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Exhibit 99a
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FIRST UNION REAL ESTATE
EQUITY AND MORTGAGE INVESTMENTS
AS THE BORROWER
FIRST UNION MANAGEMENT, INC.
AS THE MANAGEMENT COMPANY
THE FINANCIAL INSTITUTIONS NAMED HEREIN
AS LENDERS
AND
NATIONAL CITY BANK
AS ADMINISTRATIVE AGENT
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AMENDMENT NO. 2
DATED AS OF
JANUARY 8, 1999
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF
NOVEMBER 1, 1997
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AMENDMENT NO. 2
TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NO. 2, dated as of January 8, 1999 ("THIS AMENDMENT"),
among FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS, a real estate
investment trust organized under the laws of Ohio (herein, together with its
successors and assigns, the "BORROWER"); FIRST UNION MANAGEMENT, INC., a
Delaware corporation (herein, together with its successors and assigns, the
"Management Company"); the financial institutions listed on the signature pages
hereof (the "LENDERS"); and NATIONAL CITY BANK, a national banking association,
as Administrative Agent (the "ADMINISTRATIVE AGENT") for the Lenders under the
Credit Agreement:
PRELIMINARY STATEMENTS:
(1) The Borrower, the Management Company, the Lenders named therein and
the Administrative Agent entered into the Amended and Restated Credit Agreement,
dated as of November 1, 1997, as amended by Amendment No. 1 thereto ("AMENDMENT
NO. 1"), dated as of June 15, 1998 (as so amended and in effect prior to the
effective date of this Amendment, the "CREDIT AGREEMENT"; with the terms defined
therein, or the definitions of which are incorporated therein, being used herein
as so defined).
(2) Pursuant to Amendment No. 1, the Credit Agreement was modified in
certain respects, including provisions to the effect that the termination of the
Total Commitment which occurred on May 26, 1998 as a result of a Change of
Control on that date was not to be given effect until November 26, 1998. The
Borrower has now made changes in its business plan and senior management such
that the Lenders are now willing to modify the Credit Agreement as requested by
the Borrower so that the termination of the Total Commitment which was to be
given effect November 26, 1998, shall not be given effect until June 30, 1999.
(3) The Borrower and the Management Company have requested the Lenders
and the Administrative Agent to amend certain of the provisions of the Credit
Agreement, all as more fully set forth below.
NOW, THEREFORE, the parties hereby agree as follows:
SECTION 1. AMENDMENTS.
1.1. FURTHER TEMPORARY DEFERRAL OF CONSEQUENCES OF CHANGE OF CONTROL.
(a) With retroactive effect to May 26, 1998, section 3.3(b) of the Credit
Agreement is amended to change the date in the PROVISO thereto from "November
26, 1998" to "June 30, 1999", with the result that, as so amended, such section
3.3(b) reads in its entirety as follows:
(b) The Total Commitment (and the Commitment of each Lender)
shall terminate on the earlier of (x) the Maturity Date or (y) the date
on which a Change of Control occurs; PROVIDED, HOWEVER, that the
termination of the Total Commitment (and the Commitment of each Lender)
which occurred on May 26, 1998 by reason of the Change in Control
arising from the change in
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the composition of the Borrower's Board of Trustees on that date shall
not be given effect until June 30, 1999.
(b) With retroactive effect to May 26, 1998, section 4.2(c) of the
Credit Agreement is amended by changing the date "November 26, 1998" which
appears in the last paragraph thereof to "June 30, 1999", with the result that,
as so amended, section 4.2(c) reads in its entirety as follows:
(c) On the date on which a Change of Control occurs the then
outstanding principal amount of all Loans, if any, shall become due and
payable and shall be prepaid in full, and the Borrower shall
contemporaneously either (i) cause all outstanding Letters of Credit to
be surrendered for cancellation (any such Letters of Credit to be
replaced by letters of credit issued by other financial institutions),
or (ii) pay to the Administrative Agent an amount in cash and/or Cash
Equivalents equal to 100% of the Letter of Credit Outstandings and the
Administrative Agent shall hold such payment as security for the
obligations of the Borrower hereunder pursuant to a cash collateral
agreement to be entered into in form and substance reasonably
satisfactory to the Administrative Agent and the Borrower (which shall
permit certain investments in Cash Equivalents satisfactory to the
Administrative Agent and the Borrower until the proceeds are applied to
the secured obligations).
Notwithstanding the foregoing, the Borrower may defer until
June 30, 1999 its obligation to prepay the Loans and take the other
actions specified above, which obligation was triggered on May 26, 1998
by the Change in Control on that date arising from the change in the
composition of the Borrower's Board of Trustees. This sentence shall
not be construed to postpone any other prepayment or actions which may
become obligatory by reason of the occurrence of any other Change of
Control.
1.2. PRICING CHANGE. (a) Section 1.8(a) of the Credit Agreement is
amended to add a margin of 50 basis points to the interest rate provided for
therein, with the result that, as so amended, section 1.8(a) of the Credit
Agreement reads in its entirety as follows:
(a) The unpaid principal amount of each Loan which is a Base
Rate Loan shall bear interest from the date of the Borrowing thereof
until maturity (whether by acceleration or otherwise) at a fluctuating
rate per annum equal to the Base Rate in effect from time to time PLUS
50 basis points.
(b) Section 1.8(b) of the Credit Agreement is amended to increase the
interest rate margin on Eurodollar Loans provided for therein from 200 to 300
basis points per annum.
(c) Section 1.8(c) of the Credit Agreement is amended to increase the
margin specified therein from 2.25% to 2.75%.
(d) All Loans outstanding on or after November 12, 1998 shall reflect
the addition of a margin, or the increase in the margin applicable thereto,
provided for in section 1.2(a), (b) and (c) of this Amendment, as applicable,
for all periods from and after November 12, 1998.
(e) Section 3.1(b) of the Credit Agreement is amended to increase the
rate of the Letter of Credit Fees from 2.00% per annum to 3.00% per annum. Such
increase shall be effective for all periods from and after November 12, 1998.
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1.3. REDUCTION OF TOTAL COMMITMENT. Effective as of the effective date
of this Amendment, the Total Commitment is permanently reduced to $110,000,000
and the Commitments of the respective Lenders shall be permanently reduced to
the following amounts:
LENDER COMMITMENT
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National City Bank $26,400,000
Bankers Trust Company $22,000,000
KeyBank National Association $22,000,000
The Huntington National Bank $17,600,000
Mellon Bank, N. A. $13,200,000
First Merit Bank $8,800,000
TOTAL COMMITMENT $110,000,000
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1.4. USE OF PROCEEDS. Section 6.14 of the Credit Agreement is amended
by adding the following at the end thereof:
Notwithstanding the foregoing, no proceeds of any Credit Event
hereunder shall be used by the Borrower directly or indirectly to repay
or prepay any other Indebtedness for Borrowed Money of the Borrower,
the Management Company or any of their Subsidiaries, exclusive of
proceeds of one or more Letters of Credit in the aggregate face amount
of up to U.S.$8,000,000 which are expected to be issued to support
Indebtedness for Borrowed Money of Imperial Parking Limited.
1.5. DEFINITION OF NET INCOME. The definition of the term Net Income
contained in section 10.1 of the Credit Agreement is amended to, among other
things, change the last paragraph thereof, with the result that, as so amended,
such definition reads in its entirety as follows:
"NET INCOME" or the "BORROWER'S NET INCOME" means the net
income of the Borrower, the Management Company and their Subsidiaries,
as computed on a combined basis in accordance with GAAP, as reported in
the Borrower's most recent combined financial statements included in
the report on Form 10-Q or 10-K, as filed with the SEC; PROVIDED that
there shall be excluded from such net income (i) all items of gain or
loss which are properly classified as extraordinary in accordance with
GAAP; and (ii) all earnings attributable to minority interests
accounted for by the equity method of accounting, except to the extent
such earnings are actually distributed to the Borrower, the Management
Company and their Subsidiaries.
Without duplication of any exclusions made pursuant to the
PROVISO to the preceding sentence, in the case of any determination of
such net income for any period
(i) which includes the Borrower's fiscal quarter
ended March 31, 1998, there shall be excluded from such net
income the extraordinary or non-recurring charges or
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expenses during such quarter consisting of approximately
$931,000 for proxy and legal expenses;
(ii) which includes the Borrower's fiscal quarter
ended June 30, 1998, there shall be excluded from such net
income the extraordinary or non-recurring charges or expenses
during such quarter consisting of (1) termination of Jim
Mastandrea, in the amount of approximately $3,450,000, (2)
accrual for vesting of restricted shares, in the amount of
approximately $4,950,000, (3) First Union legal and proxy
costs, in the amount of approximately $1,060,000, (4) other
First Union professional fees, in the amount of approximately
$1,855,000, (5) extraordinary trustee fees, in the amount of
approximately $250,000, (6) Gotham legal and proxy costs, in
the amount of approximately $3,100,000, (7) reserve for loss
on property acquisition contract, in the amount of
approximately $2,250,000, and (8) reserve for bank and other
fees, in the amount of approximately $1,100,000;
(iii) which includes the Borrower's fiscal quarter
ended September 30, 1998, there shall be excluded from such
net income the extraordinary or non-recurring charges or
expenses during such quarter consisting of (1) approximately
$3,692,000 for severance payments, and (2) approximately
$1,825,000 for extraordinary legal, consulting or other
professional fees;
(iv) which includes the Borrower's fiscal quarter
ended December 31, 1998, or any subsequent fiscal quarter,
there shall be excluded from such net income
(A) the extraordinary or non-recurring
charges or expenses during such quarter for employee
severance, retention or recruitment payments, but
only to the extent that (1) the aggregate amount
thereof for any such fiscal quarter does not exceed
$2,500,000, and (2) the aggregate amount thereof for
the fiscal quarter ended December 31, 1998 and all
subsequent fiscal quarters does not exceed
$6,300,000;
(B) the extraordinary or non-recurring
charges or expenses incurred or accrued during such
quarter for fees and expenses incurred in the
modification of the terms of, or prepayment or
similar charges incurred in connection with the
prepayment of, the Indebtedness for Borrowed Money of
the Borrower and its Subsidiaries and Imperial
Parking Limited, but only to the extent that (1) the
aggregate amount thereof for the fiscal quarter ended
December 31, 1998 does not exceed $1.045,000, and (2)
the aggregate amount thereof for all fiscal quarters
subsequent thereto does not exceed $2,250,000; and
(C) the extraordinary or non-recurring
charges or expenses incurred or accrued during such
quarter for extraordinary legal, consulting or other
professional fees, including fees related to the
Borrower's contemplated rights offering, but only to
the extent that (1) the aggregate amount thereof for
any such fiscal quarter does not exceed $3,425,000,
and (2) the aggregate amount thereof for the fiscal
quarter ended December 31, 1998 and all subsequent
fiscal quarters does not exceed $5,675,000; and
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(v) such net income shall be adjusted to give effect
to (A) the Borrower's adoption of EITF 98-9 and the pro forma
adjustment to always give effect to a full 4 fiscal quarters
of overage rents, and (B) an elimination of any expense,
reduction of expense or other adjustment in any fiscal quarter
relating to any non-cash foreign currency mark-to-market
expense or adjustment.
1.6. FINANCIAL COVENANTS---DEBT SERVICE COVERAGE RATIO. The covenant
contained in section 7.16(b) of the Credit Agreement is amended to read in its
entirety as follows:
(b) DEBT SERVICE COVERAGE RATIO. The Borrower shall at all
times maintain a ratio, determined on a combined basis for the
Borrower, the Management Company and their Subsidiaries, determined as
of the most recently ended fiscal quarter of the Borrower, of (i)
EBITDA for the four consecutive fiscal quarters ended with such fiscal
quarter TO (ii) the aggregate amount of all regularly scheduled
payments of principal (other than balloon payments) and interest on
Indebtedness for Borrowed Money for such four consecutive fiscal
quarter period, of not less than 1.40 to 1.00 for the period ending
June 30, 1998 or for any period ending thereafter; PROVIDED, that for
purposes of clause (ii) above, in determining the amount of interest
expense on any Indebtedness for Borrowed Money, such amount shall be
adjusted so as to eliminate the effect of any increase in the interest
rate margin, or any increase from the original rate of interest with
respect to any fixed rate Indebtedness, if such increase first became
effective after May 26, 1998.
1.7. FINANCIAL COVENANTS---INTEREST COVERAGE RATIO. The covenant
contained in section 7.16(c) of the Credit Agreement is amended to read in its
entirety as follows:
(c) INTEREST COVERAGE RATIO. The Borrower shall at all times
maintain a ratio, determined on a combined basis for the Borrower, the
Management Company and their Subsidiaries, determined as of the most
recently ended fiscal quarter of the Borrower, of (i) EBITDA for the
four consecutive fiscal quarters ended with such fiscal quarter TO (ii)
the aggregate amount of all interest for such period on Indebtedness
for Borrowed Money, of not less than 1.50 to 1.00 for the period ended
June 30, 1998 or for any period ending thereafter; PROVIDED, that for
purposes of clause (ii) above, in determining the amount of interest
expense on any Indebtedness for Borrowed Money, such amount shall be
adjusted so as to eliminate the effect of any increase in the interest
rate margin, or any increase from the original rate of interest with
respect to any fixed rate Indebtedness, if such increase first became
effective after May 26, 1998.
1.8. FINANCIAL COVENANTS---ADJUSTED NET WORTH. Section 7.16(d) of the
Credit Agreement is amended by adding the following at the end thereof:
Notwithstanding the foregoing, the foregoing amount (as it may be
increased from time to time as provided above) shall also be reduced,
but not below $100,000,000, by the amount of any downward adjustments
to Adjusted Net Worth made for any write-down in the carrying value of
any specific assets which is made subsequent to September 30, 1998 in
accordance with the requirements of GAAP. The Borrower will promptly
advise the Lenders in writing of the date, amount and identity of
assets involved in any such write-down.
1.9. MATURITY. The definition of the term Maturity Date in section 10.1
of the Credit Agreement is amended to read in its entirety as follows:
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"MATURITY DATE" means August 11, 1999 or such earlier date on
which the Total Commitment is terminated as herein provided.
1.10. NO ADDITIONAL MORTGAGED PROPERTIES OR SUBSTITUTE MORTGAGED
PROPERTIES. Section 7.17 of the Credit Agreement is amended to add the following
at the end thereof:
Notwithstanding the foregoing provisions of this section 7.17 or any
other provisions of this Agreement, from and after November 1, 1998,
the Borrower shall not be permitted to exercise any right to add any
Additional Mortgaged Property or to substitute any Substitute Mortgaged
Property.
1.11. MANDATORY PREPAYMENT OF LOANS. Existing paragraph (d) of section
4.2 of the Credit Agreement is redesignated as paragraph (e), and new paragraph
(d) is added to section 4.2 of the Credit Agreement, reading in its entirety as
follows:
(d) Not later than one Business Day following the date of
receipt of any cash proceeds from the sale or other disposition of any
Mortgaged Property, an amount, conforming to the requirements as to the
amount of partial prepayments contained in section 4.1, at least equal
to 100% of such cash proceeds (net of fees and expenses of the
transaction) then received from such sale or disposition shall be
applied as a mandatory prepayment of principal of the outstanding
Loans.
1.12. MANDATORY REDUCTION OF TOTAL COMMITMENT. New paragraphs (c) and
(d) are added to section 3.3 of the Credit Agreement, reading in their entirety
as follows:
(c) If as of any date specified below the Total Commitment has
not otherwise been permanently reduced to not more than the amount
specified below for such date, the Total Commitment shall be
automatically and permanently reduced, without premium or penalty, on
each of the dates specified below to the amount specified for such
date:
DATE TOTAL COMMITMENT
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March 17, 1999 $80,000,000
May 17, 1999 $50,000,000
Any such reduction shall apply to proportionately and permanently
reduce the Commitment of each of the Lenders.
(d) The Total Commitment shall be permanently reduced, without
premium or penalty, at the time that any mandatory prepayment of Loans
would be made pursuant to section 4.2(d) if Loans were then outstanding
in the full amount of the Total Commitment then in effect, in an amount
equal to the prepayment of principal of Loans which would be required
to be made in such circumstance. Any such reduction shall apply to
proportionately and permanently reduce the Commitment of each of the
Lenders. The Borrower will provide at least three Business Days' prior
written notice (or telephonic notice confirmed in writing) to the
Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the
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Lenders), of any reduction of the Total Commitment pursuant to this
section 3.3(d), specifying the date and amount of the reduction.
1.13. ADDITIONAL REPORTING. Section 7.1(a) of the Credit Agreement is
amended by adding the following at the end thereof:
Without limitation of the foregoing, any such Compliance Certificate
delivered after November 1, 1998 shall include a certification on
behalf of the Borrower, the truth and accuracy of which shall
constitute a representation and warranty hereunder, (i) to the effect
that neither the Borrower nor any of its Subsidiaries has granted or
otherwise created any Lien on any of its properties or assets as
security or collateral for the Borrower's bridge loans outstanding
under the Fixed Rate Loan Agreements, dated as of August 11, 1998, as
amended, or any other unsecured Indebtedness for Borrowed Money, and
(ii) describing in reasonable detail the use of proceeds realized from
the incurrence of Non-Recourse Debt, or any refinancing or refunding of
any Indebtedness, effected during the fiscal period to which such
Compliance Certificate relates.
1.14. MANAGEMENT COMPANY. Section 8.2 of the Credit Agreement is
amended by adding the following at the end thereof:
Notwithstanding anything contained in this Agreement to the
contrary, but subject to section 8.8 hereof, the Management Company and
its Subsidiaries shall be permitted to sell all or substantially all of
its Property and/or to terminate its management and/or leasing
arrangements with the Borrower and its Subsidiaries.
1.15. DISTRIBUTIONS, ETC. Section 8.3(d) of the Credit Agreement is
deleted in its entirety from the Credit Agreement, and section 8.3(a) of the
Credit Agreement is amended to read in its entirety as follows:
(a) From and after November 1, 1998, (i) the Borrower will not
declare or pay any cash dividends or other Distributions of any kind on
any Securities of any class in its capital, EXCEPT that the Borrower
may (A) make such cash dividends or other Distributions (including
Distributions of capital stock of the Borrower) of net income and/or
net taxable gains as may be necessary to preserve the Borrower's
Federal income tax status and qualification as a REIT if at least five
Business Days prior to the declaration of any such Distribution, the
Borrower shall have delivered to the Administrative Agent a
certification from the Borrower's independent public accounting firm or
other evidence acceptable to the Administrative Agent confirming the
necessity of such Distribution to the preservation of the Borrower's
Federal income tax status and qualification as a REIT, (B) declare and
make regularly scheduled Distributions with respect to its Series A
Preferred Shares of Beneficial Interest, if at the time of declaration
thereof no Event of Default is in existence hereunder or would result
therefrom (unless such declaration and payment is required for the
preservation of the Borrower's Federal income tax status and
qualification as a REIT and the Borrower has provided to the
Administrative Agent at least five Business Days prior to the
declaration a certification from the Borrower's independent public
accounting firm or other evidence acceptable to the Administrative
Agent confirming the necessity of such Distribution for such purpose),
and (C) make Distributions to holders of its shares of beneficial
interest consisting of rights to purchase additional shares of
beneficial interest; (ii) the Borrower will not, and will not permit
any of its Subsidiaries, the Management Company, or any of the
Management Company's Subsidiaries to, purchase or otherwise acquire any
Securities of any class in the
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Borrower's capital, EXCEPT that if no Event of Default shall have
occurred and be continuing or would result therefrom, the Borrower may
make provisions for cash payments for the extinguishment of option
rights in connection with the severance of employment of persons who
hold options covering shares of the Borrower's capital stock (which
provisions for cash payments shall be consistent in amount with the
limitations contained in the definition of the term Net Income); and
(iii) the Borrower will not, and will not permit any of the Borrower's
Subsidiaries, the Management Company or any of the Management Company's
Subsidiaries to, purchase or otherwise acquire any Securities of any
class in the Management Company's capital.
1.16. INDEBTEDNESS. A new section 8.5(c) is added to the Credit
Agreement, reading in its entirety as follows:
(c) Notwithstanding anything to the contrary contained in the
above provisions of this section 8.5, from and after November 1, 1998,
(i) the Borrower will not incur, create or assume any
additional Indebtedness (other than the Obligations
hereunder), or permit any of its Subsidiaries to incur, create
or assume any additional Indebtedness (other than intercompany
loans and advances in the ordinary course of business), or to
guarantee any existing or additional Indebtedness, EXCEPT that
if no Event of Default shall have occurred and be continuing,
or would result therefrom, (A) the Borrower and its
Subsidiaries may incur, create, refinance or refund any
Non-Recourse Debt if (x) the loan to value ratio of the
Non-Recourse Debt so created or incurred or resulting from
such a refunding or refinancing is greater than 70%, based on
a recent appraisal of the property and improvements which
constitute security therefor, and (y) any net proceeds
realized by the Borrower and its Subsidiaries therefrom are
applied to the prepayment or other retirement of other
Indebtedness of the Borrower and its Subsidiaries (other than
other Non-Recourse Debt on unrelated properties); (B) the
Borrower and its Subsidiaries may refinance or refund any
existing Indebtedness (other than Non-Recourse Debt), if the
outstanding principal amount thereof is not increased, the
weighted average life to maturity thereof is not shortened,
any existing collateral therefor is not extended to other
property of the Borrower or any of its Subsidiaries, and in
the event any such existing Indebtedness to be refinanced or
refunded has been subordinated to any other Indebtedness, the
Indebtedness resulting from such refinancing or refunding is
similarly subordinated; and (C) the Borrower may incur
additional unsecured Indebtedness for Borrowed Money in an
aggregate principal amount not in excess of $5,000,000
outstanding at any time if such Indebtedness is subordinated
to the Obligations pursuant to a written instrument or
agreement satisfactory in form and substance to the Required
Lenders; and
(ii) the Management Company will not, and will not
permit any of its Subsidiaries to, incur, create or assume any
additional Indebtedness, or to guarantee any existing or
additional Indebtedness, OTHER than (A) additional
intercompany loans and advances, and in the case of Imperial
Parking Limited only, additional loans and extensions of
credit under or as contemplated by the Canco Credit Agreement,
which in each case referred to in this clause (ii) is incurred
only in the ordinary course of business and only for working
capital requirements (including capital expenditures required
to maintain property or reasonably required to maximize the
value of presently owned property upon a prompt sale thereof),
and (B) a guaranty by First Union Management
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Investments, Inc. of the obligations of Imperial Parking
Limited and associated Canadian companies, which was
previously agreed to be provided.
1.17. LIENS. Section 8.7 of the Credit Agreement is amended by adding
the following at the end thereof:
Notwithstanding anything to the contrary contained in this
Agreement, from and after November 1, 1998, the Borrower will not, and
will not permit any Subsidiary to, grant or otherwise create any Lien
on any of its properties or assets as security or collateral for the
Borrower's bridge loans outstanding under the Fixed Rate Loan
Agreements, dated as of August 11, 1998, as amended, or any other
unsecured Indebtedness for Borrowed Money.
At its expense, the Borrower will, on not more than two
occasions after November 1, 1998, promptly and in any event within 30
days following receipt of written notice from the Administrative Agent
requiring it to do so (which notice will only be given by the
Administrative Agent if so requested by two or more Lenders who, in
good faith, deem that the following actions are necessary or
appropriate), (i) deliver to the Administrative Agent a certified list
and description, in reasonable detail, of all of the assets and
properties of the Borrower and its Subsidiaries which are not
encumbered by a mortgage, deed of trust, similar instrument, or Uniform
Commercial Code security interest, (ii) obtain from one or more
nationally recognized title insurance companies, and deliver to the
Administrative Agent and each of the Lenders, full and complete title,
lien, judgment and Uniform Commercial Code searches and reports, or
updates of searches and reports previously so delivered, in either case
including copies of all instruments creating liens, encumbrances or
otherwise affecting title, with respect to all of the properties and
assets (including leaseholds in real property) of the Borrower and its
Subsidiaries located in the United States which are referred to in such
certified list and description, including, in addition, Uniform
Commercial Code search reports (or updates of reports previously so
delivered) for any filings against the Borrower or any Subsidiary in
each jurisdiction within the United States in which the Borrower or any
Subsidiary conducts any business. If the Borrower shall fail to timely
deliver any such materials, the Administrative Agent may itself order
and obtain, and distribute to the Lenders copies of, such title, lien,
judgment and Uniform Commercial Code searches and reports as the
Administrative Agent reasonably believes should have been so obtained
by the Borrower and delivered to the Administrative Agent and the
Lenders. The Borrower will, upon demand, reimburse the Administrative
Agent for all costs and expenses incurred by the Administrative Agent
as contemplated by the preceding sentence, it being understood that the
Administrative Agent may require any such reimbursement to be made in
advance on an estimated basis.
1.18. SALES OF ASSETS, ETC. Section 8.8 of the Credit Agreement is
amended to, among other things, eliminate references to Additional Properties
and Substitute Properties, with the result that as so amended section 8.8 of the
Credit Agreement reads in its entirety as follows:
8.8. SALES OF ASSETS, ETC. (a) The Borrower shall not sell or
otherwise transfer, or permit any Subsidiary to sell or otherwise
transfer, directly or indirectly (by merger or otherwise), any
Mortgaged Property, UNLESS (i) at the time thereof and after giving
effect thereto no Event of Default shall have occurred and be
continuing or would result therefrom; (ii) the consideration represents
at least the fair value thereof (as determined by the Borrower in good
faith); (iii) such consideration is not less than the fair market value
as reflected in the appraisal thereof referred to in section 5.1(t);
(iv) at least 90% of the consideration for such transaction consists of
cash; and
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(v) contemporaneously with the completion of such transaction the
Borrower prepays its Loans as contemplated by section 4.2(d).
(b) The Borrower shall not sell or otherwise transfer, or
permit any Subsidiary to sell or otherwise transfer, directly or
indirectly (by merger or otherwise), any other assets or Property
(including, without limitation, any shares of capital stock of any
Subsidiary) outside of the ordinary course of business, EXCEPT THAT (i)
the foregoing restriction shall not apply to transfers by a Subsidiary
of the Borrower to the Borrower or to a Wholly-Owned Subsidiary of the
Borrower, or by the Borrower to a Wholly-Owned Subsidiary of the
Borrower; (ii) if no Event of Default shall have occurred and be
continuing or would result therefrom, the Borrower or any Subsidiary
may sell or otherwise transfer, outside of the ordinary course of
business, assets or other Property, other than any Mortgaged Property,
for consideration consisting of cash, stock, securities or other
Property having a fair value at least equal to the assets or other
Property so sold or otherwise transferred (as determined by the
Borrower in good faith), PROVIDED that the net cash proceeds of any
such sale or transfer are (A) reinvested in the business of the
Borrower and its Subsidiaries within six months following receipt
thereof, or (B) applied to the repayment, prepayment or other
retirement of Indebtedness for Borrowed Money, or (C) to the extent not
so reinvested or applied, are paid as a Distribution in accordance with
section 8.3 hereof. The sale or other transfer by the Management
Company or any of its Subsidiaries of any Property and the payment or
prepayment by the Management Company or any of its Subsidiaries of any
related loans or advances owed to the Borrower or any of its
Subsidiaries, shall be considered a disposition of Property by the
Borrower and its Subsidiaries for purposes of this section 8.8(b) and
the net cash proceeds received by the Borrower or any of its
Subsidiaries in respect of such loans and advances so paid or prepaid
shall be subject to the PROVISO set forth in clause (ii) above.
1.19. ACQUISITIONS. A new section 8.12 is added to the Credit
Agreement, reading in its entirety as follows:
8.12. ACQUISITIONS. From and after November 1, 1998, the
Borrower, its Subsidiaries, the Management Company and its
Subsidiaries, considered as a combined entirety, will not purchase or
otherwise acquire any additional developed or undeveloped land and/or
buildings or other improvements thereto, not previously owned as of
such date, EXCLUSIVE of (i) immaterial acquisitions, and (ii)
acquisitions of undeveloped land adjacent to presently owned property,
if made in anticipation of a prompt sale of such property and such
adjacent land as an entirety in order to maximize the value to be
realized from such presently owned property upon such prompt sale.
1.20. REPRESENTATION AS TO ADVERSE CHANGES. Section 6.6 of the Credit
Agreement is amended to read in its entirety as follows:
6.6. NO ADVERSE CHANGES. Since September 30, 1998, (i) no
changes have occurred in the assets, liabilities or financial condition
of the Borrower and its Subsidiaries considered as an entirety from
those reflected in the Borrower's consolidated balance sheet as of such
date which, individually or in the aggregate, have been materially
adverse, and (ii) there has been no material and adverse development in
the business or in the operations of the Borrower and its Subsidiaries
considered as an entirety.
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1.21. LETTERS OF CREDIT. Section 2.1(b) of the Credit Agreement is
amended by adding the following at the end thereof:
In addition, and notwithstanding the foregoing provisions of this
section 2.1, from and after November 1, 1998, no Letter of Credit may
be issued, renewed or extended by a Letter of Credit Issuer with or to
an expiry date later than June 30, 1999, and no Letter of Credit issued
from and after November 1, 1998 shall contain any right of the
beneficiary or account party to extend or renew the expiry date thereof
beyond June 30, 1999.
SECTION 2. REPRESENTATIONS AND WARRANTIES.
2.1. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The Borrower
represents and warrants that: (a) this Amendment has been duly authorized by all
necessary organizational action on its part, has been duly executed and
delivered by it, and constitutes its valid and binding agreement, enforceable
against it in accordance with its terms, SUBJECT to the qualifications specified
in section 6.3(b) of the Credit Agreement; (b) its representations and
warranties contained in the Credit Agreement, as amended hereby, are true and
correct on and as of the date hereof as though made on and as of the date
hereof, except to the extent that such representations and warranties expressly
relate to a specified date, in which case such representations and warranties
are hereby reaffirmed as true and correct when made; (c) no condition or event
has occurred or exists which constitutes or which, after notice or lapse of time
or both, would constitute an Event of Default; (d) it is in full compliance with
all covenants and agreements contained in the Credit Agreement, as amended
hereby, and the other Loan Documents to which it is a party; and (e) the
Borrower has furnished the Lenders with a true, correct and complete copy of the
Borrower's Form 10-Q Quarterly Report for the fiscal period ended September 30,
1998, as filed with the SEC, and the financial statements included in such Form
10-Q Quarterly Report present fairly in all material respects the consolidated
financial position of the Borrower and its Subsidiaries (as combined with the
Management Company, if so presented) and the consolidated results of their
operations (combined as aforesaid, if so presented), subject, to routine
year-end audit adjustments.
2.2. REPRESENTATIONS AND WARRANTIES OF THE MANAGEMENT COMPANY. The
Management Company represents and warrants that: (a) this Amendment has been
duly authorized by all necessary corporate action on its part, has been duly
executed and delivered by it, and constitutes its valid and binding agreement,
enforceable against it in accordance with its terms, subject to the
qualifications specified in section 6.3(b) of the Credit Agreement; (b) its
representations and warranties contained in the Credit Agreement, as amended
hereby, are true and correct on and as of the date hereof as though made on and
as of the date hereof, except to the extent that such representations and
warranties expressly relate to a specified date, in which case such
representations and warranties are hereby reaffirmed as true and correct when
made; (c) no condition or event has occurred or exists which constitutes or
which, after notice or lapse of time or both, would constitute an Event of
Default; and (d) it is in full compliance with all covenants and agreements
contained in the Credit Agreement, as amended hereby, and the other Loan
Documents to which it is a party.
SECTION 3. EFFECTIVENESS.
This Amendment shall become effective if and when, on a date (the
"EFFECTIVE DATE"), on or prior to January 11, 1999, the following conditions
shall be satisfied:
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(a) this Amendment shall have been executed by the Borrower,
the Management Company and the Administrative Agent, and counterparts
hereof as so executed shall have been delivered to the Administrative
Agent;
(b) the Administrative Agent shall have been notified by all
of the Lenders that such Lenders have executed this Amendment (which
notification may be by facsimile or other written confirmation of such
execution);
(c) the Borrower shall have paid to the Administrative Agent,
for PRO RATA distribution to the Lenders, an amendment fee in the
amount of $825,000, which amount is equivalent to a rate of 75 basis
points based on the Total Commitment of $110,000,000 provided for
herein;
(d) on the Effective Date, the Borrower shall have prepaid
Loans in an aggregate principal amount of at least $8,000,000; and as
of the Effective Date, the aggregate principal amount of Loans then
outstanding under the Credit Agreement shall not exceed $93,000,000;
and
(e) the Canco Credit Agreement, and the Canco Put Agreement,
shall each have been amended or otherwise modified in a manner
acceptable to the Required Lenders, such that the Borrower, its
Subsidiaries and Imperial Parking Limited can reasonably be expected to
remain in compliance therewith without any adverse consequences of a
change of control for a period extending through at least June 30,
1999.
The Administrative Agent shall notify the Borrower and each Lender in writing of
the Effective Date.
SECTION 4. RATIFICATIONS.
The terms and provisions set forth in this Amendment shall modify and
supersede all inconsistent terms and provisions set forth in the Credit
Agreement, and except as expressly modified and superseded by this Amendment,
the terms and provisions of the Credit Agreement are ratified and confirmed and
shall continue in full force and effect.
SECTION 5. MISCELLANEOUS.
5.1. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and
inure to the benefit of the Borrower, each Lender and the Administrative Agent
and their respective permitted successors and assigns.
5.2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made in this Amendment shall survive the execution and delivery
of this Amendment, and no investigation by the Administrative Agent or any
Lender or any subsequent Loan or issuance of a Letter of Credit shall affect the
representations and warranties or the right of the Administrative Agent or any
Lender to rely upon them.
5.3. REFERENCE TO CREDIT AGREEMENT. The Credit Agreement and any and
all other agreements, instruments or documentation now or hereafter executed and
delivered pursuant to the terms of the Credit Agreement as amended hereby, are
hereby amended so that any reference therein to the Credit Agreement shall mean
a reference to the Credit Agreement as amended hereby.
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5.4. EXPENSES. As provided in the Credit Agreement, but without
limiting any terms or provisions thereof, the Borrower agrees to pay on demand
all costs and expenses incurred by the Administrative Agent in connection with
the preparation, negotiation, and execution of this Amendment, including without
limitation the costs and fees of the Administrative Agent's special legal
counsel, regardless of whether this Amendment becomes effective in accordance
with the terms hereof, and all costs and expenses incurred by the Administrative
Agent or any Lender in connection with the enforcement or preservation of any
rights under the Credit Agreement, as amended hereby.
5.5. SEVERABILITY. Any term or provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the term or provision so held to be invalid or unenforceable.
5.6. APPLICABLE LAW. This Amendment shall be governed by and construed
in accordance with the laws of the State of Ohio.
5.7. HEADINGS. The headings, captions and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
5.8. ENTIRE AGREEMENT. This Amendment is specifically limited to the
matters expressly set forth herein. This Amendment and all other instruments,
agreements and documentation executed and delivered in connection with this
Amendment embody the final, entire agreement among the parties hereto with
respect to the subject matter hereof and supersede any and all prior
commitments, agreements, representations and understandings, whether written or
oral, relating to the matters covered by this Amendment, and may not be
contradicted or varied by evidence of prior, contemporaneous or subsequent oral
agreements or discussions of the parties hereto. There are no oral agreements
among the parties hereto relating to the subject matter hereof or any other
subject matter relating to the Credit Agreement.
5.9. LIABILITY OF BORROWER'S TRUSTEES, ETC. Notwithstanding any
provision of this Amendment to the contrary, this Amendment has been executed
and delivered by a duly authorized officer of the Borrower, for and on behalf of
the Borrower's trustees. The Administrative Agent and each Lender each
acknowledges that neither the trustees of the Borrower, nor any additional or
successor trustees of the Borrower, nor any beneficiary, officer, employee or
agent of the Borrower, shall have any personal, individual liability hereunder
or under any of the Loan Documents. The Administrative Agent and each Lender
agrees to look solely to the Property and assets of the Borrower (and, where so
provided herein or in any of the Loan Documents, to the Property and assets of
the Management Company) for the satisfaction of all claims of any nature arising
under or in connection with this Amendment.
5.10. COUNTERPARTS. This Amendment may be executed by the parties
hereto separately in one or more counterparts, each of which when so executed
shall be deemed to be an original, but all of which when taken together shall
constitute one and the same agreement.
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IN WITNESS WHEREOF, this Amendment has been duly executed and delivered
as of the date first above written.
FIRST UNION REAL ESTATE EQUITY FIRST UNION MANAGEMENT, INC.
AND MORTGAGE INVESTMENTS
BY:_____________________________ By:_____________________________
TITLE: Title:
- --------------------------------------------------------------------------------
NATIONAL CITY BANK, BANKERS TRUST COMPANY,
individually and as Administrative Agent individually and as Syndication Agent
By:_____________________________ By:_____________________________
Title: Title:
- -------------------------------------------------------------------------------
KEYBANK NATIONAL ASSOCIATION, MELLON BANK, N. A.
individually and as Documentation Agent
By:_____________________________
By:_____________________________ Title:
Title:
- --------------------------------------------------------------------------------
THE HUNTINGTON NATIONAL BANK FIRST MERIT BANK
By:_____________________________ By:_____________________________
Title: Title:
- -------------------------------------------------------------------------------
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