<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
---------------------------------
Date of Report February 2, 1999
----------------
First Union Real Estate Equity and Mortgage Investments
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 1-6249 34-6513657
- --------------------------- ----------------------- -------------------
State or other jurisdiction (Commission File Number) (I.R.S. Employer
Identification No.)
Suite 1900, 55 Public Square
Cleveland, Ohio 44113-1937
- --------------------------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 781-4030
-------------------
- --------------------------------------------------------------------------------
Former name or former address, if changed since last report.
Total number of pages in report 3.
<PAGE> 2
ITEM 5. OTHER EVENTS
------------
The Registrant has executed amendments to its banking group credit agreement as
well as to its $90 million bridge loan. The amendments became necessary when, as
a result of several large and non-recurring third quarter charges, the
Registrant failed to meet certain financial covenants in the loan agreements. As
a result of the amendments, the Registrant is now in compliance with all loan
covenants for the period ending September 30, 1998 and anticipates that it will
be in compliance for the fourth quarter. Separately, Imperial Parking, a
subsidiary of the Registrant's affiliate, First Union Management, Inc., amended
its banking agreement and is also in compliance with its covenants for the third
quarter.
In substance, the Registrant's credit facility, which was originally intended to
be an acquisition line, was amended to enable the Registrant to sell assets
without breaching future financial covenants. As part of these amendments, the
credit agreement provides for a reduction in total available credit from $125
million to $110 million. The lenders' commitment will be further reduced to $80
million on March 17, 1999 and to $50 million on May 17, 1999. The maturity date
of the modified facility is August 11, 1999. The interest rate on Eurodollar
borrowings for the remainder of the term was increased by 100 basis points,
while the spread on prime rate borrowings was increased by 50 basis points.
Finally, the lenders agreed to permit the exclusion of certain past and future
extraordinary expenses for purposes of computing financial ratios on a
going-forward basis, and also extended until June 30, 1999 the waiver with
regard to the change of control that occurred to the Registrant's Board of
Trustees in May of 1998.
The bridge loan was modified to eliminate the requirement that the Registrant
complete a rights offering sufficient in size to repay the entire loan. Instead,
the Registrant is required only to execute a rights offering(s) if capital is
needed to meet required amortization payments after considering asset sales. The
maturity date of the bridge loan was extended from February 11, 1999 until
August 11, 1999, and calculation of future financial covenants will be adjusted
in the same manner as under the credit facility. The outstanding balance under
the loan must be reduced to less than $70 million by March 31, 1999 and less
than $50 million by May 31, 1999. The loan amendment further provides for an
increase in the interest rate from 9.875% to 12%, and for fees of up to 1% of
the then outstanding balances at February 11, 1999, March 31, 1999 and May 31,
1999, depending on amounts remaining unpaid at those dates.
Imperial Parking amended its credit facility so as to modify the methodology for
computing future financial covenant compliance. Imperial's lenders also extended
until June 30, 1999 the waiver with regard to the change in control that
occurred in Registrant's Board. The Registrant issued an $8 million letter of
credit as collateral for Imperial's obligations and agreed to provide an
additional $5 million in collateral on August 11, 1999.
Exhibit
-------
(99a) Amendment No. 2, dated as of January 8, 1999, to
Amended and Restated Credit Agreement, dated as of
November 1, 1997, among First Union Real Estate
Equity and Mortgage Investments, as Borrower, First
Union Management, Inc., and National City Bank,
Bankers Trust Company, Key Bank National Associates,
The Huntington National Bank, Mellon Bank, N.A. and
First Merit Bank, as Lenders.
(99b) First Amendment to Fixed Rate Loan Agreement between
First Union Real Estate Equity and Mortgage
Investments, as Borrower; and Blackacre Bridge
Capital, L.L.C., Gotham Partners, L.P., Gotham
Partners III, L.P. and Elliott Associates, L.P., as
Lenders, dated January 8, 1999.
<PAGE> 3
(99c) Letter Agreement between First Union Real Estate
Equity and Mortgage Investments, as Borrower; and
Blackacre Bridge Capital, L.L.C., Gotham Partners,
L.P., Gotham Partners III, L.P. and Elliott
Associates, L.P., as Lenders, dated January 8, 1999.
(99d) First Amendment to Fixed Rate Loan Agreement between
First Union Real Estate Equity and Mortgage
Investments, as Borrower; and BankBoston, N.A.,
Wellsford Capital and Bankers Trust Company, as
Lenders, dated January 8, 1999.
(99e) Letter Agreement between First Union Real Estate
Equity and Mortgage Investments, as Borrower; and
BankBoston, N.A., Wellsford Capital and Bankers Trust
Company, as Lenders, dated January 8, 1999.
(99f) Second Amendment, dated as of December 30, 1998, to
the Amended and Restated Credit Agreement Dated as of
April 17, 1997 between Imperial Parking Limited, as
Borrower, Impark Services Limited, as Guarantor, and
Hongkong Bank of Canada and BT Bank of Canada, as
Lenders.
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
First Union Real Estate Equity
and Mortgage Investments
--------------------------
(Registrant)
Date: February 2, 1999 By:/S/ Paul F. Levin
---------------- -------------
Paul F. Levin
Senior Vice President
Secretary and General Counsel
<PAGE> 1
Exhibit 99a
================================================================================
================================================================================
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
---------------------
AMENDMENT NO. 2
DATED AS OF
JANUARY 8, 1999
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF
NOVEMBER 1, 1997
---------------------
================================================================================
================================================================================
<PAGE> 2
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
1
<PAGE> 3
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.
2
<PAGE> 4
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:
<TABLE>
<CAPTION>
LENDER COMMITMENT
- -------------------------------- ----------
<S> <C>
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
- -------------------------------------------------------------------------------
</TABLE>
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
3
<PAGE> 5
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
4
<PAGE> 6
(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:
5
<PAGE> 7
"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:
<TABLE>
<CAPTION>
DATE TOTAL COMMITMENT
- -------------- ----------------
<S> <C>
March 17, 1999 $80,000,000
May 17, 1999 $50,000,000
</TABLE>
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
6
<PAGE> 8
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
7
<PAGE> 9
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
8
<PAGE> 10
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
9
<PAGE> 11
(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.
10
<PAGE> 12
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:
11
<PAGE> 13
(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.
12
<PAGE> 14
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.
13
<PAGE> 15
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered
as of the date first above written.
<TABLE>
<CAPTION>
FIRST UNION REAL ESTATE EQUITY FIRST UNION MANAGEMENT, INC.
AND MORTGAGE INVESTMENTS
<S> <C>
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:
- -------------------------------------------------------------------------------
</TABLE>
14
<PAGE> 1
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:
--------------------
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.
<PAGE> 2
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."
2
<PAGE> 3
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
3
<PAGE> 4
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
4
<PAGE> 5
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.
5
<PAGE> 6
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.
6
<PAGE> 7
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:
7
<PAGE> 8
BORROWER:
FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS
By: ____________________________
Name:
Title:
8
<PAGE> 1
Exhibit 99c
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
55 PUBLIC SQUARE
SUITE 1900
CLEVELAND, OHIO 44113-1937
January 8, 1999
Bankers Trust Company
Blackacre Bridge Capital, L.L.C.
Elliott Associates, L.P.
Gotham Partners, L.P.
Gotham Partners III, L.P.
c/o Bankers Trust Company
130 Liberty Street
New York, New York 10006
Gentlemen:
Reference is hereby made to that certain Fixed Rate Loan Agreement
dated as of August 11, 1998 (as amended by that certain First Amendment of Fixed
Rate Loan Agreement dated as of January 8, 1999 and as the same may further be
amended or otherwise modified from time to time, the "LOAN AGREEMENT"). 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.
1. Borrower and Lenders hereby agree that the Loan Agreement
shall be and hereby is modified as follows:
(a) The first sentence of Section 2.7(c) is hereby deleted and
the following is substituted in lieu thereof:
"On January 8, 1999, Borrower shall pay to Agent (for the
ratable benefit of Lenders) a non-refundable facility fee
of $150,000 and, on February 11, 1999, Borrower shall pay
to Agent (for the ratable benefit of Lenders) a
non-refundable facility fee of 1% of the then outstanding
principal balance of the Loans."
<PAGE> 2
(b) Section 11.1 of the Loan Agreement 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, May 31, 1999 and August 11,
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) (i),(xvi) or (xvii) of the Loan Agreement or SECTIONS
8.1(a)(i), (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. It shall be an Event of Default
if Borrower shall not commence, by that date which is 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 principal payment or amortization requirements
(as previously reduced by other prepayments) under the Loans
and Other Loans due on the applicable Required Payment Date.
Following the commencement of such Offering, Borrower shall
diligently proceed to consummate such Offering. Borrower
shall use its best efforts to cause the Registration
Statement filed by Borrower on September 17, 1998
(Registration No. 333-6351) to be declared effective on or
prior to February 11, 1999."
2. As modified hereby, the Loan Agreement is hereby ratified
and confirmed.
3. Concurrently herewith, the parties to the Other Loan
Agreement are entering into a letter agreement (the "OTHER LETTER AGREEMENT"),
which
2
<PAGE> 3
is, except for the parties thereto, substantially identical to this letter
agreement. The Lenders hereby consent to the execution and delivery of the
Other Letter Agreement.
4. This letter agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all of such counterparts together shall constitute one and the
same instrument.
If the foregoing is acceptable to you, please so indicate by
signing below.
Very truly yours,
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
By: ______________________________
Name:
Title:
AGENT:
BANKERS TRUST COMPANY
By: _________________________
Name:
Title:
3
<PAGE> 4
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:
BORROWER:
FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS
By: _____________________________
Name:
Title:
4
<PAGE> 5
CONSENTED TO:
GOTHAM PARTNERS, L.P.
By: Section H Partners, L.P.
By: Karenina Corp.
By: ________________________
Name:
Title:
ELLIOTT ASSOCIATES, L.P.
By: ____________________________________
Name:
Title: General Partner
GOTHAM PARTNERS III, L.P.
By: Section H Partners, L.P.
By: Karenina Corp.
By: ________________________
Name:
Title:
5
<PAGE> 1
Exhibit 99d
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; BankBoston, N.A., Wellsford Capital and Bankers Trust
Company, as Lenders; and Bankers Trust Company, as Agent.
W I T N E S S E T H:
--------------------
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
<PAGE> 2
Imperial Credit Facility as in effect after giving
effect to such Second Amendment to the Amended and
Restated Credit Agreement.
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:
2
<PAGE> 3
"Borrower shall repay the then outstanding principal amount of the
Loans in full on August 11, 1999, together with interest thereon
through (and including) the last day of the final Interest
Period."
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 designate
the existing provisions thereof as paragraph (a) and to add the
following as a new SECTION 2.7(b):
"On January 15, 1999, Borrower shall pay to Agent (for the ratable
benefit of Lenders) a non-refundable facility fee 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 fee 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 fee 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 less than or equal to $15,000,000, then on
May 31, 1999 Borrower shall pay to Agent (for the ratable benefit
of Lenders) a non-refundable facility fee of one-half of one
percent (.50%) of the then outstanding principal balance of the
Loans. Each of the fees payable pursuant to this SECTION 2.7(b)
shall be payable only if on the date such fee is due Loans are
outstanding. Any repayment of the Loans shall not entitle Borrower
to any refund of any fees or other amounts paid to Lenders.
Borrower's failure to pay, when due, any fee payable pursuant to
this SECTION 2.7(b) 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:
3
<PAGE> 4
"(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 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
4
<PAGE> 5
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 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
5
<PAGE> 6
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.
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.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment, as of the date and year first written above.
LENDER AND AGENT:
BANKERS TRUST COMPANY
By:_____________________________
Name:
Title:
LENDERS:
BANKBOSTON, N.A.
6
<PAGE> 7
By: ______________________________
Name:
Title:
WELLSFORD CAPITAL
By: ______________________________
Name:
Title:
BORROWER:
FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS
By: _______________________________
Name:
Title:
7
<PAGE> 1
Exhibit 99e
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
55 PUBLIC SQUARE
SUITE 1900
CLEVELAND, OHIO 44113-1937
January 8, 1999
Bankers Trust Company
BankBoston, N.A
Wellsford Capital
c/o Bankers Trust Company
130 Liberty Street
New York, New York 10006
Gentlemen:
Reference is hereby made to that certain Fixed Rate Loan Agreement
dated as of August 11, 1998 (as amended by that certain First Amendment of Fixed
Rate Loan Agreement dated as of January 8, 1999 and as the same may further be
amended or otherwise modified from time to time, the "LOAN AGREEMENT"). 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.
1. Borrower and Lenders hereby agree that the Loan Agreement shall
be and hereby is modified as follows:
(a) The first sentence of Section 2.7(b) is hereby deleted and
the following is substituted in lieu thereof:
"On January 8, 1999, Borrower shall pay to Agent (for the ratable
benefit of Lenders) a non-refundable facility fee of $150,000 and,
on February 11, 1999, Borrower shall pay to Agent (for the ratable
benefit of Lenders) a non-refundable facility fee of 1% of the
then outstanding principal balance of the Loans."
(b) Section 11.1 of the Loan Agreement 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, May 31, 1999 and August 11, 1999 (each, a
"REQUIRED PAYMENT DATE"), an offering, or offerings, as the case
may be (collectively, the "OFFERING"), pursuant to the
<PAGE> 2
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)
(i),(xvi) or (xvii) of the Loan Agreement or SECTIONS 8.1(a)(i),
(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. It shall be
an Event of Default if Borrower shall not commence, by that date
which is 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 principal payment or amortization requirements (as
previously reduced by other prepayments) under the Loans and Other
Loans due on the applicable Required Payment Date. Following the
commencement of such Offering, Borrower shall diligently proceed
to consummate such Offering. Borrower shall use its best efforts
to cause the Registration Statement filed by Borrower on September
17, 1998 (Registration No. 333-6351) to be declared effective on
or prior to February 11, 1999."
2. As modified hereby, the Loan Agreement is hereby ratified and
confirmed.
3. Concurrently herewith, the parties to the Other Loan Agreement
are entering into a letter agreement (the "OTHER LETTER AGREEMENT"), which is,
except for the parties thereto, identical to this letter agreement. The Lenders
hereby consent to the execution and delivery of the Other Letter Agreement.
4. This letter agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all of such counterparts together shall constitute one and the
same instrument.
2
<PAGE> 3
If the foregoing is acceptable to you, please so indicate by
signing below.
Very truly yours,
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
By: ______________________________
Name:
Title:
LENDER AND AGENT:
BANKERS TRUST COMPANY
By: _________________________
Name:
Title:
LENDERS:
BANKBOSTON, N.A.
By: _________________________
Name:
Title:
WELLSFORD CAPITAL
By: _________________________
Name:
Title:
CONSENTED TO:
GOTHAM PARTNERS, L.P.
3
<PAGE> 4
By: Section H Partners, L.P.
By: Karenina Corp.
By: ________________________
Name:
Title:
ELLIOTT ASSOCIATES, L.P.
By: ____________________________________
Name:
Title: General Partner
GOTHAM PARTNERS III, L.P.
By: Section H Partners, L.P.
By: Karenina Corp.
By: ________________________
Name:
Title:
4
<PAGE> 1
Exhibit 99f
IMPERIAL PARKING LIMITED
as Borrower
- and -
504463 N.B. INC.
(NOW IMPARK SERVICES LIMITED)
as Guarantor
- and -
THE FINANCIAL INSTITUTIONS SET FORTH
ON THE SIGNATURE PAGES HEREOF
- and -
BT BANK OF CANADA
as Agent
SECOND AMENDMENT
TO THE AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF APRIL 17, 1997
DATED AS OF DECEMBER 30, 1998
<PAGE> 2
SECOND AMENDMENT
Second Amendment, dated as of December 30, 1998, to the
Amended and Restated Credit Agreement dated as of April 17, 1997 among IMPERIAL
PARKING LIMITED, a corporation amalgamated and existing under the laws of
Canada, as Borrower, 504463 N.B. INC., now IMPARK SERVICES LIMITED, a
corporation incorporated and existing under the laws of the Province of New
Brunswick, as Guarantor, BT BANK OF CANADA ("BT") and HONGKONG BANK OF CANADA
("HKBC"), as Lenders, and BT BANK OF CANADA, as Agent (the "Credit Agreement").
WHEREAS the Credit Agreement was amended pursuant to a First
Amendment dated as of December 30, 1997;
AND WHEREAS the Credit Agreement was also amended pursuant to
a waiver letter dated as of June 25, 1998 following the breach by the Borrower
of certain of the financial covenants set out in the Credit Agreement;
AND WHEREAS the Lenders and the Borrower have agreed to make
certain amendments to the Credit Agreement with the intention that the Borrower
will be able to meet its obligations under the Credit Agreement, as amended, on
an ongoing basis for the remainder of the term of the Credit Agreement;
NOW THEREFORE, in consideration of the agreements set forth
herein and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Agent, the Lenders, the Borrower and the Guarantor
hereby agree that the Credit Agreement shall be amended as follows:
1. Certain definitions contained in section 1.1 of the Credit Agreement are
hereby amended to read in their entirety as follows:
" "ACCOMMODATION" means (i) an advance made by a Lender on the occasion
of any Borrowing; (ii) the creation and purchase of a Bankers'
Acceptance or the purchase of completed Drafts by a Lender or by any
other Person on the occasion of any Drawing; (iii) the issue of a
Letter of Credit by BT or HKBC; and (iv) the creation of an Overdraft
in the Overdraft Account established with HKBC (each of which is a
"TYPE" of Accommodation)."
" "ACCOMMODATIONS OUTSTANDING" means, subject in the case of the
Operating Facility to the definition of "Operating Commitment" set
out below, at any time under a Credit Facility, an amount equal to
(i) in relation to the Borrower and all Lenders, the sum of (s) the
aggregate principal amount of all outstanding Advances; (t) the
aggregate Face Amount of all outstanding Bankers' Acceptances,
completed Drafts and, without duplication, BA Equivalent Notes
which the Lenders have purchased or arranged to have purchased; (u)
the aggregate Face Amount of all Letters of Credit for which BT and
HKBC are contingently liable; and (v) the Overdraft outstanding in
the Overdraft Account; and (ii) in relation to the Borrower and any
Lender, the sum of (w) the aggregate principal amount of all
<PAGE> 3
- 2 -
outstanding Advances made by such Lender; (x) the aggregate Face
Amount of all outstanding Bankers' Acceptances, completed Drafts and,
without duplication, BA Equivalent Notes which such Lender has
purchased or arranged to have purchased; (y) the aggregate Face
Amount of all Letters of Credit for which BT or HKBC, as applicable,
is contingently liable; and (z) in the case of HKBC only, the amount
of the Overdraft in the Overdraft Account (except for the purposes of
the "Majority Lenders" definition in which case only half the amount
of the Overdraft in the Overdraft Account will be taken into
account)."
" "CONSOLIDATED EBITDA" means, for any period of months, the
Consolidated Net Income of the Borrower, the Guarantor and their
respective Consolidated Subsidiaries (or with respect to the
definition of Target EBITDA, the relevant target entity mutatis
mutandis) increased by the sum of (i) Consolidated Interest Charges,
(ii) Consolidated Income Tax Expense, (iii) Consolidated Depreciation
and Amortization Expense, (in each case, for such period and
calculated prior to extraordinary items), and in addition (but not in
the case of Target EBITDA), (iv) such out-of-pocket expenses incurred
by such entities on a one time basis and which can reasonably be
solely attributed to the carrying out of the Transaction, and, in the
case of any period of months encompassing the period from October 1,
1998 to September 30, 1999, (v) an amount equal to $4,020,000 in
respect of extraordinary one-time expenses respecting severance pay,
legal, consulting and other professional fees and banking fees
(provided that in the case of (v) such amount has been invested in
the Borrower by FUR, FUMI or any of their affiliates and the
Borrower's obligation to repay such amount is subordinated and
postponed to the Borrower's obligations to the Lenders on a basis
satisfactory to the Lenders)."
" "CONSOLIDATED INDEBTEDNESS" means the aggregate of all Debts For
Borrowed Money of the Borrower, the Guarantor and their respective
Consolidated Subsidiaries less (w) the face amount of the FUR Letter
of Credit to the extent not drawn down by the Agent, (x) Subordinated
Debt, (y) cash and Permitted Marketable Securities on the balance
sheet of the latest financial statements delivered to the Agent
pursuant to Section 8.1(a), provided that such cash is maintained in
an account at BT or HKBC and such Permitted Marketable Securities are
held by the Agent or HKBC as custodian and (z) such other cash and
Permitted Marketable Securities, which is not deposited with or held
by, as applicable, BT or HKBC, on the balance sheet of the latest
financial statements delivered to the Agent pursuant to Section
8.1(a) to the extent that the aggregate value of such cash and
Permitted Marketable Securities does not exceed an aggregate amount
of U.S. $250,000."
" "CONSOLIDATED INTEREST CHARGES" means, for any period of months for
the Borrower, the Guarantor and their respective Consolidated
Subsidiaries, the total of (i) all items properly classified as
interest expense (whether expended or capitalized) in accordance with
Generally Accepted Accounting Principles; and (ii)
<PAGE> 4
- 3 -
the imputed interest component for any element of Consolidated
Indebtedness (such as capital leases and deferred revenues) which
would not be classified as interest expense pursuant to Generally
Accepted Accounting Principles, calculated using an interest rate
equal to the then prevailing Canadian Prime Rate, in each case for
such period, provided that, notwithstanding the foregoing, no
interest will be included in this calculation with respect to (A) the
FUR Subordinated Debt or (B) the Accommodations supported by the FUR
Letter of Credit, the exclusion in (B) being achieved by taking the
amount otherwise calculated under this paragraph and deducting a
percentage of that amount equal to 100% times the result of dividing
(x) Cdn$11,500,000 by (y) the average aggregate, calculated on the
basis of the average of such amounts as at the end of each Financial
Quarter, of all Accommodations Outstanding under the Acquisition
Facility, the Term Facility and the Operating Facility (up to a
maximum of Cdn$6,500,000 in the case of the Operating Facility) for
such period."
" "CREDIT DOCUMENTS" means this Agreement, the Original Credit
Agreement, the Drafts, the Banker's Acceptances, the BA Equivalent
Notes, the Security Documents, the Hedging Agreements, the Fee
Letters, and Overdraft Security and all other connected agreements,
and any amendments to any of the foregoing and any waivers
effectively amending any of the foregoing."
" "DRAFT" includes a blank bill of exchange, within the meaning of the
Bills of Exchange Act (Canada), and a depository bill, which is
subject to the Depository Bills and Note Act (Canada), drawn by the
Borrower on a Lender or any other Person, in form acceptable to such
Lender or such Person, which at such time has not been completed or
accepted by such Lender or such Person."
" "DRAWING FEE" means with respect to each Draft or Bankers' Acceptance
drawn by the Borrower hereunder and purchased by any Person on any
Drawing Date, an amount equal to the aggregate of (i) 1.50%, with
respect to any portion of the term to maturity of such Draft from and
including January 11, 1999, up to and including June 30, 1999, and
(ii) 1.75%, with respect to any portion of the term to maturity of
such Draft before January 11, 1999 or after June 30, 1999, multiplied
in each case by the aggregate Face Amount of such Draft, calculated
on the basis of the term to maturity of such Draft and a 365/366 day
year."
" "FEES" means the fees payable by the Borrower under Sections 2.7 and
5.7."
" "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means generally accepted
accounting principles set forth from time to time in the opinions and
pronouncements of the American Institute of Certified Public
Accountants and statements and pronouncements of the Governmental
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date
of determination, applied on a consistent basis (except for changes
made with
<PAGE> 5
- 4 -
the prior written consent of the Agent and approved by the Borrower's
independent auditors as being in accordance with such opinions,
statements and pronouncements)."
" "LETTER OF CREDIT" means a standby letter of credit issued or to be
issued for the account of the Borrower pursuant to Article 5."
" "OPERATING COMMITMENT" means, at any time, in respect of the
Operating Facility, notwithstanding the aggregate amount of each
Lender's Operating Commitment, Cdn$6,500,000."
" "OPERATING FACILITY" means the Credit Facility to be made available
to the Borrower hereunder for the purposes specified in Section 2.3
by BT by way of Letter of Credit and by HKBC by way of Overdraft and
Letter of Credit."
2. The definition of "Working Capital Line" contained in section 1.1
of the Credit Agreement is hereby deleted.
3. The following definitions are hereby added to section 1.1 of the
Credit Agreement:
" "CIBC LETTERS OF CREDIT" means letters of credit issued by Canadian
Imperial Bank of Commerce on behalf of the Borrower, which as of
December 30, 1998 have an aggregate face amount of Cdn$2,045,000."
" "FUR LETTER OF CREDIT" means a letter of credit in the face amount of
US$8,000,000 and in form satisfactory to the Agent issued at the
request of FUR, by a bank acceptable to the Agent, to the Agent as
beneficiary on behalf of the Lenders."
" "HKBC" means Hongkong Bank of Canada."
" "OVERDRAFT" means the aggregate of all principal amounts made
available under the Operating Facility by HKBC, subject to the
provisions of Article 5A, and debited to the Overdraft Account
(including cheques and withdrawals and accrued and unpaid interest)
in excess of the aggregate at any time and from time to time of all
principal amounts credited to the Overdraft Account."
" "OVERDRAFT ACCOUNT" means collectively all current accounts opened by
the Borrower with HKBC."
" "OVERDRAFT RATE" means HKBC's Prime Rate plus 0.50 of 1% per annum
from and including January 11, 1999 up to and including June 30,
1999, and thereafter 0.75 of 1% per annum, such Prime Rate being a
floating annual rate of interest established and announced by HKBC
from time to time as a reference rate used for
<PAGE> 6
- 5 -
purposes of determining the rates of interest it will charge on loans
denominated in Canadian dollars in Canada."
4. Section 2.1(2) of the Credit Agreement is hereby amended to read in
its entirety as follows:
" (2) Except as otherwise set out in this paragraph, each Lender
severally agrees, on the terms and conditions of this
Agreement, to make Accommodations rateably to the Borrower in
accordance with such Lender's Term Commitment and Lender's
Acquisition Commitment. In the case of the Operating Facility
the issuance of Letters of Credit pursuant to Article 5 by BT
or HKBC and the extension of an Overdraft by HKBC pursuant to
Article 5A shall not be done rateably. Accommodations shall be
made available as (i) Advances, pursuant to Article 3; (ii)
Drawings, pursuant to Article 4; (iii) Letters of Credit,
pursuant to Article 5, issued by BT or HKBC; and (iv)
Overdraft, pursuant to Article 5A, extended by HKBC."
5. Section 2.1(3) of the Credit Agreement is hereby amended to read in its
entirety as follows:
" (3) Provided that HKBC shall be under no obligation to make
Accommodations under the Operating Facility until BT has
issued one or more Letters of Credit in favour of HKBC
pursuant to Article 5, and then only to the extent of twice
the aggregate undrawn amount of any such outstanding Letters
of Credit, and, in any event, subject to the provisions of
Article 5A, the failure of any Lender to make an Accommodation
shall not relieve any other Lender of its obligation, if any,
in connection with such Accommodation, but no Lender shall be
responsible for such other Lender's failure in respect of such
Accommodation."
6. Section 2.1 of the Credit Agreement is hereby amended by adding the
following subsection:
"(5) Notwithstanding any other provisions of this Agreement, no
further Accommodations may be obtained under either the
Acquisition Facility or the Term Facility, and the Acquisition
Commitment and the Term Commitment are reduced to the
Accommodations Outstanding under the Acquisition Facility and
the Term Facility, respectively, as of the date of this
Agreement and thereafter from time to time."
7. The last sentence of section 2.2(1) is hereby amended to read in its
entirety as follows:
" Subject to the provisions of Articles 5 and 5A, Accommodations under
the Operating Facility shall revolve and may be repaid and reborrowed
from time to time."
8. Section 2.3(1) of the Credit Agreement is hereby amended to delete the
words "under the Working Capital Line" in subparagraph (i) thereof.
<PAGE> 7
- 6 -
9. Section 2.9 of the Credit Agreement is hereby amended to add the
following as paragraph (2):
" (2) All amounts received by HKBC as a credit to the Overdraft
Account will be applied against the outstanding Overdraft."
10. Section 3.3 of the Credit Agreement is hereby amended such that each
reference to "0.75 of 1% per annum" is replaced by "0.50 of 1% per annum, from
and including January 11, 1999 up to and including June 30, 1999, and 0.75 of 1%
per annum prior to January 11, 1999 or after June 30, 1999".
11. Section 5.1 of the Credit Agreement is hereby amended to read in its
entirety as follows:
" (1) BT which has an Operating Commitment agrees, on the terms and
conditions of this Agreement to issue Letters of Credit
denominated in Canadian dollars (in a maximum aggregate amount
not exceeding $3,250,000 once the existing Letter of Credit
issued by BT in favour of Canadian Imperial Bank of Commerce
has been terminated) under the Operating Facility, for the
account of the Borrower from time to time on any Business Day
prior to the Relevant Repayment Date.
(2) HKBC which has an Operating Commitment may, in its sole
discretion, agree, on the terms and conditions of this
Agreement to issue Letters of Credit denominated in Canadian
dollars under the Operating Facility for the account of the
Borrower from time to time on any Business Day prior to the
Relevant Repayment Date."
12. Section 5.2(2) of the Credit Agreement is hereby amended to read in its
entirety as follows:
" (2) Not later than 2:00 p.m. (Toronto time) on the Issue Date, BT
or HKBC (provided in the case of HKBC that it has consented to
do so), as applicable, shall issue a Letter of Credit
completed in accordance with the Issue Notice in the
appropriate form. Upon receipt of the Letter of Credit and
upon fulfilment of the conditions set forth in Article 6, the
Agent shall deliver the Letter of Credit to or to the order of
the Borrower."
13. Section 5.2(4) of the Credit Agreement is hereby amended to read in its
entirety as follows:
" (4) Prior to the Issue Date, the Borrower shall provide a precise
description of the documents and the verbatim text of any
certificates to be presented by the Beneficiary which, if
presented by the Beneficiary, would require BT or HKBC, as
applicable, to make payment under the Letter of Credit. BT or
HKBC, as applicable, may require changes in any such document
or certificate."
<PAGE> 8
- 7 -
14. Section 5.5(2) of the Credit Agreement is hereby amended to read in its
entirety as follows:
" (2) If the Borrower fails to pay to BT or HKBC, as applicable, the
amount drawn under any Letter of Credit, the unpaid amount due
and payable shall, in the case of BT, automatically as of such
date, and without the necessity for the Borrower to give any
Borrowing Notice pursuant to Section 3.2, be deemed to be a
Canadian Prime Rate Advance advanced by BT upon the basis set
out in Section 3.3 above, and, in the case of HKBC, be debited
by HKBC to the Overdraft Account."
15. Section 5.6(1) of the Credit Agreement is hereby amended to read in its
entirety as follows:
" (1) In determining whether to pay under a Letter of Credit, BT or
HKBC, as applicable, shall be responsible only to determine
that the documents and certificates required to be delivered
under such Letter of Credit have been delivered and that they
comply on their face with the requirements of such Letter of
Credit."
16. Section 5.6(2) of the Credit Agreement is hereby amended to read in its
entirety as follows:
" (2) The reimbursement obligation of the Borrower under any Letter
of Credit shall be unconditional and irrevocable and shall be
paid strictly in accordance with the terms of this Agreement
under all circumstances, including (i) any lack of validity or
enforceability of a Letter of Credit, (ii) the existence of
any claim, set-off, defense or other right which the Borrower
may have at any time against a Beneficiary or any transferee
of a Letter of Credit, the Lender or any other Person, whether
in connection with the Credit Documents, the transactions
contemplated therein or any other transaction (including any
underlying transaction between the Borrower and the
Beneficiary), (iii) any draft, demand, certificate or any
other document presented with a Letter of Credit proving to be
forged, fraudulent or invalid or any statement in it being
untrue or inaccurate, (iv) the existence of any act or
omission or any misuse of, a Letter of Credit or
misapplication of proceeds by the Beneficiary, including any
fraud in any draft, demand, certificate or any other document
presented with a Letter of Credit, (v) payment by BT or HKBC,
as applicable, under the Letter of Credit against presentation
of a demand, draft or certificate or other document which does
not comply with the terms of the Letter of Credit unless such
payment constitutes fraud, gross negligence or wilful
misconduct of BT or HKBC, as applicable, or (vi) the existence
of a Default or Event of Default."
<PAGE> 9
- 8 -
17. Section 5.6(3) of the Credit Agreement is hereby amended to read in its
entirety as follows:
" (3) BT or HKBC, as applicable, shall be responsible for (i) the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of
Credit or the rights or benefits under it or proceeds of it,
in whole or in part, which may prove to be invalid or
ineffective for any reason, (ii) errors, omissions,
interruptions or delays in transmission or delivery of any
messages by mail, telecopy or otherwise, (iii) errors in
interpretation of technical terms, (iv) any loss or delay in
the transmission of any document required in order to make a
drawing, and (v) any consequences arising from causes beyond
the control of the Lender, including the acts or omissions,
whether rightful or wrongful, of any Governmental Entity. None
of the above shall affect, impair, or prevent the vesting of
any of the BT's or HKBC's rights or powers under this
Agreement. Any action taken or omitted by BT or HKBC under or
in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put
BT or HKBC under any resulting liability to the Borrower
provided that BT or HKBC acts in accordance with the standards
of reasonable care specified in the UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS (1993 Revision), ICC
Publication 500 (or any replacement publication)."
18. Section 5.7(1) of the Credit Agreement is hereby amended to read in its
entirety as follows:
" (1) The Borrower shall pay to BT or HKBC, as applicable, a Fee
equal to .125 of 1% per annum of its Face Amount, for the
period during which a Letter of Credit is outstanding. Such
Fee shall be calculated daily and payable in advance on the
Issue Date in Canadian dollars and shall be non-refundable."
19. Section 5.7(2) of the Credit Agreement is hereby amended to read in its
entirety as follows:
" (2) The Borrower shall pay to BT or HKBC, as applicable, a Fee
equal to 1.625% per annum for the period during which a Letter
of Credit is outstanding, which Fee, subject to the following
sentence, shall be calculated, on a 365/366 day year basis,
and payable in arrears on the last day of each month. To the
extent such Letter of Credit has been issued by BT in favour
of HKBC such Fee shall be calculated, on a 365/366 day year
basis, based on 50% of the average total utilisation by the
Borrower of the Operating Facility by way of Overdraft or
Letters of Credit issued by HKBC for such preceding month, and
payable by HKBC, on behalf of the Borrower, to BT in arrears
on the 15th day of each month with respect to the immediately
preceding calender month."
20. Section 5.7(3) of the Credit Agreement is hereby amended to read in its
entirety as follows:
<PAGE> 10
- 9 -
" (3) The Borrower shall pay to BT or HKBC, as applicable, upon the
issuance, amendment or transfer of each Letter of Credit
issued by BT or HKBC, as applicable, and each drawing made
thereunder, the standard and prevailing documentary and
administrative charges of BT or HKBC, as applicable, for
issuing, amending, transferring or drawing under, as the case
may be, Letters of Credit of similar amount, term and risk."
21. Section 5.7 of the Credit Agreement is hereby amended by adding the
following subsection:
" (4) The Borrower shall pay to HKBC a non-usage Fee equal to 0.125
of 1% per annum, calculated, on a 365/366 day year basis based
on the difference between (i) the average total utilisation by
the Borrower of the Operating Facility by way of Overdraft or
a Letter of Credit issued by HKBC for such preceding month and
(ii) the Operating Commitment, and payable in arrears on the
15th day of each month with respect to the immediately
preceding calender month, such Fee to be divided equally
between BT and HKBC."
22. Section 5.8(1) of the Credit Agreement is hereby amended to read in its
entirety as follows:
" (1) If the Borrower shall be required to repay the Accommodations
pursuant to Article 2 or Article 9, then the Borrower shall
pay to BT or HKBC, as applicable, to the extent required in
those Articles, an amount equal to the contingent liability of
BT or HKBC, as applicable, in respect of (i) any outstanding
Letter of Credit, and (ii) any Letter of Credit which is the
subject matter of any order, judgment, injunction or other
such determination (a "JUDICIAL ORDER") restricting payment
under and in accordance with such Letter of Credit or
extending the liability of BT or HKBC, as applicable, under
such Letter of Credit beyond its stated expiration date.
Payment in respect of each Letter of Credit shall be due in
Canadian dollars."
23. Section 5.8(2) of the Credit Agreement is hereby amended to read in its
entirety as follows:
" (2) BT or HKBC, as applicable, shall, with respect to any Letter
of Credit, upon the later of:
(a) the date on which any final and non-appealable order,
judgment or other such determination has been
rendered or issued either terminating the applicable
Judicial Order or permanently enjoining BT or HKBC,
as applicable, from paying under such Letter of
Credit; and
(b) the earlier of (i) the date on which either (x) the
original counterpart of the Letter of Credit is
returned to BT or HKBC, as applicable, for
cancellation, or (y) BT or HKBC, as applicable, is
released by the
<PAGE> 11
- 10 -
Beneficiary from any further obligations, and (ii)
the expiry (to the extent permitted by any applicable
Law) of the Letter of Credit,
pay to the Borrower an amount equal to the difference between the
amount paid to BT or HKBC, as applicable, pursuant to Section 5.8(1)
and the amounts paid by BT or HKBC, as applicable, under the Letter of
Credit."
24. The Credit Agreement is hereby amended by adding the following as
Article 5A:
"ARTICLE 5A - OVERDRAFT
SECTION 5A.1. HKBC, which has an Operating Commitment, agrees, on the
terms and conditions of this Agreement, to the extent of: (a) two times
the aggregate outstanding amount of Letters of Credit issued by BT in
its favour pursuant to Section 5.1 (1) above, to permit the Borrower to
incur an Overdraft in the Overdraft Account from time to time prior to
the Relevant Repayment Date LESS (b) the face amount of all Letters of
Credit issued by HKBC pursuant to this Agreement at the request of and
to accommodate the Borrower.
SECTION 5A.2. The Borrower shall pay interest to HKBC on the daily
closing balance of the Overdraft at the Overdraft Rate. Such interest
shall be calculated, on the basis of a 365/366 day year for the actual
number of days occurring in the period for which such interest is
payable, and payable monthly in arrears on the last day of each and
every month.
SECTION 5A.3 In addition to debiting the Overdraft Account with the
amount of each cheque, payment, order or other item drawn on the
Overdraft Account, and each withdrawal, HKBC shall also be entitled to
debit the Overdraft Account with the amount of all interest (including
compound interest) payable by the Borrower monthly to HKBC pursuant to
this Agreement.
SECTION 5A.4. The Borrower shall not permit the Overdraft to exceed the
Operating Commitment or such lesser amount as may be permitted pursuant
to Section 5A.1 above (the "PERMITTED OVERDRAFT"). HKBC may refuse to
honour any cheque, permit any withdrawal, or pay any other item if the
Overdraft exceeds, or would after such payment exceed, the Permitted
Overdraft on the date such cheque, withdrawal or other item is
presented to HKBC for payment; provided this Agreement shall continue
to apply to the Overdraft and to the Borrower notwithstanding that any
Overdraft is in excess of the Permitted Overdraft.
SECTION 5A.5. The Borrower shall deliver to HKBC from time to time,
promptly on request by HKBC, such number of HKBC's standard form Line
of Credit By Way Of Current Account Overdraft Agreements as HKBC may
request (collectively the "Overdraft Security"), and, in form and
substance satisfactory to HKBC, a demand promissory note or other
acknowledgement of debt evidencing
<PAGE> 12
- 11 -
the amount of all indebtedness and liability then owing by the Borrower
to HKBC in respect of the Overdraft, and in this regard the Borrower
shall deliver to HKBC a supply of blank demand promissory notes which
HKBC shall be authorized, at its discretion, to complete on behalf of
the Borrower from time to time in pursuance of this clause. In the
event that any such promissory note or any other acknowledgement of
debt, security or other document is requested by HKBC, HKBC shall not
be obligated to honour any cheque or permit any withdrawal or other
debit to the Overdraft Account until such promissory note, other
acknowledgement of debt, security or other document is delivered to
HKBC.
SECTION 5A.6. The Borrower shall comply with the Overdraft Security and
all present and future agreements between the Borrower and HKBC,
including any operation of account agreements between the Borrower and
HKBC; provided that in the event there exists any conflict between the
provisions of (i) the Overdraft Security or any of such agreements and
(ii) the provisions hereof, the provisions hereof shall govern.
SECTION 5A.7. HKBC shall have the right at any time, notwithstanding
any other provision of this Agreement or the occurrence or
non-occurrence of a Default or an Event of Default, to demand immediate
payment of the Overdraft, or any part thereof, together with interest,
fees, charges and costs outstanding hereunder and the Borrower shall
forthwith comply with any such demand. In addition, the Bank may at any
time, notwithstanding any other provision of this Agreement or the
occurrence or non-occurrence of a Default or an Event of Default,
refuse to permit any further Overdraft forthwith upon giving notice to
the Borrower, in which event thereafter HKBC shall not be obliged to
honour any cheque, permit any withdrawal or permit the creation or
increase of the Overdraft.
SECTION 5A.8. Upon receipt from HKBC each month of a statement of the
Overdraft Account together with all cheques or vouchers for amounts
appearing therein charged to the Overdraft Account, the Borrower shall
examine such statement, cheques or vouchers and check the credit and
debit entries in the statements, and, within thirty days after HKBC
delivers or mails such statement, cheques and vouchers to the Borrower,
the Borrower shall notify HKBC in writing of any errors, irregularities
or omissions therein or therefrom; and at the expiration of the said
thirty days (except as to any errors, irregularities or omissions of
which the Bank has been so notified) it shall be conclusively settled
as between HKBC and the Borrower that such statement and the amount of
the balance shown thereon is correct and the said cheques and vouchers
are genuine and properly chargeable to and charged against the
Overdraft Account and that the Borrower was not entitled to be credited
with any sum not credited, as reflected by the statement. For greater
certainty, HKBC shall not, in any legal action to which HKBC is a
party, be required to prove the evidence of any transaction which is
disclosed by any such statement or the accuracy of any such statement.
<PAGE> 13
- 12 -
SECTION 5A.9. No Security shall be released, discharged, redeemed or
extinguished by reason of the Overdraft being repaid or the Overdraft
Account ceasing to have a debit balance at any time or the Borrower
ceasing to be indebted to the Bank, and shall subsist and secure future
amounts debited to the Overdraft Account until such Security is
returned or released and discharged in writing by the Agent on behalf
of the Lenders."
25. Section 8.1(c) of the Credit Agreement is hereby amended to delete
the words in said paragraph (v) "the lender of the Working Capital Line" and
replace them by "HKBC".
26. Section 8.2(a) of the Credit Agreement is hereby amended to delete
subparagraph (vii).
27. Section 8.3(c) of the Credit Agreement is hereby amended to read in
its entirety as follows:
" (c) MAINTENANCE OF INTEREST COVERAGE RATIO. Ensure that Holdco 1,
Holdco 2 and their respective Consolidated Subsidiaries have,
as at the end of the Financial Quarter ending December 31,
1998, a minimum Interest Coverage Ratio of 1.60 to 1, as at
the end of each of the Financial Quarters ending March 31,
1999, and June 30, 1999, a minimum Interest Coverage Ratio of
1.75 to 1, as at the end of the Financial Quarter ending
September 30, 1999, a minimum Interest Coverage Ratio of 2.00
to 1 and, as at the end of each Financial Quarter thereafter,
a minimum Interest Coverage Ratio of 2.75 to 1."
28. Section 9.1 of the Credit Agreement is hereby amended by deleting the
reference to "BT's contingent liability" in the seventh last line thereof and
replacing it by "the contingent liability of BT or HKBC, as applicable,".
29. Section 10.5(1) of the Credit Agreement is hereby amended to read in
its entirety as follows:
" (1) The Security Interests and Security constituted by the
Security Documents shall be held by the Agent for the rateable
benefit of the Lenders, in accordance with their respective
terms. Whether such Security is held in the name of the Agent
or in the name of any one or more of the Lenders and without
regard to any priority to which any Lender may otherwise be
entitled under applicable Law, each Lender shall so benefit
based on the amount of Accommodations Outstanding, all
interest and Fees accrued thereon, and all other amounts
payable under this Agreement to such Lender as a proportion of
the aggregate amount of Accommodations Outstanding, all
interest and Fees accrued thereon and all other amounts
payable under this Agreement to all Lenders, provided that, on
the assumption that HKBC is able to draw as permitted under a
Letter of Credit issued by BT in HKBC's favour and
notwithstanding any other provision of this Agreement, BT and
HKBC shall benefit on a 50/50 basis with respect to any
proceeds of such Security in connection with Accommodations
Outstanding under the Operating Facility."
<PAGE> 14
- 13 -
30. Section 11.7 of the Credit Agreement is hereby amended by deleting the
word "Document" and replacing it by the word "Documents".
31. The Credit Agreement is hereby amended by amending the amount showing
on the execution page as being Operating Commitment for BT to read
"Cdn$3,250,000" (but effective only once the existing Letter of Credit issued by
BT in favour of Canadian Imperial Bank of Commerce has been terminated) and by
amending the amount shown on the same page as being Operating Commitment for
HKBC to read "Cdn$6,500,000" (but subject to the provisions of Section 5A.1).
32. The Credit Agreement is hereby amended by replacing the existing
Schedule 3A thereto by the revised Schedule 3A attached hereto.
All other terms and conditions of the Credit Agreement shall remain in full
force and effect, unamended, and the Borrower and Guarantor hereby confirm that
all existing Credit Documents (including, without limitation, any Guarantees)
and Security provided by them will remain in full force and effect for the
benefit of the Lenders after the execution and delivery of this Second
Amendment.
The Borrower hereby represents and warrants that the execution and delivery of
this Second Amendment and the performance by it of its obligations hereunder
have been duly authorized by all necessary corporate action, the Second
Amendment has been duly executed and delivered by the Borrower and constitutes a
legal, valid and binding obligation of the Borrower.
This Second Amendment shall be effective as of November 12, 1998, once fully
executed by the parties hereto and the Agent has been provided with the
following:
1. A certified copy of the resolution of the board of directors of the
Borrower approving the execution of this Second Amendment.
2. A certificate of an officer of the Borrower certifying the names and
true signatures of its officer authorized to sign this Second
Amendment.
3. A certificate of status, compliance, good standing or like certificate
with respect to the Borrower issued by the appropriate government
officials of the jurisdiction of its incorporation.
4. Confirmation in form satisfactory to the Agent from each Additional
Loan Party that the Credit Documents (including, without limitation any
Guarantee) and Security provided by it are in good standing and in full
effect.
5. Such other documents, instruments and legal opinions as the Agent or
its counsel may reasonably require.
6. A fee of Cdn$26,784 to be shared equally between the Lenders, such fee
being payable pursuant to Section 2.6(b) of the Credit Agreement as a
result of prepayments of $9,100,000
<PAGE> 15
- 14 -
having been made under the Acquisition Facility and of $2,060,000
having been made under the Term Facility. The fee of Cdn$26,784 was
calculated by dividing the aggregate of the prepayments, being
$11,160,000, by $50,000,000 and multiplying the result by $120,000.
7. A non-refundable loan restructuring fee of Cdn$388,400 to be shared
equally between the Lenders, payable by December 30, 1998.
8. Receipt by the Agent of a letter of credit in the amount of
US$8,000,000 issued by a bank acceptable to the Agent, and in form
satisfactory to the Agent, on behalf of First Union Real Estate Equity
and Mortgage Investments, which FUR Letter of Credit shall be held as
security for the benefit of the Lenders in respect of the
Accommodations Outstanding from time to time under the Credit
Facilities.
In addition, Imperial shall pay to BT and HKBC, as applicable, on demand, all
administrative costs and expenses, legal fees, and all other out-of-pocket costs
and expenses incurred by BT and HKBC, respectively, in connection with this
transaction.
Further it is hereby agreed that it will constitute an Event of Default under
the Credit Agreement if, due to any action of the Borrower or any failure to act
by the Borrower (or in the case of (1)(b) below any failure to act by Canadian
Imperial Bank of Commerce), the Borrower has failed:
(1) By noon on February 1, 1999 (a) to provide evidence
satisfactory to the Agent of the termination of all of the
Borrower's credit facilities with Canadian Imperial Bank of
Commerce; (b) to return to the Agent the Letter of Credit
issued by it in favour of Canadian Imperial Bank of Commerce;
and (c) to provide evidence that the Overdraft Account has
been opened with HKBC and that HKBC has received executed
copies of all required Overdraft Security.
(2) To provide by noon on February 1, 1999 evidence satisfactory
to the Agent that the Borrower has closed all its current
accounts with Canadian Imperial Bank of Commerce, other than
those accounts which BT and HKBC agree may remain open.
Notwithstanding the foregoing, the Lenders hereby acknowledge and agree that:
(a) each CIBC Letter of Credit will remain in place until such CIBC Letter
of Credit expires, is drawn on or is released, and in any event the
Borrower agrees that the CIBC Letters of Credit will be cancelled not
later than July 1, 1999.
Hongkong Bank of Canada hereby acknowledges and agrees that, from and after the
date hereof, it will perform cash management services for the Borrower,
including facilitating and overseeing the major portion of the work required in
order to achieve the transition contemplated by paragraphs (1) and (2) above
subject to the Borrower fully cooperating with HKBC in the process. Such Lender
further agrees that its fees for such cash management services will not exceed
the fees charged by Canadian Imperial Bank of Commerce for the same services,
namely, $14,300 monthly, such fees
<PAGE> 16
- 15 -
to be reviewed, and revised if applicable, by HKBC semi-annually based on actual
activity experience.
This Agreement shall be governed by, interpreted and enforced in accordance with
the laws of the Province of Ontario and the federal laws of Canada as applicable
therein, and may be executed in any number of counterparts. All such
counterparts shall be an original and taken together shall be deemed to
constitute one and the same instrument. Delivery by or on behalf of the
undersigned of a facsimile of a signed copy of this Agreement shall be
sufficient for all purposes.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
BT BANK OF CANADA IMPERIAL PARKING LIMITED
(as Lender and as Agent)
Per: Per:
------------------------------- -------------------------------------
Authorizing Signing Officer Authorizing Signing Officer
c/s
Per: Per:
------------------------------- -------------------------------------
Authorizing Signing Officer Authorizing Signing Officer
HONGKONG BANK OF CANADA IMPARK SERVICES LIMITED
Per: Per:
------------------------------- -------------------------------------
Authorizing Signing Officer Authorizing Signing Officer
c/s
Per: Per:
------------------------------- -------------------------------------
Authorizing Signing Officer Authorizing Signing Officer
<PAGE> 17
SCHEDULE 3A
FORM OF ISSUE NOTICE
[DATE]
BT BANK OF CANADA
OR HONGKONG BANK OF CANADA
Attention: ____
Dear Sirs:
The undersigned, Imperial Parking Limited (the "Borrower") refers to
the Amended and Restated Credit Agreement dated as of April 17, 1997 as amended,
supplemented or restated from time to time (the "Credit Agreement", the terms
defined therein being used herein as therein defined) among the Borrower, the
Agent and the Lenders, and hereby gives you notice pursuant to Section 5.2(1) of
the Credit Agreement that the Borrower hereby requests an Issue under the Credit
Agreement, and, in that connection, sets forth below the information relating to
such Issue as required by Section 5.2(1) of the Credit Agreement:
(a) The date of the Issue, being a Business Day, is _______________.
(b) The Face Amount of such Letter of Credit is $_________.
(c) The expiration date of such Letter of Credit, being a Business Day is
___________ .(1)
(e) The conditions of drawing and documentary requirements are __________.
(e) The name and address of the Beneficiary is __________________________
____________________________________________________________________.
Yours truly,
IMPERIAL PARKING LIMITED
Per:
-----------------------------
Authorized Signing Officer
- ----------------
(1) The expiration date shall occur no later than one year from the Issue
Date.
