EXHIBIT 10.27
FIRST AMENDMENT TO LOAN AGREEMENT, PLEDGE AGREEMENT,
PROMISSORY NOTE AND OTHER DOCUMENTS
THIS FIRST AMENDMENT TO LOAN AGREEMENT, PLEDGE AGREEMENT, PROMISSORY NOTE
AND OTHER DOCUMENTS (this "AGREEMENT") is made and entered into as of this __
day of August, 2000, by and between DVL, INC. ("BORROWER"), a Delaware
corporation, and PENNSYLVANIA BUSINESS BANK, a Pennsylvania state banking
association (the "BANK").
RECITALS
1. Pursuant to a certain Loan and Pledge Agreement dated March 6, 2000,
between the Bank and Borrower (the "LOAN AGREEMENT"), the Bank agreed to lend to
Borrower the principal amount of $1,000,000 (the "LOAN"). The Loan is evidenced
by a certain Promissory Note executed and delivered by Borrower in favor of the
Bank in the original principal amount of $1,000,000 (the "NOTE"). The purpose of
the Loan was to finance the acquisition by Borrower of certain Promissory Notes
(individually, a "COLLATERAL NOTE" and, collectively, the "COLLATERAL NOTES").
The Collateral Notes are secured by, INTER ALIA, certain Mortgages
(individually, a "COLLATERAL MORTGAGE" and, collectively, the "COLLATERAL
MORTGAGES") on various lands and improvements (individually a "PROPERTY" and,
collectively, the "PROPERTIES) described in each Collateral Mortgage. The
Collateral Notes, the Collateral Mortgages and all of the other documents and
instruments evidencing, securing or executed in connection with the Collateral
Notes are referred to herein as the "COLLATERAL LOAN DOCUMENTS."
2. The Note is secured by, among other things, the following documents,
all of which are dated March 6, 2000 and all of which were executed and
delivered by Borrower in favor of the Bank: (i) a certain Pledge, Collateral
Assignment and Security Agreement (the "PLEDGE AGREEMENT") pursuant to which the
Collateral Loan Documents were collaterally assigned to secure the Note and (ii)
certain Collateral Assignments of Mortgage and Other Recorded Documents
(individually, an "ASSIGNMENT OF MORTGAGE" and, collectively, the "ASSIGNMENTS
OF MORTGAGE") pursuant to which each Collateral Mortgage and all other related
recorded documents were collaterally assigned to secure the Note. The Loan
Agreement, Note, Pledge Agreement, Assignments of Mortgage and all other
documents executed in connection with or as security for the Loan are
collectively referred to herein as the "BANK LOAN DOCUMENTS."
3. Pursuant to the terms of the Loan Agreement, the Loan was fully funded
by the Bank at the time of the original closing. Following closing, the
principal outstanding under the Loan was paid down by Borrower by $700,000 to
$300,000 and the Collateral Note, Collateral Mortgage and the other Collateral
Loan Documents relating to the property located in Kinder, Parish of Allen,
Louisiana were released from all of the collateral assignments evidenced by the
Bank Loan Documents.
4. Borrower has requested and the Bank has agreed, subject to the terms
and conditions set forth herein, to lend to Borrower $700,000 (the "Loan
Increase") which Loan Increase shall be used to acquire certain additional
Promissory Notes (the "NEW PROMISSORY NOTES").
NOW THEREFORE, in consideration of the mutual covenants and benefits herein
contained and for other good and valuable consideration, the legality and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, do hereby covenant and agree as follows:
1. DEFINED TERMS. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to them in the
Loan Agreement.
<PAGE>
2. AMENDMENT TO LOAN AGREEMENT. The Loan Agreement is hereby amended
as follows:
1. Schedules I, II, III, IV, V and VI to the Loan Agreement are
each hereby replaced with Schedules I, II, III, IV, V and VI
hereto;
2. The definition of "Loan" set forth in Section 1.1 is
hereby amended and restated to read in full as follows:
"Loan" shall mean the loan to be made by Bank, including the
Loan Increase, pursuant to this Agreement in the aggregate
principal amount of One Million Dollars ($1,000,000).
3. Section 1.1 is hereby amended by inserting therein, in their
proper alphabetical location, the following:
"Champlain Property" shall mean that certain property
located in Champlain, Clinton County, New York which is
encumbered by one of the Collateral Mortgages.
"Loan Increase" shall mean that portion of the Loan equal to
$700,000 funded for purpose of acquiring the Collateral Notes
with respect to the New Hampshire Property and the Champlain
Property.
"New Hampshire Property" shall mean that certain property
located in Ossipee, Carroll County, New Hampshire which is
encumbered by one of the Collateral Mortgages.
4. The first sentence of Section 2.3 is hereby amended and
restated to read in its entirety as follows:
The term of the Loan (the "Term") shall commence as of the
date hereof and shall terminate on May 1, 2006 (the "Maturity
Date").
e. Notwithstanding anything to the contrary contained in the Loan
Agreement, the Note or this Agreement, the monthly aggregate amount paid to
Lender during the term of the Loan on account of interest and Mandatory
Principal Payments with respect to the Loan shall be at least equal to the
figures set forth in the Total column of the payment schedule attached hereto as
Schedule VII.
3. CONDITIONS PRECEDENT. Concurrently with the execution and delivery of
this Agreement and as a condition to the effectiveness of this
Agreement, Borrower shall deliver to the Bank the following, all of
which shall be in form and substance acceptable to the Bank in its
reasonable discretion:
1. Executed allonges/endorsements (the "ENDORSEMENTS") to the
Additional Promissory Notes, in the form previously executed by
Borrower;
2. Executed Collateral Assignments of Mortgage and Other Recorded
Documents from Borrower in favor of the Bank with respect to the
Collateral Mortgages on the Champlain Property and the New
Hampshire Property (collectively, the "NEW COLLATERAL ASSIGNMENTS
OF MORTGAGE");
3. Executed First Amendments to Collateral Assignments of
Mortgage and Other Recorded Documents from Borrower in
favor of the Bank for each of the Assignments of
Mortgage (collectively, the "FIRST AMENDMENTS TO
COLLATERAL ASSIGNMENTS OF MORTGAGE");
4. Executed UCC-1 and UCC-3 Financing Statements in form and
substance
<PAGE>
acceptable to the Bank
5. The Bank shall have received all duly executed and, if necessary,
acknowledged Bank Loan Documents, Borrower Documents and
Collateral Documents with respect to the Additional Promissory
Notes, including originals of all of the Additional Promissory
Notes and all amendments and modification thereto;
6. The security interests in all personal property described in the
Collateral Assignment Documents shall have been, subject to
recording of any financing statements, duly perfected and shall
constitute valid and enforceable first priority liens and
security interests in such property;
7. A loan fee in the amount of $7,000 shall have been paid to Bank;
8. No Event of Default or Conditional Default shall have occurred
and be continuing under this Agreement or any of the other Bank
Loan Documents;
9. No default shall have occurred and be continuing under any of the
Senior Loan Documents or any of the Tenant Leases;
10. The Bank shall have received or be reimbursed for all of the
Bank's reasonable out-of-pocket expenses incurred in connection
with the Loan, including, but not limited to, the reasonable fees
and expenses of the Bank's legal counsel;
11. All of the representations and warranties of Borrower as set
forth in Article VIII of the Loan Agreement shall be true,
correct and accurate in all material respects;
12. The Bank shall have received, reviewed and approved all of the
Collateral Loan Documents pertaining to the New Promissory Notes;
13. The Bank shall have received commitments for Title Policies
insuring the lien of the New Collateral Assignments of Mortgage;
14. The Bank shall have received and reviewed all of the documents in
connection with the acquisition of the Collateral Loan Documents
pertaining to the New Promissory Notes by Borrower;
15. Borrower and, if necessary, each of the Collateral Borrowers,
shall have executed and delivered to the Bank letters addressed
to each of the Tenants directing payment to the Bank of all sums
to be paid by the Tenants under the Tenant Leases;
16. Endorsements to the existing Title Policies bringing down the
effective date of each Title Policy to the date hereof and
insuring the lien of the Collateral Assignments of Mortgage as
amended by the First Amendments to Collateral Assignments of
Mortgage, subject to no other exceptions than are contained in
the existing Title Policies;
17. An opinion of Borrower's counsel dated the date hereof with
respect to the due authorization, execution and delivery of this
Agreement, the Endorsements, the New Collateral Assignments of
Mortgage, the First Amendments to Collateral Assignments of
Mortgage and the transactions contemplated herein; and
18. Such additional documents, certificates and information as the
Bank may
<PAGE>
reasonably require in connection with, and to effectuate, the
foregoing.
4. ADVANCE OF LOAN INCREASE; NO REBORROWING. Notwithstanding anything to
the contrary contained in the Loan Agreement and subject to
satisfaction of all of the other terms and conditions set forth
herein, including, but not limited to, Section 3 hereof, the Bank
shall advance to Borrower the Loan Increase upon satisfaction of all
of the conditions for Loan Advances set forth in the Loan Agreement,
as amended hereby, and such Loan Increase along with such other sums
owing by Borrower to Bank with respect to the Loan shall be evidenced
by the Note and secured by the Collateral Assignment Documents, as
amended by this Agreement and the other amendments to be delivered
pursuant to the terms of this Agreement. Notwithstanding the funding
of the Loan Increase by the Bank pursuant to the terms hereof, no
portion of the Loan including, without limitation, the Loan Increase
may be reborrowered, following repayment, by Borrower.
5. AMENDMENT TO THE BANK LOAN DOCUMENTS. All references to the Loan
Agreement, the Note, the Pledge Agreement, the Assignments of
Mortgage, and in any of the other Bank Loan Documents and in any
documents executed in connection therewith shall be deemed to refer to
the Loan Agreement, the Note, the Pledge Agreement, the Assignments of
Mortgage and such other documents as amended by this Agreement and the
other amendments to be delivered pursuant to the terms of this
Agreement.
6. RATIFICATION OF THE BANK LOAN DOCUMENTS. Notwithstanding anything to
the contrary herein contained or any claims of the parties to the
contrary, the Bank and Borrower agree that the Bank Loan Documents and
each of the documents executed in connection therewith are in full
force and effect and all such documents shall remain in full force and
effect, as expressly amended by this Agreement or any other amendment
expressly relating thereto, and Borrower hereby ratifies and confirms
its obligations thereunder.
7. BORROWER REPRESENTATIONS AND WARRANTIES.
a. Borrower hereby certifies that (i) the representations and
warranties of Borrower in the Loan Agreement and the other Bank Loan Documents
are true and correct, in all material respects, as of the date hereof, as if
made on the date hereof and (ii) no Event of Default and no Conditional Default
under the Loan Agreement, the Note, the Pledge Agreement or any of the other
Bank Loan Documents exists on the date hereof or shall occur as a result of the
funding of the Loan Increase as described in Section 4 hereof.
b. Borrower further represents that it has all the requisite power
and authority to enter into and to perform its obligations under this Agreement,
the Endorsements, the New Collateral Assignments of Mortgage, the First
Amendments to Collateral Assignments of Mortgage and the other documents and
instruments executed and delivered in connection with this Amendment and that
the execution, delivery and performance of this Agreement, the Endorsements, the
New Collateral Assignments of Mortgage, the First Amendments to Collateral
Assignments of Mortgage and the other documents and instruments have been duly
authorized by all requisite limited liability company action and will not
violate or constitute a default under any provision of any applicable law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
presently in effect or of the certificate of incorporation or by-laws of
Borrower, or of any indenture, note, loan or credit agreement, license or any
other agreement, lease or instrument to which Borrower is a party or by which
Borrower or any of its properties are bound.
8. RELEASE. Recognizing and in consideration of the Bank's agreement to
amend the Loan Agreement, including, without limiting, to fund the
Loan Increase, Borrower, as of the date hereof, hereby waives and
releases the Bank and its officers, attorneys, agents and employees
from any liability, suit,
<PAGE>
damage, claim, loss or expense of any kind or nature whatsoever and
howsoever arising that Borrower as of the date hereof ever had, could
have had or now has against the Bank, and the existence of which
Borrower knows or should reasonably have known, arising out of or
relating to the Loan Agreement, the Note, the Pledge Agreement, the
Collateral Assignments of Mortgage, any of the other Bank Loan
Documents or any other document delivered pursuant thereto or the
Bank's acts or omissions with respect thereto. Borrower further hereby
indemnifies and agrees to hold the Bank and its officers, attorneys,
agents and employees harmless from any loss, damage, judgment,
liability or expense (including reasonable counsel fees) suffered by
or rendered against the Bank on account of any respective breach or
non-performance of Borrower under the terms of the Loan Agreement, the
Note, the Pledge Agreement, the Collateral Assignments of Mortgage,
any of the other Bank Loan Documents or any other document delivered
pursuant thereto.
9. MISCELLANEOUS.
1. Borrower shall pay or reimburse all of the Bank's costs and
expenses incurred in connection with this Agreement, including
without limitation, reasonable attorneys' fees, and all other
charges, fees and expenses incurred by the Bank in connection
herewith.
2. This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns.
Nothing expressed or referred to in this Agreement is intended or
shall be construed to give any person or entity other than the
parties hereto any legal or equitable right, remedy or claim
under or with respect to this Agreement, or any provision hereof.
3. In the event any provisions of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any
other provision hereof.
4. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
5. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall
constitute one and the same instrument.
6. The headings used in this Agreement are for convenience of
reference only, do not form a part of this Agreement and shall
not affect in any way the meaning or interpretation of this
Agreement.
10. CONFESSION OF JUDGMENT; WAIVER OF JURY TRIAL. BORROWER EXPRESSLY
RATIFIES AND CONFIRMS THE CONFESSION OF JUDGMENT AND WAIVER OF JURY
TRIAL PROVISIONS CONTAINED IN THE BANK LOAN DOCUMENTS.
<PAGE>
IN WITNESS WHEREOF, the parties hereto under Seal, intending to be
legally bound, have executed this Agreement as of the day and year first above
written.
[SEAL] BORROWER:
ATTESTATION: DVL, INC., a Delaware Corporation
By: ______________________ By: _____________________________
Name: ______________________ Name: ___________________________
Title: ______________________ Title: __________________________
BANK:
PENNSYLVANIA BUSINESS BANK
By: _____________________________
Name: ___________________________
Title: __________________________
<PAGE>
SCHEDULE I
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ASSIGNMENTS OF LEASES AND RENTS
-------------------------------
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DOCUMENT EXECUTION RECORDING BOOK/PAGE
DATE DATE (LASALLE PARISH, LA)
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Assignment of Lease & Rentals from 11/28/83 11/30/83 123/378
Kenbee Management-Oklahoma, Inc. Registry No. 124040
("Kenbee") to State of Wisconsin
Investment Board
--------------------------------------------------------------------------------
Assignment of Leases & Rents in 11/23/82 11/30/82 394/129
favor of Kenbee
Management-Oklahoma, Inc. (held by
assignment to Del-Val)
--------------------------------------------------------------------------------
Assignment of Leases and Rents from 11/19/85 11/20/85 904/337
Alexandria to Kenbee
Management-Oklahoma, Inc.
--------------------------------------------------------------------------------
Second Assignment of Leases and 11/7/83 11/9/83 0916/185
Rents from Ava Associates to Kenbee
Management-Connecticut Inc.
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<PAGE>
SCHEDULE II
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COLLATERAL NOTES
----------------
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EXECUTION
DOCUMENT DATE
--------------------------------------------------------------------------------
$900,000 Note from Jena Associates to Kenbee Management-Oklahoma, 11/28/83
Inc., as amended 11/28/83
--------------------------------------------------------------------------------
$3,550,000 Note from St. Albans Associates to Spring Valley 12/28/79
Development Corporation, Inc.
--------------------------------------------------------------------------------
$1,090,000 Note from Stigler Associates to Kenbee 11/23/82
Management-Oklahoma, Inc.
--------------------------------------------------------------------------------
$685,000 Note from Alexandria Associates to Kenbee 11/19/85
Management-Oklahoma, Inc.
--------------------------------------------------------------------------------
$1,083,000 Note from Champlain Associates to Kenbee 01/29/82
Management-Connecticut, Inc., as amended 1/1/87 and 1/1/92
--------------------------------------------------------------------------------
$260,000 Note from Ava Associates to Kenbee 11/07/83
Management-Connecticut, Inc., as amended 11/7/83
--------------------------------------------------------------------------------
<PAGE>
SCHEDULE III
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MORTGAGES
---------
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DOCUMENT EXECUTION RECORDING BOOK/PAGE
DATE DATE
--------------------------------------------------------------------------------
$900,000 Wrap-Around Mortgage 11/28/83 11/30/83 MB 123/414
from Jena Associates to Kenbee Registry No. 124044
Management-Oklahoma, Inc., as
amended 10/9/87
--------------------------------------------------------------------------------
$3,550,000 Mortgage from St. 12/28/79 01/10/80 39/336 (City)
Albans Associates to Spring 35/72 (Town)
Valley Development
Corporation, Inc., as modified
1/1/92 & 6/30/95
--------------------------------------------------------------------------------
$1,090,000 Mortgage from 11/23/82 11/30/82 MB 394/118
Stigler Associates to Kenbee
Management-Oklahoma, Inc., as
modified 12/13/83, 1/1/88 &
1/1/92
--------------------------------------------------------------------------------
$685,000 Mortgage from 11/19/85 11/20/85 480/219
Alexandria Associates to
Kenbee Management-Oklahoma,
Inc., as modified 3/18/86
--------------------------------------------------------------------------------
$1,083,000 Mortgage from 01/29/82 02/08/82 Liber 343/111
Champlain Associates to Kenbee
Management- Connecticut, Inc.,
as modified 1/1/87 and 1/1/92
--------------------------------------------------------------------------------
$260,000 Mortgage from Ava 11/07/83 11/09/83 0916/177
Associates to Kenbee
Management-Connecticut, Inc.,
as modified 11/7/83
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<PAGE>
SCHEDULE IV
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TENANT LEASES
-------------
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EXECUTION
DOCUMENT DATE
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Lease between Kenbee Management-Oklahoma, Inc. and 11/28/83
Wal-Mart Stores, Inc.
--------------------------------------------------------------------------------
Lease between St. Albans Associates and The Fonda Group, Inc., as 09/01/89
amended August 24, 1990, August 7, 1992 and March 24, 1995.
--------------------------------------------------------------------------------
Lease Between Stigler Associates 11/23/82
& Wal-Mart Stores, Inc.
--------------------------------------------------------------------------------
Lease between Tanner Building Co., Inc. & Fay's Drug Company 03/25/85
--------------------------------------------------------------------------------
Lease between Ava Associates and Hannaford Bros. Co. 01/01/99
--------------------------------------------------------------------------------
Lease between Champlain Associates and Ames Department Stores, Inc. 01/29/82
--------------------------------------------------------------------------------
<PAGE>
SCHEDULE V
----------
SENIOR LOAN AND COLLATERAL LOAN BALANCES
----------------------------------------
--------------------------------------------------------------------------------
Property Senior Loan Balances Collateral Loan Balances
--------------------------------------------------------------------------------
Alexandria $93,371.94 $853,042.78
--------------------------------------------------------------------------------
Jena 332,680.82 1,710,058.92
358,506.36
--------------------------------------------------------------------------------
Stigler 330,728.77 2,601,182.08
284,762.55
--------------------------------------------------------------------------------
St. Albans 967,223.88 2,056,851.15
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Ossipee [ 0] $197,861
--------------------------------------------------------------------------------
Champlain [ 0] $637,578
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<PAGE>
SCHEDULE VI
-----------
SENIOR LOANS AND TENANT LEASES
------------------------------
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Property Senior Loans Tenant Leases
--------------------------------------------------------------------------------
Alexandria Central Life Assurance Company dated Fay's Drug Company
3/18/86 in original principal amount of
$603,500
--------------------------------------------------------------------------------
Jena State of Wisconsin Investment Board dated Wal-Mart Stores, Inc.
11/28/83 in original principal amount of
$800,631
Firstar Trust Company, as agent for Phoenix
Home Life Mutual Insurance Company dated
5/6/94 in original principal amount of
$231,784.48
--------------------------------------------------------------------------------
Stigler State of Wisconsin Board of Investment Wal-Mart Stores, Inc.
dated 12/15/83 in original principal amount
of $783,493
Firstar Trust Company, as agent for Phoenix
Home Life Mutual Insurance Company dated
5/23/94 in original principal amount of
$184,048.84
--------------------------------------------------------------------------------
St. Albans Lincoln National Life Insurance Company The Fonda Group
dated 6/30/95 in original principal amount
of $1,633,456.25
--------------------------------------------------------------------------------
Ossipee [None] Hannaford Bros. Co.
--------------------------------------------------------------------------------
Champlain [None] Ames Department
Stores, Inc.
--------------------------------------------------------------------------------
