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Exhibit 99(a)
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. 3
DATED AS OF
MARCH 1, 1999
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF
NOVEMBER 1, 1997
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AMENDMENT NO. 3
TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NO. 3, dated as of March 1, 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, dated as of June 15, 1998, and Amendment No. 2 thereto, dated as of
January 8, 1999 (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) 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 AND AGREEMENTS.
1.1. VOLUNTARY REDUCTION OF THE TOTAL COMMITMENT. The Borrower
hereby voluntarily and permanently reduces the Total Commitment under the Credit
Agreement from $110,000,000 to $105,000,000, effective on the Effective Date of
this Amendment provided for in section 3 hereof. Such reduction shall be applied
to permanently and proportionally reduce the Commitments of each of the Lenders.
The Lenders hereby waive any requirement for prior notice of such reduction.
After giving effect to such reduction, the Commitments of the respective Lenders
will be as follows:
LENDER COMMITMENT
National City Bank $ 25,200,000
Bankers Trust Company $ 21,000,000
KeyBank National Association $ 21,000,000
The Huntington National Bank $ 16,800,000
Mellon Bank, N. A. $ 12,600,000
First Merit Bank $ 8,400,000
TOTAL COMMITMENT $105,000,000
1.2. MANDATORY REDUCTION OF TOTAL COMMITMENT. Effective on the
Effective Date of this Amendment provided for in section 3 hereof, section
3.3(c) of the Credit Agreement is amended to read in its entirety as follows:
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(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
April 30, 1999 $80,000,000
June 30, 1999 $50,000,000
Any such reduction shall apply to proportionately and
permanently reduce the Commitment of each of the Lenders.
1.3. MANDATORY PREPAYMENT. Effective on the Effective Date of
this Amendment provided for in section 3 hereof, section 4.2(d) of the Credit
Agreement is amended by adding a sentence at the end thereof, with the result
that as so amended, section 4.2(d) of the Credit Agreement reads 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. In
addition, (i) in the event the Borrower successfully completes
a rights offering of its shares (such offering is expected to
be completed in May 1999 with gross proceeds of approximately
$50 million), not later than three Business Days following the
date of receipt of the proceeds from such offering, the
Borrower will make a one time mandatory prepayment of
principal of the outstanding Loans in an amount at least equal
to $9,000,000, or such lesser amount as is necessary to prepay
all outstanding Loans in full; and (ii) if after no loans are
outstanding under the Borrower's Fixed Rate Loan Agreements,
dated as of August 11, 1998, as amended, the Borrower receives
any proceeds from (1) any sale of its shares, (2) any
disposition of a Subsidiary, (3) any disposition or
refinancing of real property and or improvements (including
leaseholds) not constituting a Mortgaged Property, or (4) any
refinancing of any Mortgaged Property which may be permitted
hereunder, then the Borrower will make a mandatory prepayment
of principal of the outstanding Loans in an amount at least
equal to 100% of the cash proceeds (net of fees and expenses
of the transaction and any amounts applied to pay Indebtedness
of the Subsidiary so sold or secured by the disposed property)
then received from such transaction, or such lesser amount as
is necessary to prepay all outstanding Loans in full.
1.4. ADDITIONAL COLLATERAL. Effective on the Effective Date of
this Amendment provided for in section 3 hereof, a new section 7.21 is added to
the Credit Agreement, reading in its entirety as follows:
7.21. ADDITIONAL COLLATERAL. If any Lender so
requests in writing at any time after no loans are outstanding
under the Borrower's Fixed Rate Loan Agreements, dated as of
August 11, 1998, as amended, the Borrower will, or will cause
its Subsidiaries to, within 15
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Business Days, grant to the Administrative Agent, as security
for the Obligations, a mortgage, deed of trust or similar
instrument (similar in form and provisions to the Mortgages
previously delivered to the Administrative Agent, but
conforming to any local legal requirements) covering any real
property and improvements (including leaseholds) owned by the
Borrower or any of its Subsidiaries which is identified by
such Lender, located in the United States and is not at the
time then (x) encumbered by a mortgage or similar instrument
securing indebtedness of the Borrower or any of its
Subsidiaries, or (y) owned by Imperial Parking Limited or
Impark Services Limited or any of their Subsidiaries and
subject to restrictions contained in the Canco Credit
Agreement or any related documents which would effectively
prohibit any such mortgage, deed of trust or similar
instrument. No appraisal or environmental assessment shall be
required to be delivered hereunder in connection with any such
mortgage, deed of trust or similar instrument entered into
with the Administrative Agent, notwithstanding anything to the
contrary contained in this Agreement, any of the other Loan
Documents or any other document.
1.5. ADDITIONAL RESTRICTION ON USE OF PROCEEDS. Effective on
the Effective Date of this Amendment provided for in section 3 hereof, a new
section 7.22 is added to the Credit Agreement, reading in its entirety as
follows:
7.22. ADDITIONAL RESTRICTION ON USE OF PROCEEDS. No
Borrowing shall be made after March 22, 1999 if after giving
effect thereto the Unutilized Total Commitment is less than
$4,400,000 (any such Borrowing, to the extent it represents a
reduction of the Unutilized Total Commitment below $4,400,000,
a "LIMITED USE BORROWING"), unless at the time the Borrower
requests such Limited Use Borrowing, the Borrower provides a
certificate to the Administrative Agent, certifying that the
proceeds of such Limited Use Borrowing are to be immediately
applied to payment of the cost and expense of tenant
improvements on Properties leased to persons who are not
Affiliates, specifying in reasonable detail the amount,
character and location of the tenant improvements to be so
financed, and certifying that no prior Limited Use Borrowing
has been made to finance such costs and expenses of tenant
improvements. The Borrower undertakes and covenants that the
proceeds of any Limited Use Borrowing will be immediately
applied to the payment of the costs and expenses of tenant
improvements identified by the Borrower in its certificate
delivered to the Administrative Agent at the time the Borrower
requested such Borrowing. This section 7.22 shall cease being
effective when the Borrower has (x) applied cumulative
proceeds of Loans made after March 22, 1999 of at least
$4,400,000 to finance costs and expenses of tenant
improvements referred to above, and (y) notified the Lenders
in writing of such application, describing in reasonable
detail the amount and purpose of the expenditures by location.
1.6. FINANCIAL COVENANTS---ADJUSTED NET WORTH. The last two
sentences of section 7.16(d) of the Credit Agreement are amended to read in
their entirety as follows:
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 $80,000,000, by the amount of any
downward adjustments to Adjusted Net Worth made (i) 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, and (ii) to give effect to a
reduction in the depreciable lives of fixed assets, which
change is made after September 30, 1998 as a consequence of
comments from the staff of the SEC. The Borrower will promptly
advise the Lenders in writing of the date, amount and identity
of assets involved in any such write-down, and of the dollar
amounts by relevant period of the change in depreciation
resulting from such change in depreciable lives.
1.7. DEFINITION OF NET INCOME. The definition of the term Net
Income contained in
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section 10.1 of the Credit Agreement is amended by changing the quarterly
amount in clause (iv)(A) thereof from $2,500,000 to $4,000,000.
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 and
to additional adjustments related to the Borrower's determination to reduce the
depreciable lives of its assets and/or write-down the carrying value of its
assets, all as announced publicly on or prior to March 15, 1999.
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 April 30, 1999, the following conditions
shall be satisfied:
(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
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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 $262,500; and
(d) on or prior to the Effective Date, the Borrower
shall have delivered to the Lenders copies of an undertaking
or agreement of the Borrower's lenders under its Fixed Rate
Loan Agreements, dated as of August 11, 1998, as amended,
pursuant to which such lenders agree or it is provided that at
least $9,000,000 of proceeds of the Borrower's pending rights
offering may be applied as a prepayment of the Loans under the
Credit Agreement, and such undertaking or agreement shall be
in full force and effect and satisfactory in form and
substance to each of the Lenders.
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.
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.
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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: