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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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) August 17, 2000
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United Investors Realty Trust
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(Exact Name of Registrant as Specified in its Charter)
Texas 001-13915 76-0265701
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(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
5847 San Felipe, Suite 850
Houston, TX 77057
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 781-2860
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N.A.
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(Former name or former address, if changed since last report)
<PAGE>
Item 5. OTHER EVENTS
As of August 17, 2000, the registrant amended its Credit Agreement with
Wells Fargo Bank, National Association. Under the amendment, (i) the maturity of
the agreement was advanced to January 31, 2001; (ii) the registrant may now
borrow up to 60% of a formula based calculation of the registrant's value and
(iii) the registrant will grant the lender first lien deeds of trust on two
additional (for a total of six) properties.
Interest on outstanding borrowings under the amended agreement remain at
approximately 155 basis points over LIBOR (approximately 7.8% at June 30, 2000),
payable monthly. In addition to approximately $23,920,000 in borrowings as of
June 30, 2000, the registrant is also contingently obligated under two unfunded
letters of credit totaling approximately $3,800,000.
On August 30, 2000, the registrant issued the press release attached as
exhibit 99.1 to this Current Report on Form 8-K.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits:
Exhibit No. Description
10.43 Fifth Modification of Credit Agreement dated as of August 17,
2000 made by and between Wells Fargo Bank, National Association
and United Investors Realty Trust.
99.1 Registrant's August 30, 2000 press release announcing the denial
of injunction and lifting of temporary restraining order.
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.
UNITED INVESTORS REALTY TRUST
(Registrant)
By: /s/ R. Steven Hamner
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R. Steven Hamner
Vice President and Chief Financial Officer
(Principal Accounting Officer)
Date: August 31, 2000
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
10.43 Fifth Modification of Credit Agreement dated
August 17, 2000
WELLS FARGO BANK, NATIONAL ASSOCIATION
Real Estate Group (AU #2199)
1000 Louisiana, 4th Fl.
Houston, TX 77002
Attn: Margarita Mitas
Loan No. 4277
Fifth Modification OF CREDIT AGREEMENT
Secured Loan
THIS FIFTH MODIFICATION OF CREDIT AGREEMENT ("Fifth Modification Agreement")
dated as of July 14, 2000, is entered into by and between WELLS FARGO BANK,
NATIONAL ASSOCIATION ("Lender"), and UNITED INVESTORS REALTY TRUST, a Texas real
estate investment trust ("Borrower").
R~E~C~I~T~A~L~S
A. Borrower and Lender entered into a certain Revolving Credit Agreement dated
as of August 25, 1998, under which Lender made a revolving credit facility
available to Borrower in the maximum outstanding principal amount of THIRTY
MILLION AND NO/100th DOLLARS ($30,000,000.00) (as amended, the "Credit
Facility"). The Revolving Credit Agreement has been previously amended by
the following: (i) First Modification Agreement, dated as of January 25,
1999; (ii) Second Modification Agreement dated as of April 21, 1999; (iii)
Third Modification of Credit Agreement, dated as of December 13, 1999 (the
"Third Modification Agreement"); (iv) Fourth Modification of Credit
Agreement, dated as of December 13, 1999 (the "Fourth Modification
Agreement"); (v) modification letter agreement dated as of February 29,
2000; and (vi) modification letter agreement dated as of May 25, 2000 (the
Revolving Credit Agreement referenced above and such documents listed as
items (i) through (vi) are collectively referred to herein as the "Original
Credit Agreement").
B. Pursuant to the Fourth Modification Agreement and upon the terms stated
therein, the Credit Facility was increased to $36,500,000.00.
C. The Credit Facility is evidenced by a promissory note dated, as of August
25, 1998, executed by Borrower in favor of Lender, in the principal amount
of $30,000,000.00 ("First Note") and a Note dated as of December 13, 1999,
in the amount of $6,500,000.00 (the "Second Note"). The First Note and the
Second Note are referred to collectively herein as the "Revolving Credit
Notes". The Credit Facility is further evidenced by the documents described
in the Original Credit Agreement as the "Loan Documents".
D. The Revolving Credit Notes are secured by, among other things, those four
(4) Deeds of Trust and Security Agreements executed by Borrower, as Grantor
to Stephen P. Prinz, as Trustee, in favor of Lender (the "Deeds of Trust")
and those four (4) Assignments of Rents and Leases (the "Assignments of
Rents") which are more particularly described on Exhibit A attached hereto.
The Deeds of Trust and Assignments of Rents were amended by that certain
First Amendment to Deeds of Trust and Assignments of Rents, dated as of
December 13, 1999, which was recorded as described on Exhibit A.
E. The Revolving Credit Notes, the Original Credit Agreement, the Deeds of
Trust, the Assignment of Rents, this Fifth Modification Agreement and the
other documents described in the Original Credit Agreement as Loan
Documents, together with all modifications and amendments thereto and any
document required hereunder, are collectively referred to herein as the
"Loan Documents".
F. By this Fifth Modification Agreement, Borrower and Lender intend to modify
and amend certain terms and provisions of the Credit Facility and the Loan
Documents. All capitalized terms not expressly defined herein shall have
the meanings for such terms as set forth in the Original Credit Agreement.
All references herein to Sections shall mean Sections in the Original
Credit Agreement unless otherwise indicated.
NOW, THEREFORE, Borrower and Lender, for good and valuable consideration,
the receipt and sufficiency of which are acknowledged and confessed, and each
intending to be legally bound, agree as follows: 1. CONDITIONS PRECEDENT. The
following are conditions precedent to Lender's obligations under this Fifth
Modification Agreement:
1.1 Receipt by Lender of the executed originals of this Fifth
Modification Agreement, the organizational and authorization
items described in Sections 5.1 (g) - (l) to the Original Credit
Agreement relating to this Fifth Modification Agreement, as
applicable, and any and all other documents and agreements which
are required by this Fifth Modification Agreement or by any other
Loan Document, each in form and content acceptable to Lender; 1.2
Recordation in the Real Property Records of the County where each
of the Properties is located of any documents which are required
to be recorded by this Fifth Modification Agreement or by any
other Loan Document (if any);
1.3 Reimbursement to Lender by Borrower of Lender's costs and
expenses incurred in connection with this Fifth Modification
Agreement and the transactions contemplated hereby, including,
without limitation, title insurance costs, recording fees,
attorneys' fees, appraisal, engineers' and inspection fees and
documentation costs and charges, whether such services are
furnished by Lender's employees or agents or by independent
contractors;
1.4 The representations and warranties contained in this Fifth
Modification Agreement are true and correct;
1.5 Receipt by Lender of a Reaffirmation of Guaranty by all existing
Guarantors in the form attached as Exhibit O to the Original
Credit Agreement, and a Guaranty by all new or additional
entities required to be named as Guarantor under the Original
Credit Agreement, each such document modified as provided below,
including UIRT-Lake St. Charles L.L.C., a Florida limited
liability company, and UIRT-Skipper Palms, L.L.C., a Florida
limited liability company; and
1.6 Receipt by Lender of a duly executed Pledge Agreement as provided
for in Section 3.8 of this Fifth Modification Agreement in form
and content acceptable to Lender.
2. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants that:
2.1 No Default, breach or failure of condition has occurred, or would
exist with notice or the lapse of time or both, under any of the
Loan Documents (as modified by this Fifth Modification
Agreement);
2.2 All representations and warranties herein, in the Original Credit
Agreement and in the other Loan Documents are true and correct,
which representations and warranties shall survive execution of
this Fifth Modification Agreement;
2.3 The existing Guarantors executing the Reaffirmation of Guaranty
and the new Guarantors executing the additional Guaranty
constitute all of the entities required under the Original Credit
Agreement to serve as Guarantors of the Credit Facility.
3. MODIFICATION OF LOAN DOCUMENTS. The Loan Documents are hereby supplemented
and modified to incorporate the following, which shall supersede and
prevail over any conflicting provisions of the Loan Documents and which
shall for all pertinent purposes be deemed to be effective as of December
31, 1999:
3.1 Modification of Certain Dates. The Revolving Credit Termination
Date and Maturity Date recited in the Original Credit Agreement
and any of the other Loan Documents are hereby modified to read
January 31, 2001.
3.2 No Advances. Until such time as the Borrower's Ratio of
Liabilities to Gross Asset Value is reduced to 0.50 to 1 or less,
Lender will have no obligation to make any additional Revolving
Loans to Borrower under the provisions of Section 2.1 of the
Original Credit Agreement or to issue any Letters of Credit under
the provisions of Section 2.14 of the Original Credit Agreement,
but Lender, acting in its sole discretion, may elect to do so
and, in connection therewith, may impose such additional
conditions on such Revolving Loans or Letters of Credit as Lender
may deem appropriate, in its sole discretion.
3.3 LIBOR Loans and Existing Letters of Credit. Provided no Default
or Event of Default has occurred and is continuing and all
conditions precedent thereto have been met or satisfied, Lender
will renew any LIBOR Loans under the provisions of Section 2.7 of
the Original Credit Agreement or renew any Letters of Credit
under the provisions of Section 2.14 of the Original Credit
Agreement.
3.4 Letters of Credit Beyond Maturity Date. Notwithstanding the
provisions of Section 2.14(b) and provided no Default or Event of
Default has occurred and is continuing, Lender may, in its
discretion, elect to issue one or more Letters of Credit whose
expiration date extends beyond the Revolving Credit Termination
Date and, in connection therewith, may impose such additional
conditions on the issuance of such Letters of Credit as Lender
may deem appropriate, in its sole discretion.
3.5 Deletion of Extension Options. The extension options provided for
in Section 2.11 of the Original Credit Agreement, as modified by
Section 3.2 of the Third Modification Agreement, are hereby
deleted in their entirety. From and after the Revolving Credit
Termination Date and the Maturity Date, as revised by this Fifth
Modification Agreement, there shall be no further rights on
behalf of the Borrower to extend the Revolving Credit Facility.
The second and third full sentences of Section 3.2 of the Third
Modification Agreement are hereby deleted in their entirety and
following substituted in lieu therefor:
Notwithstanding the foregoing and notwithstanding the provisions
of Section 2.1(b) of the Original Credit Agreement, Lender
reserves the right, at Lender's option and at Borrower's expense,
to re-appraise and re-determine the Appraised Value of all or any
Pool Properties until the Revolving Credit Termination Date (as
modified by this Fifth Modification Agreement).
3.6 Modification of Form Documents. All Loan Documents and other
documents at any time required to be executed or delivered under
the Original Credit Agreement in the forms of such documents
attached to the Original Credit Agreement as exhibits shall be
executed or delivered in such forms, modified as necessary or
appropriate to correctly refer to this Fifth Modification
Agreement and the modifications effected hereby.
3.7 Additional Collateral. Within forty-five (45) days after July 31,
2000, Borrower will grant to Lender valid, enforceable, perfected
and (except for Permitted Liens) first priority and only security
interest and Lien in and to the properties owned by Borrower or
one of its Consolidated Subsidiaries which are described on
Exhibit B attached hereto (the "Additional Collateral") as
additional security for the Obligations pursuant to Collateral
Documents in the form provided for in the Original Credit
Agreement. The Additional Collateral will be subject to all of
the terms and provisions of Article 4 of the Original Credit
Agreement. In addition, the Borrower, at its expense, must
provide a Mortgagee Policy of Title Insurance (each, a "Title
Insurance Policy") for each property constituting Additional
Collateral, in an amount reasonably determined by Lender,
insuring Lender that the Mortgage in respect of such additional
property is a first priority deed of trust and that the
additional property is titled in the name of Borrower and is
otherwise free and clear of any Liens or other encumbrances other
than Permitted Liens. Each Title Insurance Policy must otherwise
be in form and content, and contain such endorsements, as are
acceptable to Lender. If one or more of the properties described
herein as Additional Collateral do not qualify and meet all
requirements of Article 4 of the Original Credit Agreement for
inclusion as a Pool Property or cannot be insured as provided
herein, Borrower agrees that it will provide one or more
replacement properties to serve as Collateral in accordance with
the provisions of Section 4.1(b) of the Original Credit Agreement
and this Section 3.7 of this Fifth Modification Agreement, each
of which shall be subject to the approval of Lender. In its sole
discretion, Lender may accept a negative pledge, assignment of
leases and rents and/or assignment of any sales or refinancing
proceeds with respect to a Property in lieu of a Mortgage on such
Property, but Lender shall be under no obligation to do so.
Borrower's failure to perform its obligations under the
provisions of this Section 3.7 within forty-five (45) days will
constitute an Event of Default.
3.8 Imposition of Property Tax Escrow. Upon the sale of any Property
or the refinancing thereof, in the manner permitted under the
Original Credit Agreement, Borrower will deposit all net sales or
refinancing proceeds into a property tax escrow account at Lender
(the "Tax Escrow Account") until the full amount of property
taxes for the year 2000 on each Pool Property (or any other
Property that is being considered to be added as a Pool Property)
that have accrued to the date of such sale or refinancing have
been escrowed. Beginning November 1, 2000, whether or not such a
sale or refinancing has occurred, Borrower will make monthly
payments into the Tax Escrow Account in amounts reasonably
calculated by Lender, so that by the date the property tax
payments for calendar year 2000 for each Pool Property are due,
the full amount of the annual tax liability for each Pool
Property will be fully escrowed in the Tax Escrow Account. The
payments will be made on the same date that payments on the
Credit Facility are due. The Tax Escrow Account will be an
interest bearing account, with all interest on the amounts
therein to be retained in the Tax Escrow Account, but to accrue
to the benefit of the Borrower, until the Lender has determined,
in its sole discretion, that funds sufficient for the property
tax liability for the year 2000 have been fully funded into the
Tax Escrow Account at which time any excess income will be
disbursed to Borrower. The Tax Escrow Account will pledged as
additional collateral for the Obligations pursuant to a Pledge
Agreement in form and content acceptable to Lender and shall be
used by Lender only for the payment of property taxes for each
Pool Property. For the purposes of this Fifth Modification
Agreement, the phrase "net sales or refinancing proceeds" shall
refer to the gross cash proceeds of such sale after deducting
therefrom only the reasonable costs of such sale and repayment of
any debt secured by such Property, including but not limited to
indebtedness under the Credit Facility if such property being
sold or refinanced is a Pool Property. Failure to implement the
Tax Escrow Account in the manner provided in this Section 3.8 of
this Fifth Modification Agreement will be an Event of Default.
3.9 Partial Release Provisions; Partial Repayment upon Sale of
Centennial or Hedwig Village Shopping Centers. Notwithstanding
anything to the contrary in the Original Credit Agreement,
Borrower and Lender agree as follows:
(a) Notwithstanding the provisions of Section 4.2(b) of the
Original Credit Agreement, Borrower will be entitled to a
release of the Mortgage in respect of a Pool Property upon
the sale or refinancing of such Pool Property in an
arm's-length transaction with an unrelated third party in
accordance with the following provisions:
(i) The agreed upon principal payments required in order to
secure the release of each Pool Property are as set
forth on Exhibit C attached hereto.
(ii) With respect to the Properties added as Additional
Collateral pursuant to the provisions of Section 3.7 of
this Fifth Modification Agreement, the agreed upon
principal payments required in order to secure the
release of each such Property will be 70% of the
Appraised Value upon a sale thereof and 65% of the
Appraised Value upon a refinancing thereof.
(iii)At the time of the sale or refinancing of a Pool
Property or the Additional Collateral, no Default or
Event of Default shall have occurred and be continuing,
unless otherwise determined in the sole discretion of
the Lender.
(iv) No Pool Properties will be released if, after giving
effect to such release, the sum of (a) the outstanding
principal balance under the Credit Facility plus (b)
the face amount of all outstanding Letters of Credit
would be greater than the Maximum Loan Availability. In
such event, Borrower agrees to deposit in the
Collateral Account sufficient cash to completely cash
collateralize the outstanding Letters of Credit to the
extent that such sum exceeds the Maximum Loan
Availability.
(v) The first sentence in Section 4.2 is hereby deleted in
its entirety and following substituted in lieu
therefor:
From time to time Borrower may request, upon not less than
forty-five (45) days prior written notice to Agent and
Lenders, that a Pool Property cease to be a Pool Property.
(b) The establishment of partial release prices in this
Section 3.9(a) of this Fifth Modification Agreement is not
intended to modify or amend the definition of Maximum Loan
Availability under the Original Credit Agreement.
(c) Upon the sale or refinancing of the Centennial Shopping
Center or Hedwig Village Shopping Center (provided that
neither of such Properties has become a Pool Property),
Borrower agrees that one-half of the net sales or
refinancing proceeds will, simultaneously with the closing
of such sale or refinancing, be paid to Lender in respect of
outstanding amounts of principal and interest due on the
Credit Facility and that the failure to do so will be an
Event of Default.
3.10 Modification of Definition of Gross Asset Value. The definition of Gross
Asset Value as set forth in Section 1.1 of the Original Credit Agreement
will be deleted in its entirety and the following substituted in lieu
therefor: "Gross Asset Value" means, at a given time, the sum of (a)
Adjusted Asset Value at such time, plus (b) all cash and cash equivalents
of Borrower and its Consolidated Subsidiaries at such time (excluding
tenant deposits and other cash and cash equivalents the disposition of
which is restricted in any way (excluding restrictions in the nature of
early withdrawal penalties)), plus tax and insurance escrows in accounts
maintained at any lender in respect of any Property that are verified to
the sole satisfaction of Lender, plus the amounts in the Tax Escrow Account
established under the provisions of Section 3.8 of this Fifth Modification
Agreement, plus the current book value of all real property of Borrower and
its Consolidated Subsidiaries held for development or upon which
construction is then in progress.
3.11 Modification of Definition of Permitted Distributions. The definition of
Permitted Distributions in Section 1.1 is hereby deleted in its entirety
and the following substituted in lieu therefor: "Permitted Distributions"
means an amount not exceeding 97% of Borrower's Funds from Operations
during the immediately preceding consecutive four-fiscal quarter period.
3.12 Modification of Section 8.1. Section 8.1 of the Original Credit Agreement
will be deleted in its entirety and the following substituted in lieu
therefor:
Borrower shall not at any time permit the Net Worth of Borrower and its
Consolidated Subsidiaries to be less than (a) $68,000,000.00 plus (b) 90%
of the amount of proceeds in cash or property (net of transaction costs)
received by Borrower or any Subsidiary from the sale or issuance by
Borrower of Shares, options, warrants or other equity securities of any
class or character after December 31, 1999. 3.13 Modification of Section
8.2. Section 8.2 of the Original Credit Agreement will be deleted in its
entirety and the following substituted in lieu therefor:
Borrower shall not at any time permit the Ratio of (a) Total Liabilities of
Borrower and its Consolidated Subsidiaries to (b) Gross Asset Value of
Borrower and its Consolidated Subsidiaries to exceed 0.60 to 1.0.
3.14 Modification of Section 8.3. Section 8.3 of the Original Credit Agreement
will be deleted in its entirety and the following substituted in lieu
therefor:
If an Event of Default under Section 9.1(a) shall have occurred and be
continuing, Borrower shall not directly or indirectly declare or make, or
incur any liability to make, any Restricted Payments. If any other Event of
Default shall have occurred and be continuing, Borrower shall not directly
or indirectly declare or make, or incur any liability to make, any
Restricted Payments other than distributions to its shareholders in the
minimum amount necessary to maintain compliance with Section 7.14. Provided
no Event of Default shall have occurred and be continuing, Borrower may
make Permitted Distributions but shall not directly or indirectly declare
or make, or incur any liability to make, any other Restricted Payments.
3.15 Modification of Section 8.4. Section 8.4 of the Original Credit Agreement
will be deleted in its entirety and the following substituted in lieu
therefor:
Borrower shall not permit the Ratio of (a) EBITDA of Borrower and its
Consolidated Subsidiaries to (b) Interest Expense of Borrower and its
Consolidated Subsidiaries for any consecutive four-fiscal quarter period to
be less than 1.95 to 1.0 at the end of such period.
3.16 Modification of Section 8.5. Section 8.5 of the Original Credit Agreement
will be deleted in its entirety and the following substituted in lieu
therefor:
Borrower shall not permit the Ratio of (a) EBITDA of Borrower and its
Consolidated Subsidiaries to (b) the sum of Debt Service of Borrower and
its Consolidated Subsidiaries plus the Capital Expenditures Reserve for all
Properties (prorated for the period owned if such period is less than one
year) for any consecutive four-fiscal quarter period to be less than 1.65
to 1.0 for such period.
3.17 Addition of Section 8.9. A new Section 8.9 will be added to the Original
Credit Agreement to read as follows:
Notwithstanding the provisions of Section 8.3 of the Original Credit
Agreement, Borrower will not and shall not permit any of its Subsidiaries
to purchase or repurchase shares of Borrower's stock or exchange property
for Borrower's stock without the prior written consent of Lender which may
be granted or withheld in Lender's sole discretion. Notwithstanding the
foregoing, Lender acknowledges and agrees that Borrower will exchange its
Property known as the University Park Shopping Center in College Station,
Texas ("University Park"), in exchange for 337,400 shares of Borrower's
stock currently held by the proposed transferee of University Park. The
transfer of University Park will be made subject to, and the transferee
thereof will expressly assume, indebtedness owed by Borrower with respect
to such Property in the amount of approximately $4,614,894.00. The form of
the documentation under which University Park will be transferred to and
the indebtedness assumed by the transferee will be subject to Lender's
reasonable approval in order to insure that the indebtedness secured by
such Property is appropriately assumed by the transferee and is no longer a
direct or contingent indebtedness of the Borrower.
3.18 Modification of Section 11.1. Section 11.1 of the Original Credit Agreement
will be deleted in its entirety and the following substituted in lieu
therefor:
SECTION 11.1. Notices.
All notices, requests and other communications to any party under the Loan
Documents shall be in writing (including facsimile transmission or similar
writing) and shall be given to such party as follows:
If to Borrower:
United Investors Realty Trust
5847 San Felipe
Suite 850
Houston, Texas 77057
Attention: Chief Financial Officer
Telecopier: (713) 268-6005
Telephone: (713) 781-2860
If to Lender:
Wells Fargo Bank, National Association
Disbursement and Operations Center
2120 East Park Place, Suite 100
El Segundo, California 90245
Attention: Disbursement Administrator
with a copy to:
Wells Fargo Bank, National Association
1000 Louisiana - 4th Floor
Houston, Texas 77002-5093
Attention: Mr. David Williams
Or as to each party at such other address as such party shall designate in
a written notice to the other parties. Each such notice, request or other
communication shall be effective (a) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (b) if given by any other means (including
facsimile), when delivered at the applicable address provided for in this
Section; provided that notices to Agent under Article II., and any notice
of a change of address for notices, shall not be effective until received.
4. ACKNOWLEDGEMENT OF RELEASE OF GUARANTOR. The parties acknowledge that
UIRT-I-McMinn, Inc., a Tennessee corporation, has been released as a
Guarantor.
5. FORMATION AND ORGANIZATIONAL DOCUMENTS. Borrower has previously delivered
to Lender all of the relevant formation and organizational documents of
Borrower, of the partners or joint venturers of Borrower (if any), and of
all guarantors of the Credit Facility (if any), and all such formation
documents remain in full force and effect and have not been amended or
modified since they were delivered to Lender. Borrower hereby certifies
that: (i) the above documents are all of the relevant formation and
organizational documents of Borrower; (ii) they remain in full force and
effect; and (iii) they have not been amended or modified since they were
previously delivered to Lender.
6. HAZARDOUS SUBSTANCES. Without in any way limiting any other provision of
this Fifth Modification Agreement, Borrower expressly reaffirms as of the
date hereof, and continuing hereafter: (i) each and every representation
and warranty in the Loan Documents respecting "Hazardous Substances"; and
(ii) each and every covenant and indemnity in the Loan Documents respecting
"Hazardous Substances".
7. ACKNOWLEDGMENT BY BORROWER. Borrower hereby acknowledges, agrees and
represents that:
(i) Borrower is indebted to Lender pursuant to the terms of the Revolving
Credit Notes and the Original Credit Agreement as modified hereby;
(ii) the liens, security interests and assignments created and evidenced by
the Loan Documents, including but not limited to this Fifth
Modification Agreement and the Loan Documents expressly required in
connection herewith, are, respectively, valid and subsisting liens,
security interests and assignments of the respective dignity and
priority recited in all Loan Documents; and such liens, security
interests and assignments are given as security for all indebtedness
evidenced by all of the Loan Documents;
(iii)there are no claims or offsets against, or defenses or counterclaims
to, the terms or provisions of the Loan Documents, and the other
obligations created or evidenced by the Loan Documents;
(iv) Borrower has no claims, offsets, defenses or counterclaims arising
from any of Lender's acts or omissions with respect to the Property,
the Loan Documents or Lender's performance under the Loan Documents or
with respect to the Property;
(v) the representations and warranties contained in the Loan Documents are
true and correct representations and warranties of Borrower and third
parties, as of the date hereof; and
(vi) To the best of Borrower's knowledge and belief, Lender is not in
default and no event has occurred which, with the passage of time,
giving of notice, or both, would constitute a default by Lender of
Lender's obligations under the terms and provisions of the Loan
Documents. To the extent Borrower now has any claims, offsets,
defenses or counterclaims against Lender or the repayment of all or a
portion of the Credit Facility, whether known or unknown, fixed or
contingent, same are hereby forever irrevocably waived and released in
their entirety.
8. NON-IMPAIRMENT. Except as expressly provided herein, nothing in this
Fifth Modification Agreement shall alter or affect any provision,
condition, or covenant contained in the Revolving Credit Notes or
other Loan Document or affect or impair any rights, powers, or
remedies of Lender, it being the intent of the parties hereto that the
provisions of the Revolving Credit Notes and other Loan Documents
shall continue in full force and effect except as expressly modified
hereby.
9. MISCELLANEOUS. This Fifth Modification Agreement and the other Loan
Documents shall be governed by and interpreted in accordance with the
laws of the State of Texas, except if preempted by federal law, and
except as expressly provided in the Mortgages covering Property
located in states other than Texas. In any action brought or arising
out of this Fifth Modification Agreement or the Loan Documents,
Borrower, and the general partners and joint venturers of Borrower,
hereby consent to the jurisdiction of any federal or state court
having proper venue within the State of Texas and also consent to the
service of process by any means authorized by Texas or federal law.
The headings used in this Fifth Modification Agreement are for
convenience only and shall be disregarded in interpreting the
substantive provisions of this Fifth Modification Agreement. All
capitalized terms used herein, which are not defined herein, shall
have the meanings given to them in the other Loan Documents. Time is
of the essence of each term of the Loan Documents, including this
Fifth Modification Agreement. If any provision of this Fifth
Modification Agreement or any of the other Loan Documents shall be
determined by a court of competent jurisdiction to be invalid, illegal
or unenforceable, that portion shall be deemed severed from this Fifth
Modification Agreement and the remaining parts shall remain in full
force as though the invalid, illegal, or unenforceable portion had
never been a part thereof.
10. INTEGRATION; INTERPRETATION. THIS FIFTH MODIFICATION AGREEMENT AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES. THIS INSTRUMENT MAY BE AMENDED ONLY BY
AN INSTRUMENT IN WRITING EXECUTED BY THE PARTIES HERETO.
11. WAIVER OF CONSUMER RIGHTS. BORROWER HEREBY WAIVES BORROWER'S RIGHTS
UNDER THE PROVISIONS OF CHAPTER 17, SUBCHAPTER E, SECTION 17.41
THROUGH 17.63 INCLUSIVE OF THE TEXAS BUSINESS AND COMMERCE CODE,
GENERALLY KNOWN AS THE "DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION
ACT", A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. AFTER
CONSULTATION WITH AN ATTORNEY OF BORROWER'S OWN SELECTION, BORROWER
VOLUNTARILY CONSENTS TO THIS WAIVER. IT IS THE INTENT OF LENDER AND
BORROWER THAT THE RIGHTS AND REMEDIES WITH RESPECT TO THIS TRANSACTION
SHALL BE GOVERNED BY LEGAL PRINCIPLES OTHER THAN THE TEXAS DECEPTIVE
TRADE PRACTICES-CONSUMER PROTECTION ACT. THE WAIVER SET FORTH HEREIN
SHALL EXPRESSLY SURVIVE THE TERMINATION OF THE REFERENCED TRANSACTION.
BORROWER REPRESENTS AND WARRANTS TO LENDER THAT BORROWER (i) IS A
BUSINESS CONSUMER, (ii) HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND
BUSINESS MATTERS THAT ENABLE BORROWER TO EVALUATE THE MERITS AND RISKS
OF THE SUBJECT TRANSACTION, (iii) IS NOT IN A SIGNIFICANTLY DISPARATE
BARGAINING POSITION WITH RESPECT TO THE SUBJECT TRANSACTION, AND
(iv) HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL (WHO WAS NOT,
DIRECTLY OR INDIRECTLY, IDENTIFIED, SUGGESTED OR SELECTED BY LENDER OR
LENDER'S AGENTS) IN CONNECTION WITH THE REFERENCED TRANSACTION.
IN WITNESS WHEREOF, Borrower and Lender have caused this Fifth Modification
Agreement to be duly executed in multiple counterpart originals as of the date
first above written. "LENDER/BENEFICIARY"
WELLS FARGO BANK,
NATIONAL ASSOCIATION
By:
Name: David C. Williams
Title: Vice President
"BORROWER/GRANTOR"
UNITED INVESTORS REALTY TRUST,
a Texas real estate investment trust
By: /S/ R. Steven Hamner
--------------------------
Name: R. Steven Hamner
Title: Vice President
Chief Financial Officer
STATE OF TEXAS
COUNTY OF
This instrument was ACKNOWLEDGED before me on _____________, 2000, by
___________________, the ___________________ of UNITED INVESTORS REALTY TRUST, a
Texas real estate investment trust, on behalf of said trust.
[S E A L]
My Commission Expires: Notary Public - State of Texas
Printed Name of Notary Public
STATE OF TEXAS
COUNTY OF HARRIS
This instrument was ACKNOWLEDGED before me on _____________, 2000, by DAVID C.
WILLIAMS, Vice President of WELLS FARGO BANK, NATIONAL ASSOCIATION, a national
banking association, on behalf of said association.
[S E A L]
My Commission Expires: Notary Public - State of Texas
Printed Name of Notary Public
<TABLE>
<CAPTION>
EXHIBIT A
DEEDS OF TRUST
AND ASSIGNMENTS OF RENTS AND FIRST AMENDMENT THERETO
First Amendment
Property County Deed of Trust Assignment of Title Company Policy No. Dec. 13, 1999
<S> File No.; Vol./Pg. Rents File No.;Vol./Pg.
<C> <C> <C> <C> <C> <C> <C>
----------------- ----------------- ------------------- ------------------- ----------------- ------------------ -------------------
Bandera Bexar 98-0231161; 98-0231162 Lawyers Title 91-00625428 99-0231816
V. 7769
P. 0726
----------------- ----------------- ------------------- ------------------- ----------------- ------------------ -------------------
----------------- ----------------- ------------------- ------------------- ----------------- ------------------ -------------------
Market at First Ft. Bend FBC 98104043 98-104044 Lawyers Title 91-00-625431 FBC 1999108407
Colony
--------------- ----------------- ------------------- ------------------- ----------------- ------------------ ---------------------
-------------- ----------------- ------------------- ------------------- ----------------- ------------------ ----------------------
Mason Park Harris T453542 T453543 Lawyers Title 91-00-625430 U132708
----------------- ----------------- ------------------- ------------------- ----------------- ------------------ -------------------
--------------- ----------------- ------------------- ------------------- ----------------- ------------------ ---------------------
Twin Lakes Loudon Co., Trust Book 480, Trust Book 480, Lawyers Title G47-0183873 N/A
Tenn. P. 870 P. 907
-------------- ----------------- ------------------- ------------------- ----------------- ------------------ ----------------------
----------------- ----------------- ------------------- ------------------- ----------------- ------------------ -------------------
El Campo Wharton V. 348, P. 426 V. 348 Lawyers Title 91-00-797221 N/A
Inst. #200537 P. 463
Inst. #200538
----------------- ----------------- ------------------- ------------------- ----------------- ------------------ -------------------
</TABLE>
EXHIBIT B
Description of Additional Collateral
1. Albertson's Bissonnet - 15,522 sq. ft. shopping center located at the NEC
of Bissonnet Road and Kirkwood Road, Harris County, Texas.
2. Spring Shadows Albertson's - 41,700 sq. ft. shopping center located at SWC
of Kempwood Road and Gessner Road, Harris County, Texas.
<TABLE>
<CAPTION>
EXHIBIT C
Description of Release Prices as to each Pool Property
Pool Property Property Sale Refinance
Release Price Release Price
<S>
<C> <C> <C>
Bandera Festival Shopping Center $ 8,050,000 $ 7,475,000
Mason Park Shopping Center 8,970,000 8,330,000
Market at First Colony Shopping Center 9,935,000 9,225,000
El Campo Shopping Center 1,600,000 1,480,000
Twin Lakes Shopping Center 1,890,000 1,755,000
</TABLE>
ENVIRONMENTAL INDEMNITORS' CONSENT
Each of the undersigned (collectively, "Indemnitors") consents to the foregoing
Fifth Modification Agreement and the transactions contemplated thereby and
reaffirms its obligations under the Environmental Indemnity Agreement
("Indemnity") dated August 25, 1998, relating to the Pool Property designated
below such Indemnitor's signature set forth below, and its waivers, as set forth
in the Indemnity, of each and every one of the possible defenses to such
obligations. Indemnitor further reaffirms that its obligations under the
Indemnity are separate and distinct from Borrower's obligations.
Each Indemnitor understands that the Lender's exercise of a non-judicial
foreclosure sale under the subject Deed of Trust relating to the Pool Property
so designated below may result in an adverse effect on any subrogation,
reimbursement or contribution rights which Indemnitor may have against the
Borrower. Indemnitor specifically waives any and all rights and defenses arising
out of an election of remedies by Lender, even though that election of remedies,
such as a nonjudicial foreclosure with respect to security for a guaranteed
obligation, may have an adverse effect on Indemnitor's rights of subrogation and
reimbursement against the principal. Indemnitor further specifically waives any
and all rights and defenses that Indemnitor may have because Borrower's debt is
secured by real property; this means, among other things, that: (1) Lender may
collect from Indemnitor without first foreclosing on any real or personal
property collateral pledged by Borrower; (2) if Lender forecloses on any real
property collateral pledged by Borrower, then (A) the amount of the debt may be
reduced only by the price for which that collateral is sold at the foreclosure
sale, even if the collateral is worth more than the sale price, and (B) Lender
may collect from Indemnitor even if, by foreclosing on the real property
collateral, there might be an adverse affect on any right Indemnitor may have to
collect from Borrower. The foregoing sentence is an unconditional and
irrevocable waiver of any rights and defenses Indemnitor may have because
Borrower's debt is secured by real property. This understanding and waiver is
made in addition to and not in limitation of any of the existing terms and
conditions of the Indemnity.
AGREED and dated as of July 14, 2000.
"INDEMNITORS"
United Investors Realty Trust,
a Texas real estate investment trust
BY: /R/ Steven Hamner
-----------------------------------------
R. Steven Hamner, as its Vice President &
Chief Financial Officer
PROPERTIES:
Bandera, El Campo, Market at First Colony,
Mason Park, Twin Lakes
EXHIBIT NO. DESCRIPTION
99.1 Press Release, dated August 30, 2000
HOUSTON --(BUSINESS WIRE)--August 30, 2000--United Investors Realty Trust
(NASDAQ: UIRT; Pacific: UIR), a Houston based equity real estate investment
trust, today was granted relief from a temporary restraining order that had
prevented UIRT from selling a shopping center. In the ruling, a State district
court in Dallas denied the plaintiff's request for an injunction against UIRT
and lifted the TRO.
UIRT's chairman and chief executive officer, Robert Scharar, stated, "We are
pleased that the court so quickly ruled on our request that the injunction be
denied. We intend now to go forward with the sale of the property as described
in our most recent quarterly report on form 10-Q and in our August 14 press
release."
Scharar went on to state that completion of the transaction is expected to
accomplish several important strategic goals of UIRT. "This sale will allow us
to sell a property that does not meet our current investment criteria, primarily
because it is encumbered by a high interest rate mortgage loan that cannot be
prepaid and because we believe it offers very little short or long-term upside
to us. By relieving ourselves of the debt on this property, our leverage ratio
and our debt service coverage ratio are both expected to improve. As part of our
previously announced share repurchase plan, this transaction also allows us to
reacquire over 380,000 shares in a single transaction. The holder of those
shares presently receives over $325,000 a year in dividends."
About United Investors Realty Trust
United Investors Realty Trust is a Houston-based real estate investment trust
and owns 28 neighborhood and community shopping centers. These centers include
approximately 3,100,000 square feet of gross leaseable area of which grocery
store operators and third parties own approximately 737,000 square feet. Of the
Company's properties, 19 are located in Texas (including eight in Houston and
six in Dallas). The remaining properties are located in Arizona (three), Florida
(four), and Tennessee (two). The Company's common shares of beneficial interest
trade on the NASDAQ National Market System under the ticker symbol "UIRT," and
on the Pacific Stock Exchange under the symbol "UIR."
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: Statements in this press release regarding United Investors Realty Trust's
business which are not historical facts are "forward-looking statements" that
involve risks and uncertainties. Examples of such risks and uncertainties
include, but are not limited to, changes in interest rates, increased
competition for acquisition of new properties, unanticipated expenses and delays
in acquiring or developing properties, inability to obtain capital, failure to
complete pending property dispositions, inability to develop effective strategic
option, changes in occupancy rates and the financial strength of tenants in the
Company's centers, and regional, local, and national economic and business
conditions.
CONTACT: United Investors Realty Trust, Houston
R. Steven Hamner, 713/260-1443
