<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 Exchange Act of 1934
Date of Report (Date of earliest event reported) April 7, 1997
KOGER EQUITY, INC.
(Exact name of registrant as specified in its charter)
Florida 1-9997 59-2898045
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(State of incorporation (Commission (IRS Employer
or organization) File Number) Identification No.)
3986 Boulevard Center Drive
Jacksonville, Florida 32207
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (904) 398-3403
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N/A
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
Reference is made to copies of loan documents dated April 7, 1997
evidencing a $50 million revolving credit facility provided Koger Equity, Inc.
by First Union National Bank of Florida and Morgan Guaranty Trust Company of
New York, which documents are filed as Exhibits 10(k)(1) through 10(k)(6) to
this report and to a Koger Equity, Inc. News Release dated April 10, 1997
concerning the same matter, which is Exhibit 99 to this Report. These exhibits
are incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
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Exhibit Number Description of Exhibit
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10(k)(1) Revolving Credit Loan Agreement
dated April 7, 1997 between and
among Koger Equity, Inc., First
Union National Bank of Florida and
Morgan Guaranty Bank of New York.
10(k)(2)(a) The Revolving Promissory Note dated
April 7, 1997 issued by Koger
Equity, Inc. to First Union
National Bank of Florida in the
principal amount of up to
$35,000,000.
10(k)(2)(b) The Revolving Promissory Note dated
April 7, 1997 issued by Koger
Equity, Inc. to Morgan Guaranty
Trust Company of New York in the
principal amount of up to
$15,000,000.
10(k)(3) The Deed to Secure Debt, Assignment
of Leases and Rents, and Security
Agreement dated as of April 7, 1997
relating to that portion of the
Collateral located in the State of
Georgia granted by Koger Equity,
Inc. to, and in favour of, First
Union National Bank of Florida and
Morgan Guaranty Trust Company of New
York.
10(k)(4)(a) The Deed of Trust and Security
Agreement dated as of April 7, 1997
relating to that portion of the
Collateral located in the State of
North Carolina granted by Koger
Equity, Inc. to, and in favour of,
First Union National Bank of Florida
and Morgan Guaranty Bank of New
York.
10(k)(4)(b) The Assignment of Leases and Rents
dated as of April 7, 1997 relating
to that portion of the Collateral
located in the State of North
Carolina from Koger Equity, Inc.,
and in
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favour of, First Union
National Bank of Florida and
Morgan Guaranty Bank of New York.
10(k)(5)(a) The Assignment of Contracts,
Licenses and Permits relating to
that portion of the Collateral in
the State of Georgia dated as of
April 7, 1997 from Koger Equity,
Inc. to, and in favour of, First
Union National Bank of Florida and
Morgan Guaranty Bank of New York.
10(k)(5)(b) The Assignment of Contracts,
Licenses and Permits relating to
that portion of the Collateral in
the State of North Carolina dated as
of April 7, 1997 from Koger Equity,
Inc. to, and in favour of, First
Union National Bank of Florida and
Morgan Guaranty Bank of New York.
10(k)(6)(a) The Environmental Indemnification
Agreement relating to that portion
of the Collateral in the state of
Georgia dated as of April 7, 1997
between and among Koger Equity, Inc.
and First Union National Bank of
Florida and Morgan Guaranty Bank of
New York.
10(k)(6)(b) The Environmental Indemnification
Agreement relating to that portion
of the Collateral in the state of
North Carolina dated as of April 7,
1997 between and among Koger Equity,
Inc. and First Union National Bank
of Florida and Morgan Guaranty Bank
of New York.
99 Koger Equity, Inc. News Release
dated April 10, 1997.
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SIGNATURE
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 thereunto duly authorized.
KOGER EQUITY, INC.
Date: April 25 , 1997 By: /s/ W. Lawrence Jenkins
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W. Lawrence Jenkins
Title: Vice President and
Corporate Secretary
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EXHIBIT INDEX
The following designated exhibits are filed herewith:
Exhibit
10(k)(1) Revolving Credit Loan Agreement, dated April 7, 1997
between and among Koger Equity, Inc., First Union National
Bank of Florida and Morgan Guaranty Bank of New York.
10(k)(2)(a) The Revolving Promissory Note dated April 7, 1997 issued
by Koger Equity, Inc. to First Union National Bank of
Florida in the principal amount of up to $35,000,000.
10(k)(2)(b) The Revolving Promissory Note dated April 7, 1997 issued
by Koger Equity, Inc. to Morgan Guaranty Trust Company of
New York in the principal amount of up to $15,000,000.
10(k)(3) The Deed to Secure Debt, Assignment of Leases and Rents,
and Security Agreement dated as of April 7, 1997 relating
to that portion of the Collateral located in the State of
Georgia granted by Koger Equity, Inc. to, and in favour
of, First Union National Bank of Florida and Morgan
Guaranty Trust Company of New York.
10(k)(4)(a) The Deed of Trust and Security Agreement dated as of April
7, 1997 relating to that portion of the Collateral located
in the State of North Carolina granted by Koger Equity,
Inc. to, and in favour of, First Union National Bank of
Florida and Morgan Guaranty Bank of New York.
10(k)(4)(b) The Assignment of Leases and Rents dated as of April 7,
1997 relating to that portion of the Collateral located in
the State of North Carolina from Koger Equity, Inc., and
in favour of, First Union National Bank of Florida and
Morgan Guaranty Bank of New York.
10(k)(5)(a) The Assignment of Contracts, Licenses and Permits relating
to that portion of the Collateral in the State of Georgia
dated as of April 7, 1997 from Koger Equity, Inc. to, and
in favour of, First Union National Bank of Florida and
Morgan Guaranty Bank of New York.
10(k)(5)(b) The Assignment of Contracts, Licenses and Permits relating
to that portion of the Collateral in the State of North
Carolina dated as of April 7, 1997 from Koger Equity, Inc.
to, and in favour of, First Union National Bank of Florida
and Morgan Guaranty Bank of New York.
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10(k)(6)(a) The Environmental Indemnification Agreement relating to that
portion of the Collateral in the state of Georgia dated as of
April 7, 1997 between and among Koger Equity, Inc. and First
Union National Bank of Florida and Morgan Guaranty Bank of New
York.
10(k)(6)(b) The Environmental Indemnification Agreement relating to
that portion of the Collateral in the state of North
Carolina dated as of April 7, 1997 between and among Koger
Equity, Inc. and First Union National Bank of Florida and
Morgan Guaranty Bank of New York.
99 Koger Equity, Inc. News Release dated April 10, 1997.
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Exhibit 10(k)(1)
U.S. $50,000,000
REVOLVING CREDIT LOAN AGREEMENT
Dated as of April 7 , 1997
between
KOGER EQUITY, INC.
as Borrower
and
FIRST UNION NATIONAL BANK OF FLORIDA
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
as Lender
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS....................................................................................1
SECTION 1.1. Certain Defined Terms.................................................................................1
SECTION 1.2. Accounting Terms......................................................................................8
ARTICLE II
AMOUNT AND TERMS OF ADVANCES........................................................................................8
SECTION 2.1. Advances..............................................................................................8
SECTION 2.2. Making Advances.......................................................................................8
SECTION 2.3. Loan Term Extension; Extension Fee...................................................................10
SECTION 2.4. Unused Fee...........................................................................................11
SECTION 2.5. Repayment of Advances; Prepayments...................................................................11
SECTION 2.6. Interest Rate; Default Rate..........................................................................11
SECTION 2.7. Payments and Computations............................................................................12
SECTION 2.8. Evidence of Indebtedness.............................................................................12
ARTICLE III
CONDITIONS OF LENDING..............................................................................................12
SECTION 3.1. Conditions Precedent to Advances.....................................................................12
SECTION 3.2. Conditions Precedent to Certain Advances.............................................................14
ARTICLE IV
ADDITION, SUBSTITUTION AND RELEASE OF COLLATERAL...................................................................15
SECTION 4.1. General Right to Add, Substitute or Release Collateral...............................................15
SECTION 4.2. Requirements for Release of Collateral...............................................................16
SECTION 4.3. Requirements for Addition or Substitution of Collateral..............................................16
ARTICLE V
CERTAIN MATTERS CONCERNING THE COLLATERAL..........................................................................20
SECTION 5.1. Inspections..........................................................................................20
SECTION 5.2. Appraisals...........................................................................................20
SECTION 5.3. Insurance............................................................................................20
SECTION 5.4. Taxes and Assessments................................................................................21
SECTION 5.5. Tax and Insurance Deposits...........................................................................21
SECTION 5.6. Tax Service Contract; Annual Tax Searches............................................................22
SECTION 5.7. Due on Sale..........................................................................................22
SECTION 5.8. Loss and Restoration following Casualty or
Condemnation.....................................................................................22
ARTICLE VI
REPRESENTATIONS AND WARRANTIES.....................................................................................23
SECTION 6.1. Representations and Warranties of Borrower...........................................................23
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ARTICLE VII
COVENANTS OF BORROWER..............................................................................................26
SECTION 7.1. Affirmative Covenants................................................................................26
(a) Costs and Expenses....................................................................................26
(b) Rent Roll.............................................................................................26
(c) Compliance with Governmental Requirements.............................................................26
(d) Preservation of Corporate Existence...................................................................27
(e) Preservation and Maintenance of Collateral............................................................27
(f) Reporting Requirements................................................................................27
(g) Notice of Failure to Perform..........................................................................28
SECTION 7.2. Negative Covenants...................................................................................28
(a) Use of Loan Proceeds..................................................................................28
(b) Structural Alterations................................................................................28
(c) Change in Nature of Business..........................................................................28
(d) Transactions with Subsidiaries........................................................................28
ARTICLE VIII
DEFAULT............................................................................................................28
SECTION 8.1. Events of Default....................................................................................28
SECTION 8.2. Remedies following an Event of Default...............................................................30
SECTION 8.3. Default Interest.....................................................................................30
ARTICLE IX
MISCELLANEOUS......................................................................................................30
SECTION 9.1. Amendments, Etc......................................................................................30
SECTION 9.2. Indemnification and Limitation of Claims.............................................................30
SECTION 9.3. Notices..............................................................................................31
SECTION 9.4. No Waiver; Remedies..................................................................................32
SECTION 9.5. Binding Effect; Assignment...........................................................................32
SECTION 9.6. Governing Law; Jurisdiction and Venue................................................................32
SECTION 9.7. Severability.........................................................................................33
SECTION 9.8. Headings.............................................................................................33
SECTION 9.9. Counterparts.........................................................................................33
SECTION 9.10. WAIVER OF TRIAL BY JURY.............................................................................33
SIGNATURE PAGE; SCHEDULE OF EXHIBITS........................................................................................35
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REVOLVING CREDIT LOAN AGREEMENT
THIS REVOLVING CREDIT LOAN AGREEMENT dated as of April 7 , 1997, by
and between KOGER EQUITY, INC., a Florida corporation, and FIRST UNION NATIONAL
BANK OF FLORIDA, a national banking association, and MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, a New York banking corporation.
IN CONSIDERATION of the mutual covenants herein contained, Borrower
and Lender agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"Advance" means any disbursement of principal out of the
available undisbursed Loan Amount by Lender to Borrower.
"Assignment of Contracts" means each Assignment of Contracts,
Licenses and Permits dated the Closing Date or on any Collateral Change Date
given by Borrower to and in favor of Lender, assigning to Lender all of
Borrower's interest in all contracts, licenses, permits, approvals, warranties,
guaranties, service contracts, equipment leases, deposits and water and sewer
rights relating to the Collateral located in each State.
"Borrower" means Koger Equity, Inc., a Florida corporation.
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City and Jacksonville, Florida,
and, if the applicable Business Day relates to any LIBOR Advances, on which
dealings are carried on in the London interbank market and banks are open for
business in London, England.
"Closing Date" means April 7 , 1997.
"Code" means the Internal Revenue Code, as amended, and
Regulations promulgated thereunder.
"Collateral" means the real property described on attached
Exhibit A, and all easements and appurtenances thereto, and all improvements,
furniture, fixtures and equipment, and related tangible and intangible personal
property owned or leased by Borrower located thereon or used and useful in
connection therewith, and such other real property and easements and
appurtenances thereto, and improvements, furniture,
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fixtures and equipment, and related tangible and intangible personal property
owned or leased by Borrower located thereon or used and useful in connection
therewith, now or hereafter mortgaged, assigned, granted or conveyed by
Borrower to Lender or a trustee for the benefit of Lender as security for the
payment and performance of the Obligations, pursuant to the terms, covenants
and conditions of this Agreement and the other Loan Documents.
"Collateral Change Date" means the effective date of any (i)
release of property from the Collateral, or (ii) addition of property to the
Collateral as additional Collateral or in substitution of property released or
to be released from the Collateral, as the case may be, pursuant to Article IV.
"Debt" means, at any time, without duplication, (A) as shown
on Borrower's balance sheet (i) all indebtedness of Borrower or any Subsidiary
for borrowed money or for the deferred purchase price of property or services
and (ii) all indebtedness of Borrower or any Subsidiary evidenced by a note,
bond, debenture or similar instrument (whether or not disbursed in full in the
case of a construction loan); (B) the face amount of all letters of credit
issued for the account of Borrower or any Subsidiary and all unreimbursed
amounts drawn thereunder; (C) all contingent obligations, including direct or
indirect guaranties and completion guaranties, of Borrower or any Subsidiary;
(D) all payment obligations of Borrower or any Subsidiary under any interest
rate protection agreement (including, without limitation, any interest rate
swaps, caps, floors, collars and similar agreements) and currency swaps and
similar agreements which were not entered specifically in connection with the
Debt referred to in clauses (A), (B) or (C) above; (E) obligations of Borrower
or any Subsidiary as lessee under leases which have been or should be, in
accordance with GAAP, recorded as capital or financing leases; and (F)
liabilities of Borrower or any Subsidiary in respect of unfunded vested
benefits under plans covered by Title IV of ERISA.
"Default" has the meaning set forth in Section 8.1.
"Default Rate" means a rate of interest equivalent to the
LIBOR Interest Rate (using LIBOR based on a 6-month Interest Period) plus
7.00%, calculated on the basis of a 360 day year.
"EBITDA" means, for any period and without duplication, net
earnings (loss) of Borrower for such period (excluding equity net earnings or
net loss of Subsidiaries) plus the sum of the following amounts (but only to
the extent included in determining net income (loss) for such period): (a)
depreciation and amortization expense and other non-cash charges of Borrower
for such period plus (b) interest expense of Borrower for such period plus (c)
income tax expense of Borrower in respect of such period plus (d) extraordinary
losses of Borrower, losses from sales of assets of Borrower and losses
resulting from forgiveness of debt by Borrower, all for such period minus (e)
extraordinary gains of Borrower and gains from sales of assets
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of Borrower for such period plus (f) distributions of cash received by Borrower
during such period from any of its Subsidiaries.
"ERISA" means the Employment Retirement Income Security Act
of 1974, as amended from time to time, and rules and regulations promulgated
thereunder.
"Event of Default" has the meaning set forth in Section 8.1.
"Extension Fee" means a non-refundable fee equivalent to
0.125% of the Loan Amount.
"Financial Covenants" has the meaning set forth in Section
3.1(a).
"FUNB" means First Union National Bank of Florida, a national
banking association.
"Funding Date" means each date on which Lender makes an
Advance, or, in the case of the continuation of an outstanding LIBOR Advance,
the next Business Day following the last day of the Interest Period applicable
to such outstanding LIBOR Advance.
"GAAP" means generally accepted accounting principles
consistently applied.
"Governmental Requirements" means the requirements and
mandates of all governmental laws, statutes, rules, regulations, ordinances or
requirements, including, without limitation, regulations relating to protection
of the environment, building and construction, highway access, disability
access, asbestos, lead-based paint, zoning, land use and concurrency, and other
regulations, applicable to the ownership, development, use or operation of the
Collateral.
"Indemnification Agreement" means each Environmental
Indemnification Agreement dated the Closing Date or any Collateral Change Date
given by Borrower to and in favor of Lender with respect to the Collateral
located in each State.
"Insurer" means American and Foreign Insurance Company, or
such other insurer selected by Borrower and approved by Lender and otherwise
authorized to transact business in each State and having an A.M. Best rating of
"A-" or better and an asset size rating of "IX" or better.
"Interest Period" means the 1-month, 2-month, 3-month or
6-month period, as elected by Borrower pursuant to Section 2.2(a), for any
LIBOR Advance, commencing on the Funding Date of such LIBOR Advance, and ending
on the last date of such period elected by Borrower; provided, that the
duration of any Interest Period
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that begins prior to the Maturity Date but otherwise would end after the
Maturity Date shall end on the Maturity Date, and further provided, that if the
last day of such Interest Period would otherwise occur on a day that is not a
Business Day, then such last day shall be extended to the next succeeding
Business Day.
"Koger Net Square Foot" means the floor area unit measurement
utilized by Borrower in the ordinary course of its business in measuring the
floor area of an office building owned by Borrower for which Borrower
ordinarily would receive rent, as follows: (A) measurement is made from
centerline of corridor partitions and partitions separating tenants, (B)
measurement is made from centerline of glass or 3" into wall where no glass is
present, for exterior and permanent walls, and (C) no reduction in floor area
is made for columns or other projections .
"Late Charge" means an amount equivalent to the lesser of
5.00% of any scheduled payment amount or the maximum late charge permitted
under applicable laws of any State if the laws of such State are determined to
govern the Notes or this Loan Agreement.
"Leases" means any tenant leases now or hereafter in
existence in connection with the Collateral.
"Lease Assignment" means each Assignment of Leases and Rents,
whether incorporated into any Security Deed or set forth in a separate
document, dated the Closing Date or any Collateral Change Date given by
Borrower to and in favor of Lender, assigning to Lender all of Borrower's
interest in the Leases and Rents relating to the Collateral located in each
State.
"Lender" means together FUNB and MGT.
"Lender's Counsel" means legal counsel engaged by Lender from
time to time in connection with the closing, administration, enforcement or
collection of the Loan.
"LIBOR" means the interest rate at which 1-month, 2-month,
3-month or 6-month deposits (as elected by Borrower) in United States dollars
are offered to prime banks in the London interbank market as reported on
Telerate page 3750 as of 11:00 A.M. (London time), 2 Business Days before the
Funding Date of any LIBOR Advance (or if not so reported, then as determined by
FUNB from another recognized source or interbank quotation) in an amount
approximately equal or comparable to such LIBOR Advance with a maturity equal
to such Interest Period, as adjusted for reserves by dividing that rate by 1.00
minus the Reserve Requirement, if any.
"LIBOR Advance" means any Advance bearing interest at a LIBOR
Interest Rate pursuant to Article II.
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"LIBOR Interest Rate" means an annual rate of interest
equivalent to LIBOR (as elected by Borrower) plus 2.00%, calculated on the
basis of 360 day year.
"Loan" means the revolving credit facility in an aggregate
amount up to the Loan Amount made available by Lender to Borrower in accordance
with the terms, covenants and conditions of this Agreement and the Loan
Commitment.
"Loan Amount" means $50,000,000.00 United States Dollars.
"Loan Commitment" means Lender's written commitment letter to
Borrower dated November 20, 1996, and accepted by Borrower December 6, 1996,
pursuant to which Lender has committed to make the Loan to Borrower.
"Loan Documents" means this Agreement, the Loan Commitment,
the Notes, the Security Deeds, the Lease Assignments, the Assignments of
Contracts, the Indemnification Agreements, and any other instruments,
documents, affidavits or certificates given by Borrower to Lender or any
trustee for the benefit of Lender in support of, or evidencing or securing, the
Loan.
"Loan Term" means the term of the Loan, which shall commence
on the Closing Date and shall expire on the Maturity Date.
"Maturity Date" means April 6 , 1999, or such later date as
may be established by an extension made pursuant to Section 2.3.
"MGT" means Morgan Guaranty Trust Company of New York, a New
York banking corporation.
"Net Income" means, for any period, Borrower's net income
determined in accordance with GAAP, adjusted to omit the straight line
treatment of rent.
"Notice of Borrowing" means any written notice given by
Borrower to Lender from time to time requesting an Advance or continuing any
outstanding Advance for an additional Interest Period, if applicable,
specifying the requested Funding Date, the requested Interest Period, the
requested amount of such Advance, and the interest rate elected by Borrower for
such Advance.
"Note" means the Revolving Promissory Note dated the Closing
Date made by Borrower payable to the order of FUNB in the original principal
amount of $35,000,000, or the Revolving Promissory Note dated the Closing Date
made by Borrower payable to the order of MGT in the original principal amount
of $15,000,000, and any renewals, modifications or extensions thereof, and
"Notes" means both of the Notes together.
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"Obligations" means each and every payment and performance
covenant, condition or agreement of Borrower to or in favor of Lender or any
trustee for the benefit of Lender under the Loan Documents, including, without
limitation, Borrower's obligation to repay the Advances, together with interest
accrued thereon, in accordance with this Agreement and the other Loan
Documents.
"Plan" means any plan defined in Section 4021(a) of ERISA in
respect of which Borrower or any Subsidiary is an "employer" or a "substantial
employer" as said terms are defined in Section 3(5) and 40041(a)(2),
respectively, of ERISA.
"Prime Advance" means any Advance bearing interest at the
Prime Interest Rate pursuant to Article II.
"Prime Interest Rate" means an annual rate of interest
equivalent to the interest rate (but not necessarily the best or lowest rate
charged borrowing customers of FUNB) published or announced by FUNB from time
to time as its prime rate, calculated on the basis of a 365 (or 366, if
applicable) day year.
"REIT" means a Real Estate Investment Trust under Section
856-860 of the Code.
"Rents" means all rents, profits, issues, income and
royalties received from the Leases or otherwise in connection with the
Collateral.
"Rent Roll" means a document, certified by Borrower to be
complete and correct, identifying all leases on any property that is or will
become Collateral, the identity of the tenants thereunder, the location and
floor area (both Koger Net Square Feet and actual floor area) of the leased
premises thereunder, and the rent for the leased premises thereunder, all other
information pertaining to such leases as Lender shall require.
"Reportable Event" means any of the events set forth in
Section 4043(b) of ERISA.
"Reserve Requirement" means the maximum percentage reserve
requirement, if any, applicable to FUNB (rounded to the next higher 1/100 of 1%
and expressed as a decimal) in effect for any day during the Interest Period
under the Federal Reserve Board's Regulation D for Eurocurrency Liabilities as
defined therein.
"SEC" means the federal Securities Exchange Commission.
"Security Agreement" means each Security Agreement, whether
incorporated into any Security Deed or set forth in a separate document, dated
the Closing Date or any Collateral Change Date given by Borrower to and in
favor of Lender, granting to Lender a first lien and security interest in that
portion of the
<PAGE> 10
Collateral located in each State that constitutes tangible and intangible
personal property.
"Security Deed" means each Deed to Secure Debt, Deed of Trust
or Mortgage dated the Closing Date or any Collateral Change Date given by
Borrower to and in favor of Lender or a trustee for the benefit of Lender,
granting to Lender or such trustee a first lien and security interest or
absolute title interest in that portion of the Collateral located in each State
that constitutes real property, easements and appurtenances thereto, and
improvements and fixtures, and sometimes incorporating a Security Agreement
and/or Lease Assignment.
"Shareholders' Equity" means at any date Borrower's
stockholders' equity (determined on a book basis), less its Intangible Assets,
as determined as of such date. For purposes of this definition, "Intangible
Assets" means with respect to any such intangible assets, (i) the amount (to
the extent reflected in determining such stockholders' equity) of all write-ups
(other than write-ups resulting from foreign currency translations and
write-ups of assets of a going concern business made within 12 months after the
acquisition of such business) subsequent to December 31, 1996, in the book
value of any asset (other than Real Property Assets) owned by Borrower, and
(ii) goodwill, patents, trademarks, service marks, trade names, anticipated
future benefit of tax loss carry forwards, copyrights, organization or
developmental expenses and other intangible assets.
"State" means each state in which the Collateral is located.
"Subsidiary" means the corporations described on attached
Exhibit G, which corporations are wholly-owned subsidiaries of Borrower,
together with any other direct or indirect subsidiary of Borrower which falls
within the meaning of "significant subsidiary" for federal securities law
purposes.
"Summary Requirements" means the Summary Requirements for
Additions to Collateral Pool Properties attached as Exhibit B.
"Title Commitment" has the meaning set forth in Section
4.3(b).
"Total Debt Service" means, for any period, an amount equal
to the sum of (i) interest (whether paid, accrued or capitalized) actually
payable by Borrower on its Debt, and (ii) scheduled payments of principal on
such Debt, whether or not paid by Borrower (excluding balloon payments).
"Title Insurer" means Lawyers Title Insurance Company, and
its authorized title agents in each State.
"Total Liabilities" means, at any date, total liabilities of
Borrower determined in accordance with GAAP, relating to all wholly-owned
properties of
<PAGE> 11
Borrower and Borrower's prorata share of liabilities from consolidated and
unconsolidated joint ventures, including Debt, and prorata share of any joint
venture obligations and contingent liabilities
"Unused Fee" means a non-refundable fee equivalent to 0.25%
per annum of the weighted average available but undisbursed proceeds under the
Loan during the immediately preceding calendar quarter, based on the difference
between (a) the Loan Amount (or weighted average thereof during such calendar
quarter if the Loan Amount changes during such calendar quarter), and (b) the
weighted average outstanding principal balance of the Loan during such calendar
quarter.
SECTION 1.2. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP, except
as otherwise stated herein.
ARTICLE II
AMOUNT AND TERMS OF ADVANCES
SECTION 2.1. Advances. Lender agrees, on the terms and
conditions set forth in this Agreement, to make Advances to Borrower from time
to time during the Loan Term in an aggregate amount not to exceed the Loan
Amount. Each Advance shall be in an amount not less than $1,000,000 (except
that an Advance may be in a lesser amount if such amount constitutes the entire
undisbursed principal of the Loan Amount). Subject to the terms and conditions
of this Agreement, Borrower may borrow under this Section 2.1, repay under
Section 2.5, and reborrow under this Section 2.1, the Loan Amount.
SECTION 2.2. Making Advances. (a) Each Advance shall be made
(or continued for an additional Interest Period, if applicable), following a
Notice of Borrowing received by FUNB not later than 2:00 P.M. (Eastern Standard
Time) on (i) in the case of a LIBOR Advance, the 4th Business Day prior to, or
(ii) in the case of a Prime Advance, the 2nd Business Day prior to, the
requested Funding Date (which requested Funding Date must be a Business Day);
provided, however, that:
(1) if Borrower fails to elect any particular interest
rate, or if the requested Funding Date is less than 4 Business Days
following such Notice of Borrowing, Borrower shall be deemed to have
elected the Prime Interest Rate; and
(2) Borrower shall have delivered to FUNB the statements
referred to in Section 3.1(c) and Section 3.1(d) prior to or
concurrently with the applicable Notice of Borrowing described above.
<PAGE> 12
(b) Each Notice of Borrowing shall be irrevocable and binding
on Borrower. Following any Notice of Borrowing, Borrower indemnifies and agrees
to hold harmless Lender from and against any loss, cost or expense incurred by
Lender as a result of any failure by Borrower to complete the borrowing
specified in such Notice of Borrowing (whether or not due to a failure to
fulfill on or before the date specified in such Notice of Borrowing the
applicable conditions set forth in Article III), such losses, costs and
expenses to include, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by Lender to fund the Advance,
when such Advance, as a result of such failure, is not made on the date
requested for such Advance.
(c) Subject to fulfillment of the applicable conditions set
forth in this Article II and Article III below, Lender will make the Advance
not later than 2:00 P.M. (Eastern Standard Time) in the amount and on the date
requested for such Advance in same-day funds at FUNB's office at 225 Water
Street, Jacksonville, Florida, by wire transfer of such Advance on behalf of
Borrower to Borrower's account maintained at FUNB, or to such other account as
Borrower shall so direct by written notice to FUNB.
(d) LIBOR Advances shall be subject to the following
additional conditions:
(1) if, at any time, (A) Lender shall determine that, by
reasons of circumstances affecting foreign exchange and interbank
markets generally, LIBOR deposits in the applicable amounts are not
being offered to Lender, or (B) the introduction of or any change in
or in the interpretation (including reversals) of any law or
regulation makes it unlawful, or any central bank or governmental
authority asserts that it is unlawful, for Lender to obtain funds in
the London interbank market to fund or maintain a LIBOR Advance or
otherwise to perform its obligations hereunder with respect to any
such Advance, Lender's obligation to make or maintain any LIBOR
Advance, and the right of Borrower to select any LIBOR Interest Rate,
shall be suspended until the circumstances causing such suspension no
longer exist, and the applicable LIBOR Interest Rate for any
outstanding LIBOR Advance shall immediately be converted to the Prime
Interest Rate for such LIBOR Advance for the remainder of the Interest
Period;
(2) LIBOR Advances may be repaid or prepaid only on the
last Business Day of the Interest Period applicable to such Advance.
Borrower may elect to maintain any outstanding LIBOR Advance for an
additional Interest Period by delivering a Notice of Borrowing making
such election within the time period required for such notices as set
forth in Section 2.2 above. If any LIBOR Advance is not repaid or
prepaid on the last Business Day of the Interest Period, and Borrower
has not otherwise timely delivered a Notice of Borrowing electing to
continue such LIBOR Advance for an additional Interest Period elected
by Borrower in such Notice of Borrowing, Borrower will be deemed to
have elected
<PAGE> 13
to maintain such Advance outstanding as a Prime Advance. If, as a
result of a payment made by Borrower due to acceleration of the
maturity of the Notes pursuant to Section 8.2 or due to any other
reason, Lender receives payment of any principal amount of any LIBOR
Advance on a day other than the last day of the Interest Period for
such LIBOR Advance, or Borrower fails to make any payment of principal
outstanding under any LIBOR Advance when due under the Notes, Borrower
shall pay to Lender on demand that amount, if any, required to
compensate Lender for additional losses, costs or expenses which
Lender may incur as a result of such payment or nonpayment, including,
without limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by Lender to fund or maintain such
LIBOR Advance.
SECTION 2.3. Loan Term Extension; Extension Fee. At the end
of the first year of the Loan Term, and at the end of each year of the Loan
Term thereafter, if applicable, the Loan shall be subject to review by Lender
for the purposes of determining the adequacy of the financial condition of
Borrower and the condition of the lending relationship between Borrower and
Lender. Based on such review and provided that no Event of Default exists,
Lender may, in its discretion, elect to extend the Maturity Date for additional
periods of 1 year each, provided, that upon Lender's approval, and Borrower's
acceptance, of each 1-year extension of the Maturity Date, Borrower shall pay
to FUNB as agent for Lender an Extension Fee as consideration for Lender's
extension of the Loan Term. If Lender declines to extend the Maturity Date, or
if Borrower declines to accept Lender's extension of the Maturity Date, then no
Extension Fee will be payable by Borrower.
SECTION 2.4. Unused Fee. After the Closing Date, in
consideration for Lender's reservation of funds for availability for borrowing
under the Loan, Borrower shall pay the Unused Fee to FUNB as agent for Lender
in arrears at the end of each calendar quarter.
SECTION 2.5. Repayment of Advances; Prepayments. (a) Interest
only, computed daily on the outstanding principal balance of the Loan, shall be
due monthly on the 10th day of each calendar month for the preceding calendar
month, and shall be paid to FUNB as agent for Lender. On the Maturity Date, the
entire outstanding principal balance of the Loan, together with accrued and
unpaid interest thereon, and late fees and other charges, if any, payable by
Borrower under the Loan Documents, shall be due and payable in full, and shall
be paid to FUNB as agent for Lender. Any payment of interest which is not made
within 10 days following its due date or such longer period as may be required
under applicable laws of any State if the laws of such State are determined to
govern this Agreement, shall be subject to a Late Charge, which shall be due
and payable contemporaneously with such payment of interest.
(b) During the Loan Term, the Loan Amount may be borrowed,
repaid and reborrowed on a revolving basis, provided, that prior to the
Maturity Date, the
<PAGE> 14
outstanding principal balance of the Loan shall never be less than $1,000.00
nor greater than the maximum principal amount permitted to be borrowed under
the Loan pursuant to the Financial Covenants. Repayments of the outstanding
principal amount of any Advance may be made on any Business Day, provided, that
repayments received after 2:00 P.M. (Eastern Standard Time) shall not be
credited to Borrower's account until the next Business Day, and further
provided, unless Borrower prior to or contemporaneously with such repayment
designates in writing to FUNB the Advance that should be credited with such
repayment, such repayment shall be applied to repayment of Advances on a
"first-borrowed first-repaid" basis. Repayment of any LIBOR Advance on any day
other than the maturity of the Interest Period applicable to such LIBOR Advance
may be subject to a charge pursuant to Section 2.2(d), payable by Borrower to
FUNB as agent for Lender at the time of such repayment. Repayment of any Prime
Advance may be repaid without penalty or premium.
SECTION 2.6. Interest Rate; Default Rate. (a) The amount of
each Advance shall accrue interest, at Borrower's election, at a LIBOR Interest
Rate or the Prime Interest Rate. Borrower shall be entitled to elect any of the
LIBOR Interest Rates (based on Interest Period selection) or the Prime Interest
Rate for any Advance under and subject to the conditions set forth in Section
2.2, provided that not more than 3 separate LIBOR Interest Rates (based on
Interest Period selection) and the Prime Interest Rate shall be applicable to
Advances at any one time that such Advances are outstanding.
(b) Following an Event of Default, the amount of each Advance
shall, at Lender's option, accrue interest from the date of Default at the
Default Rate.
SECTION 2.7. Payments and Computations. Borrower shall make
each payment under any Loan Document not later than 11:00 A.M. (Eastern
Standard Time) on the day when due in lawful money of the United States of
America to FUNB, as agent for Lender, at 225 Water Street, Jacksonville,
Florida 32202 in immediately available funds. All computations of interest
under the Notes and hereunder, other than the computation of interest at the
Prime Interest Rate, shall be made by Lender on the basis of a year of 360
days, and all computations of interest at the Prime Interest Rate shall be made
by Lender on the basis of a year of 365 or 366 days, as the case may be, for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest is payable. Whenever any
payment to be made hereunder or under the Notes shall be stated to be due on a
day other than a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest.
SECTION 2.8. Evidence of Indebtedness. The indebtedness of
Borrower resulting from all Advances made from time to time shall be evidenced
by the Notes.
<PAGE> 15
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.1. Conditions Precedent to Advances. The obligation
of Lender to make each Advance shall be subject to the conditions precedent
that on the date of any Notice of Borrowing requesting an Advance and on the
Funding Date:
(a) Borrower shall be in compliance with the following
financial covenants (the "Financial Covenants"):
(i) Total Liabilities (including all Debt) of Borrower
shall not exceed Shareholders' Equity.
(ii) As of the end of each fiscal quarter, distributions
or dividends to shareholders shall not exceed Net Income plus
Depreciation and Amortization and other non-cash items, less
non-expensed capital expenditures (excluding new building, major
renovation or rehabilitation and building acquisitions, if funded from
non-operational sources) and debt amortization, as determined in
accordance with GAAP, for the preceding four fiscal quarters;
provided, however, that Borrower may pay distributions or dividends to
shareholders in excess of such level solely in the event that
Borrower's failure to pay such distributions or dividends would
directly cause Borrower to fail to qualify as a REIT. Borrower
promptly shall notify FUNB in writing of any such permitted payment of
distributions or dividends in excess of such level, setting forth with
specificity the reason for such payment.
(iii) As of the end of each fiscal quarter, Borrower's
EBITDA, less the greater of Borrower's actual capital expenditures
(excluding new building, major renovation or rehabilitation and
building acquisitions, if funded from non-operational sources) or
$l.50 per Koger Net Square Foot owned by Borrower, for the preceding
four fiscal quarters shall be at least 1.40 times Total Debt Service.
(iv) Borrower's status as a REIT shall be continuing, and
Borrower shall continue to be listed as a publicly traded company on a
nationally recognized stock exchange.
(v) The outstanding principal balance of the Loan shall
not exceed 60.00% of the aggregate value of the Collateral as
initially determined by appraisals reviewed and approved by Lender.
Thereafter, the value of the Collateral, and the related limitation on
the outstanding principal balance of the Loan, shall be recalculated
by Borrower not less frequently than quarterly (calculated on a
historical rolling 4-quarter basis) using the actual Net Operating
Income generated from the Collateral and the capitalization rates
reasonably acceptable to Lender to determine borrowing availability of
the Loan Amount
<PAGE> 16
using the format attached as Exhibit C. All changes to capitalization
rates shall be subject to Lender's approval. Borrower may cause any
portion of the Collateral to be reappraised at any time at Borrower's
sole cost and expense using an appraiser reasonably acceptable to
Lender. Lender agrees to refer to such new appraisals in its
determination whether to approve or disapprove any change in
capitalization rates for purposes of determining borrowing
availability of the Loan Amount.
(vi) As of the end of each fiscal quarter, Net Operating
Income for such quarter derived from the Collateral (after deducting
therefrom appropriate management costs relating to the Collateral),
less the greater of Borrower's actual capital expenditures (excluding
new building, major renovation or rehabilitation and building
acquisitions, if funded from non-operational sources) for such quarter
relating to the Collateral or $0.375 per Koger Net Square Foot
constituting the Collateral, shall be at least 1.50 times Borrower's
interest expense for such quarter attributable to the Loan (including
capitalized interest), as determined in accordance with GAAP.
(b) As of the requested Funding Date, Borrower shall have
satisfied, and shall be in continuing compliance with, all of the terms,
covenants and conditions required to be satisfied as a condition precedent to
any Advance, and shall be in continuing compliance with all of the terms,
covenants and conditions of the Loan Documents, and no Default or Event of
Default shall then exist or be continuing.
(c) the following statements shall be true and FUNB shall
have received a certificate, substantially in the form attached as Exhibit J,
signed by a duly authorized officer of Borrower, dated the Funding Date,
stating that:
(i) The representations and warranties contained in
Section 6.1 are correct on and as of the Funding Date, before and
after giving effect to such Advance and to the application of proceeds
therefrom, as though made on and as of such date, and
(ii) No event or condition has occurred or is continuing,
or would result from such Advance or from the application of proceeds
therefrom, which constitutes a Default or Event of Default.
(d) Concurrently with delivery of the Notice of Borrowing for
such Advance, FUNB shall have received a certificate of the chief financial
officer or chief accounting officer of Borrower, substantially in the form
attached as Exhibit J, stating that Borrower is in compliance with the
Financial Covenants before and after giving effect to such Advance and to the
application of proceeds therefrom.
SECTION 3.2. Conditions Precedent to Certain Advances. The
obligation of Lender to make any Advance that, but for the addition of
Collateral pursuant to
<PAGE> 17
Section 4.3, would cause the principal balance of the Loan to exceed the
maximum borrowing limits determined in accordance with the Financial Covenants,
shall be subject to the further conditions precedent that on the date of the
Notice of Borrowing requesting such Advance and on the Funding Date, Borrower
shall have executed and delivered the Loan Documents, or modifications thereof,
relating to the addition of such Collateral, as Lender reasonably may request
to carry out the provisions and intent of the Loan Commitment and this
Agreement, all in form and content acceptable to Lender in its sole discretion,
and shall have satisfied the conditions and requirements set forth in Article
IV.
ARTICLE IV
ADDITION, SUBSTITUTION AND RELEASE OF COLLATERAL
SECTION 4.1. General Right to Add, Substitute or Release
Collateral. Borrower may elect, at any time during the Loan Term, to cause the
addition, substitution or release of Collateral, subject, however, to
Borrower's continuing compliance with the Financial Covenants and with the
requirements of this Article IV; provided, that Lender reserves the right to
exclude from the Collateral any particular office building or property that
Borrower requests for addition to Collateral based on sub-standard occupancy,
location, operating history, age, condition, or environmental concerns, in
Lender's sole discretion, and further provided, that Borrower shall not have
the right to cause the addition, substitution or release of Collateral if a
Default or Event of Default exists and is continuing. In support of any request
for release, substitution or addition of Collateral, Borrower shall submit to
Lender:
(i) a certification, in form and content acceptable to Lender in its
sole discretion, prepared by management and certified by the chief
financial officer or chief accounting officer of Borrower, certifying
to Lender that, after such proposed release, substitution or addition
of office buildings, Borrower will be in compliance with the Financial
Covenants;
(ii) the information or documentation required to be executed and/or
delivered to Lender as set forth in this Agreement, including, without
limitation, modifications or partial releases of the Loan Documents
(or delivery of additional Loan Documents consistent with the
requirements of the Loan Commitment and this Agreement to the extent
that any property to be added to the Collateral is located in a
jurisdiction different from the jurisdictions in which the existing
Collateral is located) as necessary or appropriate to properly reflect
the release, substitution or addition of Collateral in the discretion
of Lender and Lender's Counsel, and the documentation as set forth in
the Summary Requirements as to the office buildings proposed to be
substituted for or added to the Collateral, as applicable; and
<PAGE> 18
(iii) evidence satisfactory to Lender that such additional
Collateral, or the remaining Collateral after substitution or
release of other Collateral, has adequate and legal rights of
ingress and egress, drainage and utilities, and, if necessary
or appropriate, Borrower shall deliver to and in favor of
Lender, its successors and assigns, such perpetual
non-exclusive easements as Lender may reasonably request to
create such adequate and legal rights of ingress and egress,
drainage or utilities. With respect to easements for ingress
and egress, drainage or utilities that reasonably may be
required over, under or across the released Collateral as a
result of the release of such Collateral, Lender may
establish such easement or easements at the time of such
release pursuant to a Quit Claim Deed with Reservations and
Grants of Easements in substantially the form attached as
Exhibit I (the "Release Deed"), with modifications as
appropriate for the particular circumstances of such release
and the nature of the easement or easements required.
Similarly, if as a result of any such release, the released
Collateral reasonably may require easements for ingress and
egress, drainage or utilities over, under or across any
portion of the remaining Collateral, then at Borrower's
request, Lender shall, subject to the remaining provisions of
this Article IV below, cause such release to be made using
the form of Release Deed, with modifications as appropriate
for the particular circumstances of such release and the
nature of the easement or easements required.
Lender's decision whether to accept Borrower's request for
substitution, addition or release of Collateral shall be based on Borrower's
satisfaction of the foregoing requirements, on the documentation and
information delivered to Lender in compliance with this Agreement and the
Summary Requirements, and on a determination by Lender, in its sole and
absolute discretion, that there has been no material adverse change in the
financial condition of Borrower, and that all other aspects of the property to
be added or substituted, as applicable, including without limitation, the
general condition of such property and vacancy rates of the local commercial
leasing market, are substantially similar to the existing Collateral, or, if
applicable, to the Collateral to be released for substitution by new property,
subject to Lender's discretion.
SECTION 4.2. Requirements for Release of Collateral. In
addition to the general conditions and requirements for release of Collateral
as set forth in Section 4.1, the following conditions and requirements shall be
satisfied prior to the release of any Collateral:
(a) If the property proposed for release from the Collateral
is not the exclusive subject matter of a boundary survey on file with Lender
showing the Collateral, then, not later than 15 days prior to the Collateral
Change Date for such release, Borrower shall deliver to Lender a current
boundary survey of the property proposed for release from the Collateral, and a
current boundary survey of the remaining Collateral if the existing boundary
survey of the Collateral is affected by the
<PAGE> 19
release of such property from the Collateral. Each such survey shall meet or
exceed the Minimum Standards and Supplementary Requirements set forth on
attached Exhibit D. Each survey shall be subject to review and approval by
Lender, Lender's Counsel, and Title Insurer.
SECTION 4.3. Requirements for Addition or Substitution of
Collateral. In addition to the general conditions and requirements for addition
or substitution of Collateral as set forth in Section 4.1, the following
conditions and requirements shall be satisfied prior to the addition or
substitution of any Collateral:
(a) Prior to any Collateral Change Date, Lender shall have
ordered and received a current appraisal of the property to be added to the
Collateral as additional Collateral or in substitution of existing Collateral.
Following Lender's receipt of such appraisal satisfactory to Lender, Lender
will provide a copy of such appraisal to Borrower. Such appraisals shall be
utilized by Lender for informational purposes, and shall be subject to review
and approval by Lender.
(b) Not later than 30 days prior to any Collateral Change
Date, Borrower shall deliver to Lender and Lender's Counsel a commitment or
binder for an endorsement to the existing title insurance policy (if the
property to be added to the Collateral is located in the same State as the
existing Collateral) or for a new title insurance policy (if the property to be
added to the Collateral is not located in the same State as the existing
Collateral) issued by Title Insurer, committing to insure Lender's first
security or title interest in the property to be added to the Collateral as
additional Collateral or in substitution of existing Collateral (as legally
described to include any easements benefitting such real property), meeting or
exceeding the Minimum Title Standards set forth on attached Exhibit E (the
"Title Commitment"). The Title Commitment shall contain only those matters
expressly approved by Lender, and shall include complete copies of all listed
title exceptions. All title exceptions are subject to Lender's review and
approval, and any liens of prior mortgagees or creditors shall be satisfied or
released on or before the Collateral Change Date. On the Collateral Change
Date, Borrower shall cause Title Insurer to deliver its marked original Title
Commitment indicating the proper satisfaction of all conditions to issuance of
a title insurance policy or endorsement thereof, as the case may be, insuring
Lender, its successors and assigns as their interests may appear, based on such
Title Commitment subject only to those matters and exceptions to coverage as
set forth in the Title Commitment as previously may have been approved by
Lender.
(c) Not later than 30 days prior to any Collateral Change
Date, Borrower shall deliver to Lender and Lender's Counsel a current boundary
survey (or recertified boundary survey, provided that the same is, in the
discretion of Title Insurer, sufficient to permit Title Insurer to remove the
standard survey exceptions) for the property to be added to the Collateral,
meeting or exceeding the Minimum Standards and Supplementary Requirements set
forth on attached Exhibit D. Each survey shall be subject to review and
approval by Lender, Lender's Counsel, and Title Insurer. Surveys
<PAGE> 20
for buildings within a single office parks shall be accompanied by a site map
showing the relative location of each building within such office park.
(d) Not later than 30 days prior to any Collateral Change
Date, Borrower shall deliver to Lender a current UCC-11 search for Florida and
each State or local jurisdiction (if applicable) in which the property to be
added to the Collateral is located, evidencing to Lender's satisfaction that
such additional property is free and clear of any liens or perfected security
interests prior to Lender's security interest therein. On or before the
Collateral Change Date, Borrower shall deliver to Lender UCC-1 Financing
Statements for filing in Florida and each State or local jurisdiction (if
applicable) in which the property to be added to the Collateral is located,
perfecting Lender's first lien and security interest in the additional property
as Collateral.
(e) Not later than 30 days prior to any Collateral Change
Date, Borrower shall deliver to Lender a current environmental assessment of
each property to be added to the Collateral, meeting ASTM standards for "Phase
I" assessments, and including an asbestos evaluation for all buildings
constructed prior to 1980, prepared by Law Engineering or other environmental
engineer acceptable to Lender. Such assessments shall be utilized by Lender for
informational purposes, and shall be subject to review and approval by Lender.
Additionally, not later than 30 days prior to any Collateral Change Date,
Borrower shall deliver to Lender a certification in compliance with applicable
federal law relating to asbestos records and asbestos materials affecting any
buildings constructed before 1980 that are to be added to the Collateral.
(f) Not later than 30 days prior to any Collateral Change
Date, and on the Collateral Change Date, Borrower shall deliver to Lender a
current Rent Roll for the property to be added to the Collateral.
(g) On or before any Collateral Change Date, Borrower shall
deliver the following materials to Lender and Lender's Counsel, in form and
content acceptable to Lender and Lender's Counsel:
(i) Evidence of the current corporate status of Borrower
in Florida, and the current authority of Borrower to transact business
in each other State in which the property to be added as Collateral is
located.
(ii) A certificate of the Secretary of Borrower
certifying to Lender: (i) the completeness, accuracy and continuing
effectiveness of Articles of Incorporation and Bylaws of Borrower as
attached to such certificate, (ii) the names and signatures of all
executive officers of Borrower, and (iii) the completeness, accuracy
and continuing effectiveness of an executed resolution of the Board of
Directors of Borrower, as attached to such certificate, authorizing
Borrower's execution and delivery of the Loan Documents.
<PAGE> 21
(h) On or before any Collateral Change Date, Borrower shall
deliver to Lender evidence satisfactory to Lender and Lender's Counsel that the
property to be added to the Collateral is in compliance with the insurance
requirements set forth in Section 5.3, and in compliance with the tax
requirements set forth in Section 5.4.
(i) On or before any Collateral Change Date, Borrower shall
deliver to Lender a certification substantially in the form attached as Exhibit
F, executed and dated as of a date not more than 30 days prior to such
Collateral Change Date, relating to the level of compliance of the property to
be added to the Collateral with Governmental Requirements.
(j) On a Collateral Change Date, Borrower shall furnish
Lender with an opinion addressed to Lender provided by an attorney licensed in
each State in which the property to be added to the Collateral is located,
retained by Borrower and acceptable to Lender. Said opinions shall be subject
to approval by Lender and shall address such matters as Lender reasonably may
require, including, without limitation, the following:
(A) the due organization and valid legal existence of
Borrower as a Florida corporation, and the current
authority of Borrower to transact business in the
State.
(B) the due authorization, execution, validity, binding
effect and enforceability of the Loan Documents in
accordance with their terms.
(C) the Collateral and its use by Borrower comply with
applicable zoning, building, land use and
environmental requirements of all governmental
authorities having jurisdiction over the Collateral
(the foregoing opinion may be given to the actual
knowledge of opining counsel and based on a
certification of such matters given by Borrower to
opining counsel) .
(D) all amounts paid and to be paid by Borrower as
interest under the Loan Documents constitute lawful
interest under the laws of the State.
(E) the existence of, or the non-existence of, any
requirement for any consent of any governmental
authority in connection with the execution, delivery
or performance of the Loan Documents by Borrower.
<PAGE> 22
ARTICLE V
CERTAIN MATTERS CONCERNING THE COLLATERAL
SECTION 5.1. Inspections. Lender reserves the right to
require an engineering/structural inspection of any property constituting the
Collateral or property to be added to the Collateral if Lender has reasonable
cause to believe that the physical condition, safety features, or disabled
persons access features of such building are not maintained to standards
consistent with good management practices or in compliance with Governmental
Requirements. Any such inspection shall be conducted at the expense of
Borrower. Unless such inspection is made pursuant to the foregoing, Lender
otherwise shall have the right to inspect the Collateral at any reasonable time
throughout the Loan Term, at the expense of Lender.
SECTION 5.2. Appraisals. During the Loan Term, Lender may
obtain an appraisal of the Collateral when required by the regulations of the
Federal Reserve Board or at such other times as Lender reasonably may require.
All appraisals required under this Section 5.2, or required under any other
provision of this Agreement, shall be performed by an independent third party
appraiser selected by Lender, and shall be addressed to Lender with a copy
certified to Borrower. Following Lender's receipt of such appraisals
satisfactory to Lender, Lender shall provide a copy of such appraisals to
Borrower. The cost of such appraisals shall be borne by Borrower. The terms of
engagement of any appraiser shall include a clause obligating the appraiser to
maintain confidentiality of such appraisal and information obtained in
connection therewith. Borrower's failure or refusal to sign such an engagement
letter, however, shall not impair Lender's right to obtain such appraisals.
Borrower agrees to pay the cost of such appraisal within 10 days after
receiving an invoice for such appraisal.
SECTION 5.3. Insurance. Borrower shall procure and maintain
during the Loan Term an insurance policy issued by Insurer or other insurer
acceptable to Lender in its discretion, covering the improved real property and
personal property comprising the Collateral, with standards, terms and
coverages meeting or exceeding those of Borrower's existing Policy No. A
TL-441545 0000, issued by the Insurer, as in effect as of August 1, 1996. Such
policy shall recite Lender's interest as mortgagee in standard non-contributory
mortgagee clauses effective as of the Closing Date, or any Funding Date as to
any property added to the Collateral as of such Funding Date, and shall contain
a provision for 30 days prior written notice to Lender of cancellation of or
any change in the risk or coverages insured. Borrower shall promptly pay all
premiums for such policy as the same become due, and shall maintain such policy
throughout the Loan Term without cost to Lender.
If any such policy or part thereof shall expire or be
withdrawn, or become void or subject to cancellation by reason of the breach of
any condition thereof, or become void by reason of the failure or impairment of
the capital of any company in which the insurance shall be carried, or if for
any reason whatsoever the insurance shall be unsatisfactory to Lender, Lender
may procure such insurance as it deems
<PAGE> 23
necessary to protect its sole interest. Borrower shall promptly upon demand pay
direct or reimburse Lender for all premiums and other costs incurred in
procuring such insurance.
SECTION 5.4. Taxes and Assessments. Borrower shall pay all
taxes and assessments relating to the Collateral prior to delinquency thereof,
and shall deliver to Lender receipted bills for taxes and assessments promptly
upon Borrower's receipt thereof.
Notwithstanding the foregoing, Borrower shall not be required
to pay any taxes or assessments as long as Borrower shall contest, in good
faith and at its expense, the existence, the amount or the validity thereof by
appropriate proceedings; provided that such proceedings shall operate during
the pendency thereof to prevent (A) the collection of, or other realization
upon, such taxes or assessments so contested, (B) the sale, forfeiture or loss
of the Collateral to satisfy the same, (C) any interference with the use or
occupancy of the Collateral, and (D) any interference with the payment of
Borrower's obligations under the Loan. Borrower agrees that each such contest
shall be promptly and diligently prosecuted to a final conclusion, except that
Borrower shall, as long as the conditions of the first sentence of this
paragraph are at all times complied with, have the right to attempt to settle
or compromise such contest through negotiations. Borrower shall pay and save
Lender harmless against any and all losses, judgments, decrees and costs
(including all reasonable attorneys' fees and expenses) in connection with any
such contest and shall, promptly after the final determination of such contest,
fully pay and discharge the amounts which shall be levied, assessed, charged or
imposed or be determined to be payable therein or in connection therewith,
together with all penalties, fines, interest, costs and expenses thereof or in
connection therewith, and perform all acts the performance of which shall be
ordered or decreed as a result thereof. No such contest shall subject Lender to
the risk of any material civil liability or any criminal liability. If Lender
reasonably believes that such contest is not in compliance with the
requirements of this paragraph, then, upon written demand by Lender, Borrower
promptly shall pay the amount of such taxes or assessments so contested, which
payment may be made under protest.
SECTION 5.5. Tax and Insurance Deposits. Upon Lender's
request, or if an Event of Default has occurred, Borrower shall deposit with
Lender a sum equivalent to 1 year's insurance premium on the casualty insurance
policy insuring the Collateral, and shall pay to Lender on a monthly basis an
amount equivalent to 1/12 of all annual ad valorem real and personal property
taxes and assessments levied against the Collateral as estimated by Lender, in
order to accumulate with Lender sufficient funds to pay such taxes and
assessments and a full year's insurance premiums 30 days prior to their due
date. Lender shall maintain any funds so deposited in an interest bearing
account (money market rates), and interest accrued on such account will be
reinvested in such account but shall be considered income to Borrower for state
and federal income tax and capital gains tax purposes. To the extent that funds
are available for disbursement out of such account, Lender shall pay
<PAGE> 24
annual ad valorem real and personal property taxes and assessments levied
against the Collateral at such time as will result in the greatest discount, if
any, for early payment.
SECTION 5.6. Tax Service Contract; Annual Tax Searches.
Lender shall have the right to engage Transamerica Real Estate Tax Service
(TRETS) for the Loan Term, for the purpose of providing Lender annual tax
information concerning the Collateral; provided, however, that Lender will
notify Borrower in writing before Lender engages TRETS. The cost of the TRETS
service, if applicable, shall be paid by Borrower. Borrower shall engage or
employ the services of a tax specialist (who may be an employee of Borrower)
for the purpose of monitoring and complying with all impositions of ad valorem
real and personal property taxes and assessments against the Collateral. If
Lender requires Borrower to make tax deposits pursuant to Section 5.5 above,
then Lender will not engage TRETS. Borrower agrees to permit Lender to consult
with Borrower's tax specialist from time to time for the purpose of determining
the status of Borrower's tax compliance.
SECTION 5.7. Due on Sale. The entire balance of the Loan and
all other sums owing to Lender under the Loan Documents shall be and become
immediately due and payable, at the option of Lender, if there shall occur
without Lender's prior written consent any sale, conveyance, further
encumbrance, or other transfer of title to the Collateral, or any interest
therein (whether voluntarily or by operation of law). Any consent by Lender
permitting a transaction otherwise prohibited under this paragraph shall not
constitute a consent to or waiver of any right, remedy or power of Lender to
withhold its consent on a subsequent occasion to a transaction not otherwise
permitted by the provisions of this paragraph. No such consent shall be
considered by Lender unless the appropriate service fees and legal fees are
paid in advance and no such consent shall be given unless Borrower agrees,
inter alia, that immediately upon closing of the subject sale or transfer,
Borrower shall provide Lender with a copy of the deed or other instrument
conveying title to the Collateral to transferee.
SECTION 5.8. Loss and Restoration following Casualty or
Condemnation. (a) In the event of any casualty or condemnation affecting all or
any portion of the Collateral, Borrower shall give immediate written and oral
notice thereof to Lender. All loss proceeds of any insurance policies following
any casualty, and all awards derived from any condemnation, shall be applied
(i) to restoration of the Collateral suffering such loss if such loss is less
than 50% of the full replacement cost of such Collateral, or (ii) at Lender's
option, to restoration of the Collateral suffering such loss or to the payment
of principal (whether or not then due and payable), interest and other sums
secured by the Loan Documents (in the order and in the amounts that Lender in
its sole discretion elects), on such terms as Lender may specify, if such loss
is 50% or more of the full replacement cost of such Collateral. If Lender
elects, pursuant to clause (ii) above, to apply the proceeds of casualty or
awards of condemnation, to payment of principal, then Lender will exercise a
good faith effort to apply such proceeds or
<PAGE> 25
awards in a manner that will seek to minimize the application of charges or
penalties for prepayment or repayment of LIBOR Advances.
(b) Promptly following any loss resulting from a casualty or
condemnation, Borrower shall commence and diligently continue to restore the
Collateral affected thereby as nearly as possible to its value, condition and
character immediately prior to such loss, whether or not any insurance proceeds
or award derived from condemnation, as applicable, is sufficient to cover the
cost of restoration. Provided that no Event of Default exists, Lender shall
make available to Borrower any proceeds of such loss received by Lender,
subject to the terms and conditions set forth in this Section 5.8. Borrower
shall be entitled to receive from Lender periodic disbursements of the proceeds
payable in connection with such loss, but only on the basis of certificates of
Borrower delivered to Lender from time to time as such rebuilding, restoration
and repair progresses or is completed. Each such certificate shall describe the
work for which Borrower is requesting payment, the cost incurred by Borrower in
connection therewith, and shall state that such work has been performed in
conformity with all Governmental Requirements and in compliance with plans and
specifications therefor, the estimated cost of completing such work, and that
Borrower has not theretofore received payment for such work. Upon completion of
such work, if any proceeds of such loss remain after the final payment has been
made for such work, such remaining proceeds shall be paid to Borrower. If the
cost of any such work shall exceed the amount of such proceeds, the deficiency
shall be paid by Borrower. In no event shall Lender have any obligation to turn
over proceeds to Borrower if any Default or Event of Default exists and is
continuing, unless and until such Default or Event of Default shall have been
cured or removed.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1. Representations and Warranties of Borrower.
Borrower represents and warrants to Lender as follows:
(a) Borrower is a corporation organized under the Florida
Business Corporation Act, and its status is active. Borrower is authorized to
transact business in each State.
(b) Borrower has the corporate power to conduct its business
and to execute and deliver this Agreement and the other Loan Documents and to
perform the Obligations.
(c) Borrower has authorized the execution and delivery of the
Loan Documents and the performance of the Obligations by all necessary
corporate action.
<PAGE> 26
(d) The execution and delivery of the Loan Documents and the
performance of the Obligations by Borrower do not (i) violate Borrower's
articles of incorporation or bylaws; (ii) constitute a breach of or a default
under any agreement or instrument to which Borrower or any Subsidiary is a
party or by which Borrower, its Subsidiaries or their respective assets are
bound; (iii) violate a judgment, decree or order of any court or administrative
tribunal, which judgment, decree or order is binding on Borrower or any
Subsidiary or the Collateral; or (iv) violate any federal, Florida or State
law, rule or regulation.
(e) No consents, authorizations or approvals or other action
by, and no notice to or filing with, any governmental authority, regulatory
body or any creditor is required for the execution and delivery of the Loan
Documents or the performance of the Obligations by Borrower.
(f) The Loan Documents are the legal, valid and binding
obligations of Borrower enforceable against Borrower in accordance with their
respective terms.
(g) Borrower is a REIT, and is listed as a publicly traded
company on a nationally recognized stock exchange; and Borrower has no
Subsidiaries other than the Subsidiaries described on attached Exhibit G, and
such other Subsidiaries as may be formed subsequent to the date hereof and
disclosed to Lender in writing.
(h) No Subsidiary is the holder or obligee of any Debt.
(i) No judicial or administrative proceedings are pending or
threatened, including any bankruptcy proceeding, against Borrower or any
Subsidiary which might adversely affect Borrower's ability to pay or perform
the Obligations, Borrower's obligations under any Leases, or Borrower's
contracts and agreements entered or to be entered for the performance of the
Obligations, or which might adversely affect Borrower's ownership, management,
leasing and operation of the Collateral.
(j) All financial information supplied by Borrower to Lender
in support of Borrower's application for the Loan fairly presents the financial
condition of Borrower as at the effective dates thereof and the results of the
operations of Borrower for the period ended on such dates, all in accordance
with GAAP; and since December 31, 1996, there has been no material adverse
change in such condition, operations or properties.
(k) Neither Borrower nor any Subsidiary is engaged in the
business of extending credit for the purpose of purchasing or carrying "margin
stock" (within the meaning of Regulation U issued by the Board of Governors of
the Federal Reserve System), and no proceeds of the Loan will be used, directly
or indirectly, by Borrower or any Subsidiary to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock.
<PAGE> 27
(l) Borrower is in compliance in all material respects with
all applicable provisions of ERISA, no Reportable Event has occurred and is
continuing with respect to any Plan, and Borrower has not incurred any
liability to the Pension Benefit Guaranty Corporation under Section 4062 of
ERISA.
(m) Borrower is not in default under any material agreement,
lease, contract or other instrument relating to the ownership, management,
leasing and operation of the Collateral, and no event of default by Borrower,
or event which with the giving of notice or the passage of time would become an
event of default by Borrower, has occurred or is continuing with respect to any
such agreement, contract or other instrument.
(n) Borrower has good and marketable title to the Collateral,
free and clear of any liens, encumbrances or mortgages other than those created
or imposed by the Loan Documents, Borrower is in exclusive possession of the
Collateral subject only to rights of parties in possession as tenants under
recorded or unrecorded Leases, as tenants only, Borrower is the landlord under
the Leases, and no Subsidiary has any interest in the Collateral, including the
Leases, except as described on attached Exhibit H.
(o) There are no pending or, to the best of Borrower's
knowledge, threatened actions or proceedings for condemnation or eminent domain
affecting the Collateral, except as disclosed to Lender in the title commitment
delivered to Lender at Closing and except such actions or proceedings as may be
threatened or become pending subsequent to the date hereof and disclosed to
Lender in writing.
The foregoing representations and warranties shall survive
the execution and delivery of this Agreement.
ARTICLE VII
COVENANTS OF BORROWER
SECTION 7.1. Affirmative Covenants. So long as the Note shall
remain unpaid or Lender shall have any obligation to make any Advance
hereunder, and in addition to all other covenants and agreements of Borrower
set forth in this Agreement, Borrower shall comply with the affirmative
covenants set forth in this Section 7.1, unless Lender shall otherwise consent
in writing.
(a) Costs and Expenses. Borrower shall pay all reasonable
costs, fees, commissions, charges, taxes and other expenses incident to the
evaluation, preparation and closing of the Loan, any subsequent modification or
partial release affecting the Loan Documents, subsequent funding of Advances,
or otherwise incurred in protecting and preserving the lien of the Loan
Documents or in enforcing Lender's rights under the Loan Documents, or in
enforcing, sustaining, protecting, or defending
<PAGE> 28
the lien or priority of the Loan Documents against any and all persons,
including, but not limited to, lien claimants or the exercise of the power of
eminent domain or other governmental power of any kind, including, without
limitation, reasonable fees and expenses of Lender's Counsel, examination of
title to the Collateral and loan title insurance thereon, boundary surveys,
appraisals, environmental assessments, asbestos evaluations,
engineering/structural inspections, note and mortgage taxes, transfer taxes,
tax search service fees, and all recording fees and charges. Additionally, to
the extent that applicable state law requires that any note or mortgage tax is
payable in connection with any Advance, Borrower shall be obligated to pay the
same to Lender upon demand therefor. Every such payment made by or on behalf of
Lender will be immediately due and payable by Borrower to Lender and will bear
interest from the date of disbursement thereof by Lender at the then applicable
Prime Interest Rate until reimbursed to Lender by Borrower (provided, however,
that if Borrower fails to reimburse Lender for such payments within 5 days
following Lender's written notice and demand therefor, such payments made by
Lender will bear interest from the date of disbursement at the Default Rate),
and the same, together with such interest, will be secured by the lien of the
Loan Documents. Nothing contained in this paragraph will be construed as
requiring Lender to advance or spend money for any of the purposes mentioned in
this paragraph.
(b) Rent Roll. Borrower shall deliver to Lender on a
quarterly basis an updated Rent Roll reflecting information concerning the
Leases as of the end of the preceding quarter, and upon Lender's request,
deliver to Lender a certified report of prepaid rentals and security deposits
relating to such Leases.
(c) Compliance with Governmental Requirements. Borrower shall
comply with all Governmental Requirements, including, without limitation,
ERISA, regulations relating to protection of the environment, building and
construction, highway access, disability access, asbestos, lead-based paint,
zoning, land use and concurrency, and other regulations relating to the
ownership, leasing, development, use or operation of the Collateral.
(d) Preservation of Corporate Existence. Borrower shall
preserve and maintain its corporate existence and status as a REIT, and its
rights (charter and statutory), and remain qualified to transact business in
each State.
(e) Preservation and Maintenance of Collateral. Borrower
shall maintain the Collateral in a condition consistent with good management
practices, and in good repair (which shall include structural or non-structural
and foreseen or unforeseen repairs), without structural alteration in any
material respect (except interior tenant improvements), without Lender's prior
written approval, which will not be unreasonably withheld or delayed.
(f) Reporting Requirements.
<PAGE> 29
(i) Not later than 45 days after the end of the first
three calendar quarters of each fiscal year of Borrower, Borrower
shall submit to Lender a certification, in form and content acceptable
to Lender in its sole discretion, prepared by management and certified
as true and correct by the chief financial officer or chief
accounting officer of Borrower, confirming Borrower's compliance with
the Financial Covenants and setting forth in summary form the
financial information and numerical calculations supporting such
conclusions.
(ii) Not later than 45 days after the end of the first
three calendar quarters of each fiscal year of Borrower, Borrower
shall submit to Lender a copy of Borrower's Form 10Q as filed with the
SEC, and not later than 90 days after the end of Borrower's fiscal
year, Borrower shall submit to Lender a copy of Borrower's Form 10K as
filed with the SEC.
(iii) Borrower shall submit to Lender copies of all
special filings made by Borrower to the SEC within 15 days following
the date of such filing, including, without limitation, any filings
seeking approval of transactions with any Subsidiaries.
(iv) Borrower shall keep books and records reflecting its
financial condition in accordance with GAAP. Lender shall have the
right, from time to time, at all times during normal business hours,
to examine such books, records and accounts at the corporate offices
of Borrower at 3986 Boulevard Center Drive, Suite 101, Jacksonville,
Florida, and to make such copies or extracts thereof as Lender deems
necessary.
(g) Notice of Failure to Perform. Promptly (and in any event
within 5 days after the occurrence thereof) notify Lender of any failure by
Borrower to perform or observe any Obligation.
SECTION 7.2. Negative Covenants. So long as the Note shall
remain unpaid or Lender shall have any obligation to make any Advance
hereunder, and in addition to all other covenants and agreements of Borrower
set forth in this Agreement, Borrower shall comply with the negative covenants
set forth in this Section 7.2, unless Lender shall otherwise consent in
writing.
(a) Use of Loan Proceeds. Borrower shall not use Loan
proceeds for purposes of paying dividends or distributions to shareholders, or
for funding operating expenses, it being understood that proceeds of the Loan
shall be used by Borrower for general corporate purposes of Borrower including
Borrower's acquisition of existing office buildings, and construction and
development of new office buildings owned by Borrower located primarily in
existing Koger office parks.
(b) Structural Alterations. Borrower shall not erect or
construct any new structures of any kind or additions or material alterations
to existing buildings or
<PAGE> 30
other structures on the Collateral (except interior tenant improvements),
without Lender's prior written approval, which will not be unreasonably
withheld or delayed.
(c) Change in Nature of Business. Borrower shall not make any
material change in the nature of its business as carried on as of the Closing
Date.
(d) Transactions with Subsidiaries. Borrower shall not enter
into any transaction (including, without limitation, any purchase, sale, lease
or exchange of property or the rendering of any service) with any Subsidiary
except in the ordinary course of Borrower's business and upon fair and
reasonable terms that are no less favorable to it than would obtain in a
comparable arm's length transaction with any third person. Borrower shall not
use proceeds of the Loan for the purpose of capitalizing or of funding the
operating or capital expenses of any Subsidiary.
ARTICLE VIII
DEFAULT
SECTION 8.1. Events of Default. Any of the following events
(each a "Default") shall, following the passage of any grace or cure period as
provided below, constitute an Event of Default ("Event of Default"):
(a) Borrower shall fail to make any payment of principal
under either Note on or before the same becomes due and payable on maturity
thereof; or Borrower shall fail to make any payment of interest under either
Note, or any fees, costs or expenses due hereunder or thereunder, within 5 days
after the same becomes due and payable.
(b) Any representation or warranty made by Borrower (or any
of its officers) under or in connection with any Loan Document shall be or
become incorrect or untrue, or shall prove to have been incorrect or misleading
in any material respect when made.
(c) Borrower shall fail to perform or observe any term,
covenant or agreement (other than a covenant of payment) contained in any Loan
Document on its part to be performed or observed, and such failure shall remain
uncured for 10 days after written notice thereof shall have been given by
Lender to Borrower, or if such failure cannot by its nature be cured within
such 10 day period, Borrower shall fail to commence and diligently pursue such
cure within 10 days after written notice thereof shall have been given by
Lender to Borrower and shall fail to complete such cure within 60 days after
Lender's initial written notice of such failure.
(d) An involuntary case or proceeding under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect shall be
commenced against Borrower, and such case or proceeding shall not be dismissed
in 60 days; or a court
<PAGE> 31
shall enter a decree, or a court or regulatory authority having jurisdiction
over Borrower shall enter an order, appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator, conservator, supervisor,
rehabilitator (or similar official) of Borrower or for any substantial part of
its property, or ordering the winding-up, supervision or liquidation of its
affairs.
(e) Borrower shall commence a voluntary case or proceeding
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, shall consent to the entry of an order for relief in an
involuntary case or proceeding under any such law, or shall consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator, conservator, supervisor, rehabilitator (or
other similar official) of Borrower or for any substantial part of its
property, or shall make any general assignment for the benefit of creditors, or
shall fail generally to pay its indebtedness generally as the same becomes due,
or shall take any corporate action in furtherance of any of the foregoing.
(f) A judgment or order for the payment of money in excess of
$2,500,000 shall be rendered against Borrower and either (A) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order or (B) there shall be any period of 10 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect.
(g) A default has occurred and is continuing beyond any
applicable grace or cure period under any Debt (other than the Loan) in excess
of $2,500,000.
(h) Any material provision of the Loan Documents relating to
Lender's ability to realize on the Collateral following an Event of Default
shall for any reason cease to be valid and binding on Borrower, or Borrower
shall so state in writing.
(i) The Security Agreement shall, as a result of Borrower's
acts or omissions, for any reason, except to the extent permitted by the terms
thereof, cease to create a valid and, upon filing of UCC-1 financing
statement(s), UCC-2 Notice Filings, or UCC-3 continuation statements, as
applicable, perfected first priority security interest in any of the Collateral
purported to be covered.
SECTION 8.2. Remedies following an Event of Default. If an
Event of Default shall occur, then, at Lender's option, in addition to Lender's
remedies set forth in any other Loan Documents or as may be available to Lender
at law or in equity, Lender may by written notice to Borrower, (A) declare
Lender's obligation to make Advances to be terminated, whereupon the same shall
forthwith terminate, and (B) declare the Note, all accrued and unpaid interest
thereon and all other amounts payable under the Loan Documents to be, and the
same shall thereupon forthwith become, due and payable without presentment,
demand, protest or other notice or formality of any kind, all of which are
hereby expressly waived by Borrower.
<PAGE> 32
SECTION 8.3. Default Interest. In addition to Lender's
remedies set forth in Section 8.2, if an Event of Default occurs, then, at
Lender's option, all unpaid Obligations shall accrue interest from the date of
Default at the Default Rate.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Amendments, Etc. No amendment, modification,
release, termination or waiver of any provision of this Agreement or the other
Loan Documents shall be effective unless the same shall be in writing and
signed by Lender and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 9.2. Indemnification and Limitation of Claims.
Borrower hereby indemnifies and agrees to defend, protect and hold harmless
Lender and each of their respective officers, directors, employees, attorneys
and agents (collectively, the "Indemnitees") from and against any and all
liabilities, obligations, losses (other than loss of profits), damages,
penalties, actions, judgments, suits, claims, costs, reasonable expenses and
disbursements of any kind or nature whatsoever (excluding any taxes and
including, without limitation, the reasonable fees and disbursements of counsel
for such Indemnitees in connection with any investigative, administrative or
judicial proceeding, whether or not such Indemnitees shall be designated a
party thereto), imposed on, incurred by, or asserted against such Indemnitees
in any manner relating to or arising out of (i) this Agreement or the other
Loan Documents, or any act, event or transaction related or attendant thereto,
the making and administration of the Loan, the use or intended use of the
proceeds of the Loan, or any of the other transactions contemplated by the Loan
Documents, or (ii) any liabilities and costs relating to violation of any
Governmental Requirements (including without limitation the Americans with
Disabilities Act, regulations and guidelines promulgated thereunder, and
similar state laws and regulations), the past, present or future operations of
Borrower or any Subsidiary or any of their respective predecessors in interest,
or the past, present or future physical condition of the Collateral
(collectively, the "Indemnified Matters"); provided, however, Borrower shall
have no obligation to an Indemnitee hereunder with respect to (i) Indemnified
Matters caused by or resulting from the negligent acts or omissions of such
Indemnitee, as determined by a court of competent jurisdiction in a
non-appealable final judgment, or (ii) any loss, cost, damage, claim or expense
relating to any portion of the Collateral that accrues after title to such
portion of the Collateral is transferred to Lender, or its successors and
assigns, by foreclosure, power of sale, deed in lieu of foreclosure or
otherwise. Furthermore, Borrower agrees not to assert any claim against any of
the Indemnitees, on any theory of liability, for punitive damages arising out
of, or in any way in connection with, the Loan Commitment, the Obligations, or
the other matters governed by this Agreement and the other Loan Documents. To
the extent that the undertaking to indemnify, pay and hold harmless set forth
in this paragraph may be unenforceable
<PAGE> 33
because it is violative of any law or public policy, Borrower shall contribute
the maximum portion which it is permitted to pay and satisfy under applicable
law, to the payment and satisfaction of all Indemnified Matters incurred by the
Indemnitees.
SECTION 9.3. Notices. All notices, demands, requests for
consents, consents and other communications required or permitted hereunder
shall be in writing (including telefax transmission) and shall be given by (a)
Prepaid United States Certified Mail, Return Receipt Requested, (b) hand
delivery, (c) overnight delivery service using a reputable national or regional
carrier such as United Parcel Service or Federal Express, or (d) telefax
transmission with electronic receipt confirmation, to such party, addressed to
it, at its address or telefax number set forth below, or at such other address
or telefax number as such party may hereafter specify for the purpose of notice
to the other party. Each such notice, request or communication shall be
effective (a) if sent by United States Certified Mail, Return Receipt
Requested, 3 Business Days following the postmark, (b) if sent by hand
delivery, upon receipt thereof, (c) if sent by overnight delivery service, on
the next Business Day, or (d) if sent by telefax transmission, on the same
Business Day, to the address of the parties specified below.
If to Borrower:
Koger Equity, Inc.
3986 Boulevard Center Drive, Suite 101
Jacksonville, Florida 32207
Attention: Mr. J.C. Teagle
Telefax No. 904-346-7435
If to Lender:
First Union National Bank of Florida
214 N. Hogan Street, 6th Floor
Jacksonville, Florida 32202
Attention: Real Estate Portfolio Management
Telefax No. 904-361-1833
and
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260
Attention: Timothy O'Donovan
Telefax No. 212-648-5249
SECTION 9.4. No Waiver; Remedies. No failure on the part of
Lender to exercise, and no delay in exercising, any right under any Loan
Document shall operate
<PAGE> 34
as a waiver thereof; nor shall any single or partial exercise of any right
under any Loan Document preclude any other or further exercise thereof or the
exercise of any other right. The remedies provided in the Loan Documents are
cumulative and not exclusive of any remedies provided at law or in equity.
SECTION 9.5. Binding Effect; Assignment. This Agreement shall
be binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns, except Borrower shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of Lender.
SECTION 9.6. Governing Law; Jurisdiction and Venue. The
rights and obligations of Borrower and Lender with respect to this Agreement
and the Notes shall be governed by, and construed in accordance with, the laws
of the State of Florida, and the rights and obligations of Borrower and Lender
with respect to any other Loan Documents shall be governed by, and construed in
accordance with, the laws of the State in which the Collateral is located. Any
suit, action or proceeding may be brought against Borrower under the Loan
Documents in the courts of the State in which the Collateral is located or in
the courts of the County of Duval, State of Florida, or the United States
District Court for the Northern District of Florida, as Lender in its sole
discretion may elect, and Borrower hereby accepts the nonexclusive jurisdiction
of those courts for the purpose of any suit, action, or proceeding. In
addition, Borrower hereby irrevocably waives, to the fullest extent permitted
by law, any objection which Borrower may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to the Loan
Documents or any judgment entered by any court in respect of any part thereof,
and hereby further irrevocably waives any claim that any suit, action or
proceeding brought in the jurisdiction selected by Lender has been brought in
an inconvenient forum. Borrower irrevocably agrees that any pleadings or
service of process may be had on Borrower by mailing to Borrower at the address
set forth in Section 9.3 by certified or registered mail and such mailing shall
be effective for all purposes, including the establishment of personal
jurisdiction of the court in any such action.
SECTION 9.7. Severability. Any provision of this Agreement or
the other Loan Documents which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remainder of such
provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 9.8. Headings. Section headings used in this
Agreement are for convenience only and shall not affect the construction of
this Agreement.
SECTION 9.9. Counterparts. This Agreement may be executed in
two or more counterparts, and by the different parties on separate
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute
<PAGE> 35
one and the same instrument, and it shall not be necessary in making proof of
this Agreement to produce or account for more than one such counterpart.
SECTION 9.10. WAIVER OF TRIAL BY JURY. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, BORROWER AND LENDER, THEIR RESPECTIVE SUCCESSORS
AND ASSIGNS (ALL OF WHOM ARE HEREINAFTER REFERRED TO AS THE "PARTIES") EACH
ACKNOWLEDGE AND AGREE THAT NONE OF THEM SHALL SEEK A JURY TRIAL IN ANY LAWSUIT,
PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION OR PROCEDURE BASED UPON OR
ARISING OUT OF THE LOAN OR THE LOAN DOCUMENTS, ANY COLLATERAL OR THE DEALINGS
OR THE RELATIONSHIP BETWEEN THE PARTIES RELATED THERETO. NONE OF THE PARTIES
SHALL SEEK TO CONSOLIDATE ANY SUCH ACTION INTO ANY OTHER ACTION IN WHICH A JURY
TRIAL HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY
NEGOTIATED BY THE PARTIES, ARE MADE KNOWINGLY, VOLUNTARILY AND INTENTIONALLY,
AND CONSTITUTE A MATERIAL INDUCEMENT FOR LENDER TO MAKE THE LOAN TO BORROWER,
AND SHALL BE SUBJECT TO NO EXCEPTIONS.
[This space intentionally left blank]
<PAGE> 36
IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to
be executed as of the date first above written.
BORROWER:
KOGER EQUITY, INC., a Florida corporation
By: /s/ G. Danny Edwards
-------------------------------
Name: G. Danny Edwards
-------------------------------
Title: Treasurer
LENDER:
FIRST UNION NATIONAL BANK OF FLORIDA, a
national banking association
By: /s/ Stephen C. Franklin
-------------------------------
Name: Stephen C. Franklin
-------------------------------
Title: Senior Vice President
MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, a New York banking corporation
By: /s/ Timothy V. O'Donovan
-------------------------------
Name: Timothy V. O'Donovan
-------------------------------
Title: Vice President
SCHEDULE OF EXHIBITS:
Exhibit A - Description of Real Property
Exhibit B - Summary Requirements for Additions to Collateral Pool Properties
Exhibit C - Format for Determination of Borrowing Availability
Exhibit D - Minimum Standards and Supplementary Requirements for Surveys
Exhibit E - Minimum Title Standards
Exhibit F - Form of Certificate of Compliance with Use and Occupancy Laws
Exhibit G - Schedule of Borrower's Subsidiaries
Exhibit H - Schedule of Subsidiaries' Interest in Collateral
Exhibit I - Form of Quit Claim Deed with Reservations and Grants of Easements
<PAGE> 37
EXHIBIT A - DESCRIPTION OF REAL PROPERTY
[LEGAL DESCRIPTIONS OF REAL PROPERTY NOT INCLUDED IN FORM 8-K FILING WITH
SECURITIES AND EXCHANGE COMMISSION]
<PAGE> 38
EXHIBIT B
KOGER EQUITY, INC.
Summary Requirements
For Additions to Collateral Pool Properties
Property Name: Date:
<TABLE>
<CAPTION>
REQUIREMENT
<S> <C>
1) Description of Property including location, age and occupancy
2) Certified operating statements and operating budget
3) 3 Year Occupancy History
4) Current Rent Roll (Leases upon request)
5) Copies of Material Contracts
6) Building Condition Report
7) Phase I Environmental Assessment
8) Title Commitment
9) Insurance Binder
10) Appraisal (to be ordered by Lenders)
11) ADA Compliance Report
</TABLE>
<PAGE> 39
EXHIBIT C
KOGER EQUITY, INC.
Collateral Pool Value, Maximum Loan Availability and Occupancy Schedule as of
12/31/96.
<TABLE>
<CAPTION>
Pool Assets Net Rentable Previous 4 Less Cap Annualized Cap Rate
Square Feet Quarters' NOI Ex p @ $1.50 Pool NOI
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Oglethorpe 35,770 $ 262,726 $ 53,655 $ 209,071 10.0%
Cornell 27,930 202,814 41,895 160,919 10.0%
Dartmouth 34,030 218,913 51,045 167,868 10.0%
Yale 28,200 195,701 42,300 153,401 10.0%
Vanderbilt 28,200 176,649 42,300 134,34 10.0%
Harvard 37,650 330,833 56,475 274,358 10.0%
Columbia 9,990 31,788 14,985 16,803 10.0%
Stetson 30,200 229,091 45,300 183,791 10.0%
Hollins 31,830 289,009 47,745 241,264 10.0%
Stanford 33,120 236,516 49,680 186,836 10.0%
Drake 39,490 353,68 59,235 294,450 10.0%
Williams 107,650 988,942 161,475 827,467 10.0%
Rutgers 59,000 138,767 88,500 50,267 10.0%
Rhodes 96,400 1,230,021 144,60 1,085,421 10.0%
Wilmington 24,500 166,606 36,750 129,856 10.0%
Kinston 49,800 459,347 74,700 384,647 10.0%
Henderson 30,270 172,978 45,405 127,573 10.0%
Koger 43,380 310,739 65,070 245,669 10.0%
Salem 97,260 729,303 145,890 583,413 10.0%
Wrightsville 32,750 218,852 49,125 169,727 10.0%
Lenoir 32,430 206,198 48,645 157,553 10.0%
Hickory 44,070 295,956 66,105 229,851 10.0%
Rockingham 39,250 300,841 58,875 241,966 10.0%
Asheville 118,600 1,249,682 177,900 1,071,782 10.0%
Morehead 32,750 235,577 49,125 186,452 10.0%
Boone 21,340 97,573 32,010 65,563 10.0%
Pinehurst 44,070 357,269 66,105 291,164 10.0%
- --------------------------------------------------------------------------------------------------
Pool Value 1,209,930 $9,686,376 $1,814,895 $7,871,481
</TABLE>
<PAGE> 40
<TABLE>
<CAPTION>
Pool Assets Pool Value Avg. Period Period End
Occupancy Occupancy
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Oglethorpe $ 2,090,710 86% 79%
Cornell 1,609,190 91% 79%
Dartmouth 1,678,680 82% 100%
Yale 1,534,010 100% 100%
Vanderbilt 1,343,490 100% 100%
Harvard 2,743,580 100% 100%
Columbia 168,030 93% 83%
Stetson 1,837,910 99% 100%
Hollins 2,412,640 91% 92%
Stanford 1,868,360 100% 100%
Drake 2,944,500 100% 100%
Williams 8,274,670 94% 96%
Rutgers 502,670 77% 100%
Rhodes 10,854,210 100% 99%
Wilmington 1,298,560 88% 89%
Kinston 3,846,470 99% 99%
Henderson 1,275,730 82% 85%
Koger 2,456,690 92% 94%
Salem 5,834,130 90% 97%
Wrightsville 1,697,270 82% 88%
Lenoir 1,575,530 99% 99%
Hickory 2,298,510 100% 100%
Rockingham 2,419,660 87% 83%
Asheville 10,717,820 96% 100%
Morehead 1,864,520 84% 84%
Boone 655,630 75% 79%
Pinehurst 2,911,640 92% 100%
- -------------------------------------------------------------------------------
Pool Value $78,714,810 92% 94%
Pool Value Times 60% Equals Maximum Loan Availability of $47,228.886
</TABLE>
<PAGE> 41
EXHIBIT D - MINIMUM STANDARDS AND SUPPLEMENTARY REQUIREMENTS FOR SURVEYS
[NOT INCLUDED IN FORM 8-K FILING WITH SECURITIES AND EXCHANGE COMMISSION]
<PAGE> 42
EXHIBIT E - MINIMUM TITLE STANDARDS
[NOT INCLUDED IN FORM 8-K FILING WITH SECURITIES AND EXCHANGE COMMISSION]
<PAGE> 43
EXHIBIT F - FORM OF CERTIFICATE OF COMPLIANCE WITH USE AND OCCUPANCY LAWS
CERTIFICATE OF COMPLIANCE WITH USE AND OCCUPANCY LAWS
The undersigned, being the of KOGER EQUITY, INC., a Florida
corporation ("Koger") does hereby, on behalf of Koger and by authority duly
given, certify to FIRST UNION NATIONAL BANK OF FLORIDA, a national banking
association ("First Union"), and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, a
New York banking corporation ("Morgan Guaranty"), the following as of the date
hereof:
1. Koger understands that First Union and Morgan Guaranty are relying
upon this Certificate, and will continue to rely upon this Certificate, in
connection with the transactions contemplated in that certain Revolving Credit
Loan Agreement dated as of , 1997, by and among Koger, First Union and Morgan
Guaranty (the "Loan Agreement"). All capitalized terms used herein and not
defined herein shall have the meanings given to them in the Loan Agreement.
2. To the best of Koger's knowledge and except as disclosed on Exhibit
A attached hereto, the Collateral encumbered by the Loan Documents and the use
thereof by Koger, is in material compliance with all laws, ordinances, rules
and regulations of all governmental authorities having jurisdiction over the
Collateral, including, but not limited to, all applicable zoning, building,
occupancy, land use and environmental requirements of all governmental
authorities having jurisdiction over the Collateral, except state and federal
laws and regulations governing facilities accessibility for disabled persons
(such as the Americans with Disabilities Act Accessibility Guidelines) (the
laws, ordinances, rules and regulations referred to above being collectively
referred to as the "Use and Occupancy Laws").
3. Certificates of compliance with the Use and Occupancy Laws, if
issued in the ordinary course of business by the applicable governmental
authority, have been issued with respect to the Collateral and those
certificates have not been revoked.
4. Koger has received no notice from any governmental body, agency or
department or from any other source that the Collateral, or Koger's use
thereof, is in violation of or conflict with any of the Use and Occupancy Laws.
5. Koger understands and agrees that it has an affirmative duty to
promptly notify First Union and Morgan Guaranty upon its becoming aware of, or
upon its receipt of notice regarding, any assertion by a governmental
authority, or any action or proceeding commenced by any person, seeking damages
relating to, or seeking to cause or enforce compliance with, the Use and
Occupancy Laws. Such notice shall be in writing and shall specifically identify
the nature of such assertion, action or proceeding, and the Collateral affected
thereby.
6. Koger understands and agrees that it has an affirmative duty to
promptly remedy any noncompliance with the Use and Occupancy Laws upon written
request therefor by First Union and/or Morgan Guaranty following any assertion
by a governmental authority, or any action or proceeding commenced by any
person, seeking damages relating to, or seeking to cause or enforce compliance
with, the Use and Occupancy Laws. Koger hereby indemnifies and agrees to hold
harmless First Union and Morgan Guaranty from and against all claims, demands
and expenses related to such claims and demands, including reasonable
attorneys' fees and paralegals' fees, arising from any noncompliance with the
Use and Occupancy Laws; provided, however, this indemnity will not extend to
any damage, liability or loss resulting from the negligence, recklessness or
wilful misconduct of First Union or Morgan Guaranty (it being understood,
however, that neither First Union nor Morgan Guaranty will be deemed to have,
or to have assumed, any duty to confirm, cause, guaranty or underwrite,
compliance of the Collateral with the Use and Occupancy Laws).
<PAGE> 44
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the day of , 1997.
KOGER EQUITY, INC.,
a Florida corporation
By:
-------------------------------
Name:
-------------------------------
Its
-------------------------------
STATE OF )
---------------
COUNTY OF )
-------------
The foregoing instrument was acknowledged before me this day of ,
1997, by , the of KOGER EQUITY, INC., a Florida corporation, on behalf of the
corporation, who either ____ is personally known to me or has produced
identification in the form of driver's license.
-------------------------------------
Print Name:
--------------------------
Notary Public, State of
--------------
Commission No.
-----------------------
My Commission Expires:
---------------
[NOTARIAL SEAL]
EXHIBIT G - SCHEDULE OF BORROWER'S SUBSIDIARIES
SOUTHEAST PROPERTIES HOLDING CORPORATION
Southeast Properties Holding Corporation ("Southeast"), is a Florida
Corporation wholly-owned by Koger Equity, Inc. Pursuant to the Merger of KPI
into Koger Equity, Southeast became the managing general partner of The Koger
Partnership, Ltd. Southeast was responsible for handling the liquidation of The
Koger Partnership, Ltd. (See Footnote #4 to Koger Equity's December 31, 1995
Annual Report for a more detailed discussion of Southeast).
KOGER REAL ESTATE SERVICES, INC.
<PAGE> 45
Koger Real Estate Services, Inc., a Florida corporation, manages 21 office
buildings owned by Centoff Realty Company, Inc., a subsidiary of Morgan
Guaranty Trust Company of New York.
<PAGE> 46
EXHIBIT H - SCHEDULE OF SUBSIDIARIES' INTEREST IN COLLATERAL
NONE
<PAGE> 47
EXHIBIT 1 - FORM OF RELEASE DEED
QUIT CLAIM DEED WITH RESERVATIONS
AND GRANTS OF EASEMENTS
WHEREAS, ________________________
__________________________________________, a national banking association (the
"Trustee"), is the trustee under that certain Deed of Trust from KOGER EQUITY,
INC., a Florida corporation ("KEI"), recorded in ____________ Book _____, page
_____, of the public records of __________ County, _______________, an
Assignment of Leases and Rents recorded in _____________ Book ______, page
_____, and a financing statement recorded in _______ Book _____, page _____, of
said records (collectively, the "Security Instrument"); and
WHEREAS, the Trustee has been requested to release the premises
hereinafter described, from the lien and operation of the Security Instrument
and to quit claim Trustee's interest therein to KEI; and
WHEREAS, the Trustee will retain an interest in certain properties
adjacent to the property conveyed hereby.
NOW, THEREFORE, for valuable consideration, the Trustee does hereby
grant, convey, transfer and quit claim to KEI all of Trustee's interest in that
parcel of land more particularly described on Exhibit A attached hereto (the
"Property"), reserving to Trustee the following described easements over the
Property and granting to KEI easements over the lands retained by Trustee, all
such easements being subject to the terms and conditions contained herein.
1. Reservation of Access Easements. Trustee hereby reserves unto
Trustee a non-exclusive, perpetual easement over, across and upon the parcel of
land described in Exhibit B attached hereto ("Parcel 1") for vehicular and
pedestrian ingress and egress.
2. Grant of Access Easement. Trustee hereby grants to KEI, and
subordinates the lien of the Security Instrument to, a non-exclusive, perpetual
easement over, across and upon the parcel of land described in Exhibit C
attached hereto ("Parcel 2") for vehicular and pedestrian ingress and egress.
3. Reservation of Water/Sewer Utility Easements. Trustee hereby
reserves a non-exclusive, perpetual easement over, under, across and upon the
<PAGE> 48
parcel of land described in Exhibit D attached hereto ("Parcel 3") for the
construction, operation, repair and maintenance of [water/sanitary sewer]
utility lines.
4. Grant of Water/Sewer Utility Easement. Trustee hereby grants to
KEI, and subordinates the lien of the Security Instrument to a non-exclusive,
perpetual easement over, under, across and upon the parcel of land described in
Exhibit E attached hereto ("Parcel 4") for the construction, operation, repair
and maintenance of [water/sanitary sewer] utility lines.
5. Reservation of Drainage Easement. Trustee hereby reserves a
non-exclusive, perpetual easement under and through the parcel of land
described in Exhibit F attached hereto ("Parcel 5") for the construction,
operation, repair and maintenance of storm water drainage. The easement
reserved pursuant to this paragraph 5 for storm water drainage is strictly for
the placement and use of underground improvements and lines, and nothing herein
shall permit the placement of improvements or structures at or above surface
level.
6. Reservation of Drainage Easement. Trustee hereby grants to KEI, and
subordinates the lien of the Security Instrument to a non-exclusive, perpetual
easement under and through the parcel of land described in Exhibit C attached
hereto ("Parcel 3") for the construction, operation, repair and maintenance of
storm water drainage. The easement granted pursuant to this paragraph 6 for
storm water drainage is strictly for the placement and use of underground
improvements and lines, and nothing herein shall permit the placement of
improvements or structures at or above surface level.
7. Each party shall have the right to have landscaping, roadways,
parking and other paving and related improvements over and upon such of Parcel
3, Parcel 4, Parcel 5, and Parcel 6 as are owned by such party; provided,
however, that the fee owner shall have no right to construct or place any
buildings or other improvements over and upon such Parcels which would
materially impair or interfere with the intended purpose of such easement or
violate the terms of any permit required for the operation of the facilities
therein. Without limiting the foregoing, all parties hereto consent to the
existing improvements within such Parcels.
8. Maintenance and Repair of Access Easement Areas. The owner owning
fee title thereto shall repair and maintain Parcel 1 and Parcel 2 (including,
but not limited to the paving, striping, landscaping and lighting thereon) in
such a condition so as to permit the reasonably unobstructed use and enjoyment
of the easements herein granted.
9. Maintenance and Repair of Easement Areas other than Access Easement
Areas. Each party shall maintain and repair all storm water drainage, water and
sanitary sewer facilities and lines used exclusively by it, and shall
<PAGE> 49
also maintain and repair all other storm water drainage, water and sanitary
sewer facilities and lines located on lands owned in fee by such party which
are used by Trustee and KEI. All maintenance and repair work performed by KEI
and Trustee shall be done only with reasonable prior written notice to the
other and at such times and in such manner so as to reasonably avoid
interference with the other's use of its lands and the business conducted
thereon. All maintenance and repair work performed by KEI and Trustee shall be
completed in a timely and first class manner, and the premises shall be
restored to substantially the same condition as existed prior to the need for
the maintenance or repair (including any repaving, resurfacing or relandscaping
of the surface necessitated by the maintenance or repair). The party performing
or having performed the maintenance or repair shall indemnify and hold harmless
the fee owner of the parcel for any cost, loss, damage or expense arising from
said maintenance or repair.
10. Cost Sharing. Each owner shall bear the total cost of maintaining
any storm water drainage and water and sanitary sewer utility facilities and
lines serving only such owner's lands. The cost to maintain any storm water
drainage, or water or sanitary sewer utility facilities or lines, the use of
which is shared by more than one owner, shall be apportioned among the owners
based upon the following parameters. For storm water drainage and retention,
and ingress and egress easements, the cost of maintenance shall be apportioned
based upon the respective land area of the lands served by such facilities.
With respect to water and sanitary sewer lines, the cost of maintenance shall
be apportioned based upon the number of enclosed, heated square feet within the
improvements located on the respective lands served by such facilities.
11. Taxes. Each owner of land on which a Parcel is located shall pay,
prior to delinquency, all taxes assessed against its respective land, and upon
request, furnish proof of payment to the other owner.
12. Exercise of Easement Rights. The exercise of the easement rights
granted herein shall be conducted so as not to unreasonably interfere with the
use and enjoyment of the other persons entitled to use or enjoy the respective
parcels affected by this Agreement. The owner of the servient estate of any
easement granted hereunder shall have the right to use the relevant easement
area for any purpose which does not unreasonably interfere with or impair the
reasonable use and benefit of such easement for its intended purposes.
13. Indemnity. No fee owner of any Parcel under this Agreement shall
be responsible to any other owner, or to any of the other owner's agents,
employees, tenants, invitees or licensees for any loss, expense or damage other
than such loss, expense or damage as is caused by the negligence or other fault
of any such fee owner, its agents, contractors or employees. Each owner agrees
to indemnify and hold the other owner harmless from any and all liability,
loss, expense, damage (including attorneys' fees and paralegals' fees) and
<PAGE> 50
claims arising from or alleged to arise from use of the easements granted under
this Agreement by such first owner's agents, contractors, employees, tenants,
invitees or licensees.
14. Default and Remedies.
a. In General. In the event of a breach by any party under
this Agreement of any obligation set forth under this Agreement, the
non-breaching party shall be entitled to injunctive relief mandating compliance
with this Agreement and to obtain a decree specifically enforcing the
performance of the obligation; the parties acknowledge and stipulate the
inadequacy of legal remedies and the irreparable harm which would be caused by
any such breach. Notwithstanding the foregoing, each non-breaching party shall
also be entitled to relief by any and all other available, legal and equitable
remedies from the consequences of such breach. Any costs and expenses of such
proceeding including reasonable attorneys' and paralegals' fees, shall be paid
by the breaching party. No breach of the provisions of this Agreement shall
entitle any owner or any third party to cancel, rescind and/or otherwise
terminate this Agreement, but such limitation shall not affect in any manner
any of the other rights and remedies which such party may have under this
Agreement by reason of any breach of the provisions of this Agreement. No
breach of the provisions of this Agreement shall defeat or render invalid the
lien of any mortgage made in good faith for value covering any part of the
Parcels under this Agreement or any improvements thereon.
b. Self Help. In addition to those remedies provided above,
if any party (the "Defaulting Party") shall default in the performance of an
obligation of such Defaulting Party under this Agreement, which default
adversely affects any other owner (the "Affected Party"), the Affected Party,
after 30 days' prior written notice to the Defaulting Party and any Mortgagee
(as hereinafter defined) having a lien on the parcel held by the Defaulting
Party (providing that such Mortgagee, as the case may be, shall have given
written notice to the Affected Party of the name and address of such
Mortgagee), or, in the event of any emergency, after such notice as is
practical under the circumstances, shall have the right to perform such
obligation on behalf of the Defaulting Party. In such event, if the Affected
Party does, in fact, perform such obligation on behalf of the Defaulting Party,
the Defaulting Party shall promptly, after being given written notice of the
fact and amount of such expenditure by the Affected Party, reimburse the
Affected Party for the Defaulting Party's share of the reasonable cost thereof
(not exceeding prevailing rates for like or similar work and materials, as
applicable), together with interest thereon from the date of the Affected
Party's outlay at a rate (the "Default Rate") equal to twelve percent (12.0%)
per annum, plus reasonable collection fees.
15. Mortgagee Rights. The owner and holder of any mortgage lien, deed
of trust, or similar instrument encumbering lands benefitted by a Parcel,
<PAGE> 51
or part thereof (a "Mortgagee") shall have the same rights as its respective
mortgagor hereunder, including the right to cure defaults of its mortgagor and
to seek curative actions and exercise enforcement rights under this Agreement.
16. Notices and Communications. All notices, requests, demands and
other communications hereunder shall be in writing and transmitted to the other
party or parties by either (i) hand or courier delivery; (ii) Federal Express
or similar overnight courier delivery; or (iii) U.S. certified mail, return
receipt requested, postage prepaid. All notices are to be hand delivered or
mailed to the addresses indicated on the address of the party as shown by the
tax rolls or to such other address as shall be furnished in writing by any
party to the other parties.
17. Duration of Easements. The easements herein granted (a) are
perpetual; (b) are non-exclusive; (c) run with the land; and (d) are binding
upon all and inure to the benefit or, as the case may be, burden of all the
assigns and successors of the respective owners.
18. No Dedication. Nothing contained herein shall create any easement
or other rights in the respective parcels in the general public; provided,
however, that this provision shall not restrict the intended use by the
grantees (and their respective successors, assigns, tenants, invitees, guests
and customers) of the easements herein granted.
IN WITNESS WHEREOF, the parties have executed this instrument on the
____ day of ______________, 1997.
[APPROPRIATE SIGNATURE BLOCKS AND ACKNOWLEDGMENTS TO BE INSERTED]
<PAGE> 52
EXHIBIT J - FORM OF BORROWING COMPLIANCE CERTIFICATE
BORROWING COMPLIANCE CERTIFICATE
The undersigned, _______________________________________, the
___________________________ of Koger Equity, Inc. ("Borrower") hereby certifies
to First Union National Bank of Florida and Morgan Guaranty Trust Company of
New York ("Lender"), the following pursuant to Section 3.1(c) and 3.1(d) of
Revolving Credit Loan Agreement dated as of April ___, 1997 between Borrower
and Lender (as amended, supplemented or restated from time to time, the "Loan
Agreement") (capitalized terms not otherwise defined in this Certificate will
have the meanings assigned to such terms in the Loan Agreement):
1. Pursuant to Article III of the Loan Agreement, Borrower has
requested an Advance in the amount of $_________________ for disbursement on
______________, 199___ (the "Funding Date");
2. After giving effect to such Advance, the outstanding principal
balance of the Loan as of the Funding Date will be $___________________. The
undersigned has reviewed and is familiar with the terms of the Loan Agreement
and has made a review of the transactions, financial condition and other
affairs of Borrower for the relevant accounting period ending on
_________________, 19 __ (the "Current Accounting Period") and, on the basis
thereof:
(a) Schedule 1 attached hereto accurately and completely sets
forth the calculations required to establish Borrower's compliance
with the Financial Covenants set forth in Section 3.1(a) of the Loan
Agreement as of the date of the financial statements for the Current
Accounting Period; and
(b) The aggregate outstanding principal amount of the Loan, after
giving effect to such Advance does not exceed the maximum borrowing
availability as calculated on Exhibit C of the Loan Agreement.
3. As of the date hereof and as of the Funding Date:
(a) Borrower is in material compliance with the Financial
Covenants set forth in Section 3.1(a) of the Loan Agreement, both
before and after giving effect to such Advance and to the application
of proceeds therefrom;
(b) Borrower is in material compliance with all of the terms,
covenants and conditions of the Loan Documents, no Default or Event of
Default presently exists or is continuing, and no event or condition
has occurred or is continuing, or would result from such Advance or
from the application of proceeds therefrom, which would constitute a
Default or Event of Default;
(c) Borrower's representations and warranties set forth in
Section 6.1 of the Loan Agreement remain true and correct in all
material respects, both before and after giving effect to such Advance
and to the application of proceeds therefrom, except to the extent
such representations and warranties specifically relate to an earlier
date or such representations or warranties have become untrue by
reason of events or conditions otherwise permitted under the Loan
Agreement or the other Loan Documents.
IN WITNESS WHEREOF, the undersigned has signed this Borrowing
Compliance Certificate on behalf of Borrower on and as of _________________,
199___.
------------------------------
Name:
------------------------
Title:
------------------------
[this document must be signed by Borrower's Chief Financial Officer or Chief
Accounting Officer]
[this document must include attached Schedule 1 Financial Covenant compliance
calculations]
<PAGE> 1
Exhibit 10(k)(2)(a)
REVOLVING PROMISSORY NOTE
$35,000,000.00 Kingsland, Georgia
April 7, 1997
FOR VALUE RECEIVED, the undersigned ("Maker") promises to pay to the
order of FIRST UNION NATIONAL BANK OF FLORIDA ("Payee"), which term will
include any subsequent holder hereof, at the offices of Payee located at 225
Water Street, Jacksonville, Florida 32202, or at such other place as Payee may
designate in writing from time to time, in legal tender of the United States of
America, the principal sum of THIRTY FIVE MILLION DOLLARS ($35,000,000.00) or
so much thereof as may be outstanding from time to time as Advances (the
"Principal Amount") pursuant to Revolving Credit Loan Agreement dated of even
date herewith between Maker, as borrower, and Payee and Morgan Guaranty Trust
Company, as lender (the "Loan Agreement"), and all applicable fees, charges,
costs and expenses, together with interest on each Advance at the applicable
rate(s) of interest as provided below. The Loan Agreement by this reference is
hereby incorporated into this Note to the same extent as if fully set forth
herein. Capitalized terms not otherwise defined in this Note will have the
meanings assigned to such terms in the Loan Agreement.
Interest on each Advance outstanding under this Note from time to time
will accrue, at Maker's election, at any LIBOR Interest Rate or the Prime
Interest Rate (as defined below), subject to the terms, covenants and
conditions of the Loan Agreement. Absent an Event of Default, the rate of
interest charged on each LIBOR Advance will remain constant during the Interest
Period elected for such LIBOR Advance, but will be adjusted based on any change
in the LIBOR Interest Rate for any subsequent Interest Period applicable to
such LIBOR Advance, and the rate of interest charged on each Prime Advance will
be adjusted on a daily basis upon any changes in the Prime Interest Rate.
For purposes of the foregoing, the following terms will have the
meanings assigned to such terms as set forth below:
(a) "LIBOR" means the interest rate at which 1-month, 2-month,
3-month or 6-month deposits (as elected by Maker) in United
States dollars are offered to prime banks in the London interbank
market as reported on Telerate page 3750 as of 11:00 A.M. (London
time), 2 Business Days before the Funding Date of any LIBOR
Advance (or if not so reported, then as determined by Payee from
another recognized source or interbank quotation) in an amount
approximately equal or comparable to such LIBOR Advance with a
maturity equal to such Interest Period, as adjusted for reserves
by dividing that rate by 1.00 minus the Reserve Requirement;
<PAGE> 2
(b) "LIBOR Interest Rate" means an annual rate of interest equivalent
to LIBOR (as elected by Maker) plus 2.00%, calculated on the
basis of a 360 day year, for the actual number of days occurring
in the Interest Period applicable to each LIBOR Advance; and
(c) "Prime Interest Rate" means an annual rate of interest equivalent
to the interest rate (but not necessarily the best or lowest rate
charged borrowing customers of First Union National Bank of
Florida) published or announced by First Union National Bank of
Florida from time to time as its prime rate, calculated on the
basis of a 365 (or 366, if applicable) day year, for the actual
number of days occurring in the period for which such interest
is payable.
Interest accrued on the Principal Amount will be due and payable
monthly, commencing on May 10, 1997, and continuing on the 10th day of each
successive calendar month until this Note is fully paid.
If not sooner paid in full, the entire Principal Amount, together with
all accrued and unpaid interest, will be due and payable on April 6 , 1999 (the
"Maturity Date"), or such later date as may be established by an extension of
the Maturity Date pursuant to Section 2.3 of the Loan Agreement.
Subject to the terms, covenants and conditions of the Loan Agreement
and this Note, the Principal Amount may be repaid and reborrowed from time to
time upon Maker's request; provided, however, that Payee will have no
obligation to make any Advances if a Default or Event of Default exists.
TIME IS OF THE ESSENCE of this Note.
THE LOAN EVIDENCED BY THIS NOTE IS PAYABLE IN FULL ON THE MATURITY
DATE. MAKER MUST REPAY THE ENTIRE OUTSTANDING PRINCIPAL BALANCE OF THIS NOTE
AND UNPAID INTEREST THEN DUE. PAYEE IS UNDER NO OBLIGATION TO REFINANCE THE
LOAN AT THAT TIME.
Unless Maker prior to or contemporaneously with the repayment or
prepayment of all or any portion of the Principal Amount designates in writing
to Payee the Advance that should be credited with such repayment or prepayment,
such repayment or prepayment will be applied by Payee to Advances on a
first-borrowed, first-repaid basis. Absent an Event of Default, any payments
received for application to any Advance, or as applied by Payee to any Advance,
as provided above, will be applied to the principal balance of such Advance;
provided, however, that if an Event of Default then exists, Payee may apply
such repayment or prepayment first to late charges and fees, then to interest
to the extent accrued, and then to the principal balance of such Advance, or in
such other manner as Payee may elect. Repayments and prepayments of any
Advances accruing interest at any LIBOR Interest Rate may be subject to a
charge pursuant to Section 9.5 of the Loan Agreement. Repayments and
prepayments of any Advances accruing interest at the Prime
<PAGE> 3
Interest Rate may be made without premium or penalty. Prepayment in part will
not affect, vary or postpone the duty of Maker to pay all obligations when due,
and it will not affect or impair the right of Payee to pursue all remedies
available to it hereunder or under the other Loan Documents.
Maker's failure to make any payment of principal under this Note on or
before the same becomes due and payable on maturity hereof, or Maker's failure
to make any payment of interest under this Note, or any fees, costs or expenses
due hereunder or under the Loan Agreement, within 5 days after the same become
due and payable, will constitute an Event of Default. Other events that
constitute Events of Default are as described in the Loan Agreement. Following
an Event of Default, the amount of each Advance will, at the option of Payee,
accrue interest from the date of Default at the Default Rate. In addition to
any other remedies that Payee may have hereunder or under the Loan Agreement,
any payment of interest that is not made within 10 days after the due date
thereof, as provided herein, or such longer period as may be required under
applicable laws of any State if the laws of such State are determined to govern
this Note, will be subject to a Late Charge which will be due and payable
contemporaneously with such payment of interest.
Following an Event of Default, at Payee's option, in addition to
Payee's remedies set forth in any other Loan Documents or as may be available
to Payee at law or in equity, Payee may by written notice to Maker, declare
this Note, all accrued and unpaid interest thereon, and all other amounts
payable under the Loan Documents to be, and the same will thereupon become,
immediately due and payable without presentment, demand, protest or other
notice or formality of any kind, all of which are hereby expressly waived by
Maker. Forbearance to exercise this right with respect to any failure or breach
of Maker will not constitute a waiver of the right as to any subsequent failure
or breach.
This Note is secured by the Collateral, and subject to the terms,
covenants and conditions of the Loan Documents. The terms, covenants and
conditions of the Loan Documents are by this reference incorporated into this
Note. Advances under this Note will be governed by the terms, covenants, and
conditions set forth in the Loan Documents. A default under any of the Loan
Documents which is not cured within any applicable grace period as provided
therein will constitute a default under this Note.
Maker covenants and agrees to pay all and singular the costs, taxes,
fees, and expenses of every kind and nature, including Payee's reasonable
attorneys' and paralegals' fees and costs (including those incurred on appeal
or in bankruptcy proceedings), documentary stamp taxes, intangible taxes and
other excise taxes, and the cost of title evidence, incurred or expended at any
time by Payee in the collection of the loan evidenced hereby and/or foreclosure
of the Loan Documents or otherwise incurred in protecting and preserving the
lien of the Loan Documents or in enforcing Payee's rights under this Note, the
Loan Documents or under any other instrument evidencing or securing the
indebtedness evidenced hereby, or in enforcing, sustaining, protecting, or
<PAGE> 4
defending the lien or priority of the Loan Documents against any and all
persons, including, but not limited to, lien claimants or the exercise of the
power of eminent domain or other governmental power of any kind.
Maker, including any guarantor or endorser, for themselves, their
heirs, legal representatives, successors, and assigns, respectively, hereby
expressly waive presentment, demand for payment, notice of dishonor, protest,
notice of non-payment, and diligence in collection, and consent that the time
of all payments or any part thereof may be extended, rearranged, renewed or
postponed by Payee, and further consent that the Collateral or any part thereof
may be released, exchanged, or substituted by Payee, without in anywise
modifying, altering, releasing, affecting, or limiting their respective
liability or the lien of any security instrument, and agree that Payee will not
be required first to institute any suit, or to exhaust any of its remedies
against Maker or any other person or party liable hereunder, in order to
enforce payment of this Note.
This Note is to be construed and enforced according to the laws of the
State of Florida and the laws and regulations of the United States of America.
All agreements between Maker and Payee are expressly limited so that
in no contingency or event whatsoever, whether by reason of advancement of the
proceeds hereof, acceleration of maturity of the unpaid principal balance
hereof, or otherwise, will the amount paid or agreed to be paid to Payee for
the use, forbearance, or detention of the money to be advanced hereunder exceed
the highest lawful rate permissible under any law which a court of competent
jurisdiction may deem applicable hereto. If, from any circumstances whatsoever,
fulfillment of any provision of the Loan Documents securing this Note, or by
any other agreement referred to therein, at the time performance of such
provision will be due, will involve transcending the limit of validity
prescribed by law which a court of competent jurisdiction may deem applicable
thereto, then ipso facto, the obligation to be fulfilled will be reduced to the
maximum limit of such validity, and if for any circumstances whatsoever Payee
will ever receive interest, the amount of which would exceed the highest lawful
rate, such amount which would be excessive interest will be applied to the
reduction of the principal balance remaining unpaid hereunder and not to the
payment of interest. At all times thereafter the rate of interest in effect
under this Note will continue at such maximum rate until otherwise adjusted in
accordance with the terms of this Note and the Loan Agreement. The provisions
of this paragraph will control every other provision of all agreements between
Maker and Payee.
MAKER AND PAYEE, BY ITS ACCEPTANCE HEREOF, EACH ACKNOWLEDGE AND AGREE
THAT NEITHER MAKER NOR PAYEE, NOR ANY ENDORSER, ASSIGNEE, SUCCESSOR, HEIR OR
LEGAL REPRESENTATIVE OF ANY OF THE SAME, WILL SEEK A JURY TRIAL IN ANY LAWSUIT,
PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION PROCEDURE BASED UPON OR
ARISING OUT OF THIS NOTE, THE LOAN AGREEMENT OR THE LOAN DOCUMENTS, ANY
COLLATERAL, OR THE DEALINGS OR THE
<PAGE> 5
RELATIONSHIP BETWEEN MAKER AND PAYEE RELATED THERETO. NEITHER OF THE PARTIES
WILL SEEK TO CONSOLIDATE ANY SUCH ACTION INTO ANY OTHER ACTION IN WHICH A JURY
TRIAL HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY
NEGOTIATED BY MAKER AND PAYEE, ARE MADE KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY, AND CONSTITUTE A MATERIAL INDUCEMENT FOR PAYEE TO MAKE THE LOAN
EVIDENCED BY THIS NOTE TO MAKER, AND WILL BE SUBJECT TO NO EXCEPTIONS.
KOGER EQUITY, INC., a Florida corporation
By: /s/ G. Danny Edwards
---------------------------
Name: G. Danny Edwards
---------------------------
Its: Treasurer
---------------------------
<PAGE> 1
Exhibit 10(k)(2)(b)
REVOLVING PROMISSORY NOTE
$15,000,000.00 Kingsland, Georgia
April 7, 1997
FOR VALUE RECEIVED, the undersigned ("Maker") promises to pay to the
order of MORGAN GUARANTY TRUST COMPANY OF NEW YORK ("Payee"), which term will
include any subsequent holder hereof, at the offices of First Union National
Bank of Florida ("Agent") located at 225 Water Street, Jacksonville, Florida
32202, or at such other place as Agent may designate in writing from time to
time, in legal tender of the United States of America, the principal sum of
FIFTEEN MILLION DOLLARS ($15,000,000.00) or so much thereof as may be
outstanding from time to time as Advances (the "Principal Amount") pursuant to
Revolving Credit Loan Agreement dated of even date herewith between Maker, as
borrower, and Payee and Agent, as lender (the "Loan Agreement"), and all
applicable fees, charges, costs and expenses, together with interest on each
Advance at the applicable rate(s) of interest as provided below. The Loan
Agreement by this reference is hereby incorporated into this Note to the same
extent as if fully set forth herein. Capitalized terms not otherwise defined in
this Note will have the meanings assigned to such terms in the Loan Agreement.
Agent is Payee's agent for purposes of the administration, collection and
enforcement of this Note, including the making of Advances and the collection
of repayments and prepayments thereof and interest accrued thereon.
Interest on each Advance outstanding under this Note from time to time
will accrue, at Maker's election, at any LIBOR Interest Rate or the Prime
Interest Rate (as defined below), subject to the terms, covenants and
conditions of the Loan Agreement. Absent an Event of Default, the rate of
interest charged on each LIBOR Advance will remain constant during the Interest
Period elected for such LIBOR Advance, but will be adjusted based on any change
in the LIBOR Interest Rate for any subsequent Interest Period applicable to
such LIBOR Advance, and the rate of interest charged on each Prime Advance will
be adjusted on a daily basis upon any changes in the Prime Interest Rate.
For purposes of the foregoing, the following terms will have the
meanings assigned to such terms as set forth below:
(a) "LIBOR" means the interest rate at which 1-month, 2-month,
3-month or 6-month deposits (as elected by Maker) in United
States dollars are offered to prime banks in the London interbank
market as reported on Telerate page 3750 as of 11:00 A.M. (London
time), 2 Business Days before the Funding Date of any LIBOR
Advance (or if not so
<PAGE> 2
reported, then as determined by Payee from another recognized
source or interbank quotation) in an amount approximately
equal or comparable to such LIBOR Advance with a maturity
equal to such Interest Period, as adjusted for reserves by
dividing that rate by 1.00 minus the Reserve Requirement;
(b) "LIBOR Interest Rate" means an annual rate of interest equivalent
to LIBOR (as elected by maker) plus 2.00%, calculated on the
basis of a 360 day year, for the actual number of days occurring
in the Interest Period applicable to each LIBOR Advance; and
(c) "Prime Interest Rate" means an annual rate of interest
equivalent to the interest rate (but not necessarily the best or
lowest rate charged borrowing customers of First Union National
Bank of Florida) published or announced by First Union National
Bank of Florida from time to time as its prime rate, calculated
on the basis of a 365 (or 366, if applicable) day year, for the
actual number of days occurring in the period for which such
interest is payable.
Interest accrued on the Principal Amount will be due and payable
monthly, commencing on May 10, 1997, and continuing on the 10th day of each
successive calendar month until this Note is fully paid.
If not sooner paid in full, the entire Principal Amount, together with
all accrued and unpaid interest, will be due and payable on April 6 , 1999 (the
"Maturity Date"), or such later date as may be established by an extension of
the Maturity Date pursuant to Section 2.3 of the Loan Agreement.
Subject to the terms, covenants and conditions of the Loan Agreement
and this Note, the Principal Amount may be repaid and reborrowed from time to
time upon Maker's request; provided, however, that Agent will have no
obligation to make any Advances if a Default or Event of Default exists.
TIME IS OF THE ESSENCE of this Note.
THE LOAN EVIDENCED BY THIS NOTE IS PAYABLE IN FULL ON THE MATURITY
DATE. MAKER MUST REPAY THE ENTIRE OUTSTANDING PRINCIPAL BALANCE OF THIS NOTE
AND UNPAID INTEREST THEN DUE. NEITHER PAYEE NOR AGENT IS UNDER ANY OBLIGATION
TO REFINANCE THE LOAN AT THAT TIME.
Unless Maker prior to or contemporaneously with the repayment or
prepayment of all or any portion of the Principal Amount designates in writing
to Agent the Advance that should be credited with such repayment or prepayment,
such repayment or prepayment will be applied by Agent to Advances on a first-
borrowed, first-repaid basis. Absent an Event of Default, any payments received
for application to any Advance, or as applied by Agent to any Advance, as
provided above, will be applied to the principal balance of
<PAGE> 3
such Advance; provided, however, that if an Event of Default then exists, Payee
may apply such repayment or prepayment first to late charges and fees, then to
interest to the extent accrued, and then to the principal balance of such
Advance, or in such other manner as Agent may elect. Repayments and prepayments
of any Advances accruing interest at any LIBOR Interest Rate may be subject to
a charge pursuant to Section 9.5 of the Loan Agreement. Repayments and
prepayments of any Advances accruing interest at the Prime Interest Rate may be
made without premium or penalty. Prepayment in part will not affect, vary or
postpone the duty of Maker to pay all obligations when due, and it will not
affect or impair the right of Payee or Agent to pursue all remedies available
to it hereunder or under the other Loan Documents.
Maker's failure to make any payment of principal under this Note on or
before the same becomes due and payable on maturity hereof, or Maker's failure
to make any payment of interest under this Note, or any fees, costs or expenses
due hereunder or under the Loan Agreement, within 5 days after the same will
become due and payable will constitute an Event of Default. Other events that
constitute Events of Default are as described in the Loan Agreement. Following
an Event of Default, the amount of each Advance will, at the option of Agent,
accrue interest from the date of Default at the Default Rate. In addition to
any other remedies that Payee or Agent may have hereunder or under the Loan
Agreement, any payment of interest that is not made within 10 days after the
due date thereof, as provided herein, or such longer period as may be required
under applicable laws of any State if the laws of such State are determined to
govern this Note, will be subject to a Late Charge which will be due and
payable contemporaneously with such payment of interest.
Following an Event of Default, at Agent's option, in addition to
Payee's and Agent's remedies set forth in any other Loan Documents or as may be
available to Payee or Agent at law or in equity, Agent may by written notice to
Maker, declare this Note, all accrued and unpaid interest thereon, and all
other amounts payable under the Loan Documents to be, and the same will
thereupon become, immediately due and payable without presentment, demand,
protest or other notice or formality of any kind, all of which are hereby
expressly waived by Maker. Forbearance to exercise this right with respect to
any failure or breach of Maker will not constitute a waiver of the right as to
any subsequent failure or breach.
This Note is secured by the Collateral, and is subject to the terms,
covenants and conditions of the Loan Documents. The terms, covenants and
conditions of the Loan Documents are by this reference incorporated into this
Note. Advances under this Note will be governed by the terms, covenants, and
conditions set forth in the Loan Documents. A default under any of the Loan
Documents which is not cured within any applicable grace period as provided
therein will constitute a default under this Note.
Maker covenants and agrees to pay all and singular the costs, taxes,
fees, and expenses of every kind and nature, including Payee's and Agent's
<PAGE> 4
reasonable attorneys' and paralegals' fees and costs (including those incurred
on appeal or in bankruptcy proceedings), documentary stamp taxes, intangible
taxes and other excise taxes, and the cost of title evidence, incurred or
expended at any time by Payee or Agent in the collection of the loan evidenced
hereby and/or foreclosure of the Loan Documents or otherwise incurred in
protecting and preserving the lien of the Loan Documents or in enforcing
Payee's or Agent's rights under this Note, the Loan Documents or under any
other instrument evidencing or securing the indebtedness evidenced hereby, or
in enforcing, sustaining, protecting, or defending the lien or priority of the
Loan Documents against any and all persons, including, but not limited to, lien
claimants or the exercise of the power of eminent domain or other governmental
power of any kind.
Maker, including any guarantor or endorser, for themselves, their
heirs, legal representatives, successors, and assigns, respectively, hereby
expressly waive presentment, demand for payment, notice of dishonor, protest,
notice of non-payment, and diligence in collection, and consent that the time
of all payments or any part thereof may be extended, rearranged, renewed or
postponed by Payee or Agent, and further consent that the Collateral or any
part thereof may be released, exchanged, or substituted by Payee and Agent,
without in anywise modifying, altering, releasing, affecting, or limiting their
respective liability or the lien of any security instrument, and agree that
Payee or Agent will not be required first to institute any suit, or to exhaust
any of its remedies against Maker or any other person or party liable
hereunder, in order to enforce payment of this Note.
This Note is to be construed and enforced according to the laws of the
State of Florida and the laws and regulations of the United States of America.
All agreements between Maker and Payee or Agent are expressly limited
so that in no contingency or event whatsoever, whether by reason of advancement
of the proceeds hereof, acceleration of maturity of the unpaid principal
balance hereof, or otherwise, will the amount paid or agreed to be paid to
Payee or Agent for the use, forbearance, or detention of the money to be
advanced hereunder exceed the highest lawful rate permissible under any law
which a court of competent jurisdiction may deem applicable hereto. If, from
any circumstances whatsoever, fulfillment of any provision of the Loan
Documents securing this Note, or by any other agreement referred to therein, at
the time performance of such provision will be due, will involve transcending
the limit of validity prescribed by law which a court of competent jurisdiction
may deem applicable thereto, then ipso facto, the obligation to be fulfilled
will be reduced to the maximum limit of such validity, and if for any
circumstances whatsoever Payee or Agent will ever receive interest, the amount
of which would exceed the highest lawful rate, such amount which would be
excessive interest will be applied to the reduction of the principal balance
remaining unpaid hereunder and not to the payment of interest. At all times
thereafter the rate of interest in effect under this Note will continue at such
maximum rate until otherwise adjusted in accordance with the terms of this Note
and the Loan
<PAGE> 5
Agreement. The provisions of this paragraph will control every other provision
of all agreements between Maker and Payee and Agent.
MAKER AND PAYEE, BY ITS ACCEPTANCE HEREOF, EACH ACKNOWLEDGE AND AGREE
THAT NEITHER MAKER NOR PAYEE, NOR ANY ENDORSER, ASSIGNEE, SUCCESSOR, HEIR OR
LEGAL REPRESENTATIVE OF ANY OF THE SAME, WILL SEEK A JURY TRIAL IN ANY LAWSUIT,
PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION PROCEDURE BASED UPON OR
ARISING OUT OF THIS NOTE, THE LOAN AGREEMENT OR THE LOAN DOCUMENTS, ANY
COLLATERAL, OR THE DEALINGS OR THE RELATIONSHIP BETWEEN MAKER AND PAYEE RELATED
THERETO. NEITHER OF THE PARTIES WILL SEEK TO CONSOLIDATE ANY SUCH ACTION INTO
ANY OTHER ACTION IN WHICH A JURY TRIAL HAS NOT BEEN WAIVED. THE PROVISIONS OF
THIS PARAGRAPH HAVE BEEN FULLY NEGOTIATED BY MAKER AND PAYEE, ARE MADE
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY, AND CONSTITUTE A MATERIAL INDUCEMENT
FOR PAYEE TO MAKE THE LOAN EVIDENCED BY THIS NOTE TO MAKER, AND WILL BE SUBJECT
TO NO EXCEPTIONS.
KOGER EQUITY, INC., a Florida corporation
By: /s/ G. Dannny Edwards
-----------------------------
Name: G. Danny Edwards
-----------------------------
Its: Treasurer
<PAGE> 1
Exhibit 10(k)(3)
THIS INSTRUMENT PREPARED BY,
AND FOLLOWING RECORDING RETURN TO:
Douglas G. Stanford, Esq.
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
50 North Laura Street, Suite 2800
Jacksonville, Florida 32202
DEED TO SECURE DEBT, ASSIGNMENT OF LEASES AND RENTS, AND
SECURITY AGREEMENT
FROM
KOGER EQUITY, INC.
TO
FIRST UNION NATIONAL BANK OF FLORIDA
AND
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
Dated as of April 7, 1997
State: Georgia
Section:
Township:
Range:
County: DeKalb
Tax I.D.:
NOTE TO TAX COMMISSIONER: THIS INSTRUMENT SECURES A NOTE CONTAINING A MATURITY
DATE OF LESS THAN THREE (3) YEARS FROM THE DATE THEREOF AND, THEREFORE, SUCH
NOTE IS A "SHORT-TERM NOTE SECURED BY REAL ESTATE" AS SUCH TERM IS DEFINED IN
OFFICIAL CODE OF GEORGIA ANNOTATED SECTION 48-6-60. CONSEQUENTLY, NO
INTANGIBLES TAX IS DUE UPON THE RECORDATION OF THIS INSTRUMENT. SEE OFFICIAL
CODE OF GEORGIA ANNOTATED SECTION 48-6-61.
<PAGE> 2
DEED TO SECURE DEBT, ASSIGNMENT OF LEASES AND RENTS, AND
SECURITY AGREEMENT
THIS DEED TO SECURE DEBT, ASSIGNMENT OF LEASES AND RENTS, AND SECURITY
AGREEMENT (this "Indenture"), dated as of April 7 , 1997, from
KOGER EQUITY, INC., a Florida corporation ("Grantor"), whose mailing address is
3986 Boulevard Center Drive, Suite 101, Jacksonville, Florida 32207 Attention:
J.C. Teagle, Executive Vice President,
to
FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association ("FUNB"),
and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, a New York banking corporation
("MGT") (FUNB and MGT together being referred to as "Grantee"). For purposes of
notices permitted or required to be given hereunder, FUNB's mailing address is
214 North Hogan Street, Jacksonville, Florida 32202 Attention: Real Estate
Portfolio Management, and MGT's mailing address is 60 Wall Street, New York,
New York 10260 Attention: Timothy O'Donovan .
Capitalized terms not otherwise defined herein are defined in Article I.
W I T N E S S E T H :
THIS INDENTURE WITNESSETH, that to secure (A) the payment, performance
and observance of all obligations of Grantor and all indebtedness heretofore or
hereafter from time to time advanced under the Loan Agreement and the payment
of any and all other indebtedness which this Indenture by its terms secures
including, without limitation, the payment of principal and interest on the
Notes which shall (1) be payable to Grantee, (2) be payable in full not later
than April 6 , 1999, or such later date as may be established by an extension
of the Maturity Date (as defined in the Loan Agreement) pursuant to Section 2.3
of the Loan Agreement, and (3) bear interest at a floating rate as set forth in
Section 2.6 of the Loan Agreement; provided, that the maximum aggregate
principal amount of indebtedness secured hereby, other than for advances made
pursuant to Article XXII, Paragraph 22 hereof, shall in no event exceed
$50,000,000.00 (the "Indebtedness") and (B) the performance of the covenants
and agreements contained herein and in the Loan Agreement, and in consideration
of the aforesaid Indebtedness, Grantor hereby irrevocably grants, bargains and
sells, conveys, transfers, assigns, sets over, alienates, hypothecates and
pledges to Grantee and its successors and assigns in and to all of Grantor's
right, title and interest in the following property and rights whether now
owned or hereafter acquired by Grantor (collectively, the "Property"):
(i) the Land;
(ii) all buildings, structures and other improvements presently
situated or hereafter constructed on the Land (collectively, the
"Improvements");
(iii) all rights, privileges, tenements, hereditaments, rights of way,
easements, rights and appurtenances belonging to or in any way relating to
either the Land or the Improvements;
<PAGE> 3
(iv) all fixtures, machinery, equipment and other personal property
of all types owned by Grantor now or hereafter affixed to and used in
connection with the operation of the Land and Improvements, together with all
additions and accessions thereto, substitutions therefor and replacements
(collectively, the "Fixtures");
(v) all awards or payments, including interest thereon, which may
heretofore and hereafter be made with respect to the Land, the Improvements or
the Fixtures, whether from the exercise of the right of eminent domain
(including but not limited to any transfer made in lieu of or in anticipation
of the exercise of said right), or for a change of grade of any street, or for
any other injury to or decrease in the value of Grantor's rights, title or
interest in and to the Land, the Improvements or the Fixtures;
(vi) all leases and other agreements affecting the use, enjoyment or
occupancy of the Land, the Improvements or the Fixtures now or hereafter
entered into (the "Leases") and rents, revenues, issues and profits from the
Land, the Improvements or the Fixtures (the "Rents") and all proceeds from the
sale or other disposition of the Leases and the right to receive and apply the
Rents to the payment of the Indebtedness;
(vii) all proceeds of and any unearned premiums on any insurance
policies covering the Land, the Improvements or the Fixtures, including,
without limitation, the right to receive and apply the proceeds of any
insurance, judgments, or settlements made in lieu thereof, for damage to the
Land, the Improvements or the Fixtures; and
(viii) the right, in the name and on behalf of Grantor, to appear in
and defend any action or proceeding brought with respect to Grantor's right,
title or interest in and to the Land, the Improvements or the Fixtures and to
commence any action or proceeding to protect the interest of Grantee in the
Land, the Improvements or the Fixtures;
TO HAVE AND TO HOLD the Property and all parts, rights, members and
appurtenances thereof, for the use, benefit and behoof of Grantee, IN FEE
SIMPLE forever.
PROVIDED ALWAYS, this Indenture is intended to operate and is to be
construed as a deed passing title to the Property to Grantee and is made under
those provisions of the existing laws of the State of Georgia relating to deeds
to secure debt, and not as a mortgage, and is given to secure the payment of
the Indebtedness. Should the Indebtedness be paid according to the tenor and
effect thereof when the same shall become due and payable, and should Grantor
perform all covenants herein in a timely manner, then this Indenture shall be
cancelled and surrendered by Grantee.
IN FURTHERANCE OF THE FOREGOING GRANTS (INCLUDING GRANTS OF SECURITY
INTERESTS), BARGAINS, SALES, ALIENATIONS, CONVEYANCES, CONFIRMATIONS, PLEDGES,
TRANSFERS AND ASSIGNMENTS, AND TO PROTECT THE PROPERTY AND THE SECURITY GRANTED
BY THIS INDENTURE, GRANTOR, FOR ITSELF AND FOR ITS SUCCESSORS AND ASSIGNS,
HEREBY WARRANTS, REPRESENTS, COVENANTS AND AGREES AS FOLLOWS:
<PAGE> 4
ARTICLE I
1. Definitions. As used in this Indenture, the following capitalized
terms have the respective meanings set after them, such definitions to be
applicable equally to the singular and plural forms of such terms:
"Default" shall mean any condition or event which constitutes or which
would constitute an Event of Default either with or without notice or lapse of
time, or both.
"Default Rate" shall have the meaning assigned to such term in the
Loan Agreement.
"Event of Default" shall have the meaning assigned to such term in
Article V of this Indenture.
"FUNB" shall mean First Union National Bank of Florida.
"Fixtures" shall have the meaning assigned to such term in clause (iv)
of the Granting Clause of this Indenture.
"Governmental Requirements" shall have the meaning assigned to such
term in the Loan Agreement.
"Grantee" shall have the meaning assigned to such term in the
introductory paragraph of this Indenture.
"Grantor" shall have the meaning assigned to such term in the
introductory paragraph of this Indenture.
"Impositions" shall mean, collectively, all taxes of every kind and
nature (including real and personal property, income withholding, profits and
gross receipts taxes), all charges for any easement or agreement maintained for
the benefit of any of the Property, all general and special assessments,
levies, permits, inspection and license fees, all water and sewer rents and
other utility charges, all ground rents, and all other public charges whether
of a like or different nature, even if unforeseen or extraordinary, imposed
upon or assessed against Grantor, Grantee or any portion of the Property as a
result of or arising in respect of the acquisition, occupancy, leasing, use or
possession thereof, or any activity conducted on the Property (including,
without limitation, any gross income tax, sales tax or excise tax levied by any
governmental body on or with respect to the Rents).
"Improvements" shall have the meaning assigned to such term in clause
(ii) of the Granting Clause of this Indenture.
"Indebtedness" shall have the meaning assigned to such term in the
Granting Clause of this Indenture.
"Indenture" shall mean this Deed to Secure Debt, Assignment of Leases
and Rents, and Security Agreement.
<PAGE> 5
"Land" shall mean those certain parcels of real property located in
the County of DeKalb, State of Georgia, as more particularly described on
Exhibit A attached hereto and incorporated herein.
"Leases" shall have the meaning assigned to such term in clause (vi)
of the Granting Clause of this Indenture.
"Loan Agreement" shall mean that certain Revolving Credit Loan
Agreement dated as of , 1997 between Grantor and Grantee.
"MGT" shall mean Morgan Guaranty Trust Company of New York.
"Notes" shall mean the Revolving Promissory Note dated as of even date
herewith made by Grantor payable to the order of FUNB in the original principal
amount of $35,000,000, and the Revolving Promissory Note dated as of even date
herewith made by Grantor payable to the order of MGT in the original principal
amount of $15,000,000.
"Other Indenture" shall mean any mortgage, deed to secure debt, or
deed of trust given by Grantor to or in favor of Grantee to secure the
Indebtedness, other than this Indenture.
"Permitted Encumbrances" shall mean those covenants, restrictions,
reservations, liens, conditions and easements listed as exceptions to title as
set forth on Exhibit B attached hereto and incorporated herein.
"Person" shall mean any corporation, natural person, joint venture,
partnership, business trust, joint stock company, trust, unincorporated
organization, government or any department, agency or political subdivision
thereof.
"Property" shall have the meaning assigned to such term in the
Granting Clause of this Indenture.
"Rents" shall have the meaning assigned to such term in clause (vi) of
the Granting Clause of this Indenture.
"State" shall mean the State of Georgia.
"Taking" shall mean a taking or voluntary conveyance during the term
hereof of all or part of the Property, or any interest therein or right
accruing thereto or use thereof, as the result of or in lieu or in anticipation
of the exercise of the right of condemnation or eminent domain.
ARTICLE II
2. Representations and Warranties. Grantor represents and warrants to
Grantee that (a) it has full power, authority and legal right to execute and
deliver this Indenture and to grant a first deed to secure debt of the
Property, (b) it holds good and marketable fee simple title to the Land and
good and marketable title to the balance of the Property, (c) this Indenture
constitutes a valid first deed to secure debt
<PAGE> 6
of the Property, subject to the Permitted Encumbrances, and (d) the Leases are
in full force and effect in accordance with their respective terms, have not
been canceled or modified, and have not been assigned or encumbered except to
Grantee pursuant to this Indenture and the Loan Agreement, and, to the best of
Grantor's knowledge, no default exists under the Leases. Grantor, at its
expense, will warrant to Grantee and will defend its title to the Property and
the estate created by this Indenture against all claims and demands, and will
maintain and preserve such estate so long as the Indebtedness secured by this
Indenture remains outstanding, subject, however, to the Permitted Encumbrances.
ARTICLE III
3. Affirmative Covenants. Until this Indenture and the estate created
hereby shall terminate in accordance with Article XVII Grantor shall comply
with the following covenants:
(a) Recordation, Filing, Etc. At all times cause this Indenture and
each amendment or modification hereof or supplement hereto (and such financing
statements covering the Property under the Uniform Commercial Code as in effect
in the State as may be necessary or appropriate) to be recorded, registered and
filed and kept recorded, registered and filed in such manner and in such places
as appropriate, and comply with all applicable statutes and regulations, in
order to establish, preserve and protect the estate created hereby and the
rights of Grantee hereunder. Grantor shall pay, or shall cause to be paid, all
taxes, fees and other charges incurred in connection with such recording,
registration, filing and compliance.
(b) Maintenance and Repairs. Keep and maintain the Property in good
order, repair and operating condition (ordinary wear and tear excepted) and
make all repairs and replacements necessary to that end.
(c) Payment of Impositions and Utility Charges. Pay all Impositions
while the same may be paid without fine, penalty, interest or additional cost,
unless the same shall be contested in good faith and by appropriate proceedings
by Grantor in the manner permitted by the Loan Agreement. Any Impositions which
are payable in installments may be paid in installments provided that Grantee
is otherwise in compliance with the Loan Agreement. Upon the written request of
Grantee from time to time, Grantor will furnish to Grantee official receipts or
other satisfactory proof evidencing such payments. In addition, Grantor will
pay all utility charges as required by the Loan Agreement. Grantor shall not be
entitled to any credit on the Indebtedness, by reason of the payment of any
Imposition or utility charges or any part thereof.
(d) Compliance with Governmental Requirements. Promptly (i) comply
with all Governmental Requirements unless the same shall be contested in good
faith and by appropriate proceedings by Grantor in the manner permitted by the
Loan Agreement, and (ii) procure, maintain and comply with all licenses or
other authorizations required for any use of the Property then being made, and
for the proper erection, installation, operation, repair and maintenance of the
Improvement and the Fixtures, or any part of either thereof.
<PAGE> 7
(e) Insurance. Maintain insurance of the types and in the amounts
required by, and otherwise complying with the Loan Agreement and promptly
deliver, or cause to be promptly delivered, to Grantee any certificates or
evidence of such insurance as required under the Loan Agreement.
(f) Damage, Destruction or Taking. In the event of any damage,
destruction or Taking affecting all or any portion of the Property, Grantor
shall give immediate written and oral notice thereof to Grantee and proceed in
accordance with the terms of the Loan Agreement. In case of any such material
damage, destruction or Taking, Grantee shall be entitled to hold all insurance
proceeds, payments or awards on account thereof, to the same extent Grantor
would be entitled thereto under the Loan Agreement, and Grantor hereby
irrevocably assigns to Grantee all of its rights to any such insurance
proceeds, payments or awards. With respect to a Taking, and in accordance with
its obligations under the Loan Agreement, Grantor will file or prosecute or
will cause to be filed or prosecuted in good faith and with due diligence what
would otherwise be its claim for any such award or payment and cause the same
to be collected and paid over to Grantee. At the sole cost and expense of
Grantor, Grantee may elect to monitor or participate in, and if reasonably
necessary, may hire independent legal counsel to represent Grantee in
connection with, any claim or the claims payment process. Grantor will pay or
cause to be paid all costs and expenses reasonably incurred in connection with
any Taking and the seeking and obtaining of any award or payment in respect
thereof. Unless an Event of Default shall have occurred under the Loan
Agreement, all sums so received by Grantee shall be applied in accordance with
the provisions of the Loan Agreement.
(g) Notification of Default, Etc. Promptly after obtaining knowledge
thereof, notify Grantee of any Default hereunder or under the Loan Agreement or
of any action or proceeding materially and adversely affecting the Property.
ARTICLE IV
4. Negative Covenants. Without the prior written consent of Grantee,
Grantor will not directly or indirectly create or permit to be created or to
remain and will discharge or will cause to be discharged any mortgage, charge,
lien or encumbrance on, or attachment or pledge of, or conditional sale or
other title retention agreement with respect to, the Property or any part
thereof, its interest or the interests of Grantee therein, or the Rents or
other sums payable pursuant to the Leases, except (i) this Indenture, (ii) the
Permitted Encumbrances, (iii) easements, restrictions, liens, charges and other
encumbrances permitted by the Loan Agreement, (iv) liens being contested in
good faith and by appropriate proceedings in the manner permitted by the Loan
Agreement, and (v) liens arising out of or created by any statute, the
discharge of which cannot under the terms of such statute at the particular
time be effected by Grantor; provided, however, that any such statutory liens
will promptly be discharged as and when such discharge is possible or
permissible. Grantor shall have the right to grant, without the prior consent
of Grantee, any utility easement.
ARTICLE V
5. Events of Default. If any one or more of the following events
(individually, an "Event of Default") shall occur:
<PAGE> 8
(a) non-payment, when due, of any sums which Grantor is obligated to
pay hereunder or under the Loan Agreement continues unremedied for a period of
five (5) days after the date such payment is due; or
(b) failure of Grantor to keep in full force and effect its corporate
existence, rights, franchises and privileges, except as provided for in the
Loan Agreement; or
(c) if an Event of Default (as defined in the Loan Agreement) shall
have occurred under the Loan Agreement; or
(d) if any of the representations or warranties made by Grantor in any
document, instrument or certificate delivered in connection with the financing
of the Property by Grantor proves to be untrue in any material respect; or
(e) if a default shall have occurred under any Other Indenture and
shall be continuing beyond the applicable grace or cure period provided
therein; or
(f) if Grantor shall (i) voluntarily be adjudicated a bankrupt or
insolvent, (ii) seek or consent to the appointment of a receiver or trustee for
itself or for any portion of the Property, (iii) file a petition seeking relief
under the bankruptcy or other similar laws of the United States, any state or
any jurisdiction, (iv) make a general assignment for the benefit of creditors,
or (v) be unable to pay its debts as they mature; or
(g) a court shall enter an order, judgment or decree appointing, with
the consent of Grantor, a receiver or trustee for it or for any of the Property
or approving a petition filed against Grantor which seeks relief under the
bankruptcy or other similar laws of the United States, any state or any
jurisdiction, and such order, judgment or decree shall remain in force,
undischarged or unstayed, sixty (60) days after it is entered; or
(h) the estate or interest of Grantor in any of the Property shall be
levied upon or attached in any proceeding and such estate or interest is about
to be sold or transferred or such process shall not be vacated or discharged
within fifteen (15) days after such levy or attachment; or
(i) if Grantor sells, conveys or transfers, voluntarily or otherwise,
its interest in the Property without the prior written consent of Grantee;
then, in any such event, Grantee may accelerate the Indebtedness outstanding
under this Indenture, and may take such other actions as may be provided under
the Loan Agreement, or at law or in equity.
ARTICLE VI
6. Remedies in Case of Event of Default.
6.1. Legal Proceedings and Foreclosure. If an Event of Default shall
have occurred, Grantee may proceed by suit or suits at law or in equity or by
any other appropriate remedy to protect and enforce its rights hereunder,
whether for the
<PAGE> 9
specific performance of any covenant or agreement contained herein, or for an
injunction against the violation of any of the terms hereof, or in aid of the
exercise of any right, power or remedy available to it, or to enforce the
payment of the Indebtedness under the Loan Agreement, or to foreclose the
estate created by this Indenture and the security interest of this Indenture as
against all or any part of the Property and to have all or any part of the
Property sold, in any manner permitted by law, under the judgment or decree of
a court or courts of competent jurisdiction, or otherwise, and to pursue any
other remedy available to it. If Grantee proceeds to foreclose the estate
created hereby, Grantee shall have the statutory power of sale if permitted by
applicable law. In the event of any such suit or proceeding, Grantee shall
comply with any local laws applicable to any such suits or proceedings. Any
such suit or proceeding instituted by Grantee shall be brought in its name as
Grantee and any recovery or judgement shall be for the benefit of Grantee. All
costs and expenses (including, without limitation, reasonable attorney's fees
and expenses) incurred by Grantee in connection with any such suit or
proceeding, together with interest thereon (to the extent permitted by law)
computed at the Default Rate from the date on which such costs or expenses are
incurred to the date of payment thereof, shall constitute additional
Indebtedness secured by this Indenture and shall be paid by Grantor to Grantee,
as the case may be, on demand.
6.2. Power of Sale. Without in any way limiting the other provisions
of this Indenture, but in addition thereto and in amplification thereof, upon
the occurrence of any Event of Default, Grantee, at its option, may sell the
Property or any part of the Property at one or more public sale or sales before
the door of the courthouse of the county in which the Property or any part of
the Property is situated, to the highest bidder for cash, in order to pay the
Indebtedness, any and all expenses of sale and of all proceedings in connection
therewith, including reasonable attorneys' fees, after advertising the time,
place and terms of sale once a week for four (4) consecutive weeks (but without
regard to the number of days) in a newspaper in which Sheriff's sales are
advertised in said county. At any such public sale, Grantee may execute and
deliver to the purchaser a conveyance of the Property or any part of the
Property in fee simple, with full general warranties of title and to this end,
Grantor hereby constitutes and appoints Grantee the agent and attorney-in-fact
of Grantor to make any such sale and conveyance and thereby to divest Grantor
of all right, title and equity that Grantor may have in and to the Property and
to vest the same in the purchaser or purchasers at such sale or sales, and all
the acts or doings of said agent and attorney-in-fact are hereby ratified and
confirmed and any recitals in said conveyance or conveyances as to facts
essential to a valid sale shall be binding upon Grantor. Grantee, its agents,
representatives, successors or assigns may bid and purchase at any such sale.
The aforesaid power of sale and agency hereby granted are coupled with an
interest and are irrevocable by death or otherwise, are granted as cumulative
of the other remedies provided hereby or by law for collection of the
Indebtedness and shall not be exhausted by one exercise thereof but may be
exercised until full payment of all of the Indebtedness. In the event of any
sale under this Indenture by virtue of the exercise of the powers herein
granted, pursuant to any order in any judicial proceeding or otherwise, the
Property may be sold as an entirety or in separate parcels and in such manner
or order as Grantee in its sole discretion may elect, and if Grantee so elects,
Grantee may sell the personal property covered by this Indenture at one or more
separate sales in any manner permitted by the Uniform Commercial Code of the
State, and one or more exercises
<PAGE> 10
of the powers herein granted shall not extinguish nor exhaust such powers,
until the entire Property is sold or the Indebtedness is paid in full. If the
Indebtedness is now or hereafter further secured by any chattel mortgages,
pledges, contracts of guaranty, assignments of lease or other security
instruments, Grantee may, at its option, exhaust the remedies granted under any
of said security instruments either concurrently or independently, and in such
order as Grantee may determine.
6.3. Acceleration of Maturity. If an Event of Default shall have
occurred, Grantee may declare the entire outstanding Indebtedness under the
Loan Agreement, and all other sums secured hereby, to be due and payable
immediately, and upon such declaration, such Indebtedness and other sums shall
immediately become and be due and payable without demand or notice.
6.4. Leases. Grantee is authorized to foreclose this Indenture subject
to the rights of any tenants of the Property, and the failure to make any such
tenants parties defendant to any such foreclosure proceedings and to foreclose
their rights will not be, nor be asserted by Grantor to be, a defense to any
proceedings instituted by Grantee to collect the sums secured hereby or to
collect any deficiency remaining unpaid after the foreclosure sale of the
Property.
6.5. Suits to Protect the Property. Grantee shall have the power and
authority to institute and maintain any suits and proceedings as Grantee may
deem advisable (a) to prevent any impairment of the Property by any acts which
may be unlawful or any violation of this Indenture, (b) to preserve or protect
its interest in the Property, and (c) to restrain the enforcement of or
compliance with any legislation or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid, if the enforcement of or
compliance with such enactment, rule or order might impair the security
hereunder or be prejudicial to Grantee's interest.
6.6. Discontinuance of Proceedings; Position of Parties Restored. If
Grantee shall have proceeded to enforce any right or remedy under this
Indenture by foreclosure, entry or otherwise, and such proceedings shall have
been discontinued or abandoned for any reason, then and in every such instance,
Grantor and Grantee shall, except to the extent modified by such proceedings,
be restored to their former positions and rights hereunder, and all rights,
powers and remedies of Grantee shall continue as if no such proceeding had
occurred or had been taken.
6.7. Grantor to Pay the Indebtedness on Any Default in Payment;
Application of Monies by Grantee.
(a) If an Event of Default shall occur as a result of Grantor's
failure to pay any amount due under the Loan Agreement or this Indenture, then,
upon Grantee's demand, Grantor will pay to Grantee the whole amount due and
payable under the Loan Agreement and all other sums secured hereby. If Grantor
shall fail to pay the same forthwith upon such demand, Grantee shall be
entitled to sue for and to recover judgment for the whole amount so due and
unpaid together with costs and expenses, including the reasonable compensation,
expenses and disbursements of Grantee's agents, attorneys and other
representatives. Grantee shall be entitled to sue and recover judgment as
aforesaid either before, after or during the pendency of any proceedings for
the enforcement of this Indenture, and the right of Grantee to
recover
<PAGE> 11
such judgment shall not be affected by any taking of possession or foreclosure
sale hereunder, or by the exercise of any other right, power or remedy for the
enforcement of the terms of this Indenture, or the foreclosure of the estate
created hereby.
(b) In case of a foreclosure sale of all or any part of the Property
and of the application of the proceeds of sale to the payment of the sums
secured hereby, Grantee shall be entitled to enforce payment of and to receive
all amounts then remaining due and unpaid and to recover judgment for any
portion thereof remaining unpaid, with interest.
(c) Grantor hereby agrees, to the extent permitted by law, that no
recovery of any such judgment by Grantee and no attachment or levy of any
execution upon any of the Property or any other property shall in any way
affect the estate created hereby upon the Property or any part thereof or any
lien, rights, powers or remedies of Grantee hereunder, but such lien, rights,
powers and remedies of Grantee hereunder shall continue unimpaired as before.
ARTICLE VII
7.1. Purchase of the Property by Grantee. Upon any foreclosure sale,
Grantee may bid for and purchase the Property, and, upon compliance with the
terms of sale, may hold, retain and possess and dispose of such Property in its
own absolute right without further accountability.
7.2. Application of Indebtedness Toward Purchase Price. If Grantee
purchases the Property pursuant to foreclosure, power of sale or otherwise,
then Grantee may, in lieu of cash, apply all or any portion of the sums due to
Grantee under the Loan Agreement and this Indenture or any other instrument
securing the Indebtedness, to the unpaid balance of the purchase price
remaining after payment of any portion of the purchase price required to be
paid in cash, and the costs and expenses of the sale, compensation and other
charges relating to the sale.
ARTICLE VIII
8. Waiver of Appraisement, Valuation, Etc. Grantor hereby waives, to
the full extent it may lawfully do so, the benefit of all appraisement,
valuation, stay, moratorium, exemption from execution, extension and redemption
laws now or hereafter in force and all rights of marshaling in the event of the
sale of the Property or any part thereof or any interest therein.
ARTICLE IX
9. Appointment of Receiver. If an Event of Default shall have
occurred, Grantee shall, as a matter of right, be entitled, ex parte and
without notice, to the appointment of a receiver or receivers of the Property
or any part thereof in accordance with Georgia Official Code Section 9-8-3 and
without regard to the value of the Property as security for the Indebtedness,
or the solvency or insolvency of any Person liable for the payment of the
Indebtedness and without necessity or requirement for posting bond, whether
such receivership be incidental to a proposed
<PAGE> 12
sale thereof or otherwise, and Grantor hereby consents to the appointment of
such a receiver or receivers and will not oppose any such appointment. Any
receiver which may be appointed pursuant to this paragraph, shall have the
right, but not the obligation, to take possession, manage and operate the
Property, together with such other powers conferred upon it by the appointing
court. The expenses, including receiver's fees, attorney's fees, costs and
agent's compensation, incurred pursuant to the powers herein contained shall be
secured by this Indenture.
ARTICLE X
10. Possession, Management and Income. If an Event of Default shall
have occurred under this Indenture, Grantee, without further notice, may enter
upon and take possession of the Property or any part thereof, in any manner
permitted by law, by reasonable force, summary proceedings, ejectment or
otherwise and may remove Grantor and all other Persons and any and all property
therefrom, and Grantee may hold, operate and manage the same, make all
necessary or proper repairs, renewals, and replacements, and useful
alterations, additions, betterments and improvements thereto and thereon as may
seem advisable to either of them, and insure and reinsure the Property as may
seem advisable and to either of them, and may receive all earnings, income,
rents, issues and proceeds accruing with respect thereto. Any amounts so
received by Grantee shall be applied (a) to pay (i) the expenses of operating
the Property and of all maintenance, repairs, renewals, replacements,
alterations, additions, betterments, improvements, taxes, assessments,
insurance premiums, reasonable compensation for the services of all attorneys,
advisors, brokers, receivers, agents and other employees engaged or employed by
Grantee and all other costs and expenses of entering a bond and taking
possession of and holding the Property, and (ii) any lien prior to the estate
created hereby which Grantee may consider it necessary or desirable to
discharge and then (b) in the manner provided in Article XI of this Indenture.
If an Event of Default shall have occurred under the Loan Agreement or if the
Loan Agreement shall be terminated, all sums so received by Grantee shall be
applied in the manner specified in Article XI of this Indenture.
ARTICLE XI
11. Application of Proceeds. The proceeds of (a) the operation and
management of the Property pursuant to Article X of this Indenture, and (b) any
sale of the Property or any interest therein, shall, unless otherwise provided
in the Loan Agreement, be applied as follows:
First: to the costs and expenses of the sale, reasonable attorneys'
fees and expenses, court costs, and any other expenses or advances made or
incurred in the protection of the rights of Grantee or in the pursuance of any
remedies hereunder;
Second: to any lien prior to the estate created hereby which Grantee
may consider it necessary or desirable to discharge;
Third: to any Indebtedness secured by this Indenture and at the time
due and payable (whether by acceleration or otherwise);
<PAGE> 13
Fourth: to Grantee for payment of the Notes outstanding; and
Fifth: the balance, if any, to Grantor.
ARTICLE XII
12. Remedies, Etc., Cumulative. Each legal, equitable or contractual
right, power or remedy of Grantee now or hereafter provided herein or by
statute or otherwise shall be cumulative and concurrent and shall be in
addition to every other right, power and remedy, and the exercise or beginning
of the exercise by Grantee of any one or more of such rights, powers and
remedies shall not preclude the simultaneous or later exercise of any or all
such other rights, powers and remedies.
ARTICLE XIII
13. No Waiver, Etc. No failure by Grantee to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy
consequent upon a breach hereof shall constitute a waiver of any such term or
of any such breach. No acceptance of the payment of any sums due under this
Indenture or under the Loan Agreement during the continuance of any Default
shall constitute a waiver thereof. No waiver of any breach shall affect or
alter this Indenture which shall continue in full force and effect with respect
to any other then existing or subsequent breach.
ARTICLE XIV
14. Right of Grantee to Perform Covenants, Etc. If Grantor shall fail
to make any payment or perform any act required to be made or performed
hereunder and such failure shall not be cured within the applicable grace
period, if any, Grantee, without notice to or demand upon Grantor and without
waiving or releasing any obligation or Default, may (but shall be under no
obligation to) at any time thereafter make such payment or perform such act for
the account and at the expense of Grantor and may enter upon the Property or
any part thereof for such purpose and take all such action thereon as, in the
opinion of Grantee, may be necessary or appropriate therefor. All sums so paid
by Grantee and all costs and expenses (including, without limitation,
attorneys' fees and expenses) so incurred shall constitute additional
Indebtedness secured by this Indenture and shall be paid by Grantor to Grantee
on demand.
ARTICLE XV
15. Certificate as to No Default, Etc.; Information. At any time and
from time to time, Grantor will deliver to Grantee, promptly upon request, a
certificate signed by a duly authorized officer of Grantor stating that, to the
best of the signer's knowledge after making due inquiry, there is no Default
hereunder, or if any such Default exists to his knowledge, specifying the
nature and period of existence thereof and what action Grantor is taking or
proposes to take with respect thereto. Grantor will also furnish promptly to
Grantee, such information with respect to the Property and the Leases as may
from time to time be requested.
<PAGE> 14
ARTICLE XVI
16. Additional Instruments. Grantor, at its expense, will execute,
acknowledge, secure and deliver all such instruments and take all such action
as Grantee from time to time may reasonably request for the better
assuring of the Property, rights and obligations now or hereafter subjected to
the security of this Indenture or intended so to be.
ARTICLE XVII
17. Satisfaction of the Indenture. This Indenture and the estate
created hereby shall terminate after the payment in full of (a) all the
Indebtedness and (b) all other sums secured hereby. Upon such termination, and
upon surrender of this Indenture for cancellation, Grantee shall release,
without warranty, the Property then subject to the estate created hereby to the
Persons entitled thereto. The recitals in any satisfaction executed under this
Indenture of any matters of fact shall be conclusive proof of the truthfulness
thereof. The grantee in such release may be described as "the person or persons
legally entitled thereto". Grantee, at Grantor's expense, shall execute and
deliver such instruments of release, satisfaction and termination in proper
form for recording or filing, as may be appropriate to evidence the release of
(a) the Property from the estate created hereby, and (b) any other security
held by Grantee and such satisfaction and termination, and such instruments,
when duly executed, recorded and filed, shall conclusively evidence the
release, satisfaction and termination of this Indenture.
ARTICLE XVIII
18. Applicable Law; Severability.
(a) This Indenture shall be governed by and construed in accordance
with the laws of the State.
(b) All rights, powers and remedies provided herein may be exercised
only to the extent that the exercise thereof does not violate any applicable
law, and are intended to be limited to the extent necessary so that they will
not render this Indenture invalid, unenforceable or not entitled to be
recorded, registered or filed under any applicable law. If any term or
provision of this Indenture shall be held to be invalid, illegal or
unenforceable, the validity of the other terms and provisions hereof shall in
no way be affected thereby.
ARTICLE XIX
19. Miscellaneous. This Indenture (a) may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought, and (b) shall be binding upon Grantor, its successors and assigns, and
all Persons claiming under or through Grantor or any such successor or assign,
and shall inure to the benefit of and be enforceable by Grantee and its
successors and assigns. The headings in this Indenture are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof. All
agreements between Grantor and Grantee,
<PAGE> 15
whether now existing or hereafter arising and whether written or oral, are
hereby limited so that in no contingency, whether by reason of demand or
acceleration of the maturity of any payments hereunder or under the Loan
Agreement or otherwise, shall the interest contracted for, charged, received,
paid or agreed to be paid to Grantee exceed the maximum amount permissible
under applicable law. If, in any circumstance whatsoever, interest would
otherwise be payable to Grantee in excess of the maximum lawful amount, and if
in any circumstance Grantee shall ever receive anything of value deemed
interest by applicable law in excess of the maximum lawful amount, an amount
equal to any excessive interest shall be applied to the reduction of advances
under the Loan Agreement and not to the payment of interest, or if such
excessive interest exceeds the unpaid advances under the Loan Agreement, such
excess shall be refunded to Grantor. All interest paid or agreed to be paid to
Grantee shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full period until payment in
full of the principal so that the interest hereon for such full period shall
not exceed the maximum amount permitted by applicable law. This paragraph shall
control all agreements between Grantor and Grantee. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
all of which together shall constitute one and the same instrument.
ARTICLE XX
20. Change in Method of Taxation. In the event of the passage, after
the date of this Indenture, of any law changing in any way the laws now in
force for the taxation of mortgages or debts secured thereby, for state or
local purposes, or the operation of any such taxes so as to adversely affect
the interest of Grantee in the Property, this Indenture or the Loan Agreement,
Grantor shall, upon demand, bear and pay the full amount (or any partial
amount) requested by Grantee, of taxes resulting from such changes hereunder
without offset or credit against any other sums due under the Loan Agreement or
on the Notes.
ARTICLE XXI
21. No Petition. Grantee hereby covenants and agrees that it will not
institute against, or join any Person in instituting against Grantor, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or state bankruptcy or
similar law at any time other than on a date which is at least one (1) year and
one (1) day after the payment in full of the Notes; provided, however, that
nothing in this Article shall constitute a waiver of any right to
indemnification, reimbursement or other payment from Grantor pursuant to the
Loan Agreement.
ARTICLE XXII
22. The Indenture Secures Future Advances. This Indenture is given to
secure not only the amount initially secured by this Indenture, but also such
future advances, whether such advances are obligatory or are to be made at the
option of Grantee, or otherwise, to the same extent as if such future advances
were made on the date of the execution of this Indenture. The total amount of
Indebtedness that may be so secured may decrease or increase from time to time,
but the total unpaid
<PAGE> 16
balance so secured at one time shall not exceed two (2) times the face amount
of the amount initially secured by this Indenture, plus interest thereon.
ARTICLE XXIII
23. Assignment of Leases and Rents. Grantor hereby grants, transfers
and assigns to Grantee Grantor's entire right, title and interest in and to the
Leases and Rents. This assignment of Leases and Rents by Grantor to Grantee is
intended to operate as an absolute and immediate assignment of such Leases and
Rents.
23.1 Grantor's Representations and Warranties.
(a) Grantor has good and lawful right, title, and interest in and to
the Leases, is entitled to receive the Rents from the Leases and from the
Property, has full power and authority to assign the Leases as provided herein
and to grant to and confer upon Grantee the powers, interests and authority set
forth herein, and has not assigned the Leases or Rents to any other party;
(b) Grantor has neither done any act nor omitted to do any act which
might prevent Grantee from, or limit Grantee in, acting under any of the
provisions of this assignment of Leases and Rents;
(c) All Leases provide for Rent to be paid monthly, in advance, and
Grantor has not accepted and will not accept payment of Rent for more than one
(1) month in advance; provided, however, Grantor may accept payment of Rent two
(2) months in advance if such Rent accepted two (2) months in advance does not
exceed five percent (5%) of the Rent collected during the applicable month; and
there are no agreements, understandings, or undertakings by Grantor providing
for free or reduced Rent in the past or in the future except as provided in the
Leases;
(d) Except as disclosed to Lender in writing, Grantor is not now in
default, the nature of which could have a material adverse impact on the
financial condition of Grantor or the value of the Property, under any
provision of any of the Leases, and no tenant under any of the Leases has
claimed or asserted any defense, offset, counter-claim, or abatement of rent,
and that the Leases remain in full force and effect. Grantor further represents
and warrants that it has no knowledge of any default by any tenant under any of
the Leases that could materially adversely affect the value of the Property;
(e) This assignment of Leases and Rents, the Leases, the performance
of each and every covenant of Grantor under the Leases, and the enforcement by
Grantee of its rights hereunder does not conflict with, or will not conflict
with, and does not constitute or will not constitute a breach or default, under
any agreement, indenture or other instrument to which Grantor is a party, or so
far as is known to Grantor, any law, ordinance, administrative regulation or
court decree which is applicable to Grantor;
(f) No action has been brought or, so far as is known to Grantor, is
threatened, which would interfere in any way with the right of Grantor to
execute and deliver this
<PAGE> 17
assignment of Leases and Rents, and to perform all of Grantor's obligations
contained in this assignment of Leases and Rents and in the Leases; and
(g) To Grantor's knowledge, the Leases are valid, enforceable and
in full force and effect.
23.2 Grantor's Covenants. Grantor hereby covenants and agrees to
and with Grantee as follows:
(a) Grantor will notify Grantee in writing (but without any right of
approval or denial on the part of Grantee) of any termination, substitution or
material modification of any Leases involving 10,000 or more Koger Net Square
Feet (as defined in the Loan Agreement);
(b) Grantor hereby acknowledges that any and all Rents collected or
received by Grantor after the occurrence of an Event of Default will be the
property of Grantee, which if received and collected by Grantor, will be
considered received and collected on Grantee's behalf and as Grantee's agent,
and will be held by Grantor in trust for the benefit of Grantee, and Grantor
will deliver all such sums to Grantee immediately upon Grantor's request
therefor;
(c) In accordance with sound business judgment, Grantor will use its
reasonable best efforts, at its cost and expense, to observe, perform and
discharge, or cause to be observed, performed and discharged, all of the
obligations and undertakings of Grantor or its agents under the Leases, and
will use its best efforts, in accordance with sound business judgment, to
enforce or secure, or cause to be enforced or secured, the performance of each
and every obligation and undertaking of the respective tenants under the
Leases, and will appear in and defend, at its cost and expense, any action or
proceeding arising under or in any manner connected with the Leases or the
obligations and undertakings of any tenant thereunder. Grantor will not do or
permit to be done anything to impair the security thereof, including without
limitation the execution of any other assignment of Grantor's interest in the
Leases or the Rents, without Grantee's prior written consent;
(d) Grantor authorizes and directs each and every present and future
tenant under the Leases to pay all Rent to Grantee upon receipt of written
demand from Grantee to so pay the same, and upon paying the same, such tenants
will be relieved from all liability to Grantor for such Rent in all respects.
To the extent not so provided by applicable law, each Lease will provide that,
in the event of enforcement by Grantee of the remedies provided for by law or
by this assignment of Leases and Rents, the tenant thereunder will, upon
request of any person succeeding to the interest of Grantor as a result of such
enforcement, automatically become the tenant of said successor in interest,
without change in the terms or other provisions of such Lease. Any such
successor in interest will not be bound by any payment of rent or additional
rent made more than one (1) month in advance;
(e) This assignment of Leases and Rents will not obligate Grantee to
take any action or to incur expenses or perform or discharge any obligation,
duty or liability of Grantor under any Lease, or for the control, care,
management, or repair of the Property; nor will it operate to make Grantee
responsible or liable for any waste
<PAGE> 18
committed on the Property by the tenants or any other parties or for any
dangerous or defective condition of the Property, or for any act or
omission relating to the management, upkeep, repair, or control of the Property
that results in loss or injury or death to any person. Grantee will not be
liable for any loss sustained by Grantor resulting from Grantee's failure to
lease the Property after default. Grantor will and does hereby indemnify and
agree to hold harmless Grantee from and against any and all liability, loss,
cost, damage or expense which may be incurred under the Leases or by reason of
this assignment of Leases and Rents and from any and all claims and demands
whatsoever which may be asserted against Grantee by reason of any alleged
obligations or undertakings on its part to perform or discharge any of the
terms, covenants, or agreements contained in the Leases except to the extent
the same is caused by the negligence of Grantee. Should Grantee incur any such
liability under the Leases or by reason of this assignment of Leases and Rents
or in defense of any such claims or demands, the amount thereof, including
costs, expenses, and reasonable attorneys' and paralegals' fees and costs, will
be secured hereby and Grantor will reimburse Grantee therefor immediately upon
demand and upon the failure of Grantor so to do, Grantee may, at its option,
declare all sums secured hereby immediately due and payable, or may charge the
costs thereof to Grantor as an advance under the Notes; and
(f) This assignment of Leases and Rents is made without prejudice to
any of the rights and remedies possessed by Grantee under the Loan Agreement,
and the right of Grantee to exercise its remedies under this assignment of
Leases and Rents may be exercised by Grantee either prior to, simultaneously
with, or subsequent to any action taken by it under the Loan Agreement. Each
and every right, remedy and power granted to Grantee by this assignment of
Leases and Rents will be cumulative and in addition to any other right, remedy
and power given by the Loan Agreement now or hereafter existing in equity, at
law or by virtue of statute or otherwise. Nothing contained in this assignment
of Leases and Rents, and no act done or omitted by Grantee pursuant to the
powers and rights granted it hereunder, nor the failure of Grantee to avail
itself of any of the rights and remedies under this assignment of Leases and
Rents, will be construed or deemed to be a waiver of any of Grantee's rights
and remedies under this assignment of Leases and Rents, nor will such exercise
or omission to exercise of the powers and rights granted Grantee hereunder be
deemed to constitute a waiver of its rights and remedies under the Loan
Agreement.
23.3. Grantee's Covenants.
(a) Although this assignment of Leases and Rents constitutes a present
and absolute assignment of the Leases and the Rents, as long as there is no
Event of Default on the part of Grantor, Grantee will not require that such
Rents be paid directly to Grantee, and Grantor will have a license to collect
and use the Rents for subsequent application as provided above;
(b) Upon the payment and performance in full of Grantor's obligations
under the Loan Agreement, as evidenced by the recording or filing of an
instrument of satisfaction or termination of this Indenture without the
recording of another security instrument in favor of Grantee affecting the
Property, this assignment of Leases and
<PAGE> 19
Rents will be deemed terminated and released of record by Grantee and
thereupon will be null and void and of no further force or effect.
23.4. Remedies. If any Event of Default occurs, Grantee may, at
its option, with or without notice or demand of any kind, exercise any
and all of the following remedies:
(a) Either in person, by court appointed receiver or by agent, with or
without bringing any action or proceeding, demand and thereupon take possession
of the Property, to have, hold, manage, lease and operate the same on such
terms and for such period of time as Grantee may deem proper, and either with
or without taking possession of the Property in its own name, demand and
receive the Rents in the possession of Grantor at the time of Grantee's written
demand or collected thereafter, including those past due and unpaid, with full
power to make from time to time all alterations, renovations, repairs, or
replacements thereto or thereof as may seem proper to Grantee, and to apply
such Rents to the payment of: (i) all reasonable expenses of managing the
Property, including, without limitation, the salaries, fees and wages of the
managing agent and such other employees as Grantee may deem necessary or
desirable, all taxes, charges, claims, assessments, liens, premiums for all
insurance which Grantee may deem necessary or desirable, costs of renovations,
repairs, or replacements, and all expenses incident to taking and retaining
possession of the Property and protecting and preserving the same; or (ii) the
principal sum and interest thereon of the Notes, together with all costs and
attorneys' and paralegals' fees and costs; all in such order or priority as
Grantee in its sole discretion may determine, any custom or use to the contrary
notwithstanding; and
(b) In the name of Grantor or of Grantee, institute any legal or
equitable action which Grantee in its sole discretion deems desirable to
collect and receive any or all of the Rents.
Nothing herein contained will be construed to cause Grantee to be a
mortgagee in possession nor will Grantee be liable for laches for failure to
collect the Rents, and it is understood that Grantee is to account only for
such sums as are actually received by Grantee.
23.5 Further Assurances. At Grantee's request, Grantor will assign and
transfer to Grantee any and all subsequent Leases upon all or any part of the
Property and to execute and deliver at the request of Grantee all such further
assurances and assignments in the Leases and the Rents as Grantee will require
from time to time in its sole discretion.
23.6 Subordination, Nondisturbance and Attornment. The Leases are and
at all times shall be subject and subordinate in all respects to this
Indenture, and to all renewals, modifications, amendments, consolidations,
replacements, refinancings and extensions of this Indenture, to the full extent
of all principal, interest and all other amounts secured hereby. Provided that
a tenant is not in default under its Lease, Grantee shall not disturb the
occupancy of such tenant under its Lease during the term of such Lease,
notwithstanding foreclosure of this Indenture, acceptance of a deed in lieu of
foreclosure or exercise of any other remedy provided herein, or
<PAGE> 20
pursuant to the laws of the State of Georgia. If requested by a tenant under
any of the Leases or upon Grantee's request, Grantor shall enter into a
subordination, nondisturbance and attornment agreement (reasonably acceptable
in form and substance to Grantee) with such tenant whereby Grantee will agree
to not disturb the tenant in its possession of the Property provided such
tenant is not in default under its Lease and the tenant will agree to attorn to
Grantee if Grantee takes possession of the Property.
ARTICLE XXIV
24. Security Agreement. (a) This Indenture is hereby made and declared
to be a security agreement, encumbering each and every item of personal
property included herein, in compliance with the provisions of the Uniform
Commercial Code as enacted in the State. A financing statement or statements
reciting this Indenture to be a security agreement, affecting all of said
personal property aforementioned, shall be executed by Grantor and Grantee and
appropriately filed. The remedies for any violation of the covenants, terms and
conditions of the security agreement herein contained shall be (i) as
prescribed herein, or (ii) as prescribed by general law, or (iii) as prescribed
by the specific statutory consequences now or hereafter enacted and specified
in said Uniform Commercial Code, all at Grantee's sole election. Grantor and
Grantee agree that the filing of such financing statement(s) in the records
normally having to do with personal property shall never be construed as in any
way derogating from or impairing this declaration and hereby stated intention
of Grantor and Grantee that everything used in connection with the production
of income from the Property and/or adapted for use therein and/or which is
described or reflected in this Indenture, is, and at all times and for all
purposes and in all proceedings both legal or equitable shall be, regarded as
part of the Property irrespective of whether (i) any such item is physically
attached to the Improvements, (ii) serial numbers are used for the better
identification of certain items capable of being thus identified in a recital
contained herein, or (iii) any such item is referred to or reflected in any
such financing statement(s) so filed at any time. Similarly, the mention in any
such financing statement(s) of the rights in and to (aa) the proceeds of any
fire and/or hazard insurance policy, or (bb) any award in eminent domain
proceeds for a taking or for loss of value, or (cc) Grantor's interest as
lessor in any present or future lease or rights to income growing out of the
use and/or occupancy of the Property, whether pursuant to lease or otherwise
shall never be construed as in anyway altering any of the rights of Grantee as
determined by this instrument impugning the priority of Grantee's estate
granted hereby or by any other recorded document, but such mention in such
financing statement(s) is declared to be for the protection of Grantee in the
event any court shall at any time hold with respect to the foregoing (aa), (bb)
or (cc), that notice of Grantee's priority of interest to be effective against
a particular class of persons, must be filed in the Uniform Commercial Code
records.
(b) Grantor warrants that (i) Grantor's (that is "Debtor's") name,
identity or corporate structure and residence or principal place of business
are as set forth in Exhibit C hereto; (ii) Grantor (that is, "Debtor") has been
using or operating under said name, identity or corporate structure without
change for the time period set forth in Exhibit C hereto; and (iii) the
location of the collateral is upon the Property. Grantor covenants and agrees
that Grantor will furnish Grantee with notice of any change in
<PAGE> 21
the matters addressed by clauses (i) or (iii) of this subparagraph (b)
within thirty (30) days of the effective date of any such change and Grantor
will promptly execute any financing statements or other instruments deemed
necessary by Grantee to prevent any filed financing statement from becoming
misleading or losing its perfected status.
(c) The information contained in this subparagraph (c) is provided in
order that this Indenture shall comply with the requirements of the Uniform
Commercial Code, as enacted in the State of Georgia, for instruments to be
filed as financing statements. The names of the "Debtor" and the "Secured
Party," the identity or corporate structure and residence or principal place of
business of "Debtor," and the time period for which "Debtor" has been using or
operating under said name and identity or corporate structure without change,
are as set forth in Exhibit C attached hereto and by this reference made a part
hereof; the mailing address of the "Secured Party" from which information
concerning the security interest may be obtained, and the mailing address of
"Debtor" are as set forth in Exhibit C attached hereto; and a statement
indicating the types, or describing the items, of collateral are as set forth
hereinabove.
ARTICLE XXV
25. Waiver of Homestead. Grantor hereby waives and renounces all
homestead and exemption rights provided for by the Constitution and laws of the
United States and of any state, in and to the Property as against the
collection of the secured obligations, or any part hereof.
ARTICLE XXVI
26. WAIVER OF GRANTOR'S RIGHTS. BY EXECUTION OF THIS INDENTURE,
GRANTOR EXPRESSLY: (A) ACKNOWLEDGES THE RIGHT TO ACCELERATE THE INDEBTEDNESS
SECURED HEREBY AND THE POWER OF ATTORNEY GIVEN HEREIN TO GRANTEE TO SELL THE
PROPERTY BY NON-JUDICIAL FORECLOSURE UPON DEFAULT BY GRANTOR WITHOUT ANY
JUDICIAL HEARING AND WITHOUT ANY NOTICE OTHER THAN SUCH NOTICE (IF ANY) AS IS
SPECIFICALLY REQUIRED TO BE GIVEN UNDER THE PROVISIONS OF THIS INDENTURE; (B)
WAIVES ANY AND ALL RIGHTS WHICH GRANTOR MAY HAVE UNDER THE CONSTITUTION OF THE
UNITED STATES (INCLUDING THE FIFTH AND FOURTEENTH AMENDMENTS THEREOF, THE
VARIOUS PROVISIONS OF THE CONSTITUTIONS FOR THE SEVERAL STATES, OR BY REASON OF
ANY OTHER APPLICABLE LAW), (1) TO NOTICE AND JUDICIAL HEARING PRIOR TO THE
EXERCISE BY GRANTEE OF ANY RIGHT OR REMEDY HEREIN PROVIDED TO GRANTEE EXCEPT
SUCH NOTICE (IF ANY) AS IS SPECIFICALLY REQUIRED TO BE PROVIDED IN THIS
INDENTURE; AND (2) CONCERNING THE APPLICATION, RIGHTS OR BENEFITS OF ANY
MORATORIUM, REINSTATEMENT, MARSHALING, FORBEARANCE, APPRAISEMENT, VALUATION,
STAY, EXTENSION, HOMESTEAD, EXEMPTION OR REDEMPTION LAWS; (C) ACKNOWLEDGES THAT
GRANTOR HAS READ THIS INDENTURE AND ANY AND ALL QUESTIONS REGARDING THE LEGAL
EFFECT OF THIS INDENTURE AND ITS PROVISIONS HAVE BEEN EXPLAINED FULLY TO
GRANTOR AND GRANTOR HAS CONSULTED WITH COUNSEL OF GRANTOR'S CHOICE PRIOR TO
EXECUTING THIS INDENTURE; AND (D) ACKNOWLEDGES THAT ALL WAIVERS OF THE
AFORESAID RIGHTS OF GRANTOR HAVE BEEN MADE
<PAGE> 22
KNOWINGLY, INTENTIONALLY AND WILLINGLY BY GRANTOR AS PART OF A BARGAIN FOR
THE LOAN TRANSACTION AND THAT THIS INDENTURE IS VALID AND ENFORCEABLE BY
GRANTEE AGAINST GRANTOR IN ACCORDANCE WITH ALL THE TERMS AND CONDITIONS HEREOF.
ARTICLE XXVII
27. Approval of Legal Description. Grantor has read and does hereby
approve the legal description of the Land which Is the subject hereof, as set
forth in Exhibit A attached hereto, and hereby indemnifies Grantee and its
attorneys with respect to any liability which might arise as a consequence of
any error or omission therein.
ARTICLE XXVIII
28. Loan Agreement. The terms, provisions, conditions,
representations and warranties and covenant of the Loan Agreement are
incorporated herein by reference. In the event of a conflict between this
Indenture and the Loan Agreement, the Loan Agreement shall control.
<PAGE> 23
IN WITNESS WHEREOF, Grantor has caused this Indenture to be executed,
sealed, and attested by its proper officers thereunto duly authorized, as of
the day and year first above written.
Signed, sealed and delivered KOGER EQUITY, INC., a
in the presence of: Florida corporation
/s/ Janice R. Long By: /s/ G. Danny Edwards (SEAL)
- ---------------------- ------------------------
Witness Name: G. Danny Edwards
Title: Treasurer
/s/ Katherine P. Kime Attest: /s/ Diana R. Payne
- ---------------------- ------------------------
Notary Public Name: Diana R. Payne
Title: Assistant Secretary
[CORPORATE SEAL]
My Commission Expires:
9-28-98
[NOTARY SEAL]
<PAGE> 24
EXHIBIT A
DESCRIPTION OF REAL PROPERTY
[LEGAL DESCRIPTION OF REAL PROPERTY NOT INCLUDED IN FORM 8-K FILING
WITH SECURITIES AND EXCHANGE COMMISSION]
<PAGE> 25
EXHIBIT B
Permitted Encumbrances
[NOT INCLUDED IN FORM 8-K FILING WITH SECURITIES AND EXCHANGE COMMISSION]
<PAGE> 26
EXHIBIT C
DEBTOR
NAME: Koger Equity, Inc.
CORPORATE
STRUCTURE: a Florida corporation
PRINCIPAL PLACE
OF BUSINESS: 3986 Boulevard Center Drive, Suite 101
Jacksonville, Florida 32207
TIME PERIOD
USING NAME
WITHOUT CHANGE: June 21, 1988 to present
SECURED PARTY
NAME: First Union National Bank of Florida
PRINCIPAL PLACE
OF BUSINESS: 225 Water Street
Jacksonville, Florida 32202
AND
NAME: Morgan Guaranty Trust Company of New York
PRINCIPAL PLACE
OF BUSINESS: 60 Wall Street
New York, New York 10260
<PAGE> 1
Exhibit 10(k)(4)(a)
THIS INSTRUMENT PREPARED BY,
AND FOLLOWING RECORDING RETURN TO:
Douglas G. Stanford, Esq.
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
50 North Laura Street, Suite 2800
Jacksonville, Florida 32202
DEED OF TRUST AND SECURITY AGREEMENT
FROM
KOGER EQUITY, INC.
TO
TRESTE, INC.,
AS TRUSTEE
Dated as of April 7 , 1997
State: North Carolina
Section:
Township:
Range:
County: Guilford
Tax I.D.:
<PAGE> 2
DEED OF TRUST AND SECURITY AGREEMENT
THIS DEED OF TRUST AND SECURITY AGREEMENT (this "Indenture"), dated as
of April 7 , 1997, from
KOGER EQUITY, INC., a Florida corporation ("Borrower"), whose mailing address
is 3986 Boulevard Center Drive, Suite 101, Jacksonville, Florida 32207
Attention: J.C. Teagle., Executive Vice President,
to
TRESTE, INC., a Virginia corporation authorized to do business in North
Carolina ("Trustee") having an address c/o First Union National Bank of North
Carolina, a national banking association, 301 South Tryon Street, Charlotte,
North Carolina 28288-0146, as trustee for the benefit of FIRST UNION NATIONAL
BANK OF FLORIDA, a national banking association ("FUNB"), and MORGAN GUARANTY
TRUST COMPANY OF NEW YORK, a New York banking corporation ("MGT") (FUNB and MGT
together being referred to as "Beneficiary"). For purposes of notices permitted
or required to be given hereunder, FUNB's mailing address is 214 North Hogan
Street, Jacksonville, Florida 32202 Attention: Real Estate Portfolio
Management, and MGT's mailing address is 60 Wall Street, New York, New York
10260 Attention: Timothy O'Donovan .
Capitalized terms not otherwise defined herein are defined in Article I.
W I T N E S S E T H :
THIS INDENTURE WITNESSETH, that to secure (A) the payment, performance
and observance of all obligations of Borrower and all indebtedness heretofore
or hereafter from time to time advanced under the Loan Agreement and the
payment of any and all other indebtedness which this Indenture by its terms
secures including, without limitation, the payment of principal and interest on
the Notes which shall (1) be payable to Beneficiary, (2) be payable in
full not later than April 6 , 1999, or such later date as may be established by
an extension of the Maturity Date (as defined in the Loan Agreement) pursuant
to Section 2.3 of the Loan Agreement, and (3) bear interest at a floating rate
as set forth in Section 2.6 of the Loan Agreement; provided, that the maximum
aggregate principal amount of indebtedness secured hereby, other than for
advances made pursuant to Article XXIV, Paragraph 24 hereof, shall in no event
exceed $50,000,000.00 (the "Indebtedness") and (B) the performance of the
covenants and agreements contained herein and in the Loan Agreement, in
consideration of the aforesaid Indebtedness and the trust referred to and
created below, Borrower hereby irrevocably grants, bargains and sells, conveys,
transfers, assigns, sets over, mortgages, hypothecates, pledges and grants to
Trustee and its successors and assigns IN TRUST WITH POWER OF SALE in and to
all of Borrower's right, title and interest in the following property and
rights whether now owned or hereafter acquired by Borrower (collectively, the
"Property"):
(i) the Land;
<PAGE> 3
(ii) all buildings, structures and other improvements
presently situated or hereafter constructed on the Land (collectively, the
"Improvements");
(iii) all rights, privileges, tenements, hereditaments,
rights of way, easements, rights and appurtenances belonging to or in any way
relating to either the Land or the Improvements;
(iv) all fixtures, machinery, equipment and other personal
property of all types owned by Borrower now or hereafter affixed to and used in
connection with the operation of the Land and Improvements, together with all
additions and accessions thereto, substitutions therefor and replacements
(collectively, the "Fixtures");
(v) all awards or payments, including interest thereon, which
may heretofore and hereafter be made with respect to the Land, the Improvements
or the Fixtures, whether from the exercise of the right of eminent domain
(including but not limited to any transfer made in lieu of or in anticipation
of the exercise of said right), or for a change of grade of any street, or for
any other injury to or decrease in the value of Borrower's rights, title or
interest in and to the Land, the Improvements or the Fixtures;
(vi) all leases and other agreements affecting the use,
enjoyment or occupancy of the Land, the Improvements or the Fixtures now or
hereafter entered into (the "Leases") and rents, revenues, issues and profits
from the Land, the Improvements or the Fixtures (the "Rents") and all proceeds
from the sale or other disposition of the Leases and the right to receive and
apply the Rents to the payment of the Indebtedness;
(vii) all proceeds of and any unearned premiums on any
insurance policies covering the Land, the Improvements or the Fixtures,
including, without limitation, the right to receive and apply the proceeds of
any insurance, judgments, or settlements made in lieu thereof, for damage to
the Land, the Improvements or the Fixtures; and
(viii) the right, in the name and on behalf of Borrower, to
appear in and defend any action or proceeding brought with respect to
Borrower's right, title or interest in and to the Land, the Improvements or the
Fixtures and to commence any action or proceeding to protect the interest of
Beneficiary in the Land, the Improvements or the Fixtures;
TO HAVE AND TO HOLD the Property unto Trustee and its successors and
assigns, forever; IN TRUST NEVERTHELESS to its own proper use and benefit
forever, upon the terms and trusts herein set forth for the benefit and
security of Beneficiary.
This Indenture is a deed of trust of real property and a security
agreement covering the Fixtures under the Uniform Commercial Code of the State.
Upon the occurrence of an Event of Default, Trustee and Beneficiary shall, in
addition to other rights and remedies granted to them, have all the rights
granted to secured parties pursuant to the Uniform Commercial Code of the
State.
<PAGE> 4
Borrower, for itself and for its successors and assigns, covenants and
agrees with Trustee and with Beneficiary as follows:
ARTICLE I
1. Definitions. As used in this Indenture, the following capitalized
terms have the respective meanings set after them, such definitions to be
applicable equally to the singular and plural forms of such terms:
"Beneficiary" shall have the meaning assigned to such term in the
introductory paragraph of this Indenture.
"Borrower" shall have the meaning assigned to such term in the
introductory paragraph of this Indenture.
"Default" shall mean any condition or event which constitutes or which
would constitute an Event of Default either with or without notice or lapse of
time, or both.
"Default Rate" shall have the meaning assigned to such term in the
Loan Agreement.
"Event of Default" shall have the meaning assigned to such term in
Article V of this Indenture.
"FUNB" shall mean First Union National Bank of Florida.
"Fixtures" shall have the meaning assigned to such term in clause (iv)
of the Granting Clause of this Indenture.
"Governmental Requirements" shall have the meaning assigned to such
term in the Loan Agreement.
"Impositions" shall mean, collectively, all taxes of every kind and
nature (including real and personal property, income withholding, profits and
gross receipts taxes), all charges for any easement or agreement maintained for
the benefit of any of the Property, all general and special assessments,
levies, permits, inspection and license fees, all water and sewer rents and
other utility charges, all ground rents, and all other public charges whether
of a like or different nature, even if unforeseen or extraordinary, imposed
upon or assessed against Borrower, Beneficiary or any portion of the Property
as a result of or arising in respect of the acquisition, occupancy, leasing,
use or possession thereof, or any activity conducted on the Property
(including, without limitation, any gross income tax, sales tax or excise tax
levied by any governmental body on or with respect to the Rents).
"Improvements" shall have the meaning assigned to such term in clause
(ii) of the Granting Clause of this Indenture.
"Indebtedness" shall have the meaning assigned to such term in the
Granting Clause of this Indenture.
<PAGE> 5
"Indenture" shall mean this Deed of Trust and Security Agreement.
"Land" shall mean those certain parcels of real property located in
the County of Guilford, State of North Carolina, as more particularly described
on Exhibit A attached hereto and incorporated herein.
"Leases" shall have the meaning assigned to such term in clause (vi)
of the Granting Clause of this Indenture.
"Loan Agreement" shall mean that certain Revolving Credit Loan
Agreement dated as of ,1997 between Borrower and Beneficiary.
"MGT" shall mean Morgan Guaranty Trust Company of New York, a New York
banking corporation.
"Notes" shall mean the Revolving Promissory Note dated as of even date
herewith made by Borrower payable to the order of FUNB in the original
principal amount of $35,000,000, and the Revolving Promissory Note dated as of
even date herewith made by Borrower payable to the order of MGT in the original
principal amount of $15,000,000.
"Other Indenture" shall mean any mortgage, deed to secure debt, or
deed of trust given by Borrower to or in favor of Trustee or Beneficiary to
secure the Indebtedness, other than this Indenture.
"Permitted Encumbrances" shall mean those covenants, restrictions,
reservations, liens, conditions and easements listed as exceptions to title as
set forth on Exhibit B attached hereto and incorporated herein.
"Person" shall mean any corporation, natural person, joint venture,
partnership, business trust, joint stock company, trust, unincorporated
organization, government or any department, agency or political subdivision
thereof.
"Property" shall have the meaning assigned to such term in the
Granting Clause of this Indenture.
"Rents" shall have the meaning assigned to such term in clause (vi) of
the Granting Clause of this Indenture.
"State" shall mean the State of North Carolina.
"Taking" shall mean a taking or voluntary conveyance during the term
hereof of all or part of the Property, or any interest therein or right
accruing thereto or use thereof, as the result of or in lieu or in anticipation
of the exercise of the right of condemnation or eminent domain.
"Trustee" shall have the meaning assigned to such term in the
introductory paragraph of this Indenture.
ARTICLE II
<PAGE> 6
2. Representations and Warranties. Borrower represents and warrants to
Trustee for the benefit of Beneficiary that (a) it has full power, authority
and legal right to execute and deliver this Indenture and to grant a first deed
of trust of the Property, (b) it holds good and marketable fee simple title to
the Land and good and marketable title to the balance of the Property, (c) this
Indenture constitutes a valid first deed of trust of the Property, subject to
the Permitted Encumbrances, and (d) the Leases are in full force and effect in
accordance with their respective terms, have not been canceled or modified, and
have not been assigned or encumbered except to Beneficiary pursuant to this
Indenture and the Loan Agreement, and, to the best of Borrower's knowledge, no
default exists under the Leases. Borrower, at its expense, will warrant to
Trustee and to Beneficiary and will defend its title to the Property and the
lien thereon created by this Indenture against all claims and demands, and will
maintain and preserve such lien so long as the Indebtedness secured by this
Indenture remains outstanding, subject, however, to the Permitted Encumbrances.
ARTICLE III
3. Affirmative Covenants. Until this Indenture and the lien created
hereby shall terminate in accordance with Article XVIII, Borrower shall comply
with the following covenants:
(a) Recordation, Filing, Etc. At all times cause this Indenture and
each amendment or modification hereof or supplement hereto (and such financing
statements covering the Property under the Uniform Commercial Code as in effect
in the State as may be necessary or appropriate) to be recorded, registered and
filed and kept recorded, registered and filed in such manner and in such places
as appropriate, and comply with all applicable statutes and regulations, in
order to establish, preserve and protect the lien of this Indenture as a first
lien on the Property and the rights of Trustee and Beneficiary hereunder.
Borrower shall pay, or shall cause to be paid, all taxes, fees and other charges
incurred in connection with such recording, registration, filing and compliance.
(b) Maintenance and Repairs. Keep and maintain the Property in good
order, repair and operating condition (ordinary wear and tear excepted) and
make all repairs and replacements necessary to that end.
(c) Payment of Impositions and Utility Charges. Pay all Impositions
while the same may be paid without fine, penalty, interest or additional cost,
unless the same shall be contested in good faith and by appropriate proceedings
by Borrower in the manner permitted by the Loan Agreement. Any Impositions
which are payable in installments may be paid in installments provided that the
Borrower is otherwise in compliance with the Loan Agreement. Upon the written
request of Beneficiary from time to time, Borrower will furnish to Beneficiary
official receipts or other satisfactory proof evidencing such payments. In
addition, Borrower will pay all utility charges as required by the Loan
Agreement. Borrower shall not be entitled to any credit on the Indebtedness, by
reason of the payment of any Imposition or utility charges or any part thereof.
(d) Compliance with Governmental Requirements. Promptly (i) comply
with all Governmental Requirements unless the same shall be contested in good
faith and
<PAGE> 7
by appropriate proceedings by Borrower in the manner permitted by the
Loan Agreement, and (ii) procure, maintain and comply with all
licenses or other authorizations required for any use of the Property then
being made, and for the proper erection, installation, operation, repair and
maintenance of the Improvement and the Fixtures, or any part of either thereof.
(e) Insurance. Maintain insurance of the types and in the amounts
required by, and otherwise complying with the Loan Agreement and promptly
deliver, or cause to be promptly delivered, to Beneficiary any certificates or
evidence of such insurance as required under the Loan Agreement.
(f) Damage, Destruction or Taking. In the event of any damage,
destruction or Taking affecting all or any portion of the Property, Borrower
shall give immediate written and oral notice thereof to Beneficiary and Trustee
and proceed in accordance with the terms of the Loan Agreement. In case of any
such material damage, destruction or Taking, Beneficiary shall be entitled to
hold all insurance proceeds, payments or awards on account thereof, to the same
extent Borrower would be entitled thereto under the Loan Agreement, and
Borrower hereby irrevocably assigns to Beneficiary all of its rights to any
such insurance proceeds, payments or awards. With respect to a Taking, and in
accordance with its obligations under the Loan Agreement, Borrower will file or
prosecute or will cause to be filed or prosecuted in good faith and with due
diligence what would otherwise be its claim for any such award or payment and
cause the same to be collected and paid over to Beneficiary. At the sole cost
and expense of Borrower, Beneficiary may elect to monitor or participate in,
and if reasonably necessary, may hire independent legal counsel to represent
Beneficiary in connection with, any claim or the claims payment process.
Borrower will pay or cause to be paid all costs and expenses reasonably
incurred in connection with any Taking and the seeking and obtaining of any
award or payment in respect thereof. Unless an Event of Default shall have
occurred under the Loan Agreement, all sums so received by Beneficiary shall
be applied in accordance with the provisions of the Loan Agreement.
(g) Notification of Default, Etc. Promptly after obtaining knowledge
thereof, notify Trustee and Beneficiary of any Default hereunder or under
the Loan Agreement or of any action or proceeding materially and adversely
affecting the Property.
ARTICLE IV
4. Negative Covenants. Without the prior written consent of
Beneficiary, Borrower will not directly or indirectly create or permit to be
created or to remain and will discharge or will cause to be discharged any
mortgage, charge, lien or encumbrance on, or attachment or pledge of, or
conditional sale or other title retention agreement with respect to, the
Property or any part thereof, its interest or the interests of Trustee and
Beneficiary therein, or the Rents or other sums payable pursuant to the Leases,
except (i) this Indenture, (ii) the Permitted Encumbrances, (iii) easements,
restrictions, liens, charges and other encumbrances permitted by the Loan
Agreement, (iv) liens being contested in good faith and by appropriate
proceedings in the manner permitted by the Loan Agreement, and (v) liens
arising out of or created by any statute, the discharge of which cannot under
the terms of such
<PAGE> 8
statute at the particular time be effected by Borrower; provided, however,
that any such statutory liens will promptly be discharged as and when such
discharge is possible or permissible. Borrower shall have the right to grant,
without the prior consent of Beneficiary, any utility easement.
ARTICLE V
5. Events of Default. If any one or more of the following events
(individually, an "Event of Default") shall occur:
(a) non-payment, when due, of any sums which Borrower is obligated to
pay hereunder or under the Loan Agreement continues unremedied for a period of
five (5) days after the date such payment is due; or
(b) failure of Borrower to keep in full force and effect its corporate
existence, rights, franchises and privileges, except as provided for in the Loan
Agreement; or
(c) if an Event of Default (as defined in the Loan Agreement) shall
have occurred under the Loan Agreement; or
(d) if any of the representations or warranties made by Borrower in
any document, instrument or certificate delivered in connection with the
financing of the Property by Borrower proves to be untrue in any material
respect; or
(e) if a default shall have occurred under any Other Indenture and
shall be continuing beyond the applicable grace or cure period provided
therein; or
(f) if Borrower shall (i) voluntarily be adjudicated a bankrupt or
insolvent, (ii) seek or consent to the appointment of a receiver or trustee for
itself or for any portion of the Property, (iii) file a petition seeking relief
under the bankruptcy or other similar laws of the United States, any state or
any jurisdiction, (iv) make a general assignment for the benefit of creditors,
or (v) be unable to pay its debts as they mature; or
(g) a court shall enter an order, judgment or decree appointing, with
the consent of Borrower, a receiver or trustee for it or for any of the
Property or approving a petition filed against Borrower which seeks relief
under the bankruptcy or other similar laws of the United States, any state or
any jurisdiction, and such order, judgment or decree shall remain in force,
undischarged or unstayed, sixty (60) days after it is entered; or
(h) the estate or interest of Borrower in any of the Property shall be
levied upon or attached in any proceeding and such estate or interest is about
to be sold or transferred or such process shall not be vacated or discharged
within fifteen (15) days after such levy or attachment; or
(i) if Borrower sells, conveys or transfers, voluntarily or otherwise,
its interest in the Property without the prior written consent of Beneficiary;
<PAGE> 9
then, in any such event, Trustee or Beneficiary may accelerate the Indebtedness
outstanding under this Indenture, and may take such other actions as may be
provided under the Loan Agreement, or at law or in equity.
ARTICLE VI
6. Remedies in Case of Event of Default.
6.1. Legal Proceedings and Foreclosure. If an Event of Default shall
have occurred, Trustee or Beneficiary may proceed by suit or suits at law or in
equity or by any other appropriate remedy to protect and enforce its rights
hereunder, whether for the specific performance of any covenant or agreement
contained herein, or for an injunction against the violation of any of the terms
hereof, or in aid of the exercise of any right, power or remedy available to it,
or to enforce the payment of the Indebtedness under the Loan Agreement, or to
foreclose the lien and security interest of this Indenture as against all or any
part of the Property and to have all or any part of the Property sold, in any
manner permitted by law, under the judgment or decree of a court or courts of
competent jurisdiction, or otherwise, and to pursue any other remedy available
to it. If Beneficiary proceeds to foreclose the lien of this Indenture,
Beneficiary shall have the statutory power of sale if permitted by applicable
law. In the event of any such suit or proceeding, Beneficiary and/or Trustee
shall comply with any local laws applicable to any such suits or proceedings.
Any such suit or proceeding instituted by Trustee shall be brought in its name
as Trustee and any recovery or judgement shall be for the benefit of
Beneficiary. All costs and expenses (including, without limitation, reasonable
attorney's fees and expenses) incurred by Trustee or Beneficiary in connection
with any such suit or proceeding, together with interest thereon (to the extent
permitted by law) computed at the Default Rate from the date on which such costs
or expenses are incurred to the date of payment thereof, shall constitute
additional Indebtedness secured by this Indenture and shall be paid by Borrower
to Trustee or Beneficiary, as the case may be, on demand.
6.2. Power of Sale and Procedure. If an Event of Default shall have
occurred, Trustee, at Beneficiary's election, may sell or offer for sale the
Property in such portions, order and parcels as Beneficiary may determine, with
or without having first taken possession of same, to the highest bidder for
cash at public auction. In exercising such power of sale, Trustee shall give
such notice of hearing as to the commencement of the foreclosure proceedings
and shall obtain such findings or leave at court as may then be required by
applicable law and shall give such notice of such foreclosure sale and shall
advertise the time and place of such sale in such manner as may then be
provided by applicable law and shall comply in all respects with all laws
applicable to the institution, conduct, and completion of power of sale
foreclosures. Such sale shall be made in conformance with the laws of the State
in which the Property is located at the courthouse door of the county wherein
the Property is situated. All aspects of any power of sale foreclosure
commenced by Trustee hereunder shall be accomplished in such manner as
permitted or required by State law in existence on the date hereof relating to
the sale of real estate and/or relating to the sale of collateral after a
default by a debtor, as the same may be amended or supplemented, or by any
subsequent laws relating to same. At any such sale (i) whether made under the
power herein contained, State
<PAGE> 10
law, any other legal requirement or by virtue of any judicial proceeding
or any other legal right, remedy or recourse, it shall not be necessary for
Trustee to have physically present, or to have constructive possession of, the
Property (Borrower hereby covenanting and agreeing to deliver to Trustee any
portion of the Property not actually or constructively possessed by Trustee
immediately upon demand by Trustee) and the title to and right of possession of
any such property shall pass to the purchaser thereof as completely as if the
same had been actually present and delivered to such purchaser at such sale, and
(ii) the receipt of Trustee or of such other party or officer making the sale
shall be a sufficient discharge to the purchaser or purchasers for his or their
purchase money and no such purchaser or purchasers, or his or their assigns or
personal representatives, shall thereafter be obligated to see to the
application of such purchase money or be in any way answerable for any loss,
misapplication or non-application thereof.
6.3. Acceleration of Maturity. If an Event of Default shall have
occurred, Beneficiary may declare the entire outstanding Indebtedness under the
Loan Agreement, and all other sums secured hereby, to be due and payable
immediately, and upon such declaration, such Indebtedness and other sums shall
immediately become and be due and payable without demand or notice.
6.4. Leases. Trustee at the option of Beneficiary is authorized to
foreclose this Indenture subject to the rights of any tenants of the Property,
and the failure to make any such tenants parties defendant to any such
foreclosure proceedings and to foreclose their rights will not be, nor be
asserted by Borrower to be, a defense to any proceedings instituted by Trustee
and/or Beneficiary to collect the sums secured hereby or to collect any
deficiency remaining unpaid after the foreclosure sale of the Property.
6.5. Suits to Protect the Property. Beneficiary, or Trustee at
Beneficiary's election, shall have the power and authority to institute and
maintain any suits and proceedings as Beneficiary may deem advisable (a) to
prevent any impairment of the Property by any acts which may be unlawful or any
violation of this Indenture, (b) to preserve or protect its interest in the
Property, and (c) to restrain the enforcement of or compliance with any
legislation or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid, if the enforcement of or compliance with
such enactment, rule or order might impair the security hereunder or be
prejudicial to Beneficiary's interest.
6.6. Discontinuance of Proceedings; Position of Parties Restored. If
Beneficiary, or Trustee at Beneficiary's election, shall have proceeded to
enforce any right or remedy under this Indenture by foreclosure, entry or
otherwise, and such proceedings shall have been discontinued or abandoned for
any reason, or shall have been determined adversely to Beneficiary, then and in
every such instance, Borrower and Beneficiary shall, except to the extent
modified by such proceedings, be restored to their former positions and rights
hereunder, and all rights, powers and remedies of Beneficiary shall continue as
if no such proceeding had occurred or had been taken.
6.7. Borrower to Pay the Indebtedness on Any Default in Payment;
Application of Monies by Beneficiary.
<PAGE> 11
(a) If an Event of Default shall occur as a result of Borrower's
failure to pay any amount due under the Loan Agreement or this Indenture, then,
upon Beneficiary's demand, Borrower will pay to Beneficiary the whole amount
due and payable under the Loan Agreement and all other sums secured hereby. If
Borrower shall fail to pay the same forthwith upon such demand, Beneficiary, or
Trustee at Beneficiary's election, shall be entitled to sue for and to recover
judgment for the whole amount so due and unpaid together with costs and
expenses, including the reasonable compensation, expenses and disbursements of
Beneficiary's agents, attorneys and other representatives. Beneficiary shall be
entitled to sue and recover judgment as aforesaid either before, after or during
the pendency of any proceedings for the enforcement of this Indenture, and the
right of Beneficiary to recover such judgment shall not be affected by any
taking of possession or foreclosure sale hereunder, or by the exercise of any
other right, power or remedy for the enforcement of the terms of this Indenture,
or the foreclosure of the lien hereof.
(b) In case of a foreclosure sale of all or any part of the Property
and of the application of the proceeds of sale to the payment of the sums
secured hereby, Beneficiary shall be entitled to enforce payment of and to
receive all amounts then remaining due and unpaid and to recover judgment for
any portion thereof remaining unpaid, with interest.
(c) Borrower hereby agrees, to the extent permitted by law, that no
recovery of any such judgment by Beneficiary and no attachment or levy of any
execution upon any of the Property or any other property shall in any way
affect the lien of this Indenture upon the Property or any part thereof or any
lien, rights, powers or remedies of Beneficiary hereunder, but such lien,
rights, powers and remedies of Beneficiary hereunder shall continue unimpaired
as before.
ARTICLE VII
7.1. Purchase of the Property by Beneficiary. Beneficiary may be a
purchaser of the Property or any part thereof or any interest therein at any
sale thereof, whether pursuant to foreclosure, power of sale or otherwise, and
may apply the Indebtedness secured hereby to the purchase price.
7.2. Title Upon Sale; Receipt a Sufficient Discharge to Purchaser.
After the occurrence of an Event of Default hereunder, and upon the sale of the
Property or any part thereof or any interest therein by Trustee or Beneficiary,
whether pursuant to foreclosure, power of sale or otherwise, the purchaser
shall acquire good title thereto, free of the lien of this Indenture and free
of all rights of redemption, whether statutory, equitable or otherwise, in
Borrower to the extent permitted by applicable law. The receipt of the officer
making the sale under judicial proceedings or of Trustee or Beneficiary shall
be sufficient discharge to the purchaser for the purchase money, and such
purchaser shall not be obligated to see to the application thereof. All
occupants of the Property sold or any part thereof shall become tenants at
sufferance of the purchaser, and as long as a tenant is not in default under
its Lease, the purchaser will not disturb the occupancy of such tenant of the
Property during the term of its Lease. It shall not be necessary for the
purchaser at any such sale to bring any action for possession to the Property
purchased other than statutory action of forcible detainer in any justice court
having jurisdiction.
<PAGE> 12
7.3. Application of Indebtedness Toward Purchase Price. If Beneficiary
purchases the Property pursuant to foreclosure, power of sale or otherwise,
then Beneficiary may, in lieu of cash, apply all or any portion of the sums due
to Beneficiary under the Loan Agreement and this Indenture or any other
instrument securing the Indebtedness, to the unpaid balance of the purchase
price remaining after payment of any portion of the purchase price required to
be paid in cash, and the costs and expenses of the sale, compensation and other
charges relating to the sale.
ARTICLE VIII
8. Waiver of Appraisement, Valuation, Etc. Borrower hereby waives, to
the full extent it may lawfully do so, the benefit of all appraisement,
valuation, stay, moratorium, exemption from execution, extension and redemption
laws now or hereafter in force and all rights of marshaling in the event of the
sale of the Property or any part thereof or any interest therein.
ARTICLE IX
9. Appointment of Receiver. If an Event of Default shall have
occurred, Trustee and/or Beneficiary shall, as a matter of right and to the
fullest extent permitted by applicable law, be entitled, ex parte and without
notice, to the appointment of a receiver or receivers of the Property or any
part thereof, whether such receivership be incidental to a proposed sale
thereof or otherwise, and Borrower hereby consents to the appointment of such a
receiver or receivers and will not oppose any such appointment. The expenses,
including receiver's fees, attorney's fees, costs and agent's compensation,
incurred pursuant to the powers herein contained shall be secured by this
Indenture.
ARTICLE X
10. Possession, Management and Income. If an Event of Default shall
have occurred under this Indenture, Trustee or Beneficiary, without further
notice, may enter upon and take possession of the Property or any part thereof,
in any manner permitted by law, by reasonable force, summary proceedings,
ejectment or otherwise and may remove Borrower and all other Persons and any and
all property therefrom, and Trustee or Beneficiary may hold, operate and manage
the same, make all necessary or proper repairs, renewals, and replacements, and
useful alterations, additions, betterments and improvements thereto and thereon
as may seem advisable to either of them, and insure and reinsure the Property as
may seem advisable and to either of them, and may receive all earnings, income,
rents, issues and proceeds accruing with respect thereto. Any amounts so
received by Trustee or Beneficiary shall be applied (a) to pay (i) the expenses
of operating the Property and of all maintenance, repairs, renewals,
replacements, alterations, additions, betterments, improvements, taxes,
assessments, insurance premiums, reasonable compensation for the services of
Trustee and all attorneys, advisors, brokers, receivers, agents and other
employees engaged or employed by Trustee or Beneficiary and all other costs and
expenses of entering a bond and taking possession of and holding the Property,
and (ii) any lien prior to the lien of this Indenture which Beneficiary may
consider it necessary or desirable to discharge and
<PAGE> 13
then (b) in the manner provided in Article XI of this Indenture. If an Event
of Default shall have occurred under the Loan Agreement or if the Loan
Agreement shall be terminated, all sums so received by Trustee or Beneficiary
shall be applied in the manner specified in Article XI of this Indenture.
ARTICLE XI
11. Application of Proceeds. The proceeds of (a) the operation and
management of the Property pursuant to Article X of this Indenture, and (b) any
sale of the Property or any interest therein, shall, unless otherwise provided
in the Loan Agreement, be applied as follows:
First: to the costs and expenses of the sale, reasonable attorneys'
fees and expenses, Trustee's fees and expenses, court costs, and any other
expenses or advances made or incurred in the protection of the rights of
Trustee and Beneficiary or in the pursuance of any remedies hereunder;
Second: to the fullest extent permitted by applicable law, to any lien
prior to the lien of this Indenture which Beneficiary may consider it necessary
or desirable to discharge;
Third: to any Indebtedness secured by this Indenture and at the time
due and payable (whether by acceleration or otherwise;
Fourth: to Beneficiary for payment of the Notes outstanding; and
Fifth: the balance, if any, to Borrower.
ARTICLE XII
12. Remedies, Etc., Cumulative. Each legal, equitable or contractual
right, power or remedy of Trustee and Beneficiary now or hereafter provided
herein or by statute or otherwise shall be cumulative and concurrent and shall
be in addition to every other right, power and remedy, and the exercise or
beginning of the exercise by Trustee or Beneficiary of any one or more of such
rights, powers and remedies shall not preclude the simultaneous or later
exercise of any or all such other rights, powers and remedies.
ARTICLE XIII
13. No Waiver, Etc. No failure by Trustee or Beneficiary to insist
upon the strict performance of any term hereof or to exercise any right, power
or remedy consequent upon a breach hereof shall constitute a waiver of any such
term or of any such breach. No acceptance of the payment of any sums due under
this Indenture or under the Loan Agreement during the continuance of any
Default shall constitute a waiver thereof. No waiver of any breach shall affect
or alter this Indenture which shall continue in full force and effect with
respect to any other then existing or subsequent breach.
ARTICLE XIV
<PAGE> 14
14. Trustee. (a) All the rights, powers and remedies of Beneficiary
hereunder may be exercised by Trustee. Trustee shall not be under any
obligation to exercise any trust or power vested in him by this Indenture unless
Beneficiary shall have offered Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred by Trustee
in compliance herewith. Trustee shall not be liable with respect to any
action taken or omitted to be taken by Trustee in accordance with the written
directions of Beneficiary, except for Trustee's own bad faith, willful
misconduct or negligence. Trustee shall not be required to ascertain or inquire
as to the performance or observance of any of the covenants or agreements of
Borrower herein, and in the absence of written notice from Borrower or
Beneficiary stating that a Default has occurred and specifying the same,
Trustee may conclusively assume that no Default exists.
(b) Trustee may, with consent of Beneficiary, consult with
counsel (which may be counsel for Borrower) and the written advice or opinion
of such counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by him hereunder in good
faith and in accordance therewith.
(c) Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys.
(d) Any moneys received by Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by law.
(e) Beneficiary may, by instrument in writing, filed in the
office or offices where this Indenture has been recorded, and at any time or
from time to time, and without notice and without specifying any reason
therefor, and without applying to any court, remove Trustee and select a
successor trustee or trustees in the event of the death, removal, resignation,
refusal to act, or inability to act of Trustee or, in its sole discretion, for
any reason whatsoever. Trustee so ceasing to act shall duly assign, transfer
and deliver any of the property and monies held by such Trustee to the
successor appointed in Trustee's place. All powers, rights and duties and
authority of Trustee shall thereupon become vested in the successor. The
successor shall not be required to give bond or make an oath for the faithful
performance of his duties unless required by Beneficiary.
(f) Trustee may resign by the giving of notice of such
resignation in writing to Beneficiary.
(g) If more than one Trustee is appointed under this
Indenture, all rights granted to and all powers conferred upon Trustee
hereunder may be exercised by both or either of Trustees.
(h) All reasonable expenses, charges, counsel fees and other
disbursements incurred by Trustee in and about the administration of this
Indenture and executed in the performance of its duties and powers hereunder
shall be secured by this Indenture.
<PAGE> 15
ARTICLE XV
15. Right of Trustee or Beneficiary to Perform Covenants, Etc. If
Borrower shall fail to make any payment or perform any act required to be made
or performed hereunder and such failure shall not be cured within the
applicable grace period, if any, Trustee or Beneficiary, without notice to or
demand upon Borrower and without waiving or releasing any obligation or
Default, may (but shall be under no obligation to) at any time thereafter make
such payment or perform such act for the account and at the expense of Borrower
and may enter upon the Property or any part thereof for such purpose and take
all such action thereon as, in the opinion of Trustee or Beneficiary, may be
necessary or appropriate therefor. All sums so paid by Trustee or Beneficiary
and all costs and expenses (including, without limitation, attorneys' fees and
expenses) so incurred shall constitute additional Indebtedness secured by this
Indenture and shall be paid by Borrower to Trustee or Beneficiary on demand.
ARTICLE XVI
16. Certificate as to No Default, Etc.; Information. At any time and
from time to time, Borrower will deliver to Beneficiary, promptly upon request,
a certificate signed by a duly authorized officer of Borrower stating that, to
the best of the signer's knowledge after making due inquiry, there is no
Default hereunder, or if any such Default exists to his knowledge, specifying
the nature and period of existence thereof and what action Borrower is taking
or proposes to take with respect thereto. Borrower will also furnish promptly
to Beneficiary, such information with respect to the Property and the Leases as
may from time to time be requested.
ARTICLE XVII
17. Additional Instruments. Borrower, at its expense, will execute,
acknowledge, secure and deliver all such instruments and take all such action
as Trustee or Beneficiary from time to time may reasonably request for the
better assuring of the Property, rights and obligations now or hereafter
subjected to the security of this Indenture or intended so to be.
ARTICLE XVIII
18. Defeasance. This Indenture and the lien created hereby shall
terminate after the payment in full of (a) all the Indebtedness and (b) all
other sums secured hereby. Upon such termination, and upon surrender of this
Indenture for cancellation, Beneficiary shall release, without warranty, the
Property then subject to the lien hereof to the Persons entitled thereto. The
recitals in any reconveyance executed under this Indenture of any matters of
fact shall be conclusive proof of the truthfulness thereof. The grantee in such
release may be described as "the person or persons legally entitled thereto".
Trustee and/or Beneficiary, at Borrower's expense, shall execute and deliver
such instruments of release, satisfaction and termination in proper form for
recording or filing, as may be appropriate to evidence the release of (a) the
Property from the lien created hereby, and (b) any other security held by
Trustee and/or Beneficiary and such satisfaction and termination, and such
instruments, when duly executed, recorded and filed, shall conclusively
evidence the release, satisfaction and termination of this Indenture.
<PAGE> 16
ARTICLE XIX
19. Applicable Law; Severability.
(a) This Indenture shall be governed by and construed in accordance
with the laws of the State.
(b) All rights, powers and remedies provided herein may be exercised
only to the extent that the exercise thereof does not violate any applicable
law, and are intended to be limited to the extent necessary so that they will
not render this Indenture invalid, unenforceable or not entitled to be
recorded, registered or filed under any applicable law. If any term or
provision of this Indenture shall be held to be invalid, illegal or
unenforceable, the validity of the other terms and provisions hereof shall in
no way be affected thereby.
ARTICLE XX
20. Miscellaneous. This Indenture (a) may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought, and (b) shall be binding upon Borrower, its successors and assigns, and
all Persons claiming under or through Borrower or any such successor or assign,
and shall inure to the benefit of and be enforceable by Trustee and its
successors and Beneficiary and its successors and assigns. The headings in this
Indenture are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof. All agreements between Borrower and Beneficiary,
whether now existing or hereafter arising and whether written or oral, are
hereby limited so that in no contingency, whether by reason of demand or
acceleration of the maturity of any payments hereunder or under the Loan
Agreement or otherwise, shall the interest contracted for, charged, received,
paid or agreed to be paid to Beneficiary exceed the maximum amount permissible
under applicable law. If, in any circumstance whatsoever, interest would
otherwise be payable to Beneficiary in excess of the maximum lawful amount, and
if in any circumstance Beneficiary shall ever receive anything of value deemed
interest by applicable law in excess of the maximum lawful amount, and if
permitted by applicable law, an amount equal to any excessive interest shall be
applied to the reduction of advances under the Loan Agreement and not to the
payment of interest, or if such excessive interest exceeds the unpaid advances
under the Loan Agreement, such excess shall be refunded to Borrower. All
interest paid or agreed to be paid to Beneficiary shall, to the extent permitted
by applicable law, be amortized, prorated, allocated, and spread throughout the
full period until payment in full of the principal so that the interest hereon
for such full period shall not exceed the maximum amount permitted by applicable
law. This paragraph shall control all agreements between Borrower and
Beneficiary. This Indenture may be executed in any number of counterparts, each
of which shall be an original, but all of which together shall constitute one
and the same instrument. Portions of the Property consist of goods which are, or
are to become, fixtures relating to the Land and Borrower expressly covenants
and agrees that the filing of this Indenture in the real estate records of the
county where the Property is located shall also operate from the time of filing
therein as a financing statement filed as a fixture filing in
<PAGE> 17
accordance with Article 9 of the State's Uniform Commercial Code - Secured
Transactions.
ARTICLE XXI
21. Change in Method of Taxation. In the event of the passage, after
the date of this Indenture, of any law changing in any way the laws now in
force for the taxation of mortgages or debts secured thereby, for state or
local purposes, or the operation of any such taxes so as to adversely affect
the interest of Beneficiary in the Property, this Indenture or the Loan
Agreement, Borrower shall, upon demand, bear and pay the full amount (or any
partial amount) requested by Beneficiary, of taxes resulting from such changes
hereunder without offset or credit against any other sums due under the Loan
Agreement or on the Notes.
ARTICLE XXII
22. Trustee's Acceptance. Trustee accepts the trust created hereby
when this Indenture, duly executed and acknowledged, is made a public record
in the State and county where the Property is located, as provided by the laws
of the State.
ARTICLE XXIII
23. No Petition. Trustee and Beneficiary hereby covenant and agree
that they will not institute against, or join any Person in instituting against
Borrower, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal
or state bankruptcy or similar law at any time other than on a date which is at
least one (1) year and one (1) day after the payment in full of the Notes;
provided, however, that nothing in this Article shall constitute a waiver of
any right to indemnification, reimbursement or other payment from Borrower
pursuant to the Loan Agreement.
ARTICLE XXIV
24. Indenture Secures Future Advances. This Indenture is given to
secure not only the amount initially secured by this Indenture, but also such
future advances, whether such advances are obligatory or are to be made at the
option of Trustee or Beneficiary, or otherwise, as are made within fifteen (15)
years from the date hereof, to the same extent as if such future advances were
made on the date of the execution of this Indenture. The total amount of
Indebtedness presently secured hereby is Fifty Million Dollars ($50,000,000.00)
and the Indebtedness (including present and future obligations) that may be so
secured may decrease or increase from time to time, but the total unpaid
balance so secured at one time shall not One Hundred Million Dollars
($100,000,000.00). This Indenture secures a revolving line of credit under
which Advances may be made, repaid, and reborrowed on a revolving basis as
provided for in the Loan Agreement.
ARTICLE XXV
25. Approval of Legal Description. Borrower has read and does hereby
approve the legal description of the Land which Is the subject hereof, as set
forth in
<PAGE> 18
Exhibit A attached hereto, and hereby indemnifies Trustee and
Beneficiary and their attorneys with respect to any liability which might arise
as a consequence of any error or omission therein.
ARTICLE XXVI
26. Loan Agreement. The terms, provisions, conditions, representations
and warranties and covenant of the Loan Agreement are incorporated herein by
reference. In the event of a conflict between this Indenture and the Loan
Agreement, the Loan Agreement shall control. The Loan Agreement contains
provisions permitting Borrower to obtain releases of portions of the Property
from this Indenture from time to time.
IN WITNESS WHEREOF, Borrower has caused this Indenture to be executed
and attested by its proper officers thereunto duly authorized, as of the day
and year first above written and has executed the same in order that this
Indenture may qualify as a financing statement under the Uniform Commercial
Code of the State as to such of the Property, if any, constitutes personalty.
KOGER EQUITY, INC.,
Attest: a Florida corporation
By: /s/ Diana R. Payne By: /s/ G. Danny Edwards
Name: Diana R. Payne Name: G. Danny Edwards
Its Asst. Secretary Title: Treasurer
[AFFIX CORPORATE SEAL]
STATE OF Georgia : COUNTY OF Camden :
I, Katherine P. Kime , a Notary Public of the County of Camden , State of
Georgia , do hereby certify that Diana R. Payne , personally appeared before me
this day and acknowledged that she is the Asst. Secretary of KOGER EQUITY,
INC., a Florida corporation, and that by authority duly given and as an act of
the corporation, the foregoing instrument was signed in its name by its
Treasurer , sealed with its corporate seal, and attested by himself/herself as
its Asst. Secretary.
Witness my hand and official seal this 7th day of April , 1997.
/s/ Katherine P. Kime
Notary Public
My commission expires: 9-28-98
[NOTARIAL SEAL]
<PAGE> 19
EXHIBIT A
DESCRIPTION OF REAL PROPERTY
[LEGAL DESCRIPTION OF REAL PROPERTY NOT INCLUDED IN FORM 8-K FILING
WITH SECURITIES AND EXCHANGE COMMISSION]
<PAGE> 20
EXHIBIT B
Permitted Encumbrances
[NOT INCLUDED IN FORM 8-K FILING WITH SECURITIES AND EXCHANGE COMMISSION]
<PAGE> 1
Exhibit 10(k)(4)(b)
THIS INSTRUMENT PREPARED BY,
AND FOLLOWING RECORDING RETURN TO:
Douglas G. Stanford, Esq.
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
50 North Laura Street, Suite 2800
Jacksonville, Florida 32202
ASSIGNMENT OF LEASES AND RENTS
FROM
KOGER EQUITY, INC.
TO
FIRST UNION NATIONAL BANK OF FLORIDA
AND
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
DATED AS OF APRIL 7 , 1997
<PAGE> 2
ASSIGNMENT OF LEASES AND RENTS
THIS ASSIGNMENT OF LEASES AND RENTS (this "Assignment") is made and
executed as of this 7th day of April, 1997, from
KOGER EQUITY, INC., a Florida corporation ("Assignor"), whose address is 3986
Boulevard Center Drive, Suite 101, Jacksonville, Florida 32207 Attention: J.C.
Teagle, Executive Vice President, to and in favor of
FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association ("FUNB"),
whose address is 214 North Hogan Street, Jacksonville, Florida 32202 Attention:
Real Estate Portfolio Management, and MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, a New York banking corporation ("MGT"), whose address is 60 Wall Street,
New York, New York 10260 Attention: Timothy O'Donovan (FUNB and MGT together
being referred to as "Assignee"),
which terms Assignor and Assignee, whenever hereinafter used will be construed
to refer to and include the heirs, legal representatives, executors,
administrators, successors and assigns of said parties.
R E C I T A L S:
A. Assignor is the mortgagor under that certain Deed of Trust and
Security Agreement given by Assignor to Assignee, as beneficiary, dated of even
date herewith and recorded or to be recorded in the public records of Guilford
County, North Carolina (the "Deed of Trust"); securing those certain Revolving
Promissory Notes of even date herewith (the "Notes"), encumbering certain real
property interests located in Guilford County, North Carolina as more
particularly described on attached Exhibit A (the "Premises").
B. To further secure the payment, discharge and performance of
the Notes, and as a condition to Assignee's extension of credit to Assignor
pursuant to the Notes, Assignor has agreed to execute this Assignment for the
purposes set forth herein.
NOW, THEREFORE, to further secure the payment, discharge and
performance of the indebtedness of Assignor to Assignee evidenced by the Notes
and in consideration of Assignee's acceptance of the Notes and in further
consideration of the sum of Ten Dollars ($10.00) paid by Assignee to Assignor,
receipt and sufficiency of which are hereby acknowledged, Assignor hereby
assigns to Assignee all of Assignor's right, title and interest in, to and
under any and all present and future leases of or in the Premises ("Leases")
and any and all rents, revenues, issues and profits (including Assignor's
interest in any security deposits relating thereto) arising out of or accruing
from the Leases whether now or hereafter due ("Rents"), said Leases and Rents
being deemed part of the security for the indebtedness herein mentioned and are
encumbered, transferred and conveyed by this Assignment, and in furtherance
thereof, does hereby covenant and agree with Assignee as follows:
<PAGE> 3
1. Assignor will notify Assignee in writing (but without any right of
approval or denial on the part of Assignee) of any termination, substitution or
material modification of any Leases involving 10,000 or more Koger Net Square
Feet (as defined in the Loan Agreement).
2. Assignor will, at its cost and expense, observe, perform and
discharge, or cause to be observed, performed and discharged, all of the
obligations and undertakings of Assignor or its agents under the Leases, and
will use its reasonable best efforts in the exercise of sound business judgment
to enforce or secure, or cause to be enforced or secured, the performance of
each and every obligation and undertaking of the respective tenants under the
Leases, and will appear in and defend, at its cost and expense, any action or
proceeding arising under or in any manner connected with the Leases or the
obligations and undertakings of any tenant thereunder. Assignor will not do
or permit to be done anything to impair the security hereof, including without
limitation the execution of any other assignment of Assignor's interest in the
Leases or the Rents, without Assignee's prior written consent.
3. This Assignment is intended to operate as an absolute and immediate
assignment of the Leases and the Rents; however, unless and until a default
occurs under the Notes, the Deed of Trust or this Assignment, Assignor will
have a license to collect the Rents as and when the same become due and
payable. Assignor hereby agrees that the respective tenants under the Leases,
upon notice from Assignee of the occurrence of a default hereunder, will
thereafter pay to Assignee the Rents due and to become due under the Leases
without any obligation to determine whether or not such a default does in fact
exist. Assignor, without written approval of Assignee, will not collect or
accept Rent for more than one (1) month in advance; provided, however Assignor
may accept Rent two (2) months in advance if such Rent accepted two (2) months
in advance does not exceed five percent (5%) of the Rent collected during the
applicable month.
4. Upon payment in full of the principal sum and interest, of the
Notes, this Assignment shall become and be void and of no effect. Assignor
hereby authorizes and directs the lessees named in said leases or any other or
future lessees or occupants of the Premises described therein or in the Deed of
Trust upon receipt from the Assignee of written notice to the effect that
Assignee is then the holder of the Notes and the Deed of Trust and that a
default exists thereunder or under the Assignment, to pay over to the Assignee
all rents, income, profits and revenues hereby assigned and to continue so to
do until otherwise notified by Assignee.
5. This assignment of Leases and Rents as provided herein will not be
deemed or construed to constitute Assignee as a mortgagee in possession
of the Premises nor to obligate Assignee to take any action or to incur expenses
or perform or discharge any obligation, duty or liability of Assignor under any
Lease, or for the control, care, management, or repair of the Premises; nor will
it operate to make Assignee, except in the event of Assignee's negligence,
recklessness or wilful misconduct, responsible or liable for any waste committed
on the Premises by the tenants or any other parties or for any dangerous or
defective condition of the Premises, or for any act or omission relating to the
management, upkeep, repair, or control of the Premises that results in loss or
injury or death to any person. Except in the event of Assignee's negligence,
recklessness or wilful misconduct, Assignee will not be liable for any loss
sustained by
<PAGE> 4
Assignor resulting from Assignee's failure to lease the Premises after default
or from any other act or omission of Assignee in managing the Premises after
default. Assignor will and does hereby indemnify and agree to hold harmless
Assignee from and against any and all liability, loss, cost, damage or expense
which may be incurred under the Leases or by reason of this assignment of
Leases and, to the extent that a claim is made against Assignee prior to the
time Assignee takes possession of the Premises, from any and all claims and
demands whatsoever which may be asserted against Assignee by reason of any
alleged obligations or undertakings on its part to perform or discharge any of
the terms, covenants, or agreements contained in the Leases. Should Assignee
incur any such liability under the Leases or by reason of this assignment of
Leases and Rents or in defense of any such claims or demands, the amount
thereof, including costs, expenses, and reasonable attorneys' and paralegals'
fees and costs, will be secured hereby and Assignor will reimburse Assignee
therefor immediately upon demand and upon the failure of Assignor so to do,
Assignee may, at its option, declare all sums secured hereby immediately due and
payable, or may charge the costs thereof to Assignor as an advance under the
Notes and secured by this Assignment.
6. To the extent not so provided by applicable law, each Lease will
provide that, in the event of enforcement by Assignee of the remedies provided
for by law or by the Notes, the Deed of Trust or this Assignment, the lessee
thereunder will, upon request of any person succeeding to the interest of
Assignor as a result of such enforcement, automatically become the lessee of
said successor in interest, without change in the terms or other provisions of
such Lease. Any such successor in interest will not be bound by any payment of
rent or additional rent made more than one (1) month or two (2) months in
advance (as applicable in accordance with Paragraph 3 above). The Leases are
and at all times shall be subject and subordinate in all respects to the Deed
of Trust, and to all renewals, modifications, amendments, consolidations,
replacements, refinancings and extensions of the Deed of Trust, to the full
extent of all principal, interest and all other amounts secured thereby.
Provided that a tenant is not in default under its Lease, Assignee shall not
disturb the occupancy of such tenant under its Lease during the term of such
Lease, notwithstanding foreclosure of the Deed of Trust, acceptance of a deed
in lieu of foreclosure or exercise of any other remedy provided in the Deed of
Trust, or pursuant to the laws of the State of North Carolina. If requested by
a tenant under any of the Leases or upon Assignee's request, Assignor shall
enter into a subordination, nondisturbance and attornment agreement (reasonably
acceptable in form and substance to Assignee) with such tenant whereby Assignee
will agree to not disturb the tenant in its possession of the Premises provided
such tenant is not in default under its Lease and the tenant will agree to
attorn to Assignee if Assignee takes possession of the Premises.
7. Upon a default under the Notes, the Deed of Trust or this
Assignment, Assignee may at its option, without notice and without regard to
the adequacy of the security for the obligations set forth in the Notes, either
in person, by court appointed receiver or by agent, with or without bringing
any action or proceeding, demand and thereupon take possession of the Premises,
to have, hold, manage, lease and operate the same on such terms and for such
period of time as Assignee may deem proper, and either with or without taking
possession of the Premises in its own name, demand and receive the Rents in the
possession of Assignor at the time of Assignee's written demand or collected
thereafter, including those past due and unpaid, with full power to
<PAGE> 5
make from time to time all alterations, renovations, repairs, or replacements
thereto or thereof as may seem proper to Assignee, and to apply such Rents to
the payment of: (a) all reasonable expenses of managing the Premises,
including, without limitation, the salaries, fees and wages of the managing
agent and such other employees as Assignee may deem necessary or desirable, all
taxes, charges, claims, assessments, liens, premiums for all insurance which As
signee may deem necessary or desirable, costs of renovations, repairs, or
replacements, and all expenses incident to taking and retaining possession of
the Premises and protecting and preserving the same; or (b) the principal sum
and interest thereon of the Notes, together with all costs and attorneys' and
paralegals' fees and costs; all in such order or priority as Assignee in its
sole discretion may determine, any custom or use to the contrary
notwithstanding.
8. This Assignment is made and accepted without prejudice to any of
the rights and remedies possessed by Assignee under the remaining terms and
conditions of the Notes or the Deed of Trust, and the right of Assignee to
exercise its remedies under this Assignment may be exercised by Assignee either
prior to, simultaneously with, or subsequent to any action taken by it under
the remaining terms and conditions of the Notes or the Deed of Trust. Each and
every right, remedy and power granted to Assignee by this Assignment will be
cumulative and in addition to any other right, remedy and power given by the
remaining terms and conditions of the Notes, the Deed of Trust or this
Assignment, or now or hereafter existing in equity, at law or by virtue of
statute or otherwise. Nothing contained in this Assignment, and no act done or
omitted by Assignee pursuant to the powers and rights granted it hereunder, nor
the failure of Assignee to avail itself of any of the rights and remedies under
this Assignment, will be construed or deemed to be a waiver of any of
Assignee's rights and remedies under this Assignment, nor will such exercise or
omission to exercise of the powers and rights granted Assignee hereunder be
deemed to constitute a waiver of its rights and remedies under the remaining
terms and conditions of the Notes or the Deed of Trust.
9. Assignee may take or release other security for the payment of the
indebtedness under the Notes and the Deed of Trust, may release any party
primarily or secondarily liable therefor, and may apply any other security held
by it to the satisfaction of such indebtedness without prejudice to any of its
rights under this Assignment.
10. The term "Lease" or "Leases" as used herein, means said Leases
hereby assigned or any extension or renewal thereof, and any leases
subsequently executed during the term of this Assignment covering the Premises
or any part thereof. At Assignee's request, Assignor will assign and transfer
to Assignee any and all subsequent leases upon all or any part of the Premises
and to execute and deliver at the request of Assignee all such further
assurances and assignments in the Premises as Assignee will require from time
to time in its sole discretion.
11. This Assignment, together with the covenants and warranties
therein contained, shall inure to the benefit of Assignee and any subsequent
holder of the Notes and the Deed of Trust shall be binding upon Assignor, their
successors, executors, personal representatives, and assigns, and any
subsequent owner of the Premises.
<PAGE> 6
12. This Assignment shall expire and terminate upon the payment in
full of the Notes and any other Indebtedness secured by the Deed of Trust and
any cancellation, satisfaction or release of the Deed of Trust shall constitute
a cancellation, satisfaction, or release of this Assignment. In the event that
a specific property is released from the lien of the Deed of Trust, then such
property and the Leases relating to it shall, effective with the release, also
be released from this Assignment.
IN WITNESS WHEREOF, Assignor has executed this Assignment under seal
the day and year first above written.
ASSIGNOR:
KOGER EQUITY, INC.,
Attest: a Florida corporation
By: /s/ Diana R. Payne By: /s/ G. Danny Edwards
-------------------------- ----------------------------
Name: Diana R. Payne Name: G. Danny Edwards
------------------------- ----------------------------
Its Asst. Secretary Its Treasurer
---- ----------------------------
[AFFIX CORPORATE SEAL]
STATE OF Georgia :
COUNTY OF Camden :
I, Katherine P. Kime, a Notary Public of the County of Camden, State of
Georgia, do hereby certify that Diana R. Payne, personally appeared before me
this day and acknowledged that she is the Asst. Secretary of KOGER EQUITY,
INC., a Florida corporation, and that by authority duly given and as an act of
the corporation, the foregoing instrument was signed in its name by its
Treasurer , sealed with its corporate seal, and attested by himself/herself as
its Asst. Secretary.
Witness my hand and official seal this 7th day of April , 1997.
Katherine P. Kime
-----------------------------
Notary Public
My commission expires:9-28-98
[NOTARIAL SEAL]
<PAGE> 7
EXHIBIT A
LEGAL DESCRIPTION OF REAL PROPERTY
[LEGAL DESCRIPTION OF REAL PROPERTY NOT INCLUDED IN FORM 8-K FILING WITH
SECURITIES AND EXCHANGE COMMISSION]
<PAGE> 1
Exhibit 10(k)(5)(a)
ASSIGNMENT OF CONTRACTS, LICENSES AND PERMITS
FROM
KOGER EQUITY, INC.
TO
FIRST UNION NATIONAL BANK OF FLORIDA
AND
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
DATED AS OF APRIL 7 , 1997
<PAGE> 2
- --------------------------------------------------------------------------------
ASSIGNMENT OF CONTRACTS, LICENSES AND PERMITS
- --------------------------------------------------------------------------------
THIS ASSIGNMENT OF CONTRACTS, LICENSES AND PERMITS (this "Assignment")
is made and executed this 7th day of April, 1997, by
KOGER EQUITY, INC., a Florida corporation ("Borrower"), whose address is 3986
Boulevard Center Drive, Suite 101, Jacksonville, Florida 32207 Attention:
J.C. Teagle, Executive Vice President,
to and in favor of
FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association ("FUNB"),
whose address is 214 North Hogan Street, Jacksonville, Florida 32202 Attention:
Real Estate Portfolio Management, and MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, a New York banking corporation ("MGT"), whose address is 60 Wall Street,
New York, New York 10260 Attention: Timothy O'Donovan (FUNB and MGT together
being referred to as "Lender"),
which terms Borrower and Lender, whenever hereinafter used will be construed to
refer to and include the heirs, legal representatives, executors,
administrators, successors and assigns of said parties.
BACKGROUND. Borrower is indebted to Lender (the "Loan") pursuant to
those certain Revolving Promissory Notes (the "Notes") secured by and subject
to, among other documents, that certain Deed to Secure Debt, Assignment of
Leases and Rents, and Security Agreement (the "Deed to Secure Debt")
encumbering real property and improvements now or hereafter located thereon
located in DeKalb County, Georgia, and being more particularly described on
attached Exhibit A (the "Property"), and by a certain Revolving Credit Loan
Agreement (the "Loan Agreement") setting forth certain terms, covenants and
conditions with respect to such indebtedness, all being dated as of even date
herewith, given by Borrower to Lender, which Notes, Deed to Secure Debt and
Loan Agreement, this Assignment, and other related loan documents, together
with any modifications, extensions and amendments thereof, collectively are
referred to herein as the "Loan Documents." In order to further secure the
Obligations, as such term is defined in the Loan Agreement, Lender has
requested, and Borrower has agreed to provide, this Assignment on the terms,
covenants and conditions hereinafter set forth.
ACCORDINGLY, for good and valuable consideration, and as an inducement
to Lender to make the Loan to Borrower, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
for the purpose of
<PAGE> 3
further securing the observance and performance of the Obligations, Borrower
and Lender hereby agree as follows:
1. Assignment of Contract Documents. Borrower hereby grants, transfers
and assigns to Lender, its successors and assigns, all of Borrower's right,
title and interest in and to those contracts, licenses, permits, agreements,
approvals and other documents described on attached Exhibit B (hereinafter,
together with any changes, extensions, revisions, modifications or guarantees
of performance thereof, called the "Contract Documents") relating to the
acquisition, development, ownership or use of the Property. Lender agrees that
upon the payment and performance in full of all the Obligations, this
assignment shall become null and be void and of no further force and effect.
2. Representations and Warranties. Borrower represents and warrants
to Lender, its successors and assigns, as follows:
(a) There is no assignment of any of Borrower's rights under any of
the Contract Documents to any person or entity, other than Lender.
(b) Borrower is not in default under any of the Contract Documents and
knows of no default on the part of any other party to any of the Contract
Documents.
(c) Borrower has not done nor omitted to do any act so as to be
estopped from exercising any of its rights under any of the Contract Documents.
(d) Borrower is not prohibited under any agreement with any other
person or under any judgment or decree from the execution and delivery of this
assignment or the performance of each and every covenant of Borrower hereunder
or in the Contract Documents, except as may be set forth in the Contract
Documents.
(e) No action has been brought or threatened which would in any way
prohibit or impair the execution and delivery of this assignment or the
performance of each and every covenant of Borrower hereunder or in the Contract
Documents.
3. Performance of Obligations under Contract Documents. Borrower will
(i) fulfill, perform and observe each and every condition and covenant of
Borrower contained in any of the Contract Documents; (ii) give prompt notice to
Lender of any claim of default under any of the Contract Documents given to
Borrower or given by Borrower, together with a complete copy or statement of
any information submitted or referenced in support of such claim; (iii) at the
sole cost and expense of Borrower and in the exercise of sound business
judgment, enforce the performance and observance of each and every covenant and
condition of the Contract Documents to be performed or observed by any other
party to any of the Contract Documents; and (iv) appear in and defend any
action growing out of or in any manner connected with any of the Contract
Documents.
<PAGE> 4
4. Modifications and Waivers of Contract Documents. Except in the
ordinary course of business and in the exercise of sound business judgment,
Borrower will not (i) modify the terms of the Contract Documents unless
required so to do by the terms of the Contract Documents or by law; or (ii)
waive, or release any person from the observance or performance of any
obligation to be performed under the terms of the Contract Documents or
liability on account of any warranty given by them, unless consented to by
Lender in its reasonable discretion.
5. Rights Assigned. The rights assigned hereunder include all of
Borrower's right and title (i) to modify the Contract Documents; (ii) to
terminate the Contract Documents; and (iii) to waive, or release the
performance or observance of any obligation or condition of the Contract
Documents; provided, however, these rights shall not be exercised by Lender
unless Borrower is in default hereunder or under the other Loan Documents.
6. Defaults. Borrower shall be in default under this Assignment upon
the occurrence of any of the following events:
(a) Should Borrower fail to perform or observe any covenant of
Borrower contained in this Assignment, and the same is not cured within ten
(10) days after notice of such default is provided by Lender to Borrower;
(b) Should any representation or warranty of Borrower herein
contained prove untrue or misleading in any material respect; or
(c) Should Borrower fail to perform promptly any undertaking of
Borrower set forth in any of the Contract Documents, and the same is not cured
within ten (10) days after notice of such default is provided by Lender to
Borrower.
A default of Borrower under this Assignment will constitute an Event
of Default under the other Loan Documents.
7. Remedies.
(a) Upon the occurrence of a default hereunder, or an Event of Default
as defined in the Loan Agreement, Lender may exercise its remedies as provided
in the Loan Agreement, and in addition to such remedies may take possession of
all Contract Documents constituting plans and specifications, site plans,
surveys and architectural or engineering drawings or sketches reasonably
required by Lender in the exercise of its rights and remedies hereunder.
Furthermore, should Borrower fail to perform or observe any covenant or comply
with any condition contained in any of the Contract Documents and such failure
would cause irreparable injury to the Property including, but not limited to,
the revocation or expiration of any permit or license issued in connection with
the use of the Property, then Lender, but without obligation to do so, without
notice to or demand on Borrower, and without releasing Borrower from its
obligations to do so, may perform such covenant or condition and, to the extent
that Lender shall incur any costs or pay any monies in connection therewith,
including any costs or expenses of litigation,
<PAGE> 5
such costs, expense or payment shall be included in the indebtedness secured
hereby and by the Deed to Secure Debt and shall bear interest from the payment
of such costs, monies or expenses thereof at the then applicable rate set forth
in the Notes for amounts advanced by Lender on behalf of Borrower.
(b) Borrower hereby indemnifies and agrees to hold harmless Lender
from and against any and all losses, costs, damages, fees and expenses
whatsoever associated with the exercise of Lender's rights under this
Assignment and shall release Lender from all liability whatsoever for the
exercise of such rights and all actions taken pursuant thereto, not including
any negligent actions of Lender.
(c) The remedies herein provided shall be in addition to and not in
substitution for the rights and remedies which would otherwise be vested in
Lender in any of the other Loan Documents, all of which rights and remedies are
specifically reserved by Lender. The failure to exercise any of the remedies
herein provided shall not constitute a waiver thereof, nor shall the use of any
of the remedies hereby provided prevent the subsequent or concurrent resort to
any other remedy or remedies. It is intended that this clause shall be broadly
construed so that all remedies herein provided for or otherwise available to
Lender shall remain available to Lender until all sums due it by reason of this
Assignment have been paid to it in full and all obligations incurred by it in
connection with the construction or operation of the contemplated improvements
on the Property have been fully discharged without loss or damage to Lender.
8. No Obligation of Lender. Lender shall not be obligated to perform
or discharge any obligation of Borrower under any of the Contract Documents,
and Borrower agrees to indemnify and hold Lender harmless against any and all
liability, loss or damage which Lender may incur under any of the Contract
Documents or under or by reason of this assignment and of and from all claims
and demands whatsoever which may be asserted against it by reason of an act of
Lender under any of the terms of this assignment or under the Contract
Documents, provided that Lender does not provide such acts in a negligent
manner.
9. Miscellaneous. This Assignment shall be binding upon Borrower, its
successors and assigns, and shall inure to the benefit of Lender, its
successors, successors in title and assigns. If any term of this Assignment or
any application thereof will be invalid, illegal or unenforceable, the
remainder of this Assignment and any other application of such term will not be
affected thereby. This Assignment shall be governed by and construed in
accordance with the laws of the State of Georgia. In the event of conflict
between the terms and conditions of this Assignment and the terms and
conditions of the Loan Documents, the terms and conditions of the Loan
Documents will govern.
IN WITNESS WHEREOF, the undersigned have caused this Assignment to be
executed by their authorized officers as of the day and year first above
written.
<PAGE> 6
BORROWER:
Signed, sealed and delivered KOGER EQUITY, INC., a
in the presence of: Florida corporation
/s/ Janice R. Long By:/s/ G. Danny Edwards
- ---------------------------- -----------------------------
Witness Name: G. Danny Edwards
--------------------------
Title: Treasurer
-------------------------
Attest: /s/ Diana R. Payne
------------------------
Name: Diana R. Payne
--------------------------
Title: Assistant Secretary
-------------------------
[CORPORATE SEAL]
LENDER:
Signed, sealed and delivered FIRST UNION NATIONAL BANK OF
in the presence of: FLORIDA, a national banking association
/s/ Janice R. Long By: /s/ Stephen C. Franklin
- ---------------------------- ----------------------------
Witness Name: Stephen C. Franklin
--------------------------
Title: Sr. Vice President
-------------------------
Attest: /s/ Andy Hogshead
------------------------
Name: Andy Hogshead
------------------------
Title: Vice President
-------------------------
[CORPORATE SEAL]
Signed, sealed and delivered MORGAN GUARANTY TRUST
in the presence of: COMPANY OF NEW YORK,
a New York banking corporation
/s/ Lea M. Rivera By: /s/ Timothy V. O'Donovan
- ---------------------------- ----------------------------
Witness Name: Timothy V. O'Donovan
--------------------------
Title: Vice President
-------------------------
Attest: /s/ Silke Ossenkohp
--------------------------
Name: Silke Ossenkohp
--------------------------
Title: Assistant Secretary
------------------------
[CORPORATE SEAL]
Schedule of Exhibits:
Exhibit A Description of Property
Exhibit B Description of Contract Documents
<PAGE> 7
EXHIBIT A
DESCRIPTION OF PROPERTY
[NOT INCLUDED IN FORM 8-K FILING WITH SECURITIES AND EXCHANGE COMMISSION]
<PAGE> 8
EXHIBIT B
DESCRIPTION OF CONTRACT DOCUMENTS
(a) All contracts or agreements, now existing or hereafter executed, with
general contractors, subcontractors, materialmen, suppliers and/or
laborers in connection with or pertaining to the construction of
buildings or any other improvements on the Property.
(b) Any contracts or agreements for land surveyor services between
Borrower and any surveyor which is entered into with respect to the
surveys to be prepared for the Property; and all surveys, surveyor
costs, and maps prepared by any surveyor in connection with the
Property.
(c) Any agreements for architectural/engineering services between Borrower
and any architect/engineer which is entered into with respect to the
construction of improvements on the Property, and all drawings, plans
and specifications, and site plans prepared by any architect/engineer
in connection with the construction of improvements on the Property.
(d) All warranties and guaranties relating to improvements now or
hereafter constructed or installed on the Property.
(e) Any management agreement between Borrower and a project operation
manager related to the Property.
(f) Any development fee agreement between Borrower and a project
development manager related to the Property.
(g) Any and all permits, licenses or other authorizations and approvals in
favor of or in the name of Borrower or running with title to the
Property, now or hereafter existing or granted, with
respect to the ownership, development, use and occupancy of the
Property for its intended purpose, including without limitation,
building and excavation permits, plat and subdivision approvals,
certificates of occupancy or completion, permits for driveway
connection and highway signalization, storm water management, water
wells, water distribution systems, sewage collection systems, dredge
and fill, environmental protection, historical or archaeological
protection, and any other permit, license, or other authorization
necessary or advisable to comply with any governmental requirements
concerning the Property or its intended use, or to comply with any
private agreement concerning such Property to which Borrower is a
party or under or in compliance with which Borrower is bound to
perform.
(h) Any and all utility service agreements wherein a utility company
and/or a governmental utility service provider has agreed to provide
utilities to the Property.
(i) Any agreement to provide sewer effluent for irrigation of the Property.
<PAGE> 9
(j) All contracts, binders or other agreements between Borrower and a
buyer of the Property for the purchase and sale of all or any part of
the Property, including such contract binders or other agreements
which may hereafter come into existence with respect to the Property.
<PAGE> 1
Exhibit 10(k)(5)(b)
ASSIGNMENT OF CONTRACTS, LICENSES AND PERMITS
FROM
KOGER EQUITY, INC.
TO
FIRST UNION NATIONAL BANK OF FLORIDA
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
DATED AS OF APRIL 7 , 1997
<PAGE> 2
ASSIGNMENT OF CONTRACTS, LICENSES AND PERMITS
THIS ASSIGNMENT OF CONTRACTS, LICENSES AND PERMITS (this "Assignment")
is made and executed this 7th day of April, 1997, by
KOGER EQUITY, INC., a Florida corporation ("Borrower"), whose address is 3986
Boulevard Center Drive, Suite 101, Jacksonville, Florida 32207 Attention:
J.C. Teagle, Executive Vice President,
to and in favor of
FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association ("FUNB"),
whose address is 214 North Hogan Street, Jacksonville, Florida 32202 Attention:
Real Estate Portfolio Management, and MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, a New York banking corporation ("MGT"), whose address is 60 Wall Street,
New York, New York 10260 Attention: Timothy O'Donovan (FUNB and MGT together
being referred to as "Lender"),
which terms Borrower and Lender, whenever hereinafter used will be construed to
refer to and include the heirs, legal representatives, executors,
administrators, successors and assigns of said parties.
BACKGROUND. Borrower is indebted to Lender (the "Loan") pursuant to
those certain Revolving Promissory Notes (the "Notes") secured by and subject
to, among other documents, that certain Deed of Trust and Security Agreement
(the "Deed of Trust") encumbering real property and improvements now or
hereafter located thereon located in Guilford County, North Carolina, and being
more particularly described on attached Exhibit A (the "Property"), and by a
certain Revolving Credit Loan Agreement (the "Loan Agreement") setting forth
certain terms, covenants and conditions with respect to such indebtedness, all
being dated as of even date herewith, given by Borrower to Lender, which Notes,
Deed of Trust and Loan Agreement, this Assignment, and other related loan
documents, together with any modifications, extensions and amendments thereof,
collectively are referred to herein as the "Loan Documents." In order to
further secure the Obligations, as such term is defined in the Loan Agreement,
Lender has requested, and Borrower has agreed to provide, this Assignment on
the terms, covenants and conditions hereinafter set forth.
ACCORDINGLY, for good and valuable consideration, and as an inducement
to Lender to make the Loan to Borrower, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
for the purpose of
<PAGE> 3
further securing the observance and performance of the Obligations, Borrower
and Lender hereby agree as follows:
1. Assignment of Contract Documents. Borrower hereby grants, transfers
and assigns to Lender, its successors and assigns, all of Borrower's right,
title and interest in and to those contracts, licenses, permits, agreements,
approvals and other documents described on attached Exhibit B (hereinafter,
together with any changes, extensions, revisions, modifications or guarantees
of performance thereof, called the "Contract Documents") relating to the
acquisition, development, ownership or use of the Property. Lender agrees that
upon the payment and performance in full of all the Obligations, this
assignment shall become null and be void and of no further force and effect.
2. Representations and Warranties. Borrower represents and warrants
to Lender, its successors and assigns, as follows:
(a) There is no assignment of any of Borrower's rights under any of
the Contract Documents to any person or entity, other than Lender.
(b) Borrower is not in default under any of the Contract Documents and
knows of no default on the part of any other party to any of the Contract
Documents.
(c) Borrower has not done nor omitted to do any act so as to be
estopped from exercising any of its rights under any of the Contract Documents.
(d) Borrower is not prohibited under any agreement with any other
person or under any judgment or decree from the execution and delivery of this
assignment or the performance of each and every covenant of Borrower hereunder
or in the Contract Documents, except as may be set forth in the Contract
Documents.
(e) No action has been brought or threatened which would in any way
prohibit or impair the execution and delivery of this assignment or the
performance of each and every covenant of Borrower hereunder or in the Contract
Documents.
3. Performance of Obligations under Contract Documents. Borrower will
(i) fulfill, perform and observe each and every condition and covenant of
Borrower contained in any of the Contract Documents; (ii) give prompt notice to
Lender of any claim of default under any of the Contract Documents given to
Borrower or given by Borrower, together with a complete copy or statement of
any information submitted or referenced in support of such claim; (iii) at the
sole cost and expense of Borrower and in the exercise of sound business
judgment, enforce the performance and observance of each and every covenant and
condition of the Contract Documents to be performed or observed by any other
party to any of the Contract Documents; and (iv) appear in and defend any
action growing out of or in any manner connected with any of the Contract
Documents.
<PAGE> 4
4. Modifications and Waivers of Contract Documents. Except in the
ordinary course of business and in the exercise of sound business judgment,
Borrower will not (i) modify the terms of the Contract Documents unless
required so to do by the terms of the Contract Documents or by law; or (ii)
waive, or release any person from the observance or performance of any
obligation to be performed under the terms of the Contract Documents or
liability on account of any warranty given by them, unless consented to by
Lender in its reasonable discretion.
5. Rights Assigned. The rights assigned hereunder include all of
Borrower's right and title (i) to modify the Contract Documents; (ii) to
terminate the Contract Documents; and (iii) to waive, or release the
performance or observance of any obligation or condition of the Contract
Documents; provided, however, these rights shall not be exercised by Lender
unless Borrower is in default hereunder or under the other Loan Documents.
6. Defaults. Borrower shall be in default under this Assignment upon
the occurrence of any of the following events:
(a) Should Borrower fail to perform or observe any covenant of
Borrower contained in this Assignment, and the same is not cured within ten
(10) days after notice of such default is provided by Lender to Borrower;
(b) Should any representation or warranty of Borrower herein contained
prove untrue or misleading in any material respect; or
(c) Should Borrower fail to perform promptly any undertaking of
Borrower set forth in any of the Contract Documents, and the same is not cured
within ten (10) days after notice of such default is provided by Lender to
Borrower.
A default of Borrower under this Assignment will constitute an Event
of Default under the other Loan Documents.
7. Remedies.
(a) Upon the occurrence of a default hereunder, or an Event of Default
as defined in the Loan Agreement, Lender may exercise its remedies as provided
in the Loan Agreement, and in addition to such remedies may take possession of
all Contract Documents constituting plans and specifications, site plans,
surveys and architectural or engineering drawings or sketches reasonably
required by Lender in the exercise of its rights and remedies hereunder.
Furthermore, should Borrower fail to perform or observe any covenant or comply
with any condition contained in any of the Contract Documents and such failure
would cause irreparable injury to the Property including, but not limited to,
the revocation or expiration of any permit or license issued in connection with
the use of the Property, then Lender, but without obligation to do so, without
notice to or demand on Borrower, and without releasing Borrower from its
obligations to do so, may perform such covenant or condition and, to the extent
that Lender shall incur any costs or pay any monies in connection therewith,
including any costs or expenses of litigation,
<PAGE> 5
such costs, expense or payment shall be included in the indebtedness secured
hereby and by the Deed of Trust and shall bear interest from the payment of
such costs, monies or expenses thereof at the then applicable rate set forth in
the Notes for amounts advanced by Lender on behalf of Borrower.
(b) Borrower hereby indemnifies and agrees to hold harmless Lender
from and against any and all losses, costs, damages, fees and expenses
whatsoever associated with the exercise of Lender's rights under this
Assignment and shall release Lender from all liability whatsoever for the
exercise of such rights and all actions taken pursuant thereto, not including
any negligent actions of Lender.
(c) The remedies herein provided shall be in addition to and not in
substitution for the rights and remedies which would otherwise be vested in
Lender in any of the other Loan Documents, all of which rights and remedies are
specifically reserved by Lender. The failure to exercise any of the remedies
herein provided shall not constitute a waiver thereof, nor shall the use of any
of the remedies hereby provided prevent the subsequent or concurrent resort to
any other remedy or remedies. It is intended that this clause shall be broadly
construed so that all remedies herein provided for or otherwise available to
Lender shall remain available to Lender until all sums due it by reason of this
Assignment have been paid to it in full and all obligations incurred by it in
connection with the construction or operation of the contemplated improvements
on the Property have been fully discharged without loss or damage to Lender.
8. No Obligation of Lender. Lender shall not be obligated to perform
or discharge any obligation of Borrower under any of the Contract Documents,
and Borrower agrees to indemnify and hold Lender harmless against any and all
liability, loss or damage which Lender may incur under any of the Contract
Documents or under or by reason of this assignment and of and from all claims
and demands whatsoever which may be asserted against it by reason of an act of
Lender under any of the terms of this assignment or under the Contract
Documents, provided that Lender does not provide such acts in a negligent
manner.
9. Miscellaneous. This Assignment shall be binding upon Borrower, its
successors and assigns, and shall inure to the benefit of Lender, its
successors, successors in title and assigns. If any term of this Assignment or
any application thereof will be invalid, illegal or unenforceable, the
remainder of this Assignment and any other application of such term will not be
affected thereby. This Assignment shall be governed by and construed in
accordance with the laws of the State of North Carolina. In the event of
conflict between the terms and conditions of this Assignment and the terms and
conditions of the Loan Documents, the terms and conditions of the Loan
Documents will govern.
IN WITNESS WHEREOF, the undersigned have caused this Assignment to be
executed by their authorized officers as of the day and year first above
written.
<PAGE> 6
BORROWER:
KOGER EQUITY, INC.,
Attest: a Florida corporation
By: /s/ Diana R. Payne By: /s/ G. Danny Edwards
----------------------------- ----------------------------------
Name: Diana R. Payne Name: G. Danny Edwards
-------------------------- --------------------------------
Its Asst. Secretary Title: Treasurer
--------- --------------------------------
[AFFIX CORPORATE SEAL]
LENDER:
FIRST UNION NATIONAL BANK OF
FLORIDA, a national banking association
Attest:
By: /s/ Andy Hogshead By: /s/ Stephen C. Franklin
----------------------------- -----------------------------------
Name: Andy Hogshead Name: Stephen C. Franklin
--------------------------- ---------------------------------
Its Asst. President Its Sr. Vice President
--------- -----------------------------------
[AFFIX CORPORATE SEAL]
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
a New York banking corporation
Attest:
By: /s/ Silke Ossenkohp By: /s/ Timothy V. O'Donovan
----------------------------- -----------------------------------
Name: Silke Ossenkohp Name: Timothy V. O'Donovan
--------------------------- ---------------------------------
Its Asst. Secretary Its Vice President
----- -----
[AFFIX CORPORATE SEAL]
Schedule of Exhibits:
Exhibit A Description of Property
Exhibit B Description of Contract Documents
<PAGE> 7
EXHIBIT A
DESCRIPTION OF PROPERTY
[NOT INCLUDED IN FORM 8-K FILING WITH SECURITIES AND EXCHANGE COMMISSION]
<PAGE> 8
EXHIBIT B
DESCRIPTION OF CONTRACT DOCUMENTS
(a) All contracts or agreements, now existing or hereafter executed, with
general contractors, subcontractors, materialmen, suppliers and/or
laborers in connection with or pertaining to the construction of
buildings or any other improvements on the Property.
(b) Any contracts or agreements for land surveyor services between
Borrower and any surveyor which is entered into with respect to the
surveys to be prepared for the Property; and all surveys, surveyor
costs, and maps prepared by any surveyor in connection with the
Property.
(c) Any agreements for architectural/engineering services between Borrower
and any architect/engineer which is entered into with respect to the
construction of improvements on the Property, and all drawings, plans
and specifications, and site plans prepared by any architect/engineer
in connection with the construction of improvements on the Property.
(d) All warranties and guaranties relating to improvements now or
hereafter constructed or installed on the Property.
(e) Any management agreement between Borrower and a project operation
manager related to the Property.
(f) Any development fee agreement between Borrower and a project
development manager related to the Property.
(g) Any and all permits, licenses or other authorizations and approvals in
favor of or in the name of Borrower or running with title to
the Property, now or hereafter existing or granted, with respect to
the ownership, development, use and occupancy of the Property for its
intended purpose, including without limitation, building and
excavation permits, plat and subdivision approvals, certificates of
occupancy or completion, permits for driveway connection and highway
signalization, storm water management, water wells, water distribution
systems, sewage collection systems, dredge and fill, environmental
protection, historical or archaeological protection, and any other
permit, license, or other authorization necessary or advisable to
comply with any governmental requirements concerning the Property or
its intended use, or to comply with any private agreement concerning
such Property to which Borrower is a party or under or in compliance
with which Borrower is bound to perform.
<PAGE> 9
(h) Any and all utility service agreements wherein a utility company
and/or a governmental utility service provider has agreed to provide
utilities to the Property.
(i) Any agreement to provide sewer effluent for irrigation of the Property.
(j) All contracts, binders or other agreements between Borrower and a
buyer of the Property for the purchase and sale of all or any part of
the Property, including such contract binders or other agreements
which may hereafter come into existence with respect to the Property.
<PAGE> 1
Exhibit 10(k)(6)(a)
ENVIRONMENTAL INDEMNIFICATION AGREEMENT
FROM
KOGER EQUITY, INC.
TO
FIRST UNION NATIONAL BANK OF FLORIDA
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
DATED AS OF APRIL 7, 1997
<PAGE> 2
ENVIRONMENTAL INDEMNIFICATION AGREEMENT
THIS ENVIRONMENTAL INDEMNIFICATION AGREEMENT (this "Agreement") is
made and executed as of this 7th day of April, 1997, from
KOGER EQUITY, INC., a Florida corporation ("Borrower"), whose address is 3986
Boulevard Center Drive, Suite 101, Jacksonville, Florida 32207 Attention:
J.C. Teagle, Executive Vice President,
to and in favor of
FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association ("FUNB"),
whose address is 214 North Hogan Street, Jacksonville, Florida 32202 Attention:
Real Estate Portfolio Management, and MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, a New York banking corporation ("MGT"), whose address is 60 Wall Street,
New York, New York 10260 Attention: Timothy O'Donovan (FUNB and MGT together
being referred to as "Lender"),
which terms Borrower and Lender, whenever hereinafter used will be construed to
refer to and include the heirs, legal representatives, executors,
administrators, successors and assigns of said parties.
R E C I T A L S :
A. Borrower has obtained financing from Lender pursuant to that
certain Revolving Credit Loan Agreement dated as of even date herewith
(hereinafter, together with any and all extensions, renewals, modifications,
replacements and substitutions thereof, referred to as the "Loan Agreement")
and those certain Revolving Promissory Notes dated as of even date herewith
(hereinafter, together with any and all extensions, renewals, modifications,
replacements and substitutions thereof, referred to as the "Loan").
B. Borrower's obligations under the Loan are secured in part by a Deed
to Secure Debt, Assignment of Leases and Rents, and Security Agreement in favor
of Lender (the "Deed to Secure Debt") encumbering real property located in
DeKalb County, Georgia, and being more particularly described on attached
Exhibit A (the "Property").
C. As a condition precedent to and as a material inducement for
Lender's agreement to provide the Loan to Borrower, Lender has required
Borrower to execute and deliver this Agreement, it being acknowledged and
understood by Borrower that Lender otherwise is not willing to make or provide
the Loan.
D. Borrower has obtained a Phase I Environmental Site Assessment
dated January 17, 1997, prepared by Law Engineering & Environmental
Services, Inc. (the
<PAGE> 3
"Environmental Assessment"), and has delivered a copy of the same to Lender.
Lender intends to rely on the Environmental Assessment in making the Loan.
NOW, THEREFORE, for and in consideration of Ten and No/100 Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, and as a material inducement to Lender to make
or provide the Loan to Borrower, Borrower hereby covenants and agrees with
Lender as follows:
1. Definitions. The following terms as used in this Agreement
will have the meanings set forth below:
(a) "Hazardous Substances" will mean any hazardous or toxic substances,
materials or wastes, including without limitation any flammable explosives,
radioactive materials, friable asbestos, kepone, polychlorinated biphenyls
(PCB's), electrical transformers, batteries, paints, solvents, chemicals,
petroleum products, or other man-made materials with hazardous, carcinogenic or
toxic characteristics, and radioactive, toxic, ignitable, corrosive,
carcinogenic to human health, those substances, materials, and wastes listed in
the United States Department of Transportation Table (49 CFR 972.101) or by the
Environmental Protection Agency, as hazardous substances (40 CFR Part 302, and
amendments thereto) provided all such substances, materials and wastes are or
become regulated under applicable local, state or federal law relating to (i)
petroleum, (ii) asbestos, (iii) PCB's, or (iv) materials designated as a
"hazardous substance," "hazardous waste," "hazardous materials," "toxic
substances," "contaminants," in each case under any applicable Environmental
Laws.
(b) "Environmental Laws" will mean any applicable present or future
federal, state or local laws, ordinances, rules or regulations pertaining to
Hazardous Substances, including without limitation the following statutes and
regulations, as amended from time to time: (i) the Federal Clean Air Act, 42
U.S.C. Section 7401 et seq.; (ii) the Federal Clean Water Act, 33 U.S.C.
Section 1151 et seq.; (iii) the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901 et seq. ("RCRA"); (iv) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et
seq. ("CERCLA") and the Superfund Amendments and Reauthorization Act of 1986,
Pub. L. No. 99-499, 100 Stat. 1613 ("SARA"); (v) the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1802; (vi) the National Environment
Policy Act, 42 U.S.C. Section 1857 et seq.; (vii) The Toxic Substance Control
Act of 1976, 15 U.S.C. Section 2601 et seq.; (viii) applicable regulations of
the Environmental Protection Agency, 33 CFR and 40 CFR relating to hazardous
substances; and (ix) and similar statutes, rules and regulations under the laws
of the State of Georgia.
(c) "Hazardous Condition" will mean the presence, discharge, disposal,
storage or release of any Hazardous Substance, in violation of any
Environmental Laws, on or in the improvements, air, soil, groundwater, surface
water or soil vapor on or about the Property, or that migrates, flows,
percolates, diffuses or in any way moves onto or into
<PAGE> 4
the improvements, air, soil, groundwater, surface water or soil vapor on or
about the Property, or from the Property into adjacent property.
(d) "Claims" will mean, individually and collectively, any claims,
actions, administrative proceedings, judgments, damages, punitive damages,
penalties, fines, costs, liabilities, sums paid in settlement, interest, losses
or expenses (including reasonable attorneys' and paralegals' fees and costs,
whether incurred in enforcing this Agreement, collecting any sums due
hereunder, settlement negotiations, at trial or on appeal), reasonable
consultant fees and reasonable expert fees, together with all other reasonable
costs and expenses of any kind or nature, that arise directly from or in
connection with the existence of a Hazardous Condition, whether occurring
before, on or after the date of this Agreement or caused by any person or
entity.
Without limiting the generality of the foregoing definition, Claims
specifically will include claims, whether by related or third parties, for
personal injury or real or personal property damage, and capital, operating and
maintenance costs incurred in connection with any Remedial Work.
However, notwithstanding the foregoing, Claims will not be deemed to
include claims, actions, administrative proceedings, judgments, damages,
punitive damages, penalties, fines, costs, liabilities, sums paid in
settlement, interest, losses or expenses, that arise in connection with any
Hazardous Condition that is determined by proper judicial or administrative
procedure to have been introduced to the Property from and after the date upon
which Lender takes possession of the Property pursuant to an Order of
Receivership, foreclosure or deed in lieu of foreclosure, or which is caused by
the actions of Lender.
(e) "Remedial Work" will mean any investigation or monitoring of site
conditions, any clean-up, containment, remediation, removal or restoration work
required or performed by any federal, state or local governmental agency or
political subdivision or performed by any nongovernmental entity or person due
to the existence of a Hazardous Condition.
2. Compliance with Environmental Laws; Disclosure of Hazardous
Conditions. Except as to those conditions (the "Existing Conditions") as
specifically may be disclosed in the Environmental Assessment, Borrower hereby
represents, warrants, covenants and agrees in all material respects to and with
Lender that all operations or activities upon, or any use or occupancy of the
Property by Borrower, any tenant or other occupant, to the best of Borrower's
knowledge, is presently and will at all times until Borrower's conveyance of
the Property or foreclosure of Deed to Secure Debt be in compliance with all
Environmental Laws; that Borrower has not at any time engaged in or permitted,
nor has any existing or previous tenant or occupant of the Property engaged in
or permitted to the best of Borrower's knowledge the occurrence of any
Hazardous Condition, except as specifically may be disclosed in the
Environmental Assessment; and that to the best of Borrower's knowledge, there
does not now exist nor is there suspected to exist any Hazardous Condition on
or about the Property, except as specifically may be disclosed in the
Environmental Assessment.
<PAGE> 5
3. Indemnification. Borrower hereby indemnifies and agrees to
protect, defend and hold harmless Lender, which for purposes of this paragraph
will be deemed to include the directors, officers, shareholders, employees and
agents of Lender, from and against any Claims other than claims arising from
Lender's or such other included parties' gross negligence or willful
misconduct, including, without limitation, any claims relating to an Existing
Condition. In the event that Lender suffers or incurs any Claims, Borrower will
pay to Lender the total of all such Claims suffered or incurred by Lender upon
demand therefor by Lender.
4. Remedial Work. In the event that any Remedial Work with respect to
any Hazardous Conditions that could result in a Claim is required under any
Environmental Laws by any judicial order, or by any governmental entity, or in
order to comply with the terms, covenants and conditions of this Agreement or
of any other agreements affecting the Property, Borrower will perform or cause
to be performed the Remedial Work in compliance with such law, regulation,
order or agreement. All Remedial Work will be performed by one or more
contractors, selected by Borrower and under the supervision of a consulting
environmental engineer selected by Borrower, and approved in advance by Lender.
All costs and expenses of Remedial Work will be paid by Borrower including
without limitation the charges of such contractor(s) and the consulting
environmental engineer, and Lender's reasonable attorneys' and paralegals' fees
and costs incurred in connection with monitoring or review of all Remedial
Work. In the event that Borrower fails to timely commence, or cause to be
commenced, or fails to diligently prosecute to completion, such Remedial Work,
Lender may, but will not be required or have any obligation to, cause such
Remedial Work to be performed, and all costs and expenses thereof, or incurred
in connection therewith, will thereupon constitute Claims. All such Claims will
be due and payable by Borrower upon demand therefor by Lender.
5. Permitted Contests. Notwithstanding any provision of this
Agreement to the contrary, provided that (i) Agreement, (ii) neither Lender
nor any assignee of its interest (including any person having a beneficial
interest) in the Property, the Loan and the Loan Documents will be exposed or
subjected to civil or criminal liability, and (iii) the lien and security
interest of Lender or any such assignee in the Property, the Loan, the Loan
Documents, or the payment of any sums to be paid under the Loan Documents, is
not jeopardized or in any way adversely affected, Borrower may contest or cause
to be contested, by appropriate action, the application, interpretation or
validity of any Environmental Laws or any agreement requiring any Remedial Work
pursuant to a good faith dispute regarding such application, interpretation or
validity of such Environmental Laws or agreement requiring such Remedial Work.
During the pendency of any such permitted contest, Borrower may delay
performance of Remedial Work or compliance with the Environmental Laws or
agreement requiring such Remedial Work, provided that (i) Borrower actually
contests and prosecutes such contest by appropriate proceedings conducted in
good faith and with due diligence to resolution, (ii) prior to any such delay
in compliance with any Environmental Laws or any Remedial Work requirement on
the basis of a good faith contest of such requirement, Borrower will have given
Lender written notice that Borrower intends to contest or will contest or cause
to be contested the same, and will
<PAGE> 6
have given such security or assurances as Lender reasonably may request to
ensure compliance with the legal requirements pertaining to the Remedial Work
(and payment of all costs, expenses, interest and penalties in connection
therewith) and to prevent any sale, forfeiture or loss of all or any part of
the Property by reason of such noncompliance, delay or contest, and (iii) prior
to any such delay in compliance with any Environmental Laws or any Remedial
Work requirement on the basis of a good faith contest of such requirement,
Borrower will have taken such steps as may necessary to prevent or mitigate any
continuing occurrence of any existing or suspected Hazardous Condition giving
rise to the contested Remedial Work requirement. Subject to the terms and
conditions set forth above, during the pendency of any such permitted contest
resulting in a delay of performance of any required Remedial Work, Lender
agrees that it will not perform such Remedial Work requirement on behalf of
Borrower.
6. Subrogation of Indemnity Rights. If Borrower fails to perform its
obligations under paragraphs 3 and 4 above, Lender will be subrogated to any
rights Borrower may have under any indemnifications from any present, future or
former owners, tenants or other occupants or users of the Property relating to
the matters covered by this Agreement.
7. Assignment by Lender. No consent by Borrower will be required
for any assignment or reassignment of the rights of Lender hereunder to one or
more purchasers of the Loan, the Loan Documents or Lender's interest in the
Property under the Deed to Secure Debt.
8. Merger, Consolidation or Sale of Assets. Subject to limitations
regarding disposition of any interest or control in Borrower as may be set
forth in the Loan Documents, in the event of a disposition involving Borrower
or all or a substantial portion of the assets of Borrower to one or more
persons or other entities or the merger or consolidation of Borrower with
another entity, the surviving entity or transferee of assets, as the case may
be, will (i) be formed and existing under the laws of a state, district or
commonwealth of the United States of America, and (ii) deliver to Lender an
acknowledged instrument in recordable form assuming all obligations, covenants
and responsibilities of Borrower under this Agreement.
9. Survival; Independent Obligations. Notwithstanding anything to
the contrary contained in the Loan Agreement, the obligations of Borrower
under this Agreement will survive (a) the consummation of the Loan
transaction described above; (b) satisfaction of all terms and conditions to be
performed by or on behalf of Borrower under the Loan Agreement; (c)
termination, in accordance with their respective terms, of the Loan transaction
and the Loan Agreement; (d) any assumption of Borrower's obligations under the
Loan Agreement by a successor to Borrower (whether or not Lender approved such
assumption and whether or not Borrower was released from liability under the
Loan Agreement); (e) conveyance of title to all or any portion of the Property
to any third party, and subsequent reconveyance of all or any portion of the
Property by any such third party to subsequent transferees; and (f) conveyance
of title to the Property to Lender through power of sale, process of
foreclosure, or by conveyance in lieu of foreclosure of the Deed to Secure
Debt; provided, however, that
<PAGE> 7
Borrower will not be liable for damages resulting from Hazardous Conditions
which are determined either by a written agreement or stipulation between
Borrower and Lender or, if Borrower and Lender are unable to agree or
stipulate, a final judicial or administrative action (after all available
appeals have been taken or waived) to have been introduced to the Property from
and after the date upon which Lender takes possession of the Property pursuant
to an Order of Receivership, power of sale, process of foreclosure, or deed in
lieu of foreclosure; provided, however, that the obligations of Borrower under
this Agreement will finally cease and terminate upon the final expiration of
any applicable statute of limitation of actions as to any potential Claim.
The obligations of Borrower under this Agreement are separate and
distinct from the obligations of Borrower under the Loan Agreement. This
Agreement may be enforced by Lender without regard to any other rights and
remedies Lender may have against Borrower under the Loan Agreement and without
regard to any limitations on Lender's recourse as may be provided in the Loan
Agreement; provided, however, that a default by Borrower under this
Agreement will constitute a default under the Loan Agreement. Enforcement of
this Agreement will not be deemed to constitute an action for recovery of
Borrower's indebtedness under the Loan Agreement nor for recovery of a
deficiency judgment against Borrower following exercise of Borrower's remedies
under the Deed to Secure Debt. Borrower expressly and specifically agrees that
Lender may bring and prosecute a separate action or actions against Borrower
hereunder whether or not Lender has brought an action against Borrower under
the Loan Agreement.
10. Default Interest. Any Claims and other payments required to be
paid by Borrower to Lender under this Agreement which are not paid on demand
therefor will thereupon be considered "Delinquent," and will result in and
constitute a default hereunder. In addition to all other rights and remedies of
Lender against Borrower as provided herein, or under applicable law, Borrower
will pay to Lender, immediately upon demand therefor, Default Interest (as
defined below) on any such payments which are or have become Delinquent.
Default Interest will be paid by Borrower from the date such payment becomes
Delinquent through and including the date of payment of such Delinquent sums.
As used herein, "Default Interest" will be equal to the rate of interest
charged for a payment default under the Loan Agreement, but in any event not to
exceed the maximum rate of interest permitted to be contracted for under
Georgia law. Borrower expressly and specifically agrees that any Default
Interest charged to Borrower hereunder will in no manner or respect constitute
a penalty or interest under the Loan Agreement, with the express understanding
that this Agreement and Borrower's obligations hereunder constitute separate
obligations of Borrower independent of the Loan Agreement.
11. Miscellaneous. If there is more than one party executing this
Agreement as an indemnitor, each such party agrees that (i) the obligations of
Borrower hereunder are joint and several, (ii) a release of any one or more
such parties or any limitation of this Agreement in favor of or for the benefit
of one or more such parties will not in any way be deemed a release of or
limitation in favor of or for the benefit of any other party, and (iii) a
separate action hereunder may be brought and prosecuted against one or more
such parties. If any term of this Agreement or any application thereof will be
invalid,
<PAGE> 8
illegal or unenforceable, the remainder of this Agreement and any other
application of such term will not be affected thereby. No delay or omission in
exercising any right hereunder will operate as a waiver of such right or any
other right. This Agreement will be binding upon, inure to the benefit of and
be enforceable by Borrower and Lender, and their respective successors and
assigns. This Agreement will be governed and construed in accordance with the
laws of the State of Georgia. The parties hereby stipulate that jurisdiction
and venue for purposes of enforcement of this Agreement and adjudication of the
respective rights and obligations of the parties shall be in the Georgia
circuit court in the judicial circuit in which the Property is located.
12. Conflict. In the event of conflict between the terms and
conditions hereunder and the terms and conditions of the Loan Agreement, the
terms and conditions of the Loan Agreement will govern.
13. Waiver of Defenses. In any action, suit or proceeding relating
to this Agreement, Borrower and Lender waive the right to interpose a
defense of laches, failure of consideration or mutuality of remedy.
IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement
as of the date first above written.
BORROWER:
Signed, sealed and delivered KOGER EQUITY, INC., a
in the presence of: Florida corporation
/s/ Janice R. Long By: /s/ G. Danny Edwards
- ------------------------------- -------------------------------------
Witness Name: G. Danny Edwards
----------------------------------
Title: Treasurer
---------------------------------
Attest: /s/ Diana R. Payne
---------------------------------
Name: Diana R. Payne
----------------------------------
Title: Assistant Secretary
---------------------------------
[CORPORATE SEAL]
<PAGE> 9
LENDER:
Signed, sealed and delivered FIRST UNION NATIONAL BANK OF
in the presence of: FLORIDA, a national banking association
/s/ Janice R. Long By: /s/ Stephen C. Franklin
- ------------------------------- ------------------------------------
Witness Name: Stephen C. Franklin
---------------------------------
Title: Sr. Vice President
--------------------------------
Attest: /s/ Andy Hogshead
--------------------------------
Name: Andy Hogshead
---------------------------------
Title: Vice President
--------------------------------
[CORPORATE SEAL]
Signed, sealed and delivered MORGAN GUARANTY TRUST
in the presence of: COMPANY OF NEW YORK,
a New York banking corporation
/s/ Lea M. Rivera By: /s/ Timothy V. O'Donovan
- ------------------------------- ------------------------------------
Witness Name: Timothy V. O'Donovan
---------------------------------
Title: Vice President
--------------------------------
Attest: /s/ Silke Ossenkohp
--------------------------------
Name: Silke Ossenkohp
--------------------------------
Title: Assistant Secretary
--------------------------------
[CORPORATE SEAL]
<PAGE> 10
EXHIBIT A
DESCRIPTION OF PROPERTY
[NOT INCLUDED IN FORM 8-K FILING WITH SECURITIES AND EXCHANGE COMMISSION]
<PAGE> 1
Exhibit 10(k)(6)(b)
ENVIRONMENTAL INDEMNIFICATION AGREEMENT
FROM
KOGER EQUITY, INC.
TO
FIRST UNION NATIONAL BANK OF FLORIDA
AND
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
DATED AS OF APRIL 7, 1997
<PAGE> 2
ENVIRONMENTAL INDEMNIFICATION AGREEMENT
THIS ENVIRONMENTAL INDEMNIFICATION AGREEMENT (this "Agreement") is
made and executed as of this 7th day of April, 1997, from
KOGER EQUITY, INC., a Florida corporation ("Borrower"), whose address is 3986
Boulevard Center Drive, Suite 101, Jacksonville, Florida 32207 Attention:
J.C. Teagle, Executive Vice President,
to and in favor of
FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association ("FUNB"),
whose address is 214 North Hogan Street, Jacksonville, Florida 32202 Attention:
Real Estate Portfolio Management, and MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, a New York banking corporation ("MGT"), whose address is 60 Wall Street,
New York, New York 10260 Attention: Timothy O'Donovan (FUNB and MGT together
being referred to as "Lender"),
which terms Borrower and Lender, whenever hereinafter used will be construed to
refer to and include the heirs, legal representatives, executors,
administrators, successors and assigns of said parties.
R E C I T A L S :
A. Borrower has obtained financing from Lender pursuant to that certain
Revolving Credit Loan Agreement dated as of even date herewith (hereinafter,
together with any and all extensions, renewals, modifications, replacements and
substitutions thereof, referred to as the "Loan Agreement") and those certain
Revolving Promissory Notes dated as of even date herewith (hereinafter,
together with any and all extensions, renewals, modifications, replacements and
substitutions thereof, referred to as the "Loan").
B. Borrower's obligations under the Loan are secured in part by a Deed
of Trust and Security Agreement in favor of Lender (the "Deed of Trust")
encumbering real property located in Guilford County, North Carolina, and being
more particularly described on attached Exhibit A (the "Property").
C. As a condition precedent to and as a material inducement for
Lender's agreement to provide the Loan to Borrower, Lender has required
Borrower to execute and deliver this Agreement, it being acknowledged and
understood by Borrower that Lender otherwise is not willing to make or provide
the Loan.
D. Borrower has obtained a Phase I Environmental Site Assessment
dated January 16, 1997, prepared by Law Engineering & Environmental
Services, Inc. (the "Environmental Assessment"), and has delivered a copy of
the same to Lender. Lender intends to rely on the Environmental Assessment in
making the Loan.
<PAGE> 3
NOW, THEREFORE, for and in consideration of Ten and No/100 Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, and as a material inducement to Lender to make
or provide the Loan to Borrower, Borrower hereby covenants and agrees with
Lender as follows:
1. Definitions. The following terms as used in this Agreement will
have the meanings set forth below:
(a) "Hazardous Substances" will mean any hazardous or toxic substances,
materials or wastes, including without limitation any flammable explosives,
radioactive materials, friable asbestos, kepone, polychlorinated biphenyls
(PCB's), electrical transformers, batteries, paints, solvents, chemicals,
petroleum products, or other man-made materials with hazardous, carcinogenic or
toxic characteristics, and such other solid, semi-solid, liquid or gaseous
substances which are radioactive, toxic, ignitable, corrosive, carcinogenic to
human health, those substances, materials, and wastes listed in the United
States Department of Transportation Table (49 CFR 972.101) or by the
Environmental Protection Agency, as hazardous substances (40 CFR Part 302, and
amendments thereto) provided all such substances, materials and wastes are or
become regulated under applicable local, state or federal law relating to (i)
petroleum, (ii) asbestos, (iii) PCB's, or (iv) materials designated as a
"hazardous substance," "hazardous waste," "hazardous materials," "toxic
substances," "contaminants," in each case under any applicable Environmental
Laws.
(b) "Environmental Laws" will mean any applicable present or future
federal, state or local laws, ordinances, rules or regulations pertaining to
Hazardous Substances, including without limitation the following statutes and
regulations, as amended from time to time: (i) the Federal Clean Air Act, 42
U.S.C. Section 7401 et seq.; (ii) the Federal Clean Water Act, 33 U.S.C.
Section 1151 et seq.; (iii) the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901 et seq. ("RCRA"); (iv) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et
seq. ("CERCLA") and the Superfund Amendments and Reauthorization Act of 1986,
Pub. L. No. 99-499, 100 Stat. 1613 ("SARA"); (v) the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1802; (vi) the National Environment
Policy Act, 42 U.S.C. Section 1857 et seq.; (vii) The Toxic Substance Control
Act of 1976, 15 U.S.C. Section 2601 et seq.; (viii) applicable regulations of
the Environmental Protection Agency, 33 CFR and 40 CFR relating to hazardous
substances; and (ix) G.S. 14-284.2, G.S.95-173 - 218 (Hazardous Chemicals
Right to Know Act), G.S. 104E (North Carolina Radiation Protection Act), G.S.
130A-290 - 310.23, G.S. 143-215.75 - 215.104 (Oil Pollution and Hazardous
Substances Control Act of 1978), G.S. 143-434 -470.1 (North Carolina Pesticides
Law of 1971), General Statutes of North Carolina, and rules and regulations
promulgated thereunder.
(c) "Hazardous Condition" will mean the presence, discharge, disposal,
storage or release of any Hazardous Substance, in violation of any
Environmental Laws, on or in the improvements, air, soil, groundwater, surface
water or soil vapor on or about the Property, or that migrates, flows,
percolates, diffuses or in any way moves onto or into the improvements, air,
soil, groundwater, surface water or soil vapor on or about the Property, or
from the Property into adjacent property.
<PAGE> 4
(d) "Claims" will mean, individually and collectively, any claims,
actions, administrative proceedings, judgments, damages, punitive damages,
penalties, fines, costs, liabilities, sums paid in settlement, interest, losses
or expenses (including reasonable attorneys' and paralegals' fees and costs,
whether incurred in enforcing this Agreement, collecting any sums due
hereunder, settlement negotiations, at trial or on appeal), reasonable
consultant fees and reasonable expert fees, together with all other reasonable
costs and expenses of any kind or nature, that arise directly from or in
connection with the existence of a Hazardous Condition, whether occurring
before, on or after the date of this Agreement or caused by any person or
entity.
Without limiting the generality of the foregoing definition, Claims
specifically will include claims, whether by related or third parties, for
personal injury or real or personal property damage, and capital, operating and
maintenance costs incurred in connection with any Remedial Work.
However, notwithstanding the foregoing, Claims will not be deemed to
include claims, actions, administrative proceedings, judgments, damages,
punitive damages, penalties, fines, costs, liabilities, sums paid in
settlement, interest, losses or expenses, that arise in connection with any
Hazardous Condition that is determined by proper judicial or administrative
procedure to have been introduced to the Property from and after the date upon
which Lender takes possession of the Property pursuant to an Order of
Receivership, foreclosure or deed in lieu of foreclosure, or which is caused by
the actions of Lender.
(e) "Remedial Work" will mean any investigation or monitoring of site
conditions, any clean-up, containment, remediation, removal or restoration work
required or performed by any federal, state or local governmental agency or
political subdivision or performed by any nongovernmental entity or person due
to the existence of a Hazardous Condition.
2. Compliance with Environmental Laws; Disclosure of Hazardous
Conditions. Except as to those conditions (the "Existing Conditions") as
specifically may be disclosed in the Environmental Assessment, Borrower hereby
represents, warrants, covenants and agrees in all material respects to and with
Lender that all operations or activities upon, or any use or occupancy of the
Property by Borrower, any tenant or other occupant, to the best of Borrower's
knowledge, is presently and will at all times until Borrower's conveyance of
the Property or foreclosure of Deed of Trust be in compliance with all
Environmental Laws; that Borrower has not at any time engaged in or permitted,
nor has any existing or previous tenant or occupant of the Property engaged in
or permitted to the best of Borrower's knowledge the occurrence of any
Hazardous Condition, except as specifically may be disclosed in the
Environmental Assessment; and that to the best of Borrower's knowledge, there
does not now exist nor is there suspected to exist any Hazardous Condition on
or about the Property, except as specifically may be disclosed in the
Environmental Assessment.
3. Indemnification. Borrower hereby indemnifies and agrees to
protect, defend and hold harmless Lender, which for purposes of this paragraph
will be deemed to include the directors, officers, shareholders, employees and
agents of Lender, from and
<PAGE> 5
against any Claims other than claims arising from Lender's or such other
included parties' gross negligence or willful misconduct, including, without
limitation, any claims relating to an Existing Condition. In the event that
Lender suffers or incurs any Claims, Borrower will pay to Lender the total of
all such Claims suffered or incurred by Lender upon demand therefor by Lender.
4. Remedial Work. In the event that any Remedial Work with respect to
any Hazardous Conditions that could result in a Claim is required under any
Environmental Laws by any judicial order, or by any governmental entity, or in
order to comply with the terms, covenants and conditions of this Agreement or
of any other agreements affecting the Property, Borrower will perform or cause
to be performed the Remedial Work in compliance with such law, regulation,
order or agreement. All Remedial Work will be performed by one or more
contractors, selected by Borrower and under the supervision of a consulting
environmental engineer selected by Borrower, and approved in advance by Lender.
All costs and expenses of Remedial Work will be paid by Borrower including
without limitation the charges of such contractor(s) and the consulting
environmental engineer, and Lender's reasonable attorneys' and paralegals' fees
and costs incurred in connection with monitoring or review of all Remedial
Work. In the event that Borrower fails to timely commence, or cause to be
commenced, or fails to diligently prosecute to completion, such Remedial Work,
Lender may, but will not be required or have any obligation to, cause such
Remedial Work to be performed, and all costs and expenses thereof, or incurred
in connection therewith, will thereupon constitute Claims. All such Claims will
be due and payable by Borrower upon demand therefor by Lender.
5. Permitted Contests. Notwithstanding any provision of this
Agreement to the contrary, provided that (i) no default has occurred and is
continuing under the Loan Agreement, (ii) neither Lender nor any assignee of
its interest (including any person having a beneficial interest) in the
Property, the Loan and the Loan Agreement will be exposed or subjected to civil
or criminal liability, and (iii) the lien and security interest of Lender or
any such assignee in the Property, the Loan, the Loan Agreement, or the payment
of any sums to be paid under the Loan Agreement, is not jeopardized or in any
way adversely affected, Borrower may contest or cause to be contested, by
appropriate action, the application, interpretation or validity of any
Environmental Laws or any agreement requiring any Remedial Work pursuant to a
good faith dispute regarding such application, interpretation or validity of
such Environmental Laws or agreement requiring such Remedial Work. During the
pendency of any such permitted contest, Borrower may delay performance of
Remedial Work or compliance with the Environmental Laws or agreement requiring
such Remedial Work, provided that (i) Borrower actually contests and prosecutes
such contest by appropriate proceedings conducted in good faith and with due
diligence to resolution, (ii) prior to any such delay in compliance with any
Environmental Laws or any Remedial Work requirement on the basis of a good
faith contest of such requirement, Borrower will have given Lender written
notice that Borrower intends to contest or will contest or cause to be
contested the same, and will have given such security or assurances as Lender
reasonably may request to ensure compliance with the legal requirements
pertaining to the Remedial Work (and payment of all costs, expenses, interest
and penalties in connection therewith) and to prevent any sale, forfeiture or
loss of all or any part of the Property by reason of such
<PAGE> 6
noncompliance, delay or contest, and (iii) prior to any such delay in
compliance with any Environmental Laws or any Remedial Work requirement on the
basis of a good faith contest of such requirement, Borrower will have taken
such steps as may necessary to prevent or mitigate any continuing occurrence of
any existing or suspected Hazardous Condition giving rise to the contested
Remedial Work requirement. Subject to the terms and conditions set forth above,
during the pendency of any such permitted contest resulting in a delay of
performance of any required Remedial Work, Lender agrees that it will not
perform such Remedial Work requirement on behalf of Borrower.
6. Subrogation of Indemnity Rights. If Borrower fails to perform its
obligations under paragraphs 3 and 4 above, Lender will be subrogated to any
rights Borrower may have under any indemnifications from any present, future or
former owners, tenants or other occupants or users of the Property relating to
the matters covered by this Agreement.
7. Assignment by Lender. No consent by Borrower will be required for
any assignment or reassignment of the rights of Lender hereunder to one or more
purchasers of the Loan, the Loan Agreement or Lender's interest in the Property
under the Deed of Trust.
8. Merger, Consolidation or Sale of Assets. Subject to limitations
regarding disposition of any interest or control in Borrower as may be set
forth in the Loan Agreement, in the event of a disposition involving Borrower
or all or a substantial portion of the assets of Borrower to one or more
persons or other entities or the merger or consolidation of Borrower with
another entity, the surviving entity or transferee of assets, as the case may
be, will (i) be formed and existing under the laws of a state, district or
commonwealth of the United States of America, and (ii) deliver to Lender an
acknowledged instrument in recordable form assuming all obligations, covenants
and responsibilities of Borrower under this Agreement.
9. Survival; Independent Obligations. Notwithstanding anything to the
contrary contained in the Loan Agreement, the obligations of Borrower under
this Agreement will survive (a) the consummation of the Loan transaction
described above; (b) satisfaction of all terms and conditions to be performed
by or on behalf of Borrower under the Loan Agreement; (c) termination, in
accordance with their respective terms, of the Loan transaction and the Loan
Agreement; (d) any assumption of Borrower's obligations under the Loan
Agreement by a successor to Borrower (whether or not Lender approved such
assumption and whether or not Borrower was released from liability under the
Loan Agreement); (e) conveyance of title to all or any portion of the Property
to any third party, and subsequent reconveyance of all or any portion of the
Property by any such third party to subsequent transferees; and (f) conveyance
of title to the Property to Lender through power of sale, process of
foreclosure, or by conveyance in lieu of foreclosure of the Deed of Trust;
provided, however, that Borrower will not be liable for damages resulting from
Hazardous Conditions which are determined either by a written agreement or
stipulation between Borrower and Lender of, if Borrower and Lender are unable
to agree or stipulate, a final judicial or administrative action (after all
available appeals have been taken or waived) to have been introduced to the
Property from and after the date upon which Lender takes possession of the
Property pursuant to an Order
<PAGE> 7
of Receivership, power of sale, process of foreclosure, or deed in lieu of
foreclosure; provided, however, that the obligations of Borrower under this
Agreement will finally cease and terminate upon the final expiration of any
applicable statute of limitation of actions as to any potential Claim.
The obligations of Borrower under this Agreement are separate and
distinct from the obligations of Borrower under the Loan Agreement. This
Agreement may be enforced by Lender without regard to any other rights and
remedies Lender may have against Borrower under the Loan Agreement and
without regard to any limitations on Lender's recourse as may be provided in
the Loan Agreement; provided, however, that a default by Borrower under this
Agreement will constitute a default under the Loan Agreement. Enforcement of
this Agreement will not be deemed to constitute an action for recovery of
Borrower's indebtedness under the Loan Agreement nor for recovery of a
deficiency judgment against Borrower following exercise of Borrower's
remedies under the Deed of Trust. Borrower expressly and specifically agrees
that Lender may bring and prosecute a separate action or actions against
Borrower hereunder whether or not Lender has brought an action against
Borrower under the Loan Agreement.
10. Default Interest. Any Claims and other payments required to be paid
by Borrower to Lender under this Agreement which are not paid on demand
therefor will thereupon be considered "Delinquent," and will result in and
constitute a default hereunder. In addition to all other rights and remedies
of Lender against Borrower as provided herein, or under applicable law,
Borrower will pay to Lender, immediately upon demand therefor, Default
Interest (as defined below) on any such payments which are or have become
Delinquent. Default Interest will be paid by Borrower from the date such
payment becomes Delinquent through and including the date of payment of such
Delinquent sums. As used herein, "Default Interest" will be equal to the
rate of interest charged for a payment default under the Loan Agreement, but
in any event not to exceed the maximum rate of interest permitted to be
contracted for under North Carolina law. Borrower expressly and specifically
agrees that any Default Interest charged to Borrower hereunder will in no
manner or respect constitute a penalty or interest under the Loan Agreement,
with the express understanding that this Agreement and Borrower's
obligations hereunder constitute separate obligations of Borrower
independent of the Loan Agreement.
11. Miscellaneous. If there is more than one party executing this Agreement as
an indemnitor, each such party agrees that (i) the obligations of Borrower
hereunder are joint and several, (ii) a release of any one or more such parties
or any limitation of this Agreement in favor of or for the benefit of one or
more such parties will not in any way be deemed a release of or limitation in
favor of or for the benefit of any other party, and (iii) a separate action
hereunder may be brought and prosecuted against one or more such parties. If
any term of this Agreement or any application thereof will be invalid, illegal
or unenforceable, the remainder of this Agreement and any other application of
such term will not be affected thereby. No delay or omission in exercising any
right hereunder will operate as a waiver of such right or any other right. This
Agreement will be binding upon, inure to the benefit of and be enforceable by
Borrower and Lender, and their respective successors and assigns. This
Agreement will be governed and construed in accordance with the laws of the
State of North Carolina. The parties hereby stipulate that jurisdiction and
venue for purposes of enforcement of this Agreement and
<PAGE> 8
adjudication of the respective rights and obligations of the parties shall be
in the North Carolina circuit court in the judicial circuit in which the
Property is located.
12. Conflict. In the event of conflict between the terms and
conditions hereunder and the terms and conditions of the Loan Agreement, the
terms and conditions of the Loan Agreement will govern.
13. Waiver of Defenses. In any action, suit or proceeding relating to
this Agreement, Borrower and Lender waive the right to interpose a defense of
laches, failure of consideration or mutuality of remedy.
IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement
as of the date first above written.
BORROWER:
KOGER EQUITY, INC.,
Attest: a Florida corporation
By: /s/ Diana R. Payne By: /s/ G. Danny Edwards
-------------------------- ----------------------------
Name: Diana R. Payne Name: G. Danny Edwards
----------------------- --------------------------
Its Asst. Secretary Title: Treasurer
------- -------------------------
[AFFIX CORPORATE SEAL]
LENDER:
FIRST UNION NATIONAL BANK OF
FLORIDA, a national banking association
Attest:
By: /s/ Andy Hogshead By: /s/ Stephen C. Franklin
------------------------- ----------------------------
Name: Andy Hogshead Name: Stephen C. Franklin
----------------------- --------------------------
Its Vice President Its Sr. Vice President
------- ------------
[AFFIX CORPORATE SEAL]
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
a New York banking corporation
Attest:
By: /s/ Silke Ossenkohp By: /s/ Timothy V. O'Donovan
------------------------- -------------------------------
Name: Silke Ossenkohp Name: Timothy V. O'Donovan
----------------------- -----------------------------
Its Asst. Secretary Its Vice President
------- ---------
[AFFIX CORPORATE SEAL]
<PAGE> 9
EXHIBIT A
DESCRIPTION OF PROPERTY
[NOT INCLUDED IN FORM 8-K FILING WITH SECURITIES AND EXCHANGE COMMISSION]
<PAGE> 1
Exhibit 99
NEWS
KOGER EQUITY, INC. ANNOUNCES REVOLVING CREDIT FACILITY
JACKSONVILLE, FLORIDA - APRIL 10, 1997 - Jacksonville-based Koger Equity, Inc.
(ASE:KE) announced today the closing of a $50 million secured Revolving Credit
Facility provided by First Union National Bank of Florida and Morgan Guaranty
Trust Company of New York. Victor A. Hughes, Jr., Chairman and CEO of the
Company, noted that this facility along with the Company's cash reserves will
provide the Company the ability to take advantage of acquisition opportunities
and continue its recently initiated development program. The Company currently
has five buildings containing 406,292 square feet under construction.
Mr. Hughes also noted that with the recent closing of a $190 million 8.29%
fixed rate loan with The Northwestern Mutual Life Insurance Company, the
Company has insulated 92% of its current outstanding debt from increases in
interest rates for the next decade.
The Koger organization leases, manages and/or owns over 15 million square feet
of office space in 21 major markets throughout the Southeast and Southwest.
###
