consent by Lender to any other or further transfer or conveyance of the
Property.
3. Borrower assumes and agrees to pay, perform and fulfill all of
the obligations of the Original Borrower under the Loan Documents and to be
bound by all of the terms and provisions thereof as fully and completely as
though Borrower had originally executed the Loan Documents.
-2-
4. This Agreement shall be governed by the laws of the State of
Michigan and shall be binding upon the parties hereto and their respective
heirs, successors and assigns. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all such
counterparts shall constitute one and the same instrument.
IN WITNESS WHEREOF, this Loan Modification Agreement has been executed
by the parties hereto as of the date above.
AGREE LIMITED PARTNERSHIP, a
Delaware limited partnership
By: AGREE REALTY CORPORATION, a
Maryland Corporation
Its: General Partner
By: /s/ Richard Agree
------------------------------
Name:
Title:
/s/ Richard Agree
-----------------------------------------
RICHARD AGREE
/s/ Edward Rosenberg
-----------------------------------------
EDWARD ROSENBERG
NATIONWIDE LIFE INSURANCE COMPANY
By: /s/ James W. Prude
------------------------------------
Its: Vice President
Attest: /s/ Dennis W. Celick
-------------------------------
Its: Assistant Secretary
-3-
EXHIBIT A-1
March 2, 1994
Mr. Jerry Spangler
Nationwide Life Insurance Company
One Nationwide Plaza
Columbus, Ohio 43216
RE: AGREE K-MART LOANS
LOAN A -- WISCONSIN -- No. 030301843
LOAN B -- MICHIGAN -- No. 030301852
Gentlemen:
On November 13, 1990 and February 19, 1991, the above referenced Loan A and
Loan B, respectively, closed with Nationwide Life Insurance Company
(hereinafter "Nationwide").
In order to refinance and consolidate these loans, the Borrower hereby
makes Application to Nationwide subject, but not limited to the following
conditions:
Borrower: Seven individual partnerships, which interests will be
assigned to Agree Realty Limited Partnership, a Delaware
Limited Partnership, the owners of which are as follows:
General Partner:
Agree Realty Corporation, a Maryland Corporation 76.01%*
Limited Partners:
Richard Agree 12.40%*
Edward Rosenberg 9.03%*
Joel Weiner 2.56%*
-----
Total 100.0%
*Approximate Interests
Loan Amount: $33,600,000
It is understood and agreed that the balances on the two
existing loans will be paid down by a total of approximately
$11,000,000. Nationwide is to receive a prepayment premium
of $1,820,000 at the time of closing. This penalty
Mr. Jerry Spangler
March 2, 1994
Page 2
assumes a closing in the month of April 1994. Should closing
occur later, Nationwide shall be paid a prepayment premium
as follows:
May 1994: $1,730,000
June 1994: $1,640,000
July 1994: $1,550,000
Interest Rate: 6.875%.
Commitment
Fee: At closing, Nationwide is to receive a fee of $700,000.
Maturity Date: November 15, 2005
Monthly
Payments: Years 1-5: $192,500/month (interest only)
Thereafter: Based upon a rate as determined below and a
22 year amortization.
Rate Reset: At the end of the 5th year the rate will be reset for the
remaining loan term as provided for in the existing loan
documents.
Closing Date: No later than July 15, 1994
Documentation: It is understood and agreed that all other terms and
conditions of the existing loan documents shall remain the
same.
Nationwide will attempt to use the existing loan documents
subject to the changes required by the refinancing and
subject to changes necessary to perfect Nationwide's first
lien on the property.
Expenses: Borrower will be responsible for all expenses relating to
the refinancing of the existing loans, whether the
refinancing closes or not.
Good Faith
Deposit: Borrower herewith deposits $50,000 as a good faith deposit.
This good faith deposit will be refunded, less Nationwide's
out of pocket expenses, if any, upon closing and receipt by
Nationwide of all closing items. If the loan fails to close
as herein contemplated, Nationwide shall retain this
deposit.
By execution of this agreement, Borrower authorizes Nationwide (or its
correspondent) to perform any necessary credit and financial inquiries.
Borrower agrees to provide any information requested by Nationwide.
The undersigned hereby apply for this refinancing and consolidation for
Shawano Plaza, Plymouth Commons, and Chippewa Commons (Loan A) and Rapids
Associates, Charlevoix Commons, Marshall Plaza Phase Two and Petoskey Town
Center (Loan B), each a Michigan Co-Partnership.
Mr. Jerry Spangler
March 2, 1994
Page 3
By: /s/ Richard Agree
Richard Agree, Its Co-Partner
And: /s/ Edward Rosenberg
Edward Rosenberg, Its Co-Partner
Nationwide Hereby Accepts The Above Application. *
NATIONWIDE LIFE INSURANCE COMPANY
By: /s/ Robert H. McNaghten Date: March 17, 1994
--------------------------- ---------------------
Name:
Vice President
---------------------------
Title:
* Subject to Nationwide's March 17, 1994, letter of modification and
clarification.
April 19, 1994
Mr. Jerry Spangler
Nationwide Life Insurance Company
One Nationwide Plaza
Columbus, Ohio 43216
RE: Agree Kmart Loans
Loan A -- Wisconsin No. 03-0301843
Loan B -- Michigan No. 03-0301852
Gentlemen:
The purpose of this letter is to confirm our agreement to modify the
March 17, 1994, letter amendment to our March 2, 1994, Agreement.
Numbered Paragraph 5 of the March 17, 1994, letter amendment is hereby
deleted in its entirety and replaced with the following:
5. In the "Rate Reset" section of the Agreement delete "as provided
for in the existing loan documents" and replace with "to
Nationwide's then-prevailing Interest rate for a loan with a
seven-year term."
The balance of the Agreement, as modified by letter dated March 17,
1994, is hereby ratified and affirmed.
Please acknowledge your acceptance by signing below:
Very truly yours,
Shawano Plaza
Plymouth Commons
Chippewa Commons
Rapids Associates
Charlevoix Commons
Marshall Plaza Phase Two
Petoskey Town Center
By: /s/ Richard Agree
----------------------
Richard Agree, Partner
ACKNOWLEDGED AND ACCEPTED:
Nationwide Life Insurance Company
April 20, 1994
By: /s/
-------------------------
Its: Vice President
-------------------------
EXHIBIT A-2
[ LOGO - NATIONWIDE INSURANCE ]
NATIONWIDE LIFE INSURANCE COMPANY
HOME OFFICE ONE NATIONWIDE PLAZA - COLUMBUS, OH 43215-2220
March 17, 1994
Messrs. Richard Agree and Edward Rosenberg
C/o Mr. David J. Sibbold
Proctor & Associates
3883 Telegraph Road, Suite 104
P.O. Box 769
Bloomfield Hills, MI 48303
Re: Agree K-Mart Loans
Loan A -- Wisconsin No. 03-0301843
Loan B -- Michigan No. 03-0301852
Gentlemen:
Nationwide Life Insurance Company hereby approves the March 2, 1994, Letter
Agreement ("Agreement") to refinance the above-captioned loans subject to
the following modifications and clarifications:
1. It is understood and agreed that instead of consolidating the two
loans into one loan as contemplated in the Agreement, two separate
loans shall be maintained: $14,450,000 for Loan A (Wisconsin) and
$19,150,000 for Loan B (Michigan).
2. It is further understood and agreed that the prepayment premiums
outlined in the Agreement shall be divided between Loan A and Loan B,
43 percent and 57 percent, respectively.
3. The Commitment Fee of $700,000 outlined in the "Commitment Fee"
section of the Agreement shall be apportioned $301,000 to Loan A and
$399,000 to Loan B.
4. The monthly payment outlined under the "Monthly Payments" section of
the Agreement shall be changed to "$82,786.46" for Loan A and
"$109,713.54" for Loan B.
5. In the "Rate Reset" section of the Agreement delete "as provided for
in the existing loan documents" and replace with "to Nationwide's
then-prevailing interest rate for a loan with a six-year term".
6. In the "Documentation" section of the Agreement add the following new
paragraph:
"The conditions for release of Property from the security for the loan
set out in Section 30 of the Mortgage for each of the loans shall be
amended as follows:
a. The "eighty percent (80%)" loan-to-value requirement and "1.1"
times debt service requirement in the last paragraph of section
30 shall be changed to "sixty-two percent (62%)" and "1.75",
respectively.
Messrs. Richard Agree and Edward Rosenberg
Page 2
March 17, 1994
b. The "Project Value" of each property in this same paragraph shall
be changed to the following:
Shawano $5,650,000
Plymouth 4,350,000
Chippewa Falls 4,450,000
Big Rapids 5,790,000
Charlevoix 3,690,000
Marshall 3,660,000
Petoskey 6,010,000
These modifications constitute the only changes made to the Agreement.
Please signify your acceptance of these changes by signing and returning
the original of this amendment letter to Jerry P. Spangler at the
letterhead address no later than March 25, 1994.
Very truly yours,
NATIONWIDE LIFE INSURANCE COMPANY
/s/ Robert H. McNaghten
- -----------------------
Robert H. McNaghten
Vice President
JPS/RHM/sac
Accepted by Borrowers the 22nd day of March, 1994
Shawano Plaza
Plymouth Commons
Chippewa Commons
Rapids Associates
Charlevoix Commons
Marshall Plaza Phase Two
Petoskey Town Center
By: /s/ Richard Agree
-----------------------------
Richard Agree, Its Co-Partner
By: /s/ Edward Rosenberg
--------------------------------
Edward Rosenberg, Its Co-Partner