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Exhibit 10.31
11.7.00 File No. 1088
TERM LOAN AGREEMENT
THIS TERM LOAN AGREEMENT ("Agreement"), dated as of the____ day of October,
1999, by and between E&P Financing Limited Partnership, a Maryland limited
partnership ("Borrower") whose principal address is 12301 Old Columbia Pike,
Suite 300, Silver Spring, Maryland, 20904, and First National Bank of Omaha, a
national banking association with principal business offices at 1620 Dodge
Street in Omaha, Nebraska ("Bank") has been executed in connection with the
following circumstances:
1. Supertel Hospitality, Inc., a Delaware corporation ("Supertel"), has
caused the formation of both the Borrower, of which Supertel is the sole limited
partner, and E&P REIT Trust, a Maryland real estate investment trust ("General
Partner"), which is the sole general partner of Borrower.
2. Supertel and Humphrey Hospitality Trust, Inc., a Virginia corporation
("HHT"), have entered an Agreement and Plan of Merger dated as of June 11, 1999,
pursuant to which Supertel will merge with and into HHT following the date
hereof (the "Merger"). Following the Merger, HHT will be the surviving
corporation, and will own one hundred percent (100%) of the stock of the General
Partner and will be the sole limited partner of the Borrower.
3. Borrower has requested a loan from the Bank in the amount of Fifteen
Million Dollars ($15,000,000.00), which loan shall be used by the Borrower to
fund (1) general corporate purposes, and (2) certain distributions to its
general and limited partners, which funds would be used to fund (1) general
corporate purposes, and (2) certain distributions to its general and limited
partners, which funds would be used to fund earnings and profits dividends by
Supertel prior to the Merger (the "E&P Distribution").
4. Bank has agreed to make the above-described loan to the Borrower on
the terms and conditions set forth herein and set forth in the other collateral
documents ("Collateral Documents") (as defined below).
In consideration of the promises herein contained, and each intending to be
legally bound thereby, the parties agree as follows:
Section I. Definitions as used herein:
1. "Accounts," "Chattel Paper," "Contracts," "Documents," "Equipment,"
"Fixtures," "General Intangibles," "Goods," "Instruments" and "Inventory" shall
have the same meaning as is given that term in the Uniform Commercial Code as
presently adopted and in effect in the State of Nebraska.
2. "Accounting." Accounting terms used and not otherwise defined in this
Agreement have the meanings determined by, and all calculations with
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respect to accounting or financial matters unless otherwise provided herein
shall be computed in accordance with, GAAP.
3. "Affiliate" means as to any Person, each other Person that directly,
or indirectly through one or more intermediaries, controls, or is controlled by,
or under common control with, such Person.
4. "Collateral" has the meaning given to such term in Section III.
5. "Collateral Documents" means the Note, financing statements and other
documents required by Bank as set forth herein, together with any real estate
lien documents used in this transaction.
6. "Event of Default" has the meaning provided for in Section VI.
7. "Financial Statements" means (1) the pro forma balance sheet of the
Borrower reflecting the anticipated financial condition of Borrower immediately
following the Merger and (2) the Balance Sheets, Consolidated Statements of Cash
Flows, and Consolidated Statements of Operations of HHT as of June 30, 1999,
internally prepared, which statements shall present fairly the consolidated
financial position and results of operations of HHT at such dates and for such
periods in accordance with GAAP.
8. "GAAP" means generally accepted accounting principles applied
consistently as was done in the preparation of the Financial Statements with
such changes or modifications hereto as may be approved in writing by the Bank.
9. "Indebtedness" means all items of indebtedness, obligation or
liability, whether matured or unmatured, liquidated or unliquidated, direct or
contingent, joint or several.
10. "Loan Termination Date" means the earliest to occur of the following:
(i) November 1, 2009, (ii) the date the obligations are accelerated pursuant to
this Agreement, and (iii) the date Bank receives (a) notice in writing from
Borrower of Borrower's election to terminate this Agreement, and (b)indefeasible
payment in full of the Obligations, or such other date as may later be agreed to
by Bank and Borrower in a written amendment to this Agreement.
11. "Obligations" means the obligation of the Borrower:
A. To pay the principal of, and interest on, any promissory note in
accordance with the terms thereof and to satisfy all of its other
liabilities to the Bank, whether hereunder or otherwise, whether now
existing or hereafter incurred, matured or unmatured, direct or contingent,
joint or several, including any extensions, modifications, renewals
thereof, and
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substitutions therefor and including, but not limited to, any obligations
under letter of credit agreements;
B. To repay to the Bank all amounts advanced by the Bank hereunder
or otherwise on behalf of the Borrower, including, but without limitation,
advances for principal or interest payments to prior secured parties,
mortgagees, or licensors, or taxes, levies, insurance, rent, or repairs to,
or maintenance or storage of, any of the Collateral ; and
C. To reimburse the Bank, on demand, for all of the Bank's expenses
and costs, including the reasonable fees and expenses of its counsel, in
connection with the preparation, administration, amendment, modification,
or enforcement of this Agreement and the documents required hereunder,
including, without limitation, any proceeding brought or threatened, to
enforce payment of any of the Obligations referred to in the foregoing
Paragraphs A and B.
12. "Permitted Liens" means:
A. Liens for taxes, assessments, or similar charges, incurred in the
ordinary course of business that are not yet due and payable;
B. Exceptions (to title) itemized in Schedule B-Section II of the
loan policies of title insurance issued to Bank in connection with the
$15,000,000.00 loan from Bank to Borrower, as reflected on the following
title insurance commitments issued by Chicago Title Insurance Company to
Bank covering the motel properties legally described in the Title
Commitments (the "Mortgaged Properties):
Location Commitment No. Date
-------- -------------- -------
Hays, Kansas 98-363TT 7/19/99
Wichita (East) Kansas C535184D 8/26/99
Garden City, Kansas 0023632 7/14/99
Manhattan, Kansas CTI 7247 7/15/99
Kingdom City, Missouri 991556C 9/1/99
Wayne, Nebraska 9851017258 8/13/99
Watertown, South Dakota 1415-5 8/23/99
Omaha, Nebraska 9851017260 9/17/99
El Dorado, Kansas BU-16749 7/23/99
Wichita (North) Kansas C539408C 8/26/99
Parsons, Kansas CT9924 9/17/99
C. Pledges or deposits made in the ordinary course of business to
secure payment of workers' compensation, or to participate in any
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fund in connection with workers' compensation, unemployment insurance, old-
age pensions or other social security programs;
D. Liens of mechanics, materialmen, warehousemen, carriers, or other
like liens, securing obligations incurred in the ordinary course of
business that are not yet due and payable;
E. Liens in favor of the Bank.
13. "Person" means any individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture, court, or government or political subdivision or
agency thereof.
Section II. The Loan.
1. Bank agrees to lend $15,000,000.00 to Borrower pursuant to this
Agreement (the "Term Loan"). The Term Loan shall be evidenced by a
$15,000,000.00 Promissory Note ("Note") and further evidenced and secured by the
other "Loan Documents" as defined in the Note.
2. Interest Rate and Payments.
A. All outstanding principal and unpaid interest shall be due and
payable on Loan Termination Date, unless earlier paid or due as the result
of acceleration.
B. For purposes of determining the amount of the Obligations,
including, without limitation, the computations of interest which may from
time to time be owing by Borrower to Bank, the receipt of any check or
other item of payment by Bank shall not be treated as a payment on account
of the liabilities until such check or other item of payment is actually
paid in cash or cash equivalent.
Section III. Collateral Security.
Borrower has executed 10 Deeds of Trust or Mortgages, Assignments of Leases
and Rents, and other Loan Documents, as defined in the Note granting Bank a
first mortgage lien and security interest in and to certain real and
personal property comprising 11 operating motel properties more
particularly described on Exhibit "A" attached hereto and incorporated by
this reference herein ("Collateral"). Each such separate Loan Document is
a Collateral Document.
Section IV. Representations and Warranties.
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1. To induce the Bank to enter into this Agreement, the Borrower
represents and warrants to the Bank as follows:
A. The Borrower will allow no additional subsidiaries;
B. Neither the Borrower nor HHT is in default with respect to any of
their respective Indebtednesses, and the making and performance of this
Agreement and the Collateral Documents by Borrower will not immediately, or
with the passage of time, the giving of notice, or both, cause Borrower or
HHT to be in default under any existing Indebtedness; the execution and
performance of this Agreement by Borrower will not: violate the limited
partnership agreement of the Borrower, or violate any laws or result in a
default under any contract, agreement, or instrument to which the Borrower
is a party or by which the Borrower or its property is bound; or result in
the creation or imposition of any security interest in, or lien or
encumbrance upon, any of the assets of the Borrower, except in favor of the
Bank;
C. This Agreement and the Collateral Documents are, or when
delivered will be, valid, binding, and enforceable in accordance with their
respective terms;
D. There is no pending order, notice, claim, litigation, proceeding,
or investigation against or affecting the Borrower or HHT, which is not
covered by insurance, that would materially or adversely affect the
financial condition or business prospects of the Borrower or HHT if
adversely determined;
E. The Financial Statements, including any schedules and notes
pertaining thereto, have been prepared in accordance with GAAP and fully
and fairly present the financial condition of HHT at the date thereof and
the results of operations for the period covered thereby, and there have
been no material adverse changes in the consolidated financial condition or
business of HHT from June 30, 1999, to the date hereof. Bank acknowledges
that for the purposes of this Subparagraph and the remainder of this
Agreement, the Merger will not be an adverse change
F. As of the date hereof, neither the Borrower nor HHT has any
material Indebtedness of any nature, including but without limitation,
liabilities for taxes and any interest or penalties relating thereto,
except to the extent reflected (in a footnote or otherwise) in the
Financial Statements or as disclosed in Schedule IV.1.F attached hereto and
by this reference incorporated herein, or otherwise permitted by, this
Agreement; and the Borrower and HHT do not know, or have reasonable ground
to know of any basis for the assertion against it of any such Indebtedness
as of the date of the Closing;
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G. No representation or warranty by or with respect to the Borrower
or HHT contained herein or in any certificate or other document furnished
by the Borrower or HHT, pursuant hereto contains any untrue statement of a
material fact or omits to state a material fact necessary to make such
representation or warranty not misleading in light of the circumstances
under which it was made;
H. Any federal tax returns for all years of operation, including the
last tax year for HHT have been filed with the Internal Revenue Service and
have not been challenged;
I. Any Employee Pension Benefit Plans, as defined in the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), of HHT meet,
as of the date hereof, the minimum funding standards of 29 U.S.C. Sec. 1082
(Section 302 of ERISA), and no Reportable Event or Prohibited Transaction
as defined in ERISA, has occurred with respect to any Employee Benefit
Plans, as defined in ERISA, of the HHT;
J. (1) Borrower warrants (and this shall be a continuing warranty
which shall survive until all the Obligations of Borrower to Bank
have been fully satisfied) that it and HHT are in compliance with
all federal, state and local environmental laws and regulations
and have obtained all environmental permits necessary or
appropriate to the conduct of the business of each. There is not
pending nor, to the best of the Borrower's and HHT's knowledge
after due inquiry, are there any threatened environmental
enforcement actions, suits or proceedings before any court,
tribunal or administrative body or official. Responsible officers
and agents of the Borrower and HHT have made an extensive
investigation and have determined that neither the Borrower nor
HHT has, nor has any former owner of real property occupied by
Borrower stored, used or disposed of any toxic or hazardous
substance on its properties or transported any such substance to
or from its properties in violation of any presently existing or
previously existing laws, regulations or policies. The Borrower
will not store, use or dispose of such substances on its
properties.
(2) Notwithstanding the immediately preceding subparagraph (1),
Borrower shall not be deemed to be in default of the provisions
in said subparagraph, if (i) under applicable laws or
regulations, Borrower is not a "responsible party" to clean up
the condition constituting noncompliance, or (ii) the
noncompliance does not materially affect the value, use or
operation of the Collateral
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for the loan. "Materially" shall mean a total, at any one time,
of not more than five hundred thousand dollars ($500,000.00) for
all Collateral.
2. Survival. All of the representations and warranties set forth in
Section IV. 1 shall survive until all Obligations are satisfied in full and
there remain no outstanding commitments hereunder.
Section V. Covenants of the Borrower.
1. Affirmative Covenants. The Borrower does hereby covenant and agree
with the Bank that, so long as any of the Obligations remain unsatisfied or any
commitments hereunder remain outstanding, it will comply at all times with the
following covenants:
A. The Borrower will furnish the Bank:
1. Within ninety (90) days after the close of each quarterly
accounting period in each fiscal year an income statement and
balance sheet of the Borrower for such quarter in reasonable
detail, subject to normal year-end audit adjustments and
certified by the Borrower's president or principal financial
officer to have been prepared in accordance with GAAP;
2. Within One Hundred Twenty (120) days after the close of each
fiscal year of Borrower: (a) a consolidated statement of
partners' equity and a consolidated statement of cash flow of the
Borrower and any subsidiaries for such fiscal year; (b)
consolidated and consolidating income statements of the Borrower
and HHT and any subsidiaries as of the end of such fiscal year-
all such statements to be in reasonable detail, including all
supporting schedules and comments; the consolidated statements
and balance sheets, together with all trial balances of
Borrower's operations upon which such consolidated statements are
based, to be audited by independent certified public accountants
selected by Borrower and certified by such accountants to have
been prepared in accordance with GAAP and to present fairly the
consolidated financial position and results of operations of the
Borrower, HHT and any subsidiaries and accompanied by such
accountants' opinion thereon that such documents have been
audited in compliance with the American Institute of Certified
Public Accounts Statements of Auditing standards in effect as of
the execution hereof, together with all trial balances of the
Borrower's operations upon which such
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consolidated statements are based; the Bank shall have the right,
from time to time, to discuss the affairs of the Borrower
directly with such independent certified public accountants after
notice to the Borrower and opportunity of the Borrower to be
represented at any such discussions;
3. Bank shall agree to grant reasonable extensions of the 120 day
time period upon written request of Borrower.
B. The Borrower shall maintain:
1. A debt service coverage ratio, based on the trailing one-year
period, of more than 1.5:1 for the Mortgaged Properties on a
combined basis. This condition will be tested on a quarterly
schedule. "Debt service coverage ratio" shall be the ratio
determined by dividing Adjusted Net Operating Income (defined in
3. below) of the Mortgaged Properties for such period by the
amount of debt service payments (principal and interest) required
to be made under this Agreement.
2. A debt service coverage ratio, based on the trailing one-year
period, of more than 1.5:1 for all of Borrower's obligations on a
consolidated basis. This condition will be tested on a quarterly
schedule. The debt service coverage ratio for Borrower's
obligations on a consolidated basis shall be determined by
dividing Adjusted Net Operating Income from the Borrower's
properties on a consolidated basis by the amount of debt service
payments (principal and interest) required to be made by the
Borrower for all Borrower's properties.
3. A loan-to-value ratio not in excess of 60%, to be tested on a
quarterly basis and to be applied to the Mortgaged Properties and
to the indebtedness owed to Lender. The following formula shall
be used to determine the "loan to value ratio:"
For the purpose of calculating loan to value ratio as of
December 31, 1999, and at quarterly measurement intervals
thereafter, the value of the Collateral shall be determined
by applying a capitalization rate of 12% to the trailing
twelve months' adjusted net operating income ("Adjusted Net
Operating Income"), defined as the remainder of the net
operating income from the Mortgaged Properties after
reducing the net operating income by an amount equal to the
sum of (a) four
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percent (4%) of the gross room revenue for FF&E reserve,
plus (b) four percent (4%) of gross room revenue for
management fees and expenses. In determining loan to value
ratio, the cost of any required remedial action because of
noncompliance with "an Environmental Requirement," as
defined in the Environmental Indemnity Agreements between
Borrower and Lender dated of even date herewith, shall be
deducted from the value of the Collateral.
For the purpose of determining "value" in the above "loan-
to-value" ratio calculation, no value shall be attributed to
a motel property which is not operated under a Super 8 or
other motel franchise reasonably acceptable to Lender. This
provision shall not preclude Borrower from providing
substitute Collateral for any motel property which is not
then operated under a Super 8 or other motel franchise
reasonably acceptable to Lender.
4. A loan-to-value ratio not in excess of 60%, to be tested
on a quarterly basis and to be applied to all properties owned
by Borrower and all debt obligations of Borrower on a
consolidated basis. The following formula shall be used to
determine the "loan to value ratio:"
For the purpose of calculating loan to value ratio as of
December 31, 1999, and at quarterly measurement intervals
thereafter, the value of all properties owned by Borrower
shall be determined by applying a capitalization rate of 12%
to the trailing twelve months' adjusted net operating income
("Adjusted Net Operating Income"), defined as the remainder
of the net operating income from the all of the properties
owned by Borrower after reducing the net operating income by
an amount equal to the sum of (a) four percent (4%) of the
gross room revenue for FF&E reserve, plus (b) four percent
(4%) of gross room revenue for management fees and expenses.
In determining loan to value ratio, the cost of any required
remedial action because of noncompliance with "an
Environmental Requirement," as defined in the Environmental
Indemnity Agreements between Borrower and Lender dated of
even date herewith, shall be deducted from the value of all
properties owned by Borrower.
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For the purpose of determining "value" in the above "loan-to-
value" ratio calculation, no value shall be attributed to a motel
property which is not operated under a Super 8 or other motel
franchise reasonably acceptable to Lender. This provision shall not
preclude Borrower from providing a substitute property for any motel
property which is not then operated under a Super 8 or other motel
franchise reasonably acceptable to Lender.
5. In the event that Borrower shall merge with HHT or any other
Person, the foregoing ratios continue to be applicable to
Borrower's successor.
The failure of Borrower to maintain any of the above ratios, if
not cured as provided in Section VI.3.B.1, shall constitute an
Event of Default hereunder.
C. The Borrower will take all necessary steps to preserve limited
partnership existence and franchises and comply with all present and future
laws applicable to it in the operation of its business, and all material
agreements to which it is subject.
D. The Borrower will give immediate notice to the Bank of (1) any
litigation or proceeding in which it is a party if an adverse decision
therein would require it to pay more than $100,000.00 or deliver assets,
the value of which exceeds such sum (whether or not the claim is considered
to be covered by insurance); and (2) the institution of any other suit or
proceeding involving it that might materially and adversely affect its
operations, financial condition, property, or business prospects.
E. The Borrower will pay when due and within any applicable grace
and/or cure period all of its Indebtedness due third Persons except when
the amount thereof is being contested in good faith by appropriate
proceedings and with adequate reserves therefor being set aside on its
books.
F. The Borrower will notify the Bank immediately 1) if it becomes
aware of the occurrence of any Event of Default or of any fact, condition,
or event that only with the giving of notice or passage of time, or both,
could become an Event of Default; 2) if it becomes aware of any material
adverse change in the business prospects, financial condition (including,
without limitation, proceedings in bankruptcy, insolvency, or
reorganization), or results of operations of the Borrower; or 3) upon the
failure of the Borrower to observe any of its respective undertakings
hereunder or under any one or more of the Collateral Documents.
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G. The Borrower will (1) fund any of its Employee Pension Benefit
Plans in accordance with no less than the minimum funding standards of 29
U.S.C. Sec. 1082 (Section 302 of ERISA); (2) furnish the Bank, promptly
after the filing of the same, with copies of any reports or other
statements filed with the United States Department of Labor or the Internal
Revenue Service with respect to any such Plan; and (3) promptly advise the
Bank of the occurrence of any Reportable Event or Prohibited Transaction
with respect to any Employee Benefit Plan.
H. The Borrower will cause HHT to furnish the Bank:
1. Within ninety (90) days after the close of each quarterly
accounting period in each fiscal year an income statement and
balance sheet of HHT for such quarter in reasonable detail,
subject to normal year-end audit adjustments and certified by
HHT's president or principal financial officer to have been
prepared in accordance with GAAP. Borrower may comply with this
provision by furnishing a copy of HHT's Form 10-Q, as filed with
the SEC;
2. Within One Hundred Twenty (120) days after the close of each
fiscal year of HHT: (a) a consolidated statement of shareholder's
equity and a consolidated statement of cash flow of HHT and any
subsidiaries for such fiscal year; (b) consolidated and
consolidating income statements of HHT and any subsidiaries as of
the end of such fiscal year-all such statements to be in
reasonable detail, including all supporting schedules and
comments; the consolidated statements and balance sheets to be
audited by independent certified public accountants selected by
HHT and certified by such accountants (with such certification
directed to Bank, as well as to HHT) to have been prepared in
accordance with GAAP and to present fairly the consolidated
financial position and results of operations of HHT and any
subsidiaries and accompanied by such accountants' opinion thereon
that such documents have been audited in compliance with the
American Institute of Certified Public Accounts Statements of
Auditing standards in effect as of the execution hereof; the Bank
shall have the right, from time to time, to discuss the affairs
of HHT directly with such independent certified public
accountants after notice to HHT and opportunity of HHT to be
represented at any such discussions. Borrower may comply with
this provision by furnishing a copy of HHT's Form 10-K, as filed
with the SEC;
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I. HHT will maintain a debt service coverage ratio of 1.5:1. The
"debt service coverage ratio" of HHT shall be the ratio determined by
dividing the Adjusted Net Operating Income of HHT for the trailing one-year
period by the amount of debt service payments (principal and interest)
required to be made with respect to the properties of HHT. "Adjusted Net
Operating Income" for HHT shall be determined in accordance with the
formula for Adjusted Net Operating Income in Section V.B.3.
The failure of HHT to maintain the above ratio, if not cured as provided
in Section VI.3.B., shall constitute an Event of Default hereunder.
J. HHT will take all necessary steps to preserve its real estate
investment trust existence and franchises and comply with all present and
future laws applicable to it in the operation of its business, and all
material agreements to which it is subject.
K. It shall be an Event of Default hereunder if HHT fails to give
immediate notice to the Bank of (1) any litigation or proceeding in which
it is a party, if an adverse decision therein would require it to pay more
than $100,000.00 or deliver assets, the value of which exceeds such sum,
unless the claim is covered by insurance; or (2) if there occurs the
institution of any other suit or proceeding involving HHT that might
materially and adversely affect its operations, financial condition,
property, or business prospects.
2. Negative Covenants. The Borrower does hereby covenant and agree with
the Bank that, so long as any of the Obligations remain unsatisfied or any
commitments hereunder remain outstanding, it will comply at all times with the
following negative covenants, unless the Bank shall otherwise have agreed in
writing.
A. The Borrower shall not change its name, enter into any merger
(except with HHT), consolidation, reorganization or recapitalization, or
reclassify its capital stock, except where Borrower or HHT is the surviving
entity;
B. Borrower will not further mortgage, pledge, grant, or permit to
exist a security interest in, or a lien upon, any of the Collateral, except
for liens in favor of Bank or Permitted Liens;
C. Borrower will not become liable, directly or indirectly, as
Guarantor or otherwise for any obligation of any other Person;
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D. Borrower will not make any assignment or transfer of any of its
Accounts or Inventory, or other than in the ordinary course of business;
E. Borrower will form no subsidiary, make no investment in
(including any assignment of Inventory or other property), or make any loan
in the nature of an investment to, any Person;
F. Borrower will not make any loan or advance to any officer,
shareholder, director, or employee of the Borrower, except for business
travel and similar temporary advances in the ordinary course of business,
other than the E&P Distribution;
G. Intentionally omitted.
H. Borrower will not redeem, purchase, or retire any partnership
interests or grant or issue, or purchase or retire for any consideration,
any warrant, right or option pertaining thereto, or permit any redemption,
retirement, or other acquisition by Borrower of the ownership of the
outstanding partnership interest of the Borrower, other than the E&P
Distribution;
I. Borrower shall not furnish the Bank any certificate or other
document that will contain any untrue statement of material fact or that
will omit to state a material fact necessary to make it not misleading in
light of the circumstances under which it was furnished; and
J. Borrower will not directly or indirectly apply any part of the
proceeds of the Obligations to the purchasing or carrying of any "margin
stock" within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System, or any regulations, interpretations, or rulings
thereunder.
Section VI. Default.
1. Events of Default. The occurrence of any one or more of the following
events shall constitute an Event of Default hereunder:
A. The Borrower shall fail, within any applicable grace or cure
period, to perform, or cause HHT to perform, any covenant, promise, or
payment obligation made in this Agreement or in any of the Collateral
Documents or in any other agreement with any third Person for the repayment
of borrowed money.
B. The Borrower shall admit its inability to pay its debts as they
mature or shall make an assignment for the benefit of itself or any of its
creditors.
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2. Acceleration. At the option of the Bank upon the occurrence of any
non-monetary Event of Default not cured following thirty (30) days' written
notice to Borrower, or HHT, as the case may be, all Obligations shall
immediately become due and payable.
3. Remedies.
A. After any acceleration, as provided for in Section VI. 2., the
Bank shall have, in addition to the rights and remedies given it by this
Agreement and the Collateral Documents, all those allowed by all applicable
laws, including, but without limitation, the Uniform Commercial Code as
enacted in any jurisdiction in which any Collateral may be located. The
rights of the Bank under this Section VI. 3. are in addition to the other
rights and remedies (including, without limitation, other rights of set-
off) which the Bank may have.
B. In any instance under this Agreement where Borrower or HHT has
failed to maintain the ratio specified under Section V.1.B or V.1.I.
hereof, or if Borrower would otherwise be in default under IV.1.J., such
failure may be cured by the Borrower substituting or adding Collateral,
provided that such Collateral is offered Bank within the thirty (30) day
notice and cure period and such Collateral is determined by Bank within a
thirty (30) day period thereafter to be of appropriate character, quality
and value.
Section VII. Miscellaneous
1. Construction. Nothing herein contained shall prevent the Bank from
enforcing any or all other guaranty, pledge or security agreements, notes,
mortgages, deeds of trust, other evidences of liability, or other Collateral
Documents in accordance with their respective terms.
2. Enforcement and Waiver by the Bank. The Bank shall have the right at
all times to enforce the provisions of this Agreement and the Collateral
Documents in strict accordance with the terms hereof and thereof,
notwithstanding any conduct or custom on the part of the Bank in refraining from
so doing at any time or times. Failure of Bank to enforce its rights under such
provisions, strictly in accordance with the same, shall not be construed as
having created a custom in any way or manner contrary to specific provisions of
this Agreement or as having in any way or manner modified or waived the same.
All rights and remedies of the Bank are cumulative and concurrent and the
exercise of one right or remedy shall not be deemed a waiver or release of any
other right or remedy.
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3. Substitution of Collateral. Provided that no default by Borrower has
occurred hereunder and is continuing, Borrower shall have the privilege from
time to time to substitute Collateral, provided that the substituted Collateral
is first determined by Bank, in its sole discretion, to be of appropriate
character, quality and value
4. Expense of the Bank. The Borrower will, on demand, reimburse the Bank
for all expenses, including the reasonable fees and expenses of legal counsel
for the Bank, incurred by the Bank in connection with the preparation
administration, amendment, modification, or enforcement of this Agreement, the
Collateral Documents, and the collection or attempted collection of the
Obligations.
5. Notices. Any notice or consents required or permitted by this
Agreement shall be in writing and shall be deemed delivered if delivered in
Person or if sent by certified mail, postage prepaid, return receipt requested,
or telegraph, as follows, unless such address is changed by written notice
hereunder:
A. If to the Borrower: At the address set forth on Page 1 hereof.
B. If to the Bank: First National Bank of Omaha
One First National Center
Omaha, NE 68102
ATTN: Senior Officer, Mortgage Loan
Department
6. Intentionally Omitted.
7. Applicable Law. This Agreement is entered into and performable in
Omaha, Douglas County, Nebraska and shall be subject to and construed and
enforced in accordance with the laws of the State of Nebraska.
8. Binding Effect, Assignment and Entire Agreement. This Agreement shall
inure to the benefit of, and shall be binding upon, the respective successors
and permitted assigns of the parties hereto. This Agreement, including the
Exhibits hereto, all of which are hereby incorporated herein by reference, and
the documents executed and delivered pursuant hereto, constitute the entire
agreement between the parties and may be amended only by a writing signed on
behalf of each party.
9. Severability. If any provision of this Agreement shall be held invalid
under any applicable law, such invalidity shall not affect any other provision
of this Agreement that can be given effect without the invalid provision, and,
to this end, the provisions hereof are severable.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
FIRST NATIONAL BANK OF OMAHA
By ______________________________
Title____________________________
E&P FINANCING LIMITED PARTNERSHIP, A MARYLAND LIMITED
PARTNERSHIP
BY: E&P REIT TRUST, A MARYLAND REAL ESTATE INVESTMENT
TRUST - GENERAL PARTNER
By:___________________________________
Paul J. Schulte, President
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EXHIBIT "A"
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Legal Descriptions
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Hays, Kansas
TRACT 1: A tract of land located in the Northwest Quarter (NW/4) of Section
Twenty-Seven (27), Township Thirteen (13) South, Range Eighteen (18) West of the
Sixth (6th) Principal Meridian, Ellis County, Kansas, and more particularly
described as follows:
BEGINNING at a point on West Section line of the above said Section 1332.00 feet
north of the Southwest corner of the Northwest Quarter on a bearing on North 0
degrees 35 minutes 25 seconds East; thence East on a bearing North 90 degrees 00
minutes 00 seconds East parallel to South line a distance of 67.0 feet this
being the point of beginning; thence continuing East on the last described
course, a distance of 150.00 feet; thence North on a bearing of North 0 degrees
35 minutes 35 seconds East a distance of 244.1 feet; thence Northwest on a
bearing of North 75 degrees 59 minutes 25 seconds West a distance of 161.55
feet; thence South on a bearing of South 0 degrees 51 minutes 00 seconds East a
distance of 283.2 feet to the point of beginning.
TRACT 2: A tract of land in the Northwest Quarter of Section 27, Township 13
South, Range 18 West of the 6th P.M., Ellis County, Kansas, described as
follows:
BEGINNING at the intersection of the North right-of-way line of 37th Street,
City of Hays, and the East line of the existing highway, said point being 68.3
feet East of the West line of said Quarter Section; FIRST COURSE; thence
Northerly along said right-of-way line to a point 1030.4 feet South of the
Northwest corner and 61.3 feet East of the West line of said Quarter Section,
SECOND COURSE, thence Southwesterly 40.0 feet to a point 28.0 feet West of the
last described course; THIRD COURSE, thence South parallel and 28.0 feet West of
said right-of-way line to a point on said North right-of-way line of 37th Street
28.0 feet West of the place of beginning; FOURTH COURSE, thence East to the
place of beginning.
Wichita (East), Kansas
PARCEL #1:
Beginning at the Southwest corner of Lot 1, Davis-Moore Addition, Wichita,
Kansas, Sedgwick County, Kansas; thence with an assumed bearing of N 0 degrees
00'E on the West line of said Lot 1, a distance of 75 feet; thence N 54 degrees
47'E on the Northwesterly line of Lot 1, a distance of 389.24 feet to the
Northwest corner of said Lot; thence N 89 degrees 57'38"E on the North line of
said Lot a distance of 67 feet to the centerline of the 20 foot wide private
water
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easement as recorded on Film 618, Page 1038; thence S 0 degrees 00'E on said
centerline a distance of 299.51 feet, more or less, to the South line of Lot 1;
thence S 90 degrees 00'W on the south line of said Lot 1, a distance of 385 feet
to the point of beginning.
PARCEL #2:
Easement for the benefit of Parcel #1 as created by instrument dated January 26,
1983 and filed February 15, 1983, on film 567, Page 1344, for ingress and egress
to and from said Parcel #1, over the following described land: Commencing at a
point on the East line of the Northeast quarter of Section 29, Township 27
South, Range 2 East of the Sixth Principal Meridian, Sedgwick County, Kansas,
379.40 feet south of the Northeast corner thereof; thence west, at right angles,
60 feet for a place of beginning; thence south at right angles and parallel with
the East line of said Northeast Quarter, 80 feet; thence west, at right angles,
1040 feet; thence north at right angles, 80 feet; thence east, at right angles,
1040 feet to the place of beginning.
PARCEL #3:
A non-exclusive easement for the benefit of Parcel #1 as created by instrument
dated September 15, 1988, FILED September 16, 1988, on Film 995, Page 220, for
utility lines over the south 20 feet of Lot 1, Davis-Moore Addition, Wichita,
Kansas, Sedgwick County, Kansas, EXCEPT that portion lying within Parcel #1
above.
PARCEL #4:
A non-exclusive easement for the benefit of Parcel #1 as created by instrument
dated September 16, 1988 and filed September 20, 1988, on Film 995, Page 861,
for sanitary sewer over a tract in the Northeast Quarter of Section 29, Township
27 South, Range 2 East of the Sixth Principal meridian, Sedgwick County, Kansas,
described as: Beginning at a point on the northwesterly line of Lot 1, Davis-
Moore Addition, Wichita Kansas, Sedgwick County, Kansas, at a platted bearing of
N 54 degrees 47'E on said Northwesterly line, a distance of 214 feet from the
most Westerly Northwest corner of said Lot; thence N 35 degrees 13'W, 70 feet;
thence N 54 degrees 47'E 15 feet; thence S 35 degrees 13'E, 70 feet, to the
Northwesterly line of said Lot; thence S 54 degrees, 47'W on said Northwesterly
line, 15 feet to the point of beginning.
PARCEL #5:
A non-exclusive easement for the benefit of Parcel #1 as created by instrument
dated July 18, 1985, and filed February 25, 1986, on film 781, Page 372, for
storm water drainage purposes over a tract of land described as follows: the
north 1600 feet of the east 1800 feet of the Northeast Quarter, Section 29,
Township 27 South, Range 2 East of the Sixth Principal Meridian, Sedgwick
County, Kansas, EXCEPT any part of Lot 1, Davis-Moore Addition; East Turnpike
Entrance Addition, East Turnpike Second Addition, and the right-of-ways of U.S.
Highway 54 and Webb Road.
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Garden City, Kansas
Lots One (1) and Two (2), Block One (1), 83 Commercial Subdivision, to the City
of Garden City, Finney County, Kansas, except the north ten feet (N.10') of Lot
Two (2) which has been deeded to the City of Garden City, Kansas.
Manhattan, Kansas
Lot 2, S and B Addition, Unit 2, to the City of Manhattan, Pottawatomie County,
Kansas.
Kingdom City, Missouri
All that portion of the Northwest Quarter of section Sixteen (16), Township
Forty-eight (48) North, Range Nine (9) West in Callaway County, Missouri, more
particularly described as follows:
Commencing at the Northwest Corner of Section 16, Township 48 North, Range Nine
(9) West; thence South 26 degrees 03'30" East, 116.2 feet to a point on the
centerline of Interstate 70 at Station 600+29.71; thence South 85 degrees
00'West, 4.86 feet to Interstate Route 70 Centerline Station 600+24.85= U.S.
Route 54 Centerline Station 166+89.89; thence South 3 degrees 50' East, 1222.11
feet to U.S. Route 54 Centerline Station 179+12; thence in an easterly direction
at right angles to said centerline a distance of 145 feet to a found right-of-
way marker; thence along U.S. Rouge 54 right-of-way, South 03 degrees 50'08"
East, 587.12 feet to a right-of-way marker (found); thence South 03 degrees
46'19" East, 107.65 feet to a 1/2 inch iron pipe (found), being the TRUE POINT
OF BEGINNING; thence North 85 degrees 06'32" East, 286.12 feet to a 1/2 inch
iron pipe (set); thence South 03 degrees 50'00" East, 305.82 feet to a 1/2 inch
iron pipe (set); thence South 85 degrees 06'32" West, 286.44 feet to a 1/2 inch
iron pipe (set) on the Easterly right-of-way of U.S. route 54; thence along said
right-of-way North 03 degrees 46'19" West, 305.82 feet to the TRUE POINT OF
BEGINNING. The basis of bearings is the bearing of the centerline of U.S. Route
54 as shown on the Missouri Highway and Transportation plans and is assumed to
be correct.
Wayne, Nebraska
Lot 1, in Replat of McCright's First Subdivision to the City of Wayne, Wayne
County, Nebraska; (sometimes also described as Lot 1, McCright's First
Subdivision to the City of Wayne)
And
The North 18 feet of the East 6th Street abutting Lot 1 of the Replat of
McCright's First Subdivision to Wayne, Wayne County, Nebraska, more particularly
described as follows:
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Beginning at the Southwest corner of said Lot 1 and assuming the West line of
said replat to have a bearing of South 00 degrees 03'57" East; thence South 00
degrees 03'57" East, 18.00 feet; thence North 89 degrees 57'47" East, 143.37
feet to a point, said point being the start of a 50 foot radius curve concaved
Northwesterly (having a chord bearing of North 44 degrees 57'09" East, and a
chord distance of 70.75 feet); thence North 00 degrees 00'00" East, 18.00 feet
to a point on a 50 foot radius curve concaved Northwesterly (having a chord
bearing of South 44 degrees 57'09" West and a chord distance of 70.75 feet);
thence South 89 degrees 57'47" West, along the South line of said Lot 1, 143.50
feet to the point of beginning.
Watertown, South Dakota
Lot No. 6, of the Plat entitled "Jurrens-Schulte Industrial Addition to the City
of Watertown, South Dakota", located in Codington County, South Dakota, and is
according to the recorded plat.
Omaha, Nebraska
Lot 1, Empire Park Replat 6, an Administrative Subdivision of Lot 3 and the East
145 feet in width of Lot 4, Empire Park, an Addition to the City of Omaha, as
surveyed, platted and recorded in Douglas County, Nebraska.
El Dorado, Kansas
Beginning at a point on the North right-of-way line of K-196 Highway, said point
being 50.4 feet North and 460 feet West of the Southwest corner of the West Half
of the East Half of the Northeast Quarter of Section Numbered 4, Township
Numbered 26 South, Range Numbered 5 East of the 6th P.M., thence West 150 feet
along said right-of-way line; thence North parallel with the West line of
Northeast Quarter a distance of 450 feet, thence East parallel with the South
line of said Northeast Quarter a distance of 150 feet, thence South parallel
with said West line a distance of 450 feet to the point of beginning, in Butler
County, Kansas.
Wichita (North), Kansas
Parcel #1: Lot 3, Block 1, Air Cap Truck Plaza Addition, Sedgwick County,
Kansas.
Parcel #2: A non-exclusive easement for the benefit of Parcel #1 as created by
the instrument dated November 3, 1994, and recorded November 4, 1994, on Film
1487, Page 286 for ingress and egress purposes over and across the driveway and
parking areas of Lot 1, Block 1, Air Cap Truck Plaza Addition, Sedgwick County,
Kansas.
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Parsons, Kansas
The West 145 feet of Tract A, Reinhart Subdivision A and vacated street lying
South and adjacent to the above described real estate, all in the City of
Parsons, Labette County, Kansas.
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SCHEDULE IV.1.F
DISCLOSED INDEBTEDNESS
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