Exhibit 10.1
FIRST AMENDMENT TO LOAN AGREEMENT
FIRST AMENDMENT TO LOAN AGREEMENT dated as of June 14, 2000 (this
"Amendment") between KPT PROPERTIES, L.P., a Delaware limited partnership having
an address c/o Konover Property Trust, 11000 Regency Parkway, Suite 300, Cary,
North Carolina 27511(together with its permitted successors and assigns,
"Borrower") and LASALLE BANK NATIONAL ASSOCIATION, as Trustee for CDC Depositor
Trust ST-I (formerly known as Nomura Depositor Trust ST-I), Commercial Mortgage
Pass-Through Certificates, Series 1998 - ST-I, having an address c/o CapMark
Services, L.P., 245 Peachtree Center Avenue, NE, Suite 1800, Atlanta, Georgia
30303-1231 (together with its permitted successors and assigns, "Lender").
RECITALS
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A. FAC Realty, Inc. ("FAC"), the predecessor in interest to
Borrower, and Nomura Asset Capital Corporation ("NACC") entered into that
certain Loan Agreement dated as of February 19, 1997 (the "Existing Loan
Agreement") providing for a secured mortgage loan in an amount of up to
$150,000,000 (the "Original Loan") to be made to Borrower. The Original Loan is
evidenced by that certain Amended, Restated and Consolidated Promissory Note
dated as of February 19, 1997 in the principal amount of $150,000,000 made by
FAC and payable to NACC, (the "Original Note").
B. Prior to the execution hereof, the Existing Loan Agreement,
the Original Loan and the Original Note were assigned (i) by NACC to The Capital
Company of America LLC ("CCA"), (ii) by CCA to the Owner Trustee (hereinafter
defined) and (iii) by Owner Trustee to Lender, each pursuant to a general
assignment.
C. (i) This Amendment was requested by the Borrower and agreed
to by CDC Mortgage Capital, Inc. ("CDC"); (ii) CDC negotiated or established the
terms of the amendment, evaluated the Borrower's financial condition and
prepared or caused to be prepared this Amendment; and (iii) neither CapMark
Services, L.P. nor Lender engaged in any of the foregoing activities, but rather
are executing this Amendment at the request of CDC.
D. Pursuant to Section 3.28(k) of that certain Pooling and
Servicing Agreement, dated as of February 4, 1998, as amended (the "Pooling and
Servicing Agreement"), by and between Nomura Depositor Trust ST I, as depositor,
The Capital Company of America Client Services LLC, as servicer (the
"Servicer"), AMRESCO Services, L.P., as operating advisor, AMRESCO Management,
Inc., as special servicer, LaSalle National Bank, as trustee (the "Trustee"),
and ABN AMRO Bank N.V., as fiscal agent, for federal, state and local tax
purposes (i) the Original Loan shall be deemed to have been transferred by
LaSalle National Bank, as trustee of the Nomura Depositor Trust ST I, Commercial
Mortgage Pass-Through Certificates, Series 1998-ST I, to Wilmington Trust
Company, in its capacity as Owner Trustee (the "Owner Trustee") of Nomura Mirror
Trust ST-I-FAC (the "Mirror Trust"), and by the Owner Trustee to the Servicer,
as servicer on behalf of the Owner Trustee under the Pooling and
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Servicing Agreement and on behalf of Certificateholders for purposes of
effecting this modification to be held outside of the Mirror Trust and modified
as provided herein, (ii) such modification shall be deemed to have been executed
by the Trustee as agent for the Servicer, as transferee of the Loan pursuant to
clause (i), and (iii) the Loan shall be deemed to have been re-transferred by
the Servicer, as servicer on behalf of the Owner Trustee under the Pooling and
Servicing Agreement, to the Owner Trustee to hold as an asset of the Mirror
Trust, and to have been re-transferred by the Owner Trustee to the Trustee, to
hold as collateral for the related Mirror Note, immediately following the
execution hereof, it being the intention of the parties hereto that neither the
Mirror Trust nor the Trust Fund shall be considered to have "originated" the
modified Loan for purposes of Section 860L(e)(2)(C) of the Internal Revenue Code
of 1986, as amended.
E. Borrower and Lender desire to amend the terms and
conditions of the Existing Loan Agreement in accordance with the terms hereof.
NOW THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Existing Loan Agreement is hereby amended as follows:
I. Modification of Existing Loan Agreement.
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1. Section 1.01 of the Existing Loan Agreement is hereby amended as follows:
A. The following definitions are hereby deleted in their entirety: "Acquisition
Loan"; "Acquisition Mortgage"; "Acquisition Property"; "Additional Loan";
"Additional Mortgage"; "Additional Properties"; "Allocation Factor"; "Approval
Information"; "Commitment"; "Extension Fee"; "FSA"; "Lender Fee"; "Limited
Release Property"; "Loans"; "MAI"; "NACC Refinancing"; "Revolver Period";
"Revolving Credit Termination Date". All references in the Existing Loan
Agreement to the aforementioned defined terms are hereby deleted.
B. The following definitions are hereby deleted in their entirety and replaced
with the following respective definitions:
(a) "Allocated Loan Amount" shall mean, in respect of
any Property, the amount set forth for such Property
on Exhibit A attached hereto.
(b) "Applicable Margin" shall mean 3.25% per annum.
(c) "Borrower" shall mean KPT Properties, L.P., a
Delaware limited partnership, together with its
permitted successors and assigns.
(d) "Collateral Properties" shall mean the Properties
identified on Schedule A attached hereto.
(e) "Lender" shall mean LaSalle Bank N.A., as Trustee
for CDC Depositor Trust ST-I (formerly known as
Nomura Depositor Trust ST-I),
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Commercial Mortgage Pass-Through Certificates, Series
1998 - ST-I, together with its permitted successors
and assigns.
(f) "Note" shall mean the Second Amended and Restated
Renewal Promissory Note dated as of June 14, 2000
made by the Borrower to the Lender in the principal
amount of $60,000,000.
(g) "Required Constant" shall mean (i) 11.0% with
respect to any determination relating to Collateral
Properties that are factory outlet centers and (ii)
10.09% with respect to any determination relating to
Collateral Properties that are community shopping
centers.
C. The following definitions are hereby amended as follows:
(a) The definition of "Available Amount" is hereby
amended by (i) deleting the number "1.6," on the
fourth line thereof and replacing the same with "1.4"
and (ii) deleting the number "1.4," on the sixth line
thereof and replacing the same with "1.25".
(b) The definition of "FSA Properties" is hereby
amended by (i) changing such definition to "REMIC
Properties" and (ii) deleting the words "owned by
FSA" and replacing such words with the words "owned
by REMIC LLC".
(c) The definition of "LIBOR Rate" is hereby amended
by (i) inserting the word "Eurodollar" before the
words "Business Days" on the third line thereof and
(ii) deleting the words "first day of" on the third
line thereof and replacing such words with the words
"fifteenth day of the calendar month occurring
during" and (iii) adding the sentence "For purposes
hereof "Eurodollar Business Day" shall mean any day
other than a Saturday, Sunday or other day on which
banks in the City of London, England are closed for
interbank or foreign exchange transactions." at the
end thereof.
(d) The definition of "Loan Documents" is hereby
amended by inserting the words "the Clearing Account
Agreement (as defined in Section 11.01), the Deposit
Account Agreement" immediately after the words "the
Security Documents" on the second line thereof.
(e) The definition of "Release Amount" is hereby
amended by deleting therefrom the words "as of such
date" on the third line thereof.
(f) The definition of "Total Asset Value" is hereby
amended by deleting the number "0.11" at the end
thereof and replacing the same with the number
"0.12".
D. The following definitions are hereby added:
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(a) "Approved Capital Expenditures" shall mean
Capital Expenditures incurred by the Borrower,
provided that during a Cash Management Period, such
Capital Expenditures shall either be (i) included in
the approved Capital Budget for a Collateral Property
for the current calendar month or (ii) approved by
the Lender.
(b) "Approved Leasing Expenses" shall mean expenses
incurred by the Borrower in leasing space at a
Collateral Property pursuant to Leases entered into
in accordance with the Loan Documents, including
brokerage commissions, tenant improvements and other
inducements, which expenses (i) are (A) specifically
approved by the Lender in connection with approving
the applicable Lease, (B) incurred in the ordinary
course of business and on market terms and conditions
in connection with Leases which do not require the
Lender's approval under the Loan Documents, or (C)
otherwise approved by the Lender, which approval
shall not be unreasonably withheld or delayed, and
(ii) are substantiated by executed Lease documents
and brokerage agreements.
(c) "Approved Operating Expenses" shall mean during a
Cash Management Period, operating expenses incurred
by the Borrower which (i) are included in the
approved Operating Budget for a Collateral Property
for the current calendar month, (ii) are for real
estate taxes, insurance premiums, electric, gas, oil,
water, sewer or other utility service to such
Collateral Property or (iii) have been approved by
the Lender.
(d) "Cash Management Period" shall mean the period
that commences upon the Lender giving notice to the
Clearing Bank of the occurrence of any of the
following: (i) the Stated Maturity Date, (ii) a
Default or an Event of Default, (iii) the finding by
the Lender that less than 95% of (x) the Rents
received by or on behalf of Borrower or (y) the Net
Cash Flow received by or on behalf of Borrower or
REMIC LLC, have been deposited into the Clearing
Account for any calendar month or (iv) the finding by
the Lender that the Debt Service Ratio, after the end
of a calendar quarter, is less that 1.15:1; and shall
end upon the Lender giving notice to the Clearing
Bank that the sweeping of funds into the Deposit
Account may cease, which notice the Lender shall only
be required to give if (1) the Loan and all other
obligations under the Loan Documents have been repaid
in full or (2) the Stated Maturity Date has not
occurred and for twelve consecutive months since the
commencement of the existing Cash Management Period
(A) no Default or Event of Default has occurred, (B)
no event that would trigger another Cash Management
Period has occurred and (C) the Debt Service Ratio is
at least equal to 1.15:1.
(e) "Deposit Bank" shall mean LaSalle Bank, N.A., or
such other bank or depository selected by Lender in
its discretion.
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(f) "General Partner" shall mean Konover Property
Trust, Inc., a Maryland corporation.
(g) "Leases" shall mean all leases and other
agreements or arrangements heretofore or hereafter
entered into affecting the use, enjoyment or
occupancy of, or the conduct of any activity upon or
in, a Collateral Property or the improvements
relating thereto, including any guarantees,
extensions, renewals, modifications or amendments
thereof and all additional remainders, reversions and
other rights and estates appurtenant thereunder.
(h) "Loan" shall mean the loan in the principal
amount of $60,000,000 made to the Borrower pursuant
to the terms of this Agreement and evidenced by the
Note.
(i) "Maturity Date" shall mean the date on which the
final payment of principal of the Note becomes due
and payable as therein provided, whether at the
Stated Maturity Date, by declaration of acceleration,
or otherwise.
(j) "REMIC LLC" shall mean KPT REMIC Loan LLC, a
Delaware limited liability company.
(k) "Rents" shall mean all rents, rent equivalents,
moneys payable as damages (including payments by
reason of the rejection of a Lease in a Bankruptcy
Proceeding) or in lieu of rent or rent equivalents,
royalties (including all oil and gas or other mineral
royalties and bonuses), income, fees, receivables,
receipts, revenues, deposits (including security,
utility and other deposits), accounts, cash, issues,
profits, charges for services rendered, and other
payment and consideration of whatever form or nature
received by or paid to or for the account of or
benefit of the Borrower, the Manager or any of their
agents or employees from any and all sources arising
from or attributable to the Collateral Properties and
the improvements thereon, including all receivables,
customer obligations, installment payment obligations
and other obligations now existing or hereafter
arising or created out of the sale, lease, sublease,
license, concession or other grant of the right of
the use and occupancy of the Collateral Properties or
rendering of services by the Borrower, the Manager or
any of their agents or employees and proceeds, if
any, from business interruption or other loss of
income insurance.
(l) "Stated Maturity Date" shall mean the earlier to
occur of (i) December 11, 2002 and (ii) the date on
which the REMIC Loan becomes due and payable.
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(m) "Taxes" shall mean all real estate and personal
property taxes, assessments, water rates or sewer
rents, maintenance charges, impositions, vault
charges and license fees, now or hereafter levied or
assessed or imposed against all or part of the
Collateral Properties.
2. The following Sections are hereby deleted in their entirety from the Existing
Loan Agreement: Sections 2.02; 2.03; 2.04(b); 2.07; 2.12; 3.03; 6.02; 6.03;
6.04; 6.05; and 8.13.
3. Section 2.01 of the Existing Loan Agreement is hereby deleted in its entirety
and replaced with the following:
Section 2.01 The Loan; Generally. The Borrower
represents to the Lender that (i) as of the date
hereof the outstanding principal balance of the
Original Loan (including any amounts advanced
contemporaneously herewith) is $60,000,000, (ii)
there exists no claims by the Borrower against the
Lender or any holder of the Original Loan and (iii)
there are no offsets or defenses by the Borrower to
the payment of any amounts required under the Loan
Documents or otherwise to enforcement by the holder
of the Loan. The Lender shall have no further
obligations to provide any additional financing to
Borrower and any amounts of the Loan repaid may not
be reborrowed.
4. Section 2.05 of the Existing Loan Agreement is hereby deleted in its entirety
and replaced with the following:
Section 2.05 Note. The Loan shall be evidenced by the
Note.
5. Section 2.08 of the Existing Loan Agreement is hereby amended as follows:
(a) Subsection (c) is hereby deleted in its entirety and
replaced with the following:
(c) (i) with respect to a Release of a Collateral
Property, after giving effect to such Release, and
the payments contemplated by clause (b) above, the
Collateral Property Debt Service Coverage Ratio
(hereinafter defined) for all of the Collateral
Properties then remaining subject to the Liens of the
Mortgages shall be no less than 1.35:1 and (ii) with
respect to the Release of a REMIC Property, after
giving effect to such Release, and the payments
contemplated by clause (b) above, the REMIC Property
Coverage Ratio (hereinafter defined) for all of the
remaining REMIC Properties shall be no less than
1.55:1.
For purposes of this Section 2.08, the following
terms shall have the following meanings:
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"Collateral Property Debt Service Coverage Ratio"
shall mean as of any date, the ratio calculated by
Lender of (i) the aggregate Property NOI for all of
the applicable Collateral Properties on such date for
the 12-month period ending with the most recently
completed calendar month to (ii) the Collateral
Property Debt Service for such period ending on the
last day of the calendar month ending on or most
recently ended prior to such date.
"Collateral Property Debt Service" shall mean for any
period the greater of (i) all Interest Expense
payable by the Borrower during such period with
respect to the Loan or (ii) the sum of (x) the
payments of principal and Interest Expense that would
be payable during such period if the amount of such
payments were at an annual rate equal to the product
of (A) the aggregate Allocated Loan Amounts
applicable to the Collateral Properties that are
factory outlet centers multiplied by (B) the Required
Constant applicable thereto and (y) the payments of
principal and Interest Expense that would be payable
during such period if the amount of such payments
were at an annual rate equal to the product of (A)
the aggregate Allocated Loan Amounts applicable to
the Collateral Properties that are community shopping
centers multiplied by (B) the Required Constant
applicable thereto.
"REMIC Property Coverage Ratio" shall mean as of any
date, the ratio calculated by Lender of (i) the
aggregate Property NOI for all of the REMIC
Properties on such date for the 12-month period
ending with the most recently completed calendar
month to (ii) the greater of (x) the scheduled
principal and interest payments due under the REMIC
Note in such period or (y) the product of 11.0%
multiplied by the sum of (A) the outstanding
principal balance of the REMIC Loan on such date plus
(B) the aggregate sum of all Allocated Loan Amounts
with respect to such REMIC Properties.
(b) Subsection (e) is hereby deleted in its entirety.
(c) The final sentence beginning with the words "If a Release
is made in connection with" is hereby deleted in its entirety.
6. Section 2.09 of the Existing Loan Agreement is hereby deleted in its entirety
and replaced with the following:
2.09 Exit Fee Upon any repayment or prepayment of all
or any portion of the principal amount of the Loan,
the Borrower shall pay to the Lender on the date of
such repayment or prepayment an amount equal to one
and one-half percent (1.50 %) of the amount of
principal being repaid or prepaid (the "Exit Fee").
Upon any acceleration of the Loan, the Borrower shall
immediately pay to the Lender on account of the Exit
Fee the amount by which (i) one and one-half percent
(1.50%) of the original
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principal amount of the Loan evidenced by the Note
exceeds (ii) the total amount of Exit Fees
theretofore paid by the Borrower pursuant to this
Section 2.09. All Exit Fees hereunder shall be deemed
to be earned by the Lender upon the funding of the
Loan.
7. The following Section 2.13 is hereby added at the end of Article 2 of the
Existing Loan Agreement.
2.13 Interest Rate Protection Agreements. As of the date
hereof, the Borrower has entered into, made all payments
required under, and satisfied all conditions precedent to the
effectiveness of, an interest rate protection agreement that
satisfies all of the following conditions. (such interest rate
protection agreement being referred to herein as the "Interest
Rate Protection Agreement"):
(a) the Interest Rate Protection Agreement is with a
financial institution having a long term, unsecured
and unsubordinated debt rating of at least "AA" by
S&P and "Aa2" by Moody's; has a term ending no
earlier than the Maturity Date; is an interest rate
cap in respect of a notional amount not less than the
maximum principal amount of the Loan that shall have
the effect of capping the LIBOR Rate at 7.41% per
annum; and provides that the only obligation of the
Borrower thereunder is the making of a single payment
upon the execution and delivery thereof.
(b) The Borrower's interest in such Interest Rate
Protection Agreement has been assigned to the Lender
pursuant to documentation satisfactory to the Lender
in form and substance, and the counterparty to such
Interest Rate Protection Agreement has executed and
delivered to the Lender an acknowledgment of such
assignment, which acknowledgment includes such
counterparty's agreement to pay directly to the
Lender all sums payable by such counterparty pursuant
to the Interest Rate Protection Agreement and shall
otherwise be satisfactory to the Lender in form and
substance.
(c) Notwithstanding anything in this Section 2.13 to
the contrary, prior to purchasing an Interest Rate
Protection Agreement, the Borrower shall notify CDC
Mortgage Capital Inc. of its intention to purchase
such Interest Rate Protection Agreement, which notice
may be telephonic and shall contain the name of the
proposed financial institution and the price and
other applicable terms relating to the proposed
Interest Rate Protection Agreement. Upon receipt of
such notice, CDC Mortgage Capital Inc. or its
Affiliate shall have the right to provide an Interest
Rate Protection Agreement to the Borrower at the same
(or lower) price and upon substantially the same
terms and conditions applicable to the proposed
Interest Rate Protection Agreement with such other
financial institution and the Borrower hereby agrees
to promptly enter into same with CDC Mortgage Capital
Inc. or its Affiliate. If CDC Mortgage Capital Inc.
or its
<PAGE>
Affiliate does not elect to provide such Interest
Rate Protection Agreement to the Borrower as provided
in the preceding sentence, the Borrower may purchase
the Interest Rate Protection Agreement from any
financial institution having a rating of at least
that specified in Section 2.13(a) above at the same
(or lower) price and upon substantially the same
terms and conditions applicable to the proposed
Interest Rate Protection Agreement first offered to
CDC Mortgage Capital Inc.
(d) The Borrower agrees that the Lender shall not
have any obligation, duty or responsibility to the
Borrower or any other Person by reason of, or in
connection with, any Interest Rate Protection
Agreement (including any duty to provide or arrange
any Interest Rate Protection Agreement, to consent to
any mortgage or pledge of the Properties or any
portion thereof as security for the Borrower's
performance of its obligations under any Interest
Rate Protection Agreement, or to provide any credit
or financial support for the obligations of the
Borrower or any other Person thereunder or with
respect thereto). No Interest Rate Protection
Agreement shall alter, impair, restrict, limit or
modify in any respect the obligation of the Borrower
to pay interest on the Loan as and when the same
becomes due and payable in accordance with the
provisions of the Loan Documents.
(e) All amounts received by the Lender from payments
made by the counterparty to the Interest Rate
Protection Agreement shall be deposited into the
Clearing Account and applied in the same manner as
repayments hereunder.
8. All references in the Existing Loan Agreement to the defined term "the
Revolving Credit Termination Date" are hereby deleted and replaced with the
words "the Maturity Date".
9. All references in the Existing Loan Agreement to the defined terms of (i) the
"Commitment" and (ii) the "Loans" are deemed to mean the "Loan".
10. All references in the Existing Loan Agreement to the defined term "FSA" are
hereby replaced with the defined term "REMIC LLC".
11. Section 3.02 of the Existing Loan Agreement is hereby amended by (i)
inserting the words "the greater of" immediately after the words "of (i)" on the
third line thereof and (ii) inserting the words "and 5.75%" immediately after
the words "for such Interest Period" on the fourth line thereof.
12. Section 4.04 of the Existing Loan Agreement is hereby amended by (i)
deleting the words "borrowing of the Loans and each" on the first line thereof
and (ii) replacing the dollar amount of "$1,000,000" at the end thereof with the
dollar amount of "$350,000" (it being understood and agreed by the parties that
with respect to any payment of principal made pursuant to Section 2.08, the
minimum amount of $350,000 shall refer to the amount paid by the
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Borrower as the applicable Release Amount (as opposed to the Allocated Loan
Amount for any applicable Release Property)).
13. Section 4.05 of the Existing Loan Agreement is hereby deleted in its
entirety and replaced with the following:
4.05 Certain Notices. Notices by the Borrower to the Lender of
any prepayments of the Loan shall be irrevocable and shall be
effective only if received by the Lender not later than 5:00
p.m. New York time at least 5 Business Days prior to the date
of the relevant prepayment. Each such notice of prepayment
shall specify the amount, and the date of prepayment (which
shall be a Business Day).
14. Section 7.01 of the Existing Loan Agreement is hereby amended by deleting
the word "corporation" on the first line thereof and replacing such word with
the word "limited partnership".
15. Section 7.14 of the Existing Loan Agreement is hereby deleted in its
entirety and replaced with the following:
7.14 Ownership; REIT Status. The sole general partner of the
Borrower is the General Partner. The General Partner currently
qualifies and is taxed as a real estate investment trust under
Subchapter M of the Code. KPT Property Holding Corp., a
Maryland corporation, owns in excess of 95% of the limited
partnership interests in Borrower. The General Partner is the
owner of all of the issued and outstanding capital stock of
KPT Property Holding Corp. and KPT REMIC Loan, Inc., all of
which capital stock has been validly issued, is fully paid and
nonassessable and is owned by the General Partner free and
clear of all assignments, pledges and security interests and
free and clear of all warrants, options and rights to
purchase. The Borrower is the sole member of REMIC LLC and KPT
REMIC Loan, Inc., a Delaware corporation, is the non-member
manager of REMIC LLC. The partnership interests in the
Borrower and the membership interests in REMIC LLC are owned
free and clear of all assignments, pledges and security
interests and free and clear of all warrants, options and
rights to purchase. Neither the Borrower nor REMIC LLC has any
obligation to any Person to purchase or repurchase any
ownership interest in it.
16. Section 8.01 of the Existing Loan Agreement is hereby amended as follows:
(i) the items referred to in subsections (a) and (b) to be delivered with
respect to the Borrower and FSA shall also be delivered with respect to the
General Partner; (ii) the items referred to in subsections (c) and (d) to be
delivered with respect to the Borrower and/or FSA shall instead be delivered
with respect to the General Partner; and (iii) by adding the following
subsection thereto:
(l) The Borrower shall prepare and submit (or shall the cause
Manager to prepare and submit) to the Lender within 30 days
after a Cash Management
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Period and by November 15th of each year thereafter during the
term hereof until such Cash Management Period has ended, for
approval by the Lender, which approval shall not be
unreasonably withheld or delayed, a proposed pro forma budget
for the Collateral Properties for the succeeding calendar year
(the "Annual Budget"), and, promptly after preparation
thereof, any revisions to such Annual Budget. The Lender's
failure to approve or disapprove any Annual Budget or revision
within 30 days after the Lender's receipt thereof shall be
deemed to constitute the Lender's approval thereof. The Annual
Budget shall consist of (i) an operating expense budget (the
"Operating Budget") showing, on a month-by-month basis, in
reasonable detail, each line item of the Borrower's
anticipated operating income and operating expenses (on a cash
and accrual basis), including amounts required to establish,
maintain and/or increase any monthly payments required
hereunder, and (ii) a Capital Expense budget (the "Capital
Budget") showing, on a month-by-month basis, in reasonable
detail, each line item of anticipated Capital Expenditures.
17. Section 8.03 of the Existing Loan Agreement is hereby deleted in its
entirety and replaced with the following:
8.03 Corporate Existence, Etc. The Borrower will, and will
cause REMIC LLC to, preserve and maintain its limited
partnership or limited liability company existence, as
applicable, and all of its material rights, privileges and
franchises; comply with the requirements of all applicable
laws, rules, regulations and orders of governmental or
regulatory authorities if failure to comply with such
requirements would have a Material Adverse Effect; pay and
discharge all taxes, assessments and governmental charges or
levies imposed on it or on its income or profits or on any of
its property prior to the date on which penalties attach
thereto, except for any such tax, assessment, charge or levy
the payment of which is being contested in good faith and by
proper proceedings and against which adequate reserves are
being maintained; maintain all of its properties used or
useful in its business in good working order and condition,
ordinary wear and tear excepted; and permit representatives of
the Lender, during normal business hours and upon reasonable
prior notice, and consistent with the rights of tenants under
their leases, to examine, copy and make extracts from its
books and records, to inspect its properties, and to discuss
its business and affairs with its officers, all to the extent
reasonably requested by the Lender. The General Partner will
continue to qualify and be taxed as a real estate investment
trust under Subchapter M of the Code and listed on the New
York Stock Exchange, NASDAQ or the American Stock Exchange.
REMIC LLC shall at all times continue to be 100% owned by the
Borrower.
18. The following Section 11 is hereby added immediately after Section 10 of the
Existing Loan Agreement:
Section 11 Cash Management and Reserves.
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11.01 Cash Management Arrangements. (a) The Borrower shall
cause (i) all Net Cash Flow to be transmitted directly by
REMIC LLC and (ii) all Rents to be transmitted directly by
non-residential tenants of each Collateral Property, in each
such case, into a trust account (the "Clearing Account")
maintained by the Borrower at a bank selected by the Borrower
(a "Clearing Bank") as more fully described in the Clearing
Account Agreement among the Borrower, the Lender and the First
Union Bank (the "Clearing Account Agreement"). Without in any
way limiting the foregoing, all Net Cash Flow and all Rents
received by the Borrower or the Manager shall be deposited
into the Clearing Account within one Business Day of receipt.
Funds deposited into the Clearing Account shall be swept by
the Clearing Bank on a daily basis into the Borrower's
operating account at the Clearing Bank, unless a Cash
Management Period is continuing, in which event such funds
shall be swept on a daily basis into an Eligible Account at
the Deposit Bank controlled by the Lender (the "Deposit
Account") and applied and disbursed in accordance with this
Agreement. Funds in the Deposit Account shall be invested at
the Lender's discretion only in Permitted Investments. The
Lender will also establish subaccounts of the Deposit Account
which shall at all times be Eligible Accounts (and may be
ledger or book entry accounts and not actual accounts) (such
subaccounts are referred to herein as "Subaccounts"). At all
times other than during the continuance of a Cash Management
Period, the Lender may, in its discretion, elect to maintain
the deposits and reserves required under this Agreement in an
Eligible Account at a bank or other depository selected by the
Lender other than the Deposit Bank in which case, all
references to the Deposit Account and any Subaccounts
hereunder shall be deemed to include such Eligible Account and
the subaccounts of any such Eligible Account and all funds in
such Eligible Account shall be invested at the Lender's
discretion only in Permitted Investments. The Deposit Account
and any Subaccount will be under the sole control and dominion
of the Lender, and the Borrower shall have no right of
withdrawal therefrom. The Borrower shall pay for all expenses
of opening and maintaining all of the above accounts.
11.02 Taxes and Insurance. The Borrower shall pay to the
Lender on each Interest Payment Date (i) one-twelfth of the
Taxes that the Lender estimates will be payable during the
next 12 months in order to accumulate with Lender sufficient
funds to pay all such Taxes at least 30 days prior to their
respective due dates and (ii) one-twelfth of the insurance
premiums that the Lender estimates will be payable for the
renewal of the coverage afforded by the insurance policies for
the Collateral Properties upon the expiration thereof in order
to accumulate with Lender sufficient funds to pay all such
insurance premiums at least 30 days prior to the expiration of
the insurance policies; provided, however, that the payments
required under this clause (ii) shall not commence unless the
insurance premiums shall become due within the next succeeding
12 month period. Such amounts will be transferred by the
Lender to a Subaccount (the "Tax and Insurance Subaccount").
Provided that no Default or Event of Default has occurred and
is continuing, Lender will (a) apply funds in the Tax and
Insurance Subaccount to payments of Taxes and insurance
premiums required to be made by
<PAGE>
the Borrower pursuant to Sections 3 and 4 of the Mortgages,
provided that the Borrower has promptly supplied the Lender
with notices of all Taxes and insurance premiums due, or (b)
reimburse the Borrower for such amounts upon presentation of
evidence of payment and a certificate from a senior financial
officer of the Borrower in form and substance satisfactory to
the Lender; subject however to the Borrower's right to contest
Taxes in accordance with Section 4(b) of the Mortgages. In
making any payment relating to Taxes and insurance premiums,
the Lender may do so according to any bill, statement or
estimate procured from the appropriate public office (with
respect to Taxes) or insurer or agent (with respect to
insurance premiums), without inquiry into the accuracy of such
bill, statement or estimate or into the validity of any tax,
assessment, sale, forfeiture, tax lien or title or claim
thereof. If the Lender determines in its reasonable judgment
that the funds in the Tax and Insurance Subaccount will be
insufficient to pay (or in excess of) the Taxes or insurance
premiums next coming due, the Lender may increase (or
decrease) the monthly contribution required to be made by the
Borrower to the Tax and Insurance Subaccount.
11.03 Capital Expense Reserve. With respect to each Collateral
Property, the Borrower shall pay to the Lender on each
Interest Payment Date the amount set forth for such Collateral
Property on Exhibit B attached hereto. The Lender will
transfer such amount into a Subaccount (the "Capital Reserve
Subaccount"). Additionally, upon thirty (30) days' prior
notice to the Borrower, the Lender may reassess the amount of
the monthly payment required under this Section 11.03 from
time to time in its reasonable discretion (based upon its then
current underwriting standards). If the funds in the Capital
Reserve Subaccount shall exceed the amounts due for Approved
Capital Expenditures pursuant to the terms hereof, the Lender
may return any excess to the Borrower or, if future payments
hereunder are then required, credit such excess against such
future payments. If the Lender determines in its reasonable
judgment that the funds in the Capital Reserve Subaccount will
be insufficient to pay (or in excess of) the amounts due or to
become due for Approved Capital Expenditures, the Lender may
increase (or decrease) the monthly contribution required to be
made by the Borrower to the Capital Reserve Subaccount.
Provided that no Default or Event of Default has occurred and
is continuing, the Lender shall disburse funds held in the
Capital Reserve Subaccount to the Borrower, within 15 days
after the delivery by the Borrower to the Lender of a request
therefor (but not more often than once per month), in
increments of at least $5,000 provided that (i) such
disbursement is for an Approved Capital Expenditures; (ii)
Lender shall have (if it desires) verified (by an inspection
conducted at the Borrower's expense) performance of the work
associated with such Approved Capital Expenditures if the cost
of such work exceeds $50,000; and (iii) the request for
disbursement is accompanied by (A) a certificate from a senior
financial officer of the Borrower certifying (w) that such
funds will be used to pay or reimburse the Borrower for
Approved Capital Expenditures and a description thereof, (x)
that all outstanding trade payables (other than those to be
paid from the requested disbursement or those constituting
Permitted Indebtedness) have been paid in full, (y) that the
same has not been the
<PAGE>
subject of a previous disbursement, and (z) that all previous
disbursements have been used to pay the previously identified
Approved Capital Expenditures, and (B) reasonably detailed
documentation satisfactory to the Lender as to the amount,
necessity and purpose therefor. Any such disbursement of more
than $10,000 to pay (rather than reimburse) Approved Capital
Expenditures may, at the Lender's option, be made by joint
check payable to the Borrower and the payee on such Approved
Capital Expenditures.
11.04 Rollover Reserves. With respect to each Collateral
Property, the Borrower shall pay to the Lender on each
Interest Payment Date the amount set forth for such Collateral
Property on Exhibit C attached hereto. The Lender will
transfer such amount into a Subaccount (the "Rollover Reserve
Subaccount"). The Borrower shall also pay to Lender for
transfer into the Rollover Reserve Subaccount all payments
received from tenants in connection with the early termination
or cancellation of any Leases, including fees, penalties and
commissions. If the amount in the Rollover Reserve Subaccount
shall exceed the amounts due for Approved Leasing Expenses
pursuant to the terms hereof, the Lender shall, in its
discretion, return any excess to the Borrower, credit such
excess against future payments to the Rollover Reserve
Subaccount or allocate such excess to other Subaccounts. If
the Lender determines in its reasonable judgment that the
funds in the Rollover Reserve Subaccount will be insufficient
to pay (or in excess of) the amounts due or to become due for
Approved Leasing Expenses, the Lender may increase (or
decrease) the monthly contribution required to be made by the
Borrower to the Rollover Reserve Subaccount. Provided that no
Default or Event of Default has occurred and is continuing,
the Lender shall disburse funds held in the Rollover Reserve
Subaccount to the Borrower, within 15 days after the delivery
by Borrower to Lender of a request therefor (but not more
often than once per month), in increments of at least $5,000,
provided (i) such disbursement is for an Approved Leasing
Expense; (ii) Lender shall have (if it desires) verified (by
an inspection conducted at the Borrower's expense) performance
of any construction work associated with such Approved Leasing
Expense; and (iii) the request for disbursement is accompanied
by (A) a certificate from a senior financial officer of the
Borrower certifying (w) that such funds will be used only to
pay (or reimburse Borrower for) Approved Leasing Expenses and
a description thereof, (x) that all outstanding trade payables
(other than those to be paid from the requested disbursement)
have been paid in full, (y) that the same has not been the
subject of a previous disbursement, and (z) that all previous
disbursements have been used only to pay (or reimburse the
Borrower for) the previously identified Approved Leasing
Expenses, and (B) reasonably detailed supporting documentation
as to the amount, necessity and purpose therefor. Any such
disbursement of more than $10,000 to pay (rather than
reimburse) Approved Leasing Expenses may, at the Lender's
option, be made by joint check payable to the Borrower and the
payee of such Approved Leasing Expenses.
<PAGE>
11.05 Operating Expense Subaccount. During a Cash Management
Period, Rents shall be transferred into a Subaccount (the
"Operating Expense Subaccount") as provided in Section 11.09.
Provided no Default or Event of Default has occurred and is
continuing, the Lender shall disburse funds held in the
Operating Expense Subaccount to the Borrower, within 15 days
after delivery by Borrower to Lender of a request therefor
(but not more often than once per month), in increments of at
least $1,000, provided (i) such disbursement is for an
Approved Operating Expense; and (ii) such disbursement is
accompanied by (A) a certificate from a senior financial
officer of the Borrower certifying (w) that such funds will be
used to pay Approved Operating Expenses and a description
thereof, (x) that all outstanding trade payables (other than
those to be paid from the requested disbursement) have been
paid in full, (y) that the same has not been the subject of a
previous disbursement, and (z) that all previous disbursements
have been or will be used to pay the previously identified
Approved Operating Expenses, and (B) reasonably detailed
documentation satisfactory to the Lender as to the amount,
necessity and purpose therefor.
11.06 Casualty/Condemnation Subaccount. The Borrower shall
pay, or cause to be paid, to the Lender all Proceeds or Awards
due to any Casualty or Condemnation to be transferred to a
Subaccount (the "Casualty/Condemnation Subaccount"). All
amounts in the Casualty/Condemnation Subaccount shall
disbursed in accordance with the provisions of the Mortgages.
11.07 Security Deposits. During a Cash Management Period, the
Borrower shall, upon Lender's request, if permitted by
applicable Legal Requirements, turn over to the Lender the
security deposits (and any interest theretofore earned
thereon) under Leases, to be held by the Lender in a
Subaccount (the "Security Deposit Subaccount") subject to the
terms of the Leases. Security deposits held in the Security
Deposit Subaccount will be released by the Lender upon notice
from the Borrower together with such evidence as the Lender
may reasonably request that such security deposit is required
to be returned to a tenant pursuant to the terms of a Lease or
may be applied as Rent pursuant to the rights of the Borrower
under the applicable Lease. Any letter of credit or other
instrument that the Borrower receives in lieu of a cash
security deposit under any Lease entered into after the date
hereof shall (i) be maintained in full force and effect in the
full amount unless replaced by a cash deposit as hereinabove
described and (ii) if permitted pursuant to any Legal
Requirements, name the Lender as payee or mortgagee thereunder
(or at the Lender's option, be fully assignable to the
Lender).
11.08 Grant of Security Interest; Application of Funds. As
security for payment of the Debt and the performance by the
Borrower of all other terms, conditions and provisions of the
Loan Documents, the Borrower hereby pledges and assigns to the
Lender, and grants to the Lender a security interest in, all
the Borrower's right, title and interest in and to all Rents
and in and to all payments to or monies held in the Clearing
Account, the Deposit Account, all Subaccounts created
<PAGE>
pursuant to this Agreement (collectively, the "Cash Management
Accounts"). The Borrower hereby grants to the Lender a
continuing security interest in, and agrees to hold in trust
for the benefit of the Lender, all Rents in its possession
prior to the (i) payment of such Rents to the Lender or (ii)
deposit of such Rents into the Deposit Account. The Borrower
shall not, without obtaining the prior written consent of the
Lender, further pledge, assign or grant any security interest
in any Cash Management Account, or permit any Lien to attach
thereto, or any levy to be made thereon, or any UCC-l
Financing Statements, except those naming the Lender as the
secured party, to be filed with respect thereto. This
Agreement is, among other things, intended by the parties to
be a security agreement for purposes of the UCC. Upon the
occurrence and during the continuance of an Event of Default,
the Lender may apply any sums in any Cash Management Account
in any order and in any manner as the Lender shall elect in
the Lender's discretion without seeking the appointment of a
receiver and without adversely affecting the rights of the
Lender to foreclose the Lien of any Mortgage or exercise its
other rights under the Loan Documents. Cash Management
Accounts shall not constitute trust funds and may be
commingled with other monies held by the Lender. The Borrower
shall be entitled to receive on a semi-annual basis interest
on any balance in the Deposit Account and any Subaccounts
(including any Eligible Account maintained at a bank or other
depository other than the Deposit Bank selected by Lender in
accordance with Section 11.01) at a rate equal to the U.S. and
Regional Composite National Bank Average Retail Savings Money
Market CD Yield, from time to time. Upon payment in full of
the Loan and all other amounts owed by the Borrower under the
Loan Documents, the Lender shall cause the amounts, if any,
remaining in the Cash Managements Accounts to be promptly
remitted to the Borrower.
11.09 Property Cash Flow Allocation.
(a) During any Cash Management Period, any Rents
deposited into the Deposit Account during the
immediately preceding Interest Period shall be
applied on each Interest Payment Date as follows in
the following order of priority: (i) First, to make
payments into the Tax and Insurance Subaccount as
required under Section 11.02; (ii) Second, to pay the
monthly portion of the fees charged by the Deposit
Bank in accordance with the Deposit Account
Agreement; (iii) Third, to the Lender to pay the
interest due on such Interest Payment Date (plus, if
applicable, interest at the Post Default Rate and all
other amounts, other than those described under other
clauses of this Section 11.09(a), then due to the
Lender under the Loan Documents); (iv) Fourth, to
make payments into the Capital Reserve Subaccount as
required under Section 11.03; (v) Fifth, to make
payments into the Rollover Reserve Subaccount as
required under Section 11.04; (vi) Sixth, to make
payments for Approved Operating Expenses as required
under Section 11.05; and (vii) Lastly, payments to
the Borrower of any excess amounts.
<PAGE>
(b) The failure of the Borrower to make all of the
payments required under clauses (i) through (vi) of
Section 11.09(a) in full on each Interest Payment
Date shall constitute an Event of Default under this
Agreement.
(c) Notwithstanding anything to the contrary
contained in this Section 11.09, after the occurrence
of a Default or an Event of Default, the Lender may
apply all Rents deposited into the Deposit Account
and other proceeds of repayment in such order and in
such manner as the Lender shall elect.
19. The "Address for Notices" set forth on the signature pages of the Existing
Loan Agreement is hereby amended (i) to provide that notices to the Lender
should be sent to LaSalle Bank N.A., as Trustee for CDC Depositor Trust ST-I
(formerly known as Nomura Depositor Trust ST-I), Commercial Mortgage
Pass-Through Certificates, Series 1998 - ST-I, c/o CapMark Services, L.P., 245
Peachtree Center Avenue N.E., Suite 1800, Atlanta, Georgia 30303-1231, Attention
Katherine M. Saathoff, Vice President, Telecopier (404) 654-2726, with copies
to: CDC Mortgage Capital Inc., 9 West 57th Street, 36th Floor, New York, New
York 10019; Attention: Real Estate Administration (Gary DiGiuseppe), Telecopier
(212) 891-6851 and with copies to: Kaye, Scholer, Fierman, Hays & Handler, LLP,
425 Park Avenue, New York, New York 10022, Attention: Stephen Gliatta,
Telecopier: (212) 836-8689, (ii) by adding the words "and Attn: Legal
Department, Telecopier No.: (919) 234-3251" after the words "Attn: C. Cammack
Morton", (iii) by deleting the words "Michaela M. Twomey, Esq., FAC Realty,
Inc., 1095 Old Cedar Road, McLean, Virginia 22102, Telecopier No: (703)
506-9137" and (iv) by changing the address of Mayer, Brown & Platt to 1909 K
Street, N.W., Washington, D.C., 20006, Telecopier No.: (202) 263-3300.
20. Schedule A of the Existing Loan Agreement is hereby deleted in its entirety
and replaced with the Schedule A attached to this Amendment.
II. Representations. The Borrower hereby represents and warrants to the Lender
as of the date hereof as follows:
1. Authorization and Power. The Borrower has the power and requisite authority
to execute, deliver and perform its obligations under this Amendment and any
other document executed in connection herewith and is duly authorized to, and
has taken all action necessary to authorize it to, execute, deliver and perform
its obligations under this Amendment.
2. Valid and Binding Obligations. This Amendment constitutes legal, valid and
binding obligations of the Borrower enforceable in accordance with its terms.
3. Consents, Etc. No consent, approval, authorization or order of any court or
governmental authority or any third party is required in connection with the
execution and delivery by the Borrower of this Amendment or to consummate the
transactions contemplated hereby, which consent has not been obtained.
<PAGE>
4. No Offsets; Defenses. There are no existing claims by the Borrower against
the Lender and there are no offsets or defenses by the Borrower to the payment
of any amounts required under the Loan Documents or otherwise to the enforcement
by the Lender of the Loan Documents.
III. Reaffirmation and Ratification. The Borrower hereby ratifies and reaffirms
the obligations, waivers, indemnities and covenants made under the Loan
Documents to which it is bound. The Existing Loan Agreement (as amended hereby)
and each of the Loan Documents is hereby ratified and confirmed and shall
continue in full force and effect.
IV. Successors and Assigns. This Amendment shall be binding upon and shall inure
to the benefit of each of the parties hereto and their respective successors and
assigns.
V. Counterparts. This Amendment may be executed in multiple counterparts, each
of which shall constitute an original, but all of which shall constitute one
original.
[Remainder of page intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their duly authorized representatives, all as of the day and
year first above written.
BORROWER:
--------
KPT PROPERTIES, L.P., a Delaware limited partnership
By: Konover Property Trust, Inc., its general partner
By: ____________________________
Name:
Title:
LENDER:
------
LASALLE BANK NATIONAL ASSOCIATION,
as Trustee for CDC Depositor Trust
ST-I (formerly known as Nomura
Depositor Trust ST-I), Commercial
Mortgage Pass-Through Certificates,
Series 1998 - ST-I
By: CapMark Services, L.P., a Texas limited partnership, it
authorized agent
By: Pearl Mortgage, Inc., a Delaware corporation,
general partner
By: ____________________________
Name: Katherine M. Saathoff
Title: Vice President
<PAGE>
ACKNOWLEDGMENT
--------------
The undersigned Owner Trustee hereby acknowledges the terms of the foregoing.
Wilmington Trust Company, in its capacity as Owner Trustee of CDC Mirror Trust
ST-I-FAC (formerly known as Nomura Mirror Trust ST-I-FAC)
By: _____________________
David A. Vanaskey, Jr.
Assistant Vice President
<PAGE>
EXHIBIT A
---------
Allocated Loan Amounts
----------------------
(See Attached)
<PAGE>
EXHIBIT B
---------
Capital Expense Reserve Monthly Payments
----------------------------------------
1. Crossroads at Mandarin Shopping Center, Jacksonville, FL $7,322
2. Eastgate Plaza, Pensacola, FL $6,321
3. Factory Stores of America, Lake Park, GA $1,750
4. Factory Stores of America, Tupelo, MS $4,206
5. Gateway Shopping Center, Wilson, NC $2,044
6. Braves Village Shopping Center, Socastee, SC $2,840
7. Grove Park Shopping Center, Orangeburg, SC $1,344
8. Robertson Corners Shopping Centers, Walterboro, SC $ 595
9. Factory Stores of America, Nashville, TN $3,573
10. Factory Stores of America, Hempstead, TX $1,431
<PAGE>
EXHIBIT C
---------
Rollover Reserve Monthly Payments
---------------------------------
1. Crossroads at Mandarin Shopping Center, Jacksonville, FL $ 2,479
2. Eastgate Plaza, Pensacola, FL $ 8,003
3. Factory Stores of America, Lake Park, GA $ 4,167
4. Factory Stores of America, Tupelo, MS $ 3,333
5. Gateway Shopping Center, Wilson, NC $ 2,052
6. Braves Village Shopping Center, Socastee, SC $ 2,457
7. Grove Park Shopping Center, Orangeburg, SC $ 5,274
8. Robertson Corners Shopping Centers, Walterboro, SC $ 1,137
9. Factory Stores of America, Nashville, TN $14,467
10. Factory Stores of America, Hempstead, TX $ 2,083
<PAGE>
SCHEDULE A
----------
Collateral Properties/REMIC Properties
--------------------------------------
Collateral Properties
---------------------
1. Crossroads at Mandarin Shopping Center, Jacksonville, FL
2. Eastgate Plaza, Pensacola, FL
3. Factory Stores of America, Lake Park, GA
4. Factory Stores of America, Tupelo, MS
5. Gateway Shopping Center, Wilson, NC
6. Braves Village Shopping Center, Socastee, SC
7. Grove Park Shopping Center, Orangeburg, SC
8. Robertson Corners Shopping Centers, Walterboro, SC
9. Factory Stores of America, Nashville, TN
10. Factory Stores of America, Hempstead, TX
REMIC Properties
----------------
1. Factory Stores of America, Arcadia, LA
2. Factory Stores of America, Crossville, TN
3. Factory Stores of America, Draper, UT
4. Factory Stores of America, Hanson, KY
5. Factory Stores of America, Iowa, LA
6. Factory Stores of America, Mesa, AZ
7. Factory Stores of America, Tucson, AZ
8. Factory Stores of America, Union City, TN
9. Factory Stores of America, West Fankfort, IL
10. Factory Stores of America, Kittery, ME
11. Factory Stores of America, Lake George, NY
12. Factory Stores of America, La Marque, TX
13. Las Vegas Factory Stores, Las Vegas, NV
14. Factory Stores of America, North Bend, WA
15. Factory Stores of America, Vacaville, CA
16. Lenoir II
17. Factory Stores of America, Livingston, TX
18. Factory Stores of America, Mineral Wells, TX
19. Oakland Park
20. Petersburg - Food Lion
21. Stanton Square, North Carolina
22. Tower Shopping Center, North Carolina
23. Factory Stores of America, Corsicana, TX
