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Exhibit 99b
FIRST AMENDMENT OF FIXED RATE LOAN AGREEMENT
FIRST AMENDMENT OF FIXED RATE LOAN AGREEMENT (as the same may be
amended or otherwise modified from time to time, the "AMENDMENT"), dated as of
the ____ day of December, 1998, among First Union Real Estate Equity and
Mortgage Investments, as Borrower; Blackacre Bridge Capital, L.L.C., Gotham
Partners, L.P., Gotham Partners III, L.P. and Elliott Associates, L.P., as
Lenders; and Bankers Trust Company, as Agent.
W I T N E S S E T H:
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WHEREAS, pursuant to that certain Fixed Rate Loan Agreement as of
August 11, 1998 among the parties hereto (as the same may be amended or
otherwise modified from time to time, the "LOAN AGREEMENT"), Lenders made loans
to Borrower in the original aggregate principal amount of Forty-Five Million and
00/100 ($45,000,000.00) Dollars; and
WHEREAS, Borrower and Lenders desire to modify and amend the terms and
provisions of the Loan Agreement as hereinafter provided.
NOW, THEREFORE, in consideration of the covenants set forth herein and
for other good and valuable consideration, the receipt and legal sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
1. DEFINITIONS. All capitalized terms used herein without definition and
which are defined in the Loan Agreement are used herein with the
meanings assigned to such terms in the Loan Agreement.
2. AMENDMENTS TO LOAN AGREEMENT. The Loan Agreement is hereby modified as
follows:
a. The definition of the Imperial Credit Facility is
hereby amended to include, as part of the Amended
and Restated Credit Agreement referred to in such
definition, that certain Second Amendment to the
Amended and Restated Credit Agreement dated as of
December ___, 1998, a copy of which is annexed to
this Amendment as EXHIBIT A. Accordingly, the
reference in SECTION 8.1(a)(xii) of the Loan
Agreement to the Prior Debt Documents "as in
effect on the date hereof" (to the extent such
reference to the Prior Debt Documents is a
reference to the Imperial Credit Facility) shall
mean the Imperial Credit Facility as in effect after
giving effect to such Second Amendment to the Amended
and Restated Credit Agreement.
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b. The definition of Line of Credit Facility is
hereby amended to include, as part of the Amended
and Restated Credit Agreement referred to in such
definition, that certain Amendment No. 2 dated as
of November 24, 1998 to the Amended and Restated
Credit Agreement dated as of November 1, 1997, a
copy of which Amendment No. 2 is annexed to this
Amendment as EXHIBIT B. Accordingly, the
references in SECTIONS 6.1.9 and 7.1.3 of the Loan
Agreement to the Line of Credit Facility "as in
effect on the date hereof" and in SECTION
8.1(a)(xii) of the Loan Agreement to the Prior
Debt Documents "as in effect on the date hereof"
(to the extent such reference to the Prior Debt
Documents is a reference to the Line of Credit
Facility) shall mean the Line of Credit Facility
as in effect after giving effect to Amendment No.
2.
c. Clause (b) of the definition of "Interest Period" is
hereby amended to read, in its entirety, as follows:
"(b) the final Interest Period shall end on (and
include) August 11, 1999."
d. The definition of Interest Rate is hereby amended to
read, in its entirety, as follows:
"INTEREST RATE" means (i) from the date hereof to and
including November 11, 1998, a rate of interest equal
to nine and seven-eighths percent (9.875%) per annum
and (ii) on and after November 12, 1998, a rate of
interest equal to twelve percent (12%) per annum.
e. The first sentence of SECTION 2.1.4 of the Loan
Agreement is hereby amended to read, in its entirety,
as follows:
"The Commitments and the Loans shall be evidenced by
the Notes of Borrower, each in the original principal
amount of the respective Loans and having a scheduled
maturity date of August 11, 1999."
f. SECTION 2.3.1 of the Loan Agreement is hereby amended
to read, in its entirety, as follows:
"Borrower shall repay the then outstanding principal
amount of the Loan in full on August 11, 1999,
together with interest thereon through (and
including) the last day of the final Interest
Period."
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g. SECTION 2.6 of the Loan Agreement and all related
definitions are hereby deleted.
h. All references in the Loan Agreement to the Initial
Maturity Date, the Initial Extension Maturity Date
and the Final Extension Maturity Date shall mean
August 11, 1999.
i. SECTION 2.7 of the Loan Agreement is hereby amended
to add the following as a new SECTION 2.7(c):
"On January 15, 1999, Borrower shall pay to Agent
(for the ratable benefit of Lenders) a non-refundable
facility premium of $450,000. If, on March 31, 1999,
the outstanding principal balance of the Loans is
$30,000,000 or more, then on March 31, 1999 Borrower
shall pay to Agent (for the ratable benefit of
Lenders) a non-refundable facility premium of
one-half of one percent (.50%) of the then
outstanding principal balance of the Loans. If, on
May 31, 1999, the outstanding principal balance of
the Loans exceeds $15,000,000, then on May 31, 1999
Borrower shall pay to Agent (for the ratable benefit
of Lenders) a non-refundable facility premium of one
percent (1.0%) of the then outstanding principal
balance of the Loans. However, if on May 31, 1999 the
outstanding principal balance of the Loans is equal
to or less than $15,000,000, then on May 31, 1999
Borrower shall pay to Agent (for the ratable benefit
of Lenders) a non-refundable premium of one-half of
one percent (.50%) of the then outstanding principal
balance of the Loans. Each of the premiums payable
pursuant to this SECTION 2.7(c) shall be payable only
if on the date such premium is due Loans are
outstanding. Any repayment of the Loans shall not
entitle Borrower to any refund of any premiums or
other amounts paid to Lenders. Borrower's failure to
pay, when due, any premium payable pursuant to this
SECTION 2.7(c) shall be an Event of Default."
j. SECTION 8.1(a)(ii) of the Loan Agreement is hereby
amended to read, in its entirety, as follows:
"(ii) if Borrower fails to pay the Indebtedness in
full on August 11, 1999;"
k. SECTION 8.1(a) (xiv) of the Loan Agreement is hereby
amended to delete the "or" at the end thereof;
SECTION 8.1(a)(xv) of the Loan Agreement is hereby
amended to add "or" at the end thereof; and the
following are hereby added to the Loan
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Agreement as new SECTIONS 8.1(a)(xvi) and (xvii):
"(xvi) if on March 31, 1999 the outstanding
principal amount of the Loans is $35,000,000 or
more; or
(xvii) if on May 31, 1999 the outstanding
principal balance of the Loans is $25,000,000 or
more."
1. SECTIONS 11.2 and 11.3 of the Loan Agreement are
hereby deleted and SECTION 11.1 is hereby amended to
read, in its entirety, as follows:
"Borrower shall use its best efforts to
consummate, on or before each of March 31, 1999 and
May 31, 1999 (each, a "Required Payment Date"), an
offering, or offerings, as the case may be
(collectively, the "OFFERING"), pursuant to the
Registration Statement filed by Borrower on September
17, 1998 (Registration No. 333-63541), as amended
from time to time, and such other registration
statements as Borrower shall deem necessary or
appropriate, which entitle(s) holders of equity
securities of Borrower to purchase additional equity
securities of Borrower, on a pro rata basis and which
Offering, if fully subscribed, would provide Borrower
with net proceeds, together with any other Capital
Event Proceeds received by Borrower prior to each
Required Payment Date, sufficient to enable Borrower
to make principal payments on account of the Loans
and Other Loans such that no Event of Default will
occur under SECTIONS 8.1(a)(xvi) or (xvii) of the
Loan Agreement or SECTIONS 8.1(a)(xvi) or (xvii) of
the Other Loan Agreement. Borrower shall use its best
efforts to take, or cause to be taken, any and all
further action or actions necessary or advisable to
be taken in order to consummate the Offering when and
as required by this SECTION 11.1, including but not
limited to the distribution of a prospectus or
preparation, filing and distribution of any necessary
prospectus supplement with respect to any of the
applicable registration statements referred to above.
Without limiting the foregoing, Borrower shall use
its best efforts to commence, on a timely basis, but
in any event no later than sixteen (16) days prior to
each applicable Required Payment Date, an Offering
which, if fully subscribed, would provide the
Borrower with net proceeds, together with any other
Capital Event Proceeds received by Borrower prior to
the applicable Required Payment Date, sufficient to
enable Borrower to satisfy such
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principal amortization requirements (as previously
reduced by other prepayments) under the Loans and
Other Loans due on the applicable Required Payment
Date, and, following the commencement of such
Offering, diligently proceed to consummate such
Offering. It shall be an Event of Default if the
Registration Statement filed by Borrower on September
17, 1998 (Registration No. 333-6351) is not declared
effective on or prior to February 11, 1999."
3. AMENDMENTS TO NOTES. The first eight (8) lines of SECTION 1 of each
Note are hereby deleted and are replaced with the following:
"FOR VALUE RECEIVED, Borrower hereby promises to pay to the order of
Lender, on or before August 11, 1999 (the "Maturity Date"), the
principal sum of "
4. OUTSTANDING LOANS. Borrower represents and warrants to
Lenders that the outstanding principal amount of the Loans
is $45,000,000, that there are no offsets, defenses or
counterclaims to its obligations under the Loan Documents
and, that to the extent that any such offsets, defenses or
counterclaims exist without its knowledge, the same are
hereby waived to the fullest extent permitted by law.
Except as modified by this Amendment, the terms and
provisions of the Loan Documents are hereby ratified and
confirmed in all respects and continue in full force and
effect.
5. CONSENT OF LENDERS. Concurrently herewith the parties to the Other Loan
Agreement are entering into a First Amendment to Fixed Rate Loan
Agreement (the "OTHER AMENDMENT"), which Other Amendment is, except for
the parties thereto, substantially identical to this Amendment. The
Lenders hereby consent to the execution and delivery of the Other
Amendment.
6. MODIFICATIONS. No provision of this Amendment may be
waived, amended or supplemented except by a written
instrument executed in accordance with SECTION 9.4 of the
Loan Agreement.
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7. SUCCESSORS AND ASSIGNS. This Amendment, which sets forth the entire
understanding of the parties hereto with respect to the subject matter
hereof, inures to the benefit of, and shall be binding upon, the
parties hereto and their respective successors and permitted assigns.
8. SEVERABILITY. In the event that any one or more of the
provisions contained in this Amendment shall for any reason
be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Amendment, but
this Amendment shall be construed as if such invalid,
illegal or unenforceable provision had never been contained
herein.
9. CAPTIONS; COUNTERPARTS; GOVERNING LAW. Captions used in this
Amendment are for convenience of reference only and shall
not be deemed a part of this Amendment nor used in the
construction of its meaning. This Amendment may be signed
in any number of counterparts, each of which, when taken
together, shall constitute one and the same Amendment. This
Amendment shall be governed by and construed and enforced in
accordance with the laws of the State of New York applicable
to contracts made and to wholly be performed within such
state.
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IN WITNESS WHEREOF, the parties hereto have duly
executed this Amendment, as of the date and year first written
above.
AGENT:
BANKERS TRUST COMPANY
By: __________________________
Name:
Title:
LENDERS:
BLACKACRE BRIDGE CAPITAL,
L.L.C.
By: Blackacre Capital
Management Corp., a
Connecticut corporation,
as managing member
By: __________________________
Name:
Title:
ELLIOTT ASSOCIATES, L.P.
By: __________________________
Name:
Title:
GOTHAM PARTNERS, L.P. and
GOTHAM PARTNERS III, L.P.
By: Section H Partners, L.P.
By: Karenina Corp.
By: _____________________
Name:
Title:
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BORROWER:
FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS
By: ____________________________
Name:
Title:
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